Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency

Published date06 November 2020
Record Number2020-24332
SectionRules and Regulations
CourtCenters For Medicare & Medicaid Services,Employee Benefits Security Administration
Federal Register, Volume 85 Issue 216 (Friday, November 6, 2020)
[Federal Register Volume 85, Number 216 (Friday, November 6, 2020)]
                [Rules and Regulations]
                [Pages 71142-71205]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-24332]
                [[Page 71141]]
                Vol. 85
                Friday,
                No. 216
                November 6, 2020
                Part II
                Department of the Treasury
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                Internal Revenue Service
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                26 CFR Part 54
                Office of the Secretary
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                31 Part 33
                Department of Labor
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                Employee Benefits Security Administration
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                29 CFR Part 2590
                Department of Health and Human Services
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                Centers for Medicare & Medicaid Services
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                42 CFR Parts 410, 411, 414, et al.
                Office of the Secretary
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                45 CFR Parts 147, 155 and 182
                Additional Policy and Regulatory Revisions in Response to the COVID-19
                Public Health Emergency; Interim Final Rule
                Federal Register / Vol. 85, No. 216 / Friday, November 6, 2020 /
                Rules and Regulations
                [[Page 71142]]
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                DEPARTMENT OF THE TREASURY
                Internal Revenue Service
                26 CFR Part 54
                [TD 9931]
                Office of the Secretary
                31 CFR Part 33
                RIN 1545-BP97
                DEPARTMENT OF LABOR
                Employee Benefits Security Administration
                29 CFR Part 2590
                RIN 1210-AB98
                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                Centers for Medicare & Medicaid Services
                42 CFR Parts 410, 411, 414, 417, 433, and 510
                Office of the Secretary
                45 CFR Parts 147, 155, and 182
                [CMS-9912-IFC]
                RIN 0938-AU35
                Additional Policy and Regulatory Revisions in Response to the
                COVID-19 Public Health Emergency
                AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
                Health and Human Services (HHS); Internal Revenue Service, Department
                of the Treasury; Employee Benefits Security Administration, Department
                of Labor.
                ACTION: Interim final rule with request for comments.
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                SUMMARY: This interim final rule with request for comments (IFC)
                discusses CMS's implementation of section 3713 of the Coronavirus Aid,
                Relief, and Economic Security Act (CARES Act), which established
                Medicare Part B coverage and payment for Coronavirus Disease 2019
                (COVID-19) vaccine and its administration. This IFC implements
                requirements in the CARES Act that providers of COVID-19 diagnostic
                tests make public their cash prices for those tests and establishes an
                enforcement scheme to enforce those requirements. This rule also
                establishes an add-on payment for cases involving the use of new COVID-
                19 treatments under the Medicare Inpatient Prospective Payment System
                (IPPS). This IFC provides for separate payment for new COVID-19
                treatments under the Outpatient Prospective Payment System (OPPS) for
                the remainder of the PHE for COVID-19 when these treatments are
                provided at the same time as a Comprehensive Ambulatory Payment
                Classification (C-APC) service. This rule also interprets and
                implements the requirement to maintain Medicaid beneficiary enrollment
                in order to receive the temporary increase in Federal funding in the
                Families First Coronavirus Response Act (FFCRA). This IFC modifies
                policies of the Comprehensive Care for Joint Replacement (CJR) model
                and adds technical changes to accommodate these policy changes.
                Specifically, we are extending Performance Year (PY) 5 by adding 6
                months, creating an episode-based extreme and uncontrollable
                circumstances COVID-19 policy, providing two reconciliation periods for
                PY 5, and adding DRGs 521 and 522 for hip and knee procedures. This
                rule also amends regulations regarding coverage of preventive health
                services to implement section 3203 of the CARES Act, which shortens the
                timeframe within which non-grandfathered group health plans and health
                insurance issuers offering non-grandfathered group or individual health
                insurance coverage must begin to cover without cost sharing qualifying
                coronavirus preventive services, including recommended COVID-19
                immunizations. This IFC also revises regulations to set forth
                flexibilities in the public notice requirements and post award public
                participation requirements for State Innovation Waivers under section
                1332 of the Patient Protection and Affordable Care Act (PPACA) during
                the public health emergency for COVID-19.
                DATES: Effective date: These regulations are effective on November 2,
                2020, except for amendatory instructions 36 and 37, which are effective
                on January 1, 2021.
                 Applicability date: Except as otherwise specified in this
                paragraph, these regulations are applicable from November 2, 2020,
                until the end of the public health emergency for COVID-19 as determined
                by the HHS Secretary. The regulations at 42 CFR 410.57, 410.152,
                410.160, 411.15, 414.701, 414.707, 414.900, and 414.904 and at 42 CFR
                part 510 (other than 42 CFR 510.300(a)(1)(i) and (iii)) are applicable
                November 2, 2020. Because the requirement at section 6008(b)(3) of the
                Families First Coronavirus Response Act (FFCRA) is not limited to the
                duration of the public health emergency for COVID-19, regulations at 42
                CFR part 433, subpart G, apply from November 2, 2020, through the end
                of the last month of the public health emergency for COVID-19 in
                accordance with section 6008(b)(3) of the Families First Coronavirus
                Response Act. Regulations at 42 CFR 510.300(a)(1)(i) and (a)(1)(iii)
                are applicable October 1, 2020.
                 Comment date: To be assured consideration, comments must be
                received at one of the addresses provided below, no later than 5 p.m.
                on January 4, 2021.
                ADDRESSES: In commenting, please refer to file code CMS-9912-IFC.
                 Comments, including mass comment submissions, must be submitted in
                one of the following three ways (please choose only one of the ways
                listed):
                 1. Electronically. You may submit electronic comments on this
                regulation to http://www.regulations.gov. Follow the ``Submit a
                comment'' instructions.
                 2. By regular mail. You may mail written comments to the following
                address ONLY: Centers for Medicare & Medicaid Services, Department of
                Health and Human Services, Attention: CMS-9912-IFC, P.O. Box 8016,
                Baltimore, MD 21244-8016.
                 Please allow sufficient time for mailed comments to be received
                before the close of the comment period.
                 3. By express or overnight mail. You may send written comments to
                the following address ONLY: Centers for Medicare & Medicaid Services,
                Department of Health and Human Services, Attention: CMS-9912-IFC, Mail
                Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
                 For information on viewing public comments, see the beginning of
                the SUPPLEMENTARY INFORMATION section.
                FOR FURTHER INFORMATION CONTACT: Laura Kennedy, (410) 786-3377, for
                discussion related to COVID-19 vaccine and administration payment
                provided under Medicare Part B.
                 Lina Rashid, (443) 902-2823, or Michelle Koltov, (301) 492-4225,
                Centers for Medicare & Medicaid Services, Department of Health and
                Human Services, Services, Kimberly Koch, (202) 622-0854, Department of
                the Treasury, for issues related to State Innovation Waivers Policy and
                Regulatory Revisions in Response to the COVID-19 Public Health
                Emergency.
                 Dr. Terri Postma or Rhonda Sheppard, (410) 786-8465, or via email
                at [email protected], for provisions related to Price
                Transparency for COVID-19 Diagnostic Testing.
                [[Page 71143]]
                 Cristina Nigro, (410) 786-7763, for issues related to the Medicare
                Inpatient Prospective Payment System (IPPS) New COVID-19 Treatments
                Add-on Payment (NCTAP) for the remainder of the public health
                emergency.
                 David Mlawsky, (410) 786-1565, Centers for Medicare & Medicaid
                Services, Department of Health and Human Services, Elizabeth
                Schumacher, (202) 693-8335, Employee Benefits Security Administration,
                Department of Labor, Dara Alderman, (202) 317-5500, Internal Revenue
                Service, Department of the Treasury, for issues related to Rapid
                Coverage of Preventive Services for Coronavirus.
                 Stephanie Bell, (410) 786-0617, for issues related to the temporary
                increase in Federal Medicaid funding.
                 Bobbie Knickman, (410) 786-4161; Heather Holsey, (410) 786-0028;
                Sarah Mioduski, (410) 786-2014 or email [email protected] for the
                Comprehensive Care for Joint Replacement Model.
                SUPPLEMENTARY INFORMATION:
                 Inspection of Public Comments: All comments received before the
                close of the comment period are available for viewing by the public,
                including any personally identifiable or confidential business
                information that is included in a comment. We post all comments
                received before the close of the comment period on the following
                website as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that website to view
                public comments.
                Background
                 The United States is responding to an outbreak of respiratory
                disease caused by a novel coronavirus that was first detected in China
                and has now been detected in more than 190 countries internationally,
                and all 50 States, the District of Columbia, and U.S. territories. The
                virus has been named ``severe acute respiratory syndrome coronavirus
                2'' (``SARS-CoV-2'') and the disease it causes has been named
                ``coronavirus disease 2019'' (``COVID-19'').
                 On January 30, 2020, the International Health Regulations Emergency
                Committee of the World Health Organization (WHO) declared the outbreak
                a ``Public Health Emergency of International Concern.'' On January 31,
                2020, pursuant to section 319 of the Public Health Service (PHS) Act
                (42 U.S.C. 247d), the Health and Human Services Secretary (the
                Secretary) determined that a public health emergency (PHE) exists for
                the United States to aid the nation's health care community in
                responding to COVID-19 (hereafter referred to as the PHE for COVID-19).
                On March 11, 2020, the WHO publicly declared COVID-19 a pandemic. On
                March 13, 2020, President Donald J. Trump (the President) declared the
                COVID-19 pandemic a national emergency. Effective October 23, 2020, the
                Secretary renewed the January 31, 2020 determination that was
                previously renewed on April 21, 2020 and July 23, 2020 that a PHE
                exists and has existed since January 27, 2020.
                 The Administration is committed to ensuring that Americans have
                access to a COVID-19 vaccine through Operation Warp Speed, a
                partnership among components of the HHS, including the Centers for
                Disease Control and Prevention (CDC), the Food and Drug Administration
                (FDA), the National Institutes of Health (NIH), and the Biomedical
                Advanced Research and Development Authority (BARDA). Operation Warp
                Speed engages with private firms and other Federal agencies, including
                the Department of Defense (DoD), Department of Agriculture, the
                Department of Energy, and the Department of Veterans Affairs. Through
                the work of the Federal Government and the private sector, Operation
                Warp Speed seeks to accelerate the development, manufacture, and
                distribution of a COVID-19 vaccine to the American people.
                 The CDC has reported that some people are at higher risk of severe
                illness from COVID-19.\1\ These higher-risk categories include:
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                 \1\ https://www.cdc.gov/mmwr/volumes/69/wr/mm6915e3.htm.
                 Older adults, with risk increasing by age.
                 People who have serious chronic medical conditions such
                as:
                 ++ Obesity.
                 ++ Cardiovascular disease.
                 ++ Diabetes mellitus.
                 ++ Hypertension.
                 ++ Chronic lung disease.
                 ++ Neurologic/Neurodevelopmental disability.\2\
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                 \2\ https://www.cdc.gov/mmwr/volumes/69/wr/mm6924e2.htm?s_cid=mm6924e2_w.
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                 ++ Immunocompromised individuals.
                 Residents of Long Term Care (LTC) facilities, including
                nursing homes, Intermediate Care Facilities for Individuals with
                Intellectual and Developmental Disabilities (ICF/IIDs), inpatient
                psychiatric and substance abuse treatment facilities including
                Institutions for Mental Disease (IMDs) & Psychiatric Residential
                Treatment Facilities (PRTFs), assisted living facilities, group homes
                for individuals with developmental disabilities and board-and-care
                facilities.\3\
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                 \3\ https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html.
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                 As the health care community implements and updates recommended
                prevention and control practices, regulatory agencies operating under
                appropriate waiver authority granted by the PHE for COVID-19 are also
                working to revise and implement regulations that support these health
                care community infection prevention and treatment practices. Based on
                the current and projected increases in the incidence rate of COVID-19
                in the US, observed fatalities in the older adult population, and the
                impact on health care workers at increased risk due to treating special
                populations, CMS \4\ is reviewing and revising regulations, as
                appropriate, to offer states, providers, suppliers, and group health
                plans and health insurance issuers additional flexibilities in
                furnishing and providing services to combat the PHE for COVID-19 and to
                address and minimize the unique impact of the PHE for COVID-19 on other
                regulatory provisions.
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                 \4\ Throughout this IFC, unless otherwise specified, ``we'' and
                ``our'' refer to CMS only.
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                 CMS addressed additional policies in three previous interim final
                rules with comment period (IFCs). The ``Medicare and Medicaid Programs;
                Policy and Regulatory Revisions in Response to the COVID-19 Public
                Health Emergency'' IFC appeared in the April 6, 2020 Federal Register
                (85 FR 19230) with an effective date of March 31, 2020, and the
                ``Medicare and Medicaid Programs, Basic Health Program, and Exchanges;
                Additional Policy and Regulatory Revisions in Response to the COVID-19
                Public Health Emergency and Delay of Certain Reporting Requirements for
                the Skilled Nursing Facility Quality Reporting Program'' IFC appeared
                in the May 8, 2020 Federal Register (85 FR 27550) with an effective
                date of May 8, 2020. The ``Medicare and Medicaid Programs, Clinical
                Laboratory Improvement Amendments, and Patient Protection and
                Affordable Care Act: Additional Policy and Regulatory Revisions in
                Response to the COVID-19 Public Health Emergency'' IFC appeared in the
                September 2, 2020 Federal Register (85 FR 54820) with an effective date
                of September 2, 2020.
                 This IFC implements a number of measures intended to further the
                Administration's commitment to ensure every American has timely access
                to a COVID-19 vaccine without any out-of-pocket expenses, no matter
                their source of coverage, or whether they are covered at all.
                [[Page 71144]]
                 In this IFC, CMS discusses Section 3713 of the Coronavirus Aid,
                Relief, and Economic Security (CARES) Act which added the COVID-19
                vaccine and its administration to section 1861(s)(10)(A) of the Social
                Security Act (the Act) in the same subparagraph as the flu and
                pneumococcal vaccines and their administration. It also specified that
                under Medicare Part B, beneficiaries can receive a COVID-19 vaccination
                (vaccine and administration) with no cost sharing (deductible or
                copayment).
                 In this IFC, HHS and the Departments of Labor and the Treasury
                (referred to collectively as ``the Departments'') clarify certain
                aspects of coverage of preventive services without cost sharing under
                the current regulations implementing section 2713 of the Public Health
                Service (PHS) Act, as added by PPACA and incorporated into the Employee
                Retirement Income Security Act of 1974 (ERISA) by section 715 of ERISA
                and into the Internal Revenue Code (the Code) by section 9815 of the
                Code. The Departments also amend those regulations to implement the
                unique requirements related to rapid coverage of qualifying coronavirus
                preventive services under section 3203 of the CARES Act. Specifically,
                this IFC clarifies that plans and issuers subject to section 2713 of
                the PHS Act must cover without cost sharing recommended immunizations
                as well as the administration of such immunizations, regardless of how
                the administration is billed. This IFC also defines qualifying
                coronavirus preventive services consistent with the definition provided
                in section 3203 of the CARES Act and clarifies that plans and issuers
                subject to section 2713 of the PHS Act must cover recommended
                immunizations for COVID-19 that are qualifying coronavirus preventive
                services, even if not listed for routine use on the Immunization
                Schedules of the CDC. Due to the urgent need to ensure coverage of and
                access to qualifying coronavirus preventive services, and to ensure
                that participants, beneficiaries, and enrollees can access qualifying
                coronavirus preventive services on the expedited basis specified by
                statute, this IFC also provides that during the PHE for COVID-19, plans
                and issuers must cover, without cost sharing, qualifying coronavirus
                preventive services, regardless of whether such services are delivered
                by an in-network or out-of-network provider. This coverage is required
                to be provided within 15 business days after the date the United States
                Preventive Services Task Force (USPSTF) or the Advisory Committee on
                Immunization Practices of the CDC (ACIP) makes an applicable
                recommendation relating to a qualifying coronavirus preventive service.
                 Section 3202(b) of the CARES Act establishes a requirement to
                publicize cash prices for COVID-19 diagnostic testing during the PHE.
                For purposes of implementing section 3202(b) of the CARES Act, this IFC
                adds a new 45 CFR part 182, including (1) definitions of ``provider of
                a diagnostic test for COVID-19'' (or ``provider''), ``COVID-19
                diagnostic test,'' and ``cash price,'' and (2) requirements for posting
                cash price information on the internet, or upon request and through
                signage (if applicable) if the provider does not have its own website.
                This IFC gives CMS discretion to take any of the following actions,
                which generally, but not necessarily, will occur in the following order
                if CMS determines the provider is noncompliant with section 3202(b)(1)
                of the CARES Act and the requirements of Sec. 182.40:
                 Provide a written warning notice to the provider of the
                specific violation(s).
                 Request that a provider submit and comply with a
                corrective action plan (CAP) under Sec. 182.60 if its noncompliance is
                not corrected after a warning notice.
                 Impose a civil monetary penalty (CMP) on the provider if
                the provider fails to respond to CMS' request to submit a CAP or to
                comply with the requirements of a CAP approved by CMS.
                 This IFC creates a New COVID-19 Treatments Add-on Payment (NCTAP)
                under the Inpatient Prospective Payment System (IPPS) for COVID-19
                cases that meet certain criteria. We believe that as drugs and
                biological products become available and are authorized or approved by
                FDA for the treatment of COVID-19 in the inpatient setting, it is
                appropriate to increase the current IPPS payment amounts to mitigate
                any potential financial disincentives for hospitals to provide new
                COVID-19 treatments during the PHE. Therefore, effective for discharges
                occurring on or after the effective date of this rule and until the end
                of the PHE for COVID-19, this IFC establishes the NCTAP to pay
                hospitals the lesser of (1) 65 percent of the operating outlier
                threshold for the claim or (2) 65 percent of the amount by which the
                costs of the case exceed the standard DRG payment, including the
                adjustment to the relative weight under section 3710 of the CARES Act,
                for certain cases that include the use of a drug or biological product
                currently authorized or approved for treating COVID-19. The NCTAP will
                not be included as part of the calculation of the operating outlier
                payments.
                 This IFC provides for separate payment for New COVID-19 Treatments
                under the Outpatient Prospective Payment System (OPPS) for the
                remainder of the PHE for COVID-19 when these treatments are provided at
                the same time as a Comprehensive Ambulatory Payment Classification (C-
                APC) service. Although we do not expect that many beneficiaries would
                both receive a primary C-APC service and a drug or biological for
                treating COVID-19 on the same claim, we nonetheless believe that as
                drugs or biologicals become available and are authorized or approved
                for the treatment of COVID-19 in the outpatient setting, it would be
                appropriate to mitigate any potential financial disincentives for
                hospitals to provide these new treatments during the PHE for COVID-19.
                Therefore, effective for services furnished on or after the effective
                date of this rule and until the end of the PHE, CMS is creating an
                exception to its OPPS C-APC policy to ensure separate payment for new
                COVID-19 treatments that meet certain criteria.
                 This IFC adds a new subpart G, Temporary FMAP Increase During the
                Public Health Emergency for COVID-19, to 42 CFR part 433, including a
                new Sec. 433.400. This new provision interprets and implements section
                6008(b)(3) of the FFCRA to require states, as a condition for receiving
                the temporary FMAP increase described at section 6008(a) of the FFCRA,
                to maintain beneficiary enrollment with specified protections. The
                terms of new Sec. 433.400 are effective immediately upon display of
                this rule. CMS' previous interpretation, described in this preamble and
                in the FAQs cited therein, continues to apply up to the date this rule
                is effective.
                 This IFC modifies policies of the Comprehensive Care for Joint
                Replacement (CJR) model and adds technical changes to accommodate these
                policy changes. Specifically, we are extending Performance Year (PY) 5
                an additional 6 months, creating an episode-based extreme and
                uncontrollable circumstances COVID-19 policy, providing two
                reconciliation periods for PY 5, and adding DRGs 521 and 522 for hip
                and knee procedures.
                 This IFC provides for flexibilities in the public notice
                requirements for a State Innovation Waiver (also referred to as a
                section 1332 waiver) described in section 1332 of PPACA that apply
                during the PHE for COVID-19. Specifically, this IFC gives the Secretary
                of HHS and the Secretary of the Treasury the authority to modify, in
                part, the public notice procedures to
                [[Page 71145]]
                expedite a decision on a proposed waiver request that is submitted or
                would otherwise become due during the PHE for COVID-19. This IFC also
                gives these Secretaries the authority to modify, in part, the post-
                award public notice requirements for an approved waiver request that
                would otherwise take place or become due during the PHE for COVID-19.
                II. Provisions of the Interim Final Rule--Department of Health and
                Human Services
                A. Medicare Coding and Payment for COVID-19 Vaccine
                1. Summary
                 This section of this IFC discusses CMS's implementation of section
                3713 of the CARES Act, which established Medicare Part B coverage and
                payment for a COVID-19 vaccine and its administration. While section
                3713(e) of the CARES Act authorizes CMS to implement section 3713 via
                ``program instruction or otherwise,'' we believe it is important to
                clarify in this IFC our interpretation of Section 3713 and ensure the
                public is aware of our plans to ensure timely Medicare Part B coverage
                and payment for COVID-19 vaccine and its administration.
                2. Background on Medicare Part B Coverage, Payment, Coding and Billing
                for Vaccines
                 As required under section 1842(o)(1)(A)(iv) of the Act, the
                Medicare Part B payment allowance limits for influenza, pneumococcal,
                and hepatitis B virus (HBV) vaccines are 95 percent of the Average
                Wholesale Price (AWP) as reflected in the published compendia except
                where the vaccine is furnished in a hospital outpatient department,
                Rural Health Clinic (RHC), or Federally Qualified Health Center (FQHC),
                skilled nursing facility, and home health. Where the vaccine is
                furnished in these settings, payment for the vaccine is based on
                reasonable cost.
                 For preventive vaccines described in section 1861(s)(10) of the
                Act, Medicare pays for both the vaccine and its administration. Under
                sections 1833(a)(1)(B), annual Part B deductible and coinsurance
                amounts do not apply for these vaccinations. In 2020, payment for
                vaccines is based on the 95 percent of the AWP for a particular vaccine
                product except where furnished in the settings for which payment is
                based on reasonable cost. For example, for the 2020-2021 influenza
                season, payment limits for adult flu vaccines range from about $19 to
                $61 per adult dose.\5\
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                 \5\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/VaccinesPricing, accessed
                September 29, 2020.
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                 We note that in the Calendar Year 2021 Physician Fee Schedule
                Proposed Rule (85 FR 50162-50163), CMS proposed to increase the
                Medicare payment rate for administration of the flu, pneumococcal or
                HBV vaccine furnished by a physician, non-physician practitioner, or
                other supplier. CMS will address public comments on the proposal and
                establish payment rates for administration of these vaccines by a
                physician, non-physician practitioner, or other supplier in the
                Calendar Year 2021 Physician Fee Schedule Final Rule, which will be
                issued later this year. Note that the payment rates for administration
                of these preventive vaccines established in the CY 2021 Physician Fee
                Schedule final rule do not apply when the vaccine is furnished by the
                providers and suppliers paid for administration under reasonable cost.
                Under the CY 2021 OPPS proposed rule, CMS proposed to assign the HCPCS
                codes for administration of the influenza, pneumococcal, and hepatitis
                B vaccines to APC 5691, Level 1 Drug Administration. See Addendum C to
                the CY 2021 OPPS/ASC proposed rule. Payment amounts for these
                preventive vaccines and their administration are not adjusted based on
                product-specific factors.
                 Generally, providers and suppliers bill for the vaccine and the
                vaccine administration separately using different codes. For example,
                many vaccine products are identified by AMA CPT codes in the 90000
                series, while others are identified by Level II HCPCS codes, usually
                beginning with the letter Q. Vaccine administration services are
                described by the types of codes used to describe professional and/or
                hospital outpatient services, and are typically identified by a G code
                for Medicare billing, or by a different AMA CPT code in the 90000
                series.
                 Many providers, professionals, and other suppliers can bill
                Medicare for the preventive vaccines and vaccine administration they
                furnish using claims rules similar to those that apply to the other
                Medicare covered items and services. Additionally, certain entities can
                enroll under Medicare as mass immunizers to offer and bill Medicare for
                flu vaccinations, pneumococcal vaccinations, or both to large groups of
                Medicare beneficiaries under roster billing. A mass immunizer may be
                enrolled in Medicare as another type of provider or supplier such as a
                physician, non-physician practitioner, hospital outpatient department,
                home health agency or skilled nursing facility. An entity or individual
                that does not otherwise qualify as a Medicare provider or supplier but
                wishes to furnish mass immunization services may be eligible to enroll
                in Medicare as a ``Mass Immunization Roster Biller'' via the Form CMS-
                855 enrollment application (Medicare Enrollment Application: Clinics/
                Group Practices and Certain Other Suppliers; OMB Control No.: 0938-
                0685; Expires 12/21). Aside from meeting all applicable enrollment
                requirements in 42 CFR part 424, subpart P (and as outlined in CMS Pub.
                100-08 (Program Integrity Manual), chapter 10, section 10.2.4), a party
                enrolled only as a mass immunization roster biller must comply with the
                following: (1) May not bill Medicare for any services other than
                pneumococcal pneumonia vaccines (PPVs), influenza virus vaccines, and
                their administration; (2) must submit claims through the roster biller
                or centralized biller process; and (3) the enrolled entity or
                individual must meet all applicable state and local licensure or
                certification requirements. In other words, an enrolled mass immunizer
                roster biller may only roster bill Medicare for the services described
                in the previous sentence. (For more information on the enrollment
                process for mass immunization roster billers, see https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/Become-a-Medicare-Provider-or-Supplier and/or contact your local Part A/B Medicare
                Administrative Contractor.)
                 For entities that are already enrolled Medicare providers and
                suppliers, these entities would contact their MAC if they plan to
                submit claims as a mass immunizer. Mass immunizers may submit claims
                for immunizations (vaccine and administration) on roster bills that
                include a limited set of information on each beneficiary and the
                vaccine(s) they were given. We note that HBV vaccinations require an
                assessment of a patient's risk of contracting hepatitis B; they require
                a physician's order and cannot be roster billed by mass immunizers.
                3. Provisions of the CARES Act
                 Section 3713 of the CARES Act provides for coverage of the COVID-19
                vaccine under Part B of the Medicare program without any beneficiary
                cost sharing. Specifically, section 3713 amended section 1861(s)(10)(A)
                of the Act to include COVID-19 vaccine and its administration. The
                amendments made are effective on the date of
                [[Page 71146]]
                enactment and apply to a COVID-19 vaccine beginning on the date that
                such vaccine is licensed under section 351 of the PHS Act (42 U.S.C.
                262). Section 3713(e) of the CARES Act further states that the
                Secretary may implement the provisions of, and the amendments made by,
                this section by program instruction or otherwise.
                 Under section 564 of the Federal Food, Drug, and Cosmetic Act (FD&C
                Act), the Commissioner of Food and Drugs, as delegated authority by the
                Secretary, may authorize, during the effective period of a declaration
                of emergency or threat justifying emergency authorized use, the
                introduction into interstate commerce of unapproved medical products or
                unapproved uses of approved medical products to diagnose, treat, or
                prevent serious or life-threatening diseases or conditions caused by
                chemical, biological, radiological and nuclear defense (CBRN) threat
                agents when there are no adequate, approved, and available
                alternatives. On March 27, 2020, on the basis of his determination of a
                PHE that has a significant potential to affect national security or the
                health and security of United States citizens living abroad involving
                COVID-19, the Secretary declared that circumstances exist justifying
                the authorization of emergency use of drugs and biological products
                during the COVID-19 pandemic (85 FR 18250). Pursuant to this
                declaration, the Commissioner of Food and Drugs, as delegated authority
                by the Secretary, may issue an emergency use authorization (EUA) for a
                drug or biological product if, after consultation with officials such
                as the Director of the CDC and the Director of the NIH, to the extent
                feasible and appropriate, the Commissioner reasonably concludes that,
                among other criteria, based on the totality of available scientific
                evidence, the product may be effective in diagnosing, treating or
                preventing such disease or condition, and the product's known and
                potential benefits when used to diagnose, prevent, or treat such
                disease or condition, outweigh its known and potential risks.
                 FDA's June 2020 guidance to industry titled ``Development and
                Licensure of Vaccines to Prevent COVID-19'' \6\ and October 2020
                guidance to industry titled ``Emergency Use Authorization for Vaccines
                to Prevent COVID-19'' \7\ state that issuance of an EUA may be
                appropriate for a COVID-19 vaccine, for which there is adequate
                manufacturing information, once studies have demonstrated the safety
                and effectiveness of the vaccine in a clear and compelling manner, but
                before the submission and/or formal review of the biologics license
                application for the vaccine. These guidance documents state that in the
                case of vaccines being developed for the prevention of COVID-19, any
                assessment regarding an EUA would be made on a case by case basis
                considering the target population, the characteristics of the product,
                the preclinical and human clinical study data on the product, and the
                totality of the relevant available scientific evidence. The FDA has
                made clear in its October 2020 guidance to industry that for a COVID-19
                vaccine for which there is adequate information to ensure its quality
                and consistency, issuance of an EUA would require a determination by
                FDA that the vaccine's benefits outweigh its risks based on data from
                at least one well-designed Phase 3 clinical trial that demonstrates the
                vaccine's safety and efficacy in a clear and compelling manner. Because
                the vaccine would be intended for administration to healthy people as a
                prophylactic measure, there must be a higher degree of certainty about
                the risks and benefits of the product than needed for EUAs for medical
                products intended for treatment of sick patients.
                ---------------------------------------------------------------------------
                 \6\ Available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/development-and-licensure-vaccines-prevent-covid-19, accessed September 30, 2020.
                 \7\ Available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/emergency-use-authorization-vaccines-prevent-covid-19, accessed October 9, 2020.
                ---------------------------------------------------------------------------
                 There are no historical examples in which Medicare has covered
                vaccines for which an EUA was issued by FDA. We recall that during the
                PHE involving the 2009 H1N1 flu outbreak,\8\ Influenza A (H1N1) 2009
                Monovalent Vaccine was approved by the FDA on September 15, 2009 on the
                basis of a supplement to the applicant's biologics license application
                (BLA) for influenza virus vaccine.\9\ In our review of PHEs, there are
                no circumstances in which a vaccine product authorized for emergency
                use has been covered or paid for by Medicare.
                ---------------------------------------------------------------------------
                 \8\ Available at https://www.phe.gov/emergency/news/healthactions/phe/Pages/h1n1.aspx, accessed on October 14, 2020.
                 \9\ Available at https://www.fda.gov/vaccines-blood-biologics/vaccines/influenza-h1n1-2009-monovalent-vaccine-novartis-vaccines-and-diagnostics-limited, accessed October 14, 2020.
                ---------------------------------------------------------------------------
                 As discussed previously, the CDC recognizes that the categories of
                people at higher risk of severe illness from COVID-19 include older
                adults (with risk increasing by age), people with chronic conditions
                such as cardiovascular disease or diabetes, and residents of long-term
                care facilities.\10\ The Medicare population includes many
                beneficiaries who are in these higher-risk categories, primarily
                because most, (over 85 percent) \11\ Medicare beneficiaries are over 65
                years old. Given the high risk nature of the Medicare population, the
                circumstances of this nationwide pandemic, and FDA's guidance that an
                EUA may be appropriate for a COVID-19 vaccine prior to its licensure if
                there is a demonstration of safety and efficacy in a clear and
                compelling manner from at least one Phase 3 clinical trial, we believe
                it is appropriate for Medicare to consider any EUA under section 564 of
                the FD&C Act issued for a COVID-19 vaccine during the PHE to be
                tantamount to a license under section 351 of the PHS Act for the sole
                purpose of considering such a vaccine to be described in section
                1861(s)(10)(A) of the Act. That is, even though section 3713 of the
                CARES Act refers to a COVID-19 vaccine ``licensed under section 351 of
                the PHS Act,'' CMS could consider any vaccine for which FDA issued an
                EUA during the PHE, when furnished consistent with terms of the EUA, to
                be eligible for Medicare coverage and payment. We consider our
                interpretation of section 3713(d) of the CARES Act to be consistent
                with Congress' intent to provide for Medicare coverage without
                deductible or coinsurance of any COVID-19 vaccine (and its
                administration) that FDA has authorized to be introduced into
                interstate commerce, which would be the case both for a vaccine for
                which emergency use is authorized under section 564 of the FD&C Act and
                for a vaccine that is licensed under section 351 of the PHS Act. Our
                interpretation also would be consistent with Congress' general intent
                in the CARES Act and other recent legislation to provide for rapid
                coverage of COVID-19 vaccines.
                ---------------------------------------------------------------------------
                 \10\ https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/index.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fneed-extra-precautions%2Fpeople-at-increased-risk.html.
                 \11\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Beneficiary-Snapshot/Downloads/Bene_Snaphot.pdf.
                ---------------------------------------------------------------------------
                 We note that section 3713(e) of the CARES Act permits CMS to
                implement the changes made by that section through ``program
                instruction or otherwise,'' and we intend to issue any necessary
                instructions for Medicare providers and suppliers expediently in order
                to ensure beneficiary access to COVID-19 vaccines as quickly as
                possible.
                [[Page 71147]]
                4. Implementation and Methods of Coding and Payment for COVID-19
                Vaccine and Administration
                 Section 3713 of the CARES Act added the COVID-19 vaccine and its
                administration to section 1861(s)(10)(A) of the Act in the same
                subparagraph as the flu and pneumococcal vaccines and their
                administration. As such, the Medicare allowed amount for the COVID-19
                vaccine will also be 95 percent of the average wholesale price (or
                reasonable cost, for example under OPPS).
                 Because COVID-19 vaccines are being developed rapidly and systems
                to operationalize payment of administration will need to be implemented
                quickly to ensure beneficiary access, we also recognize the need to
                establish coding and payment for COVID-19 vaccine and administration
                under Medicare Part B. Because there are many product-specific factors
                that are still unknown, including the possibility of differential costs
                associated with each COVID-19 vaccine product and storage and
                administration requirements, we anticipate establishing a unique
                administration code for each COVID-19 vaccine product. We believe it is
                imperative that coding and payment be in place as soon as possible
                after COVID-19 vaccines become available. We anticipate establishing
                specific coding and payment rates through technical direction to the
                MACs, including instructions to make this information available to the
                public. We also anticipate posting information on coding, payment, and
                billing for COVID-19 vaccines and vaccine administration on the CMS
                website. This approach will maintain public transparency while allowing
                CMS to pay appropriately for particular vaccines and vaccine
                administration as quickly as practicable once they are authorized or
                licensed for use by FDA. We anticipate that payment rates for the
                administration of other Part B preventive vaccines and related
                services, such as the flu and pneumococcal vaccines, would serve to
                inform the payment rates for administration of COVID-19 vaccines.
                 CMS ordinarily establishes Medicare payment rates for particular
                items and services, through notice-and-comment rulemaking. Because of
                the unique circumstances of the PHE for COVID-19 pandemic and the
                anticipated, specific conditions for the entry of COVID-19 vaccine
                products into the marketplace, we believe it is necessary to initially
                dispense with the rulemaking process in order to make Medicare payment
                available in a timely manner to ensure widespread access to the new
                vaccines. Therefore, as soon as practicable after the authorization or
                licensure of each COVID-19 vaccine product by FDA, we will announce the
                interim coding and a payment rate for its administration (or, in the
                case of the OPPS, an APC assignment for each vaccine product's
                administration code), taking into consideration any product-specific
                costs or considerations involved in furnishing the service. Such
                consideration may be necessary, specifically for COVID-19 vaccines in
                the context of the pandemic, in order to ensure that health care
                providers can offer prompt access to vaccination for a large number of
                people as quickly as possible. We then anticipate addressing coding and
                payment rates for administration of the COVID-19 vaccine products
                through future notice-and-comment rulemaking. In other words, the
                approach to payment and coding described in this IFC will ensure
                efficient and timely beneficiary access to COVID-19 vaccine products,
                that for public health purposes may need to be administered to a large
                number of people during a compressed period of time, until further
                rulemaking, such as annual rulemaking under the Medicare Physician Fee
                Schedule, is possible.
                 Given that the COVID-19 vaccine and administration was added to the
                same subparagraph as the flu and pneumococcal vaccines and
                administration under section 1861(s)(10)(A) of the Act, we believe it
                would be appropriate to use billing processes for COVID-19 vaccinations
                that are similar to those in place for flu and pneumococcal
                vaccinations. With the pressing need to ensure broad access to a COVID-
                19 vaccine, it would be appropriate to allow COVID-19 vaccinations to
                be provided through the mass immunization and roster billing process
                that is in place for flu and pneumococcal vaccinations. We recognize
                that, at this time, there is very limited detailed information on
                COVID-19 vaccines and their administration and that information on
                these vaccines is likely to evolve as they reach the market and then
                experience with them is gained. At this time, we believe that the
                COVID-19 vaccines will be administered as one or two parenteral doses,
                thus we believe that using the Part B influenza vaccination approach
                that permits certain providers and mass immunization to bill for the
                product strikes a balance between the need to vaccinate many millions
                of Medicare patients promptly and the lack of detailed information
                about particular COVID-19 vaccine products. Although influenza
                vaccination is generally only given once each flu season, CMS has
                contemplated how to respond to pandemics where payment for additional
                doses of an influenza vaccine during a season may be required. Thus, a
                two dose initial COVID-19 vaccination schedule can be accommodated
                under this general approach. Also, the CARES Act permits the Secretary
                to implement the provisions of, and the amendments made by, section
                3713 by program instruction or otherwise. As information about vaccine
                products becomes available, we anticipate that updated information, for
                example information concerning additional doses after initial
                vaccination, applicability of specific vaccine products to subsets of
                our beneficiary population, or updates about billing would be
                disseminated primarily by program instruction.
                 As part of this IFC, we are updating the following regulations:
                 At Sec. 410.57, Pneumococcal vaccine and flu vaccine, we
                are amending the section heading and adding a new paragraph to
                reference COVID-19 vaccine.
                 At Sec. 410.152, Amounts of payment, we are amending
                Sec. 410.152(l)(1) to include the COVID-19 vaccine in the list of
                vaccines for which Medicare Part B pays 100 percent of the Medicare
                payment amount.
                 At Sec. 410.160, Part B annual deductible, we are
                amending Sec. 410.160(b)(2) to include the COVID-19 vaccine in the
                list of vaccines that are not subject to the Part B annual deductible
                and do not count toward meeting that deductible.
                 At Sec. 411.15, Particular services excluded from
                coverage, we are amending Sec. 411.15(e) to add an exception for
                COVID-19 vaccinations to the general exclusion of coverage for
                immunizations.
                 At Sec. 414.701, Purpose, we are amending the list of
                statutorily covered drugs to include the COVID-19 vaccine.
                 At Sec. 414.707, Basis of Payment, we are amending Sec.
                414.707(a)(2)(iii) to include the COVID-19 vaccine in the list of
                vaccines with a payment limit calculated using 95 percent of the
                average wholesale price.
                 At Sec. 414.900, Basis and scope, we are amending Sec.
                414.900(b)(3) to include the COVID-19 vaccine in the list of
                statutorily covered drugs.
                 At Sec. 414.904, Average sales price as the basis for
                payment, we are amending Sec. 414.904(e)(1) to include the COVID-19
                vaccine in the list of vaccines with payment limits calculated using 95
                percent of the average wholesale price.
                [[Page 71148]]
                5. Medicare Advantage and Cost Plans
                 Under sections 1852(a)(1) and 1876(c)(2) of the Act, Medicare
                Advantage (MA) plans and cost plan organizations must cover all
                benefits covered under Part A and Part B of Original Medicare, subject
                to limited exclusions. Therefore, all MA plans and cost plans must
                cover a COVID-19 vaccine and its administration described in section
                1861(s)(10)(A) of the Act. As described previously, the interpretation
                of section 3713 of the CARES Act adopted in this rule will result in
                Part B coverage of a COVID-19 vaccine for which FDA issues an EUA
                during the PHE, and administration of that vaccine when furnished
                consistent with terms of such EUA. As amended by section 3713 of the
                CARES Act, section 1852(a)(1)(B)(iv)(VI) of the Act prohibits MA plans
                from using cost sharing that exceeds the cost sharing imposed under
                original Medicare for a COVID-19 vaccine and its administration when MA
                coverage is provided because they are covered under Part B under
                section 1861(s)(10)(A) of the Act.
                 Section 1852(a)(5) of the Act and 42 CFR 422.109 provide that when
                a National Coverage Determination (NCD) or legislative change in
                benefits, such as the addition of Part B coverage of a COVID-19 vaccine
                and its administration, results in significant costs that have not been
                included in the capitation payments made to MA plans, coverage of the
                new benefit will be provided through the Medicare FFS program until the
                capitation payments take the new significant costs into account. The
                payment rates for MA organizations for contract years 2020 and 2021
                have been set without including the costs for a COVID-19 vaccine and
                its administration. Therefore, if coverage of a COVID-19 vaccine and
                its administration during that period results in significant costs,
                section 1852(a)(5) of the Act and Sec. 422.109 will apply to require
                Medicare FFS coverage of the vaccine and its administration.
                 The cost projection used for the determination whether the
                legislative change results in significant costs is based on an analysis
                by the Chief Actuary of CMS of the actuarial costs associated with a
                NCD or the legislative change in benefits and compared to the
                thresholds specified in the regulation at Sec. 422.109. This analysis
                is generally performed once a Medicare FFS payment rate is determined
                for the service. If the estimated cost of an NCD or legislative change
                represents at least 0.1 percent of the national average per capita
                costs or the average cost of furnishing a single service exceeds the
                cost threshold established in using the formula in Sec. 422.109(a), it
                is considered a significant cost and the FFS Medicare program provides
                coverage for the service until the costs are factored into Medicare
                Advantage payments. Therefore, this legislative change would be subject
                to an analysis whether the new benefit results in significant costs.
                The significant cost threshold will be met assuming that the projected
                cost per-beneficiary-per-year is greater than approximately $13, which
                is 0.1 percent of the national average per capita costs. If the
                threshold is reached, Medicare beneficiaries enrolled in MA plans will
                receive coverage of the COVID-19 vaccine and its administration through
                the Medicare FFS program and would be able to access the COVID-19
                vaccine, without cost sharing, at any FFS provider or supplier that
                participates in Medicare and is eligible to bill under Part B for
                vaccine administration, including those enrolled in Medicare as a mass
                immunizer or a physician, non-physician practitioner, hospital, clinic,
                or group practice.
                 Section 3713 of the CARES Act added Medicare Part B coverage for a
                COVID-19 vaccine and its administration and provides that MA plans must
                cover the new benefit without cost sharing. While section 1876(c)(2) of
                the Act ensures that enrollees in Medicare cost plans will have
                coverage of a COVID-19 vaccine and its administration, section 3713 of
                the CARES Act did not amend section 1876 of the Act to provide similar
                cost-sharing protections for enrollees in cost plans who receive the
                vaccine from an in-network provider. Nor is there a provision
                affirmatively relieving cost plans of the obligation to cover the new
                Part B benefit. Because the Medicare FFS program covers Part A and Part
                B items and services furnished to cost plan enrollees by out-of-network
                health care providers that participate in the Medicare FFS program,
                cost plan enrollees will receive the COVID-19 vaccine and its
                administration without cost sharing when they go to a health care
                provider that is out of the cost plan's network. See 42 CFR
                417.436(a)(5) and 417.448. However, there is no requirement for cost
                plans to cover the COVID-19 vaccine and its administration without cost
                sharing (that is, with cost sharing that is the same as original
                Medicare) when the vaccine is furnished by an in-network health care
                provider. Many enrollees may seek the COVID-19 vaccine from the health
                care provider they usually see or from whom they receive most of their
                health care; that provider is likely to be in-network with the cost
                plan. CMS believes that it is necessary and appropriate to ensure that
                cost plan enrollees, like other Medicare beneficiaries, are provided
                access to the COVID-19 vaccine and its administration without cost
                sharing. Section 1876(i)(3)(D) of the Act authorizes us to impose
                ``other terms and conditions not inconsistent with [section 1876]''
                that are deemed ``necessary and appropriate.'' Requiring cost plans to
                comply with the same cost sharing protections available to Medicare
                beneficiaries in the FFS program and enrolled in Medicare Advantage
                plans is necessary and appropriate, so that cost is not a barrier for
                beneficiaries to get the vaccine, particularly during the public health
                emergency when ensuring access is of paramount importance. To ensure
                that cost plan enrollees also do not pay cost sharing for the COVID-19
                vaccine and its administration when received from an in-network
                provider at least until the end of the public health emergency for
                COVID-19, we are adding a new paragraph (e)(4) to Sec. 417.454 to
                require section 1876 cost plans to cover without cost sharing the
                COVID-19 vaccine and its administration described in section
                1861(s)(10)(A) of the Act without cost sharing for the duration of the
                PHE for the COVID-19 pandemic, specifically the end of the emergency
                period defined in paragraph (1)(B) of section 1135(g) of the Act, which
                is the PHE declared by the Secretary on January 31, 2020 and any
                renewals thereof.
                B. COVID-19 Vaccine Coverage for Medicaid, CHIP, and BHP Beneficiaries
                 Under section 6008 of the FFCRA, states' and territories' Medicaid
                programs may receive a temporary 6.2 percentage point increase in the
                Federal Medical Assistance Percentage (FMAP). Under section 6008(b)(4)
                of the FFCRA, to receive that increase, a state or territory must cover
                COVID-19 testing services and treatments, including vaccines and the
                administration of such vaccines, for Medicaid enrollees without cost
                sharing. That coverage is required during any quarter for which the
                state or territory claims the temporary FMAP increase under FFCRA
                section 6008, and the FMAP increase is available through the end of the
                quarter in which the PHE for COVID-19 ends. CMS is not aware of any
                states or territories not currently claiming this temporary FMAP
                increase, or of any state or territory that intends to cease claiming
                it. Accordingly, Medicaid coverage of a COVID-19 vaccine and its
                administration, without cost-sharing, is expected to be available for
                most
                [[Page 71149]]
                Medicaid beneficiaries through the end of the quarter in which the PHE
                for COVID-19 ends. For the remainder of this section of preamble,
                references to ``state'' or ``states'' in discussions of Medicaid policy
                also include the territories.
                 To meet the requirement in FFCRA section 6008(b)(4) to cover a
                COVID-19 vaccine and its administration without cost sharing, states
                must compensate Medicaid providers with a vaccine administration fee or
                reimbursement for a provider visit during which a vaccine dose is
                administered, even if the vaccine dose is furnished to the provider at
                no cost.
                 There are some very limited circumstances in which the FFCRA
                section 6008(b)(4) coverage requirements would not apply. CMS has not
                interpreted section 6008(b)(4) of the FFCRA to require that state
                Medicaid programs cover the services described in that provision for
                individuals whose Medicaid eligibility is limited by statute to only a
                narrow range of benefits that would not otherwise include these
                services. FFCRA section 6008(b)(4) did not amend the varying benefits
                packages that are required for different Medicaid eligibility groups
                under section 1902(a)(10) of the Act. In some cases, beneficiaries'
                coverage is limited by statute to a very narrow range of benefits and
                services that typically would not include services described in FFCRA
                section 6008(b)(4), such as COVID-19 vaccines or their administration
                (see, e.g., the limitations described in the matter following section
                1902(a)(10)(G) of the Act for some Medicaid eligibility groups). Nor
                did FFCRA section 6008(b)(4) direct states to amend existing
                demonstration projects under section 1115(a) of the Act, through which
                states may offer eligibility to groups not otherwise eligible under
                title XIX of the Act, and can opt to provide these groups with limited
                benefits. Moreover, after FFCRA was enacted, in section 3716 of the
                CARES Act (Pub. L. 116-136), Congress defined eligibility for the
                COVID-19 testing-only optional Medicaid eligibility group described in
                section 1902(a)(10)(A)(ii)(XXIII) of the Act in a manner that
                recognized that certain limited-benefit Medicaid eligibility groups are
                ``uninsured,'' and therefore eligible to receive coverage for COVID-19
                testing under that provision, without referring to or acknowledging the
                FFCRA section 6008(b)(4) COVID-19 testing coverage requirement. See
                section 1902(ss) of the Act. Accordingly, CMS does not interpret FFCRA
                section 6008(b)(4) to require states to provide COVID-19 testing and
                treatment services without cost-sharing, including vaccines and their
                administration, to eligibility groups whose coverage is limited by
                statute or under an existing section 1115 demonstration to a narrow
                range of benefits that would not ordinarily include this coverage, such
                as groups that receive Medicaid coverage only for COVID-19 testing,
                family planning services and supplies, or tuberculosis-related
                services. The COVID-19 Claims Reimbursement to Health Care Providers
                and Facilities for Testing and Treatment of the Uninsured Program
                (COVID-19 Claims Reimbursement program) administered by the Health
                Resources and Services Administration (HRSA) is available for
                reimbursement of a COVID-19 vaccine and vaccine administration costs
                for individuals who would not receive Medicaid coverage for a COVID-19
                vaccine or its administration because their Medicaid coverage is for
                limited benefit packages only.
                 After the requirements in section 6008(b)(4) of FFCRA are no longer
                in effect in a state, the state must cover COVID-19 vaccines
                recommended by the ACIP, and their administration, for several
                populations under existing statutory and regulatory authority. All
                Medicaid-enrolled children under the age of 21 eligible for the Early
                and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit must
                receive ACIP-recommended vaccines pursuant to section 1905(r)(1)(A)(i)
                and (B)(iii) of the Act.\12\ Coverage of ACIP-recommended vaccines
                without cost-sharing is required for any adult populations who receive
                coverage through Alternative Benefit Plans (ABPs), including the adult
                expansion population described at section 1902(a)(10)(A)(i)(VIII) of
                the Act, pursuant to section 1937(b)(5) of the Act, 42 CFR 440.347(a),
                and 45 CFR 156.115(a)(4) and 147.130. Some states may also elect to
                receive a 1 percentage point FMAP increase for their expenditures on
                certain services, in return for covering ACIP-recommended vaccines and
                their administration without cost-sharing for adults under section
                1905(a)(13) of the Act, pursuant to section 4106 of PPACA (as codified
                in section 1905(b) of the Act). Children through age 18 who are
                eligible for Medicaid (funded through both titles XIX and XXI), as well
                as children who are uninsured, who are not insured with respect to the
                vaccine and who are administered pediatric vaccines by a federally
                qualified health center (FQHC) or rural health clinic, or who are
                Indians (as defined in section 4 of the Indian Health Care Improvement
                Act) receive ACIP-recommended vaccinations through the Vaccines for
                Children (VFC) program, described at section 1928 of the Act. The
                Centers for Disease Control and Prevention (CDC) will determine if
                COVID-19 vaccines will be included in the VFC program. Coverage of the
                administration of a VFC-covered vaccine for Medicaid-eligible children
                would be provided by the state Medicaid program.
                ---------------------------------------------------------------------------
                 \12\ Medicaid enrolled children up to the age of 18 are
                generally exempt from cost sharing. For children age 19 or 20 cost
                sharing for an ACIP-recommended vaccine may apply, outside of an
                Alternative Benefit Plan.
                ---------------------------------------------------------------------------
                 After the FFCRA section 6008(b)(4) requirements are no longer in
                effect in a state, the state also has the option to cover a COVID-19
                vaccine and its administration for other eligibility groups. Such
                groups include the parent/caretaker relative eligibility group at 42
                CFR 435.110, eligibility groups for individuals who are age 65 or older
                or who are eligible on the basis of blindness or a disability, and
                pregnant women enrolled under 42 CFR 435.116 who are eligible for full
                state plan benefits. If a state elects to cover a COVID-19 vaccine and
                its administration for any one of these groups, it must do so for all
                of them, except that with respect to the pregnant women group described
                in 42 CFR 435.116, per 42 CFR 440.250(p) states can cover a vaccine and
                its administration as a pregnancy-related service while not providing
                the same coverage for the other eligibility groups. Outside of the
                period in which FFCRA section 6008(b)(4) applies to a state, the state
                has the option to apply cost sharing to coverage of a COVID-19 vaccine
                or its administration unless the beneficiary is in an eligibility group
                that is exempt from cost-sharing under section 1916 or section 1916A of
                the Act and regulations at 42 CFR 447.56 (for example, most children
                under age 18, most pregnant women, most children in foster care,
                individuals receiving services in an institution that already had their
                medical assistance reduced by their income, individuals receiving
                hospice care, and Indians who are currently receiving or have ever
                received an item or service furnished by an Indian health care provider
                or through referral under contract health services).
                 After the FFCRA section 6008(b)(4) requirements are no longer in
                effect in a state, a COVID-19 vaccine and its administration could also
                be a covered service for many Medicaid eligibility groups when
                furnished by a participating provider under certain Medicaid benefits
                that are mandatory for many Medicaid eligibility groups,
                [[Page 71150]]
                depending on how the state has defined the amount, duration, and scope
                parameters of the benefit. Because inpatient and outpatient hospital
                services, physician services, and Federally Qualified Health Center and
                Rural Health Clinic services are mandatory Medicaid benefits for the
                categorically needy populations, COVID-19 vaccine administration could
                be a covered service for many Medicaid beneficiaries when provided by
                these participating providers, at state option. States might also cover
                COVID-19 vaccine administration for beneficiaries under various
                optional state plan benefits, such as the ``other licensed
                practitioner'' benefit described in section 1905(a)(6) of the Act and
                42 CFR 440.60, or the ``preventive services'' benefit described in
                section 1905(a)(13) of the Act and 42 CFR 440.130(c). However, states
                would generally not have the option to cover a COVID-19 vaccine or its
                administration for any group whose coverage is limited by statute or
                under a current section 1115 demonstration to a narrow range of
                benefits that would not ordinarily include vaccine coverage. As
                described above, the COVID-19 Claims Reimbursement program administered
                by HRSA may be used to cover COVID-19 treatment, including the
                administration of vaccines, for such limited-benefit beneficiaries. In
                addition, a state might have the option, subject to Federal approval,
                to propose or amend a section 1115 demonstration to include this
                coverage for a group that would not otherwise be entitled to receive it
                under the statute or under current section 1115 authority.
                 The FFCRA section 6008(b)(4) requirement does not apply to separate
                CHIPs.\13\ In separate CHIPs, states must cover ACIP-recommended
                vaccines and their administration for all children under age 19 with no
                cost sharing. See section 2103(c)(1)(D) and (e)(2) of the Act, and 42
                CFR 457.410(b)(2) and 457.520(b)(4). Coverage of uninsured pregnant
                women in a separate CHIP is optional. Currently, the states that cover
                pregnant women in a separate CHIP include all ACIP-recommended vaccines
                with no cost sharing in this coverage. However, current CMS
                interpretation is that this vaccine coverage is not required.
                ---------------------------------------------------------------------------
                 \13\ In states that use title XXI funding to expand Medicaid
                eligibility for children, the FFCRA section 6008(b)(4) requirements
                apply to these title XXI funded Medicaid beneficiaries in the same
                way that they do to all other Medicaid beneficiaries.
                ---------------------------------------------------------------------------
                 The FFCRA section 6008(b)(4) requirement also does not apply to the
                Basic Health Program (BHP). Minnesota and New York are the only states
                that currently operate a BHP. BHP coverage must include benefits in at
                least the ten essential health benefits described in section 1302(b) of
                the PPACA and must comply with the Exchange's cost-sharing
                protections,\14\ which includes providing all ACIP recommended vaccines
                without cost sharing. See sections 1331(a)(1), (a)(2)(B) and (b)(2) of
                PPACA, and 42 CFR 600.405(a) and 600.510(b).
                ---------------------------------------------------------------------------
                 \14\ As explained in rulemaking, this includes the prohibition
                on cost sharing for preventive health services. See the Basic Health
                Program: State Administration of Basic Health Programs; Eligibility
                and Enrollment in Standard Health Plans; Essential Health Benefits
                in Standard Health Plans; Performance Standards for Basic Health
                Programs; Premium and Cost Sharing for Basic Health Programs;
                Federal Funding Process; Trust Fund and Financial Integrity; Final
                Rule. 79 FR 14111 at 14128 (March 12, 2014).
                ---------------------------------------------------------------------------
                 Section 600.510(b) cross-references 45 CFR 147.130, which
                establishes requirements related to the coverage of preventive health
                services for BHP. For ABPs, 42 CFR 440.347 cross-references 45 CFR part
                156, which incorporates 45 CFR 147.130, which establishes requirements
                related to the coverage of preventive health services. Consistent with
                the changes to 45 CFR 147.130 made through this rulemaking, during the
                COVID-19 public health emergency BHP plans and Medicaid ABPs must
                provide coverage for and must not impose any cost-sharing for
                ``qualifying coronavirus preventive services,'' including a COVID
                vaccine, regardless of whether the vaccine is delivered by an in-
                network or out-of-network provider. For details on the coverage
                requirements for ``qualifying coronavirus preventive services'' and the
                updates to 45 CFR 147.130 see section III of this IFC.
                 Lastly, we note that CMS intends this section only to be a
                description of current policy and existing law, with the exception
                noted directly above for BHP and Medicaid ABPs, and that CMS is not
                making any changes to its current policy or regulatory requirements in
                this rule.
                C. Price Transparency for COVID-19 Diagnostic Tests
                1. Introduction
                 Robust COVID-19 diagnostic testing is fundamental to the Federal
                Government's strategy for controlling the spread of COVID-19.\15\ In
                recognition of the importance of COVID-19 diagnostic testing, the
                Federal Government has taken several steps to reduce financial barriers
                to testing for both insured and uninsured individuals, including the
                following:
                ---------------------------------------------------------------------------
                 \15\ The White House, CDC and FDA document: Testing Overview,
                Opening Up America Again. Available at: https://www.whitehouse.gov/wp-content/uploads/2020/04/Testing-Overview-Final.pdf.
                ---------------------------------------------------------------------------
                 The FFCRA was enacted on March 18, 2020. Section 6001 of
                the FFCRA generally requires group health plans and health insurance
                issuers offering group or individual health insurance coverage to
                provide coverage for certain items and services, including in vitro
                diagnostic testing products for the detection of SARS-CoV-2, the virus
                that causes COVID-19, or the diagnosis of COVID-19 (referred to herein
                collectively as COVID-19 diagnostic tests) when those items or services
                are furnished on or after March 18, 2020, and during the PHE for COVID-
                19. Plans and issuers must provide this coverage without imposing any
                cost-sharing requirements (including deductibles, copayments, and
                coinsurance) or prior authorization or other medical management
                requirements. Related items and services include those provided during
                urgent care center visits, in-person and telehealth office visits, and
                emergency room visits that result in an order for or administration of
                an in vitro diagnostic product, to the extent that such items and
                services relate to the furnishing or administration of a COVID-19
                diagnostic test, or to the evaluation of an individual for purposes of
                determining the need of the individual for a COVID-19 diagnostic test.
                Section 3201 of the CARES Act, enacted on March 27, 2020, amended
                section 6001 of the FFCRA to include a broader range of diagnostic
                tests that plans and issuers must cover without any cost-sharing
                requirements or prior authorization or other medical management
                requirements.
                 The COVID-19 Claims Reimbursement to Health Care Providers
                and Facilities for Testing and Treatment of the Uninsured Program
                provides reimbursements on a rolling basis directly to eligible
                providers for claims that are attributed to the testing and treatment
                of COVID-19 for certain uninsured individuals. The program is funded
                via (1) the FFCRA Relief Fund, which includes funds received from the
                Public Health and Social Services Emergency Fund, as appropriated in
                the FFCRA and the Paycheck Protection Program and Health Care
                Enhancement Act (PPPHCEA) (Pub. L. 116-139), which each appropriated
                funding to reimburse providers for conducting COVID-19 testing for the
                uninsured, and (2) the Provider Relief Fund, as appropriated in the
                CARES Act and the PPPHCEA.\16\
                ---------------------------------------------------------------------------
                 \16\ FAQs for COVID-19 Claims Reimbursement to Health Care
                Providers and Facilities for Testing and Treatment of the Uninsured.
                Available at https://www.hrsa.gov/coviduninsuredclaim/frequently-asked-questions.
                ---------------------------------------------------------------------------
                [[Page 71151]]
                 HHS has partnered with pharmacies, retail companies, and
                health centers nationwide to make no-cost COVID-19 diagnostic testing
                available to Americans in communities across the country.\17\
                ---------------------------------------------------------------------------
                 \17\ Information on Community-Based Testing Sites for COVID-19
                can be found at https://www.hhs.gov/coronavirus/community-based-testing-sites/index.html.
                ---------------------------------------------------------------------------
                 Congress has also taken steps to facilitate the reimbursement for
                COVID-19 diagnostic testing and to ensure that pricing for performance
                of such testing is publicly available. Specifically, section 3202(a) of
                the CARES Act requires group health plans and issuers providing
                coverage for items and services described in section 6001(a) of the
                FFCRA to reimburse any provider of a COVID-19 diagnostic test an amount
                that equals the negotiated rate, or, if the plan or issuer does not
                have a negotiated rate with the provider, the cash price for such
                service that is listed by the provider on a public website. The plan or
                issuer may also negotiate a rate with the provider that is lower than
                the cash price. More information related to health insurance issuer and
                group health plan coverage and reimbursement for COVID-19 diagnostic
                testing is available at https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf and https://www.cms.gov/files/document/FFCRA-Part-43-FAQs.pdf. Specifically, the Departments note that the reimbursement
                requirements under CARES Act 3202(a) will apply to COVID-19 diagnostic
                testing, as defined in this IFC.
                 Section 3202(b) of the CARES Act establishes a requirement for each
                provider of a diagnostic test for COVID-19 to publicize cash prices for
                such COVID-19 diagnostic testing. Specifically, section 3202(b)(1) of
                the CARES Act requires each provider of a diagnostic test for COVID-19
                to make public the cash price for such test on a public internet
                website of such provider during the emergency period declared under
                section 319 of the PHS Act. Section 3202(b)(2) of the CARES Act
                authorizes the Secretary to impose a civil monetary penalty (CMP) on
                any provider of a diagnostic test for COVID-19 that does not make
                public its cash price for such test in compliance with section
                3202(b)(1) of the CARES Act and that has not completed a corrective
                action plan (CAP) to comply with that section. The statute states that
                the amount of the CMP must not exceed $300 per day that the violation
                is ongoing.
                 We believe that cash price posting by providers of diagnostic tests
                for COVID-19 is important for not only for plans and issuers that must
                comply under section 3202(a) of the CARES Act but also for individuals
                who seek COVID-19 diagnostic testing.
                 Therefore, we are adopting in this IFC policies that implement the
                requirement in section 3202(b) of the CARES Act that providers of
                diagnostic tests for COVID-19 make public their cash price for such
                tests on the internet. Specifically, we are finalizing the following:
                (1) Definitions of ``provider of a diagnostic test for COVID-19''
                (herein referred to as ``provider''), ``diagnostic test for COVID-19''
                (herein referred to as ``COVID-19 diagnostic test''), and ``cash
                price''; (2) requirements for making public cash prices; and (3)
                penalties for non-compliance with the cash price posting requirements.
                2. Requirement That Providers of COVID-19 Diagnostic Tests Make Public
                Cash Prices for COVID-19 Diagnostic Tests
                 The rapid expansion of COVID-19 related diagnostic testing capacity
                is a top priority in HHS' strategy to combat the pandemic. COVID-19
                diagnostic testing is generally performed by laboratories located in a
                variety of sites, including for example: Government labs; hospital-run
                labs; clinician offices; stand-alone labs; urgent care centers; and
                pharmacies. There are several types of COVID-19 tests designed to
                detect SARS-CoV-2 or to diagnose a possible case of COVID-19, including
                molecular (RT-PCR) tests, which are used to detect the virus's genetic
                material, and antigen tests, which are used to detect specific proteins
                on the surface of the virus and serology testing, which is used to look
                for the presence of antibodies produced by the body in response to
                infections.
                 For purposes of implementing section 3202(b) of the CARES Act, we
                are adopting a new 45 CFR part 182, ``Price Transparency for COVID-19
                Diagnostic Tests,'' that will implement price transparency requirements
                for making public cash prices for performance of a COVID-19 diagnostic
                test. Section 182.10 states that part 182 implements section 3202(b) of
                the CARES Act.
                 For purposes of section 6001(a)(1) of the FFCRA, as amended by
                section 3201 of the CARES Act, and as explained in guidance issued by
                the Departments, COVID-19 diagnostic tests include all in vitro
                diagnostic tests, which include molecular, antigen, and serological
                tests. Specifically, section 6001(a) of the FFCRA, as amended by
                section 3201 of the CARES Act, requires plans and issuers to provide
                coverage for an in vitro diagnostic test, as defined in 21 CFR 809.3(a)
                (or its successor regulations), for the detection of SARS-CoV-2 or
                diagnosis of COVID-19, and the administration of such a test that: (1)
                Is approved, cleared, or authorized under section 510(k), 513, 515, or
                564 of the FD&C Act (21 U.S.C. 360(k), 360c, 360e, 360bbb-3); (2) the
                developer has requested, or intends to request, emergency use
                authorization under section 564 of the FD&C Act (21 U.S.C. 360bbb-3),
                unless and until the emergency use authorization request under such
                section 564 has been denied or the developer of such test does not
                submit a request under such section within a reasonable timeframe; (3)
                is developed in and authorized by a state that has notified the
                Secretary of HHS of its intention to review tests intended to diagnose
                COVID-19; or (4) other tests that the Secretary of HHS determines
                appropriate in guidance.\18\ We are therefore at Sec. 182.20 defining
                a ``diagnostic test for COVID-19'' (also referred to as a ``COVID-19
                diagnostic test'') as a COVID-19 in vitro diagnostic test described in
                section 6001 of the FFCRA, as amended by section 3201 of the CARES Act.
                Such COVID-19 diagnostic tests are currently billed by providers using
                HCPCS and CPT codes including, but not limited to: CPT codes 86408,
                86409, 87635, 87426, 86328, and 86769 and HCPCS codes U0001 through
                U0004. We intend this list of billing codes to be illustrative,
                however, not exhaustive. Therefore, as noted previously, a ``COVID-19
                diagnostic test'' is defined as a COVID-19 in vitro diagnostic test
                described in section 6001 of the FFCRA, as amended by section 3201 of
                the CARES Act, even if a particular COVID-19 diagnostic test or its
                billing code is not included on this list. Codes continue to be created
                to address new and proprietary tests as they are developed. We
                therefore anticipate updating this list in guidance as new tests and
                codes are developed.
                ---------------------------------------------------------------------------
                 \18\ See Q3 of FAQs About Families First Coronavirus Response
                Act and Coronavirus Aid, Relief, And Economic Security Act
                Implementation Part 42 available at: https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf.
                ---------------------------------------------------------------------------
                 Obtaining a diagnostic test for COVID-19 generally can involve up
                to three separate health care services for an individual including
                evaluation by a practitioner of the need for such testing, and, once
                the provider determines the need for a COVID-19 diagnostic test,
                specimen collection and laboratory analysis of the specimen, that is,
                actual performance of a COVID-19 diagnostic
                [[Page 71152]]
                test. For purposes of implementing section 3202(b), we are defining
                ``provider of a diagnostic test for COVID-19'' (herein referred to as
                ``provider'') as any facility that performs one or more COVID-19
                diagnostic tests. CMS regulates all laboratory testing performed on
                humans for the purposes of diagnosis, prevention, or treatment in the
                U.S. through the Clinical Laboratory Improvement Amendments CLIA
                program (42 U.S.C. 263a). In order to perform COVID-19 testing, a
                facility (whether that be a primary care provider's office, urgent care
                center, outpatient hospital site or stand-alone laboratory) is required
                to hold a CLIA certificate based on the complexity of the testing
                performed by the facility. Therefore, we expect that any ``provider of
                a diagnostic test for COVID-19'' would either hold or have submitted a
                CLIA application necessary to obtain a CLIA certificate (including a
                certificate of waiver, as applicable) and that such testing would occur
                in facilities ranging from primary care provider offices to urgent care
                centers to stand-alone national laboratories.
                 At Sec. 182.20, we are defining ``cash price'' as the charge that
                applies to an individual who pays in cash (or cash equivalent) for a
                COVID-19 diagnostic test. We believe this definition will provide a
                clear point of reference not only for individuals who seek such tests,
                but also for payers who wish to negotiate reimbursement rates with
                providers of diagnostic tests for COVID-19, or who wish to help direct
                their members to providers of diagnostic tests for COVID-19 who charge
                cash prices that payers believe to be reasonable. The ``cash price'' is
                generally analogous to the ``discounted cash price'' as defined at 45
                CFR 180.20 for purposes of the Hospital Price Transparency final rule.
                As we explained in that rule, providers often offer discounts off their
                gross charges or make other concessions to individuals who pay for
                their own care (referred to as self-pay individuals) (84 FR 65524). We
                also stated that the discounted cash price may be generally analogous
                to the ``walk-in'' rate that would apply to all self-pay individuals,
                regardless of insurance status, who pay in cash at the time of the
                service, and that such charges are often lower than the rate the
                hospital negotiates with third party payers because billing self-pay
                individuals would not require many of the administrative functions that
                exist for hospitals to seek payment from third party payers (for
                example, prior authorization and billing
                functions).19 20 21 22 It is therefore our expectation that
                the ``cash price'' established by the provider will be generally
                similar to, or lower than, rates negotiated with in-network plans and
                insurers. If a provider has not established a ``cash price'' for a
                COVID-19 diagnostic test that is lower than its gross charge or retail
                rate, the provider must make public the undiscounted gross or retail
                rate found in its master price list (which is analogous to the
                hospital's chargemaster). We do not believe that posting a ``cash
                price'' should prevent a provider of a diagnostic test for COVID-19
                from offering testing for free to individuals as charity care or in an
                effort to combat the public health crisis, rather, the ``cash price''
                would be the maximum charge that may apply to a self-pay individual
                paying out-of-pocket. We solicit comment on this approach and whether
                any additional standards should be implemented to address any potential
                abuse.
                ---------------------------------------------------------------------------
                 \19\ Rosato D. How Paying Your Doctor in Cash Could Save You
                Money. Consumer Reports. May 4, 2018. Available at: https://www.consumerreports.org/healthcare-costs/how-paying-your-doctor-in-cash-could-save-you-money/.
                 \20\ David Lazarus. Insured price: $2,758. Cash price: $521.
                Could our Healthcare System by any Dumber? Los Angeles Times. July
                30, 2019. Available at: https://www.latimes.com/business/story/2019-07-29/column-could-our-healthcare-system-be-any-dumber.
                 \21\ Beck M. How to Cut Your Health-Care Bill: Pay Cash. The
                Wall Street Journal. February 15, 2016. Available at: https://www.wsj.com/articles/how-to-cut-your-health-care-bill-pay-cash-1455592277.
                 \22\ Dr. Steven Goldstein. Patients Can Save Money When They Pay
                Their Doctor In Cash. Houston Healthcare Initiative. August 10,
                2020. Available at: https://houstonhealthcareinitiative.org/patients-can-save-money-when-they-pay-their-doctor-in-cash/.
                ---------------------------------------------------------------------------
                 Under new Sec. 182.30(a) and (b), these requirements apply to a
                ``provider of a diagnostic test for COVID-19'' as defined at Sec.
                182.20 and are applicable during the PHE for COVID-19 determined to
                exist nationwide as of January 27, 2020, by the HHS Secretary under
                section 319 of the PHS on January 31, 2020, as a result of confirmed
                cases of COVID-19, including any subsequent renewals.
                 Finally, section 3202(b)(1) of the CARES Act states that each
                provider of a diagnostic test for COVID-19 shall make public the cash
                price for such test on a public internet website of such provider. We
                interpret this to mean that providers must make public the cash prices
                for performing COVID-19 diagnostic tests on the provider's internet
                website. Specifically, as discussed below, Sec. 182.40(a)(1) and (2)
                require that each provider of a COVID-19 diagnostic test that has a
                website make public the cash price information described in Sec.
                182.40(c) electronically, and that the information itself, or a link to
                a web page that contains such information, must appear in a conspicuous
                location on a searchable homepage on the provider's website. We
                recognize that some providers of a COVID-19 diagnostic test, for
                example, small or rural providers, may not have websites. Therefore, in
                the event that a provider does not have a website on which to post this
                cash price information, we are finalizing a policy at Sec. 182.40(b)
                to require the provider to make public its cash price information in
                writing upon request within two business days and by posting signage
                prominently at the location where the provider offers a COVID-19
                diagnostic test in a place likely to be viewed by members of the public
                seeking to obtain and pay for such testing. If the provider does not
                have its own website or a publicly accessible location then, upon
                request and within two business days, the provider will be required to
                make public its cash price information in writing to the requestor but
                will not be required to post signage at the location where it performs
                the COVID-19 diagnostic test. For purposes of complying with the
                requirement that the cash price information be made public in writing,
                we will consider email correspondence to the requester to be an
                acceptable written format. We believe these policies will help ensure
                that the public (including individuals, issuers, health plans, and
                others) has access to every provider's COVID-19 diagnostic test cash
                prices, including those providers who do not perform COVID-19
                diagnostic tests at publicly accessible locations. We seek comment on
                these issues, including the frequency by which providers may not have
                websites.
                 Furthermore, at Sec. 182.40(a)(3), we are requiring that providers
                of a COVID-19 diagnostic test display their cash price information in
                an easily accessible manner, without barriers, including, but not
                limited to, ensuring the information is accessible: Free of charge;
                without having to establish a user account or password; and without
                having to submit personal identifiable information (PII). In addition,
                we are requiring at Sec. 182.40(a)(4) that the provider's homepage
                contain certain keywords that we believe will increase the likelihood
                that the public will be able to locate the information using a search
                engine. Specifically, Sec. 182.40(a)(4) requires that all of the
                following terms be included on the provider's homepage: The provider's
                name; ``price''; ``cost''; ``test''; ``COVID''; and ``coronavirus.'' We
                seek
                [[Page 71153]]
                comment on whether providers should have flexibility to select between
                using ``COVID'' or ``coronavirus'' and between ``cost'' and ``price''
                if the provider is linking to the information from its homepage.
                 Finally, we believe that it is important for the provider to
                include certain standardized information so that the public can
                understand the relationship between the posted cash price and the
                COVID-19 diagnostic test(s) offered by the provider. Therefore, at
                Sec. 182.40(c)(1) through (4), we are requiring all providers to make
                public, along with the cash price for each COVID-19 diagnostic test(s)
                that they offer, information that, at minimum, includes a plain
                language description of each COVID-19 diagnostic test, the
                corresponding cash price, the billing code(s) for each such test(s),
                and any additional information as may be necessary for the public to be
                certain of the cash price for a particular COVID-19 diagnostic test.
                For example, if the provider offers the same test at a different cash
                price that is dependent on location or some other factor, then on its
                website listing of cash prices, the provider must indicate all the cash
                prices that apply to the test and relevant distinguishing information
                as to when each different cash price applies. We believe that this
                information is necessary for the public, including group health plans
                and health insurance issuers offering group or individual health
                insurance coverage that must provide reimbursement for COVID-19
                diagnostic testing pursuant to the requirements of section 3202(a) of
                the CARES Act. This requirement applies to cash price information
                posted on the provider's website, made available upon request and,
                where applicable, on signage.
                 These requirements are applicable immediately; however, we seek
                comment on these requirements and may, as a result of public comment,
                revise these requirements or finalize additional requirements. We also
                specifically seek comment on the definition of ``diagnostic test for
                COVID-19'' as solely a COVID-19 in vitro diagnostic test described in
                section 6001 of FFCRA.
                 We seek comment on the definition of ``provider of a COVID-19
                diagnostic test''. We seek comment on whether consumers may benefit
                from knowing the total cost of care for receiving a COVID-19 test,
                including the doctor's visit and specimen collection, in order to
                protect themselves against potential unexpected health care costs and
                make a more informed health care purchasing decision and therefore
                whether we should adopt a more inclusive definition of a provider of a
                diagnostic test for purposes of this requirement. Specifically, we seek
                comment on whether a ``provider of a diagnostic test for COVID-19''
                should be expanded to include providers that perform additional
                services related to the performance of a COVID-19 diagnostic test, such
                as for specimen collection or mileage fees that may be billed as part
                of or in conjunction with the specimen collection, if applicable. We
                are particularly interested in submissions from stakeholders that
                include data, both anecdotal and claims-based, on the ways in which
                consumers request and receive COVID-19 diagnostic testing, including
                the site of care, frequency, and type of provider.
                 We seek comment on the definition of ``cash price''. We have heard
                concerns from stakeholders that certain providers may use the posting
                of a ``cash price'' as an opportunity to ``price
                gouge''.23 24 25 We therefore specifically seek comment on
                whether this definition or some other definition would help to mitigate
                concerns for price gouging by out-of-network providers. We seek comment
                on whether there are additional authorities and safeguards that could
                be used to mitigate concerns for price gouging both for group health
                plans and issuers and for consumers receiving a COVID-19 diagnostic
                test.
                ---------------------------------------------------------------------------
                 \23\ Morgan Haefner. Out-of-network Providers Price Gouging
                COVID-19 tests, AHIP says. Becker's Hospital Review Newsletter.
                August 28, 2020. Available at: https://www.beckershospitalreview.com/payer-issues/out-of-network-providers-price-gouging-covid-19-tests-ahip-says.html.
                 \24\ Susannah Luthi. The $7,000 COVID Test: Why States are
                Stepping in to Shield Consumers. POLITICO. June 8, 2020. Available
                at: https://www.politico.com/news/2020/06/08/coronavirus-test-costs-304058.
                 \25\ Ken Alltucker. `I was floored': Coronavirus test prices
                charged by some hospitals and labs stun consumers, spur questions.
                USA Today. September 15, 2020. Available at: https://www.usatoday.com/story/news/health/2020/09/15/covid-test-prices-hospitals-scrutiny-congress-insurers-consumers/3472304001/.
                ---------------------------------------------------------------------------
                 We seek comment regarding whether these requirements are sufficient
                to inform consumers of the cash price for a COVID-19 diagnostic test in
                advance of receiving one and what, if any, additional requirements or
                safeguards should be considered to avoid consumer confusion or prevent
                unintended consequences (for example, balance billing). Specifically,
                we seek comment regarding how providers should post cash prices so that
                they do not inadvertently deter consumers from seeking a test that
                would normally result in no out-of-pocket cost to the consumer.
                 Finally, we seek comment on an approach that balances priorities to
                further price transparency for consumers and other stakeholders and
                reduce barriers to COVID-19 testing. We recognize that these final
                policies become effective as of the date of display of this IFC and are
                applicable only until the end of the PHE. Even so, we seek comment
                whether and to what extent these final policies and the alternatives
                about which we are seeking comment (for instance, expansion of the
                definition of ``provider'') may lead to:
                 Potential cost shifting from providers or participants,
                beneficiaries, and enrollees to group health plans or issuers, if the
                group health plan and issuer reimbursement obligation for COVID-19
                diagnostic testing is expanded to cover such testing without cost-
                sharing (including deductibles, co-pays, and co-insurance) and as
                payment in full for items and services that were not previously covered
                in such a manner by group health plans or issuers.
                 Potential for group health plans or issuers to negotiate
                rates that are lower than the cash price with out-of-network providers
                with whom they do not have established negotiated rates.
                 Price gouging or other anti-competitive behavior (under
                both the policies and the alternatives for which we seek comment) by
                providers as well as any potential negative impact on premiums in the
                future that have not already been accounted for in 2021 rates. Please
                provide empirical evidence, if any, including based on claims data
                during the PHE for COVID-19.
                 Potential savings to issuers and plans from insured
                consumers seeking out COVID-19 diagnostic testing from in-network
                providers, as opposed to the provider of their choice, as a result of
                these increased price transparency requirements.
                 Price sensitivity by consumers covered by group health
                plans or issuers in their choice of provider, and awareness of any
                potential cost-shifting to group health plans or issuers, or to
                consumers themselves through balance billing, as a result of these
                increased price transparency requirements.
                 Transparency benefits for the uninsured, who may already
                have an incentive to find the lowest price.
                 Group health plans or issuers taking on new consumer
                education or other potential costs, for example, costs associated with
                incentivizing consumers covered by group health plans or issuers to
                stay in network or seek care from lower cost providers.
                [[Page 71154]]
                3. Monitoring and Enforcement of Requirements To Publicize Cash Prices
                for COVID-19 Diagnostic Tests
                 Section 3202(b)(2) of the CARES Act authorizes and provides the
                Secretary discretion to impose a CMP on any provider of a diagnostic
                test for COVID-19 that is not in compliance with section 3202(b)(1) of
                the CARES Act and has not completed a CAP to comply with the
                requirements of such paragraph, in an amount not to exceed $300 per day
                that the violation is ongoing. In this IFC, we are adopting mechanisms
                to monitor the requirement that a provider of a diagnostic test for
                COVID-19 publicize the cash price for diagnostic testing and enforce
                these requirements, as necessary.
                a. Monitoring for Noncompliance and Pre-Penalty Actions
                 Section 3202(b)(1) of the CARES Act does not prescribe monitoring
                procedures or the factors we should consider in imposing penalties on
                providers for noncompliance. We anticipate relying predominantly on
                complaints made to CMS by the public, including individuals, as well as
                issuers and plans, regarding providers' potential noncompliance.
                Specifically, in response to such complaints, we may investigate and
                evaluate whether a provider has complied with the requirements
                discussed above. The monitoring methods for determining a provider's
                compliance with the requirements for publicizing the cash price for a
                COVID-19 diagnostic test may include, but are not limited to, the
                following, as appropriate:
                 CMS' evaluation of complaints made to CMS.
                 CMS' review of an individual's or entity's analysis of
                noncompliance as stated in the complaint.
                 CMS' review of providers' websites or, where a provider
                does not have a website, its written notice and signage.
                 The IFC includes these monitoring methods in the regulations at
                Sec. 182.50(a).
                 Additionally, at Sec. 182.50(b), we are finalizing discretion for
                CMS to take any of the following actions if CMS determines the provider
                is noncompliant with the requirements of Sec. 182.40:
                 Provide a written warning notice to the provider of the
                specific violation(s).
                 Request that a provider submit and comply with a CAP under
                Sec. 182.60.
                 Impose a CMP on the provider if the provider fails to
                respond to CMS' request to submit a CAP or to comply with the
                requirements of a CAP approved by CMS.
                 A provider that CMS identifies as noncompliant and to which it
                offers an opportunity to take corrective action to come into compliance
                may be notified via a warning notice of its deficiencies. In response
                to the warning letter, a provider may choose, but is not required, to
                submit documentation for CMS to review to determine compliance. CMS
                will review any documentation a provider may submit and, where
                applicable, a provider's website or other form of written notice, to
                determine if the provider's noncompliance has been corrected. In the
                event that a provider does not have its own website on which to post
                the cash price, CMS will require documentation that the provider has
                the cash price in written form timely upon request and, where
                applicable, has posted signage at the provider's facility.
                 At Sec. 182.60, we specify the requirements for CAPs.
                Specifically, Sec. 182.60(a) states that a provider may be required to
                submit a CAP if CMS determines a provider is noncompliant or the
                provider's noncompliance continues after a warning notice. A violation
                may include, but is not limited to, a provider's failure to make public
                its cash price information for COVID-19 diagnostic testing required by
                Sec. 182.40 and a provider's failure to make public its cash price
                information in the form and manner required under Sec. 180.40.
                 Section 182.60(b) states that CMS may request that a provider
                submit and comply with a CAP, specified in a notice of violation issued
                by CMS to a provider. Additionally, in Sec. 182.60(c), we specify the
                following provisions related to CAPs:
                 A provider required to submit a CAP must do so, in the
                form and manner, and by the deadline, specified in the notice of
                violation issued by CMS to the provider, and must comply with the
                requirements of the CAP approved by CMS.
                 A provider's CAP must specify elements including, but not
                limited to, the corrective actions or processes the provider will take
                to address the deficiency or deficiencies identified by CMS, and the
                timeframe by which the provider will complete the corrective action.
                 A CAP is subject to CMS review and approval. After CMS'
                review and approval of a provider's CAP, CMS may monitor and evaluate
                the provider's compliance with the corrective actions specified in the
                CAP.
                 Section 182.60(d) outlines the following provisions for identifying
                a provider's noncompliance with CAP requests and requirements:
                 A provider's failure to respond to CMS' request to submit
                a CAP includes failure to submit a CAP in the form, manner, or by the
                deadline, specified in a notice of violation issued by CMS to the
                provider.
                 A provider's failure to comply with the requirements of a
                CAP includes failure to correct violation(s) within the specified
                timeframes.
                 We seek comment on this approach for monitoring providers of COVID-
                19 diagnostic testing for compliance with these requirements.
                Specifically, we seek comments on relying predominantly on complaints
                to determine a provider's potential noncompliance. We further seek
                comments on issuing warning letters and requesting CAPs for violations
                related to making public cash prices for COVID-19 diagnostic testing.
                Additionally, we seek comments on the length of time we should specify
                in warning notices to allow corrections of violations before issuance
                of a request for CAP, and the length of time we should specify for
                providers to complete and return a CAP to CMS.
                b. Civil Monetary Penalties
                 Under section 3202(b)(2) of the CARES Act, CMS may impose a CMP on
                a provider that we identify as noncompliant. At Sec. 182.70, we are
                finalizing requirements related to imposition of CMPs. At Sec.
                182.70(a), we finalize a policy that CMS may impose a CMP on a provider
                that we identify as noncompliant with any of the requirements of Sec.
                182.40, and that fails to respond to CMS' request to submit a CAP or to
                comply with the requirements of a CAP approved by CMS described in
                Sec. 182.60(d).
                 Under the statute, the maximum daily dollar amount for a CMP to
                which a provider may be subject is $300, even if the provider is in
                violation of multiple discrete requirements of Sec. 182.40. The
                maximum daily amount of the CMP will be adjusted annually using the
                multiplier determined by the Office of Management and Budget (OMB) for
                annually adjusting CMP amounts under 45 CFR part 102. CMS will provide
                a written notice of imposition of a CMP to the provider via certified
                mail or another form of traceable carrier. The elements of this notice
                to the provider will include but are not limited to the following:
                 The basis for the provider's noncompliance, including, but
                not limited to, the following: CMS' determination as to which
                requirement(s) the provider has violated; and the provider's failure to
                respond to CMS' request to submit a
                [[Page 71155]]
                CAP or comply with the requirements of a CAP.
                 CMS' determination as to the effective date for the
                violation(s).
                 The amount of the penalty as of the date of the notice.
                 A statement that a CMP may continue to be imposed for
                continuing violation(s).
                 Payment instructions.
                 A statement of the provider's right to a hearing according
                to Sec. 182.90 of subpart D.
                 A statement that the provider's failure to request a
                hearing within 30 calendar days of the issuance of the notice permits
                the imposition of the penalty, and any subsequent penalties pursuant to
                continuing violations, without right of appeal.
                 CMS may issue subsequent notice(s) of imposition of a CMP,
                according to the aforementioned requirements (in short, where
                investigation reveals there is continuing justification), that result
                from the same instance(s) of noncompliance. A provider must pay the CMP
                in full within 60 calendar days after the date of the notice of
                imposition of a CMP from CMS. In the event a provider requests a
                hearing, under subpart D of 45 CFR part 182, the provider must pay the
                amount in full within 60 calendar days after the date of a final and
                binding decision to uphold, in whole or in part, the CMP. If the 60th
                calendar day is a weekend or a Federal holiday, then the timeframe is
                extended until the end of the next business day. Should a provider
                elect to appeal the CMP, and where the CMP is upheld only in part by a
                final and binding decision, CMS will issue a modified notice of
                imposition of a CMP, to conform to the adjudicated finding as specified
                in Sec. 182.70.
                 In the event a CMP is not paid in full within 60 days, CMS will
                follow the collections activities set forth in 45 CFR part 30.
                Generally, CMS will issue a written demand for payment no later than 30
                days after a debt is delinquent. For debts not paid by the date
                specified in the written demand, interest, charged at a rate
                established by the Secretary of the Treasury, shall accrue from the
                date of delinquency. CMS will transfer debts 180 days or more
                delinquent to the Department of Treasury for collection.
                 We seek comment on the approach we are establishing for imposing a
                CMP on a provider noncompliant with the regulations set forth in Sec.
                182.40. Specifically, we seek comments on the length of time allowed
                between issuance of the request for CAP and the imposition of a CMP. In
                addition, we seek comments on the amount of the CMP imposed per day up
                to the statutory maximum daily amount that would be applicable to all
                noncompliant providers.
                c. Appeals Process
                 We believe it is important to establish a fair administrative
                process by which providers may appeal CMS' decisions to impose
                penalties under the requirements established by Sec. 182.40. Through
                various programs, we have gained experience with administrative
                hearings and other processes to review CMS' determinations. That
                experience includes the processes we recently finalized in the CY 2020
                Hospital Outpatient Prospective Payment System (OPPS) Price
                Transparency Final Rule (84 FR 65524) and corresponding regulations at
                45 CFR part 180, which requires price transparency for hospitals, and
                we are aligning the procedures for the appeals process here with those
                procedures. Therefore, a provider upon which CMS has imposed a penalty
                under Sec. 182.70 may appeal that penalty in accordance with
                Sec. Sec. 180.100 and 180.110, subpart D, with conforming edits.
                 Generally, under this approach, a provider upon which CMS has
                imposed a penalty may request a hearing of that penalty before an
                Administrative Law Judge (ALJ). The CMS Administrator, at his or her
                discretion, may review in whole or in part the ALJ's decision. A
                provider against which a final order imposing a CMP is entered may
                obtain judicial review.
                 We specify at Sec. 182.80 the procedures for a provider to appeal
                the CMP imposed by CMS for its noncompliance with the requirements of
                Sec. 182.40 to an ALJ, and for the CMS Administrator, at his or her
                discretion, to review in whole or in part the ALJ's decision. In so
                doing, we apply the following conforming modifications to the text:
                 References to ``hospital'' are replaced by the term
                ``provider.'' We note that the term ``provider,'' as defined at new 45
                CFR 182.20 in this rule, may also include hospitals.
                 References to ``standard charge'' are replaced by the term
                ``cash price.''
                 We seek comment on the approach we are establishing for appeals.
                 We also set forth in Sec. 182.90 the consequences for failure of a
                provider to request a hearing. If a provider does not request a hearing
                within 30 calendar days of the issuance of the notice of imposition of
                a CMP described in Sec. 182.70(b), CMS may impose the CMP indicated in
                such notice and may impose additional penalties under continuing
                violations according to Sec. 182.70(e) without right of appeal. If the
                30th calendar day is a weekend or a Federal holiday, then the timeframe
                is extended until the end of the next business day. The provider has no
                right to appeal a penalty with respect to which it has not requested a
                hearing in accordance with 45 CFR 150.405, unless the provider can show
                good cause, as determined at Sec. 150.405(b), for failing to timely
                exercise its right to a hearing.
                D. Medicare Inpatient Prospective Payment System (IPPS) New COVID-19
                Treatments Add-On Payment (NCTAP) for the Remainder of the Public
                Health Emergency (PHE)
                1. Section 3710 of the CARES Act IPPS Add-On Payment for COVID-19
                Patients During the PHE
                 Section 3710 of the CARES Act amended section 1886(d)(4)(C) of the
                Act to provide for an increase in the weighting factor of the assigned
                Diagnosis-Related Group (DRG) by 20 percent for an individual diagnosed
                with COVID-19 discharged during the period of the PHE for COVID-19. To
                implement this temporary adjustment, Medicare's claims processing
                systems apply an adjustment factor to increase the Medicare Severity-
                DRG (MS-DRG) relative weight that would otherwise be applied by 20
                percent when determining IPPS operating payments. For additional
                information regarding this add-on payment, including which claims are
                eligible for the 20 percent increase in the MS-DRG weighting factor,
                please see the Medicare Learning Network (MLN) Matters article ``New
                COVID-19 Policies for Inpatient Prospective Payment System (IPPS)
                Hospitals, Long-Term Care Hospitals (LTCHs), and Inpatient
                Rehabilitation Facilities (IRFs) due to Provisions of the CARES Act''
                available on the CMS website at https://www.cms.gov/files/document/se20015.pdf.
                2. Overview of IPPS New Technology Add-On Payment
                 The new medical service or technology add-on payment policy under
                the IPPS provides additional payments for cases with relatively high
                costs involving eligible new medical services or technologies, while
                preserving some of the incentives inherent under an average-based
                prospective payment system. The payment mechanism is based on the cost
                to hospitals for the new medical service or technology. Sections
                1886(d)(5)(K) and (L) of the Act establish a process of identifying and
                ensuring adequate payment for new medical services and technologies
                (sometimes collectively referred to in this section as ``new
                technologies'')
                [[Page 71156]]
                under the IPPS. The regulations at 42 CFR 412.87 and 412.88 implement
                these provisions.
                 As set forth in Sec. 412.88(b)(2), for a new technology other than
                certain antimicrobial products (for which the maximum add-on payment is
                75 percent), if the costs of a discharge involving a new technology
                exceed the full DRG payment (including payments for Indirect Medical
                Education (IME) and Disproportionate Share Hospital (DSH), but
                excluding outlier payments)), Medicare will make a new technology add-
                on payment equal to the lesser of: (1) 65 percent of the costs of the
                new technology; or (2) 65 percent of the amount by which the costs of
                the case exceed the standard DRG payment.
                 For additional information regarding IPPS new technology add-on
                payments please see the FY 2021 IPPS/LTCH PPS final rule (85 FR 58602
                through 58608).
                3. Overview of the Food and Drug Administration (FDA) Coronavirus
                Treatment Acceleration Program
                 The FDA has created a special emergency program for possible
                coronavirus therapies, the Coronavirus Treatment Acceleration Program.
                The program uses every available method to move new treatments to
                patients as quickly as possible, while at the same time finding out
                whether they are helpful or harmful. The FDA continues to support
                clinical trials that are testing new treatments for COVID-19 so that
                valuable knowledge about their safety and effectiveness can be gained.
                Additional information regarding this program is available on the FDA
                website at https://www.fda.gov/drugs/coronavirus-covid-19-drugs/coronavirus-treatment-acceleration-program-ctap.
                 One aspect of the program is the issuance by the FDA of EUAs during
                the PHE for COVID-19. On February 4, 2020, pursuant to Section
                564(b)(1)(C) of the FD&C Act, the Secretary of the Department of Health
                and Human Services (HHS) determined that there is a PHE that has a
                significant potential to affect national security or the health and
                security of United States citizens living abroad, and that involves the
                virus that causes COVID-19.\26\ On the basis of such determination, the
                Secretary of HHS on March 27, 2020, declared that circumstances exist
                justifying the authorization of emergency use of drugs and biological
                products during the COVID-19 pandemic, pursuant to section 564 of the
                FD&C Act, subject to terms of any authorization issued under that
                section.\27\
                ---------------------------------------------------------------------------
                 \26\ U.S. Department of Health and Human Services, Determination
                of a Public Health Emergency and Declaration that Circumstances
                Exist Justifying Authorizations Pursuant to Section 564(b) of the
                Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bbb-3. February
                4, 2020.
                 \27\ U.S. Department of Health and Human Services, Declaration
                that Circumstances Exist Justifying Authorizations Pursuant to
                Section 564(b) of the Federal Food, Drug, and Cosmetic Act, 21
                U.S.C. 360bbb-3, 85 FR 18250 (April 1, 2020).
                ---------------------------------------------------------------------------
                 There are currently five drug and biological products with EUAs
                issued during the PHE for COVID-19. In section ``I. Criteria for
                Issuance of Authorization'' of the current letters of authorization for
                these drug and biological products, the letters for two of the products
                state that based on the totality of scientific evidence available to
                FDA, it is reasonable to believe that the product may be effective in
                treating COVID-19, and that, when used under the conditions described
                in the authorization, the known and potential benefits of the product
                when used to treat COVID-19 outweigh the known and potential risks of
                such products.\28\\[1]\ Those two drug and biological products are
                COVID-19 convalescent plasma and Veklury (remdesivir).
                ---------------------------------------------------------------------------
                 \28\ EUA for COVID-19 convalescent plasma: https://www.fda.gov/media/141477/download; EUA for remdesivir: https://www.fda.gov/media/137564/download.
                ---------------------------------------------------------------------------
                 The current letters of authorization for the other three products
                used in patients with suspected or confirmed COVID-19 do not indicate
                that those products are treating COVID-19 and instead treat a disease
                or condition caused or exacerbated by COVID-19.\29\ Specifically, the
                letter of authorization for REGIOCIT indicates its use as a replacement
                solution in adult patients in a critical care setting who are being
                treated with Continuous Renal Replacement Therapy (CRRT) and for whom
                regional citrate anticoagulation (RCA) is appropriate; the letter of
                authorization for Fresenius Propoven 2 percent Emulsion indicates its
                use to maintain sedation via continuous infusion in patients greater
                than 16 years old who require mechanical ventilation in an ICU setting;
                and the letter of authorization for multiFiltrate PRO System and
                multiBic/multiPlus Solutions indicates its use in delivering CRRT in an
                acute care environment.
                ---------------------------------------------------------------------------
                 \29\ EUA for REGIOCIT: https://www.fda.gov/media/141168/download; EUA for Fresenius Propoven 2 percent Emulsion https://www.fda.gov/media/137888/download; EUA for multiFiltrate PRO System
                and multiBic/multiPlus Solutions: https://www.fda.gov/media/137520/download.
                ---------------------------------------------------------------------------
                 While COVID-19 convalescent plasma has received an EUA for treating
                COVID-19 in hospitalized patients, Veklury (remdesivir), as of October
                22, 2020, is the only drug or biological product approved by FDA for
                treating COVID-19.\30\ In order for an item or service to be considered
                for coverage under Medicare Part A or Part B, the item or service must
                fall within at least one benefit category established in the Act. Drugs
                and biologicals are included within several such benefit categories. In
                general, section 1861(t)(1) of the Act defines drugs and biologicals to
                include drugs or biologicals approved for inclusion in certain
                compendia (except for any drugs and biologicals unfavorably evaluated
                therein) or that are approved by the pharmacy and drug therapeutics
                committee (or equivalent committee) of the medical staff of a hospital
                furnishing that drug or biological for use in that hospital. CMS has
                determined that it is appropriate for CMS to consider drug and
                biological products which are authorized for emergency use for COVID-
                19, with letters of authorization, and are used to treat COVID-19
                disease, to fall within the drugs and biologicals definition in section
                1861(t)(1) of the Act for Medicare purposes if they are included or
                approved for inclusion in the applicable compendia, or when furnished
                by a specific hospital if approved for use in that hospital by the
                pharmacy and drug therapeutics committee (or equivalent committee) of
                the medical staff of that hospital.
                ---------------------------------------------------------------------------
                 \30\ FDA approval for remdesivir: https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/214787Orig1s000ltr.pdf.
                ---------------------------------------------------------------------------
                 More information regarding EUAs for drug and biological products
                during the PHE for COVID-19 is available on the FDA website at https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization#coviddrugs.
                4. Overview of IPPS Outlier Payments
                 Section 1886(d)(5)(A) of the Act provides for payments in addition
                to the basic prospective payments for ``outlier'' cases involving
                extraordinarily high costs. To qualify for outlier payments, one
                criterion is that a case must have costs greater than the sum of the
                prospective payment rate for the MS-DRG, any IME and DSH payments,
                uncompensated care payments, any new technology add-on payments, and
                the ``outlier threshold'' or ``fixed-loss'' amount (a dollar amount by
                which the costs of a case must exceed payments in order to qualify for
                an outlier payment). We refer to the sum of the prospective payment
                rate for the MS-DRG (including the Section 3710 of the CARES Act add-on
                payment if applicable), any IME and DSH payments, uncompensated care
                [[Page 71157]]
                payments, any new technology add-on payments, and the outlier threshold
                as the outlier ``fixed-loss cost threshold.'' Payments for eligible
                cases are then made based on a marginal cost factor, which is a
                percentage of the estimated costs above the fixed-loss cost threshold.
                The marginal cost factor is 80 percent for all MS-DRGs except the burn
                MS-DRGs, where the marginal cost factor is 90 percent. For the complete
                formula for how an outlier payment is computed, we refer the reader to
                the FY 2021 IPPS/LTCH PPS final rule (85 FR 59043 through 59044). We
                note, for each claim, per the formula in the FY 2021 IPPS/LTCH PPS
                final rule, in determining whether the claim is eligible for an
                operating outlier payment and/or a capital outlier payment, an
                ``operating outlier threshold'' and a ``capital outlier threshold'' are
                computed, including application of a geographic adjustment to account
                for local cost variation. If the case is eligible, an ``operating
                outlier payment'' and/or ``capital outlier payment'' will be made for
                an individual claim. For additional information regarding IPPS outlier
                payments please see the FY 2021 IPPS/LTCH PPS final rule (85 FR 59034
                through 59041).
                5. Eligibility Criteria for an IPPS New COVID-19 Treatments Add-on
                Payment (NCTAP) for the Remainder of the PHE
                 We believe that as drugs or biological products become available
                and are authorized or approved by FDA for the treatment of COVID-19 in
                the inpatient setting, it would be appropriate to increase the current
                IPPS payment amounts to mitigate any potential financial disincentives
                for hospitals to provide these new treatments during the PHE.
                Therefore, effective for discharges occurring on or after the effective
                date of this rule and until the end of the public health emergency, CMS
                is using the exceptions and adjustment authority under section
                1886(d)(5)(I) of the Act to create a New COVID-19 Treatments Add-on
                Payment (NCTAP) under the IPPS for COVID-19 cases that meet certain
                criteria.
                 First, the case must include the use of a drug or biological
                product authorized to treat COVID-19 as indicated in section ``I.
                Criteria for Issuance of Authorization'' of the current letter of
                authorization for the drug or biological product, or the drug or
                biological product must be approved by the FDA for treating COVID-19.
                Because the purpose of the NCTAP is to mitigate potential financial
                disincentives for hospitals to provide new COVID-19 treatments, this
                criterion expeditiously provides assurance in the context of the
                urgency of the PHE that a treatment is new and is used to treat COVID-
                19 during the PHE. Currently, there are only two drug or biological
                products that meet this criterion: Veklury (remdesivir) and COVID-19
                convalescent plasma. However, as additional drug and biological
                products become available that meet this criterion, cases that use
                those products would become eligible for the NCTAP if the remaining
                criteria are met.
                 Second, the case must also be eligible for the 20 percent increase
                in the weighting factor for the assigned MS-DRG for an individual
                diagnosed with COVID-19 discharged during the period of the PHE for
                COVID-19 under section 3710 of the CARES Act. The primary purposes of
                this criterion are to help appropriately identify COVID-19 cases to
                potentially receive the NCTAP, and ensure for program integrity reasons
                that there is a positive COVID-19 laboratory test documented in the
                patient's medical record. CMS may conduct post-payment medical review
                to confirm the presence of a positive COVID-19 laboratory test and, if
                no such test is contained in the medical record, the NCTAP will be
                recouped.
                 Third, the operating cost of the case must exceed the operating
                Federal payment under the IPPS, including the add-on payment under
                section 3710 of the CARES Act. The primary purpose of this criterion is
                to ensure that the NCTAP is made only when needed. The cost of the case
                is determined by multiplying the covered charges by the operating cost-
                to-charge ratio, the same way it is determined for new technology add-
                on payments and operating outlier payments.
                 We note that all generally applicable statutory and regulatory
                requirements during the PHE for Medicare payment for a particular case
                must continue to be met, and that the NCTAP will only be available to
                the extent that the new COVID-19 treatment meets all coverage
                requirements under Medicare, including that the use of a drug or
                biological product is medically reasonable and necessary for that case.
                No applicable Medicare requirements during the PHE are being waived by
                the creation of the NCTAP policy.
                6. Determination of the IPPS NCTAP Amount for the Remainder of the PHE
                 As indicated earlier, the goal of the NCTAP is to mitigate
                potential financial disincentives for hospitals to provide new COVID-19
                treatments. These potential financial disincentives are already
                mitigated in part by the IPPS outlier payment, but we recognize that
                the costs of a case must exceed payments by the ``outlier threshold''
                or ``fixed-loss'' amount before outlier payments are made. For FY 2021,
                the outlier threshold is approximately $30,000. As discussed
                previously, the outlier threshold is adjusted to account for local cost
                variation in determining whether an individual claim is eligible for
                outlier payments. As a simplified example for purposes of illustration,
                if the operating costs of a case using a new COVID-19 treatment exceed
                the operating IPPS payment by $10,000, there are no Medicare outlier
                payments made for this case because the costs are less than the outlier
                threshold.
                 We believe that in order to further mitigate any potential
                financial disincentives for hospitals to provide new COVID-19
                treatments, the NCTAP, when needed, should function to partially offset
                costs that exceed the Medicare payment, but are less than the outlier
                threshold. By partially rather than fully offsetting these costs, we
                believe that the NCTAP, similar to the new technology add-on payment
                policy under the IPPS, preserves some of the incentives inherent under
                an average-based prospective payment system. One way in which the new
                technology add-on payment policy accomplishes this goal is by making
                the new technology add-on payment equal to the lesser of: (1) 65
                percent of the costs of the new technology; or (2) 65 percent of the
                amount by which the costs of the case exceed the standard DRG payment.
                 We believe that the new technology add-on payment calculation
                provides an appropriate conceptual framework for the NCTAP calculation.
                In the context of the urgency of the PHE for COVID-19, however, and the
                practical and operational challenges of individually tailoring the
                payment calculation to each new treatment, we believe the NCTAP
                calculation should take into account 65 percent of the amount by which
                the costs of the case exceed the standard DRG payment, without
                comparison to 65 percent of the costs of the new treatment itself. As
                part of the approval process for the new technology add-on payment for
                a given new technology, the claims processing system is modified and
                tailored to apply the new technology add-on payment for that technology
                using cost and coding information according to the ``lesser of'' policy
                described above. In order to more expeditiously provide payment for
                cases meeting the previously described criteria in the context of the
                urgency of the PHE, we believe the NCTAP calculation should take into
                account 65 percent of the amount by which the costs of the case exceed
                the standard DRG payment for all cases that qualify
                [[Page 71158]]
                for the NCTAP, without comparison to the costs of the new treatment as
                under the ``lesser of'' policy applicable for the new technology add-on
                payment.
                 We note that a hospital should not seek additional payment on the
                claim for drugs or biologicals procured or provided by a governmental
                entity to a provider at no cost to the provider to diagnose or treat
                patients with known or suspected COVID-19, as described in the CMS
                Medicare Claims Processing Manual, Pub. 100-04, Chapter 32, Section 67.
                 CMS will use ICD-10-PCS procedure codes XW033E5 (Introduction of
                Remdesivir Anti-infective into Peripheral Vein, Percutaneous Approach,
                New Technology Group 5) and XW043E5 (Introduction of Remdesivir Anti-
                infective into Central Vein, Percutaneous Approach, New Technology
                Group 5) to identify cases using remdesivir and ICD-10-PCS procedure
                codes XW13325 (Transfusion of Convalescent Plasma (Nonautologous) into
                Peripheral Vein, Percutaneous Approach, New Technology Group 5) and
                XW14325 (Transfusion of Convalescent Plasma (Nonautologous) into
                Central Vein, Percutaneous Approach, New Technology Group 5) to
                identify cases using convalescent plasma. More information on the new
                procedure codes implemented into the International Classification of
                Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) in
                response to the PHE for COVID-19 is available on the CMS website at
                https://www.cms.gov/files/document/icd-10-ms-drgs-version-372-effective-august-01-2020.pdf. CMS will issue additional operational
                instructions on how eligible cases will be identified, including any
                new treatments that may become available.
                 We also considered in the determination of the NCTAP amount that we
                did not want to inadvertently reduce the IPPS operating outlier
                payments that the hospital would have otherwise received for a costly
                COVID-19 case given that these outlier payments already help to
                mitigate potential financial disincentives for hospitals to provide new
                COVID-19 treatments. Therefore, we do not believe the calculation of
                the operating outlier payments should be impacted by the NCTAP.
                 Taking these factors into account, CMS is setting the NCTAP amount
                for a case that meets the NCTAP eligibility criteria equal to the
                lesser of: (1) 65 percent of the operating outlier threshold for the
                claim or (2) 65 percent of the amount by which the costs of the case
                exceed the standard DRG payment, including the adjustment to the
                relative weight under section 3710 of the CARES Act. As with the new
                technology add-on payment and outlier payments, the costs of the case
                are determined by multiplying the covered charges by the operating
                cost-to-charge ratio. In addition, the NCTAP will not be included as
                part of the calculation of the operating outlier payments.
                 Returning to our simplified example, if the cost of a case using a
                new COVID-19 treatment exceeds the operating IPPS payment by $10,000
                and the operating outlier threshold for the case is for purposes of
                illustration $30,000, the NCTAP would be $6,500 (= $10,000 excess cost
                x 0.65). There would be no outlier payments because the excess cost of
                the case ($10,000) does not exceed the operating outlier threshold for
                the case ($30,000).
                 As a simplified example of a case that qualifies for an operating
                outlier payment, if the cost of a case using a new COVID-19 treatment
                exceeds the operating IPPS payment by $100,000, the NCTAP would be
                equal to the maximum NCTAP amount of 65 percent of the operating
                outlier threshold for the case. In this illustrative example, if the
                applicable operating outlier threshold for the claim is $30,000, that
                amount is $19,500 (equals first $30,000 of the excess cost before the
                operating outlier threshold for the claim is reached x 0.65). In
                addition, the case would receive an outlier payment that is calculated
                the same way it is currently calculated in the absence of the $19,500
                NCTAP, that is, $56,000 (= ($100,000 excess cost-$30,000 outlier
                threshold for the case) * the 0.80 outlier marginal cost factor). The
                combined NCTAP and outlier payment would be $75,500 (equals the $19,500
                enhanced payment + the $56,000 outlier payment).
                E. Medicare Outpatient Prospective Payment System (OPPS) Separate
                Payment for New COVID-19 Treatments Policy for the Remainder of the
                Public Health Emergency (PHE)
                1. FDA Coronavirus Treatment Acceleration Program
                 The FDA has created a special emergency program to facilitate the
                development of coronavirus therapies, the Coronavirus Treatment
                Acceleration Program. One aspect of the program is the issuance by the
                FDA of EUAs during the PHE for COVID-19. On February 4, 2020, pursuant
                to Section 564(b)(1)(C) of the FD&C Act, the Secretary of the
                Department of Health and Human Services (HHS) determined that there is
                a PHE that has a significant potential to affect national security or
                the health and security of United States citizens living abroad, and
                that involves the virus that causes COVID-19.\31\ On the basis of such
                determination, the Secretary of HHS on March 27, 2020, declared that
                circumstances exist justifying the authorization of emergency use of
                drugs and biologics during the COVID-19 public health emergency,
                pursuant to section 564 of the FD&C Act, subject to terms of any
                authorization issued under that section.\32\ Readers should refer to
                Section D.3 of this interim final rule with comment period for a full
                discussion of the Coronavirus Treatment Acceleration Program.
                ---------------------------------------------------------------------------
                 \31\ U.S. Department of Health and Human Services, Determination
                of a Public Health Emergency and Declaration that Circumstances
                Exist Justifying Authorizations Pursuant to Section 564(b) of the
                Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bbb-3. February
                4, 2020.
                 \32\ U.S. Department of Health and Human Services, Declaration
                that Circumstances Exist Justifying Authorizations Pursuant to
                Section 564(b) of the Federal Food, Drug, and Cosmetic Act, 21
                U.S.C. 360bbb-3, 85 FR 18250 (April 1, 2020).
                ---------------------------------------------------------------------------
                 There are currently five drug and biological products with EUAs
                issued during the PHE for COVID-19. In section ``I. Criteria for
                Issuance of Authorization'' of the current letters of authorization for
                these drug and biological products, the letters for two of the products
                state that based on the totality of scientific evidence available to
                FDA, it is reasonable to believe that the product may be effective in
                treating COVID-19, and that, when used under the conditions described
                in the authorization, the known and potential benefits of the product
                when used to treat COVID-19 outweigh the known and potential risks of
                such products.\33\ Those drug and biological products are COVID-19
                convalescent plasma and Veklury (remdesivir).
                ---------------------------------------------------------------------------
                 \33\ EUA for remdesivir: https://www.fda.gov/media/137564/download; EUA for COVID-19 convalescent plasma: https://www.fda.gov/media/141477/download.
                ---------------------------------------------------------------------------
                 While COVID-19 convalescent plasma has received an EUA for treating
                COVID-19 in hospitalized patients, Veklury (remdesivir), as of October
                22, 2020, is the only drug or biological product approved by FDA for
                treating COVID-19. As discussed in Section II.D.3 of this interim final
                rule with comment period, in order for an item or service to be
                considered for coverage under Medicare Part A or Part B, the item or
                service must fall within at least one benefit category established in
                the Act. Drugs and biologicals are included within several such benefit
                categories. In general, section 1861(t)(1) of the Act defines drugs and
                biologicals to include drugs or biologicals approved for inclusion in
                certain compendia (except
                [[Page 71159]]
                for any drugs and biologicals unfavorably evaluated therein) or that
                are approved by the pharmacy and drug therapeutics committee (or
                equivalent committee) of the medical staff of a hospital furnishing
                that drug or biological for use in that hospital. CMS has determined
                that it is appropriate for CMS to consider drug and biological products
                which are authorized for emergency use for COVID-19, with letters of
                authorization, and are used to treat COVID-19 disease, to fall within
                the drugs and biologicals definition in 1861(t)(1) of the Act for
                Medicare purposes if they are included or approved for inclusion in the
                applicable compendia, or when furnished by a specific hospital if
                approved for use in that hospital by the pharmacy and drug therapeutics
                committee (or equivalent committee) of the medical staff of that
                hospital.
                2. OPPS Comprehensive-Ambulatory Payment Classification (C-APC) Policy
                 To date, no drug or biological product has an EUA for the treatment
                of patients with COVID-19 in the outpatient setting. However, because
                treatment of COVID-19 is rapidly evolving, we believe it is important
                to ensure that separate payment is available under the OPPS for new
                drug and biological products (including blood products) that receive an
                EUA for treating COVID-19 in the outpatient setting or are approved by
                the FDA for treating COVID-19 in the outpatient setting, or where a
                drug or biological product approved under an existing EUA is authorized
                for use in settings other than the inpatient setting. As part of that
                process, we expect to include the addition of new codes describing
                those treatments as soon as practicable, after their availability, to
                ensure efficient and timely beneficiary access to those treatments. We
                anticipate that most drugs and biological products authorized for use
                in treating COVID-19 in the outpatient setting would be separately paid
                under our standard OPPS payment policy because drugs and biological
                products are typically assigned separate Ambulatory Payment
                Classification payment status indicators in the OPPS unless they meet
                one of the criteria for packaging, which, with the exception of drug or
                biological products billed with a Comprehensive Ambulatory Payment
                Classification (C-APC) service, we do not anticipate that drugs or
                biological products approved or authorized to treat COVID-19 would
                meet. However, these products could be packaged into a C-APC when
                provided on the same claim as a C-APC service, in which case separate
                payment would not be made for these products.
                 Under our C-APC policy, which we adopted beginning in CY 2015, we
                designate a service described by a HCPCS code assigned to a C-APC as
                the primary service when the service is identified by OPPS status
                indicator ``J1''. When such a primary service is reported on a hospital
                outpatient claim, with certain exceptions, we make payment for all
                other items and services reported on the hospital outpatient claim as
                being integral, ancillary, supportive, dependent, and adjunctive to the
                primary service (hereinafter collectively referred to as ``adjunctive
                services'') and representing components of a complete comprehensive
                service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services
                are packaged into the payments for the primary services. This results
                in a single prospective payment for each of the primary, comprehensive
                services based on the costs of all reported services at the claim
                level. Items included in the packaged payment provided in conjunction
                with the primary service also include all drugs, biologicals, and
                radiopharmaceuticals, regardless of cost, except those drugs with pass-
                through payment status and self-administered drugs, unless they
                function as packaged supplies (78 FR 74868 through 74869 and 74909 and
                79 FR 66800). Thus, under our current policy, payment for drugs or
                biological products with an emergency authorization or approved to
                treat COVID-19 in the outpatient setting would be packaged into payment
                for a primary C-APC service when billed on the same claim as that
                service.
                 Currently, there are 67 C-APCs in the CY 2020 OPPS, with payments
                ranging from approximately $1,000 to $37,000. Most C-APCs are for
                surgical or other intensive procedures, which we would expect most
                hospital outpatient departments would not perform on a patient that has
                an active case of COVID-19. However, observation services can also be
                paid through the ``Comprehensive Observation Services'' C-APC (C-APC
                8011), which packages payment for qualifying extended assessment and
                management encounters. It is possible that future COVID treatments that
                are authorized or approved for use in the outpatient setting might be
                administered to patients under observation while the provider
                determines if the patient needs to be admitted to the hospital for
                COVID-19.
                3. Separate Payment Under the OPPS for New COVID-19 Treatments for the
                Remainder of the PHE for COVID-19
                 Although we do not expect that many beneficiaries would both
                receive a primary C-APC service and a drug or biological for treating
                COVID-19, we nonetheless believe that as drugs or biologicals become
                available and are authorized or approved for the treatment of COVID-19
                in the outpatient setting, it would be appropriate to mitigate any
                potential financial disincentives for hospitals to provide these new
                treatments during the PHE for COVID-19. Therefore, effective for
                services furnished on or after the effective date of this rule and
                until the end of the PHE for COVID-19, CMS is creating an exception to
                its OPPS C-APC policy to ensure separate payment for new COVID-19
                treatments that meet certain criteria. Under this exception, any new
                COVID-19 treatment that meets the two criteria below will, for the
                remainder of the PHE for COVID-19, always be separately paid and will
                not be packaged into a C-APC when it is provided on the same claim as
                the primary C-APC service. Note that this separate payment will result
                in an additional copayment of 20 percent of the cost of the new COVID-
                19 treatment, up to the amount of the inpatient deductible.
                 CMS has identified two criteria for COVID-19 treatments to receive
                this exception. First, the treatment must be a drug or biological
                product (which could include a blood product) authorized to treat
                COVID-19, as indicated in section ``I. Criteria for Issuance of
                Authorization'' of the letter of authorization for the drug or
                biological product, or the drug or biological product must be approved
                by the FDA for treating COVID-19. Because the purpose of this exception
                is to mitigate potential financial disincentives for hospitals to
                provide new COVID-19 treatments, this criterion expeditiously provides
                assurance in the context of the urgency of the PHE for COVID-19 that a
                treatment is new and is used to treat COVID-19 disease during the PHE
                for COVID-19.
                 Second, the EUA for the drug or biological product (which could
                include a blood product) must authorize the use of the product in the
                outpatient setting or not limit its use to the inpatient setting, or
                the product must be approved by the FDA to treat COVID-19 disease and
                not limit its use to the inpatient setting.
                 We note that during the PHE for COVID-19 this new exception to the
                C-
                [[Page 71160]]
                APC packaging policy would apply to all drug and biological products
                that meet both of these criteria. As of the date of issuance of this
                interim final rule there are two drug or biological products that meet
                the first criterion (Veklury (remdesivir) and COVID-19 convalescent
                plasma), but neither of these products is authorized or approved for
                use in the outpatient setting and, as a result, no product meets the
                second criterion.
                 We also note that all generally applicable statutory and regulatory
                requirements for Medicare payment under the OPPS must continue to be
                met, and that OPPS payment will only be available to the extent that
                the new COVID-19 treatment meets all coverage requirements under
                Medicare, including that the use of a drug or biological product is
                medically reasonable and necessary for the patient. No applicable
                Medicare requirements during the PHE are being waived by the creation
                of this C-APC exception.
                4. Effects of This Exception on the OPPS Budget Neutrality Calculation
                 As we noted in Section II.E.2, we believe it would be a fairly rare
                occurrence that an outpatient department would perform a C-APC
                procedure on a beneficiary being treated for COVID-19 because most C-
                APCs are for surgical or other intensive procedures and we would expect
                most hospital outpatients departments would not perform outpatient
                surgery on a patient that has an active case of COVID-19. While it is
                possible that future COVID-19 treatments that are authorized or
                approved for use in the outpatient setting might be administered to
                patients under observation while the provider determines if the patient
                needs to be admitted to the hospital for COVID-19, it is our
                expectation that this hypothetical situation would not happen
                frequently. Because we believe a new COVID-19 treatment will rarely be
                provided on the same claim as a primary C-APC service, we believe new
                COVID-19 treatments used in the outpatient setting will be separately
                paid under current policy the vast majority of the time. As a result,
                we do not believe it is necessary that we make an adjustment to OPPS
                budget neutrality calculations at this time to account for this new
                exception, as any budgetary effect of this new exception is likely to
                be de minimis. If, once new COVID-19 treatments are being provided in
                the outpatient setting, the claims data indicates that these treatments
                are being provided on the same claim as a C-APC more frequently than we
                expected, we can make a prospective adjustment to the OPPS budget
                neutrality calculations through future rulemaking.
                F. Temporary Increase in Federal Medicaid Funding
                1. Background
                 Section 6008 of the FFCRA, as amended by section 3720 of the CARES
                Act, provides a temporary 6.2 percentage point increase to each
                qualifying state and territory's Federal Medical Assistance Percentage
                (FMAP) under section 1905(b) of the Act (``temporary FMAP increase'').
                This temporary FMAP increase is effective beginning January 1, 2020 and
                could extend through the last day of the calendar quarter in which the
                PHE for COVID-19, including any extensions, terminates, if the state
                claims the FMAP increase in that quarter (we refer herein to the entire
                period where the FMAP increase is potentially applicable as the
                ``increased FMAP period'').
                 To qualify for the temporary FMAP increase in a given quarter,
                states must meet the four conditions described in subsection (b) of
                section 6008 of the FFCRA during that quarter. Three of these
                conditions (described at section 6008(b)(1), (2), and (4) of the FFCRA)
                could extend through the end of the increased FMAP period, if the state
                claims the increased FMAP through the end of the quarter in which the
                PHE for COVID-19 ends. They are: (a) The state must maintain
                eligibility standards, methodologies, or procedures that are no more
                restrictive than what the state had in place as of January 1, 2020; (b)
                the state may not charge premiums that exceed those that were in place
                as of January 1, 2020; \34\ and (c) the state must cover, without the
                imposition of cost sharing, testing services and treatments for COVID-
                19, including vaccines, specialized equipment, and therapies.
                ---------------------------------------------------------------------------
                 \34\ Section 3720 of the CARES Act added a new subsection (d) to
                section 6008 of the FFCRA in order to provide states which have
                increased premiums for any Medicaid beneficiaries above the amounts
                in effect on January 1, 2020, with a 30-day grace period to restore
                premiums to amounts no greater than those in effect as of January 1
                without jeopardizing the state's eligibility for the temporary 6.2
                percentage point FMAP increase.
                ---------------------------------------------------------------------------
                 The fourth condition, which is described at section 6008(b)(3) of
                the FFCRA, extends through the last day of the month in which the PHE
                for COVID-19 ends. This condition provides that a state may not receive
                the temporary FMAP increase if ``the [s]tate fails to provide that an
                individual who is enrolled for benefits under [the Medicaid state] plan
                (or waiver) as of the date of enactment of this section [March 18,
                2020] or enrolls for benefits under such plan (or waiver) during the
                period beginning on such date of enactment [March 18, 2020] and ending
                the last day of the month in which the [PHE for COVID-19] ends shall be
                treated as eligible for such benefits through the end of the month in
                which such emergency period ends unless the individual requests a
                voluntary termination of eligibility or the individual ceases to be a
                resident of the State[.]''
                 The language in section 6008(b)(3) of the FFCRA is somewhat
                ambiguous. CMS issued guidance on this condition through frequently
                asked questions (FAQs) posted on Medicaid.gov on April 13, 2020, May 5,
                2020, and June 30, 2020.\35\ However, our existing interpretation
                (discussed in section II.F.2 of this preamble) is not the only possible
                interpretation that could be made. As the PHE for COVID-19 continued,
                and states requested increased flexibility for managing their programs,
                we revisited our existing interpretation. Seeking to balance the
                beneficiary protections in our existing interpretation with the state
                flexibility that could be afforded through an alternative
                interpretation, this IFC establishes a blended approach as discussed
                below.
                ---------------------------------------------------------------------------
                 \35\ See:
                 COVID-19 Frequently Asked Questions (FAQs) for State
                Medicaid and Children's Health Insurance Program (CHIP) Agencies,
                available at https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf (Updated June 30, 2020)
                 Families First Coronavirus Response Act--Increased FMAP
                FAQs available at https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-faqs.pdf (Updated April 13, 2020)
                 Families First Coronavirus Response Act (FFCRA), Public
                Law 116-127 Coronavirus Aid, Relief, and Economic Security (CARES)
                Act, Public Law 116-136 Frequently Asked Questions (FAQs) available
                at https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-CARES-faqs.pdf (Posted April 13, 2020)
                ---------------------------------------------------------------------------
                2. CMS's Existing Interpretation of Section 6008(b)(3) of the FFCRA
                 CMS first provided an interpretation of section 6008(b)(3) for
                implementation by states through FAQs issued in April 2020. Our most
                recent interpretation provided that to receive the increased FMAP under
                the FFCRA, a state must keep beneficiaries enrolled in Medicaid, if
                they were enrolled on or after March 18, 2020, with the same amount,
                duration, and scope of benefits. It also provided that states could not
                subject such beneficiaries to any increase in cost sharing or
                beneficiary liability for institutional services or other long-term
                services and supports (LTSS) during this time period. This
                interpretation
                [[Page 71161]]
                protects both beneficiary eligibility and access to medically necessary
                services.
                 Under this interpretation, if a state receives information about a
                beneficiary's change in circumstances that would make the beneficiary
                ineligible for Medicaid, the state may not terminate that beneficiary's
                eligibility until the end of the month in which the PHE for COVID-19
                ends, except in cases where the beneficiary voluntarily disenrolls or
                is no longer a resident of the state. Further, if the state receives
                information that would make a beneficiary eligible for a different
                eligibility group with lesser benefits, greater cost sharing, or
                increased beneficiary liability, the state may not transition that
                beneficiary to the new eligibility group but must maintain the
                beneficiary's enrollment in the current eligibility group until the end
                of the month in which the PHE for COVID-19 ends.\36\
                ---------------------------------------------------------------------------
                 \36\ See Question B.12 of the Families First Coronavirus
                Response Act--Increased FMAP FAQs available at https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-faqs.pdf; Question F.27 of the Families First Coronavirus
                Response Act (FFCRA), Public Law 116-127 Coronavirus Aid, Relief,
                and Economic Security (CARES) Act, Public Law 116-136 Frequently
                Asked Questions posted on April 13, 2020, available at https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-CARES-faqs.pdf; and Questions relating to Continuing Coverage
                under Section 6008 of the Families First Coronavirus Response Act in
                the COVID-19 Frequently Asked Questions (FAQs) for State Medicaid
                and Children's Health Insurance Program (CHIP) Agencies available at
                https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf
                ---------------------------------------------------------------------------
                 In protecting access to medically necessary services pursuant to
                this interpretation, states must maintain current coverage in the state
                plan, including alternative benefit plans (ABPs), and must also
                maintain current coverage under any waivers and section 1115
                demonstrations. For example, states may not implement any new
                restrictions such as a reduction in the number of covered visits or a
                prior authorization requirement. Beneficiary coverage may not be
                reduced on an individual basis either. For example, if a beneficiary
                has reached age 21 and would no longer be eligible for the Early and
                Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, the
                state must continue to provide EPSDT services to the beneficiary when
                medically necessary, through the end of the month in which the PHE for
                COVID-19 ends. Further, if a beneficiary is enrolled in a home and
                community-based services (HCBS) waiver program authorized under section
                1915(c) of the Act, and the individual is determined to no longer meet
                the level-of-care requirements or other requirements for that waiver,
                the state must maintain the beneficiary's enrollment in the HCBS
                waiver. Under this interpretation, states are not required to provide
                services that do not meet the state plan amount, duration, and scope
                criteria for a benefit (such as medical necessity). However, as a
                condition for receiving the temporary FMAP increase, the state must
                ensure that a beneficiary can continue to access the benefits package
                that was available to that beneficiary as of March 18, 2020 (or a later
                date within the PHE) through the end of the month in which the PHE for
                COVID-19 ends.
                 States have expressed concern that our existing interpretation of
                section 6008(b)(3) of the FFCRA makes it challenging for them to manage
                their programs effectively and still qualify for the increased Federal
                financial participation, in frustration of one purpose of section 6008
                of the FFCRA to provide additional support to state Medicaid programs
                in their response to the COVID-19 pandemic. States made clear to CMS
                that this interpretation, coupled with the prohibition on adopting more
                restrictive eligibility standards, methodologies, or procedures under
                section 6008(b)(1) of the FFCRA, would impede the routine, orderly
                transition of beneficiaries between eligibility groups, and could lead
                to significant backlogs in redeterminations and appeals after the PHE
                for COVID-19 ends.
                 States also noted that our existing interpretation severely limits
                state flexibility to control program costs in the face of growing
                budgetary constraints and developing fiscal challenges during the
                emergency period. For example, it freezes post-eligibility treatment-
                of-income (PETI) calculations for institutionalized beneficiaries
                regardless of changes in circumstances. States have pointed out that a
                beneficiary receiving HCBS through a waiver approved under section
                1915(c) of the Act who is subject to the PETI rules and who
                subsequently moves into an institution would be entitled to retain the
                higher personal needs allowance allowed for individuals participating
                in the relevant waiver, even though the beneficiary's personal needs
                would be far lower once in the institution. The aggregate effects of
                this interpretation could result in a substantial increase in the state
                Medicaid program's cost for the needed institutional services as
                beneficiaries are not contributing as much toward the cost of their
                care as they would be in the absence of the FFCRA 6008(b)(3)
                requirement.
                 In practice, the only cost-controlling measure available to states
                under our existing interpretation is reducing provider rates to the
                minimum level permitted under section 1902(a)(30)(A) of the Act. Such
                rate cuts, combined with a substantially lower volume of visits since
                the beginning of the pandemic,\37\ could put some providers out of
                business. This could undermine the solvency of critical provider
                networks and their ability to serve beneficiaries in the future,
                particularly in rural areas where health care workforce shortages may
                already exist.
                ---------------------------------------------------------------------------
                 \37\ Source: Ateev Mehrotra et al., The Impact of the COVID-19
                Pandemic on Outpatient Visits: Practices Are Adapting to the New
                Normal (Commonwealth Fund, June 2020). https://doi.org/10.26099/2v5t-9y63
                ---------------------------------------------------------------------------
                3. Alternative Interpretation of Section 6008(b)(3) of the FFCRA
                 CMS's existing interpretation of section 6008(b)(3) of the FFCRA is
                not the only possible, reasonable interpretation of that provision. The
                language in this section could also reasonably be interpreted to mean
                only that states must maintain the enrollment of beneficiaries who
                enrolled in the state's Medicaid program as of or after March 18, 2020,
                through the end of the month in which the PHE ends, but not the
                specific benefits package they were receiving at that time. In other
                words, under this alternative interpretation, to fulfill the
                requirement in section 6008(b)(3) of the FFCRA with respect to a
                beneficiary who becomes ineligible for enrollment in his current
                Medicaid eligibility group, states would either (a) transition the
                beneficiary to another group for which he is eligible and enroll him
                for the benefits provided to that eligibility group, or (b) retain the
                beneficiary's enrollment in the original eligibility group, if he did
                not meet the eligibility criteria for any other group, and maintain the
                benefits provided to that group. Under this alternative interpretation,
                a state would be required to move a beneficiary who becomes eligible
                for another Medicaid eligibility group during the period in which
                section 6008(b)(3) of the FFCRA applies into that new group, no matter
                how limited the benefits package is for the new group. We refer to this
                alternative interpretation as the ``enrollment interpretation.''
                 Under the enrollment interpretation, states claiming the 6.2
                percentage point temporary FMAP increase would be permitted to make
                programmatic changes, such as changes to the medical necessity criteria
                or utilization control procedures in determining coverage for benefits;
                elimination of optional benefits
                [[Page 71162]]
                coverage; increases in cost-sharing responsibilities (except with
                respect to testing services and treatments for COVID-19 per section
                6008(b)(4) of the FFCRA); or changes to the PETI methodology. For
                example, states would be permitted to establish a limit on the number
                of visits permitted for a given service and to require a copayment for
                a service in accordance with Medicaid statute and regulations. These
                programmatic changes would not jeopardize the state's receipt of the
                temporary FMAP increase.
                 In considering this interpretation, we note that Congress expressly
                conditioned receipt of the temporary FMAP increase on a state's
                temporarily not implementing ``more restrictive'' ``eligibility
                standards, methodologies, or procedures'' in section 6008(b)(1), on
                temporarily not imposing higher premiums in section 6008(b)(2), and on
                covering COVID-19 testing and treatment services without cost-sharing
                in section 6008(b)(4). However, Congress did not legislate with the
                same express clarity in section 6008(b)(3) with respect to states'
                ability or inability to reduce the amount, duration, and scope of
                benefits other than COVID-19 testing and treatment services or to
                eliminate optional benefits. Further, while Congress expressly
                prohibited states from imposing cost sharing on testing services and
                treatments for COVID-19 in section 6008(b)(4) of the FFCRA, Congress
                did not expressly provide in section 6008(b)(3) for any limitation on
                cost sharing, or on states' ability to modify cost sharing or
                beneficiaries' liability for the cost of other services (e.g., in
                accordance with the PETI rules set forth in 42 CFR part 435, subpart H,
                and 42 CFR 435.832 for beneficiaries receiving institutional services
                or other long-term services and supports who are subject to the PETI
                rules).
                 Under the enrollment interpretation, states would be required to
                make individual beneficiary eligibility changes short of disenrollment
                from Medicaid entirely. For example, states would be required to make
                changes to a beneficiary's eligibility to reflect a change in income,
                or a change related to age, pregnancy status, need for LTSS or other
                eligibility factors. A change of service, such as moving from
                participation in an HCBS waiver authorized under section 1915(c) of the
                Act into an institution or vice versa, would also require a change in
                eligibility for a beneficiary enrolled in an eligibility group specific
                to HCBS recipients, such as the group described at 42 CFR 435.217, or
                an eligibility group for individuals living in an institution like the
                special income level group described at 42 CFR 435.236.
                 The enrollment interpretation would require states to move a
                beneficiary who loses eligibility under one Medicaid eligibility group
                and becomes eligible in a second Medicaid eligibility group into the
                second eligibility group, even if the second eligibility group confers
                lesser benefits or results in increased financial liability for the
                beneficiary. However, as with our existing interpretation, under the
                enrollment interpretation states would not be permitted to terminate a
                beneficiary's eligibility unless the individual requested such
                termination or was no longer a state resident. If a beneficiary loses
                eligibility under one Medicaid eligibility group and is not eligible
                for another group, in order to claim the temporary FMAP increase, the
                state must maintain the beneficiary's enrollment in the current group
                until the end of the month in which the PHE for COVID-19 ends. Like the
                programmatic changes discussed previously, individual beneficiary
                eligibility changes would not jeopardize receipt of the temporary FMAP
                increase.
                 In most cases, transferring a beneficiary from one eligibility
                group to another would not result in a significant change in available
                benefits. With a few exceptions, Medicaid is considered to be minimum
                essential coverage (MEC) as defined in section 5000A(f) of the Internal
                Revenue Code of 1986 (``Code'') and implementing regulations at 26 CFR
                1.5000A-2. Certain Medicaid eligibility groups, however, such as the
                optional eligibility group for individuals infected with tuberculosis
                (described at 42 CFR 435.215), provide only limited benefits pursuant
                to the matter following section 1902(a)(10)(G) of the Act. This
                optional coverage of tuberculosis and tuberculosis-related services is
                excepted from the definition of MEC at 26 CFR 1.5000A-2(b)(2)(ii) and
                transferring a beneficiary from an eligibility group that provides MEC
                to the eligibility group for individuals infected with tuberculosis
                would result in a significant reduction in available benefits.
                 Another example of non-MEC coverage available through Medicaid is
                the optional eligibility group limited to family planning and related
                services at 42 CFR 435.214, which also provides only a limited benefits
                package pursuant to the matter following section 1902(a)(10)(G) of the
                Act, and which is excluded from MEC at 26 CFR 1.5000A-2(b)(2)(i). If
                the enrollment interpretation was adopted, following the postpartum
                period for coverage of pregnant women at 42 CFR 435.116, states that
                cover the optional family planning group (or that provide family
                planning-only coverage through a section 1115 demonstration) would be
                required to transfer women who do not qualify for a full-benefit
                Medicaid eligibility group into family planning-only coverage if they
                meet the eligibility requirements for the family planning-only group or
                demonstration.
                 The enrollment interpretation of section 6008(b)(3) of the FFCRA
                would make it more challenging for some beneficiaries to access
                medically necessary services, including services related to the COVID-
                19 pandemic. A beneficiary transferred to the family planning group
                following the end of her postpartum period would continue to have
                access to provider visits for family planning and outpatient drugs and
                supplies related to those visits, but she would no longer have access
                to testing services and treatment for COVID-19, pursuant to CMS's
                interpretation of section 6008(b)(4) of the FFCRA, which is discussed
                above in section II.B. In addition, she would lose access to inpatient
                and outpatient hospital services, prescription drugs, and other
                Medicaid-covered services that are unrelated to family planning.
                 Beneficiaries with certain chronic conditions like diabetes and
                sickle cell disease are at higher risk for severe illness from the
                virus that causes COVID-19.\38\ Under the enrollment interpretation,
                individuals who lose eligibility for a group that offers MEC may be
                transitioned to a limited benefit eligibility group, in a state that
                offers such coverage, in which they would no longer have access to the
                benefits needed to manage their chronic conditions. Not only would this
                negatively impact the beneficiary who loses comprehensive Medicaid
                coverage as a result of this interpretation, but it could also
                undermine states' COVID-19 response efforts during the public health
                emergency.
                ---------------------------------------------------------------------------
                 \38\ Centers for Disease Control and Prevention, Coronavirus
                Disease 2019 (COVID-19); People with Certain Medical Conditions;
                accessed 10/08/2020 at https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-with-medical-conditions.html.
                ---------------------------------------------------------------------------
                4. Adopting a Blended Approach
                 As we considered changing our interpretation of section 6008(b)(3)
                of the FFCRA, CMS examined the implications of both the existing and
                alternative interpretations on each of the major Medicaid stakeholder
                groups. Based on that analysis, this IFC adopts a blended approach. It
                is intended to balance the interests of states, providers, and
                beneficiaries, without materially undermining their ability to address
                the challenges presented by COVID-19.
                [[Page 71163]]
                 Looking first at states, the circumstances facing each state during
                the PHE for COVID-19 are different. States have sent a strong message
                to CMS that they need more flexibility to make choices that meet their
                unique needs. They have made clear that our existing interpretation of
                section 6008(b)(3) of the FFCRA has interfered with their ability to
                implement cost-saving decisions in the face of increasing beneficiary
                enrollment and declining state revenues. The enrollment interpretation
                would allow states to impose coverage limitations that reduce spending
                and allow for better management of state programs during the PHE for
                COVID-19. More flexibility in managing their programs could help states
                to stretch scarce financial resources over the long term, including
                after the PHE for COVID-19 ends, and that could ultimately benefit both
                providers and beneficiaries. Supporting states and providers fighting
                the pandemic is consistent with the protections and the various
                provider relief funds established by Congress in the FFCRA, the CARES
                Act, and the PPPHCEA.
                 While the enrollment interpretation of section 6008(b)(3) of the
                FFCRA may be the preferred option for states, we recognize that it
                could negatively impact certain provider types. Under the enrollment
                interpretation, states could eliminate optional benefits. For example,
                a state could cut its optional dental benefit, and dentists in that
                state would lose Medicaid reimbursement. CMS's existing interpretation,
                however, leaves states with little ability to manage program costs
                other than by cutting provider rates to the fullest extent permitted
                under section 1902(a)(30)(A) of the Act. We believe such rate cuts
                represent a far more significant threat to providers and their
                continued availability to beneficiaries. Under the enrollment
                interpretation, states may be less likely to reduce provider rates,
                which could benefit both providers and beneficiaries.
                 Considering the impact on beneficiaries, our existing
                interpretation provided the strongest protections for beneficiary
                access to medically necessary care during the PHE. It ensured that
                beneficiaries remained enrolled in Medicaid and that no new coverage
                restrictions were imposed. Every Medicaid beneficiary who had access to
                MEC and to testing services and treatment for COVID-19 as of or after
                March 18, 2020 would continue to have access to these services under
                the existing interpretation. The enrollment interpretation would also
                protect beneficiary enrollment in Medicaid. At the same time, it would
                expand state flexibility to make cost-saving decisions that could
                reduce beneficiaries' coverage below what they had access to as of or
                after March 18, 2020. Under the enrollment interpretation, some
                beneficiaries would be transitioned from MEC to non-MEC coverage, which
                may not include testing services and treatment for COVID-19 pursuant to
                CMS's interpretation of FFCRA section 6008(b)(4). Ensuring access to
                testing and treatment, along with care for the chronic health
                conditions that place beneficiaries at higher risk for COVID-19, is
                important for fighting the pandemic.
                 Seeking to balance the needs of each stakeholder group, both in
                fighting the pandemic and ensuring long-term program sustainability,
                this IFC adopts a blended approach to interpreting section 6008(b)(3)
                of the FFCRA. This blended approach adopts the state flexibility
                available through the enrollment interpretation--allowing states to
                make programmatic changes to benefits and cost sharing and to
                transition individual beneficiaries between eligibility groups with
                differing benefit packages--while also establishing parameters to
                prevent beneficiaries from losing access to comprehensive coverage,
                consistent with our existing interpretation, through the end of the
                month in which the PHE for COVID-19 ends.
                 This blended approach is expected to give states more flexibility,
                beyond what is available under our existing interpretation, to manage
                their Medicaid programs. This is consistent with section 1902(a)(4) of
                the Act, which requires the state plan to provide for such methods of
                administration as are necessary for the proper and efficient operation
                of the plan. CMS is also exercising its general rulemaking authority
                under sections 1102 and 1902(a)(19) of the Act to establish parameters
                under which states must operate when they exercise the flexibility that
                CMS is providing with respect to compliance with section 6008(b)(3) of
                the FFCRA.
                 The parameters established by this IFC will help to ensure that
                states are determining eligibility, and providing care and services, in
                a manner that is consistent with the simplicity of administration, as
                described in section 1902(a)(19) of the Act. Under this blended
                approach, CMS is giving states a wider degree of flexibility to
                effectuate enrollment transitions during the PHE for COVID-19, which
                could decrease backlogs in redeterminations and appeals following the
                PHE for COVID-19, thereby simplifying state implementation of the
                conditions in FFCRA section 6008(b)(3) and administration of the state
                plan. These parameters are also expected to help ensure that states are
                determining eligibility, and providing care and services, in a manner
                that is consistent with the best interests of beneficiaries, as
                described in section 1902(a)(19) of the Act. That is because CMS is
                giving states less flexibility to reduce beneficiaries' coverage under
                this blended approach than might be available to states under the
                enrollment interpretation, in an effort to help protect beneficiaries'
                access to potentially necessary medical care during the period in which
                the FFCRA 6008(b)(3) requirement applies. We therefore believe this
                blended approach balances the interests of all stakeholders consistent
                with the statute.
                 This IFC adds a new subpart G, Temporary FMAP Increase During the
                Public Health Emergency for COVID-19, to 42 CFR part 433, including a
                new Sec. 433.400. Section 433.400(a) describes the statutory basis for
                this provision, while Sec. 433.400(b) provides definitions specific to
                this subpart. As described in detail below, Sec. 433.400(c) requires
                states, as a condition for receiving the temporary FMAP increase, to
                maintain beneficiary enrollment in an eligibility group that provides
                one of three tiers of coverage through the end of the month in which
                the PHE for COVID-19 ends, except under the circumstances specified in
                paragraph (d). This provision generally does not require states to
                provide the exact same (or greater) amount, duration, and scope of
                medical assistance, or maintain the cost-sharing or PETI liability for
                a particular beneficiary at the same (or lower) level that was
                applicable to the beneficiary as of March 18, 2020 or subsequent date
                of initial enrollment during the PHE. Section 433.400 is effective
                immediately upon display of this rule. CMS' previous interpretation, as
                described in section II.F.2. of this preamble, continues to apply from
                the beginning of the quarter up to the date that this IFC is displayed.
                5. Maintaining Enrollment in the Same Tier of Coverage
                 As discussed, we believe that interpreting FFCRA section 6008(b)(3)
                only to require continued enrollment in a state's Medicaid program
                (even if benefits are strictly limited), could have significant
                negative consequences for both beneficiaries and efforts to combat the
                COVID-19 pandemic. Some beneficiaries may transition from medical
                assistance that qualifies as MEC to non-MEC coverage, and some may even
                lose access to COVID-19 testing
                [[Page 71164]]
                services and treatment. CMS has not interpreted section 6008(b)(4) of
                the FFCRA to require state Medicaid programs to cover COVID-19 testing
                services and treatment for beneficiaries whose Medicaid eligibility is
                limited by statute or under existing section 1115 demonstration
                authority to coverage for care and services that are for a specific
                (non-COVID-19-related) condition, disease or purpose and that would not
                otherwise include COVID-19 testing and treatment services.
                 Consistent with the blended approach to interpreting section
                6008(b)(3) of the FFCRA that is described above, and consistent with
                section 1902(a)(4) and (a)(19) of the Act, we are requiring states to
                ensure that beneficiaries who were validly enrolled for benefits as of
                or after March 18, 2020 with access to minimum essential coverage
                retain access to minimum essential coverage, and to ensure that
                beneficiaries with access to testing services and treatment for COVID-
                19 maintain access to those services.
                 We believe it is reasonable to interpret the term ``enrolled for
                benefits'' in section 6008(b)(3) to mean validly enrolled, such that
                those who were erroneously enrolled are not to be considered ``enrolled
                for benefits'' for purposes of FFCRA section 6008. Therefore, we define
                ``validly enrolled'' at Sec. 433.400(b) to mean that the beneficiary
                was enrolled in Medicaid based on a determination of eligibility,
                including during the retroactive eligibility period, and that the
                beneficiary was not erroneously granted eligibility at the point of
                application or last redetermination (if such last redetermination was
                completed prior to March 18, 2020) because of: (1) Agency error; or (2)
                fraud (as evidenced by a fraud conviction) or abuse (as determined
                following the completion of an investigation pursuant to 42 CFR 455.15
                and 455.16) attributed to the beneficiary or the beneficiary's
                representative which was material to the determination of eligibility.
                Terminating the eligibility of beneficiaries who are not validly
                enrolled as defined at Sec. 433.400(b) will not impact a state's
                ability to claim the temporary FMAP increase. We note that prior to
                termination, however, the state must complete a redetermination
                consistent with 42 CFR 435.916 and provide the beneficiary with advance
                notice and the opportunity for a fair hearing consistent with 42 CFR
                part 431, subpart E. Additionally, individuals receiving medical
                assistance during a presumptive eligibility period in accordance with
                section 1902(a)(47) of the Act and 42 CFR part 435, subpart L, have not
                received a determination of eligibility by the state under the state
                plan and therefore are not considered to be validly enrolled for
                continuous coverage under section 6008(b)(3) of the FFCRA.
                 In order to receive the temporary FMAP increase (defined at Sec.
                433.400(b)) for any quarter in which it is available, a state must meet
                the requirements described in paragraph (c). As described in Sec.
                433.400(c)(1)(i), for the quarter in which this rule becomes effective,
                states would be expected to meet the requirements described in Sec.
                433.400(c)(2) and (3) only from the date of display through the end of
                the quarter. CMS' previous interpretation, as described in section
                II.F.2. of this preamble and in the FAQs cited therein, continues to
                apply from the beginning of the quarter up to the date this rule is
                effective. For all quarters following the effective date of this rule,
                states would be expected to meet the requirements of Sec. 433.400(c)
                for the entirety of the quarter in order to claim the temporary FMAP
                increase.
                 Section 433.400(c)(2) requires states to maintain the enrollment of
                all beneficiaries who were validly enrolled on or after March 18, 2020.
                Paragraphs (c)(2)(i), (ii), and (iii) of 433.400 establish safeguards
                for the maintenance of enrollment. For beneficiaries who were not
                validly enrolled during this period, and whom the state is therefore
                permitted to disenroll, the state must provide advance notice of
                termination and fair hearing rights in accordance with 42 CFR 435.917
                and 42 CFR part 431, subpart E, when terminating coverage.
                 Consistent with the Secretary's rulemaking authority under section
                1102 of the Act and section 1902(a)(19) of the Act, which provides for
                such safeguards as are needed to ensure that care and services are
                provided in a manner consistent with the best interests of
                beneficiaries, Sec. 433.400(c)(2) establishes three tiers of Medicaid
                coverage. These coverage tiers will help to ensure that beneficiaries
                protected under section 6008(b)(3) of the FFCRA in states claiming the
                temporary FMAP increase, who no longer meet eligibility requirements
                for the initial eligibility group in which they are enrolled but who
                become eligible under a different eligibility group or who lose
                Medicaid eligibility entirely, do not experience a reduction in covered
                benefits that would be inconsistent with section 1902(a)(19) of the
                Act, or with our interpretation of sections 6008(b)(3) and (4) of the
                FFCRA.
                 The first tier of coverage, under paragraph (c)(2)(i) of Sec.
                433.400, consists of Medicaid coverage that meets the definition of
                MEC, as defined in section 5000A(f) of the Code and implementing
                regulations at regulation at 26 CFR 1.5000A-2. Under Sec.
                433.400(c)(2)(i)(A), for beneficiaries whose Medicaid coverage as of or
                after March 18, 2020 meets the definition of MEC, the state must
                generally continue to provide Medicaid coverage that meets the
                definition of MEC throughout the period in which this rule applies.
                This means that if a state determines a beneficiary ineligible for the
                group in which he or she is currently enrolled, which provides MEC, and
                finds the beneficiary eligible for another group that also provides
                MEC, the state would transition the beneficiary to the new eligibility
                group. In contrast, if the beneficiary lost eligibility for a group
                that provides MEC, but gained eligibility for coverage that does not
                meet the definition of MEC, the state may not move the beneficiary to
                the new group or demonstration but must instead maintain the
                beneficiary's access to coverage meeting the definition of MEC during
                the period in which the rule applies, except as discussed below.
                 For example, the state must transition a beneficiary enrolled in
                the eligibility group for children under age 19 at 42 CFR 435.118 to
                the adult group described at 42 CFR 435.119 when the beneficiary
                reaches age 19, provided that the state covers this group and the
                beneficiary meets the eligibility requirements of the group. That is
                because the medical assistance provided under the eligibility group for
                children under age 19 includes full state plan benefits with no cost
                sharing, which meets the definition of MEC, and the medical assistance
                offered under the adult group may include a somewhat different set of
                benefits through the state's ABP, and may include cost sharing for
                certain services, but it also meets the definition of MEC. This
                transition would therefore be permissible under Sec. 433.400(c)(2)(i).
                 In contrast, a state may not transition a beneficiary from the
                eligibility group for children under age 19 or the adult group, both of
                which provide MEC, to a limited benefit group that does not provide
                MEC, such as the family planning group at 42 CFR 435.214, which covers
                only family planning and family planning-related services. As described
                further in Sec. 433.400(c)(2)(iv), if a beneficiary receiving tier 1
                coverage no longer meets the eligibility requirements for the original
                group in which he or she was enrolled, and the beneficiary does not
                meet the requirements for any other eligibility groups with tier 1
                coverage, the state
                [[Page 71165]]
                must continue to provide the medical assistance offered under the
                eligibility group in which the beneficiary was eligible on or after
                March 18, 2020.
                 At Sec. 433.400(c)(2)(i)(B), we establish a variation on this
                requirement for beneficiaries who have coverage meeting the definition
                of MEC as of or after March 18, 2020, and whom the state subsequently
                determines are eligible for coverage under a Medicare Savings Program
                eligibility group. The Medicare Savings Program is defined at Sec.
                433.400(b) to include the eligibility groups described at section
                1902(a)(10)(E)(i), (iii), and (iv) of the Act. For such beneficiaries,
                the state satisfies the requirement described in paragraph (c)(2) of
                this section if it furnishes the medical assistance available through
                the Medicare Savings Program, because the coverage that beneficiary
                receives under the Medicare program qualifies as MEC. Thus, for
                example, a beneficiary enrolled in the adult group as of or after March
                18, 2020, may be transitioned to a Medicare Savings Program eligibility
                group, such as the qualified Medicare beneficiaries (QMB) group
                described at section 1902(a)(10)(E)(i) of the Act, when the beneficiary
                reaches age 65, if the beneficiary meets the eligibility requirements
                of the QMB group. Such a beneficiary would receive Medicaid coverage of
                Medicare premiums and Medicare-related cost sharing through the QMB
                group. However, unless that beneficiary was also eligible for another
                full-benefit Medicaid eligibility group, all of the beneficiary's
                health care services would be provided through Medicare and the
                beneficiary would not receive any other Medicaid covered services.
                While the medical assistance provided under the adult group differs
                from the medical assistance provided under the QMB group, the
                beneficiary maintains access to MEC. Therefore, the state may
                transition the beneficiary from the adult group to a Medicare Savings
                Program group.
                 The second tier of coverage, which is described at Sec.
                433.400(c)(2)(ii), consists of coverage that is not defined as MEC but
                that is robust enough to include access to coverage of both testing
                services and treatment for COVID-19 under CMS's interpretation of FFCRA
                section 6008(b)(4). Not all Medicaid coverage qualifies as MEC, and the
                non-MEC coverage provided to beneficiaries can vary greatly. As noted
                previously, some beneficiaries' coverage is limited by statute or
                existing section 1115 demonstration authority to a very narrow range of
                services that would not include COVID-19 testing or treatment services,
                and CMS has not interpreted section 6008(b)(4) of the FFCRA to require
                states to cover COVID-19 testing and treatment services for those
                beneficiaries. However, other Medicaid beneficiaries receive a
                relatively robust set of benefits, such as pregnancy-related services
                described in the matter following section 1902(a)(10)(G) of the Act,
                which would include testing services and treatment for COVID-19,
                including vaccines, specialized equipment, and therapies, during the
                period when FFCRA section 6008(b)(4) applies in a state, but which does
                not qualify as MEC in all states.
                 Section 433.400(c)(2)(ii) of this IFC provides that states must
                continue to provide Medicaid coverage that includes coverage of COVID-
                19 testing services and treatments, including vaccines, specialized
                equipment, and therapies, to beneficiaries who had access to coverage
                in tier 2 as of or after March 18, 2020. Thus, states must transition
                beneficiaries who lose eligibility for tier 2 coverage but gain access
                to MEC coverage in tier 1 or to other coverage in tier 2 to the new
                eligibility group or demonstration, but they may not transition such
                beneficiaries to coverage that does not include access to testing
                services and treatment for COVID-19. This interpretation is consistent
                with the requirement for states claiming the temporary FMAP increase to
                provide coverage for testing services and treatments for COVID-19, as
                described at section 6008(b)(4), and with CMS's interpretation of that
                requirement.
                 Consistent with Sec. 433.400(c)(2)(ii), a state must transition a
                beneficiary from tier 2 coverage to tier 1 coverage if that beneficiary
                becomes eligible for coverage that qualifies as MEC. For example, a
                state must transition a woman receiving tier 2 postpartum coverage
                under the pregnant women group described at 42 CFR 435.116 (in a state
                in which such coverage is not considered MEC) to the adult group
                described at 42 CFR 435.119 at the end of the postpartum period,
                because coverage under the adult group qualifies as MEC and is
                therefore included in tier 1. If this postpartum beneficiary was not
                eligible for any eligibility groups with tier 1 coverage, such as in a
                state that does not cover the adult group, but was eligible for tier 2
                coverage, such as through a limited benefit section 1115 demonstration
                providing non-MEC coverage that includes access to testing services and
                treatment for COVID-19, the state must move her to that coverage. If
                such a beneficiary is not eligible for any other tier 1 or tier 2
                coverage, the state must continue to provide the medical assistance
                available through the pregnant women group until the end of the month
                in which the PHE for COVID-19 ends, in order to qualify for the
                temporary FMAP increase, as described at Sec. 433.400(c)(2)(iv). For
                example, a woman receiving non-MEC pregnancy related coverage that
                includes coverage of testing services and treatments for COVID-19 could
                not be transitioned to coverage of only family planning services at the
                end of the postpartum period.
                 The third tier, described at Sec. 433.400(c)(2)(iii), includes
                coverage that is not MEC and that also does not cover testing services
                and treatment for COVID-19, including vaccines, specialized equipment,
                and therapies, under CMS's interpretation of FFCRA section 6008(b)(4).
                Coverage under tier 3 may include coverage for the eligibility group
                limited to family planning described at 42 CFR 435.214 or the
                eligibility group for individuals with tuberculosis described at 42 CFR
                435.215. Coverage through an existing family planning demonstration or
                other limited benefit section 1115 demonstration may also be included
                in tier 3 if it does not cover COVID-19 testing and treatment. If a
                beneficiary loses eligibility for coverage meeting the tier 3
                description during the period in which the FFCRA section 6008(b)(3)
                requirement applies, and the beneficiary gains eligibility for a group
                that provides coverage in tier 1 or tier 2, then, under Sec.
                433.400(c)(2)(iii), the state must transfer the beneficiary into that
                new eligibility group as coverage in those tiers is more robust than
                coverage in tier 3.
                 The coverage in tier 3 differs from the coverage in tier 1, which
                is always considered MEC and the coverage in tier 2, which always
                includes testing services and treatment for COVID-19. The coverage
                available to a beneficiary in tier 3 is more limited and may vary
                widely from one group or demonstration to the next. Coverage limited to
                family planning and family planning-related services is significantly
                different from coverage in a limited-benefit section 1115 demonstration
                that focuses, for example, on preventing the progression of a specific
                disease. Therefore, the requirement in Sec. 433.400(c)(2)(iii) for
                tier 3 coverage differs somewhat from the requirements in Sec.
                433.400(c)(2)(i) and (ii) for tiers 1 and 2. If a beneficiary becomes
                ineligible for the tier 3 eligibility group or demonstration in which
                he or she is enrolled and becomes eligible for another eligibility
                group or demonstration with coverage that is also within tier 3, the
                state must continue to provide the coverage
                [[Page 71166]]
                available through the eligibility group or demonstration for which the
                beneficiary was eligible as of or after March 18, 2020, unless the
                beneficiary requests a voluntary termination to transition to the new
                eligibility group or demonstration, as discussed below. Transitioning a
                beneficiary from one eligibility group offering tier 3 coverage to
                another eligibility group offering tier 3 coverage would not satisfy
                the requirement in Sec. 433.400(c)(2)(iii).
                 We note that beneficiaries enrolled in certain limited-benefit
                state plan eligibility groups may be eligible for coverage in the
                optional COVID-19 testing group authorized under section
                1902(a)(10)(A)(ii)(XXIII), and such individuals can be enrolled in both
                limited benefit groups. Section 3716 of the CARES Act amended section
                1902(ss) of the Act to establish that individuals eligible for certain
                optional eligibility groups, such as the eligibility group limited to
                family planning and related services described at
                1902(a)(10)(A)(ii)(XXI) of the Act, are considered ``uninsured'' for
                purposes of eligibility under the optional COVID-19 testing group and
                therefore may obtain COVID-19 testing coverage under that group in
                addition to coverage under the other optional eligibility group.
                 In addition, beneficiaries in each benefit tier retain the right to
                request a voluntary transition to a different eligibility group
                (provided that they meet the applicable eligibility requirements), even
                if such transition results in a change in the individual's benefit
                package that would not otherwise satisfy the conditions of this rule,
                such as a transition from an eligibility group with coverage in tier 1
                to an eligibility group with coverage in tier 3 or a transition from
                one tier 3 group to another tier 3 group. Such a transition is
                permissible under the exception at Sec. 433.400(d)(1)(i), as described
                at Sec. 433.400(d)(3)(i), in which a beneficiary may request a
                voluntary termination of eligibility, and would not impact the state's
                ability to claim the temporary FMAP increase.
                 Section 42 CFR 430.400(c)(2)(iv) specifies that for any beneficiary
                who is validly enrolled and receiving medical assistance on or after
                March 18, 2020, and who is determined ineligible for Medicaid prior to
                the last day of the month in which the PHE for COVID-19 ends, except as
                provided in paragraph (d), a state meets the requirements of Sec.
                430.400(c)(2)(i), (ii), or (iii) by continuing the provide the same
                coverage that the individual would have received absent the
                determination of ineligibility. For example, if a beneficiary is
                enrolled in the age and disability-related poverty level group
                described at section 1902(a)(10)(A)(ii)(X) of the Act, and the
                beneficiary reports a change in resources that would result in
                ineligibility for this group, if the beneficiary is not eligible for
                coverage in any other Medicaid eligibility group, the state would
                continue to provide that individual with the coverage available to
                beneficiaries enrolled in the age and disability-related poverty level
                group.
                 The requirement at Sec. 430.400(c)(2)(iv) also applies in cases
                where a state finds a beneficiary ineligible on a procedural basis,
                such as a failure to respond to a request for additional information,
                with an exception related to residency described at Sec.
                430.400(d)(3). For example, if a state receives information from
                quarterly wage data, which indicates that a child's household income
                exceeds the income standard for the eligibility group for children
                under age 19 (described at 42 CFR 435.118), the child is not eligible
                on another basis, and the beneficiary's family does not respond to a
                request from the state for additional information, the child may be
                determined ineligible on a procedural basis. In this case, through the
                end of the month in which the PHE for COVID-19 ends, the state would
                continue to provide the child with the same coverage provided to
                beneficiaries enrolled in the eligibility group for children under age
                19. If the beneficiary is subsequently determined eligible for a
                different eligibility group that provides the same tier of coverage, in
                this case tier 1, the state would transfer the beneficiary to the new
                eligibility group.
                 CMS is available for technical assistance to help states ensure
                that all beneficiaries retain coverage in either the same tier or in a
                more robust tier of coverage when their eligibility changes in a manner
                that would ordinarily result in a transition between eligibility
                groups.
                6. Changes to Benefits, Cost Sharing, and PETI
                 Section 433.400 of this IFC allows states, during the period when
                section 6008(b)(3) of the FFCRA applies, to move a beneficiary from one
                eligibility group to another when the beneficiary becomes ineligible
                for one group and eligible for another group, as long as the coverage
                provided under the new group is within the same tier of coverage
                (applicable to tier 1 and tier 2 coverage only) or a beneficiary may
                also be moved to a more generous tier of coverage than the coverage
                available to the beneficiary on or after March 18, 2020. Section
                433.400(c)(3) specifies that states may make programmatic changes to
                coverage, cost sharing, and beneficiary liability without violating the
                requirements for receiving the temporary FMAP increase, provided that
                such changes do not violate the individual beneficiary protections at
                Sec. 433.400(c)(2) or the requirements under section 6008(b)(4) of the
                FFCRA to cover COVID-19 testing and treatment services without cost-
                sharing.
                 As described at Sec. 433.400(c)(3), states may generally make
                changes to benefits offered under the state plan (as allowed under
                relevant provisions of the Act) or a section 1115 demonstration. For
                example, section 6008(b)(3) of the FFCRA does not prohibit a state from
                eliminating an optional benefit from its state plan. Therefore, a state
                could eliminate dental services for individuals age 21 and above, and
                still comply with section 6008(b)(3) of the FFCRA. Note that under
                section 1905(r)(5) of the Act, as part of the mandatory EPSDT benefit,
                states must provide beneficiaries under age 21 with all necessary
                health care, diagnostic services, treatment, and other measures
                described in section 1905(a) of the Act, to correct or ameliorate
                defects and physical and mental illnesses and conditions discovered by
                EPSDT screening services, whether or not such services are covered
                under the state plan. However, states need not maintain EPSDT benefits
                for beneficiaries who turn 21 in order to comply with the terms of
                section 6008(b)(3) of the FFCRA.
                 Additionally, states are permitted to change the scope of benefits
                provided to beneficiaries without violating the requirements of section
                6008(b)(3) for claiming the temporary FMAP increase, as long as they
                comply with otherwise applicable Medicaid law, including section
                6008(b)(4) of the FFCRA. For example, section 6008(b)(3) of the FFCRA
                does not prohibit states from applying service authorization criteria,
                including for services authorized under section 1915(c) of the Act, in
                determining the amount, duration, or scope of coverage a beneficiary is
                entitled to receive under the state's program. Section 440.230(b) still
                applies as a limit on state flexibility. That regulation requires that
                each Medicaid service must be sufficient in amount, duration, and scope
                to reasonably achieve its purpose.
                 In considering optional changes to coverage, states may wish to
                avoid service authorization changes that lead to more individuals being
                placed in institutional or congregate settings, as these settings have
                had a disproportionate share of COVID-19 cases and deaths. We also note
                that
                [[Page 71167]]
                regardless of the flexibility provided at Sec. 433.400(c)(3), states
                retain their obligations to provide services and supports in the ``most
                integrated setting'' under the integration mandate of Title II of the
                Americans with Disabilities Act (ADA), as interpreted by the Supreme
                Court in Olmstead v. L.C., 527 U.S. 581 (1999) (hereafter
                ``Olmstead''),\39\ to avoid unjustified institutionalization or
                segregation. If the elimination of an optional benefit results in or
                places an individual with a disability at risk of unjustified
                institutionalization or segregation, it may be a violation of the
                state's obligations under the ADA and Olmstead.\40\ States' Olmstead
                obligations do not confer Medicaid authority or create Medicaid
                obligations where they do not otherwise exist; states may choose to
                (and in some cases would be required to) use funds outside of or in
                addition to Medicaid to comply with Olmstead responsibilities.
                ---------------------------------------------------------------------------
                 \39\ Under title II of the ADA and Olmstead, the unjustified
                isolation of individuals with disabilities constitutes unlawful
                discrimination. States are required to provide community-based
                treatment where such treatment would be appropriate, the affected
                person does not oppose such treatment, and the treatment can be
                reasonably accommodated.
                 \40\ See DOJ's Statement of the Department of Justice on
                Enforcement of the Integration Mandate of Title II of the Americans
                with Disabilities Act and Olmstead v. L.C., Question 9, updated
                February 25, 2020, available at: https://www.ada.gov/olmstead/q&a_olmstead.htm.
                ---------------------------------------------------------------------------
                 Finally, states may generally establish or increase cost sharing
                (consistent with sections 1916 and 1916A of the Act, implementing
                regulations at 42 CFR 447.50 through 447.90, and the state plan), and
                increase beneficiary obligations under the PETI rules, and still comply
                with FFCRA section 6008(b)(3). However, states should also comply with
                FFCRA 6008(b)(4) if they are claiming the temporary FMAP increase. For
                example, a state may increase the liability of individuals receiving
                Medicaid coverage for institutional services under the state plan
                through otherwise permissible reductions in their standard personal
                needs allowances or family allowances. In addition, they may transfer a
                beneficiary from one program furnishing HCBS (for example, a waiver
                program authorized under section 1915(c) of the Act) to another as a
                beneficiary's health status and level of care changes.
                 Prior to reducing benefits or increasing cost sharing or
                beneficiary liability a state must provide proper advance notice and
                comply with other applicable statutory and regulatory requirements. In
                particular, the advance notice requirements that apply under 42 CFR
                431.211 preclude states from reducing benefits or increasing cost
                sharing or beneficiary liability retroactively. Additionally, 42 CFR
                440.230(b) limits states' flexibility to reduce the amount, duration,
                or scope of benefits; that regulation requires that each Medicaid
                service must be sufficient in amount, duration, and scope to reasonably
                achieve its purpose.
                7. Exceptions to Maintaining Enrollment
                 Section 433.400(d) of this IFC describes the exceptions to the
                continuous enrollment requirement in Sec. 433.400(c)(2). Section
                6008(b)(3) of the FFCRA specifies that a beneficiary's Medicaid
                enrollment may be terminated if the beneficiary requests a voluntary
                termination of eligibility or the beneficiary is no longer a resident
                of the state. These exceptions are described in Sec. 433.400(d)(1)(i)
                and (ii). Because a beneficiary who dies is no longer a state resident,
                Sec. 433.400(d)(1)(iii) also provides an exception for deceased
                beneficiaries.
                 Section 433.400(d)(2) provides that states that have elected the
                option under section 1903(v)(4) of the Act to provide coverage to
                certain lawfully residing children and/or pregnant women, must limit
                the provision of services for these beneficiaries to services necessary
                for treatment of an emergency medical condition, as defined in section
                1903(v)(3) of the Act, when they no longer meet the criteria at section
                1903(v)(4) of the Act. This is because section 1903(v) of the Act
                prohibits the provision of FFP for otherwise eligible non-citizens who
                are not in a satisfactory immigration status, except as provided under
                paragraphs (2) (authorizing FFP for services necessary to treat an
                emergency medical condition) and (4) (relating to coverage of certain
                lawfully residing children and/or pregnant women) of section 1903(v) of
                the Act.
                 Finally, Sec. 433.400(d)(3) clarifies the exceptions at Sec.
                433.400(d)(1). As noted above, Sec. 433.400(d)(1)(i) provides an
                exception for beneficiaries who request a voluntary termination.
                Section 433.400(d)(3)(i) provides that this exception applies not only
                to beneficiaries who request that their Medicaid coverage be terminated
                in its entirety, but also to beneficiaries who request a voluntary
                transition to a different eligibility group (provided that they meet
                the applicable eligibility requirements), even if such transition
                results in a change in the individual's benefit package that would not
                otherwise satisfy the conditions of Sec. 433.400(c)(2). For example, a
                state may transition a beneficiary from an eligibility group with
                coverage in tier 1 to an eligibility group with coverage in tier 3, at
                the beneficiary's request. Such a transition would not impact the
                state's ability to claim the temporary FMAP increase because the change
                resulted from a beneficiary request for voluntary termination from the
                original eligibility group.
                 Additionally, as described at Sec. 433.400(d)(3)(ii), individuals
                who are identified as receiving benefits in more than one state via a
                data match with the Public Assistance Reporting Information System
                (PARIS) interstate matching service in accordance with Sec. 435.945(d)
                and who fail to respond to a request for information to verify their
                residency in the reasonable period permitted by the state, consistent
                with Sec. 435.952(c)(2)(iii), are generally considered to no longer be
                residents of the state for purposes of section 6008(b)(3) of the FFCRA,
                provided that the state takes all available reasonable measures to
                determine state residency prior to termination. These measures include,
                but are not limited to, reviewing existing information in the
                beneficiary's record to validate state residency, checking available
                state electronic data sources such as the Department of Motor Vehicles
                records or other state benefit programs, and coordinating with agencies
                in the other state(s) in which the PARIS interstate match identified
                the beneficiary as receiving benefits to determine the state in which
                the individual is a resident for purposes of Medicaid eligibility. If
                the state is unable to verify the beneficiary's continued residency in
                the state because the beneficiary fails to respond to requests for
                additional information and the state's alternative efforts cannot
                verify the beneficiary's continued residency in the state through other
                sources, that beneficiary's Medicaid enrollment may be terminated in
                accordance with Sec. 435.400(d)(1)(ii). Such an individual will be
                considered a non-resident for purposes of section 6008(b)(3) of the
                FFCRA until such time as the state has information verifying residency.
                If, after termination, the state obtains information that verifies
                residency, the state must reinstate the individual's eligibility back
                to the date of termination.
                G. Updates to the Comprehensive Care for Joint Replacement (CJR) Model,
                Performance Year (PY) 5 During the COVID-19 Public Health Emergency
                (PHE)
                1. Background
                 Under the authority of section 1115A of the Act, through notice-
                and-comment
                [[Page 71168]]
                rulemaking, the Innovation Center established the CJR model in a final
                rule titled ``Medicare Program; Comprehensive Care for Joint
                Replacement Payment Model for Acute Care Hospitals Furnishing Lower
                Extremity Joint Replacement Services'' published in the November 24,
                2015 Federal Register (80 FR 73274) (referred to as the ``November 2015
                final rule''). The CJR model, which was implemented on April 1, 2016,
                aims to support better and more efficient care for beneficiaries
                undergoing the most common inpatient surgeries for Medicare
                beneficiaries: Hip and knee replacements (also called lower extremity
                joint replacements or LEJR). This model tests bundled payment and
                quality measurement for an episode of care associated with hip and knee
                replacements to encourage hospitals, physicians, and post-acute care
                providers to work together to improve the quality and coordination of
                care from the initial hospitalization through recovery. All related
                care covered by Medicare Parts A and B within 90 days of hospital
                discharge from the LEJR procedure is included in the episode of care.
                During the first CJR model performance period, the CJR model required
                hospitals located in the 67 MSAs selected participation to participate
                in the model through December 31, 2020 unless the hospital was an
                episode initiator for an LEJR episode in the risk-bearing phase of
                Models 2 or 4 of the Bundled Payments for Care Improvement (BPCI)
                initiative. Hospitals located in one of the 67 MSAs that participated
                in Model 1 of the BPCI initiative, which ended on December 31, 2016,
                were required to begin participating in the CJR model when their
                participation in the BPCI model ended.
                 In the December 1, 2017 Federal Register, we published another
                final rule (82 FR 57066), titled ``Medicare Program; Cancellation of
                Advancing Care Coordination Through Episode Payment and Cardiac
                Rehabilitation Incentive Payment Models; Changes to Comprehensive Care
                for Joint Replacement Payment Model: Extreme and Uncontrollable
                Circumstances Policy for the Comprehensive Care for Joint Replacement
                Payment Model'' (referred to as the ``December 2017 final rule''), that
                implemented revisions to the CJR model, including giving rural and low
                volume hospitals selected for participation in the CJR model as well as
                those hospitals located in 33 of the 67 metropolitan statistical areas
                (MSAs) \41\ a one-time option to choose whether to continue their
                participation in the model through December 31, 2020 (that is, continue
                their participation through PY5). An interim final rule with comment
                period was also issued in conjunction with the December 2017 final rule
                (82 FR 57092) in order to address the need for a policy to provide some
                flexibility in the determination of episode costs for providers located
                in areas impacted by extreme and uncontrollable circumstances. This
                extreme and uncontrollable circumstances policy was adopted as final in
                the final rule (83 FR 26604) we published in the June 8, 2018 Federal
                Register, titled ``Medicare Program; Changes to the Comprehensive Care
                for Joint Replacement Payment Model (CJR): Extreme and Uncontrollable
                Circumstances Policy for the CJR Model.''
                ---------------------------------------------------------------------------
                 \41\ Metropolitan Statistical Area (MSA) means a core-based
                statistical area associated with at least one urbanized area that
                has a population of at least 50,000. MSAs included in the CJR model
                are available in the December 2017 final rule available at https://www.federalregister.gov/documents/2017/12/01/2017-25979/medicare-program-cancellation-of-advancing-care-coordination-through-episode-payment-and-cardiac.
                ---------------------------------------------------------------------------
                 In the February 24, 2020 Federal Register (85 FR 10516), we
                published the proposed rule titled ``Medicare Program: Comprehensive
                Care for Joint Replacement Model Three-Year Extension and Changes to
                Episode Definition and Pricing'' (hereinafter referred to as the
                ``February 2020 proposed rule''). Among other changes, this proposed
                rule proposed to add three additional performance years to the CJR
                model (i.e., performance years 6 through 8).
                 In the April 6, 2020 Federal Register (85 FR 19230), we published
                an interim final rule with comment period (IFC) titled ``Medicare and
                Medicaid Programs; Policy and Regulatory Revisions in Response to the
                COVID-19 Public Health Emergency'' (hereinafter referred to as the
                ``April 2020 IFC''). In the April 2020 IFC, to account for the impact
                of the PHE for COVID-19 on CJR participant hospitals, we extended PY5
                through March 31, 2021, and adjusted the extreme and uncontrollable
                circumstances policy to account for COVID-19 by specifying that all
                episodes with a date of admission to the anchor hospitalization that is
                on or within 30 days before the date that the emergency period (as
                defined in section 1135(g) of the Act) begins or that occurs through
                the termination of the emergency period (as described in section
                1135(e) of the Act), actual episode payments are capped at the target
                price determined for that episode under Sec. 510.300.
                 Additionally, in the May 29, 2020 Federal Register (85 FR 32460),
                CMS published a proposed rule titled ``Medicare Program; Hospital
                Inpatient Prospective Payment Systems for Acute Care Hospitals and the
                Long-Term Care Hospital Prospective Payment System and Proposed Policy
                Changes and Fiscal Year 2021 Rates; Quality Reporting and Medicare and
                Medicaid Promotion Interoperability Programs Requirements for Eligible
                Hospitals and Critical Access Hospitals: (hereinafter referred to as
                the FY 2021 IPPS/LTCH proposed rule). In the FY 2021 IPPS/LTCH proposed
                rule (85 FR 32510), we solicited comment on the effect of the proposal
                to create new MS-DRG 521 and MS-DRG 522, the effect this proposal would
                have on the CJR model and whether to incorporate MS-DRG 521 and MS-DRG
                522, if finalized, into the CJR model's proposed extension to December
                31, 2023.
                 Through this IFC we are implementing four changes to the CJR model.
                These are: (1) Extending performance year 5 an additional 6 months to
                provide for continuity of model operations with the same scope while we
                continue to consider comments received on our proposal to extend the
                model to performance years 6 through 8 and adopt other changes to the
                model; (2) making changes to the reconciliation process for PY5 to
                allow for two periods and to enable more frequent receipt of
                reconciliation reports by participants; (3) making a technical change,
                retroactive to October 1, 2020, to ensure that the model continues to
                include the same inpatient Lower Extremity Joint Replacement (LEJR)
                procedures, despite the adoption of new MS-DRGs to describe those
                procedures; and (4) making changes to the extreme and uncontrollable
                circumstances policy for COVID-19 to adapt to an increase in CJR
                episode volume and renewal of the PHE, while providing protection
                against financial consequences of COVID-19 after the extreme and
                uncontrollable circumstances policy no longer applies.
                2. Extension of Performance Year 5 to September 30, 2021
                 We are implementing a 6-month extension to CJR performance year
                (PY) 5 such that the model will now end on September 30, 2021. In the
                February 2020 proposed rule, we proposed to extend the CJR model by
                adding three performance years (PY6 through 8), from January 1, 2021 to
                December 31, 2023, to revise target prices, to change the definition of
                an episode of care to
                [[Page 71169]]
                include outpatient procedures for Total Knee Arthroplasty and Total Hip
                Arthroplasty, as well as to revise other sections of 42 CFR part
                510.\42\ In response to the PHE for COVID-19, in the April 2020 IFC we
                extended PY 5 an additional 3 months to end on March 31, 2021 rather
                than on December 31, 2020 as finalized in November 2015 final rule.
                ---------------------------------------------------------------------------
                 \42\ For proposed changes to the CJR Model in ``Medicare
                Program: Comprehensive Care for Joint Replacement Model Three Year
                Extension and Changes to Episode Definition and Pricing'' See 85 FR
                10516.
                ---------------------------------------------------------------------------
                 While we continue to consider the addition of performance years to
                the model and other changes proposed in the February 2020 proposed
                rule, we also do not want to create a disruption to the model by
                allowing the model to end on March 31, 2021, which could be disruptive
                to hospitals and patient care during the PHE if it is still ongoing at
                that time. Implementing an additional six months of PY5, so that PY5
                now ends on September 30, 2021, provides participant hospitals
                additional relief and stability in model operations. In the event the
                three-year extension is finalized, participant hospitals would be in a
                worse position if PY 5 was not extended to September 30, 2021 because
                participant hospitals would have made operational choices in reliance
                on the model ending on March 31, 2021 and then have to adjust to model
                changes on top of the significant burden of managing COVID-19 treatment
                and under COVID-19 safety protocols and utilization changes. Overall,
                this means a nine-month extension from the original conclusion of the
                model as finalized in the November 2015 final rule (80 FR 73274), which
                had established that the model would end on December 31, 2020 with no
                new episodes initiating after October 4, 2020.
                 We received several comments on the April 2020 IFC supporting the
                policy to extend PY5 an additional three months and asking that we
                extend PY5 by 12 months instead, not just the 3 months in the April
                2020 IFC. In addition, commenters noted that though state and local
                guidelines have laid out a process for regions and facilities to
                determine when to re-open elective procedures, the progression of
                COVID-19 could impact elective procedures well into 2021. We appreciate
                commenters' request to extend PY 5 by 12 additional months because of
                the impact COVID-19 has had on LEJR procedures. We observe that COVID-
                19 has had an impact on CJR procedures from February 2020 to August
                2020. Table 1 depicts recent Medicare claims data comparing February to
                August of 2019 and February to August of 2020. These numbers reflect
                episode volume for each month, accounting for any CJR episode that
                began within that month.
                 Table 1--CJR Episode Volume Comparison
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                 February March April May June July August
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                2019 6214 6174 6515 6019 5836 6060 5838
                2020 5245 3374 876 2242 4036 3838 3090
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                 In light of these data, we believe providing an additional 6 months
                beyond what we adopted in the April 2020 IFC provides participant
                hospitals relief from COVID-19 challenges. Therefore, we are
                implementing an additional 6-month extension of CJR PY 5 and amending
                the provisions at 42 CFR 510.2 and 510.200(a) to reflect this
                extension.
                 We note that in our February 2020 proposed rule to extend and
                modify the CJR model through PYs 6 to 8 (CMS-5529-P), we proposed PY 6
                would comprise all CJR episodes ending on or after January 1, 2021 and
                on or before December 31, 2021. However, since we are amending PY 5
                such that it comprises all CJR episodes ending on or after January 1,
                2020 and on or before September 30, 2021, we seek comment on the
                duration of PY 6, if finalized. In particular, we seek comment on the
                potential for PYs 6 through 8 to remain 12-month performance years and
                each begin with episodes ending on or after October 1 each year. We
                also seek comment on increasing the duration of proposed PY 6 to 15
                months. Under this alternative, PY 6 would comprise all CJR episodes
                ending on or after October 1, 2021 and on or before December 31, 2022;
                PY 7 and PY 8 would remain 12 months and each begin with episodes
                ending on or after January 1, 2023 or January 1, 2024, respectively.
                3. Additional Reconciliations for Performance Year 5
                 Currently, following the end of each performance year, CMS
                determines actual episode payments and calculates the amount of a
                reconciliation payment or repayment amount, as described in 42 CFR
                510.305. Each performance year is reconciled twice. The first
                reconciliation calculation process begins after a 2-month period of
                claims runout, while the final reconciliation calculation process
                begins after a 14-month period of claims runout. The initial
                reconciliation of a given performance year is conducted concurrently
                with the final reconciliation of the previous performance year, and the
                resulting amounts are netted against one another for one annual
                reconciliation payment or repayment amount, as set forth in 42 CFR
                510.305. The initial reconciliation process typically begins in late
                February of the calendar year following the performance year, with
                reports and reconciliation amounts issued in June. Final reconciliation
                for the performance year is issued the following June.
                 Absent modification to the reconciliation process, the extension of
                PY 5 to a total of 21 months, from January 1, 2020 through September
                30, 2021 would mean that participant hospitals would experience a 21-
                month gap between the PY4 final reconciliation in June of 2020 and
                initial PY 5 reconciliation in early 2022. We believe this significant
                gap is problematic because participant hospitals gain important
                feedback from their annual reconciliation reports that they can use to
                gauge their quality performance and efforts at cost-savings. These
                annual reports also facilitate the relationships that participant
                hospitals have established with clinicians and other entities with whom
                they coordinate care and/or have gainsharing arrangements. Further, not
                having an initial reconciliation for PY5 until early 2022 is not
                consistent with the model design goal of reconciling one time a year
                and netting against final reconciliation amounts from the prior year.
                Therefore, we believe there is good cause to conduct two initial, and
                two final, reconciliations of PY5. The first initial reconciliation
                will apply to the first 12 months of PY5 in order to maintain
                consistency with the 12 month reconciliation cycles for previous PYs 2-
                4 (we note that PY 1 was 9 months rather than 12 months), and the
                second initial reconciliation will apply to the
                [[Page 71170]]
                remaining 9 months of PY5. To minimize confusion, we will refer to
                these two subsets of PY5 as performance year subset 5.1and 5.2,
                respectively.
                 The initial reconciliation of performance year subset 5.1 will
                occur fourteen months after the start of PY5, which is the same
                timeline as would have occurred PY5 under the December 2017 final rule.
                After the usual 2-month period of claims runout, the initial
                reconciliation for performance year subset 5.1 episodes will begin in
                late February of 2021 using 12 months of claims from CY 2020 to
                calculate reconciliation payments, with the resulting amounts netted
                against the results of the concurrent PY4 final reconciliation
                calculation when we issue reports and reconciliation amounts to
                participants in June 2021. Participants can expect to receive their
                2021 reconciliation reports on approximately the same schedule as in
                previous model years.
                 The nine additional months of PY 5 (performance year subset 5.2)
                will be reconciled one full calendar year after the reconciliation of
                PY 4 final/performance year subset 5.1 initial. We will use claims data
                for the initial reconciliation of performance year subset 5.2 that
                reflect a 2-month period of claims runout (as set forth in 42 CFR
                510.305(e)(1)(i)), as we have for PY 1-4 and performance year subset
                5.1. In short, performance year subset 5.2 will run from January 1,
                2021 through September 30, 2021. Consistent with using two months of
                claims run out, we will pull claims for the initial reconciliation in
                December 2021. However, we will not reconcile performance year subset
                5.2 until late February 2022 along with the final reconciliation for
                performance year subset 5.1. This means that we will not begin
                reconciliation calculation for performance year subset 5.2 until five
                months after the end of performance year subset 5.2 in order to align
                the initial reconciliation calculation for performance year subset 5.2
                with the timing of the subsequent reconciliation calculation for
                performance year subset 5.1. While alignment with the performance year
                subset 5.1 subsequent reconciliation calculation is the primary reason
                for this delay in the performance year subset 5.2 initial
                reconciliation, it is also necessary to allow time to receive certain
                input files to perform the initial reconciliation calculation,
                including standardized claims files and quality data. These data are
                generally not available more than a few weeks prior to the usual
                reconciliation process start date in late February. Therefore, the
                reconciliation process will occur on the same schedule as PY 1 through
                4 and performance year subset 5.1, with the reconciliation report
                available one year after the reports from the previous year's
                reconciliation.
                 We note that, as part of the separate reconciliation calculation
                processes for performance year subsets 5.1 and 5.2, we will calculate a
                separate Composite Quality Score (CQS) for each of performance year
                subsets 5.1 and 5.2, including a separate set of quality improvement
                points and quality performance points for each performance year subset.
                In order to conduct separate CQS calculations for each time period, we
                are amending 42 CFR 510.400 to indicate that the required data
                submissions that previously applied to PY 5 will now apply to
                performance year subset 5.1, and we are adding a required data
                submission for performance year subset 5.2. These additional
                requirements will reflect the timeframe of performance year subset 5.2,
                but will otherwise parallel the requirements for performance year
                subset 5.1, and will not require an increased amount of data for
                performance year subset 5.2 as compared to performance year subset 5.1.
                We recognize that some of the timeframe for both performance year
                subsets 5.1 and 5.2 quality data collection overlap with the effective
                dates of the COVID-19 waiver \43\ that provided reporting exemptions
                for hospitals participating in quality reporting programs, so we will
                use quality data reported before and after the effective dates of the
                COVID-19 waiver, for those quality measures to which the waiver
                applied.
                ---------------------------------------------------------------------------
                 \43\ https://www.cms.gov/files/document/covid-ifc-3-8-25-20.pdf.
                ---------------------------------------------------------------------------
                 The final reconciliation calculation for performance year subset
                5.2 will occur one year after the initial reconciliation of performance
                year subset 5.2. Although we will use claims data that were available
                14 months after the end of performance year subset 5.2 for the
                subsequent reconciliation (as set forth in 42 CFR 510.305(i)(1)), as
                with the initial reconciliation, we will not begin the subsequent
                reconciliation calculation process until 17 months after the end of
                performance year subset 5.2. We would begin the final reconciliation
                calculation for performance year subset 5.2 in late February 2023 with
                reconciliation payment amounts and reports issued in June, because
                input files that are required for the final reconciliation will not be
                available until 17 months after the end of performance year subset 5.2.
                In particular, we need to receive the reconciliation results from
                Accountable Care Organizations (ACOs) that overlap with CJR in order to
                conduct the ACO overlap calculation. Since we cannot state with
                confidence that we will have access to those data prior to the normal
                reconciliation process start date in late February 2023, we will
                perform the reconciliation calculation at the same time of year that we
                have performed previous reconciliations. As noted above, we will
                conduct the final reconciliation of performance year subset 5.2
                independently. Table 2 illustrates the timelines for performance year
                subsets 5.1 and 5.2.
                 Table 2--Timelines for Performance Years 4 and 5
                ----------------------------------------------------------------------------------------------------------------
                 Initial Subsequent
                 Performance year (PY) Performance period reconciliation reconciliation Reconciliation
                 calculation start calculation start amount (+/-)
                ----------------------------------------------------------------------------------------------------------------
                4............................... 01/01/2019 to 12/ 2 months after 12/ 14 months after 12/ Net PY3 and PY4
                 31/2019. 31/2019: Late 31/2019: Late reconciliation
                 February 2020. February 2021. amounts.
                5 (two periods)................. 01/01/2020 to 09/
                 30/2021.
                Subset 5.1...................... 01/01/2020 to 12/ 2 months after 12/ 14 months after 12/ Net PY4 and PY5.1
                 31/2021. 31/2020: Late 31/2020: Late reconciliation
                 February 2021. February 2022. amounts.
                [[Page 71171]]
                
                Subset 5.2...................... 01/01/2021 to 09/ 5 months after 09/ 17 months after 09/ Net PY5.1 and
                 30/2021. 30/2021: Late 30/2021: Late PY5.2
                 February 2022. February 2023. reconciliation.
                ----------------------------------------------------------------------------------------------------------------
                 In order to reflect the changes in reconciliation timing and other
                changes associated with additional reconciliations in PY5, we are
                amending the following provisions: 42 CFR 510.2, 42 CFR 510.200, 42 CFR
                510.305(b), (d)(1), (e), (i)(1) and (2), and (j)(1) and (2), and 42 CFR
                510.400(b)(3)(v), and adding 42 CFR 510.400(b)(3)(vi).
                4. DRG 521 and DRG 522
                 In this IFC we are amending our regulations at Sec. 510.300(a) to
                specify that, as of October 1, 2020, the CJR model includes episodes
                when the MS-DRG assigned at discharge for an anchor hospitalization is
                one of two new MS-DRGs we adopted in the FY 2021 IPPS/LTCH final rule
                (85 FR 58432): MS-DRG 521 (Hip Replacement with Principal Diagnosis of
                Hip Fracture with Major Complications and Comorbidities (MCC)) and MS-
                DRG 522 (Hip Replacement with Principal Diagnosis of Hip Fracture,
                without MCC). As indicated in 42 CFR 510.300(a)(1), the CJR model
                episode definition historically included MS-DRG 469 (Major Hip and Knee
                Joint Replacement or Reattachment of Lower Extremity with MCC) and MS-
                DRG 470 (Major Hip and Knee Joint Replacement or Reattachment of Lower
                Extremity without MCC). For purposes of calculating quality adjusted
                target prices, we further subdivided episodes within each MS-DRG based
                on the presence or absence of a primary hip fracture. In the FY 2021
                IPPS/LTCH final rule, we stated that because the CJR model would
                continue until at least March 31, 2021, we intended to adopt a policy
                in the CJR final rule that incorporates these new MS-DRGs into the CJR
                model as of October 1, 2020 to avoid disruption to the model for the
                remainder of PY5 (as extended) and thereafter, if our proposal to
                extend the CJR model through PY8 were finalized (85 FR 58502). To this
                end, we are adopting the change in this IFC, with retroactive effect to
                October 1, 2020. This change ensures that hip replacements with a
                principal diagnosis of hip fracture, with and without MCC, will
                continue to trigger CJR model episodes even though they are now
                assigned to these new DRGs rather than MS-DRGs 469 and 470.
                 As background, in the FY 2021 IPPS/LTCH proposed rule (85 FR
                32510), CMS proposed the creation of two new MS-DRGs, 521 and 522 (Hip
                Replacement with primary hip fracture, with and without major
                complications and comorbidities, respectively). Because the FY2021
                IPPS/LTCH proposed rule was published after the CJR February 2020
                proposed rule, the new MS-DRGs 521 and 522 were not addressed in the
                February 2020 proposed rule. We solicited comment in the FY2021 IPPS/
                LTCH proposed rule on the effect this proposal would have on the CJR
                model and whether to incorporate MS-DRG 521 and MS-DRG 522, if
                finalized, into the CJR model's proposed extension to December 31,
                2023. The public also had the opportunity to address this issue in
                comments responding to the CJR February 2020 proposed rule, as the
                comment period for that rule had been extended.
                 We received three comments in response to the February 2020
                proposed rule and 20 comments in response to the FY2021 IPPS/LTCH
                proposed rule addressing the effects of the proposed new MS-DRGs on the
                CJR model. Most commenters agreed that MS-DRGs 521 and 522 should be
                included in the definition of a CJR model episode, noting their
                assumption that this would have a neutral economic impact on the model
                and participants, as the CJR model already provides for separate
                quality adjusted target prices for hip fracture cases for MS-DRGs 469
                and 470. Multiple commenters stated their belief that there is value in
                maintaining hip fracture cases in the CJR model, including that it is
                administratively simpler and that maintaining hip fractures in the CJR
                model would mean those procedures remain subject to the value-based
                care incentives of the CJR model. Some commenters suggested that
                quality adjusted target prices for episodes previously triggered by MS-
                DRG 469 and MS-DRG 470 with hip fracture could apply to episodes
                triggered by the new MS-DRGs. Others noted that if the DRGs were added
                retroactively, they would not want the new DRGs to retroactively impact
                quality adjusted target prices.
                 As of October 1, 2020, MS-DRGs 521 and 522 separately identify a
                subset of LEJR procedures that were previously grouped to MS-DRGs 469
                and 470, and if the definition of a CJR model episode is not revised to
                accommodate this technical change the LEJR procedures associated with
                these new codes will no longer be part of the CJR model. This result
                would be highly disruptive to the CJR model, because it would remove a
                significant number of episodes midway through a performance year.
                Therefore, we believe there is good cause for this rulemaking to change
                the definition of a CJR model episode to include MS-DRGs 521 and 522.
                Indeed, it would be contrary to the public interest to undertake
                traditional notice and comment rulemaking to adopt these regulatory
                changes because they are intended to preserve the model's scope in
                light of underlying technical changes in the IPPS. Based on the public
                comments previously described, we believe that including DRGs 521 and
                522 in the CJR episode definition is less disruptive to participant
                hospitals than the alternative, which would be to allow hip
                replacements with a primary hip fracture to drop abruptly out of the
                model (or to drop out of the model until we were able to undertake full
                notice and comment rulemaking to add them back at a later point). We
                believe that failure to retroactively incorporate MS-DRGs 521 and 522
                into the CJR model as of October 1, 2020 would be contrary to the
                public interest because it would result in approximately 20-25% of all
                LEJR episodes to be dropped from the CJR model. The categories of
                episodes that would be dropped tend to be associated with emergent
                surgeries, high-costs, and complex post-acute care needs. Dropping
                these episodes from the model would create confusion, increase
                administrative burden for participant hospitals, and remove the
                opportunity for participant hospitals to earn reconciliation payments
                by coordinating care for these complex, high-cost episodes.
                 Operationally, this is a seamless transition for participant
                hospitals, which have continued to bill Medicare
                [[Page 71172]]
                FFS as usual for hip replacements with hip fractures. Beginning on
                October 1, 2020, the Medicare IPPS grouper began to assign those
                hospitalizations to one of the new MS-DRGs, with no billing changes
                required of participant hospitals. The new MS-DRGs will be incorporated
                into the CJR episode reconciliation data system, and will be included
                in participant hospitals' monthly data feeds going forward. Participant
                hospitals were notified of their quality adjusted target prices for
                episodes beginning on October 1, 2020 for MS-DRGs 469 and 470, with and
                without hip fracture. As of October 1, 2020, the quality adjusted
                target prices for MS-DRGs 469 and 470 with hip fracture will apply to
                episodes initiated by the new MS-DRGs 521 and 522, respectively, for
                the remainder of PY5 (including both performance year subsets 5.1 and
                5.2).
                 Given that the CJR model currently provides separate quality
                adjusted target prices for episodes with and without a hip fracture,
                incorporating the new DRGs would have minimal financial impact on the
                model. The PY5 quality adjusted target price calculation methodology
                includes the application of update factors (80 FR 73342-73346), which
                incorporate annual changes to each CMS payment system (for example,
                IPPS, OPPS, and SNF). The update factor is calculated and applied twice
                per year, in order to incorporate both fiscal year and calendar year
                payment system updates. The MS-DRG weights assigned to the new MS-DRGs
                521 and 522 in the FY 2021 IPPS/LTCH final rule (84 FR 42044) will be
                incorporated into the IPPS update factor as part of the calculation of
                the quality adjusted target prices for episodes beginning between
                October 1, 2020 and December 31, 2020. These FY 2021 MS-DRG weights
                will continue in the quality adjusted target prices for episodes that
                begin between January 1, 2021 and September 30, 2021, which will
                incorporate CY 2021 payment system updates. As a result, baseline
                prices for hip replacements with primary hip fracture, which would have
                been assigned the MS-DRGs 469 and 470 and stratified by hip fracture
                status, are comparable to those same episodes in the performance period
                that are assigned to MS-DRGs 521 and 522, respectively. For the
                remainder of PY5, we will calculate quality adjusted target prices for
                episodes initiated by MS-DRGs 521 and 522 using baseline episodes
                initiated by MS-DRG 469 with fracture and MS-DRG 470 with fracture,
                respectively, but updated to include the MS-DRG weights assigned to MS-
                DRGs 521 and 522 for FY 2021.
                 In this IFC we are incorporating the new MS-DRGs 521 and 522 into
                the CJR model episode definition as of October 1, 2020, updating
                quality adjusted target prices to reflect the applicable MS-DRG
                weights, and amending the provisions at 42 CFR 510.300(a)(1)(i) and
                (iii) to reflect these changes.
                5. Changes to Extreme and Uncontrollable Circumstances Policy for the
                PHE for COVID-19
                 We are also modifying the extreme and uncontrollable circumstances
                adjustment for COVID-19 in Sec. 510.300(k)(4) to expire on March 31,
                2021 or the last day of the emergency period, whichever is earlier. In
                addition, we are adopting a more targeted adjustment, which will apply
                after March 31, 2021 or the last day of emergency period (whichever is
                earlier), so that financial safeguards continue to apply for CJR
                episodes during which a CJR beneficiary receives a positive COVID-19
                diagnosis.
                 Currently, the extreme and uncontrollable circumstances adjustment
                for COVID-19 provides financial safeguards for participant hospitals
                that have a CCN primary address that is located in an emergency area
                during an emergency period, as those terms are defined in section
                1135(g) of the Act, for which the Secretary issued a waiver or
                modification of requirements under section 1135 of the Act on March 13,
                2020, effectively applying the financial safeguards to all participant
                hospitals. These financial safeguards, wherein actual episode payments
                are capped at the target price determined for that episode, apply to
                fracture or non-fracture episode with a date of admission to the anchor
                hospitalization that is on or within 30 days before the date that the
                emergency period (as defined in section 1135(g) of the Act) begins or
                that occurs through the termination of the emergency period (as
                described in section 1135(e) of the Act). In the April 2020 IFC we
                explained this extreme and uncontrollable circumstances adjustment,
                noting that the previous CJR model policy for extreme and
                uncontrollable circumstances was not applicable to the PHE for the
                COVID-19 pandemic. We also indicated that we did not expect many new
                CJR episodes to initiate in light of the COVID-19 virus and the related
                guidance to avoid elective surgeries. We further stated that we wanted
                to avoid inadvertently creating incentives to place cost considerations
                above patient safety within the CJR model, given the challenges to the
                health care delivery system in responding to COVID-19 cases and the
                expenses associated with treating the virus.
                 We received comments on both the April 2020 IFC and the CJR
                February 2020 proposed rule about the extreme and uncontrollable
                circumstances adjustment. Commenters favored the extreme and
                uncontrollable circumstances policy for COVID-19 and commended CMS for
                providing relief to participant hospitals. Some commenters questioned
                what steps CMS would take once the PHE ends and noted the uncertainty
                in the current policy since there is not a concrete end date for the
                PHE. A commenter recommended CMS hold participant hospitals harmless
                from performance-related penalties for the 2020 performance year and
                urged CMS to make appropriate adjustments for the 2020 and 2021
                performance years and to address the impact of COVID-19 on financial
                expenditures, performance scores and risk adjustment.
                 We appreciate commenters' positive feedback on the April 2020 IFC
                and our decision to provide relief to participant hospitals. At the
                onset on the PHE, we quickly developed financial safeguards in the
                April 2020 IFC due to the mandatory nature of the model and the
                location of all 471-participant hospitals in MSAs where COVID-19 was
                most prevalent. For example, there are 98 participant hospitals in the
                New York/New Jersey Metropolitan Area, which was the epicenter for
                COVID-19.\44\ Further, at that time, we did not possess data that
                allowed CMS to determine the COVID-19 virus's effect on the CJR model,
                and believed it was most prudent to waive downside risk for all
                episodes thorough the duration of the PHE.
                ---------------------------------------------------------------------------
                 \44\ ``New York City Region Is Now an Epicenter of the
                Coronavirus Pandemic'' March 22, 2020. Available at https://www.nytimes.com/2020/03/22/nyregion/Coronavirus-new-York-epicenter.html.
                ---------------------------------------------------------------------------
                 Since publishing the April 2020 IFC, we reviewed Medicare claims
                data and observe a steep decline in the initiation of episodes in April
                2020 (See Table 1). Post April 2020, CJR episodes are increasing, and
                though not at normal utilization as compared to 2019 Medicare claims
                data, the data reflects a continual initiation of CJR episodes despite
                the ongoing PHE. In addition, related Federal guidance to avoid
                elective surgeries has expired, which allows certain participant
                hospitals to initiate elective LEJR procedures.\45\ The continual
                initiation of CJR episodes during the PHE is contrary to our assumption
                in the April 2020 IFC, that
                [[Page 71173]]
                is, we did not expect many new CJR episodes to initiate during the PHE.
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                 \45\ https://www.cms.gov/files/document/covid-flexibility-reopen-essential-non-covid-services.pdf.
                ---------------------------------------------------------------------------
                 Absent a change to specify an end date, the current extreme and
                uncontrollable adjustment in 42 CFR 510.300(k)(4) would continue as
                long as the PHE. Unfortunately, the combination of CJR episode volume
                increasing to levels we did not anticipate during the PHE and the
                continued renewal of the PHE threatens the ability of the CJR model to
                generate any savings over the course of the model. With greater
                surgical volume, we do not believe such a broad extreme and
                uncontrollable circumstances policy for COVID-19 remains necessary.
                 For these reasons, we are implementing an end date to the extreme
                and uncontrollable circumstances adjustment for COVID-19. Specifically,
                for a fracture or non-fracture episode with a date of admission to the
                anchor hospitalization that is on or within 30 days before the date
                that the emergency period (as defined in section 1135(g) of the Act)
                begins or that occurs on or before March 31, 2021 or the last day of
                such emergency period, whichever is earlier, actual episode payments
                are capped at the quality adjusted target price determined for that
                episode under Sec. 510.300. We are amending the provisions at 42 CFR
                510.305(k)(4) to reflect this change.
                 In addition, in order to account for CJR beneficiaries with a
                positive COVID-19 diagnosis during a CJR episode that initiates after
                the adjustments for extreme and uncontrollable circumstances specified
                in Sec. 510.305(k)(4) end, we are amending our regulations at Sec.
                510.305(e)(1)(i) to cap actual episode payments at the quality adjusted
                target price for the episode, effectively waiving downside risk for all
                episodes with actual episode payments that include a claim with a
                COVID-19 diagnosis code. This policy will apply after March 31, 2021 or
                the last day of the PHE, whichever occurs earlier.
                 In response to commenters' questions about how the CJR model will
                alleviate financial risk associated with COVID-19 once the PHE expires,
                we explored the flexibilities provided by other CMMI models and found
                them to be consistent with a targeted, episode-based approach to
                providing financial relief from COVID-19. In order to be responsible
                stewards of the Medicare Trust Fund, we are adopting a policy to
                provide participant hospitals continuing financial protection from the
                effect of COVID-19 on the CJR model that may continue beyond the end of
                the PHE for COVID-19 or March 31, 2021 (whichever is earlier).
                Specifically, at the initial and subsequent reconciliations of
                performance year subset 5.2, which will include episodes subject to
                this new adjustment policy, we will identify episodes with actual
                episode payments with any claim containing a COVID-19 diagnosis and
                costs for those episodes will be capped at the quality adjusted target
                price, effectively waiving downside risk for that episode. A COVID-19
                diagnosis is identified by the following ICD-10-CM diagnosis codes:
                B97.29; U07.1; or any other ICD-10-CM diagnosis code that is
                recommended by the Centers for Disease Control and Prevention for the
                coding of a confirmed case of COVID-19.\46\ We understand that ICD-10
                diagnosis codes B97.29 (which was used for dates of service on or after
                January 27, 2020 through March 31, 2020) and U07.1 (which was used for
                dates of service on or after April 1, 2020 through September 30, 2020)
                might not be used for dates of service to which our new adjustment
                policy will apply. Nevertheless, given the potential for uncertainty as
                to whether either of these codes will be used for dates of service
                after September 30, 2020, we are including them in the definition of
                ``COVID-19 diagnosis code'' that we are adding to Sec. 510.2 for
                completeness.
                ---------------------------------------------------------------------------
                 \46\ https://www.cdc.gov/nchs/data/icd/ICD-10-CM-Official-Coding-Gudance-Interim-Advice-coronavirus-feb-20-2020.pdf?fbclid=IwAR2c9LrGMAhum_Ogu-LrxPJ-S4u_j4wGW1615I_fmoiDB5AA0wKHKitjoXo.
                ---------------------------------------------------------------------------
                 In order to provide participant hospitals continuing financial
                protection from the effect of COVID-19 on the CJR model that may
                continue beyond the end of the PHE for COVID-19 or March 31, 2021,
                whichever occurs earlier, we are implementing that actual episode
                payments are capped at the quality adjusted target price determined for
                that episode under Sec. 510.300 for episodes with actual episode
                payments that include a claim with a COVID-19 diagnosis code and
                initiate after the earlier of March 31, 2021 or the last day of the
                emergency period.
                III. Provisions of the Interim Final Rule--Departments of the Treasury,
                Labor and Health and Human Services
                A. Rapid Coverage of Preventive Services for Coronavirus
                1. Background
                 In addition to the steps Congress took to ensure coverage of COVID-
                19 diagnostic testing, in section 3203 of the CARES Act, Congress
                required group health plans and health insurance issuers offering group
                or individual health insurance coverage to cover, without cost sharing,
                qualifying coronavirus preventive services. This coverage is required
                to be provided ``pursuant to section 2713(a) of the [PHS] Act,''
                including its implementing regulations or any successor regulations.
                 Section 2713 of the PHS Act was added by section 1001 of PPACA and
                incorporated by reference into ERISA by section 715 of ERISA and into
                the Code by section 9815 of the Code. Section 2713 of the PHS Act and
                the regulations implementing section 2713 of the PHS Act require non-
                grandfathered group health plans and health insurance issuers offering
                non-grandfathered group or individual health insurance coverage to
                provide coverage of certain specified preventive items and services
                without cost sharing. These services include:
                 Evidence-based items or services that have in effect a
                rating of ``A'' or ``B'' in the current recommendations of the USPSTF
                with respect to the individual involved.
                 Immunizations for routine use in children, adolescents,
                and adults that have in effect a recommendation from ACIP with respect
                to the individual involved. A recommendation of ACIP is considered to
                be ``in effect'' after it has been adopted by the Director of the CDC.
                A recommendation is considered to be for ``routine use'' if it appears
                on the Immunization Schedules of the CDC.
                 With respect to infants, children, and adolescents,
                evidence-informed preventive care and screenings provided for in the
                comprehensive guidelines supported by the Health Resources and Services
                Administration (HRSA).
                 With respect to women, preventive care and screenings
                provided for in comprehensive guidelines supported by HRSA (not
                otherwise addressed by the recommendations of the USPSTF), subject to
                certain exemptions and accommodations (see 45 CFR 147.131 through
                147.133).
                 The Departments' current regulations (herein referred to as the
                2015 Final Regulations) under section 2713 of the PHS Act at 26 CFR
                54.9815-2713; 29 CFR 2590.715-2713; and 45 CFR 147.130 require that
                plans and issuers provide coverage of recommended preventive services
                for plan years that begin on or after September 23, 2010, or, if later,
                for plan years that begin on or after the date that is one year after
                the date the recommendation or guideline is issued.
                 Under the 2015 Final Regulations, if a recommended preventive
                service is billed separately (or is tracked as individual encounter
                data separately) from an office visit, then a plan or issuer
                [[Page 71174]]
                may impose cost-sharing requirements with respect to the office visit.
                However, if a preventive service is not billed separately (or is not
                tracked as individual encounter data separately) from an office visit
                and the primary purpose of the office visit is the delivery of such an
                item or service, then a plan or issuer may not impose cost-sharing
                requirements with respect to the office visit.
                 The 2015 Final Regulations generally do not require a plan and
                issuer that has a network of providers to provide benefits for
                applicable preventive items or services that are delivered by an out-
                of-network provider. Moreover, the 2015 Final Regulations generally do
                not preclude a plan or issuer that has a network of providers from
                imposing cost-sharing requirements for preventive services that are
                delivered by an out-of-network provider. However, if a plan or issuer
                does not have in its network a provider who can provide a preventive
                service, then the plan or issuer must cover the recommended preventive
                service when performed by an out-of-network provider and may not impose
                cost sharing with respect to the recommended preventive service.
                 Many items and services required to be covered under section 2713
                of the PHS Act typically are provided as part of the usual course of
                preventive care, often according to regularly scheduled intervals.
                Examples include immunizations provided according to schedules
                established by the CDC and other annual screenings or counseling.
                Therefore, the 2015 Final Regulations require coverage without cost
                sharing for applicable immunizations that are recommended by ACIP for
                routine use, and state that a recommendation is considered to be for
                ``routine use'' if it appears on the Immunization Schedules of the CDC.
                 Section 3203 of the CARES Act establishes a more accelerated
                timeline for required coverage of qualifying coronavirus preventive
                services than other recommended preventive services under PHS Act
                section 2713. As stated above, coverage of qualifying coronavirus
                preventive services must be provided no later than 15 business days
                following an applicable recommendation. In addition, it is possible
                that items, services, and immunizations used to prevent or mitigate
                COVID-19 will not, in the immediate future, be recommended as part of a
                usual course of preventive care, but rather for more urgent use. As
                reflected by the expedited timeline for coverage Congress established
                in section 3203 of the CARES Act, the need to provide coverage of
                qualifying coronavirus preventive services is urgent. Therefore, as
                discussed below, this IFC requires coverage of COVID-19 immunizations
                within 15 business days after the immunization has been recommended by
                ACIP and adopted by the CDC, regardless of whether it appears on the
                Immunization Schedules of the CDC for routine use.
                 Additionally, in light of the current PHE for COVID-19, it is
                imperative that group health plans and health insurance issuers provide
                full coverage for these items and services, including costs for the
                administration of vaccines, and ensure timely access to coverage as
                Congress intended. Accordingly, in this IFC, the Departments provide
                certain clarifications previously made with respect to the 2015 Final
                Regulations and amend those regulations to implement unique
                requirements related to covering qualifying coronavirus preventive
                services.\47\
                ---------------------------------------------------------------------------
                 \47\ The 2015 Final Regulations address the obligation to
                continue to provide coverage for recommended preventive services
                that are in effect on the first day of a plan or policy year when
                there are changes in recommendations or guidelines. See 26 CFR
                54.9815-2713(b)(2)(i) and (ii); 29 CFR 2590.715-2713(b)(2)(i) and
                (ii); 45 CFR 147.130(b)(2)(i) and (ii). Given the expedited timeline
                for coverage under section 3203 of the CARES Act, this IFC amends
                the 2015 Final Regulations to make clear that these paragraphs apply
                to recommended preventive services that are covered on the first day
                of the plan or policy year or, with respect to qualifying
                coronavirus preventive services, ``as otherwise specified in
                paragraph (b)(3) of this section.''
                ---------------------------------------------------------------------------
                2. Scope of Requirement To Cover Certain Recommended Preventive
                Services Under Section 2713 of the Public Health Service Act
                a. Related Items and Services
                 In implementing section 2713 of the PHS Act, the 2015 Final
                Regulations addressed whether office visit charges associated with
                certain recommended preventive services must be covered without cost
                sharing. Specifically, Example 1 in the 2015 Final Regulations
                illustrates how the requirements apply in situations where a provider
                bills a plan for an office visit where a preventive screening for
                cholesterol abnormalities (which has in effect a rating of A or B from
                the USPSTF) is conducted and for the laboratory work of the cholesterol
                screening test. In that example, the plan may not impose any cost-
                sharing requirements with respect to the separately billed laboratory
                work of the cholesterol screening test. Because the office visit is
                billed separately from the cholesterol screening test, the 2015 Final
                Regulations provide that the plan may impose cost-sharing requirements
                for the office visit.
                 Prior to the publication of the 2015 Final Regulations, the
                Departments received questions from stakeholders regarding discrete
                coverage issues related to certain recommended preventive services. In
                particular, with respect to colonoscopies, stakeholders asked whether
                certain related services (such as the cost of polyp removal or
                anesthesia) must also be covered without cost sharing. The Departments
                clarified in subregulatory guidance that a plan or issuer may not
                impose cost sharing for polyp removal during a preventive screening
                colonoscopy, as such service is an integral part of a colonoscopy, and
                also stated that anesthesia provided in connection with a preventive
                colonoscopy must be covered without cost sharing.\48\
                ---------------------------------------------------------------------------
                 \48\ See FAQs About Affordable Care Act Implementation Part 12,
                Q5 (Feb. 20, 2013), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12 and FAQs About Affordable Care Act
                Implementation Part XXVI, Q7 (May 11, 2015), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf.
                ---------------------------------------------------------------------------
                 Consistent with the examples provided in the 2015 Final Regulations
                and subregulatory guidance cited in the preamble to the rulemaking
                promulgating the 2015 Final Regulations, the Departments further
                clarify that under the 2015 Final Regulations and this IFC, plans and
                issuers subject to section 2713 of the PHS Act must cover, without cost
                sharing, items and services that are integral to the furnishing of the
                recommended preventive service, regardless of whether the item or
                service is billed separately. For example, several of the recommended
                preventive services involve screenings for the presence of certain
                health conditions, such as diabetes, or a variety of sexually
                transmitted infections. These recommended screenings, typically
                performed by laboratories, cannot be conducted without first collecting
                a specimen. Accordingly, plans and issuers subject to section 2713 of
                the PHS Act must cover without cost sharing both the specimen
                collection and the recommended preventive service, regardless of how
                the specimen collection is billed. Similarly, a recommended
                immunization generally cannot be furnished without being administered
                by a medical professional. As qualifying coronavirus preventive
                services are expected to include immunizations, plans and issuers
                subject to section 2713 of the PHS Act
                [[Page 71175]]
                must cover without cost sharing such an immunization and its
                administration, regardless of how the administration is billed, and
                regardless of whether a COVID-19 vaccine or any other immunization
                requires the administration of multiple doses in order to be considered
                a complete vaccination. This includes coverage without cost sharing of
                the administration of a required preventive immunization in instances
                where a third party, such as the Federal Government, pays for the
                preventive immunization. Further, if a COVID-19 immunization is not
                billed separately (or is not tracked as individual encounter data
                separately) from an office visit and the primary purpose of the visit
                is the delivery of the recommended COVID-19 immunization, then
                consistent with the 2015 Final Regulations, the plan or issuer may not
                impose cost-sharing requirements with respect to the office visit. The
                Departments seek comment on this clarification.
                b. Out-of-Network Coverage During the PHE for COVID-19
                 The 2015 Final Regulations permit a group health plan or issuer
                that has a network of providers to omit coverage or to impose cost-
                sharing requirements for recommended preventive services when such
                services are provided by an out-of-network provider, unless the plan or
                issuer does not have in its network a provider who can provide the
                service.\49\ This approach reflects that, as noted earlier in this
                section of the preamble, recommended preventive services generally are
                obtained as part of a regular course of preventive care, so
                participants, beneficiaries, and enrollees typically have the
                opportunity to seek such care from an in-network provider. By contrast,
                in the immediate term, newly developed qualifying coronavirus
                preventive services might be available from a narrower range of
                providers than other, more established recommended preventive services.
                To help ensure full access to and the widespread use of qualifying
                coronavirus preventive services to mitigate the effect of the PHE for
                COVID-19 and slow transmission of the virus, it is critical that
                individuals be able to receive such services from any provider
                authorized to provide the service. Therefore, this IFC amends the 2015
                Final Regulations to require that plans and issuers subject to section
                2713 of the PHS Act must cover without cost sharing a qualifying
                coronavirus preventive service, regardless of whether such service is
                delivered by an in-network or out-of-network provider. This is based on
                the Departments' view that participants, beneficiaries, and enrollees
                may not be able to locate in-network providers consistently during the
                emergency period.
                ---------------------------------------------------------------------------
                 \49\ 26 CFR 54.9815-2713(a)(3); 29 CFR 2590.715-2713(a)(3); 45
                CFR 147.130(a)(3).
                ---------------------------------------------------------------------------
                 To satisfy this requirement, the Departments are of the view that
                plans and issuers must administer this out-of-network coverage
                requirement in such a way that makes receiving out-of-network services
                for qualifying coronavirus preventive services a meaningful benefit for
                participants, beneficiaries, and enrollees. To be a meaningful benefit,
                the Departments are of the view that plans and issuers must administer
                this out-of-network coverage requirement in a way that ensures that
                participants, beneficiaries, and enrollees have access to a variety of
                out-of-network providers for such services. To the extent plans and
                issuers reimburse out-of-network providers an unreasonably low amount
                for qualifying coronavirus preventive services, including for
                administration of a COVID-19 vaccine, this approach could severely
                limit the number of such providers that are willing to provide the
                service, which would contravene the purpose of the requirement to
                provide out-of-network coverage without cost sharing of qualifying
                coronavirus preventive services. Therefore, this IFC provides that with
                respect to a qualifying coronavirus preventive service and a provider
                with whom the plan or issuer does not have a negotiated rate for such
                service (such as an out-of-network provider), the plan or issuer must
                reimburse the provider for such service in an amount that is
                reasonable, as determined in comparison to prevailing market rates for
                such service. The Departments will consider the amount of payment to be
                reasonable, for example, if the plan or issuer pays the provider the
                amount that would be paid under Medicare for the item or service. In
                the Departments' view, these minimum payment standards are necessary
                and appropriate because providers that participate in the CDC COVID-19
                Vaccination Program contractually agree to administer a COVID-19
                vaccine regardless of an individual's ability to pay and regardless of
                their coverage status, and also may not seek any reimbursement,
                including through balance billing, from a vaccine recipient.
                 The Departments request comment on all aspects of this approach.
                The Departments request comment on the issue of network adequacy and
                whether and, if so, how long provider networks are expected to be
                inadequate. The Departments also request comment on the safeguards in
                this IFC to ensure that out-of-network reimbursement rates are
                reasonable and that providers administering a publicly funded COVID-19
                vaccine are reimbursed by group health plans and issuers prevailing
                market rates in the absence of a negotiated rate, and whether other
                examples of reasonable reimbursement rates, in addition to Medicare
                rates, would be useful.
                3. Definition of Qualifying Coronavirus Preventive Services
                 Section 3203(b)(1) of the CARES Act defines ``qualifying
                coronavirus preventive service'' as an item, service, or immunization
                that is intended to prevent or mitigate COVID-19 and that is--(A) an
                evidence-based item or service that has in effect a rating of `A' or
                `B' in the current recommendations of the USPSTF; or (B) an
                immunization that has in effect a recommendation from ACIP with respect
                to the individual involved. The statutory provisions describing USPSTF
                and ACIP recommendations in this definition are substantively identical
                to the ones at section 2713(a)(1) and (2) of the PHS Act. However, as
                stated above, under the 2015 Final Regulations, only ``immunizations
                for routine use in children, adolescents, and adults'' that are
                recommended by ACIP must be covered without cost sharing.\50\ A
                recommendation is considered to be for routine use if it is listed on
                the CDC's Immunization Schedules.\51\
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                 \50\ See 75 FR 41726, 41728 (July 19, 2010), codified at 26 CFR
                54.9815-2713(a)(1)(ii); 29 CFR 2590.715-2713(a)(1)(ii); 45 CFR
                147.130(a)(1)(ii).
                 \51\ Id.
                ---------------------------------------------------------------------------
                 This IFC provides a definition of qualifying coronavirus preventive
                services that is consistent with the statutory definition in section
                3203 of the CARES Act. However, the Departments note that unlike the
                other preventive service immunizations required to be covered without
                cost sharing under section 2713 of the PHS Act and the 2015 Final
                Regulations, this definition and related coverage requirement are not
                limited to COVID-19 immunizations recommended by ACIP for ``routine
                use.'' While other preventive items and services may be recommended for
                routine use, for reasons described elsewhere in this section of the
                preamble, the PHE for COVID-19 presents unique circumstances and
                qualifying coronavirus preventive services might not, in the immediate
                term, be recommended for routine use, according to specified schedules.
                Rather, the
                [[Page 71176]]
                Departments generally expect consumers should receive an immunization
                for COVID-19 as soon as it becomes available to the general public, or
                as soon as it becomes available to them based on their status as part
                of a high-risk or high-priority population, as recommended by ACIP.
                Plans and issuers subject to section 2713 of the PHS Act must cover,
                without cost sharing, COVID-19 immunizations that are recommended by
                ACIP and adopted by the Director of CDC, even if not listed for routine
                use on the CDC Immunization Schedules, pursuant to 26 CFR 54.9815-
                2713T(a); 29 CFR 2590.715-2713(a); and 45 CFR 147.130(a), and subject
                to the additional changes described later in this section of the
                preamble.\52\
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                 \52\ HHS reminds states that the HHS Office for Civil Rights
                enforces applicable Federal civil rights laws as described above, as
                well as laws protecting the exercise of conscience and religious
                freedom, including the Religious Freedom Restoration Act (42 U.S.C.
                2000bb through 2000bb-4). HHS's requirements are subject to these
                laws, and states may have obligations under these laws to protect
                conscience, prohibit coercion, and to ensure the free exercise of
                religion. U.S. Department of Health & Human Services, Office for
                Civil Rights, Conscience and Religious Freedom, https://www.hhs.gov/conscience/index.html (last visited Aug. 20, 2020).
                ---------------------------------------------------------------------------
                4. Qualifying Coronavirus Preventive Services--Timing Requirement
                 Section 2713 of the PHS Act and the 2015 Final Regulations require
                plans and issuers to cover recommended preventive items and services
                beginning with the first plan year (or in the individual market, policy
                year) that is one year after the date the recommendation or guideline
                is issued. Section 3203 of the CARES Act accelerates the timeline for
                coverage of qualifying coronavirus preventive services without cost
                sharing, requiring coverage to be provided within 15 business days
                after the date on which a recommendation is made relating to such
                service. This IFC codifies these timing requirements at 26 CFR 54.9815-
                2713T(b)(3); 29 CFR 2590.715-2713(b)(3); and 45 CFR 147.130(b)(3).
                 In addition, the IFC adds a sunset provision at 26 CFR 54.9815-
                2713T(e); 29 CFR 2590.715-2713(e); and 45 CFR 147.130(e), under which
                the amendments made to the regulations will not apply with respect to
                qualifying coronavirus preventive services furnished on or after the
                expiration of the PHE for COVID-19. The Departments note, however, that
                coverage under section 3203 of the CARES Act is not limited to the
                duration of the PHE for COVID-19 and therefore the statutory provisions
                will continue to apply.
                B. Diagnostic Testing for COVID-19
                 Section 6001 of the FFCRA generally requires group health plans and
                health insurance issuers offering group or individual health insurance
                coverage to provide benefits for COVID-19 diagnostic tests and certain
                items and services related to diagnostic testing for COVID-19 when
                those items or services are furnished on or after March 18, 2020, and
                during the duration of the PHE for COVID-19. Under the FFCRA, plans and
                issuers must provide this coverage without imposing any cost-sharing
                requirements (including deductibles, copayments, and coinsurance) or
                prior authorization or other medical management requirements. Section
                3201 of the CARES Act, enacted on March 27, 2020, amended section 6001
                of the FFCRA to include a broader range of diagnostic tests that plans
                and issuers must cover without any cost-sharing requirements or prior
                authorization or other medical management requirements.
                 Section 3202(a) of the CARES Act provides that a plan or issuer
                providing coverage of items or services described in section 6001(a) of
                the FFCRA shall reimburse the provider of the diagnostic testing at a
                rate negotiated with the provider, or if there is no negotiated rate,
                at an amount that equals the cash price for such service as listed by
                the provider on a public internet website. As previously articulated in
                guidance, the Departments interpret the requirement to provide coverage
                without cost sharing in section 6001 of the FFCRA, together with
                section 3202(a) of the CARES Act, as establishing a process for setting
                reimbursement rates and protecting participants, beneficiaries, and
                enrollees from being balance billed for an applicable COVID-19
                test.\53\ These provisions help ensure consumers can be tested for
                COVID-19 without barriers related to cost, and are critical to the
                ability to detect the virus and stop its spread. However, testing
                efforts have continued to be hampered by challenges, such as delays in
                obtaining results, issues with test accuracy, and supply shortages.\54\
                ---------------------------------------------------------------------------
                 \53\ FAQs About Families First Coronavirus Response Act and
                Coronavirus Aid, Relief, and Economic Security Act Implementation
                Part 43 (June 23, 2020), available at https://www.cms.gov/files/document/FFCRA-Part-43-FAQs.pdf and https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-43.pdf.
                 \54\ American Society for Microbiology, ``Supply Shortages
                Impacting COVID-19 and Non-COVID Testing'' (Oct. 15, 2020),
                available at https://asm.org/Articles/2020/September/Clinical-Microbiology-Supply-Shortage-Collecti-1.
                ---------------------------------------------------------------------------
                 The Departments encourage group health plans and issuers of group
                or individual health insurance coverage to consider market-driven
                approaches to addressing these continued challenges surrounding COVID-
                19 diagnostic testing. The Departments encourage plans and issuers to
                explore using payment arrangements that create incentives for providers
                to reduce the time it takes to provide results for diagnostic testing
                for COVID-19, while maintaining the accuracy rates of their test
                results in instances where it is within the ability of providers to
                address a delay.
                 At certain points in this PHE, there have been wide variations in
                the time it takes providers to make test results available to
                consumers. These delays in obtaining test results increase the risk
                that infected individuals may unknowingly infect others. These delays
                could be caused by large volumes of tests to process and/or inadequate
                resources. Pay-for-performance arrangements, where reimbursement rates
                are based on the time it takes to make test results available, could
                encourage innovative approaches by providers to reduce the turnaround
                time. The Departments encourage group health plans and issuers of group
                or individual health insurance coverage to consider developing such
                arrangements with providers, and strongly encourage plans and issuers
                that do so to incorporate safeguards to ensure that the payment
                arrangements are not structured in a way that prioritizes speed over
                accuracy or that result in unintended consequences, such as reduction
                in access to COVID-19 diagnostic testing or non-compliance with balance
                billing restrictions.
                IV. Provisions of the Interim Final Rule Regarding State Innovation
                Waivers--Department of the Treasury and Health and Human Services
                A. State Innovation Waivers Policy and Regulatory Revisions in Response
                to the PHE for COVID-19 Public Health Emergency
                1. Background
                 Section 1332 of the PPACA permits states to apply for a State
                Innovation Waiver (also referred to as ``section 1332 waivers'' or
                ``State Relief and Empowerment Waivers'') to pursue innovative
                strategies for providing their residents with access to higher value,
                more affordable health coverage. The overarching goal of section 1332
                waivers is to give all Americans the opportunity to obtain high value
                and affordable health coverage regardless of income, geography, age,
                sex, or health status,
                [[Page 71177]]
                while simultaneously empowering states to develop health coverage
                strategies that best meet the needs of their residents. Section 1332
                waivers provide states an opportunity to promote a stable health
                insurance market that offers more choice and affordability to their
                residents. Under section 1332 of the PPACA, a State Innovation Waiver
                can be approved by HHS and the Department of the Treasury if it
                provides access to quality health coverage that is at least as
                comprehensive and affordable as would be provided absent the waiver,
                provides coverage to a comparable number of residents of the state as
                would be provided coverage absent a waiver, and does not increase the
                Federal deficit. To date, HHS and the Department of the Treasury have
                approved 15 state waiver requests, 14 of which implement state-based
                reinsurance programs.\55\ As noted in a recent data brief issued by
                CMS, section 1332 state-based reinsurance waivers have resulted in a
                statewide average premium reduction ranging from four to 37 percent in
                calendar year 2020 for residents in states with approved waivers.\56\
                Reinsurance provides a direct benefit to consumers by paying a portion
                of provider claims that would otherwise be paid by consumers through
                higher premiums and lowering premiums for people in the individual
                health insurance market. HHS and the Department of the Treasury
                continue to encourage states to take advantage of the flexibilities
                available through section 1332 waivers in order to pursue solutions to
                help lower costs and increase coverage choices for Americans faced with
                unaffordable premiums and reduced competition in the insurance market
                both during and after the PHE for COVID-19.
                ---------------------------------------------------------------------------
                 \55\ More information on section 1332 waivers that are approved
                is available online: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Section_1332_State_Innovation_Waivers-.
                 \56\ CCIIO Data Brief Series: State Relief and Empowerment
                Waives: State-based Reinsurance Programs. June 2020. Available
                online: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/1332-Data-Brief-June2020.pdf.
                ---------------------------------------------------------------------------
                 Section 1332(a)(4)(B) of the PPACA requires the Secretary of HHS
                and the Secretary of the Treasury (the Secretaries) to issue
                regulations regarding procedures for State Innovation Waivers. On March
                14, 2011, HHS and the Department of the Treasury published the
                ``Application, Review, and Reporting Process for Waivers for State
                Innovation'' proposed rule (76 FR 13553) to implement section
                1332(a)(4)(B) of the PPACA.\57\ On February 27, 2012, HHS and the
                Department of the Treasury published the ``Application, Review, and
                Reporting Process for Waivers for State Innovation'' final rule (77 FR
                11700) (hereinafter referred to as the ``2012 Final Rule'').\58\ On
                October 24, 2018, HHS and the Department of the Treasury issued the
                ``State Relief and Empowerment Waivers'' guidance (83 FR 53575)
                (hereinafter referred to as the ``2018 Guidance''), which superseded
                the previous guidance published on December 16, 2015 (80 FR 78131), and
                provided additional information about the requirements that states must
                meet regarding section 1332 waiver proposals, the Secretaries'
                application review procedures, pass-through funding determinations,
                certain analytical requirements, and operational
                considerations.59 60
                ---------------------------------------------------------------------------
                 \57\ https://www.govinfo.gov/content/pkg/FR-2011-03-14/pdf/2011-5583.pdf.
                 \58\ https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
                 \59\ https://www.govinfo.gov/content/pkg/FR-2018-10-24/pdf/2018-23182.pdf.
                 \60\ https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf.
                ---------------------------------------------------------------------------
                 Section 1332(a)(4)(B) of the PPACA also directs HHS and the
                Department of the Treasury to issue regulations that provide for state
                and Federal public notice and comment sufficient to ensure a meaningful
                level of public input regarding a state's section 1332 waiver plan,
                both during the application process and after a waiver is implemented.
                Current regulations and guidance address how states may apply for a
                waiver, information states must include in an application, public
                notice and comment requirements, and HHS' and the Department of the
                Treasury's monitoring and compliance activities, including state
                reporting requirements (collectively referred to as public notice
                procedures).
                 The Secretaries are setting forth a process for states to request
                modifications to the public notice procedures during the PHE for COVID-
                19 prior to and after approval of a section 1332 waiver that continue
                to meet the statutory and regulatory requirements that the public has
                an opportunity to provide meaningful input. Further the Secretaries are
                promulgating this rule so that HHS and the Department of the Treasury
                do not impose requirements that are unreasonable or unnecessarily
                burdensome regarding state compliance consistent with section
                1332(a)(4)(B)(iii) of the PPACA during the PHE for COVID 19. This IFC
                promulgates rules to establish a framework for the Secretaries to
                modify some of the existing regulatory public notice procedures to
                expedite a decision on a proposed waiver request during the PHE for
                COVID-19 when a delay would undermine or compromise the purpose of the
                proposed waiver request and be contrary to the interests of consumers.
                The Secretaries will also make available such flexibility regarding
                public notice procedures should any state with an approved section 1332
                waiver request an extension or amendment of an approved section 1332
                waiver during the PHE for COVID-19.
                 Similarly, this IFC also establishes a framework for the
                Secretaries to modify, in part, post award public notice procedures for
                an approved waiver request that would otherwise take place or become
                due during the PHE for COVID-19. The Secretaries will also make
                available such flexibility for post award public notice procedures for
                approved waiver extensions, amendments, or phase-out for a waiver
                should those otherwise take place or become due during the PHE for
                COVID-19. HHS and the Department of the Treasury are of the view that
                section 1332 waivers are a critical tool for states to ensure patients
                have stable access to health care coverage, including during the PHE
                for COVID-19. These interim final provisions are effective immediately
                for the duration of the PHE for COVID-19. HHS and the Department of the
                Treasury note that existing threats to consumers' access to health
                coverage or care--such as in geographic areas in which issuer
                participation has been low for some time--would not be considered
                emergency situations for purposes of applying the flexibilities adopted
                in this rulemaking.
                2. Public Notice Procedures and Approval Processes During the PHE (31
                CFR 33.118 and 45 CFR 155.1318)
                 Section 1332(a)(4)(B) of the PPACA provides that the Secretary of
                HHS and the Secretary of the Treasury shall issue regulations providing
                a process for public notice and comment at the state level, including
                public hearings, and a process for providing public notice and comment
                after the application is received by the Secretaries, that are both
                sufficient to ensure a meaningful level of public input. Current
                regulations at Sec. Sec. 33.112 and 155.1312 specify state public
                notice and participation requirements for proposed waiver requests, and
                Sec. Sec. 33.116(b) and 155.1316(b) specify the accompanying public
                notice and comment period requirements under the Federal public notice
                and approval process.
                [[Page 71178]]
                 Under the current regulations at Sec. Sec. 33.112 and 155.1312,
                states are required to provide a public notice and comment period prior
                to submitting an application for a new section 1332 waiver. The notice
                must include a comprehensive description of the section 1332 waiver
                application; information about where the application is available for
                public review; where the written comments may be submitted; and the
                location, date, and time of public hearings that will be convened by
                the state to seek public input on the application for a section 1332
                waiver.\61\ After issuing the public notice and prior to submitting an
                application for a section 1332 waiver, the state must hold public
                hearings to allow the public to learn about and comment on the state's
                application, and must publish the date, time, and location of the
                hearings in a prominent location on the state's public website.\62\ As
                set forth in Sec. Sec. 33.112(a)(2) and 155.1312(a)(2), as part of the
                public notice and comment period, a state with one or more federally
                recognized tribes must conduct a separate process for meaningful
                consultation with such tribes, if applicable. As HHS and the Department
                of the Treasury explained in the 2012 Final Rule preamble, this tribal
                consultation must be conducted in accordance with Executive Order
                (E.O.) 13175, and, as E.O. 13175 also applies to Medicaid, a state may
                use a Medicaid consultation process to satisfy the consultation needed
                for a section 1332 waiver (77 FR 11700, 11706). Furthermore, the state
                should include in its section 1332 waiver application a description of
                issues raised and comments received.
                ---------------------------------------------------------------------------
                 \61\ 31 CFR 33.112(b); 45 CFR 155.1312(b).
                 \62\ In response to a question from a commenter, the 2012 Final
                Rule states that ``hearings,'' as used in 31 CFR 33.112(c)(1) and 45
                CFR 155.1312(c)(1), means no less than two hearings. (77 FR 11700,
                11706). The HHS and the Department of Treasury continue to interpret
                the regulatory requirement that a State shall hold ``hearings'' to
                refer to at least two hearings, except as otherwise provided by the
                amendments made in this IFC. The existing regulation does not
                expressly rely on the statutory requirement that the Secretaries of
                HHS and Treasury establish ``a process for public notice and comment
                at the State level, including public hearings . . . '' and HHS and
                the Department of the Treasury are of the view that language, by
                itself, does not require a particular state to hold more than one
                hearing. Rather, the statutory language describes a process
                applicable across multiple states, which will, in the aggregate,
                necessarily involve multiple hearings.
                ---------------------------------------------------------------------------
                 In addition, under section 1332(a)(4)(B)(iii) of the PPACA and the
                existing implementing regulations at Sec. Sec. 33.116(b) and
                155.1316(b), the Secretary of HHS and the Secretary of the Treasury are
                required to provide a Federal public notice and comment period
                following their preliminary determination that a state's section 1332
                waiver application is complete.
                 Section 1332 waivers may vary significantly in their complexity and
                breadth. The existing regulations generally provide states and the
                Federal Government flexibility in determining and/or extending the
                length of the comment periods. Both the state and the Federal public
                notice and comment periods must be sufficient to ensure a meaningful
                level of public input. The 2018 Guidance \63\ further specifies that
                the state comment period should be no less than 30 days, and explains
                that consistent with HHS regulations, waiver applications must be
                posted online in a manner that meets technical standards for website
                accessibility similar to applicable national standards \64\ to ensure
                access for individuals with disabilities.
                ---------------------------------------------------------------------------
                 \63\ 83 FR 53575 (https://www.govinfo.gov/content/pkg/FR-2018-10-24/pdf/2018-23182.pdf).
                 \64\ ``National standards'' refers to standards issued by the
                Architectural and Transportation Barriers Compliance Board (often
                referred to as ``section 508'' standards), or alternatively, the
                World Wide Web Consortium's Web Content Accessibility Guidelines
                (WCAG) 2.0 Level AA standards. See 83 FR 53575, 53583 (Oct. 24,
                2018).
                ---------------------------------------------------------------------------
                 HHS and the Department of the Treasury recognize that the current
                section 1332 regulations regarding state and Federal public notice
                procedures and comment period requirements may impose barriers for
                states pursuing a proposed waiver request during the PHE for COVID-
                19.\65\ It is the mission of HHS to enhance and protect the health and
                well-being of all Americans. As such, HHS and the Department of the
                Treasury are issuing this guidance to protect public health and to
                prevent the spread of COVID-19 by limiting the need for in-person
                gatherings related to section 1332 waivers during the PHE.
                Additionally, states may face uncertainty as to whether their waiver
                request will be approved in time, given the state and Federal public
                notice procedures or other public participation requirement associated
                with state procedures that would otherwise require an in-person
                gathering, to expeditiously reform their health insurance markets and
                to protect consumers from the effects of the PHE for COVID-19. Some
                states may not consider more robust changes because they are concerned
                that the current section 1332 waiver application requirements are too
                time-consuming or burdensome to pursue during the PHE for COVID-19.
                Therefore, HHS and the Department of the Treasury are of the view that
                having the flexibility to modify certain public notice procedures and
                participation requirements during the PHE for COVID-19 will protect
                public health and health insurance markets, and will increase
                flexibility and reduce burdens for states seeking to use section 1332
                waivers as a means of innovation for providing coverage, lowering
                premiums, and improving their health care markets.
                ---------------------------------------------------------------------------
                 \65\ During the PHE for COVID-19, under the Secretaries'
                discretion, HHS and the Department of the Treasury have allowed
                states to conduct their public forums virtually, both prior to
                application submission and post award. For example, following the
                scheduling and notice of the hearings, and in consultation with CMS,
                the New Hampshire Insurance Department rescheduled planned in-person
                public hearings to an online webinar format in response to social
                distancing guidance provided by New Hampshire Governor Chris Sununu
                and the Federal government. (https://www.nh.gov/insurance/lah/documents/nh-section-1332-waiver-draft.pdf). Georgia also offered
                public hearings virtually because of public health concerns
                regarding large, in-person gatherings during the COVID-19 pandemic.
                In addition, as of July 13, 2020, several states with approved
                waivers conducted their post award forum virtually due to COVID-19,
                including Alaska, Colorado, Delaware, Maine, Maryland, Minnesota,
                Montana, Oregon, North Dakota, Rhode Island, and Wisconsin. In this
                IFC, the Secretaries expand and build upon this approach by
                providing more flexibility to allow HHS and the Department of the
                Treasury to expedite a decision on a proposed waiver request.
                (https://medicaid.georgia.gov/document/document/georgia1332waiverapplicationfinal07312020vfpdf/download).
                ---------------------------------------------------------------------------
                 Section 1332 waivers are a critical tool for states to ensure
                patients across the country have access to health care coverage. About
                10.7 million individuals on average rely on the Exchanges to purchase
                individual health insurance coverage throughout the
                year.66 67 Although recently there have been positive
                premium stabilization and insurer participation trends, the COVID-19
                pandemic has introduced new uncertainties in the individual and small
                group markets such that past trends resulting in limited access and
                affordability may return in some areas. For example, in response to the
                uncertainty created by the PHE for COVID-19 regarding health care
                utilization rates and claims costs, such as those associated with
                testing and treatment for COVID-19, premiums may increase and issuers
                may reduce their presence or coverage options in the individual and
                small group markets. Additionally, due to the PHE for COVID-19, some
                issuers may have difficulty predicting the composition of their risk
                pools given uncertainty about
                [[Page 71179]]
                the risk profiles of many new enrollees coming from employer-sponsored
                coverage and the potential transition of other enrollees to Medicaid
                due to income loss. Therefore, HHS and the Department of the Treasury
                are concerned that past trends that threaten the stability of the
                individual market risk pool may return, leading some issuers to cease
                offering coverage on the Exchanges in some states and counties and
                leading other issuers to increase their rates, leaving some geographic
                areas with limited or no affordable Exchange coverage options.
                Permitting the Secretary of HHS and the Secretary of the Treasury to
                modify the public notice procedures, in part, will help states seeking
                section 1332 waivers to address such circumstances more quickly and
                develop innovative ways to ensure consumers have access to affordable
                health care coverage. As such, HHS and the Department of the Treasury
                are of the view that, if certain safeguards are met, it is in the best
                interest of the public to provide states applying for section 1332
                waivers with the option to request to modify public notice procedures
                during the PHE for COVID-19.
                ---------------------------------------------------------------------------
                 \66\ American Health Benefit Exchanges, or ``Exchanges,'' are
                entities established under PPACA through which qualified individuals
                and qualified employers can purchase health insurance coverage in
                qualified health plans (QHPs).
                 \67\ First Half of 2020 Average Effectuated Enrollment Data,
                available at https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Early-2020-2019-Effectuated-Enrollment-Report.pdf.
                ---------------------------------------------------------------------------
                 This IFC adds the new Sec. Sec. 33.118 and 155.1318 and provides
                that the Secretary of HHS and the Secretary of the Treasury may modify,
                in part, the state public notice requirements specified in Sec. Sec.
                33.112 and 155.1312 and the Federal public notice requirements
                specified at Sec. Sec. 33.116(b) and 155.1316(b) to expedite a
                decision on a proposed waiver request during the PHE for COVID-19 when
                a delay would undermine or compromise the purpose of the proposed
                waiver request and be contrary to the interests of consumers. Examples
                of the public notice procedures that currently apply under the
                aforementioned regulations that a state may seek to have waived or
                modified include the requirement that states notify the public and hold
                hearings prior to submitting an application, that the state hold more
                than one public hearing in more than one location and that HHS and the
                Department of the Treasury provide for public notice and comment after
                an application is determined to be complete. States may also seek to
                modify the state and/or Federal comment periods to be less than 30 days
                and to host public hearings virtually rather than in-person.
                 For a state to qualify for modification of the state or Federal
                public notice requirements to expedite a decision on a proposed waiver
                request during the PHE for COVID-19, a delay must undermine or
                compromise the purpose of the proposed waiver request and be contrary
                to the interests of consumers. During the PHE for COVID-19, the
                Secretary of HHS and the Secretary of the Treasury (the Secretaries)
                may modify the Federal and/or state public notice procedures, in part,
                if the state meets all of the following:
                 The state requests a modification in the form and manner
                specified by the Secretaries.
                 The state acted in good faith, and in a diligent, timely,
                and prudent manner in the preparation of the request for the
                modification for the waiver, and the waiver application request.
                 The state details in its request for a modification, as
                applicable, the reason(s) the state seeks a modification from the state
                public notice procedures, describes how the state meets the
                modification criteria, and describes the alternative public notice
                procedures it proposes to implement at the state level, including
                public hearings, that are designed to provide the greatest opportunity
                and level of meaningful public input from impacted stakeholders that is
                practicable given the emergency circumstances underlying the state's
                request for a modification.
                 The state details in its request for a modification, as
                applicable, the justification for the request and the alternative
                public notice procedures it requests to be implemented at the Federal
                level.
                 The state must, as applicable, implement the alternative
                public notice procedures at the state level if the state's modification
                request is approved and, if required, amend the waiver application to
                specify that it is the state's intent to comply with those alternative
                public notice procedures in the state's modification request.
                 Any state submitting a proposed waiver request during the PHE for
                COVID-19 can submit a request to the Secretary of HHS and the Secretary
                of the Treasury for this modification from the state and/or Federal
                public notice procedures or include such a request in its section 1332
                waiver application request.
                 The Secretary of HHS and the Secretary of the Treasury's review and
                consideration of a modification request will vary based on the state's
                circumstances, its modification request, and the complexity and breadth
                of the state's proposed section 1332 waiver request. For example,
                during the PHE for COVID-19, many states are prohibiting in-person
                public gatherings or establishing stay-at-home orders due to the public
                health threat.\68\ States seeking new section 1332 waiver(s) that have
                such prohibitions in effect at the time they would have otherwise have
                to conduct public notice would most likely be unable to comply with the
                public notice requirements to hold two in-person public hearings prior
                to submission of their section 1332 waiver applications in accordance
                with the 2018 Guidance addressing requirements under Sec. Sec.
                33.112(b) and 155.1312(b). In such cases, this IFC will allow the
                Secretaries to grant the state's request to hold the two public
                hearings virtually, rather than in-person, or to hold one public
                hearing at the state level, rather than two public hearings at the
                state level. As another example, the Secretaries may agree with a state
                that, due to emergency circumstances that have arisen related to the
                PHE for COVID-19, there is insufficient time for the state to provide
                public notice and hold any public hearings at the state level prior to
                submitting its section 1332 waiver application as required by
                Sec. Sec. 33.112(a) and 155.1312(a), and grant the state's request to
                provide public notice and hold public hearings at the state level after
                the state submits its section 1332 waiver application.
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                 \68\ https://khn.org/morning-breakout/states-declare-emergencies-ban-large-gatherings-as-coronavirus-sweeps-the-nation/.
                https://www.axios.com/states-shelter-in-place-coronavirus-66e9987a-a674-42bc-8d3f-070a1c0ee1a9.html.
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                 In situations where HHS and the Department of the Treasury
                determine that public notice and hearings are warranted on a different
                timeframe and may occur after the submission of a state's waiver
                application request, the state will be required to amend the
                application request as necessary to reflect public comments or other
                relevant feedback received during the alternative public notice
                procedures. HHS and the Department of the Treasury will evaluate a
                state's request for a modification and issue their modification
                determination within approximately 15 calendar days after the request
                is received. In assessing whether a state acted in good faith, and in a
                diligent, timely, and prudent manner in the preparation of the
                modification request for the waiver, and for the waiver application,
                HHS and the Department of the Treasury will evaluate whether the
                relevant circumstances constitute an emergency.
                 HHS and the Department of the Treasury remind states that any
                public participation processes must continue to comply with applicable
                Federal civil rights laws, including taking reasonable steps to provide
                meaningful access for individuals with limited English
                [[Page 71180]]
                proficiency and taking appropriate steps to ensure effective
                communication with individuals with disabilities, including
                accessibility of information and communication technology. Please note
                that virtual meetings may present additional accessibility challenges
                for people with communications and mobility disabilities, as well as to
                those who lack broadband access. Ensuring effective communication may
                include providing American Sign Language interpretation and real-time
                captioning, and ensuring that the platform is interoperable with
                assistive technology for those with mobility difficulties. HHS and the
                Department of the Treasury especially encourage states to strive to
                obtain meaningful input from potentially affected populations,
                including low-income residents, residents with high expected health
                care costs, persons less likely to have access to care, and members of
                federally-recognized tribes, if applicable, as part of any alternative
                public participation process.\69\
                ---------------------------------------------------------------------------
                 \69\ As noted above, the HHS Office for Civil Rights enforces
                applicable Federal civil rights laws as described above, as well as
                laws protecting the exercise of conscience and religious freedom,
                including the Religious Freedom Restoration Act (42 U.S.C. 2000bb
                through 2000bb-4). HHS's requirements are subject to these laws, and
                states may have obligations under these laws to protect conscience,
                prohibit coercion, and to ensure the free exercise of religion. U.S.
                Department of Health & Human Services, Office for Civil Rights,
                Conscience and Religious Freedom, https://www.hhs.gov/conscience/index.html (last visited Aug. 20, 2020).
                ---------------------------------------------------------------------------
                 The Secretary of HHS will publish on the CMS website any
                modification determinations within 15 calendar days of the Secretary of
                HHS and the Secretary of the Treasury making such a determination, as
                well as the approved revised timeline for public comment at the state
                and Federal level, as applicable. In addition, under the new Sec. Sec.
                33.118 and 155.1318, the state will be required to publish on its
                website any modification requests and determinations within 15 calendar
                days of receipt of the determination, as well as the approved revised
                timeline for public comment at the state and Federal level, as
                applicable.
                3. Monitoring and Compliance (31 CFR 33.120 and 45 CFR 155.1320)
                 As section 1332 waivers are likely to a have a significant impact
                on individuals, states, and the Federal Government, the 2012 Final Rule
                established processes and methodologies to ensure that the Secretary of
                HHS and the Secretary of the Treasury receive adequate and appropriate
                information regarding section 1332 waivers (consistent with section
                1332(a)(4)(B)(iv) of the PPACA). Under Sec. Sec. 33.120(c) and
                155.1320(c), to ensure continued public input within at least 6 months
                after the implementation date, and annually thereafter, states are
                required to hold a public forum at which members of the public have an
                opportunity to provide comments on the progress of the program
                authorized by the section 1332 waiver and to provide a summary of this
                forum to the Secretary of HHS as part of the quarterly and annual
                reports required under Sec. Sec. 33.124 and 155.1324. Under Sec. Sec.
                33.120(c)(1) and 155.1320(c)(1), states are required to publish the
                date, time, and location of the public forum in a prominent location on
                the state's public website at least 30 days prior to the date of the
                planned public forum.
                 This IFC adds new Sec. Sec. 33.120(c)(2) and 155.1320(c)(2), which
                provide that the Secretary of HHS and the Secretary of the Treasury
                (the Secretaries) may waive, in part, post award public notice
                requirements for an approved waiver outlined in Sec. Sec. 33.120(c)
                and 155.1320(c) during the PHE for COVID-19 when the application of the
                post award public notice procedures would be contrary to the interests
                of consumers during the PHE for COVID-19.
                 The Secretaries may modify the post award public notice procedures,
                in part, when the state meets all of the following:
                 The state requests a modification in the form and manner
                specified by the Secretaries.
                 The state acts in good faith, and in a diligent, timely,
                and prudent manner to comply with the monitoring and compliance
                requirements under the regulations and specific terms and conditions of
                the waiver and to submit and prepare the request for a modification.
                 The state details in its request for a modification the
                reason(s) the state seeks a modification from the state post award
                public notice procedures, describes how the state meets the
                modification criteria, and describes the alternative post award public
                notice procedures it proposes to implement at the state level,
                including public hearings, that are designed to provide the greatest
                opportunity and level of meaningful public input from impacted
                stakeholders that is practicable given the emergency circumstances
                underlying the state's request for a modification.
                 As part of HHS and the Department of the Treasury's monitoring and
                oversight of approved section 1332 waivers, the Secretary of HHS and
                the Secretary of the Treasury, at their discretion, monitor the state's
                compliance with the specific terms and conditions of the waiver
                including, but not limited to, compliance with the guardrails,
                reporting requirements, and the post award forum requirements. Under
                the flexibilities provided in this IFC, the Secretaries may, for
                example, allow the public forum for an approved waiver that would take
                place or become due during the PHE for COVID-19 to be held virtually
                rather than as an in person gathering. HHS and the Department of the
                Treasury will work closely with states that have these approved
                flexibilities through oversight and monitoring activities to ensure
                open communication with states during the PHE for COVID-19. HHS and the
                Department of the Treasury also will remain focused on ensuring the
                public is informed about the implementation of programs authorized by
                section 1332 waivers and have a meaningful opportunity to comment on
                the implementation.
                 The Secretary of HHS and the Secretary of the Treasury will
                evaluate a state's request for a modification and issue their
                modification determination within approximately 15 calendar days after
                the request is received. The state is required to publish on its
                website any modification requests and determinations by HHS and the
                Department of the Treasury within 15 calendar days of receipt of the
                determination, as well as information on the approved revised timeline
                for the state's post award public notice procedures, as applicable.
                Since the state is already required to post materials as part of post
                award annual reporting requirements, such as the notice for the public
                forum and annual report, states will be responsible for ensuring that
                the public is aware of the determination to modify the public notice
                procedures and must include this information along with the information
                required under Sec. Sec. 33.120(c)(1) and 155.1320(c)(1) in a
                prominent location on the state's public website.
                 HHS and the Department of the Treasury are of the view that post
                award forums are critical to ensure that the public has a regular
                opportunity to learn about and comment on the progress of section 1332
                waivers. States that receive approval, to modify, in part, these post
                award public notice procedures would still need to meet all other
                requirements specified in Sec. Sec. 33.112(b) and 155.1312(b). For
                example, should the state receive a modification approval that permits
                it to hold the post award public forum virtually instead of in person,
                the state must still publish the notice of its post award public notice
                on
                [[Page 71181]]
                the state's public website and use other effective means to communicate
                the required information to the public. The public notice must include
                the website, date, and time of the public forum that will be convened
                by the state, information related to the timeframe for comments, and
                how comments from the public on the section 1332 waiver must be
                submitted. HHS and the Department of the Treasury remind states that
                they still must also comply with Federal civil rights requirements,
                including laws pertaining to accessibility, if the Secretary of HHS and
                the Secretary of the Treasury approve a modification from all or a
                portion of the post award public notice procedures. In such a
                circumstance, the state would need to ensure these virtual public
                hearings are as accessible as possible during the PHE for COVID-19 so
                members of the public can participate and submit comments. The state
                should also track how many people are attending these forums, if
                possible.
                V. Waiver of Proposed Rulemaking
                 Section 553(b) of the APA requires the agency to publish a notice
                of the proposed rule in the Federal Register that includes a reference
                to the legal authority under which the rule is proposed, and the terms
                and substance of the proposed rule or a description of the subjects and
                issues involved. Section 553(c) further requires the agency to give
                interested parties the opportunity to participate in the rulemaking
                through public comment before the provisions of the rule take effect.
                Section 553(b)(B) authorizes the agency to waive these procedures,
                however, if the agency finds good cause that notice and comment
                procedures are impracticable, unnecessary, or contrary to the public
                interest and incorporates a statement of the finding and its reasons in
                the rule issued.
                 Section 553(d) ordinarily requires a 30-day delay in the effective
                date of a final rule from the date of its publication in the Federal
                Register. This 30-day delay in effective date can be waived, however,
                if an agency finds good cause to support an earlier effective date.
                Finally, the Congressional Review Act (CRA) requires a delay in the
                effective date for major rules unless an agency finds good cause that
                notice and public procedure are impracticable, unnecessary, or contrary
                to the public interest, in which case the rule shall take effect at
                such time as the agency determines. 5 U.S.C. 801(a)(3), 808(2).
                 As noted earlier in this preamble, on January 30, 2020, the
                International Health Regulations Emergency Committee of the WHO
                declared the outbreak a ``Public Health Emergency of international
                concern.'' On January 31, 2020, pursuant to section 319 of the PHS, the
                HHS Secretary determined that a PHE exists for the United States to aid
                the nation's health care community in responding to COVID-19. On March
                11, 2020, the WHO publicly declared COVID-19 a pandemic. On March 13,
                2020, the President declared the COVID-19 pandemic a national
                emergency. Effective October 23, 2020, the HHS Secretary renewed the
                January 31, 2020 determination, which was previously renewed on April
                21, 2020 and July 25, 2020, that a PHE exists and has existed since
                January 27, 2020. This declaration, along with the HHS Secretary's
                January 30, 2020 declaration of a PHE, conferred on the HHS Secretary
                certain waiver authorities under section 1135 of the Act. On March 13,
                2020, the HHS Secretary authorized waivers under section 1135 of the
                Act, effective March 1, 2020.\70\
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                 \70\ https://www.phe.gov/emergency/news/healthactions/section1135/Pages/covid19-13March20.aspx.
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                 It is critically important that the Departments implement the
                policies in this IFC as quickly as possible. As the United States is in
                the midst of the PHE for COVID-19, the Departments find good cause to
                waive notice of proposed rulemaking under the APA, 5 U.S.C. 553(b)(B).
                For those same reasons, as authorized by section 808(2) of the CRA, the
                Departments find it is impracticable and contrary to the public
                interest not to waive the delay in effective date of this IFC under
                section 801 of the CRA. Therefore, the Departments find there is good
                cause to waive the CRA's delay in effective date pursuant to section
                808(2) of the CRA. Thus, the Departments find good cause to waive the
                applicable delays in the effective date and, moreover, to establish
                these policies in this IFC applicable as of the date of display at the
                Office of the Federal Register.
                 In this IFC, consistent with section 1902(a)(4) and (a)(19) of the
                Act, the Department adds a new subpart G to 42 CFR part 433 to provide
                states with more flexibility, subject to certain safeguards, in
                implementing the requirement in section 6008(b)(3) of the FFCRA that
                states maintain Medicaid beneficiary enrollment in order to receive the
                temporary increase in Federal funding in the FFCRA. This temporary
                funding increase is effective beginning January 1, 2020 and could
                extend through the last day of the calendar quarter in which the PHE
                for COVID-19, including any extensions, terminates, if the state claims
                the temporary funding increase in that quarter. This provision of the
                IFC is immediately necessary to ensure that states can determine
                eligibility and provide care and services during the PHE in a manner
                that is consistent with simplicity of administration and the best
                interests of beneficiaries and also claim the temporary funding
                increase.
                 In this IFC, HHS and the Department of the Treasury are setting
                forth flexibilities in the public notice and post award public
                participation requirements for a State Innovation Waiver described in
                section 1332 of PPACA during the PHE for COVID-19. HHS and the
                Department of the Treasury recognize that following the normal state
                and Federal public notice procedures and the state post award
                requirements for section 1332 waivers may impose barriers for states
                pursuing a proposed waiver request during the PHE for COVID-19. This
                guidance is intended to protect public health and prevent the spread of
                COVID-19 by limiting the need for in-person gatherings related to a
                section 1332 waiver. Additionally, states may face uncertainty as to
                whether their waiver requests will be approved in time to expeditiously
                reform their health insurance markets and to protect consumers from the
                effects of the PHE for COVID-19. Some states may not consider more
                robust changes because they were concerned that the current section
                1332 waiver application requirements are too time-consuming or
                burdensome to be helpful during the PHE for COVID-19. HHS and the
                Department of the Treasury are of the view that the flexibility to
                modify certain public notice procedures and participation requirements
                will increase flexibility and reduce burden for states seeking to use
                section 1332 waivers as a means of innovation for providing coverage,
                lowering premiums, and improving their health care markets during the
                PHE for COVID-19. As such, these flexibilities are immediately
                necessary to provide states applying for a section 1332 waiver or
                during the post award period with the option to request a modification
                from the state and/or Federal public notice requirements when a delay
                would undermine or compromise the purpose of the waiver and be contrary
                to the interests of consumers. HHS and the Department of the Treasury
                are of the view that it could be contrary to the public interest to
                require full notice and comment during the current PHE for COVID-19
                because following the normal timeframes and requirements could result
                in waiver approvals for
                [[Page 71182]]
                innovative waivers taking effect after issuers have already made their
                decisions regarding issuer participation in the individual market and
                after rates for the upcoming plan year have been submitted. A
                modification from the public participation requirements would be
                beneficial to the public interest by providing states and the Federal
                Government the flexibilities necessary to review and approve, as
                appropriate, section 1332 waivers that expand access to coverage on a
                faster timeframe.
                 In this IFC, the Departments amend the regulations under section
                2713 of the PHS Act to implement the requirement in section 3203 of the
                CARES Act that non-grandfathered group health plans and health
                insurance issuers offering non-grandfathered group or individual health
                insurance coverage provide coverage without cost sharing for qualifying
                coronavirus preventive services. This coverage must be provided within
                15 business days after the date on which a recommendation is made by
                the USPSTF or ACIP. The Departments also establish in this IFC that
                this coverage must be provided regardless of whether the service is
                delivered by an in-network or out-of-network provider.
                 The Departments are issuing these amendments under the authority of
                section 9833 of the Code, section 734 of ERISA, and section 2792 of the
                PHS Act. These sections authorize the Secretaries of the Treasury,
                Labor, and HHS to promulgate any interim final rules that the
                Secretaries determine are appropriate to carry out the provisions of
                chapter 100 of the Code, part 7 of subtitle B of title I of ERISA, and
                part A of title XXVII of the PHS Act, which include PHS Act sections
                2701 through 2728 and the incorporation of those sections into ERISA
                section 715 and Code section 9815. In addition, section 7805(e) of the
                Code restricts any temporary regulation issued by Treasury and the IRS
                under the Code, such as interim final regulations, to a duration of 3
                years.
                 Several COVID-19 vaccine candidates are currently in late-stage
                development. Once a vaccine is authorized or approved by FDA, the
                Departments expect that ACIP may move expeditiously to recommend the
                immunization. In addition, unlike other preventive items and services
                typically provided according to regularly scheduled intervals, items
                and services intended to prevent or mitigate COVID-19 will not, in the
                immediate future, be provided as part of a usual course of preventive
                care. Instead, the Departments expect consumers to receive these
                services once they are recommended for the general public or specific
                high-risk or high-priority populations. To help ensure full access to
                and the widespread use of qualifying coronavirus preventive services to
                mitigate the PHE for COVID 19, it is critical that individuals be able
                to receive such services from any provider authorized to provide the
                service. This is consistent with the objectives of Operation Warp
                Speed, which, as mentioned above, is a partnership among components of
                the Federal Government that engages with private firms to accelerate
                the development, manufacture, and distribution of a COVID-19 vaccine to
                the American people.
                 The provisions of this IFC therefore are immediately necessary to
                ensure group health plan and group and individual health insurance
                coverage of these items and services is prompt and broad, to ensure
                timely access to combat the pandemic. In this IFC, the Department adds
                a requirement at Sec. 417.454 to require section 1876 cost plans to
                cover without cost sharing the COVID 19 vaccine and its administration
                described in section 1861(s)(10)(A) of the Act without cost sharing for
                the duration of the PHE for the COVID-19 pandemic, specifically the end
                of the emergency period defined in paragraph (1)(B) of section 1135(g)
                of the Act, which is the PHE declared by the Secretary on January 31,
                2020 and any renewals thereof. While section 1876(c)(2) of the Act
                ensures that enrollees in Medicare cost plans will have coverage of a
                COVID-19 vaccine and its administration, section 3713 of the CARES Act
                did not amend section 1876 of the Act to provide similar cost-sharing
                protections for enrollees in cost plans who receive the vaccine from an
                in-network provider. Currently, there is no requirement for cost plans
                to cover the COVID-19 vaccine and its administration without cost
                sharing (that is, with cost sharing that is the same as original
                Medicare) when the vaccine is furnished by an in-network health care
                provider. This provision of the IFC is immediately necessary to ensure
                that cost plan enrollees, like other Medicare beneficiaries, are
                provided access to the COVID-19 vaccine and its administration without
                cost sharing. This immediate action will ensure that cost is not a
                barrier for beneficiaries to get the vaccine, particularly during the
                public health emergency when ensuring access is paramount importance.
                The delay necessary for notice and comment rulemaking is both contrary
                to the public interest and impractical here as it would delay access to
                a COVID-19 vaccine without cost sharing and be contrary to the need to
                ensure access to a COVID-19 vaccine for enrollees in cost plans on the
                same basis as is ensured for other Medicare beneficiaries.
                 Further, as underscored by the timeline for coverage Congress
                established in section 3203 of the CARES Act, the need to provide
                coverage of qualifying coronavirus preventive services is urgent.
                Following a recommendation of the USPTF or ACIP, the requirement to
                provide coverage without cost sharing of qualifying coronavirus
                preventive services, which are expected to include immunizations, takes
                effect within 15 business days. Plans and issuers need immediate
                guidance to understand their obligations under section 3203 of the
                CARES Act and to take steps that will enable them to comply with those
                requirements as soon as the coverage requirement goes into effect.
                Delaying these provisions would likewise delay plans' and issuers'
                ability to prepare for the availability of a COVID-19 vaccine,
                resulting in barriers in access to coverage of these critical services
                during the PHE for COVID-19. As of the date of display of this
                regulation, there are not any coronavirus preventive services including
                vaccines for coronavirus that are required to be covered. However,
                because emergency use authorization or approval of a COVID-19 vaccine
                may be imminent, the Departments are of the view it is critical that
                these regulations under section 2713 of the PHS Act be issued and
                effective prior to such authorization or approval. The Departments are
                of the view that it would be impracticable and contrary to the public
                interest to undertake normal notice and comment rulemaking procedures
                in light of the urgent need to ensure coverage of and access to
                qualifying coronavirus preventive services to protect the public health
                as well as the health and safety of individuals and communities to
                prevent the spread of COVID-19. For these same reasons, the Departments
                are of the view a delayed effective date would also be contrary to the
                public interest. Ensuring individuals have access to a COVID-19 vaccine
                as soon as it becomes available is critical to ending the PHE for
                COVID-19, and therefore it is imperative that these regulations are in
                effect on the date such a vaccine becomes available and recommended by
                ACIP. Undertaking the standard rulemaking process of publishing a
                proposed rule, seeking public comment, carefully
                [[Page 71183]]
                analyzing those public comments, and subsequently publishing a final
                rule would possibly and perhaps likely jeopardize such an effective
                date.
                 The Departments are of the view that it would be impracticable and
                contrary to the public interest to undertake normal notice and comment
                procedures and to thereby delay the effective date of this IFC. The
                Departments find good cause to waive notice of proposed rulemaking
                under the APA, 5 U.S.C. 553(b)(B). For those same reasons, as
                authorized by section 808(2) of the CRA, the Departments find it is
                impracticable and contrary to the public interest not to waive the
                delay in effective date of this IFC under section 801 of the CRA.
                Therefore, the Departments find there is good cause to waive the CRA's
                delay in effective date pursuant to section 808(2) of the CRA. The
                provisions in this IFC will go into effect on the date of display.
                 This IFC implements the requirement that providers of diagnostic
                tests for COVID-19 make public their cash prices for COVID-19
                diagnostic tests and specifies the COVID-19 diagnostic tests to which
                this requirement applies. This IFC further defines ``provider of a
                diagnostic test for COVID-19'' (referred to as ``provider'') as any
                facility that performs one or more COVID-19 diagnostic tests. In
                addition, this IFC defines ``cash price'' as the charge that applies to
                an individual who pays cash (or cash equivalent) for a COVID-19
                diagnostic test. This IFC gives CMS discretion to take any of the
                following actions if CMS determines a provider is noncompliant with the
                requirements of new 45 CFR 182.50:
                 Provide a written warning notice to the provider of the
                specific violation(s).
                 Request that a provider submit and comply with a CAP.
                 Impose a CMP on the provider if the provider fails to
                respond to CMS' request to submit a CAP or to comply with the
                requirements of a CAP approved by CMS.
                 As indicated above, these requirements are applicable during the
                PHE for COVID-19 (and any extensions to the PHE for COVID-19);
                therefore, it is critically important that we implement the policies in
                this IFC as quickly as possible in order for stakeholders to know with
                certainty during the PHE for COVID-19 how to comply with the law and
                what penalties they will face for noncompliance during the PHE for
                COVID-19. Moreover, these rules are necessary for CMS to enforce
                section 3202(b) of the CARES Act and to ensure plans, issuers, and
                consumers know in advance the price for a diagnostic test for COVID-19
                during the PHE for COVID-19. For these reasons, we believe it would be
                impracticable and contrary to the public interest to undertake normal
                notice and comment rulemaking procedures and to delay the effective
                date of the new requirements being adopted at 45 CFR part 182.
                 In this IFC, the Department creates a New COVID-19 Treatments Add-
                on Payment (NCTAP) under the Inpatient Prospective Payment System
                (IPPS) for COVID-19 cases that meet certain criteria. The Department is
                of the view that it would be impracticable and contrary to the public
                interest to undertake normal notice and comment procedures and to
                thereby delay the effective date of this IFC. As drug and biological
                products become available and are authorized or approved by FDA for the
                treatment of COVID-19 in the inpatient setting, there may be potential
                financial disincentives for hospitals to provide these new COVID-19
                treatments to Medicare inpatients during the PHE because the costs of
                these new treatments are not yet reflected in Medicare payment rates
                and there are no new technology add-on payments for these treatments.
                The delay necessary for notice and comment rulemaking is both contrary
                to the public interest and impracticable because of the urgency in
                ensuring there are not financial disincentives for hospitals to provide
                COVID-19 treatments to beneficiaries during the PHE. We expect that
                increasing the current IPPS payment amounts for sufficiently costly
                cases to mitigate potential financial disincentives for hospitals to
                provide new COVID-19 treatments during the PHE will potentially improve
                and speed access to these treatments for Medicare patients. We also
                believe that the establishment of the NCTAP provides greater
                transparency and predictability to the public, including innovators
                that are developing new COVID-19 treatments, as to how Medicare
                payments for cases involving these treatments will be determined when
                those treatments become available.
                 In this IFC, the Department assures separate payment for new COVID-
                19 treatments provided in the outpatient setting for the remainder of
                the Public Health Emergency for COVID-19. The Department is of the view
                that it would be impracticable and contrary to the public interest to
                undertake normal notice and comment procedures and to thereby delay the
                effective date of this IFC. We anticipate that most drugs and
                biological products authorized or approved for use in treating COVID-19
                in the outpatient setting would be separately paid under our standard
                OPPS payment policy; however, these products could be packaged into a
                Comprehensive Ambulatory Payment Classification (C-APC) payment when
                provided on the same claim as a C-APC service, in which case separate
                payment would not be made for these products. Although we do not expect
                that many beneficiaries would both receive a primary C-APC service and
                a drug or biological for treating COVID-19, we nonetheless believe that
                as drugs or biologicals become available and are authorized or approved
                for the treatment of COVID-19 in the outpatient setting, it would be
                appropriate to mitigate any potential financial disincentives for
                hospitals to provide these new treatments during the PHE for COVID-19.
                The delay necessary for notice and comment rulemaking to address this
                issue is both contrary to the public interest and impracticable because
                of the urgency in ensuring there are not financial disincentives for
                hospitals to provide COVID-19 treatments to beneficiaries. Therefore,
                effective for services furnished on or after the effective date of this
                rule and until the end of the PHE for COVID-19, CMS is creating an
                exception to its OPPS C-APC policy to ensure separate payment for new
                COVID-19 treatments that meet certain criteria.
                 In this IFC, the Department adds changes to the CJR model that are
                immediately necessary to continue the CJR model consistent with model
                goals to, cover inpatient major lower joint replacements without
                interruption, and to reduce operational and financial uncertainty for
                CJR hospital participants during and beyond the PHE. Ending on March
                31, 2021 would be disruptive to hospitals and patient care during the
                PHE. The end date of March 31, 2021, means hospitals stop initiating
                episodes under the model after January 2, 2021, before the end of the
                public health emergency as renewed on October 23, 2020.\71\ Extending
                the model through an additional six months of performance year (PY) 5,
                so that PY 5 now ends on September 30, 2021, provides participant
                hospitals with greater certainty in model operations during the
                remainder of the PHE.
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                 Through this IFC we are implementing four changes to the CJR model
                needed to extend PY 5. These are: (1) Extending PY 5 an additional 6
                months to provide for continuity of model operations with the same
                scope while we continue to consider comments received on our proposal
                to extend the model to PYs 6 through 8 and adopt other changes to the
                model
                [[Page 71184]]
                (42 CFR 510.2 and 510.200(a)); (2) making changes to the reconciliation
                process for PY 5 to allow for two periods and to enable more frequent
                receipt of reconciliation reports by participants (42 CFR 510.2, 42 CFR
                510.200, 42 CFR 510.305(b), (d)(1), (e), (i)(1) and (2), and (j)(1) and
                (2), and 42 CFR 510.400(b)(3)(v), and adding 42 CFR 510.400(b)(3)(vi));
                (3) making a technical change, retroactive to October 1, 2020, to
                ensure that the model continues to include the same inpatient Lower
                Extremity Joint Replacement (LEJR) procedures, despite the adoption of
                new MS-DRGs to describe those procedures (42 CFR 510.300(a)(1)(i) and
                (iii)); and (4) making changes to the extreme and uncontrollable
                circumstances policy for COVID-19 to adapt to an increase in CJR
                episode volume and renewal of the PHE, while providing protection
                against financial consequences of COVID-19 after the extreme and
                uncontrollable circumstances policy no longer applies (42 CFR 510.300).
                 Implementing an additional six months of PY 5, so that PY 5 now
                ends on September 30, 2021 (hospitals stop initiating new episodes
                under the model after July 2, 2021) provides participant hospitals
                additional relief and stability in model operations while the end of
                the PHE remains unknown. We have modified the reconciliation process to
                provide payments consistent with the current annual reconciliation
                schedule for hospitals for greater stability. Absent modification to
                the reconciliation process, the extension of PY 5 to a total of 21
                months, from January 1, 2020 through September 30, 2021 would mean that
                participant hospitals would experience a 21-month gap between the PY4
                final reconciliation in June of 2020 and initial PY 5 reconciliation in
                early 2022. In the FY 2021 IPPS/LTCH final rule, we stated that because
                the CJR model would continue until at least March 31, 2021, we intended
                to adopt a policy in the CJR final rule that incorporates new MS-DRGs
                for the same procedures currently included in the CJR model, under
                prior MS-DRGs, as of their effective date to avoid disruption to the
                model for the remainder of PY5 (as extended) and thereafter, if our
                proposal to extend the CJR model through PY8 were finalized (85 FR
                58502). We are adopting the change in this IFC, retroactive to October
                1, 2020 because without a change the model ceases to continue as a
                comprehensive joint replacement model. Not making this change would
                have a significant impact on operational stability. Finally, this
                interim final rule with comment specifies an end for the current
                extreme and uncontrollable adjustment in 42 CFR 510.300(k)(4). In order
                to provide participant hospitals continuing financial protection from
                the effect of COVID-19 on the CJR model that may continue beyond the
                end of the PHE for COVID-19 or March 31, 2021, whichever occurs
                earlier, we are implementing that actual episode payments are capped at
                the quality adjusted target price determined for that episode under
                Sec. 510.300 for episodes with actual episode payments that include a
                claim with a COVID-19 diagnosis code and initiate after the earlier of
                March 31, 2021 or the last day of the emergency period. This policy is
                consistent with flexibilities and protections for impact of COVID-19 in
                other Innovation Center models. For all of these revisions, we believe
                it is contrary to the public interest to undertake traditional notice
                and comment rulemaking to adopt these regulatory changes because they
                preserve the model's scope and operations at current levels, fostering
                model stability now and in the future for hospital operations during
                and beyond the PHE.
                VI. Collection of Information Requirements
                 Under the Paperwork Reduction Act of 1995, the Departments are
                required to provide 30-day notice in the Federal Register and solicit
                public comment before a collection of information requirement is
                submitted to OMB for review and approval. In order to fairly evaluate
                whether an information collection should be approved by OMB, section
                3506(c)(2)(A) of the Paperwork Reduction Act of 1995 (PRA) requires
                that the Departments solicit comment on the following issues:
                 The need for the information collection and its usefulness
                in carrying out the proper functions of the agency.
                 The accuracy of the 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.
                 The Departments are soliciting public comment on each of the
                section 3506(c)(2)(A)-required issues for the following information
                collection requirements (ICRs). The requirements and burden will be
                submitted to under OMB Control Number 0938-NEW.
                A. ICRs for Price Transparency for COVID-19 Diagnostic Tests
                 As discussed in section II.C of this IFC, section 3202(b) of the
                CARES Act establishes a requirement to publicize cash prices for COVID-
                19 diagnostic tests during the PHE. For purposes of implementing
                section 3202(b) of the CARES Act, we are adding new 45 CFR part 182,
                ``Price Transparency for COVID-19 Diagnostic Tests,'' that will codify
                price transparency requirements for the performance of a COVID-19
                diagnostic test.
                 There are several types of COVID-19 tests designed to detect SARS-
                CoV-2 or to diagnose a possible case of COVID-19, including: molecular
                (RT-PCR) tests, which are used to detect the virus's genetic material;
                antigen tests, which are used to detect specific proteins on the
                surface of the virus; and serology testing, which is used to look for
                the presence of antibodies produced by the body in response to
                infections.
                 For purposes of 45 CFR part 182, we are defining ``provider of a
                diagnostic test for COVID-19'' as any facility that performs one or
                more COVID-19 diagnostic tests. In order to perform a diagnostic test
                for COVID-19 and report patient-specific results, a facility (whether
                that be a primary care provider's office, urgent care center,
                outpatient hospital site or stand-alone laboratory) is required to hold
                a CLIA certificate based on the complexity of the testing performed by
                the facility. Therefore, we expect that any ``provider of a COVID-19
                diagnostic test'' would hold a CLIA certificate (including a
                certificate of waiver or certificate of registration) and that such
                testing would occur in facilities ranging from primary care provider
                offices to urgent care centers to stand-alone national laboratories.
                 As explained in section VIII.B of this IFC, we estimate that
                approximately 83,309 CLIA providers could potentially be performing
                COVID-19 diagnostic tests and need to publicize their cash prices. For
                purposes of this IFC, we are estimating it will take a business
                operations specialist (13-1000), on average 1 hour for a total of
                83,309 burden hours to compile and make public the cash prices for
                COVID-19 diagnostic tests, at an hourly wage of $36.31 as published by
                the BLS in 2019.\72\ We estimate the overhead and fringe benefit cost
                to be 100 percent of wages. Therefore, we estimate a one-time cost per
                provider to be $72.62
                [[Page 71185]]
                ($36.31 x 2) and the total cost estimated to be $6,049,900 (83,309
                hours x $72.62) to collect, compile and post the required information.
                ---------------------------------------------------------------------------
                 \72\ Bureau of Labor Statistics. National Occupational
                Employment and Wage Estimates, May 2019. Available at: https://www.bls.gov/oes/current/oes_nat.htm#13-0000.
                ---------------------------------------------------------------------------
                B. ICRs for State Innovation Waivers Policy and Regulatory Revision in
                Response to COVID-19 Public Health Emergency
                 This IFC provides that states are required to submit modification
                requests to the Secretary of HHS and the Secretary of the Treasury in
                order to obtain approval for the modifications made available by this
                IFC. Any state can submit a request to the Secretaries for a
                modification from the state and/or Federal public notice procedures or
                include such a request in their section 1332 waiver application if the
                waiver application is submitted during the PHE for COVID-19. The
                request must describe the reason the state seeks a modification from
                the state public notice procedures, describe how the state meets the
                modification criteria, describe the alternative public notice
                procedures it proposes to implement at the state level, including
                public hearings, that are designed to provide the greatest opportunity
                and level of meaningful public input from impacted stakeholders that is
                practicable given the emergency circumstances underlying the state's
                request for a modification. The request must describe the reason the
                state seeks a modification from the Federal public notice procedures
                and the alternative public notice procedures it requests to be
                implemented at the Federal level, as applicable.
                 A state with an approved section 1332 waiver can submit a request
                to HHS and the Department of Treasury for a modification from post
                award public notice procedures. The request must specify the reason the
                state seeks a modification from the post award public notice
                procedures, describe how the state meets the modification criteria, and
                describe the alternative procedures it proposes to implement at the
                state level, including public hearings, that are designed to provide
                the greatest opportunity and level of meaningful public input from
                impacted stakeholders that is practicable given the emergency
                circumstances underlying the state's request for a modification.
                 While HHS and the Department of Treasury do not have data available
                to predict the number of states that will likely request a modification
                of either the waiver application or the post award public notice
                procedures, HHS and the Department of Treasury estimate it will take a
                senior manager 1 hour to prepare a state's request, with an equivalent
                cost of approximately $118.\73\ In addition, if HHS and the Department
                of Treasury approve a state's modification request, the state will have
                to post the determination on their website within 15 days of the
                approval. HHS and the Department of Treasury estimate that for each
                state, it will take a network and computer systems administrator 15
                minutes to post the approval with an equivalent cost of approximately
                $21.\74\ Assuming that approximately 15 states will submit a
                modification request, the total burden hours for all states will be 15
                hours, with an equivalent cost of approximately $1,775. HHS and the
                Department of Treasury have assumed that 15 states will submit a
                request because, as of display of this IFC, 15 states have an approved
                1332 waiver. This is an upper bound, since some states may not need to
                request the available modification for their waivers, and therefore,
                will incur no burden. Furthermore, assuming that approximately 15
                states receive approval of the modification request and then must post
                the approval, the total burden hours for all states will be
                approximately 3.75 hours, with an equivalent cost of approximately
                $319. This is an upper bound, since some states may not receive
                approval, and therefore, will incur a lower (or no) burden. The total
                estimated burden hours assuming approximately 15 states apply for and
                receive approval of the modification request is 18.75 hours, with an
                equivalent cost of approximately $2,094.
                ---------------------------------------------------------------------------
                 \73\ Using data from the Bureau of Labor Statistics (BLS) for
                General and Operations Managers (Code 11-1020), we estimate that the
                average hourly labor cost will be $118.30, including 100 percent
                increase for overhead and fringe benefits. https://www.bls.gov/oes/current/oes_stru.htm.
                 \74\ Using data from the BLS for Network and Computer Systems
                Administrators (Code 15-1244), we estimate that the average hourly
                labor cost will be $85.02, including 100 percent increase for
                overhead and fringe benefits. https://www.bls.gov/oes/current/oes_stru.htm.
                 Table 3--Estimated Cost and Burden Hours per Respondent
                ----------------------------------------------------------------------------------------------------------------
                 Average burden
                 hour per Hourly wage Total cost per
                 BLS occupation respondent (in rates respondent
                 hours)
                ----------------------------------------------------------------------------------------------------------------
                Senior Manager.................................................. 1 $118.30 $118.30
                Network and Computer Systems Administrator...................... 0.25 85.02 21.26
                 -----------------------------------------------
                 Total....................................................... 1.25 .............. 139.56
                ----------------------------------------------------------------------------------------------------------------
                 Table 4--Estimated Total Cost and Burden for all Respondents
                ----------------------------------------------------------------------------------------------------------------
                 Number of Number of Burden hours Total burden
                 respondents responses per respondent hours Total cost
                ----------------------------------------------------------------------------------------------------------------
                Modification Request............ 15 15 1 15 $1,775
                Posting modification approval... 15 15 0.25 3.75 319
                 -------------------------------------------------------------------------------
                 Total....................... 15 .............. 1.25 18.75 2,094
                ----------------------------------------------------------------------------------------------------------------
                [[Page 71186]]
                C. ICRs Regarding the Comprehensive Joint Replacement (CJR) Model
                 Section 1115A(d)(3) of the Social Security Act exempts the Center
                for Medicare and Medicaid Innovation (CMMI) model tests and expansions,
                from the PRA. The section provides that Chapter 35 of title 44, United
                States Code, which includes such provisions as the PRA, shall not apply
                to the testing and evaluation of CMMI models or expansion of such
                models.
                D. ICRs Regarding Enrollment as Mass Immunization Roster Biller
                 As discussed in section II.A.1. of this IFC, a mass immunizer may
                be enrolled in Medicare as another type of provider or supplier such as
                a physician, non-physician practitioner, hospital outpatient
                department, home health agency, or skilled nursing facility. However,
                an entity that does not otherwise qualify as a Medicare provider or
                supplier but wishes to furnish mass immunization services may be
                eligible to enroll in Medicare as a ``Mass Immunization Roster Biller''
                via the Form CMS-855B enrollment application (Medicare Enrollment
                Application: Clinics/Group Practices and Certain Other Suppliers; OMB
                Control No.: 0938-0685; Expires 12/21).
                 This section discusses our burden estimates for the enrollment of
                mass immunization roster billers via the Form CMS-855B application as
                well as the PRA exemption we are claiming for the appeals process.
                1. Cost of Completing Form CMS-855B
                 Using our internal data, we generally estimate that approximately
                60,000 entities (the preponderance of which will be pharmacies) will
                seek to enroll as mass immunization roster billers pursuant to the IFC,
                all of whom will attempt enrollment in the 12-month period following
                the IFC's display. According to the most recent wage data provided by
                the Bureau of Labor Statistics (BLS) for May 2019 (see http://www.bls.gov/oes/current/oes_nat.htm), the mean hourly wages for the
                following categories are:
                 Table 5--National Occupational Employment and Wage Estimates
                ----------------------------------------------------------------------------------------------------------------
                 Fringe
                 Occupation Mean hourly benefits and Adjusted
                 Occupation title code wage ($/hr) overhead ($/ hourly wage ($/
                 hr) hr)
                ----------------------------------------------------------------------------------------------------------------
                Healthcare Diagnosing or Treating Practitioners. 29-1000 49.26 49.26 98.52
                Medical Secretaries and Administrative 43-6013 18.31 18.31 36.62
                 Assistants.....................................
                ----------------------------------------------------------------------------------------------------------------
                 Consistent with Form CMS-855B projections made in recent rulemaking
                efforts, it will take each entity an average of 2.5 hours to obtain and
                furnish the information on the Form CMS-855B. Per our experience, the
                entity's medical secretary will secure and report this data, a task
                that would take approximately 2 hours. Additionally, a health
                diagnosing and treating practitioner of the entity will review and sign
                the form, a process we estimate takes 30 minutes. We therefore project
                a total burden of 150,000 hours (60,000 suppliers x 2.5 hrs) at a cost
                of $7,350,000 (60,000 suppliers x ((2 hrs x $36.62/hr) + (0.5 hrs x
                $98.52/hr)). When averaged over the typical 3-year OMB approval period,
                we estimate an annual burden of 50,000 hours (150,000 hrs/3) at a cost
                of $2,450,000 ($7,350,000/3).
                2. Appeals
                 Pursuant to 42 CFR part 498, a mass immunization roster biller may
                appeal the denial or revocation of its enrollment. While there are
                information collection requirements associated with the appeals
                process, we believe they are exempt from the PRA. In accordance with
                the implementing regulations of the PRA at 5 CFR 1320.4(a)(2), the
                information collection requirements associated with the appeals process
                are subsequent to an administrative action (specifically, the denial or
                revocation of a mass immunization roster biller's enrollment).
                Therefore, we have not developed burden estimates. We also believe that
                any costs associated with mass immunization roster biller enrollment
                will, in any event, be de minimis; this is because we anticipate, based
                on past experience, there would be comparatively few denials and
                revocations of such enrollments.
                Response to Comments
                 Because of the large number of public comments normally received on
                Federal Register documents, the Departments are not able to acknowledge
                or respond to them individually. All comments received by the date and
                time specified in the DATES section of this preamble will be
                considered, and, when the Departments proceed with a subsequent
                document, the Departments will respond to the comments in the preamble
                to that document.
                Regulatory Impact Analysis
                A. Statement of Need
                 The flexibilities and changes contained within this IFC are
                responsive to the PHE for COVID-19. The policies implemented in this
                IFC will provide flexibilities, during the PHE for COVID-19, to states
                pursuing waivers under section 1332 of the PPACA and to states with
                approved section 1332 waivers. Additionally, the policies and
                regulatory updates implemented in this IFC will increase the
                affordability with regards to section 1332 waiver applications and
                support continuity of health insurance coverage for consumers in the
                individual and small group (or merged) market during the PHE for COVID-
                19. This IFC also implements section 3202(b) of the CARES Act, which
                requires that providers of COVID-19 diagnostic tests make public their
                cash prices for those tests and establishes an enforcement scheme to
                enforce those requirements during the PHE for COVID-19.
                 In section 3203 of the CARES Act, Congress required group health
                plans and issuers of group or individual health insurance coverage to
                cover without cost sharing qualifying coronavirus preventive services,
                and required such coverage to be provided within 15 business days after
                the date on which an applicable recommendation is made relating to such
                service. The Departments codify these requirements in this IFC, and
                finalize amendments to the regulations implementing section 2713 of the
                PHS Act at 26 CFR 54.9815-2713; 29 CFR 2590.715-2713; and 45 CFR
                147.130 that are intended to help ensure full access to and the
                widespread use of qualifying coronavirus preventive services to
                mitigate the public health emergency.
                B. Overall Impact
                 The Departments have examined the potential 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
                [[Page 71187]]
                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), the Congressional Review Act (5 U.S.C. 804(2)), and Executive
                Order 13771 on Reducing Regulation and Controlling Regulatory Costs
                (January 30, 2017).
                 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 one 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 one
                year), and a ``significant'' regulatory action is subject to review by
                the OMB. The Departments have determined that these rules are likely to
                have economic impacts of $100 million or more in at least one year, and
                thus, meet the definition of ``economically significant'' under
                Executive Order 12866 and a major rule under the Congressional Review
                Act. Therefore, the Departments have provided an assessment of the
                potential costs, benefits, and transfers associated with this rule. In
                accordance with the provisions of Executive Order 12866, this
                regulation was reviewed by OMB.
                C. Detailed Economic Analysis
                1. Effect of Price Transparency for COVID-19 Diagnostic Tests During
                the PHE
                 As discussed in section II.C of this IFC, Section 3202(b) of the
                CARES Act establishes a requirement to publicize cash prices for COVID-
                19 diagnostic tests during the PHE. For purposes of implementing
                section 3202(b) of the CARES Act, we are adding new 45 CFR part 182,
                ``Price Transparency for COVID-19 Diagnostic Tests,'' that will codify
                price transparency requirements for the actual performance of a COVID-
                19 diagnostic test. At Sec. 182.20, we are defining a ``COVID-19
                diagnostic test'' as a COVID-19 in vitro diagnostic test described in
                section 6001 of the FFCRA, as amended by section 3201 of the CARES Act.
                 This IFC defines a ``provider of a diagnostic test for COVID-19''
                (referred to as ``provider'') as any facility that performs one or more
                COVID-19 diagnostic tests. In order to perform a COVID-19 diagnostic
                tests and report patient-specific results, a facility is required to
                hold a CLIA certificate based on the complexity of the testing
                performed by the facility. This IFC requires providers of COVID-19
                diagnostic tests to make public the cash price for such tests on a
                public internet website of such provider during the emergency period
                declared under section 319 of the PHS Act. In the event that a provider
                does not have its own website on which to post this cash price
                information, Sec. 182.40(b) states that the provider would be required
                to make public its cash price information in writing, within two
                business days upon request, and by posting signage prominently at the
                provider's COVID-19 diagnostic testing location, if such location is
                accessible to the public.
                 We anticipate that price transparency has potential beneficial
                marketplace benefits generally, as discussed in detail in the CY 2020
                Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory
                Surgical Center Payment System Policy Changes and Payment Rates, Price
                Transparency Requirements for Hospitals To Make Standard Charges Public
                Final Rule (84 FR 65524) and the Transparency in Coverage Proposed Rule
                (84 FR 65464). As noted in section II.C of this IFC, section 3202 of
                the CARES Act addresses reimbursement of COVID-19 diagnostic tests.
                Section 3202(a) of the CARES Act requires group health plans and
                issuers that provide coverage for items and services described in
                section 6001(a) of the FFCRA to reimburse any provider of a COVID-19
                diagnostic test an amount that equals the negotiated rate, or, if the
                plan or issuer does not have a negotiated rate with the provider, the
                cash price for such service that is listed by the provider on a public
                website. We anticipate that price transparency in COVID-19 diagnostic
                testing, in particular, will help improve clarity for consumers and the
                plans and issuers that are required to cover the cost of performing a
                COVID-19 diagnostic test when there is no negotiated rate between the
                plan or issuer and the provider. For individuals without insurance and
                for health plans and health insurance issuers attempting to negotiate a
                rate for performance of a COVID-19 diagnostic test with a provider that
                has posted its cash price, that cash price could provide some context
                and a baseline against which those negotiations can occur. Moreover,
                price transparency in COVID-19 diagnostic tests will assist the
                uninsured in determining the cash price at various providers when price
                shopping for COVID-19 diagnostic tests.
                 Assessments of broader transparency policies yield per-capita
                estimates of annual expenditure reductions ranging from between $3 and
                $5 (= $2.8 million + $1.3 million + $7.0 million + $2.3 million two-
                year savings, across 1.3 million California public employees and their
                family members, per Boynton and Robinson (2015)), to $6.50 (= $7.9
                million + $36 million five-year savings found by Brown (2018), divided
                across the 1.36 million residents of New Hampshire), to $17 (= $13.2
                million three-year savings across 0.26 million beneficiaries, per
                Rhoads (2019)).\75\ If the $6.50 median result is extrapolated from the
                context of general health spending--which is approximately $10,000 per
                capita in the United States--to a range of between $60 and $1,200 in
                COVID-19 diagnostic testing (= $60 per test, across between one and 20
                tests), the estimate of rule-induced reductions in annual consumer
                expenditures could range from $13 million to $254 million. (This
                expenditure change combines transfers (to patients or insurers from
                providers)
                [[Page 71188]]
                with potential societal resource cost savings; only the latter portion
                should be compared against estimates of the provision's administrative
                and paperwork costs.) We note, however, that this estimate is based on
                annual expenditure reductions; because this requirement is only
                applicable for the remainder of the PHE, which may be less than a year,
                the saving impact is likely to be lower.
                ---------------------------------------------------------------------------
                 \75\ Boynton, A., and Robinson, J. ``Appropriate Use of
                Reference Pricing Can Increase Value.'' Health Affairs Blog. July 7,
                2015. Available at: https://www.healthaffairs.org/do/10.1377/hblog20150707.049155/full/. Brown, Z. Y. ``Equilibrium Effects of
                Health Care Price Information.'' 100 Rev. of Econ. and Stat. 1. July
                16, 2018. Available at: http://www-personal.umich.edu/~zachb/
                zbrown_eqm_effects_price_transparency.pdf. Rhoads, J. ``Right to
                Shop for Public Employees: How health care incentives are saving
                money in Kentucky.'' The Dartmouth Institute for Health Policy and
                Clinical Practice. March 8, 2019. Available at: https://thefga.org/wp-content/uploads/2019/03/RTS-Kentucky-HealthCareIncentivesSavingMoney-DRAFT8.pdf.
                ---------------------------------------------------------------------------
                 To comply with the regulatory updates in this IFC, providers would
                need to review their billing practices and determine their ``cash
                price'' for COVID-19 diagnostic tests. They would further need to
                publicly post the cash prices for all COVID-19 diagnostic tests along
                with associated plain language descriptions and HCPCS or CPT billing
                codes. The provider would be required to make all of this information
                public on the provider's internet website. As discussed in section
                VI.C, we estimate it would take a Business Operations Specialist, on
                average 1 hour to compile and make public the cash prices for the
                COVID-19 diagnostic tests that the facility offers at an hourly wage of
                $36.31 as published by the 2019 Bureau of Labor Statistics.\76\ We
                estimate the overhead and fringe benefit cost to be 100 percent of
                wages. Therefore, we estimate a one-time cost per provider to be $72.62
                (36.31 x 2).
                ---------------------------------------------------------------------------
                 \76\ Bureau of Labor Statistics. National Occupational
                Employment and Wage Estimates, May 2019. Available at: https://www.bls.gov/oes/current/oes_nat.htm#13-0000.
                ---------------------------------------------------------------------------
                 We expect that approximately 30 percent \77\ (n = 83,309) of the
                total CLIA-certified laboratories (n = 277,699 \78\) could potentially
                be performing COVID-19 diagnostic tests and need to publicize their
                cash prices in such form and manner as prescribed in new 45 CFR part
                182 during the PHE for COVID-19, including any subsequent renewals. The
                total cost is estimated to be $ $6,049,900 (83,309 hours x $72.62) to
                collect, compile and post the required information.
                ---------------------------------------------------------------------------
                 \77\ Consistent with the percent of laboratories required to
                report COVID-19 diagnostic test results in CMS-3401-IFC.
                 \78\ As of October 11, 2020, according to the Certification and
                Survey Provider Enhanced Reporting system this includes Certificate
                of Waiver (210,669), Certificate of Provider-Performed Microscopy
                (31,992), Certificate of Compliance (19,044) and Certificate of
                Accreditation (15,994). Available at: https://qcor.cms.gov/CLIA_wizard.jsp?which=4&report=active_CLIA.jsp.
                ---------------------------------------------------------------------------
                 We seek comment on the burden estimate for providers of a
                diagnostic test for COVID-19, specifically the number of burden hours
                estimated to post their cash price for COVID-19 diagnostic test.
                2. Effects of Medicare Inpatient Prospective Payment System (IPPS) New
                COVID-19 Treatments Add-on Payment (NCTAP) for the Remainder of the
                Public Health Emergency (PHE)
                 As drug and biological products become available and are authorized
                or approved by FDA for the treatment of COVID-19 in the inpatient
                setting, there may be potential financial disincentives for hospitals
                to provide these new COVID-19 treatments to Medicare inpatients during
                the PHE because the costs of these new treatments are not yet reflected
                in Medicare payment rates and there are no new technology add-on
                payments for these treatments. We expect that increasing the current
                IPPS payment amounts for sufficiently costly cases to mitigate
                potential financial disincentives for hospitals to provide new COVID-19
                treatments during the PHE will potentially improve and speed access to
                these treatments for Medicare patients. We also believe that the
                establishment of the NCTAP provides greater transparency and
                predictability to the public, including innovators that are developing
                new COVID-19 treatments, as to how Medicare payments for cases
                involving these treatments will be determined when those treatments
                become available.
                 Given it is unknown what the cost and utilization of inpatient
                stays using these new treatments will be, the net overall cost of the
                NCTAP policy is not estimable. On one extreme, if all of the new COVID-
                19 treatments decrease the net cost of hospitalizations (for example,
                due to shortened lengths of stay), including the cost of the new
                treatment, below the Medicare payment as increased by section 3710 of
                the CARES Act then there would be no NCTAP payments made and no
                additional cost to the Medicare program as a result of this policy. On
                the other extreme, if all of the new COVID-19 treatments result in the
                net cost of hospitalizations that exceed the outlier threshold (for
                example, due to the cost of the new treatment), the cost to the
                Medicare program would be the sum over all NCTAP cases of 0.65 times
                the outlier threshold for each case.
                3. Effects of the Medicare Outpatient Prospective Payment System (OPPS)
                Separate Payment for New COVID-19 Treatments Policy for the Remainder
                of the Public Health Emergency (PHE) for COVID-19
                 This IFC provides for separate payment for New COVID-19 Treatments
                under the Outpatient Prospective Payment System (OPPS) for the
                remainder of the PHE for COVID-19 when these treatments are provided at
                the same time as a Comprehensive Ambulatory Payment Classification (C-
                APC) service. As we noted in Section II.E.2, we believe it would be a
                fairly rare occurrence that an outpatient department would perform a C-
                APC procedure on a beneficiary being treated for COVID-19 because most
                C-APCs are for surgical or other intensive procedures and we would
                expect most hospital outpatients departments would not perform
                outpatient surgery on a patient that has an active case of COVID-19.
                While it is possible that future COVID-19 treatments that are
                authorized or approved for use in the outpatient setting might be
                administered to patients under observation while the provider
                determines if the patient needs to be admitted to the hospital for
                COVID-19, it is our expectation that this hypothetical situation would
                not happen frequently. Because we believe a new COVID-19 treatment will
                rarely be provided on the same claim as a primary C-APC service, we
                believe new COVID-19 treatments used in the outpatient setting will be
                separately paid under current policy the vast majority of the time. As
                a result, we believe any budgetary effect of this new exception is
                likely to be de minimis.
                4. Effects of Temporary Increase in Federal Medicaid Funding
                 This IFC interprets the requirement in section 6008(b)(3) of the
                FFCRA that states maintain Medicaid beneficiary enrollment as a
                condition of receiving the temporary FMAP increase described at section
                6008(a) of the FFCRA. This IFC provides states with greater flexibility
                than current CMS guidance to transition beneficiaries between
                eligibility groups, to modify the amount, duration, and scope of
                coverage available to beneficiaries, and to make changes to applicable
                cost sharing and beneficiary liability. At the same time, this IFC
                protects beneficiary access to medical assistance by requiring states
                to maintain each beneficiary's coverage in one of three tiers, thereby
                protecting access to the basic coverage a beneficiary was receiving as
                of or after March 18, 2020.
                 We anticipate that this IFC will result in lessened financial
                burden on state Medicaid agencies and the Federal Government as
                compared to CMS's existing interpretation of the FFCRA 6008(b)(3)
                requirement. It would be highly challenging to estimate specific cost
                savings resulting from this IFC because such an estimate would be
                almost entirely dependent on state behavior under the unique
                circumstances of the PHE for COVID-
                [[Page 71189]]
                19. First, we believe that some savings may result from transitioning
                beneficiaries to different eligibility groups with greater cost sharing
                or beneficiary liability. However, we know that states have faced both
                system and operational constraints that may prevent them from
                processing routine actions, such as transitioning a beneficiary from
                one group to another following a change in circumstances. A state that
                has been processing eligibility renewals and redeterminations during
                the PHE may be able to make such transitions relatively quickly, while
                a state that has been unable to process changes without violating the
                requirements for receiving the temporary FMAP increase may need more
                time to begin transferring beneficiaries between groups.
                 Second, we anticipate that states will implement the new
                flexibilities offered by this rule in a variety of ways and to
                different degrees. States may, for example, look for cost savings
                through the elimination of an optional benefit, establishing new
                copayments for services that are unrelated to the PHE, or increasing
                beneficiary liability for institutional care through a reduction to the
                personal needs allowance. Because each state's financial situation is
                unique and the characteristics of each Medicaid program are different,
                it is difficult to predict how states will respond to this IFC. While
                one state may elect to implement just one cost saving flexibility,
                another state may utilize all available options, and yet another state
                may elect not to make any program changes. Based on the recent feedback
                we have received from states, we do anticipate that some states will
                implement some of these cost saving measures, which will result in
                decreased financial burden for states and cost savings for the Federal
                Government.
                 While our current interpretation of section 6008(b)(3) of the FFCRA
                provides the strongest protections for beneficiary access to coverage,
                the safeguards established by this IFC will ensure that all
                beneficiaries maintain the same basic level of access to coverage that
                they were receiving as of or after March 18, 2020. All beneficiaries
                who had access to minimum essential coverage will maintain access to
                such coverage, and every beneficiary who had access to testing services
                and treatment for COVID-19, including vaccines, will retain such
                access. Individual beneficiaries may be required to pay cost sharing
                that they were not previously charged (except with respect to testing
                and treatment services related to COVID-19, which states cannot charge
                under section 6008(b)(4) of the FFCRA if they are claiming the
                temporary FMAP increase), or they may need to meet additional prior
                authorization or medical necessity requirements.
                5. Effects of Updates to the Comprehensive Care for Joint Replacement
                (CJR) Model, Performance Year (PY) 5 During the PHE
                 The evolving impact of the PHE for the COVID-19 has created
                difficulties in forecasting the state of the LEJR market for 2021. For
                example, Table 1 indicates CJR episode volume increasing and moving
                back toward traditional levels from April to June, but then decreasing
                again in July and August. It is difficult to predict the impact of
                extending PY 5 an additional 6 months with the amended policies
                described above because there exists a potential for variation between
                PY 5 target prices and PY 5 actual episode costs (as a result of COVID-
                19) which creates uncertainty in calculating anticipated net
                reconciliation amounts for PY 5. As a result, the Office of the Actuary
                was unable create projections regarding Medicare program spending in
                2021 for MS-DRGs 469, 470, 521, or 522 or discrete impact estimates
                regarding the effect of extending CJR PY 5 an additional 6 months with
                the amended policies described above. In assessing the potential cost
                or savings for this extension, CMMI internal analysis considered the
                following data points. First, the Second Annual CJR Evaluation
                Report,\79\ indicates participant hospitals reduced spending by 3.7
                percent (difference in claims) during the first 2 years of the CJR
                model. Additionally, if the episode definition policy were not amended
                to include the new MS-DRGs and fracture episodes were no longer
                included in the CJR episode definition October 1, 2020--March 31, 2021,
                episode volume would decrease significantly and the cost saving effect
                of the CJR model would be limited to only non-fracture episodes, which
                are generally the less costly episodes. We also know that while the CJR
                model achieves program savings, this observation is not net of
                reconciliation payments and administrative costs. Further, our February
                2020 proposed rule (85 FR 10516) proposes payment methodology revisions
                to the target price methodology to improve payment accuracy as the
                current methodology tends to excessive payment. Given the confluence of
                factors affecting payments, including episode volume, actual episode
                costs, and even target prices, we cannot confidently estimate cost or
                savings associated with the CJR model changes in this final rule,
                specifically, the provisions: to add reconciliation periods to PY 5, to
                add MS-DRGs 521 and 522 to the episode definition, to change the
                extreme and uncontrollable circumstances policy, and to extend PY5 6
                months. We will continue to refine this analysis. If the February 2020
                proposed rule is finalized after review and response to comment, we
                will strive to provide a more detailed estimate for future model
                performance years.
                ---------------------------------------------------------------------------
                 \79\ CMS Comprehensive Care for Joint Replacement Model:
                Performance Year 2 Evaluation Report Available at https://innovation.cms.gov/files/reports/cjr-secondannrpt.pdf.
                ---------------------------------------------------------------------------
                6. Effects of Rapid Coverage of Preventative Services for Coronavirus
                 This IFC requires that non-grandfathered group health plans and
                health insurance issuers offering non-grandfathered group or individual
                health insurance coverage provide coverage for qualifying coronavirus
                preventive services, including recommended COVID-19 immunizations and
                their administration, without any cost sharing. It also requires plans
                and issuers to provide coverage within 15 business days after the date
                on which an applicable recommendation is made by USPSTF or ACIP
                relating to such a service. In addition, it requires that during the
                PHE for COVID-19 a group health plan or issuer that has a network of
                providers to provide coverage without cost sharing regardless of
                whether the service is delivered by an in-network or out-of-network
                provider. Making these qualifying coronavirus preventive services,
                including COVID-19 immunizations, available without any delay is in the
                interest of public health, as making these services available as
                quickly as possible may encourage individuals to take advantage of
                these services and therefore may slow the transmission of COVID-19.
                Access to qualifying coronavirus preventive services without cost
                sharing will encourage more individuals to obtain them. Increased use
                of qualifying coronavirus preventive services may reduce the
                transmission and spread of the disease and thus potentially result in
                better overall health outcomes. In the immediate term, newly developed
                qualifying coronavirus preventive services might be available from a
                narrower range of providers than other, more established recommended
                preventive items and services. If COVID-19 immunizations require
                specialized storage and administration services, only a limited number
                of
                [[Page 71190]]
                providers may be able to offer them at first. If consumers have to
                incur additional burdens, long wait times, and increased travel times
                to find an in-network provider that can provide such services, it will
                limit access and discourage them from obtaining such services.
                Therefore, the Departments are of the view that requiring out-of-
                network coverage without cost sharing for qualifying coronavirus
                preventive services will help ensure that consumers are able to obtain
                the preventive services without cost sharing as soon as possible.
                 Plans and issuers will incur the cost of the qualifying coronavirus
                preventive services and administration of such services. Providing
                coverage within 15 business days after a recommendation is made
                relating to such services is likely to impose significant
                administrative costs on issuers, group health plans, and other service
                providers to update systems to include billing codes for the preventive
                services, negotiate prices with network providers, determine
                reimbursements for out-of-network providers, and conduct outreach to
                providers, participants, beneficiaries, and enrollees in a very short
                time period. Depending on the magnitude of the costs of qualifying
                coronavirus preventive services and administration of such services
                relative to the potential cost of treatment for the disease, this may
                have an impact on premiums. There are uncertainties regarding the price
                of potential qualifying coronavirus preventive services, including
                COVID-19 immunizations. If the prices are high and there is widespread
                use of such services, premiums may increase. If the timing of
                availability of the preventive services is such that plans and issuers
                are unable to take them into account when setting premiums, it may
                result in lower profits or losses for plans and issuers. The costs to
                plans and issuers will be lower if a third party, such as the Federal
                Government, covers the cost of the immunizations. In addition, the
                costs associated with providing coverage for qualifying coronavirus
                preventive services may be offset by savings from avoidance of
                treatment for COVID-19.
                 During the PHE for COVID-19, costs to group health plans or issuers
                that have networks of providers will be higher if a significant number
                of participants, beneficiaries, or enrollees go to out-of-network
                providers, and the issuers and plans reimburse those out-of-network
                providers at higher levels than their negotiated rate with in-network
                providers. However, if consumers can obtain the qualifying coronavirus
                preventive services where they usually obtain health care services,
                consumers are likely to receive the services from an in-network
                provider. Plans and issuers may also wish to educate participants,
                beneficiaries, or enrollees about the availability of the services from
                in-network providers and encourage them to obtain these services from
                their usual providers. This approach could limit the number of
                participants, beneficiaries, or enrollees going to out-of-network
                providers instead of staying in network, but there will be associated
                administrative burdens and costs.
                 The total cost to plans and issuers related to qualifying
                coronavirus preventive services that are immunizations will depend on
                the cost and number of required immunization doses to be administered,
                the number of people who will choose to get immunized against COVID-19
                and which providers will be able to provide the preventive services.
                For the 2018-19 influenza season, 62.6 percent of children 6 months
                through 17 years and 45.3 percent of adults 18 years and older obtained
                the influenza vaccine.\80\ Given the severity of COVID-19, the
                Departments anticipate the immunization rates for COVID-19 are likely
                to ultimately be higher than for influenza, although initial rates may
                be lower until an adequate supply is available. Total costs to plans
                and issuers will depend on the cost of covering qualifying coronavirus
                preventive services, the number of people choosing to obtain such
                services, and whether a third party such as the Federal Government
                covers the costs of any immunizations.
                ---------------------------------------------------------------------------
                 \80\ See Flu Vaccination Coverage, United States, 2018-19
                Influenza Season. Center for Disease Control and Prevention,
                available at https://www.cdc.gov/flu/fluvaxview/coverage-1819estimates.htm.
                ---------------------------------------------------------------------------
                 The Departments seek comment on any potential costs and burdens
                that may be incurred by plans and issuers due to the requirements to
                cover the costs and administration of such qualifying coronavirus
                preventive services without any cost sharing regardless of whether the
                service is delivered by an in-network or out-of-network provider. The
                Departments also seek comment on the potential effects and costs
                consumers may face as a result of this provision.
                7. Effects of Changes to State Innovation Waivers Policy and Regulatory
                Revisions in Response to the COVID-19 Public Health Emergency
                 This IFC establishes a framework for states to request the
                Secretary of HHS and the Secretary of the Treasury to modify, in part,
                the public notice procedures outlined in 31 CFR 33.112 and 33.116 and
                45 CFR 155.1312 and 155.1316 to expedite a decision on a proposed
                section 1332 waiver request during the PHE for COVID-19. Regulations at
                Sec. Sec. 33.112 and 155.1312 require a state to provide a public
                notice and comment period at the state level prior to submitting an
                application for a section 1332 waiver. The regulations at Sec. Sec.
                33.116 and 155.1316 establish Federal public notice requirements for
                state section 1332 waiver applications. This IFC also establishes a
                framework at the new 31 CFR 33.120(c)(2) and 45 CFR 155.1320(c)(2) for
                states to request the Secretaries to modify, in part, the post award
                public notice procedures outlined in Sec. Sec. 33.120(c) and
                155.1320(c) for an approved waiver that would otherwise take place or
                become due during the PHE for COVID-19. As stated above, HHS and the
                Department of the Treasury are of the view that requiring states that
                meet the criteria outlined in this IFC to comply with the full public
                notice procedures during the PHE for COVID-19 could cause undue harm to
                the public. Allowing the Secretaries to modify, in part, these
                requirements will enable states to request and receive approval for
                waiver requests more quickly and also implement changes that will
                provide consumers with access to affordable health insurance coverage
                during the current PHE for COVID-19. States that request modifications
                from the public notice procedures will incur some burden, as discussed
                in the Collection of Information Requirements section. For a state that
                requests and receives a modification of the public notice procedures,
                we acknowledge that consumers may receive less prior notice than would
                occur without the modification. Through this IFC, the HHS and the
                Department of Treasury intend to provide an appropriate balance and
                permit flexibility where a state can ensure a sufficient opportunity
                for meaningful public input given the circumstances in the PHE for
                COVID-19 while also ensuring the safety of the public. If a state's
                modification request is approved there may be a shorter comment period
                at the state or Federal level, or the comment periods may be the same
                number of days (for example 30 days) but perhaps on a different
                timeframe. For example, a state may conduct the state public comment
                period concurrently with the Federal public comment period instead of
                before. States with approved modification requests may experience a
                reduction in costs related to post award public notice procedures.
                However, if
                [[Page 71191]]
                the state's modification request is approved, the state must also
                implement alternative public notice procedures and, if required, amend
                the waiver application to specify that it is the state's intent to
                comply with those alternative public notice requirements in the state's
                modification request. States may also need to employ additional
                technologies to host virtual hearings instead of in person gatherings.
                In this case, there may be no reduction in costs related to public
                notice procedures.
                 HHS and the Department of the Treasury seek comment on any
                potential costs and burdens that may be incurred by states due to the
                flexibilities afforded in this IFC. HHS and the Department of the
                Treasury also seek comment on the potential effects and costs consumers
                may face as a result of a state's action taken as a result of the
                flexibilities in this IFC.
                8. Effects of Medicare Coding and Payment for COVID-19 Vaccine
                 This IFC discusses CMS's implementation of section 3713 of the
                CARES Act (Pub. L. 116-136), which established Medicare Part B coverage
                and payment for a COVID-19 vaccine and its administration. This IFC
                requires that Medicare provide coverage for qualifying COVID-19
                vaccines administration, without any cost sharing. Making COVID-19
                vaccines, available without any delay is in the interest of public
                health, as making these services available as quickly as possible may
                encourage individuals to take advantage of these services and therefore
                may slow the transmission of COVID-19. Access to COVID-19 vaccines
                without cost sharing will encourage more individuals to obtain them. In
                the immediate term, any newly developed COVID-19 vaccines might be
                available from a narrower range of providers than other, more
                established recommended preventive items and services. If COVID-19
                vaccines require specialized storage and administration services, only
                a limited number of providers may be able to offer them at first. If
                beneficiaries have to incur additional burdens, long wait times, and
                increased travel times to find Medicare providers and suppliers that
                can provide such services, it will limit access and discourage them
                from obtaining such services. Medicare providers and suppliers will
                incur costs for providing COVID-19 vaccines and administration of such
                services. There are uncertainties regarding the cost to the Medicare
                program for COVID-19 vaccines and administration at this time. The
                total cost to Medicare related to COVID-19 vaccines and administration
                cost are dependent on and the number of required immunization doses to
                be administered, the number of people who will choose to get immunized
                against COVID-19 and which providers and suppliers will be able to
                provide the preventive services.
                9. Effects of Application Fee as Part of Form CMS-855B Enrollment as
                Mass Immunization Roster Biller
                 Consistent with Sec. 424.514, an entity enrolling in Medicare as a
                mass immunization roster biller via the Form CMS-855B must pay an
                application fee at the time of enrollment. The application fees for
                each of the past 3 calendar years were or are $569 (CY 2018), $586, (CY
                2019), and $595 (CY 2020). The differing fee amounts are predicated on
                changes/increases in the Consumer Price Index (CPI) for all urban
                consumers (all items; United State city average, CPI-U) for the 12-
                month period ending on June 30 of the previous year. Although we cannot
                predict future changes to the CPI, the fee amounts between 2018 and
                2020 increased by an average of $13 per year. We believe this is a
                reasonable barometer with which to establish a CY 2021 fee estimate
                (strictly for purposes of this IFC) of $608.
                 Applying this prospective fee amount to the previously mentioned
                60,000 projected mass immunization roster biller applicants in the
                first year of this rule, we estimate a total application fee cost to
                enrollees of $36,400,000 (or 60,000 x $608). This represents a transfer
                from mass immunizer suppliers to the Federal Government.
                D. Regulatory Alternatives Considered
                 The Department considered not implementing the changes to the CJR
                model but determined the effect of the changes, particularly relief
                from financial risk for COVID-19 cases and stability in model
                operations, to be very important for participant hospitals during the
                PHE. Further, if the three-year extension of the CJR model is
                finalized, it would be much more difficult for participant hospitals to
                stop model value-based operations, and then restart value operations
                when hospitals already have significant burden managing COVID-19
                treatment and under COVID-19 safety protocols and utilization changes.
                 The Departments considered not requiring plans and issuers to
                provide coverage for qualifying coronavirus preventive services without
                cost sharing from out-of-network providers. However, in the near term,
                newly developed qualifying coronavirus preventive services might be
                available from a narrower range of providers than other, more
                established recommended preventive services because of specialized
                storage and administration requirements. If there are only a limited
                number of in-network providers that can administer these services,
                consumers may incur additional burden related to travel and long wait
                times to obtain these services, which can result in lower utilization.
                The Departments are concerned that allowing plans and issuers to impose
                cost sharing for COVID-19 immunizations provided by out-of-network
                providers would discourage individuals from seeking immunization,
                potentially leading to reduced administration of any COVID-19 vaccine
                and prolonging the PHE for COVID-19, contrary to the intent of the
                CARES Act. In order to ensure that the immunization services will be
                available to all consumers enrolled in non-grandfathered group health
                plans and non-grandfathered group and individual health insurance
                coverage, the Departments are therefore requiring such plans and
                issuers to cover without cost sharing a qualifying coronavirus
                preventive service, regardless of whether such service is delivered by
                an in-network or out-of-network provider. The Departments anticipate
                that as such services become more widely available over time, consumers
                will be able to obtain them more easily from in-network providers.
                 HHS and the Department of the Treasury considered providing states
                with the flexibility to waive all of the public notice procedures
                outlined in 31 CFR 33.112 and 33.116 and 45 CFR 155.1312 and 155.1316
                to expedite a decision on a proposed section 1332 waiver request during
                the PHE for COVID-19. This approach would have allowed a state to
                request to completely eliminate a public notice or reporting
                requirement pre- or post-award. However, HHS and the Department of the
                Treasury were concerned that that this would violate the statutory
                requirements regarding a meaningful level of input from the public. In
                addition, HHS and the Department of Treasury are committed to
                transparency and value public input on waiver proposals and value
                public feedback to ensure consumers are aware of waiver proposals that
                may affect them. HHS and the Department of the Treasury anticipate
                working with states on their modification request to ensure the public
                is provided the opportunity to provide feedback on waiver proposals and
                the progress of the program authorized by the section 1332 waiver.
                [[Page 71192]]
                E. Regulatory Flexibility Act
                 The Regulatory Flexibility Act, (5 U.S.C. 601, et seq.), requires
                agencies to analyze options for regulatory relief of small entities to
                prepare an initial regulatory flexibility analysis to describe the
                impact of the proposed rule on small entities, unless the head of the
                agency can certify that the rule will not have a significant economic
                impact on a substantial number of small entities. The RFA generally
                defines a ``small entity'' as (1) a proprietary firm meeting the size
                standards of the Small Business Administration (SBA), (2) a not-for-
                profit organization that is not dominant in its field, or (3) a small
                government jurisdiction with a population of less than 50,000. States
                and individuals are not included in the definition of ``small entity.''
                HHS uses a change in revenues of more than 3 to 5 percent as its
                measure of significant economic impact on a substantial number of small
                entities. For purposes of the RFA, small entities include small
                businesses, nonprofit organizations, and small governmental
                jurisdictions. Individuals and states are not included in the
                definition of a small entity. This IFC is not preceded by a general
                notice of proposed rulemaking, and thus the requirements of RFA do not
                apply.
                 In addition, section 1102(b)(2) of the Act provides that whenever
                the Secretaries promulgate a final version of a rule or regulation with
                respect to which an initial regulatory impact analysis is required, the
                Secretaries shall prepare a final regulatory impact analysis with
                respect to the final version of such rule or regulation. Such analysis
                is required to set forth, with respect to small rural hospitals, the
                matters required under section 604 of title 5, United States Code, to
                be set forth with respect to small entities. The Departments are not
                required to prepare a final regulatory impact analysis, because this
                regulatory action is being issued as an interim final rule without
                being preceded by a general notice of proposed rulemaking.
                F. Unfunded Mandates
                 Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
                requires that agencies assess anticipated costs and benefits and take
                certain other actions before issuing any proposed rule or any final
                rule for which a general notice of proposed rulemaking was published
                that includes any Federal mandate that may result in expenditures in
                any 1 year by a state, local, or Tribal governments, in the aggregate,
                or by the private sector, of $100 million in 1995 dollars, updated
                annually for inflation. In 2020, that threshold is approximately $156
                million. This IFC was not preceded by a general notice of proposed
                rulemaking, and thus the requirements of UMRA do not apply.
                G. Federalism
                 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. Since this rule aims to alleviate burden on State and
                local governments, the requirements of Executive Order 13132 are not
                applicable.
                 In compliance with the requirement of Executive Order 13132 that
                agencies examine closely any policies that may have federalism
                implications or limit the policy making discretion of the states, the
                Departments have engaged in efforts to consult with and work
                cooperatively with affected states, including participating in
                conference calls with and attending conferences of the NAIC, and
                consulting with state insurance officials on an individual basis.
                 While developing this rule, the Departments attempted to balance
                the states' interests in regulating health insurance issuers with the
                need to ensure market stability. By doing so, the Departments complied
                with the requirements of Executive Order 13132.
                H. Reducing Regulation and Controlling Regulatory Costs
                 Executive Order 13771, titled Reducing Regulation and Controlling
                Regulatory Costs, was issued on January 30, 2017 and requires that the
                costs associated with significant new regulations ``shall, to the
                extent permitted by law, be offset by the elimination of existing costs
                associated with at least two prior regulations.'' This IFC's
                designation under Executive Order 13771, titled Reducing Regulation and
                Controlling Regulatory Costs (82 FR 9339), which was issued on January
                30, 2017, will be informed by public comments received.
                List of Subjects
                26 CFR Part 54
                 Excise taxes, Health care, Health insurance, Pensions, Reporting
                and recordkeeping requirements.
                29 CFR Part 2590
                 Employee benefit plans, Health care, Health insurance, Penalties,
                Pensions, Privacy, Reporting and recordkeeping requirements.
                31 CFR Part 33
                 Health care, Health insurance, Reporting and recordkeeping
                requirements.
                42 CFR Part 410
                 Diseases, Health facilities, Health professions, Laboratories,
                Medicare, Reporting and recordkeeping requirements, Rural areas, X-
                rays.
                42 CFR Part 411
                 Diseases, Medicare, Reporting and recordkeeping requirements.
                42 CFR Part 414
                 Administrative practice and procedure, Biologics, Diseases, Drugs,
                Health facilities, Health professions, Medicare, Reporting and
                recordkeeping requirements.
                42 CFR Part 417
                 Administrative practice and procedure, Grant programs-health,
                Health care, Health insurance, Health maintenance organizations (HMO),
                Loan programs-health, Medicare, Reporting and recordkeeping
                requirements.
                42 CFR Part 433
                 Administrative practice and procedure, Child support, Claims, Grant
                programs-health, Medicaid, Reporting and recordkeeping requirements.
                42 CFR Part 510
                 Administrative practice and procedure, Health facilities, Medicare,
                Reporting and recordkeeping requirement.
                45 CFR Part 147
                 Age discrimination, Citizenship and naturalization, Civil rights,
                Health care, Health insurance, Individuals with disabilities,
                Intergovernmental relations, Reporting and recordkeeping requirements,
                Sex discrimination.
                45 CFR Part 155
                 Administrative practice and procedure, Advertising, Brokers,
                Conflict of interests, Consumer protection, Grant programs-health,
                Grants administration, Health care, Health insurance, Health
                maintenance organizations (HMO), Health records, Hospitals, Indians,
                Individuals with disabilities, Intergovernmental relations, Loan
                programs-health, Medicaid, Organization and functions (Government
                agencies), Public assistance programs, Reporting and recordkeeping
                requirements, State flexibility, Technical assistance, Women and youth.
                [[Page 71193]]
                45 CFR Part 182
                 COVID-19 diagnostic testing, Reporting and recordkeeping
                requirements.
                 Dated: October 21, 2020.
                Seema Verma,
                Administrator, Centers for Medicare & Medicaid Services.
                 Dated: October 26, 2020.
                Alex M. Azar II,
                Secretary, Department of Health and Human Services.
                Sunita Lough,
                Deputy Commissioner for Services and Enforcement, Internal Revenue
                Service.
                 Approved: October 28, 2020.
                David J. Kautter,
                Assistant Secretary of the Treasury (Tax Policy).
                 Signed at Washington DC, this 29th day of October, 2020.
                Jeanne Klinefelter Wilson,
                Acting Assistant Secretary, Employee Benefits Security Administration,
                Department of Labor.
                DEPARTMENT OF THE TREASURY
                Internal Revenue Service
                Amendments to the Regulations
                 For the reasons set forth in the preamble, the Department of the
                Treasury amends 26 CFR part 54 as set forth below:
                PART 54--PENSION EXCISE TAXES
                0
                Par. 1. The authority citation for part 54 continues to read in part as
                follows:
                 Authority: 26 U.S.C. 7805, unless otherwise noted.
                * * * * *
                 Section 54.9815-2713T also issued under 26 U.S.C. 9833.
                * * * * *
                0
                2. Section 54.9815-2713T is added to read as follows:
                Sec. 54.9815-2713T Coverage of preventive health services
                (temporary).
                 (a) Services--(1) In general. Beginning at the time described in
                paragraph (b) of this section and subject to Sec. 54.9815-2713A, a
                group health plan, or a health insurance issuer offering group health
                insurance coverage, must provide coverage for and must not impose any
                cost-sharing requirements (such as a copayment, coinsurance, or a
                deductible) for--
                 (i) Evidence-based items or services that have in effect a rating
                of A or B in the current recommendations of the United States
                Preventive Services Task Force with respect to the individual involved
                (except as otherwise provided in paragraph (c) of this section);
                 (ii) Immunizations for routine use in children, adolescents, and
                adults that have in effect a recommendation from the Advisory Committee
                on Immunization Practices of the Centers for Disease Control and
                Prevention with respect to the individual involved (for purposes of
                this paragraph (a)(1)(ii), a recommendation from the Advisory Committee
                on Immunization Practices of the Centers for Disease Control and
                Prevention is considered in effect after it has been adopted by the
                Director of the Centers for Disease Control and Prevention, and a
                recommendation is considered to be for routine use if it is listed on
                the Immunization Schedules of the Centers for Disease Control and
                Prevention);
                 (iii) With respect to infants, children, and adolescents, evidence-
                informed preventive care and screenings provided for in comprehensive
                guidelines supported by the Health Resources and Services
                Administration;
                 (iv) With respect to women, such additional preventive care and
                screenings not described in paragraph (a)(1)(i) of this section as
                provided for in comprehensive guidelines supported by the Health
                Resources and Services Administration for purposes of section
                2713(a)(4) of the Public Health Service Act, subject to 45 CFR 147.131,
                147.132, and 147.133; and
                 (v) Any qualifying coronavirus preventive service, which means an
                item, service, or immunization that is intended to prevent or mitigate
                coronavirus disease 2019 (COVID-19) and that is, with respect to the
                individual involved--
                 (A) An evidence-based item or service that has in effect a rating
                of A or B in the current recommendations of the United States
                Preventive Services Task Force; or
                 (B) An immunization that has in effect a recommendation from the
                Advisory Committee on Immunization Practices of the Centers for Disease
                Control and Prevention (regardless of whether the immunization is
                recommended for routine use). For purposes of this paragraph
                (a)(1)(v)(B), a recommendation from the Advisory Committee on
                Immunization Practices of the Centers for Disease Control and
                Prevention is considered in effect after it has been adopted by the
                Director of the Centers for Disease Control and Prevention.
                 (2) Office visits. (i) If an item or service described in paragraph
                (a)(1) of this section is billed separately (or is tracked as
                individual encounter data separately) from an office visit, then a plan
                or issuer may impose cost-sharing requirements with respect to the
                office visit.
                 (ii) If an item or service described in paragraph (a)(1) of this
                section is not billed separately (or is not tracked as individual
                encounter data separately) from an office visit and the primary purpose
                of the office visit is the delivery of such an item or service, then a
                plan or issuer may not impose cost-sharing requirements with respect to
                the office visit.
                 (iii) If an item or service described in paragraph (a)(1) of this
                section is not billed separately (or is not tracked as individual
                encounter data separately) from an office visit and the primary purpose
                of the office visit is not the delivery of such an item or service,
                then a plan or issuer may impose cost-sharing requirements with respect
                to the office visit.
                 (iv) The rules of this paragraph (a)(2) are illustrated by the
                following examples:
                 (A) Example 1--(1) Facts. An individual covered by a group health
                plan visits an in-network health care provider. While visiting the
                provider, the individual is screened for cholesterol abnormalities,
                which has in effect a rating of A or B in the current recommendations
                of the United States Preventive Services Task Force with respect to the
                individual. The provider bills the plan for an office visit and for the
                laboratory work of the cholesterol screening test.
                 (2) Conclusion. In paragraph (a)(2)(iv)(A)(1) of this section, the
                plan may not impose any cost-sharing requirements with respect to the
                separately-billed laboratory work of the cholesterol screening test.
                Because the office visit is billed separately from the cholesterol
                screening test, the plan may impose cost-sharing requirements for the
                office visit.
                 (B) Example 2--(1) Facts. Same facts as in paragraph
                (a)(2)(iv)(A)(1) of this section (Example 1). As the result of the
                screening, the individual is diagnosed with hyperlipidemia and is
                prescribed a course of treatment that is not included in the
                recommendations under paragraph (a)(1) of this section.
                 (2) Conclusion. In paragraph (a)(2)(iv)(B)(1) of this section,
                because the treatment is not included in the recommendations under
                paragraph (a)(1) of this section, the plan is not prohibited from
                imposing cost-sharing requirements with respect to the treatment.
                 (C) Example 3--(1) Facts. An individual covered by a group health
                plan visits an in-network health care provider to discuss recurring
                abdominal pain. During the visit, the individual
                [[Page 71194]]
                has a blood pressure screening, which has in effect a rating of A or B
                in the current recommendations of the United States Preventive Services
                Task Force with respect to the individual. The provider bills the plan
                for an office visit.
                 (2) Conclusion. In paragraph (a)(2)(iv)(C)(1) of this section, the
                blood pressure screening is provided as part of an office visit for
                which the primary purpose was not to deliver items or services
                described in paragraph (a)(1) of this section. Therefore, the plan may
                impose a cost-sharing requirement for the office visit charge.
                 (D) Example 4--(1) Facts. A child covered by a group health plan
                visits an in-network pediatrician to receive an annual physical exam
                described as part of the comprehensive guidelines supported by the
                Health Resources and Services Administration. During the office visit,
                the child receives additional items and services that are not described
                in the comprehensive guidelines supported by the Health Resources and
                Services Administration, nor otherwise described in paragraph (a)(1) of
                this section. The provider bills the plan for an office visit.
                 (2) Conclusion. In paragraph (a)(2)(iv)(D)(1) of this section, the
                service was not billed as a separate charge and was billed as part of
                an office visit. Moreover, the primary purpose for the visit was to
                deliver items and services described as part of the comprehensive
                guidelines supported by the Health Resources and Services
                Administration. Therefore, the plan may not impose a cost-sharing
                requirement with respect to the office visit.
                 (3) Out-of-network providers. (i) Subject to paragraphs (a)(3)(ii)
                and (iii) of this section, nothing in this section requires a plan or
                issuer that has a network of providers to provide benefits for items or
                services described in paragraph (a)(1) of this section that are
                delivered by an out-of-network provider, or precludes a plan or issuer
                that has a network of providers from imposing cost-sharing requirements
                for items or services described in paragraph (a)(1) of this section
                that are delivered by an out-of-network provider.
                 (ii) If a plan or issuer does not have in its network a provider
                who can provide an item or service described in paragraph (a)(1) of
                this section, the plan or issuer must cover the item or service when
                performed by an out-of-network provider, and may not impose cost-
                sharing with respect to the item or service.
                 (iii) A plan or issuer must provide coverage for and must not
                impose any cost-sharing requirements (such as a copayment, coinsurance,
                or a deductible) for any qualifying coronavirus preventive service
                described in paragraph (a)(1)(v) of this section, regardless of whether
                such service is delivered by an in-network or out-of-network provider.
                For purposes of this paragraph (a)(3)(iii), with respect to a
                qualifying coronavirus preventive service and a provider with whom the
                plan or issuer does not have a negotiated rate for such service (such
                as an out-of-network provider), the plan or issuer must reimburse the
                provider for such service in an amount that is reasonable, as
                determined in comparison to prevailing market rates for such service.
                 (4) Reasonable medical management. Nothing prevents a plan or
                issuer from using reasonable medical management techniques to determine
                the frequency, method, treatment, or setting for an item or service
                described in paragraph (a)(1) of this section to the extent not
                specified in the relevant recommendation or guideline. To the extent
                not specified in a recommendation or guideline, a plan or issuer may
                rely on the relevant clinical evidence base and established reasonable
                medical management techniques to determine the frequency, method,
                treatment, or setting for coverage of a recommended preventive health
                service.
                 (5) Services not described. Nothing in this section prohibits a
                plan or issuer from providing coverage for items and services in
                addition to those recommended by the United States Preventive Services
                Task Force or the Advisory Committee on Immunization Practices of the
                Centers for Disease Control and Prevention, or provided for by
                guidelines supported by the Health Resources and Services
                Administration, or from denying coverage for items and services that
                are not recommended by that task force or that advisory committee, or
                under those guidelines. A plan or issuer may impose cost-sharing
                requirements for a treatment not described in paragraph (a)(1) of this
                section, even if the treatment results from an item or service
                described in paragraph (a)(1) of this section.
                 (b) Timing--(1) In general. A plan or issuer must provide coverage
                pursuant to paragraph (a)(1) of this section for plan years that begin
                on or after September 23, 2010, or, if later, for plan years that begin
                on or after the date that is one year after the date the recommendation
                or guideline is issued, except as provided in paragraph (b)(3) of this
                section.
                 (2) Changes in recommendations or guidelines. (i) A plan or issuer
                that is required to provide coverage for any items and services
                specified in any recommendation or guideline described in paragraph
                (a)(1) of this section on the first day of a plan year, or as otherwise
                provided in paragraph (b)(3) of this section, must provide coverage
                through the last day of the plan or policy year, even if the
                recommendation or guideline changes or is no longer described in
                paragraph (a)(1) of this section, during the applicable plan or policy
                year.
                 (ii) Notwithstanding paragraph (b)(2)(i) of this section, to the
                extent a recommendation or guideline described in paragraph (a)(1)(i)
                of this section that was in effect on the first day of a plan year, or
                as otherwise provided in paragraph (b)(3) of this section, is
                downgraded to a ``D'' rating, or any item or service associated with
                any recommendation or guideline specified in paragraph (a)(1) of this
                section is subject to a safety recall or is otherwise determined to
                pose a significant safety concern by a Federal agency authorized to
                regulate the item or service during a plan or policy year, there is no
                requirement under this section to cover these items and services
                through the last day of the applicable plan or policy year.
                 (3) Rapid coverage of preventive services for coronavirus. In the
                case of a qualifying coronavirus preventive service described in
                paragraph (a)(1)(v) of this section, a plan or issuer must provide
                coverage for such item, service, or immunization in accordance with
                this section by the date that is 15 business days after the date on
                which a recommendation specified in paragraph (a)(1)(v)(A) or (B) of
                this section is made relating to such item, service, or immunization.
                 (c) Recommendations not current. For purposes of paragraph
                (a)(1)(i) of this section, and for purposes of any other provision of
                law, recommendations of the United States Preventive Services Task
                Force regarding breast cancer screening, mammography, and prevention
                issued in or around November 2009 are not considered to be current.
                 (d) Applicability date. The provisions of paragraphs (a)(1)(i)
                through (iv), (a)(2), (a)(3)(i) and (ii), (a)(4) through (5), (b)(1)
                and (2), and (c) of this section are applicable as of April 16, 2012.
                 (e) Sunset date. The provisions of paragraphs (a)(1)(v),
                (a)(3)(iii), and (b)(3) of this section will not apply with respect to
                a qualifying coronavirus preventive service furnished on or after the
                expiration of the public health emergency determined on January 31,
                2020, to exist nationwide as of January 27, 2020, by the Secretary of
                Health and
                [[Page 71195]]
                Human Services pursuant to section 319 of the Public Health Service
                Act, as a result of COVID-19, including any subsequent renewals of that
                determination.
                DEPARTMENT OF LABOR
                Employee Benefits Security Administration
                 For the reasons set forth in the preamble, the Department of Labor
                amends 29 CFR part 2590 as set forth below:
                PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS
                0
                3. The authority citation for part 2590 continues to read as follows:
                 Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
                1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c;
                sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L.
                105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L.
                110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-
                148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029;
                Division M, Pub. L. 113-235, 128 Stat. 2130; Secretary of Labor's
                Order 1-2011, 77 FR 1088 (Jan. 9, 2012).
                0
                4. Section 2590.715-2713 is amended--
                0
                a. In paragraph (a)(1)(iii) by removing ``and'' after the semicolon;
                0
                b. In paragraph (a)(1)(iv) by removing the period at the end of the
                paragraph and adding ``; and'' in its place;
                0
                c. By adding paragraph (a)(1)(v);
                0
                d. By revising paragraph (a)(3)(i);
                0
                e. By adding paragraph (a)(3)(iii);
                0
                f. By revising paragraphs (b)(1) and (b)(2)(i) and (ii); and
                0
                g. By adding paragraphs (b)(3) and (e).
                 The revisions and additions read as follows:
                Sec. 2590.715-2713 Coverage of preventive health services.
                 (a) * * *
                 (1) * * *
                 (v) Any qualifying coronavirus preventive service, which means an
                item, service, or immunization that is intended to prevent or mitigate
                coronavirus disease 2019 (COVID-19) and that is, with respect to the
                individual involved--
                 (A) An evidence-based item or service that has in effect a rating
                of A or B in the current recommendations of the United States
                Preventive Services Task Force; or
                 (B) An immunization that has in effect a recommendation from the
                Advisory Committee on Immunization Practices of the Centers for Disease
                Control and Prevention (regardless of whether the immunization is
                recommended for routine use). For purposes of this paragraph
                (a)(1)(v)(B), a recommendation from the Advisory Committee on
                Immunization Practices of the Centers for Disease Control and
                Prevention is considered in effect after it has been adopted by the
                Director of the Centers for Disease Control and Prevention.
                * * * * *
                 (3) * * *
                 (i) Subject to paragraphs (a)(3)(ii) and (iii) of this section,
                nothing in this section requires a plan or issuer that has a network of
                providers to provide benefits for items or services described in
                paragraph (a)(1) of this section that are delivered by an out-of-
                network provider, or precludes a plan or issuer that has a network of
                providers from imposing cost-sharing requirements for items or services
                described in paragraph (a)(1) of this section that are delivered by an
                out-of-network provider.
                * * * * *
                 (iii) A plan or issuer must provide coverage for and must not
                impose any cost-sharing requirements (such as a copayment, coinsurance,
                or a deductible) for any qualifying coronavirus preventive service
                described in paragraph (a)(1)(v) of this section, regardless of whether
                such service is delivered by an in-network or out-of-network provider.
                For purposes of this paragraph (a)(3)(iii), with respect to a
                qualifying coronavirus preventive service and a provider with whom the
                plan or issuer does not have a negotiated rate for such service (such
                as an out-of-network provider), the plan or issuer must reimburse the
                provider for such service in an amount that is reasonable, as
                determined in comparison to prevailing market rates for such service.
                * * * * *
                 (b) * * *
                 (1) In general. A plan or issuer must provide coverage pursuant to
                paragraph (a)(1) of this section for plan years that begin on or after
                September 23, 2010, or, if later, for plan years that begin on or after
                the date that is one year after the date the recommendation or
                guideline is issued, except as provided in paragraph (b)(3) of this
                section.
                 (2) * * *
                 (i) A plan or issuer that is required to provide coverage for any
                items and services specified in any recommendation or guideline
                described in paragraph (a)(1) of this section on the first day of a
                plan year, or as otherwise provided in paragraph (b)(3) of this
                section, must provide coverage through the last day of the plan or
                policy year, even if the recommendation or guideline changes or is no
                longer described in paragraph (a)(1) of this section, during the
                applicable plan or policy year.
                 (ii) Notwithstanding paragraph (b)(2)(i) of this section, to the
                extent a recommendation or guideline described in paragraph (a)(1)(i)
                of this section that was in effect on the first day of a plan year, or
                as otherwise provided in paragraph (b)(3) of this section, is
                downgraded to a ``D'' rating, or any item or service associated with
                any recommendation or guideline specified in paragraph (a)(1) of this
                section is subject to a safety recall or is otherwise determined to
                pose a significant safety concern by a Federal agency authorized to
                regulate the item or service during a plan or policy year, there is no
                requirement under this section to cover these items and services
                through the last day of the applicable plan or policy year.
                 (3) Rapid coverage of preventive services for coronavirus. In the
                case of a qualifying coronavirus preventive service described in
                paragraph (a)(1)(v) of this section, a plan or issuer must provide
                coverage for such item, service, or immunization in accordance with
                this section by the date that is 15 business days after the date on
                which a recommendation specified in paragraph (a)(1)(v)(A) or (B) of
                this section is made relating to such item, service, or immunization.
                * * * * *
                 (e) Sunset date. The provisions of paragraphs (a)(1)(v),
                (a)(3)(iii), and (b)(3) of this section will not apply with respect to
                a qualifying coronavirus preventive service furnished on or after the
                expiration of the public health emergency determined on January 31,
                2020, to exist nationwide as of January 27, 2020, by the Secretary of
                Health and Human Services pursuant to section 319 of the Public Health
                Service Act, as a result of COVID-19, including any subsequent renewals
                of that determination.
                DEPARTMENT OF THE TREASURY
                Office of the Secretary
                Amendments to the Regulations
                 For the reasons set forth in the preamble, the Department of
                Treasury amends 31 CFR part 33 as set forth below:
                PART 33--WAIVERS FOR STATE INNOVATION
                0
                5. The authority citation for part 33 continues to read as follows:
                [[Page 71196]]
                 Authority: Sec. 1332, Pub. L. 111-148, 124 Stat. 119.
                0
                6. Section 33.118 is added to read as follows:
                Sec. 33.118 Modification from the normal public notice requirements
                during the public health emergency.
                 (a) The Secretary and the Secretary of Health and Human Services
                may modify, in part, the State public notice requirements under Sec.
                33.112 and the Federal public notice procedures under Sec. 33.116 to
                expedite a decision on a proposed waiver request during the public
                health emergency for COVID-19, as defined in 42 CFR 400.200, when a
                delay would undermine or compromise the purpose of the proposed waiver
                request and be contrary to the interests of consumers. These
                flexibilities are limited to event-triggered, emergent situations, and
                the flexibilities outlined in this section will not be available for
                States seeking to address a threat to consumers' access to health
                coverage or care that existed prior to the public health emergency for
                COVID-19.
                 (b) A State must meet all of the following criteria to request a
                modification under paragraph (a) of this section:
                 (1) The State must request a modification under paragraph (a) of
                this section, in the form and manner specified by the Secretaries.
                 (2) The State must have acted in good faith, and in a diligent,
                timely, and prudent manner in the preparation of the request for a
                modification under paragraph (a) of this section, and the waiver
                application request, as applicable.
                 (3) The State must, as applicable, detail in its request for a
                modification from State-level notice procedures under paragraph (a) of
                this section the justification for the request and the alternative
                public notice procedures it proposes to implement at the State level,
                including public hearings, that are designed to provide the greatest
                opportunity and level of meaningful public input from impacted
                stakeholders that is practicable given the emergency circumstances
                underlying the State's request for a modification. As a condition of
                receiving a modification approval, a State must implement public notice
                procedures, including public hearings, at the State level and, if
                required, amend the waiver application request.
                 (4) The State must, as applicable, detail in its request for a
                modification from Federal-level notice procedures under paragraph (a)
                of this section the justification for the request as it relates to the
                public health emergency and the alternative public notice procedures it
                requests to be implemented at the Federal level.
                 (c) The Secretary and the Secretary of Health and Human Services
                will evaluate a State's request for a modification under paragraph (a)
                of this section and issue their exemption determination within
                approximately 15 calendar days after the request is received.
                 (d) The Secretary of Health and Human Services will publish on the
                Centers for Medicare and Medicaid Services (CMS) website any
                modification determinations within 15 calendar days of the Secretary
                and the Secretary of Health and Human Services making such a
                determination, as well as the approved revised timeline for public
                comment under the approved alternative State or Federal public notice
                procedures, as applicable.
                 (e) The State must publish on its website any modification requests
                and determinations within 15 calendar days of receipt of the
                determination, as well as the approved revised timeline for public
                comment under the alternative State or Federal public notice
                procedures, as applicable.
                 (f) The State must, as applicable, implement the alternative public
                notice procedures at the State level if the State's exemption request
                is approved and, if required, amend the waiver application request.
                0
                7. Section 33.120 is amended--
                0
                a. In paragraph (c)(1) by adding a paragraph heading; and
                0
                b. By adding paragraph (c)(2).
                 The additions read as follows:
                Sec. 33.120 Monitoring and compliance.
                * * * * *
                 (c) * * *
                 (1) Notification requirements for public forum. * * *
                 (2) Modification from the normal post-award requirements during the
                public health emergency. (i) The Secretary and the Secretary of Health
                and Human Services may modify, in part, State post-award requirements
                under this paragraph (c)(2) for an approved waiver request during the
                public health emergency for COVID-19, as defined in 42 CFR 400.200,
                when the application of the post award public notice requirements would
                be contrary to the interests of consumers during the public health
                emergency. These flexibilities are limited to event-triggered, emergent
                situations, and the flexibilities outlined in this section will not be
                available for States seeking to address a threat to consumers' access
                to health coverage or care that existed prior to the public health
                emergency for COVID-19.
                 (ii) A State must meet all of the following criteria to request a
                modification under paragraph (c) of this section:
                 (A) The State must request a modification under this paragraph
                (c)(2), in the form and manner specified by the Secretaries.
                 (B) The State must have acted in good faith, and in a diligent,
                timely, and prudent manner to comply with the monitoring and compliance
                requirement under the waiver and the terms and conditions of the
                agreement between the Secretary and the Secretary of Health and Human
                Services, as applicable, and the State to implement a section 1332
                waiver and to submit and prepare the request for a modification under
                this paragraph (c)(2).
                 (C) The State must detail in its request for a modification under
                this paragraph (c)(2) the alternative post award public notice
                procedures it proposes to implement at the State level, including
                public hearings, that are designed to provide the greatest opportunity
                and level of meaningful public input from impacted stakeholders that is
                practicable given the emergency circumstances underlying the State's
                request for a modification.
                 (D) The Secretary and the Secretary of Health and Human Services
                will evaluate a State's request for a modification under this paragraph
                (c)(2) and issue their modification determination within approximately
                15 calendar days after the request is received.
                 (E) The State must publish on its website any modification requests
                and determinations within 15 calendar days of the receipt of the
                determination as well as information on the approved revised timeline
                for the state's post award public notice procedures, as applicable.
                * * * * *
                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                Centers for Medicare & Medicaid Services
                 For the reasons stated in the preamble, the Centers for Medicare &
                Medicaid Services amends 42 CFR chapter IV as set forth below:
                PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
                0
                8. The authority citation part 414 continues to read as follows:
                 Authority: 42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.
                [[Page 71197]]
                0
                9. Section 410.57 is amended by adding paragraph (c) to read as
                follows:
                Sec. 410.57 Pneumococcal vaccine, flu vaccine, and COVID-19 vaccine.
                * * * * *
                 (c) Medicare Part B pays for the COVID-19 vaccine and its
                administration.
                0
                10. Section 410.152 is amended by revising paragraph (l)(1) to read as
                follows:
                Sec. 410.152 Amounts of payment.
                * * * * *
                 (l) * * *
                 (1) Pneumococcal (as specified in paragraph (h) of this section),
                influenza, hepatitis B, and COVID-19 vaccine and administration.
                * * * * *
                0
                11. Section 410.160 is amended by revising paragraph (b)(2) to read as
                follows:
                Sec. 410.160 Part B annual deductible.
                * * * * *
                 (b) * * *
                 (2) Pneumococcal, influenza, and hepatitis b, and COVID-19 vaccines
                and their administration.
                * * * * *
                PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE
                PAYMENT
                0
                12. The authority citation part 411 continues to read as follows:
                 Authority: 42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh,
                and 1395nn.
                0
                13. Section 411.15 is amended by:
                0
                a. Removing ``and'' at the end of paragraph (e)(3);
                0
                b. Removing the period at the end of paragraph (e)(4) and adding ``;
                and'' in its place; and
                0
                c. Adding paragraph (e)(5).
                 The addition reads as follows:
                Sec. 411.15 Particular services excluded from coverage.
                * * * * *
                 (e) * * *
                 (5) COVID-19 vaccinations that are reasonable and necessary for the
                prevention of illness.
                * * * * *
                PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES
                0
                14. The authority citation part 414 continues to read as follows:
                 Authority: 42 U.S.C. 1302, 1395hh, and 1395rr(b)(l).
                0
                15. Section 414.701 is revised to read as follows:
                Sec. 414.701 Purpose.
                 This subpart implements section 1842(o) of the Act by specifying
                the methodology for determining the payment allowance limit for drugs
                and biologicals covered under Part B of Title XVIII of the Act
                (hereafter in this subpart referred to as the ``program'') that are not
                paid on a cost or prospective payment system basis. Examples of drugs
                that are subject to the rules contained in this subpart are: Drugs
                furnished incident to a physician's service; durable medical equipment
                (DME) drugs; separately billable drugs at independent dialysis
                facilities not under the ESRD composite rate; statutorily covered
                drugs, for example, influenza, pneumococcal, hepatitis, and COVID-19
                vaccines, antigens, hemophilia blood clotting factor, immunosuppressive
                drugs and certain oral anti-cancer drugs.
                0
                16. Section 414.707 is amended by revising paragraph (a)(2)(iii) to
                read as follows:
                Sec. 414.707 Basis of payment.
                 (a) * * *
                 (2) * * *
                 (iii) Pneumococcal, influenza, and COVID-19 vaccines as well as
                hepatitis B vaccine that is furnished to individuals at high or
                intermediate risk of contracting hepatitis B (as determined by the
                Secretary).
                * * * * *
                0
                17. Section 414.900 is amended by revising paragraph (b)(3)(ii) to read
                as follows:
                Sec. 414.900 Basis and scope.
                * * * * *
                 (b) * * *
                 (3) * * *
                 (ii) Pneumococcal, Hepatitis B, and COVID-19 vaccines.
                * * * * *
                0
                18. Section 414.904 is amended by revising paragraph (e)(1) to read as
                follows:
                Sec. 414.904 Average sales price as the basis for payment.
                * * * * *
                 (e) * * *
                 (1) Vaccines. The payment limits for hepatitis B vaccine furnished
                to individuals at high or intermediate risk of contracting hepatitis B
                (as determined by the Secretary), pneumococcal vaccine, influenza
                vaccine, and COVID-19 vaccine are calculated using 95 percent of the
                average wholesale price.
                * * * * *
                PART 417--HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL
                PLANS, AND HEALTH CARE PREPAYMENT PLANS
                0
                19. The authority citation for part 417 is revised to read as follows:
                 Authority: 42 U.S.C. 1302 and 1395hh, and 300e, 300e-5, and
                300e-9, and 31 U.S.C. 9701.
                0
                20. Section 417.454 is amended by adding paragraph (e)(4) to read as
                follows:
                Sec. 417.454 Charges to Medicare enrollees.
                * * * * *
                 (e) * * *
                 (4) A COVID-19 vaccine and its administration described in section
                1861(s)(10)(A) for the duration of the emergency period defined in
                paragraph (1)(B) of section 1135(g) of the Act.
                PART 433--STATE FISCAL ADMINISTRATION
                0
                21. The authority citation for part 433 continues to read as follows:
                 Authority: Sec. 1102 of the Social Security Act, (42 U.S.C.
                1302).
                0
                22. Subpart G, consisting of Sec. 433.400, is added to read as
                follows:
                Subpart G--Temporary FMAP Increase During the Public Health
                Emergency for COVID-19
                Sec. 433.400 Continued Enrollment for Temporary FMAP Increase.
                 (a) Statutory basis. This subpart interprets and implements section
                6008(b)(3) of the Families First Coronavirus Response Act (FFCRA) and
                section 1902(a)(4) and (a)(19) of the Social Security Act.
                 (b) Definitions. For purposes of this subpart--
                 COVID-19 means Coronavirus Disease 2019.
                 Medicare Savings Program means the coverage of Medicare premiums
                and cost sharing furnished to individuals described in, and determined
                by the state to be eligible under, section 1902(a)(10)(E)(i),
                1902(a)(10)(E)(iii), or 1902(a)(10)(E)(iv) of the Act.
                 Minimum essential coverage (MEC) has the meaning provided under
                section 5000A(f)(1) of the Internal Revenue Code and implementing
                regulations at 26 CFR 1.5000A-2 and includes minimum essential coverage
                determined by the Secretary under 26 CFR 1.5000A-2(f).
                 Public Health Emergency for COVID-19 has the same definition
                provided in Sec. 400.200 of this chapter.
                 Temporary FMAP increase means the 6.2 percentage point increase in
                the
                [[Page 71198]]
                State's Federal medical assistance percentage (FMAP) that is authorized
                under section 6008(a) of the FFCRA through the end of the fiscal
                quarter in which the Public Health Emergency for COVID-19 ends.
                 Validly enrolled means that the beneficiary was enrolled in
                Medicaid based on a determination of eligibility. A beneficiary is not
                validly enrolled if the agency determines the eligibility was
                erroneously granted at the most recent determination, redetermination,
                or renewal of eligibility (if such last redetermination or renewal was
                completed prior to March 18, 2020) because of agency error or fraud (as
                evidenced by a fraud conviction) or abuse (as determined following the
                completion of an investigation pursuant to Sec. Sec. 455.15 and 455.16
                of this chapter) attributed to the beneficiary or the beneficiary's
                representative, which was material to the determination of eligibility.
                Individuals receiving medical assistance during a presumptive
                eligibility period in accordance with part 435, subpart L, of this
                chapter have not received a determination of eligibility by the state
                under the state plan and are not considered validly enrolled
                beneficiaries for purposes of this section.
                 (c) General requirements. (1) In order to claim the temporary FMAP
                increase for:
                 (i) The quarter in which November 2, 2020, falls, a state must meet
                the requirements described in paragraph (c)(2) of this section from
                November 2, 2020, through the end of the quarter.
                 (ii) Any quarter beginning after November 2, 2020, through the
                quarter in which the public health emergency for COVID-19, including
                any extensions, ends, a state must meet the requirements described in
                paragraphs (c)(2) of this section.
                 (2) Except as provided in paragraph (d) of this section, for all
                beneficiaries validly enrolled for benefits under the state plan, a
                waiver of such plan, or a demonstration project under section 1115(a)
                of the Act as of or after March 18, 2020, the state must maintain the
                beneficiary's enrollment as follows, through the end of the month in
                which the public health emergency for COVID-19 ends:
                 (i)(A) For beneficiaries whose Medicaid coverage meets the
                definition of MEC in paragraph (b) of this section as of or after March
                18, 2020, the state must continue to provide Medicaid coverage that
                meets the definition of MEC, except as provided in paragraph
                (c)(2)(i)(B) of this section.
                 (B) For beneficiaries described in paragraph (c)(2)(i)(A) whom the
                state subsequently determines are eligible for coverage under a
                Medicare Savings Program eligibility group, the state satisfies the
                requirement described in paragraph (c)(2) of this section if it
                furnishes the medical assistance available through the Medicare Savings
                Program.
                 (ii) For beneficiaries whose Medicaid coverage as of or after March
                18, 2020 does not meet the definition of MEC in paragraph (b) of this
                section but does include coverage for testing services and treatments
                for COVID-19, including vaccines, specialized equipment, and therapies,
                the state must continue to provide Medicaid coverage that includes such
                testing services and treatments.
                 (iii) For beneficiaries not described in paragraph (c)(2)(i) or
                (ii) of this section, the state must continue to provide at least the
                same level of medical assistance as was provided as of or after March
                18, 2020.
                 (iv) If a state determines that a validly enrolled beneficiary is
                no longer eligible for Medicaid, including on a procedural basis, the
                state meets the requirements described in paragraph (c)(2)(i), (ii), or
                (iii) of this section by continuing to provide the same Medicaid
                coverage that the beneficiary would have received absent the
                determination of ineligibility.
                 (3) Otherwise permissible changes to beneficiary coverage, cost
                sharing, and post-eligibility treatment of income, including both
                changes affecting an individual beneficiary and approved changes to the
                state plan, a section 1115 demonstration and/or a waiver authorized
                under section 1915 of the Act impacting multiple beneficiaries, will
                not impact a state's ability to claim the temporary FMAP increase
                provided that any such changes do not violate the requirement to
                maintain beneficiary enrollment described at paragraph (c)(2) of this
                section or the requirement in section 6008(b)(4) of the FFCRA.
                 (d) Exceptions. (1) Consistent with the condition to claim the
                temporary FMAP increase described in paragraph (c)(2) of this section,
                a state may terminate a beneficiary's Medicaid enrollment prior to the
                first day of the month after the public health emergency for COVID-19
                ends in the following circumstances:
                 (i) The beneficiary or the beneficiary's representative requests a
                voluntary termination of eligibility;
                 (ii) The beneficiary ceases to be a resident of the state; or
                 (iii) The beneficiary dies.
                 (2) States which have elected the option under section 1903(v)(4)
                of the Act to provide full benefits to lawfully residing children or
                pregnant women must limit coverage for such beneficiaries if they no
                longer meet the definition of a lawfully residing child or pregnant
                woman under such section to services necessary for treatment of an
                emergency medical condition, as defined in section 1903(v)(3) of the
                Act.
                 (3)(i) For purposes of paragraph (d)(1)(i) of this section, a
                beneficiary may request a voluntary termination of eligibility from the
                Medicaid coverage in which the beneficiary is enrolled to transition to
                other Medicaid coverage for which the beneficiary is eligible, even if
                the transition to the new Medicaid coverage would not be consistent
                with paragraph (c)(2) of this section.
                 (ii) For purposes of paragraph (d)(1)(ii) of this section,
                beneficiaries who were identified through a data match with the Public
                Assistance Reporting Information System in accordance with Sec.
                435.945(d) of this chapter indicating simultaneous enrollment in two or
                more states, and who fail to respond to a request for information to
                verify their residency, may be treated as not being a state resident
                for purposes of paragraph (d)(1)(ii) of this section, provided that the
                state takes all reasonably available measures to attempt to verify the
                beneficiary's state residency. If a beneficiary's enrollment is
                terminated under the exception at paragraph (d)(1)(ii) of this section
                based on a PARIS data match and the state subsequently obtains
                information verifying residency, the state must reinstate the
                beneficiary's Medicaid enrollment retroactive to the date of
                termination.
                PART 510--COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL
                0
                23. The authority citation for part 510 is revised to read as follows:
                 Authority: 42 U.S.C. 1302, 1315(a), and 1395hh.
                0
                24. Section 510.2 is amended by--
                0
                a. Adding a definition for ``COVID-19 Diagnosis Code'' in alphabetical
                order; and
                0
                b. Revising the definitions for ``Lower-extremity joint replacement
                (LEJR)'', ``Performance year'', and ``Quality improvement points''.
                 The addition and revisions read as follows:
                Sec. 510.2 Definitions.
                * * * * *
                 COVID-19 Diagnosis Code means any of the following ICD-10-CM
                diagnosis codes:
                [[Page 71199]]
                 (1) B97.29;
                 (2) U07.1; or
                 (3) Any other ICD-10-CM diagnosis code that is recommended by the
                Centers for Disease Control and Prevention for the coding of a
                confirmed case of COVID-19.
                * * * * *
                 Lower-extremity joint replacement (LEJR) means any procedure that
                is within MS-DRG 469 or 470, or, on or after October 1, 2020, MS-DRG
                521 or 522, including lower-extremity joint replacement procedures or
                reattachment of a lower extremity.
                * * * * *
                 Performance year means one of the years in which the CJR model is
                being tested. Performance years for the model correlate to calendar
                years with the exceptions of performance year 1, which is April 1, 2016
                through December 31, 2016 and performance year 5, which is January 1,
                2020 through September 30, 2021. For reconciliation purposes,
                performance year 5 is divided into two subsets, performance year subset
                5.1 (January 1, 2020 through December 31, 2020) and performance year
                subset 5.2 (January 1, 2021 through September 30, 2021).
                * * * * *
                 Quality improvement points are points that CMS adds to a
                participant hospital's composite quality score for a measure if the
                hospital's performance percentile on an individual quality measure for
                performance years 2 through 4 and for performance year subsets 5.1 and
                5.2, increases from the previous performance year or performance year
                subset by at least 2 deciles on the performance percentile scale, as
                described in Sec. 510.315(d). For performance year 1, CMS adds quality
                improvement points to a participant hospital's composite quality score
                for a measure if the hospital's performance percentile on an individual
                quality measure increases from the corresponding time period in the
                previous year by at least 2 deciles on the performance percentile
                scale, as described in Sec. 510.315(d).
                * * * * *
                0
                25. Section 510.200 is amended by revising paragraphs (a) and (d)(6) to
                read as follows:
                Sec. 510.200 Time periods, included and excluded services, and
                attribution.
                 (a) Time periods. All episodes must begin on or after April 1, 2016
                and end on or before September 30, 2021.
                * * * * *
                 (d) * * *
                 (6) For performance years 1 through 4 and for performance year
                subsets 5.1 and 5.2, payments for otherwise included items and services
                in excess of 2 standard deviations above the mean regional episode
                payment in accordance with Sec. 510.300(b)(5).
                * * * * *
                0
                26. Section 510.300 is amended by revising paragraphs (a) introductory
                text, (a)(1)(i), (a)(1)(iii), (a)(2) and (3), (b)(1)(iii), (b)(2)(iii),
                (b)(8), (c)(1) and (2), and (c)(3)(iii) to read as follows:
                Sec. 510.300 Determination of episode quality-adjusted target prices.
                 (a) General. CMS establishes episode quality-adjusted target prices
                for participant hospitals for each performance year or performance year
                subset of the model as specified in this section. Episode quality-
                adjusted target prices are established according to the following:
                 (1) * * *
                 (i)(A) MS-DRG 469 with hip fracture; or
                 (B) For episodes beginning on or after October 1, 2020, MS-DRG 521;
                * * * * *
                 (iii)(A) MS-DRG 470 with hip fracture; or
                 (B) For episodes beginning on or after October 1, 2020, MS-DRG 522;
                or
                * * * * *
                 (2) Applicable time period for performance year or performance year
                subset episode quality-adjusted target prices. Episode quality-adjusted
                target prices are updated to account for Medicare payment updates no
                less than 2 times per year, for updated quality-adjusted target prices
                effective October 1 and January 1, and at other intervals if necessary.
                 (3) Episodes that straddle performance years or performance year
                subsets or payment updates. The quality-adjusted target price that
                applies to the type of episode as of the date of admission for the
                anchor hospitalization is the quality-adjusted target price that
                applies to the episode.
                * * * * *
                 (b) * * *
                 (1) * * *
                 (iii) Episodes beginning in 2016 through 2018 for each of
                performance year subsets 5.1 and 5.2.
                 (2) * * *
                 (iii) Regional historical episode payments for performance year 4
                and each of performance year subsets 5.1 and 5.2.
                * * * * *
                 (8) Inclusion of reconciliation payments and repayments. For
                performance years 3, 4, and each of performance year subsets 5.1 and
                5.2 only, reconciliation payments and repayment amounts under Sec.
                510.305(f)(2) and (3) and from LEJR episodes included in the BPCI
                initiative are included in historical episode payments.
                 (c) * * *
                 (1) Discount factors affected by the quality incentive payments and
                the composite quality score. In all performance years and performance
                year subsets, the discount factor may be affected by the quality
                incentive payment and composite quality score as provided in Sec.
                510.315 to create the effective discount factor or applicable discount
                factor used for calculating reconciliation payments and repayment
                amounts. The quality-adjusted target prices incorporate the effective
                or applicable discount factor at reconciliation.
                 (2) Discount factor for reconciliation payments. The discount
                factor for reconciliation payments in all performance years and
                performance year subsets is 3.0 percent.
                 (3) * * *
                 (iii) In performance year 4 and each of performance year subsets
                5.1 and 5.2, 3.0 percent.
                * * * * *
                0
                27. Section 510.305 is amended by revising paragraphs (b), (d)(1)
                introductory text, (e) introductory text, (e)(1) introductory text,
                (e)(1)(i), (ii), and (iii), (e)(1)(v)(A) introductory text,
                (e)(1)(v)(A)(3), (e)(1)(v)(B) introductory text, (e)(1)(v)(B)(3),
                (e)(1)(v)(C), (f)(1)(ii), (g)(1) and (3), (h) introductory text, (h)(5)
                and (6), (i), (j), and (k)(4) to read as follows:
                Sec. 510.305 Determination of the NPRA and reconciliation process.
                * * * * *
                 (b) Reconciliation. CMS uses a series of reconciliation processes,
                which CMS performs as described in paragraphs (d) and (f) of this
                section, after the end of each performance year 1 through 4 to
                establish final payment amounts to participant hospitals for CJR
                episodes for a given performance year. Following the end of each
                performance year 1 through 4, CMS determines actual episode payments
                for each episode for the performance year (other than episodes that
                have been canceled in accordance with Sec. 510.210(b)), and determines
                the amount of a reconciliation payment or repayment amount. Within
                performance year 5, CMS separately performs the reconciliation
                processes described in paragraphs (d) and (f) of this section for
                performance year subsets 5.1 and 5.2 and following the end of each
                performance year subset 5.1 and 5.2, CMS separately determines the
                actual
                [[Page 71200]]
                episode payment for each episode for the subset of the performance year
                (other than episodes that have been canceled in accordance with Sec.
                510.210(b)) and determines the amount of a reconciliation payment or
                repayment for each of performance year subsets 5.1 and 5.2.
                * * * * *
                 (d) * * *
                 (1) Beginning 2 months after the end of each of performance years 1
                through 4 and performance year subset 5.1 and 5 months after the end of
                performance year subset 5.2, CMS does all of the following:
                * * * * *
                 (e) Calculation of the NPRA. By comparing the quality-adjusted
                target prices described in Sec. 510.300 and the participant hospital's
                actual episode spending for each of performance years 1 through 4 and
                each of performance year subsets 5.1 and 5.2 and applying the
                adjustments in paragraph (e)(1)(v) of this section, CMS establishes an
                NPRA for each participant hospital for each such performance year or
                performance year subset.
                 (1) Initial calculation. In calculating the NPRA for each
                participant hospital for each of performance years 1 through 4 and each
                of performance year subsets 5.1 and 5.2, CMS does the following:
                 (i) Determines actual episode payments for each episode included in
                the performance year or performance year subset (other than episodes
                that have been canceled in accordance with Sec. 510.210(b)) using
                claims data that is available 2 months after the end of the performance
                year or performance year subset. Actual episode payments are capped, as
                applicable, at the amount determined in accordance with Sec.
                510.300(b)(5) for the performance year or performance year subset at
                the amount determined in paragraph (k) of this section for episodes
                affected by extreme and uncontrollable circumstances, or at the quality
                adjusted target price determined for that episode under Sec. 510.300
                for an episode with actual episode payments that include a claim with a
                COVID-19 diagnosis code and initiate after the earlier of March 31,
                2021 or the last day of the emergency period described in paragraph
                (k)(4) of this section.
                 (ii) Multiplies each episode quality-adjusted target price by the
                number of episodes included in the performance year or performance year
                subset (other than episodes that have been canceled in accordance with
                Sec. 510.210(b)) to which that episode quality-adjusted target price
                applies.
                 (iii) Aggregates the amounts computed in paragraph (e)(1)(ii) of
                this section for all episodes included in the performance year or
                performance year subset (other than episodes that have been canceled in
                accordance with Sec. 510.210(b)).
                * * * * *
                 (v) * * *
                 (A) Limitation on loss. Except as provided in paragraph
                (e)(1)(v)(C) of this section, the total amount of the NPRA and
                subsequent reconciliation calculation for a performance year or
                performance year subset cannot exceed the following:
                * * * * *
                 (3) For performance year 4 and each of performance year subsets 5.1
                and 5.2, 20 percent of the amount calculated in paragraph (e)(1)(iii)
                of this section for the performance year or performance year subset.
                * * * * *
                 (B) Limitation on gain. The total amount of the NPRA and subsequent
                reconciliation calculation for a performance year or performance year
                subset cannot exceed the following:
                * * * * *
                 (3) For performance year 4 and each of performance year subsets 5.1
                and 5.2, 20 percent of the amount calculated in paragraph (e)(1)(iii)
                of this section for the performance year or performance year subset.
                * * * * *
                 (C) Financial loss limits for rural hospitals, SCHs, MDHs, and
                RRCs. If a participant hospital is a rural hospital, SCH, MDH, or RRC,
                then for performance year 2, the total repayment amount for which the
                participant hospital is responsible due to the NPRA and subsequent
                reconciliation calculation cannot exceed 3 percent of the amount
                calculated in paragraph (e)(1)(iii) of this section. For performance
                years 3 and 4 and for performance year subsets 5.1 and 5.2, the amount
                cannot exceed 5 percent of the amount calculated in paragraph
                (e)(1)(iii) of this section.
                 (f) * * *
                 (1) * * *
                 (ii) Subject to paragraph (f)(1)(iii) of this section, for
                performance years 2 through 4 and for each of performance year subsets
                5.1 and 5.2, results from the subsequent reconciliation calculation for
                a prior year's reconciliation as described in paragraph (i) of this
                section and the post-episode spending and ACO overlap calculations as
                described in paragraph (j) of this section are added to the current
                year's NPRA in order to determine the reconciliation payment or
                repayment amount.
                * * * * *
                 (g) * * *
                 (1) CMS assesses each participant hospital's performance on quality
                metrics, as described in Sec. 510.315, to determine whether the
                participant hospital is eligible to receive a reconciliation payment
                for a performance year or performance year subset.
                * * * * *
                 (3) If the hospital's composite quality score described in Sec.
                510.315 is below acceptable, defined as less than 4.00 for a
                performance year or performance year subset, the hospital is not
                eligible for a reconciliation payment.
                * * * * *
                 (h) Reconciliation report. CMS issues each participant hospital a
                CJR reconciliation report for the performance year or performance year
                subset. Each CJR reconciliation report contains the following:
                * * * * *
                 (5) As applicable, the NPRA and subsequent reconciliation
                calculation amount for the previous performance year or performance
                year subset.
                 (6) As applicable, the post-episode spending amount and ACO overlap
                calculation for the previous performance year or performance year
                subset.
                * * * * *
                 (i) Subsequent reconciliation calculation. (1) Fourteen months
                after the end of each of performance years 1 through 4 and performance
                year subset 5.1 and seventeen months after the end of performance year
                subset 5.2, CMS performs an additional calculation, using claims data
                available at that time, to account for final claims run-out and any
                additional episode cancelations due to overlap between the CJR model
                and other CMS models and programs, or for other reasons as specified in
                Sec. 510.210(b).
                 (2) The subsequent calculation for each of performance years 1
                through 4 and performance year subset 5.1 occurs concurrently with the
                first reconciliation process for the following performance year (or in
                the case of performance year subset 5.1, with the first reconciliation
                of performance year subset 5.2) . If the result of the subsequent
                calculation is different than zero, CMS applies the stop-loss and stop-
                gain limits in paragraph (e) of this section to the aggregate
                calculation of the amounts described in paragraphs (e)(1)(iv) and
                (i)(1) of this section for that performance year or performance year
                subset (the initial reconciliation
                [[Page 71201]]
                and the subsequent reconciliation calculation) to ensure such amount
                does not exceed the applicable stop-loss or stop-gain limits. The
                subsequent reconciliation calculation for performance year subset 5.2
                will occur independently in 2023.
                 (j) Additional adjustments to the reconciliation payment or
                repayment amount. (1) In order to account for shared savings payments,
                CMS will reduce the reconciliation payment or increase the repayment
                amount for the subsequent performance year (for performance years 1
                through 4 and performance year subset 5.1) by the amount of the
                participant hospital's discount percentage that is paid to the ACO in
                the prior performance year as shared savings. (This amount will be
                assessed independently for performance year subset 5.2 in 2023.) This
                adjustment is made only when the participant hospital is a participant
                or provider/supplier in the ACO and the beneficiary in the CJR episode
                is assigned to one of the following ACO models or programs:
                 (i) The Pioneer ACO model.
                 (ii) The Medicare Shared Savings Program (excluding Track 3 for CJR
                episodes that initiate on or after July 1, 2017).
                 (iii) The Comprehensive ESRD Care Initiative (excluding a track
                with downside risk for CJR episodes that initiate after July 1, 2017).
                 (iv) The Next Generation ACO model (excluding CJR episodes that
                initiate on or after July 1, 2017).
                 (2) If the average post-episode Medicare Parts A and B payments for
                a participant hospital in the prior performance year or performance
                year subset is greater than 3 standard deviations above the regional
                average post-episode payments for the same performance year or
                performance year subset, then the spending amount exceeding 3 standard
                deviations above the regional average post-episode payments for the
                same performance year or performance year subset is subtracted from the
                net reconciliation or added to the repayment amount for the subsequent
                performance year for years 1 through 4 and performance year subset 5.1,
                and assessed independently for performance year subset 5.2.
                 (k) * * *
                 (4) For a fracture or non-fracture episode with a date of admission
                to the anchor hospitalization that is on or within 30 days before the
                date that the emergency period (as defined in section 1135(g) of the
                Act) begins or that occurs on or before March 31, 2021 or the last day
                of such emergency period, whichever is earlier, actual episode payments
                are capped at the quality adjusted target price determined for that
                episode under Sec. 510.300.
                0
                28. Section 510.315 is amended by revising paragraphs (a), (b)
                introductory text, and (d) to read as follows:
                Sec. 510.315 Composite quality scores for determining reconciliation
                payment eligibility and quality incentive payments.
                 (a) General. A participant hospital's eligibility for a
                reconciliation payment under Sec. 510.305(g), and the determination of
                quality incentive payments under paragraph (f) of this section, for a
                performance year or performance year subset depend on the hospital's
                composite quality score (including any quality performance points and
                quality improvement points earned) for that performance year or
                performance year subset.
                 (b) Composite quality score. CMS calculates a composite quality
                score for each participant hospital for each performance year or
                performance year subset which equals the sum of the following:
                * * * * *
                 (d) Quality improvement points. For performance year 1, if a
                participant hospital's quality performance percentile on an individual
                measure described in Sec. 510.400(a) increases from the corresponding
                time period in the previous year by at least 2 deciles on the
                performance percentile scale, then the hospital is eligible to receive
                quality improvement points equal to 10 percent of the total available
                point for that individual measure up to a maximum composite quality
                score of 20 points. For each of performance years 2 through 4 and for
                each of performance year subsets 5.1 and 5.2, if a participant
                hospital's quality performance percentile on an individual measure
                described in Sec. 510.400(a) increases from the previous performance
                year or performance year subset by at least 2 deciles on the
                performance percentile scale, then the hospitals is eligible to receive
                quality improvement points equal to 10 percent of the total available
                point for that individual measure up to a maximum composite quality
                score of 20 points.
                * * * * *
                0
                29. Section 510.400 is amended by--
                0
                a. Revising paragraphs (a) introductory text, (b)(2) introductory text,
                (b)(2)(i), (b)(2)(ii) introductory text, and (b)(3)(v) introductory
                text; and
                0
                b. By adding paragraph (b)(3)(vi).
                 The revisions and addition read as follows:
                Sec. 510.400 Quality measures and reporting.
                 (a) Reporting of quality measures. The following quality measures
                are used for public reporting, for determining whether a participant
                hospital is eligible for reconciliation payments under Sec.
                510.305(g), and whether a participant hospital is eligible for quality
                incentive payments under Sec. 510.315(f) in the performance year or
                performance year subset:
                * * * * *
                 (b) * * *
                 (2) Hospitals must also submit the amount of requested THA/TKA
                patient-reported outcomes data required for each performance year or
                performance year subset of the model in order to be considered
                successful in submitting voluntary data.
                 (i) The amount of requested THA/TKA patient-reported outcomes data
                to submit, in order to be considered successful will increase each
                subsequent year of the model over the 5 years of the model (with the
                exception of performance year subset 5.2, for which CMS will request
                the same amount of THA/TKA patient-reported outcomes data as
                performance year subset 5.1, updated to reflect the timeframe
                applicable to performance year subset 5.2).
                 (ii) A phase-in approach that determines the amount of requested
                THA/TKA patient-reported outcomes data to submit over performance years
                1 through 4 and performance year subset 5.1 (with the exception of
                performance year subset 5.2, for which CMS will request the same amount
                of THA/TKA patient-reported outcomes as performance year subset 5.1,
                updated to reflect the timeframe applicable to performance year subset
                5.2) of the program will be applied so that in year 1 successful
                submission of data would mean CMS received all requested THA/TKA
                patient-reported outcomes and limited risk variable data on both of the
                following:
                * * * * *
                 (3) * * *
                 (v) Year 5 (subset 5.1, January 1, 2020-December 31, 2020).
                Submit--
                * * * * *
                 (vi) Year 5 (subset 5.2, January 1, 2021-September 30, 2021).
                Submit--
                 (A) Post-operative data on primary elective THA/TKA procedures for
                >=80% or >=200 procedures performed between July 1, 2019 and June 30,
                2020; and
                 (B) Pre-operative data on primary elective THA/TKA procedures for
                >=80% or >=200 procedures performed between July 1, 2020 and June 30,
                2021, unless CMS requests a more limited data set, in
                [[Page 71202]]
                which case, submit all requested data elements.
                * * * * *
                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                Office of the Secretary
                 For the reasons set forth in the preamble, the Department of Health
                and Human Services amends 45 CFR parts 147, 155, and 182 as set forth
                below:
                PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
                INDIVIDUAL HEALTH INSURANCE MARKETS
                0
                30. The authority citation for part 147 is revised to read as follows:
                 Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, and
                300gg-92, as amended, and section 3203, Pub. L. 116-136, 134 Stat.
                281.
                0
                31. Section 147.130 is amended--
                0
                a. In paragraph (a)(1)(iii) by removing ``and'' after the semicolon;
                0
                b. In paragraph (a)(1)(iv) by removing the period at the end of the
                paragraph and adding ``; and'' in its place;
                0
                c. By adding paragraph (a)(1)(v);
                0
                d. By revising paragraph (a)(3)(i);
                0
                e. By adding paragraph (a)(3)(iii);
                0
                f. By revising paragraphs (b)(1) and (b)(2)(i) and (ii); and
                0
                g. By adding paragraphs (b)(3) and (e).
                 The revisions and additions read as follows:
                Sec. 147.130 Coverage of preventive health services.
                 (a) * * *
                 (1) * * *
                 (v) Any qualifying coronavirus preventive service, which means an
                item, service, or immunization that is intended to prevent or mitigate
                coronavirus disease 2019 (COVID-19) and that is, with respect to the
                individual involved--
                 (A) An evidence-based item or service that has in effect a rating
                of A or B in the current recommendations of the United States
                Preventive Services Task Force; or
                 (B) An immunization that has in effect a recommendation from the
                Advisory Committee on Immunization Practices of the Centers for Disease
                Control and Prevention (regardless of whether the immunization is
                recommended for routine use). For purposes of this paragraph
                (a)(1)(v)(B), a recommendation from the Advisory Committee on
                Immunization Practices of the Centers for Disease Control and
                Prevention is considered in effect after it has been adopted by the
                Director of the Centers for Disease Control and Prevention.
                * * * * *
                 (3) * * *
                 (i) Subject to paragraphs (a)(3)(ii) and (iii) of this section,
                nothing in this section requires a plan or issuer that has a network of
                providers to provide benefits for items or services described in
                paragraph (a)(1) of this section that are delivered by an out-of-
                network provider, or precludes a plan or issuer that has a network of
                providers from imposing cost-sharing requirements for items or services
                described in paragraph (a)(1) of this section that are delivered by an
                out-of-network provider.
                * * * * *
                 (iii) A plan or issuer must provide coverage for and must not
                impose any cost-sharing requirements (such as a copayment, coinsurance,
                or a deductible) for any qualifying coronavirus preventive service
                described in paragraph (a)(1)(v) of this section, regardless of whether
                such service is delivered by an in-network or out-of-network provider.
                For purposes of this paragraph (a)(3)(iii), with respect to a
                qualifying coronavirus preventive service and a provider with whom the
                plan or issuer does not have a negotiated rate for such service (such
                as an out-of-network provider), the plan or issuer must reimburse the
                provider for such service in an amount that is reasonable, as
                determined in comparison to prevailing market rates for such service.
                * * * * *
                 (b) * * *
                 (1) In general. A plan or issuer must provide coverage pursuant to
                paragraph (a)(1) of this section for plan years (in the individual
                market, policy years) that begin on or after September 23, 2010, or, if
                later, for plan years (in the individual market, policy years) that
                begin on or after the date that is one year after the date the
                recommendation or guideline is issued, except as provided in paragraph
                (b)(3) of this section.
                 (2) * * *
                 (i) A plan or issuer that is required to provide coverage for any
                items and services specified in any recommendation or guideline
                described in paragraph (a)(1) of this section on the first day of a
                plan year (in the individual market, policy year), or as otherwise
                provided in paragraph (b)(3) of this section, must provide coverage
                through the last day of the plan or policy year, even if the
                recommendation or guideline changes or is no longer described in
                paragraph (a)(1) of this section, during the applicable plan or policy
                year.
                 (ii) Notwithstanding paragraph (b)(2)(i) of this section, to the
                extent a recommendation or guideline described in paragraph (a)(1)(i)
                of this section that was in effect on the first day of a plan year (in
                the individual market, policy year), or as otherwise provided in
                paragraph (b)(3) of this section, is downgraded to a ``D'' rating, or
                any item or service associated with any recommendation or guideline
                specified in paragraph (a)(1) of this section is subject to a safety
                recall or is otherwise determined to pose a significant safety concern
                by a Federal agency authorized to regulate the item or service during a
                plan or policy year, there is no requirement under this section to
                cover these items and services through the last day of the applicable
                plan or policy year.
                 (3) Rapid coverage of preventive services for coronavirus. In the
                case of a qualifying coronavirus preventive service described in
                paragraph (a)(1)(v) of this section, a plan or issuer must provide
                coverage for such item, service, or immunization in accordance with
                this section by the date that is 15 business days after the date on
                which a recommendation specified in paragraph (a)(1)(v)(A) or (B) of
                this section is made relating to such item, service, or immunization.
                * * * * *
                 (e) Sunset date. The provisions of paragraphs (a)(1)(v),
                (a)(3)(iii), and (b)(3) of this section will not apply with respect to
                a qualifying coronavirus preventive service furnished on or after the
                expiration of the public health emergency determined on January 31,
                2020, to exist nationwide as of January 27, 2020, by the Secretary of
                Health and Human Services pursuant to section 319 of the Public Health
                Service Act, as a result of COVID-19, including any subsequent renewals
                of that determination.
                PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
                STANDARDS UNDER THE AFFORDABLE CARE ACT
                0
                32. The authority citation for part 155 continues to read as follows:
                 Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042,
                18051, 18054, 18071, and 18081-18083.
                0
                33. Section 155.1318 is added to read as follows:
                Sec. 155.1318 Modification from the normal public notice requirements
                during the public health emergency.
                 (a) The Secretary and the Secretary of the Treasury may modify, in
                part, the State public notice requirements under
                [[Page 71203]]
                Sec. 155.1312 and the Federal public notice procedures under Sec.
                155.1316 to expedite a decision on a proposed waiver request during the
                public health emergency, as defined in 42 CFR 400.200, when a delay
                would undermine or compromise the purpose of the proposed waiver
                request and be contrary to the interests of consumers. These
                flexibilities are limited to event-triggered, emergent situations, and
                the flexibilities outlined in this section will not be available for
                States seeking to address a threat to consumers' access to health
                coverage or care that existed prior to the public health emergency for
                COVID-19.
                 (b) A State must meet all of the following criteria to request a
                modification under paragraph (a) of this section:
                 (1) The State must request a modification under paragraph (a) of
                this section, in the form and manner specified by the Secretaries.
                 (2) The State must have acted in good faith, and in a diligent,
                timely, and prudent manner in the preparation of the request for a
                modification under paragraph (a) of this section, and the waiver
                application request, as applicable.
                 (3) The State must, as applicable, detail in its request for a
                modification from State-level notice procedures under paragraph (a) of
                this section the justification for the request as it relates to the
                public health emergency and the alternative public notice procedures it
                proposes to implement at the State level, including public hearings,
                that are designed to provide the greatest opportunity and level of
                meaningful public input from impacted stakeholders that is practicable
                given the emergency circumstances underlying the State's request for a
                modification.
                 (4) The State must, as applicable, detail in its request for a
                modification from Federal-level notice procedures under paragraph (a)
                of this section the justification for the request and the alternative
                public notice procedures it requests to be implemented at the Federal
                level.
                 (c) The Secretary and the Secretary of the Treasury will evaluate a
                State's request for a modification under paragraph (a) of this section
                and issue their modification determination within approximately 15
                calendar days after the request is received.
                 (d) The Secretary will publish on the CMS website any modification
                determinations within 15 calendar days of the Secretary and the
                Secretary of the Treasury making such a determination, as well as the
                approved revised timeline for public comment under the approved
                alternative State or Federal public notice procedures, as applicable.
                 (e) The State must publish on its website any modification requests
                and determinations within 15 calendar days of receipt of the
                determination, as well as the approved revised timeline for public
                comment under the alternative State or Federal public notice
                procedures, as applicable.
                 (f) The State must, as applicable, implement the alternative public
                notice procedures at the State level if the State's modification
                request is approved and, if required, amend the waiver application
                request.
                0
                34. Section 155.1320 is amended--
                0
                a. In paragraph (c)(1) by adding a paragraph heading; and
                0
                b. By adding paragraph (c)(2).
                 The additions read as follows:
                Sec. 155.1320 Monitoring and compliance.
                * * * * *
                 (c) * * *
                 (1) Notification requirements for public forum. * * *
                 (2) Modification from the normal post award requirements during the
                public health emergency. (i) The Secretary and the Secretary of the
                Treasury may modify, in part, State post award requirements under this
                paragraph (c)(2) for an approved waiver request during the public
                health emergency, as defined in 42 CFR 400.200, when the application of
                the post award public notice requirements would be contrary to the
                interests of consumers during the public health emergency. These
                flexibilities are limited to event-triggered, emergent situations, and
                the flexibilities outlined in this section will not be available for
                States seeking to address a threat to consumers' access to health
                coverage or care that existed prior to the public health emergency for
                COVID-19.
                 (ii) A State must meet all of the following criteria to request a
                modification under paragraph (c) of this section:
                 (A) The State must request a modification under paragraph (c)(2) of
                this section, in the form and manner specified by the Secretaries.
                 (B) The State must have acted in good faith, and in a diligent,
                timely, and prudent manner to comply with the monitoring and compliance
                requirement under the waiver and the terms and conditions of the
                agreement between the Secretary and the Secretary of the Treasury, as
                applicable, and the State to implement a section 1332 waiver and to
                submit and prepare the request for a modification under paragraph
                (c)(2) of this section.
                 (C) The State must detail in its request for a modification under
                paragraph (c)(2) of this section the alternative post award public
                notice procedures it proposes to implement at the State level,
                including public hearings, that are designed to provide the greatest
                opportunity and level of meaningful public input from impacted
                stakeholders that is practicable given the emergency circumstances
                underlying the State's request for a modification.
                 (D) The Secretary and the Secretary of the Treasury will evaluate a
                State's request for a modification under paragraph (c)(2) of this
                section and issue their modification determination within approximately
                15 calendar days after the request is received.
                 (E) The State must publish on its website any modification requests
                and determinations within 15 calendar days of receipt of the
                determination, as well as information on the approved revised timeline
                for the State's post award public notice procedures, as applicable.
                * * * * *
                0
                35. Subchapter E-T, consisting of part 182, is added to subtitle A to
                read as follows:
                Subchapter E-T--Price Transparency
                PART 182--PRICE TRANSPARENCY FOR COVID-19 DIAGNOSTIC TESTS
                Subpart A--General Provisions
                Sec.
                182.10 Basis and scope.
                182.20 Definitions.
                182.30 Applicability.
                Subpart B--Public Disclosure Requirements
                182.40 Requirements for making public cash prices for a diagnostic
                test for COVID-19.
                Subpart C--Monitoring and Penalties for Noncompliance
                182.50 Monitoring and enforcement.
                182.60 Corrective action plans.
                182.70 Civil monetary penalties.
                Subpart D--Appeals of Civil Monetary Penalties
                182.80 Appeal of penalty.
                182.90 Failure to request a hearing.
                 Authority: Section 3202(b), Pub. L. 116-136, 134 Stat. 281.
                Subpart A--General Provisions
                Sec. 182.10 Basis and scope.
                 This part implements section 3202(b)(1) of the Coronavirus Aid,
                Relief, and Economic Security Act (Pub. L. 116-136, March 27, 2020)
                (CARES Act), which requires that during the emergency period declared
                under section 319 of the PHS Act (42 U.S.C.
                [[Page 71204]]
                247d), providers of diagnostic tests for COVID-19 make public the cash
                price for such tests on a public internet website of such provider.
                This part also implements section 3202(b)(2) of the CARES Act, which
                authorizes the Secretary to impose a civil monetary penalty (CMP) on
                any provider of a diagnostic test for COVID-19 that does not comply
                with section 3202(b)(1) of the CARES Act and that has not completed a
                corrective action plan to comply with that section, in an amount that
                does not exceed $300 per day that the violation is ongoing.
                Sec. 182.20 Definitions.
                 The following definitions and abbreviated terms apply to this part:
                 Cash price means the charge that applies to an individual who pays
                cash (or cash equivalent) for a COVID-19 diagnostic test.
                 COVID-19 for purposes of this part is the abbreviated term for the
                virus called SARS-CoV-2 and the disease it causes, called coronavirus
                disease 2019.
                 Diagnostic test for COVID-19 (``COVID-19 diagnostic test'') means a
                COVID-19 in vitro diagnostic test described in section 6001 of the
                Families First Coronavirus Response Act (Pub. L. 116-127, March 18,
                2020), as amended by section 3201 of the CARES Act (Pub. L. 116-136,
                March 27, 2020).
                 Provider of a diagnostic test for COVID-19 (``provider'') means any
                facility that performs one or more COVID-19 diagnostic tests.
                Sec. 182.30 Applicability.
                 (a) General applicability. The requirements of this part apply to
                each provider of a diagnostic test for COVID-19 as defined at Sec.
                182.20.
                 (b) Duration of requirements. The requirements of this part are
                applicable during the public health emergency (PHE) determined to exist
                nationwide as of January 27, 2020, by the Secretary of Health and Human
                Services pursuant to section 319 of the PHS Act on January 31, 2020, as
                a result of confirmed cases of COVID-19, including any subsequent
                renewals.
                Subpart B--Public Disclosure Requirements
                Sec. 182.40 Requirements for making public cash prices for a
                diagnostic test for COVID-19.
                 (a) General rules. (1) Except as provided under paragraph (b) of
                this section, a provider of a COVID-19 diagnostic test must make public
                the information described in paragraph (c) of this section
                electronically via the internet.
                 (2) The information described in paragraph (c) of this section, or
                a link to such information, must appear in a conspicuous location on a
                searchable homepage of the provider's website.
                 (3) The information described in paragraph (c) of this section must
                be displayed in a manner that is easily accessible, without barriers,
                and ensures that the information is accessible:
                 (i) Free of charge;
                 (ii) Without having to establish a user account or password; and
                 (iii) Without having to submit personal identifiable information
                (PII).
                 (4) The provider must include all of the following terms on its
                homepage:
                 (i) The provider's name;
                 (ii) The term ``price'';
                 (iii) The term ``cost'';
                 (iv) The term ``test'';
                 (v) The term ``COVID''; and
                 (vi) The term ``coronavirus''.
                 (b) Exception. A provider of a COVID-19 diagnostic test that does
                not have its own website must make public the information described in
                paragraph (c) of this section:
                 (1) In writing, within two business days upon request; and
                 (2) On a sign posted prominently at the location where the provider
                offers a COVID-19 diagnostic test, if such location is accessible to
                the public.
                 (c) Required information. For purposes of paragraphs (a) and (b) of
                this section, the provider must make public the following information:
                 (1) A plain-language description of each COVID-19 diagnostic test
                that is offered by the provider;
                 (2) The billing code used for each COVID-19 diagnostic test;
                 (3) The provider's cash price for each such COVID-19 diagnostic
                test; and
                 (4) Any additional information as may be necessary for the public
                to have certainty of the cash price that applies to each COVID-19
                diagnostic test.
                Subpart C--Monitoring and Penalties for Noncompliance
                Sec. 182.50 Monitoring and enforcement.
                 (a) Monitoring. (1) CMS may evaluate whether a provider has
                complied with the requirements under Sec. 182.40.
                 (2) CMS may use methods to monitor and assess provider compliance
                with the requirements under this part, including, but not limited to,
                the following, as appropriate:
                 (i) CMS' evaluation of complaints made to CMS.
                 (ii) CMS review of an individual's or entity's analysis of
                noncompliance as stated in the complaint.
                 (iii) CMS review of providers' websites.
                 (b) Actions to address provider noncompliance. If CMS concludes
                that the provider is noncompliant with one or more of the requirements
                of Sec. 182.40, CMS may take any of the following actions:
                 (1) Provide a written warning notice to the provider of the
                specific violation(s).
                 (2) Request that the provider submit and comply with a corrective
                action plan under Sec. 182.60.
                 (3) Impose a civil monetary penalty on the provider if the provider
                fails to respond to CMS' request to submit a corrective action plan or
                to comply with the requirements of a corrective action plan approved by
                CMS.
                Sec. 182.60 Corrective action plans.
                 (a) Violations requiring a corrective action plan. If CMS
                determines a provider's noncompliance with the requirements of this
                part continues after a warning notice, a corrective action plan may be
                required. A violation may include, but is not limited to, the
                following:
                 (1) A provider's failure to make public its cash price information
                required by Sec. 182.40.
                 (2) A provider's failure to make public its cash price information
                in the form and manner required under Sec. 182.40.
                 (b) Notice of violation. CMS may request that a provider submit and
                comply with a corrective action plan, specified in a notice of
                violation issued by CMS to a provider.
                 (c) Compliance with corrective action plan requests and corrective
                actions. (1) A provider required to submit a corrective action plan
                must do so, in the form and manner, and by the deadline, specified in
                the notice of violation issued by CMS to the provider, and must comply
                with the requirements of the corrective action plan approved by CMS.
                 (2) A provider's corrective action plan must specify elements
                including, but not limited to:
                 (i) The corrective actions or processes the provider will take to
                address the deficiency or deficiencies identified by CMS.
                 (ii) The timeframe by which the provider will complete the
                corrective action.
                 (3) A corrective action plan is subject to CMS review and approval.
                 (4) After CMS' review and approval of a provider's corrective
                action plan, CMS may monitor and evaluate the provider's compliance
                with the corrective actions specified in the corrective action plan.
                 (d) Noncompliance with corrective action plan requests and
                requirements. (1) A provider's failure to respond to
                [[Page 71205]]
                CMS' request to submit a corrective action plan includes failure to
                submit a corrective action plan in the form, manner, or by the
                deadline, specified in a notice of violation issued by CMS to the
                provider.
                 (2) A provider's failure to comply with the requirements of a
                corrective action plan includes failure to correct violation(s) within
                the specified timeframes.
                Sec. 182.70 Civil monetary penalties.
                 (a) Basis for imposing civil monetary penalties. CMS may impose a
                civil monetary penalty on a provider identified by CMS as noncompliant
                according to Sec. 182.50, and that fails to respond to CMS' request to
                submit a corrective action plan or to comply with the requirements of a
                corrective action plan approved by CMS as described in Sec. 182.60(d).
                 (b) Notice of imposition of a civil monetary penalty. (1) If CMS
                imposes a penalty in accordance with this part, CMS will provide a
                written notice of imposition of a civil monetary penalty to the
                provider via certified mail or another form of traceable carrier.
                 (2) This notice to the provider may include, but is not limited to,
                the following:
                 (i) The basis for the provider's noncompliance, including, but not
                limited to, the following:
                 (A) CMS' determination as to which requirement(s) the provider has
                violated.
                 (B) The provider's failure to respond to CMS' request to submit a
                corrective action plan or comply with the requirements of a corrective
                action plan, as described in Sec. 182.60(d).
                 (ii) CMS' determination as to the effective date for the
                violation(s). This date is the latest date of the following:
                 (A) The first day the provider is required to meet the requirements
                of this part.
                 (B) A date determined by CMS, such as one resulting from monitoring
                activities specified in Sec. 182.50, or development of a corrective
                action plan as specified in Sec. 182.60.
                 (iii) The amount of the penalty as of the date of the notice.
                 (iv) A statement that a civil monetary penalty may continue to be
                imposed for continuing violation(s).
                 (v) Payment instructions.
                 (vi) A statement of the provider's right to a hearing according to
                subpart D of this part.
                 (vii) A statement that the provider's failure to request a hearing
                within 30 calendar days of the issuance of the notice permits the
                imposition of the penalty, and any subsequent penalties pursuant to
                continuing violations, without right of appeal in accordance with Sec.
                182.90.
                 (3) If the civil monetary penalty is upheld, in part, by a final
                and binding decision according to subpart D of this part, CMS will
                issue a modified notice of imposition of a civil monetary penalty, to
                conform to the adjudicated finding.
                 (c) Amount of the civil monetary penalty. (1) CMS may impose a
                civil monetary penalty upon a provider for a violation of each
                requirement of this part.
                 (2) The maximum daily dollar amount for a civil monetary penalty to
                which a provider may be subject is $300. Even if the provider is in
                violation of multiple discrete requirements of this part, the maximum
                total sum that a single provider may be assessed per day is $300.
                 (3) The maximum daily amount of the civil monetary penalty will be
                adjusted annually using the multiplier determined by the Office of
                Management and Budget for annually adjusting civil monetary penalty
                amounts under part 102 of this title.
                 (d) Timing of payment of civil monetary penalty. (1) A provider
                must pay the civil monetary penalty in full within 60 calendar days
                after the date of the notice of imposition of a civil monetary penalty
                from CMS under paragraph (b) of this section.
                 (2) In the event a provider requests a hearing, pursuant to subpart
                D of this part, the provider must pay the amount in full within 60
                calendar days after the date of a final and binding decision, according
                to subpart D of this part, to uphold, in whole or in part, the civil
                monetary penalty.
                 (3) If the 60th calendar day described in paragraphs (d)(1) and (2)
                of this section is a weekend or a Federal holiday, then the timeframe
                is extended until the end of the next business day.
                 (4) In the event a civil money penalty is not paid in full within
                60 days, CMS will follow the collections activities set forth in 45 CFR
                part 30.
                 (e) Continuing violations. CMS may issue subsequent notice(s) of
                imposition of a civil monetary penalty, according to paragraph (b) of
                this section, that result from the same instance(s) of noncompliance.
                Subpart D--Appeals of Civil Monetary Penalties
                Sec. 182.80 Appeal of penalty.
                 (a) A provider upon which CMS has imposed a penalty under this part
                may appeal that penalty in accordance with subpart D of part 150 of
                this title, except as specified in paragraph (b) of this section.
                 (b) For purposes of applying subpart D of part 150 of this title to
                appeals of civil monetary penalties under this part:
                 (1) ``Respondent'' means a provider, as defined in Sec. 182.20
                that received a notice of imposition of a civil monetary penalty
                according to Sec. 182.70(b).
                 (2) In deciding whether the amount of a civil money penalty is
                reasonable, the administrative law judge (ALJ) may only consider
                evidence of record relating to the following:
                 (i) The provider's posting(s) of its cash price information, if
                available.
                 (ii) Material the provider timely previously submitted to CMS
                (including with respect to corrective actions and corrective action
                plans).
                 (iii) Material CMS used to monitor and assess the provider's
                compliance according to Sec. 182.70(a)(2).
                 (3) The ALJ's consideration of evidence of acts other than those at
                issue in the instant case under Sec. 150.445(g) of this title does not
                apply.
                Sec. 182.90 Failure to request a hearing.
                 (a) If a provider does not request a hearing within 30 calendar
                days of the issuance of the notice of imposition of a civil monetary
                penalty described in Sec. 182.70(b), CMS may impose the civil monetary
                penalty indicated in such notice without right of appeal in accordance
                with this part.
                 (1) If the 30th calendar day described paragraph (a) of this
                section is a weekend or a Federal holiday, then the timeframe is
                extended until the end of the next business day.
                 (2) [Reserved]
                 (b) The provider has no right to appeal a penalty with respect to
                which it has not requested a hearing in accordance with Sec. 150.405
                of this title, unless the provider can show good cause, as determined
                at Sec. 150.405(b) of this title, for failing to timely exercise its
                right to a hearing.
                PART 182 [Transferred to Subchapter E]
                0
                36. Effective January 1, 2021, transfer part 182 from subchapter E-T to
                subchapter E.
                Subchapter E-T [Removed]
                0
                37. Effective January 1, 2021, remove subchapter E-T.
                [FR Doc. 2020-24332 Filed 11-2-20; 4:15 pm]
                BILLING CODE 4120-01-P
                

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