---
kind: "range"
citation: "42 U.S.C. §§ 1395w–21–1395w–28"
title: "42"
from: "1395w–21"
to: "1395w–28"
count: 9
release: "119-102"
url: "https://uscodex.org/usc/42/1395w-21..1395w-28"
---

# §1395w–21. Eligibility, election, and enrollment

- (a) **Choice of medicare benefits through Medicare+Choice plans—**
  - (1) **In general—** Subject to the provisions of this section, each [Medicare+Choice eligible individual](#a-3) (as defined in [paragraph (3)](#a-3)) is entitled to elect to receive benefits (other than qualified prescription [drug](/usc/42/282.md?p=j-1-A-vii) benefits) under this subchapter—
    - (A) through the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B, or
    - (B) through enrollment in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) under this part,

    and may elect [qualified prescription drug coverage](/usc/42/1395w–151.md?p=a-15) in accordance with [section 1395w–101 of this title](/usc/42/1395w–101.md).

  - (2) **Types of Medicare+Choice plans that may be available—** A [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) may be any of the following types of plans of health insurance:
    - (A) **Coordinated care plans (including regional plans)—**
      - (i) **In general—** Coordinated care plans which provide health care services, [including](/usc/42/1301.md?p=b) but not limited to health maintenance organization plans (with or without point of service options), plans offered by [provider-sponsored organizations](/usc/42/1395w–25.md?p=d-1) (as defined in [section 1395w–25(d) of this title](/usc/42/1395w–25.md?p=d)), and regional or local preferred provider organization plans ([including](/usc/42/1301.md?p=b) [MA regional plans](/usc/42/1395w–28.md?p=b-4)).
      - (ii) **Specialized MA plans for special needs individuals—** Specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](/usc/42/1395w–28.md?p=b-6-B) (as defined in [section 1395w–28(b)(6) of this title](/usc/42/1395w–28.md?p=b-6)) may be any type of coordinated care plan.
    - (B) **Combination of MSA plan and contributions to Medicare+Choice MSA—** An [MSA plan](/usc/42/1395w–28.md?p=b-3-A), as defined in [section 1395w–28(b)(3) of this title](/usc/42/1395w–28.md?p=b-3), and a contribution into a Medicare+Choice medical savings account (MSA).
    - (C) **Private fee-for-service plans—** A [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2), as defined in [section 1395w–28(b)(2) of this title](/usc/42/1395w–28.md?p=b-2).
  - (3) **Medicare+Choice eligible individual—** In this subchapter, the term “Medicare+Choice eligible individual” means an individual who is entitled to benefits under part A and enrolled under part B.
- (b) **Special rules—**
  - (1) **Residence requirement—**
    - (A) **In general—** Except as the [Secretary](/usc/42/1301.md?p=a-6) may otherwise provide and except as provided in [subparagraph (C)](#b-1-C), an individual is eligible to elect a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) only if the plan serves the [geographic area](/usc/42/11360.md?p=9) in which the individual resides.
    - (B) **Continuation of enrollment permitted—** Pursuant to rules specified by the [Secretary](/usc/42/1301.md?p=a-6), the [Secretary](/usc/42/1301.md?p=a-6) shall provide that an [MA local plan](/usc/42/1395w–28.md?p=b-5) may offer to all individuals residing in a [geographic area](/usc/42/11360.md?p=9) the option to continue enrollment in the plan, notwithstanding that the individual no longer resides in the service area of the plan, so long as the plan provides that individuals exercising this option have, as part of the [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i), reasonable access within that [geographic area](/usc/42/11360.md?p=9) to the full range of basic benefits, subject to reasonable cost sharing liability in obtaining such benefits.
    - (C) **Continuation of enrollment permitted where service changed—** Notwithstanding [subparagraph (A)](#b-1-A) and in addition to [subparagraph (B)](#b-1-B), if a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) eliminates from its service area a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) that was previously within its service area, the organization may elect to offer individuals residing in all or portions of the affected area who would otherwise be ineligible to continue enrollment the option to continue enrollment in an [MA local plan](/usc/42/1395w–28.md?p=b-5) it offers so long as—
      - (i) the enrollee agrees to receive the full range of basic benefits (excluding emergency and urgently needed care) exclusively at [facilities](/usc/42/11049.md?p=4) designated by the organization within the plan service area; and
      - (ii) there is no other [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered in the area in which the enrollee resides at the time of the organization’s election.
  - (2) **Special rule for certain individuals covered under FEHBP or eligible for veterans or military health benefits—**
    - (A) **FEHBP—** An individual who is enrolled in a health benefit plan under [chapter 89](/usc/5/chptIII-sptG-ch89.md) of title 5 is not eligible to enroll in an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) until such time as the [Director](/usc/42/5061.md?p=1) of the [Office](/usc/42/3058f.md?p=1) of Management and Budget certifies to the [Secretary](/usc/42/1301.md?p=a-6) that the [Office](/usc/42/3058f.md?p=1) of Personnel Management has adopted policies which will ensure that the enrollment of such individuals in such plans will not result in increased expenditures for the Federal Government for health benefit plans under such chapter.
    - (B) **VA and DOD—** The [Secretary](/usc/42/1301.md?p=a-6) may apply rules similar to the rules described in [subparagraph (A)](#b-2-A) in the case of individuals who are eligible for health care benefits under [chapter 55](/usc/10/chstA-ptII-ch55.md) of title 10 or under [chapter 17](/usc/38/chptII-ch17.md) of title 38.
  - (3) **Limitation on eligibility of qualified medicare beneficiaries and other medicaid beneficiaries to enroll in an MSA plan—** An individual who is a qualified medicare beneficiary (as defined in [section 1396d(p)(1) of this title](/usc/42/1396d.md?p=p-1)), a qualified disabled and working individual (described in [section 1396d(s) of this title](/usc/42/1396d.md?p=s)), an individual described in [section 1396a(a)(10)(E)(iii) of this title](/usc/42/1396a.md?p=a-10-E-iii), or otherwise entitled to [medicare cost-sharing](/usc/42/1396d.md?p=p-3) under a [State](/usc/42/1397n–12.md?p=6) plan under subchapter XIX is not eligible to enroll in an [MSA plan](/usc/42/1395w–28.md?p=b-3-A).
  - (4) **Coverage under MSA plans—**
    - (A) **In general—** Under rules established by the [Secretary](/usc/42/1301.md?p=a-6), an individual is not eligible to enroll (or continue enrollment) in an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) for a year unless the individual provides assurances satisfactory to the [Secretary](/usc/42/1301.md?p=a-6) that the individual will reside in the [United States](/usc/42/1301.md?p=a-2) for at least 183 days during the year.
    - (B) **Evaluation—** The [Secretary](/usc/42/1301.md?p=a-6) shall regularly evaluate the impact of permitting enrollment in [MSA plans](/usc/42/1395w–28.md?p=b-3-A) under this part on selection ([including](/usc/42/1301.md?p=b) adverse selection), use of preventive care, access to care, and the financial status of the [Trust](/usc/42/12854.md?p=6) [Funds](/usc/42/12854.md?p=3) under this subchapter.
    - (C) **Reports—** The [Secretary](/usc/42/1301.md?p=a-6) shall submit to Congress periodic reports on the numbers of individuals enrolled in such plans and on the evaluation being conducted under [subparagraph (B)](#b-4-B).
- (c) **Process for exercising choice—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish a process through which elections described in [subsection (a)](#a) are made and changed, [including](/usc/42/1301.md?p=b) the form and manner in which such elections are made and changed. Subject to [paragraph (4)](#c-4), such elections shall be made or changed only during coverage election periods specified under [subsection (e)](#e) and shall become effective as provided in [subsection (f)](#f).
  - (2) **Coordination through Medicare+Choice organizations—**
    - (A) **Enrollment—** Such process shall permit an individual who wishes to elect a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) to make such election through the filing of an appropriate election form with the organization.
    - (B) **Disenrollment—** Such process shall permit an individual, who has elected a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) and who wishes to terminate such election, to terminate such election through the filing of an appropriate election form with the organization.
  - (3) **Default—**
    - (A) **Initial election—**
      - (i) **In general—** Subject to [clause (ii)](#c-3-A-ii), an individual who fails to make an election during an initial election period under [subsection (e)(1)](#e-1) is deemed to have chosen the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) option.
      - (ii) **Seamless continuation of coverage—** The [Secretary](/usc/42/1301.md?p=a-6) may establish procedures under which an individual who is enrolled in a [health plan](/usc/42/300jj.md?p=6) (other than [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1)) offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) at the time of the initial election period and who fails to elect to receive coverage other than through the organization is deemed to have elected the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by the organization (or, if the organization offers more than one such plan, such plan or plans as the [Secretary](/usc/42/1301.md?p=a-6) identifies under such procedures).
    - (B) **Continuing periods—** An individual who has made (or is deemed to have made) an election under this section is considered to have continued to make such election until such time as—
      - (i) the individual changes the election under this section, or
      - (ii) the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) with respect to which such election is in effect is discontinued or, subject to [subsection (b)(1)(B)](#b-1-B), no longer serves the area in which the individual resides.
  - (4) **Deemed enrollment relating to converted reasonable cost reimbursement contracts—**
    - (A) **In general—** On the first day of the [annual, coordinated election period](#e-3-B) under [subsection (e)(3)](#e-3) for plan years beginning on or after January 1, 2017, an MA [eligible individual](/usc/42/239.md?p=a-6) described in clause [(i)](#c-4-B-i) or [(ii)](#c-4-B-ii) of subparagraph (B) is deemed, unless the individual elects otherwise, to have elected to receive benefits under this subchapter through an [applicable MA plan](#c-4-C) (and shall be enrolled in such plan) beginning with such plan year, if—
      - (i) the individual is enrolled in a reasonable cost reimbursement contract under [section 1395mm(h) of this title](/usc/42/1395mm.md?p=h) in the previous plan year;
      - (ii) such reasonable cost reimbursement contract was extended or renewed for the last reasonable cost reimbursement contract year of the contract (as described in subclause (I) of [section 1395mm(h)(5)(C)(iv) of this title](/usc/42/1395mm.md?p=h-5-C-iv)) pursuant to such section;
      - (iii) the eligible organization that is offering such reasonable cost reimbursement contract provided the notice described in subclause (III) of such section that the contract was to be converted;
      - (iv) the [applicable MA plan](#c-4-C)—
        - (I) is the plan that was converted from the reasonable cost reimbursement contract described in [clause (iii)](#c-4-A-iii);
        - (II) is offered by the same entity (or an organization affiliated with such entity that has a common ownership interest of control) that entered into such contract; and
        - (III) is offered in the service area where the individual resides;
      - (v) in the case of reasonable cost reimbursement contracts that provide coverage under parts A and B (and, to the extent the [Secretary](/usc/42/1301.md?p=a-6) determines it to be feasible, contracts that provide only part B coverage), the difference between the estimated individual costs (as determined applicable by the [Secretary](/usc/42/1301.md?p=a-6)) for the [applicable MA plan](#c-4-C) and such costs for the predecessor cost plan does not exceed a threshold established by the [Secretary](/usc/42/1301.md?p=a-6); and
      - (vi) the [applicable MA plan](#c-4-C)—
        - (I) provides coverage for enrollees transitioning from the converted reasonable cost reimbursement contract to such plan to maintain current providers of services and [suppliers](/usc/42/1395x.md?p=d) and course of [treatment](/usc/42/11851.md?p=11) at the time of enrollment for a period of at least 90 days after enrollment; and
        - (II) during such period, pays such providers of services and [suppliers](/usc/42/1395x.md?p=d) for items and services furnished to the enrollee an amount that is not less than the amount of payment applicable for such items and services under the original Medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B.
    - (B) **MA eligible individuals described—**
      - (i) **Without prescription drug coverage—** An MA [eligible individual](/usc/42/239.md?p=a-6) described in this clause, with respect to a plan year, is an MA [eligible individual](/usc/42/239.md?p=a-6) who is enrolled in a reasonable cost reimbursement contract under [section 1395mm(h) of this title](/usc/42/1395mm.md?p=h) in the previous plan year and who is not, for such previous plan year, enrolled in a [prescription drug plan](/usc/42/1395w–154.md?p=d-2) under part D, [including](/usc/42/1301.md?p=b) coverage under [section 1395w–132 of this title](/usc/42/1395w–132.md).
      - (ii) **With prescription drug coverage—** An MA [eligible individual](/usc/42/239.md?p=a-6) described in this clause, with respect to a plan year, is an MA [eligible individual](/usc/42/239.md?p=a-6) who is enrolled in a reasonable cost reimbursement contract under [section 1395mm(h) of this title](/usc/42/1395mm.md?p=h) in the previous plan year and who, for such previous plan year, is enrolled in a [prescription drug plan](/usc/42/1395w–154.md?p=d-2) under part D—
        - (I) through such contract; or
        - (II) through a [prescription drug plan](/usc/42/1395w–154.md?p=d-2), if the sponsor of such plan is the same entity (or an organization affiliated with such entity) that entered into such contract.
    - (C) **Applicable MA plan defined—** In this paragraph, the term “applicable MA plan” means, in the case of an individual described in—
      - (i) [subparagraph (B)(i)](#c-4-B-i), an [MA plan](/usc/42/1395w–101.md?p=a-3-B) that is not an [MA–PD plan](/usc/42/1395w–151.md?p=a-9); and
      - (ii) [subparagraph (B)(ii)](#c-4-B-ii), an [MA–PD plan](/usc/42/1395w–151.md?p=a-9).
    - (D) **Identification and notification of deemed individuals—** Not later than 45 days before the first day of the [annual, coordinated election period](#e-3-B) under [subsection (e)(3)](#e-3) for plan years beginning on or after January 1, 2017, the [Secretary](/usc/42/1301.md?p=a-6) shall identify and notify the individuals who will be subject to deemed elections under [subparagraph (A)](#c-4-A) on the first day of such period.
- (d) **Providing information to promote informed choice—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide for activities under this subsection to broadly disseminate information to medicare beneficiaries (and prospective medicare beneficiaries) on the coverage options provided under this section in order to promote an active, informed selection among such options.
  - (2) **Provision of notice—**
    - (A) **Open season notification—** At least 15 days before the beginning of each [annual, coordinated election period](#e-3-B) (as defined in [subsection (e)(3)(B)](#e-3-B)), the [Secretary](/usc/42/1301.md?p=a-6) shall mail to each [Medicare+Choice eligible individual](#a-3) residing in an area the following:
      - (i) **General information—** The general information described in [paragraph (3)](#d-3).
      - (ii) **List of plans and comparison of plan options—** A list identifying the [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) that are (or will be) available to residents of the area and information described in [paragraph (4)](#d-4) concerning such plans. Such information shall be presented in a comparative form.
      - (iii) **Additional information—** Any other information that the [Secretary](/usc/42/1301.md?p=a-6) determines will assist the individual in making the election under this section.

      The mailing of such information shall be coordinated, to the extent practicable, with the mailing of any annual notice under [section 1395b–2 of this title](/usc/42/1395b–2.md).

    - (B) **Notifications required—**
      - (i) **Notification to newly eligible Medicare Advantage eligible individuals—** To the extent practicable, the [Secretary](/usc/42/1301.md?p=a-6) shall, not later than 30 days before the beginning of the initial Medicare+Choice enrollment period for an individual described in [subsection (e)(1)](#e-1), mail to the individual the information described in [subparagraph (A)](#d-2-A).
      - (ii) **Notification related to certain deemed elections—** The [Secretary](/usc/42/1301.md?p=a-6) shall require a Medicare Advantage organization that is offering a Medicare Advantage plan that has been converted from a reasonable cost reimbursement contract pursuant to [section 1395mm(h)(5)(C)(iv) of this title](/usc/42/1395mm.md?p=h-5-C-iv) to mail, not later than 30 days prior to the first day of the [annual, coordinated election period](#e-3-B) under [subsection (e)(3)](#e-3) of a year, to any individual enrolled under such contract and identified by the [Secretary](/usc/42/1301.md?p=a-6) under [subsection (c)(4)(D)](#c-4-D) for such year—
        - (I) a notification that such individual will, on such day, be deemed to have made an election with respect to such plan to receive benefits under this subchapter through an [MA plan](/usc/42/1395w–101.md?p=a-3-B) or [MA–PD plan](/usc/42/1395w–151.md?p=a-9) (and shall be enrolled in such plan) for the next plan year under [subsection (c)(4)(A)](#c-4-A), but that the individual may make a different election during the [annual, coordinated election period](#e-3-B) for such year;
        - (II) the information described in [subparagraph (A)](#d-2-A);
        - (III) a description of the differences between such [MA plan](/usc/42/1395w–101.md?p=a-3-B) or [MA–PD plan](/usc/42/1395w–151.md?p=a-9) and the reasonable cost reimbursement contract in which the individual was most recently enrolled with respect to benefits covered under such plans, [including](/usc/42/1301.md?p=b) [cost-sharing](/usc/42/18022.md?p=c-3-A), premiums, [drug](/usc/42/282.md?p=j-1-A-vii) coverage, and provider networks;
        - (IV) information about the special period for elections under [subsection (e)(2)(F)](#e-2-F); and
        - (V) other information the [Secretary](/usc/42/1301.md?p=a-6) may specify.
    - (C) **Form—** The information disseminated under this paragraph shall be written and formatted using language that is easily understandable by medicare beneficiaries.
    - (D) **Periodic updating—** The information described in [subparagraph (A)](#d-2-A) shall be updated on at least an annual basis to reflect changes in the availability of [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) and the benefits and Medicare+Choice monthly basic and supplemental beneficiary premiums for such plans.
  - (3) **General information—** General information under this paragraph, with respect to coverage under this part during a year, shall include the following:
    - (A) **Benefits under original medicare fee-for-service program option—** A general description of the benefits covered under the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B, [including](/usc/42/1301.md?p=b)—
      - (i) covered items and services,
      - (ii) beneficiary cost sharing, such as deductibles, coinsurance, and copayment amounts, and
      - (iii) any beneficiary liability for balance billing.
    - (B) **Election procedures—** Information and instructions on how to exercise election options under this section.
    - (C) **Rights—** A general description of procedural rights ([including](/usc/42/1301.md?p=b) grievance and appeals procedures) of beneficiaries under the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) and the Medicare+Choice [program](/usc/42/274l–1.md?p=4) and the right to be protected against discrimination based on health status-related factors under [section 1395w–22(b) of this title](/usc/42/1395w–22.md?p=b).
    - (D) **Information on medigap and medicare select—** A general description of the benefits, enrollment rights, and other requirements applicable to [medicare supplemental policies](/usc/42/1320d–9.md?p=b-2) under [section 1395ss of this title](/usc/42/1395ss.md) and provisions relating to medicare select policies described in [section 1395ss(t) of this title](/usc/42/1395ss.md?p=t).
    - (E) **Potential for contract termination—** The fact that a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may terminate its contract, refuse to renew its contract, or reduce the service area included in its contract, under this part, and the effect of such a termination, nonrenewal, or service area reduction may have on individuals enrolled with the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) under this part.
    - (F) **Catastrophic coverage and single deductible—** In the case of an [MA regional plan](/usc/42/1395w–28.md?p=b-4), a description of the catastrophic coverage and [single](/usc/42/2304.md?p=m) deductible applicable under the plan.
  - (4) **Information comparing plan options—** Information under this paragraph, with respect to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) for a year, shall include the following:
    - (A) **Benefits—** The benefits covered under the plan, [including](/usc/42/1301.md?p=b) the following:
      - (i) Covered items and services beyond those provided under the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4).
      - (ii) Any beneficiary cost sharing, [including](/usc/42/1301.md?p=b) information on the [single](/usc/42/2304.md?p=m) deductible (if applicable) under [section 1395w–27a(b)(1) of this title](/usc/42/1395w–27a.md?p=b-1).
      - (iii) Any maximum limitations on out-of-pocket expenses.
      - (iv) In the case of an [MSA plan](/usc/42/1395w–28.md?p=b-3-A), differences in cost sharing, premiums, and balance billing under such a plan compared to under other [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1).
      - (v) In the case of a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2), differences in cost sharing, premiums, and balance billing under such a plan compared to under other [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1).
      - (vi) The extent to which an enrollee may obtain benefits through out-of-network [health care providers](/usc/42/300jj.md?p=3).
      - (vii) The extent to which an enrollee may select among in-network providers and the types of providers participating in the plan’s network.
      - (viii) The organization’s coverage of emergency and urgently needed care.
    - (B) **Premiums—**
      - (i) **In general—** The monthly amount of the premium charged to an individual.
      - (ii) **Reductions—** The reduction in part B premiums, if any.
    - (C) **Service area—** The service area of the plan.
    - (D) **Quality and performance—** To the extent available, plan quality and performance indicators for the benefits under the plan (and how they compare to such indicators under the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B in the area involved), [including](/usc/42/1301.md?p=b)—
      - (i) disenrollment rates for medicare enrollees electing to receive benefits through the plan for the previous 2 years (excluding disenrollment due to death or moving outside the plan’s service area),
      - (ii) information on medicare enrollee satisfaction,
      - (iii) information on health outcomes, and
      - (iv) the recent record regarding compliance of the plan with requirements of this part (as determined by the [Secretary](/usc/42/1301.md?p=a-6)).
    - (E) **Supplemental benefits—** Supplemental health care benefits, [including](/usc/42/1301.md?p=b) any reductions in [cost-sharing](/usc/42/18022.md?p=c-3-A) under [section 1395w–22(a)(3) of this title](/usc/42/1395w–22.md?p=a-3) and the terms and conditions ([including](/usc/42/1301.md?p=b) premiums) for such benefits.
    - (F) **Provider directory—** Beginning with plan years beginning on or after January 1, 2029, in the case of a specified [MA plan](/usc/42/1395w–101.md?p=a-3-B) (as defined in [section 1395w–22(c)(3)(C) of this title](/usc/42/1395w–22.md?p=c-3-C)), the accuracy score of the plan’s provider directory (as reported under [section 1395w–27(e)(6)(A)(ii) of this title](/usc/42/1395w–27.md?p=e-6-A-ii)) listed prominently on the plan’s provider directory.
  - (5) **Maintaining a toll-free number and Internet site—** The [Secretary](/usc/42/1301.md?p=a-6) shall maintain a toll-free number for inquiries regarding Medicare+Choice options and the operation of this part in all areas in which [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) are offered and an Internet site through which individuals may electronically obtain information on such options and [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1).
  - (6) **Use of non-Federal entities—** The [Secretary](/usc/42/1301.md?p=a-6) may enter into contracts with non-Federal entities to carry out activities under this subsection.
  - (7) **Provision of information—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall provide the [Secretary](/usc/42/1301.md?p=a-6) with such information on the organization and each [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) it offers as may be required for the preparation of the information referred to in [paragraph (2)(A)](#d-2-A).
- (e) **Coverage election periods—**
  - (1) **Initial choice upon eligibility to make election if Medicare+Choice plans available to individual—** If, at the time an individual first becomes entitled to benefits under part A and enrolled under part B, there is one or more [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) offered in the area in which the individual resides, the individual shall make the election under this section during a period specified by the [Secretary](/usc/42/1301.md?p=a-6) such that if the individual elects a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) during the period, coverage under the plan becomes effective as of the first date on which the individual may receive such coverage. If any portion of an individual’s initial enrollment period under part B occurs after the end of the [annual, coordinated election period](#e-3-B) described in [paragraph (3)(B)(iii)](#e-3-B-iii), the initial enrollment period under this part shall further extend through the end of the individual’s initial enrollment period under part B.
  - (2) **Open enrollment and disenrollment opportunities—** Subject to [paragraph (5)](#e-5)—
    - (A) **Continuous open enrollment and disenrollment through 2005—** At any time during the period beginning January 1, 1998, and ending on December 31, 2005, a [Medicare+Choice eligible individual](#a-3) may change the election under [subsection (a)(1)](#a-1).
    - (B) **Continuous open enrollment and disenrollment for first 6 months during 2006—**
      - (i) **In general—** Subject to [clause (ii)](#e-2-B-ii), subparagraph (C)(iii),[^1] and [subparagraph (D)](#e-2-D), at any time during the first 6 months of 2006, or, if the individual first becomes a [Medicare+Choice eligible individual](#a-3) during 2006, during the first 6 months during 2006 in which the individual is a [Medicare+Choice eligible individual](#a-3), a [Medicare+Choice eligible individual](#a-3) may change the election under [subsection (a)(1)](#a-1).
      - (ii) **Limitation of one change—** An individual may exercise the right under [clause (i)](#e-2-B-i) only once. The limitation under this clause shall not apply to changes in elections effected during an [annual, coordinated election period](#e-3-B) under [paragraph (3)](#e-3) or during a special enrollment period under the first sentence of [paragraph (4)](#e-4).
    - (C) **Annual 45-day period from 2011 through 2018 for disenrollment from MA plans to elect to receive benefits under the original Medicare fee-for-service program—** Subject to [subparagraph (D)](#e-2-D), at any time during the first 45 days of a year (beginning with 2011 and ending with 2018), an individual who is enrolled in a Medicare Advantage plan may change the election under [subsection (a)(1)](#a-1), but only with respect to coverage under the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B, and may elect [qualified prescription drug coverage](/usc/42/1395w–151.md?p=a-15) in accordance with [section 1395w–101 of this title](/usc/42/1395w–101.md).
    - (D) **Continuous open enrollment for institutionalized individuals—** At any time after 2005 in the case of a [Medicare+Choice eligible individual](#a-3) who is institutionalized (as defined by the [Secretary](/usc/42/1301.md?p=a-6)), the individual may elect under [subsection (a)(1)](#a-1)—
      - (i) to enroll in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1); or
      - (ii) to change the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) in which the individual is enrolled.
    - (E) **Limited continuous open enrollment of original fee-for-service enrollees in medicare advantage non-prescription drug plans—**
      - (i) **In general—** On any date during the period beginning on January 1, 2007, and ending on July 31, 2007, on which a Medicare Advantage [eligible individual](/usc/42/239.md?p=a-6) is an [unenrolled fee-for-service individual](#e-2-E-ii) (as defined in [clause (ii)](#e-2-E-ii)), the individual may elect under [subsection (a)(1)](#a-1) to enroll in a Medicare Advantage plan that is not an [MA–PD plan](/usc/42/1395w–151.md?p=a-9).
      - (ii) **Unenrolled fee-for-service individual defined—** In this subparagraph, the term “unenrolled fee-for-service individual” means, with respect to a date, a Medicare Advantage [eligible individual](/usc/42/239.md?p=a-6) who—
        - (I) is receiving benefits under this subchapter through enrollment in the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B;
        - (II) is not enrolled in an [MA plan](/usc/42/1395w–101.md?p=a-3-B) on such date; and
        - (III) as of such date is not otherwise eligible to elect to enroll in an [MA plan](/usc/42/1395w–101.md?p=a-3-B).
      - (iii) **Limitation of one change during the applicable period—** An individual may exercise the right under [clause (i)](#e-2-E-i) only once during the period described in such clause.
      - (iv) **No effect on coverage under a prescription drug plan—** Nothing in this subparagraph shall be construed as permitting an individual exercising the right under [clause (i)](#e-2-E-i)—
        - (I) who is enrolled in a [prescription drug plan](/usc/42/1395w–154.md?p=d-2) under part D, to disenroll from such plan or to enroll in a different [prescription drug plan](/usc/42/1395w–154.md?p=d-2); or
        - (II) who is not enrolled in a [prescription drug plan](/usc/42/1395w–154.md?p=d-2), to enroll in such a plan.
    - (F) **Special period for certain deemed elections—**
      - (i) **In general—** At any time during the period beginning after the last day of the [annual, coordinated election period](#e-3-B) under [paragraph (3)](#e-3) in which an individual is deemed to have elected to enroll in an [MA plan](/usc/42/1395w–101.md?p=a-3-B) or [MA–PD plan](/usc/42/1395w–151.md?p=a-9) under [subsection (c)(4)](#c-4) and ending on the last day of February of the first plan year for which the individual is enrolled in such plan, such individual may change the election under [subsection (a)(1)](#a-1) ([including](/usc/42/1301.md?p=b) changing the [MA plan](/usc/42/1395w–101.md?p=a-3-B) or [MA–PD plan](/usc/42/1395w–151.md?p=a-9) in which the individual is enrolled).
      - (ii) **Limitation of one change—** An individual may exercise the right under [clause (i)](#e-2-F-i) only once during the applicable period described in such clause. The limitation under this clause shall not apply to changes in elections effected during an [annual, coordinated election period](#e-3-B) under [paragraph (3)](#e-3) or during a special enrollment period under [paragraph (4)](#e-4).
    - (G) **Continuous open enrollment and disenrollment for first 3 months in 2016 and subsequent years—**
      - (i) **In general—** Subject to [clause (ii)](#e-2-G-ii) and [subparagraph (D)](#e-2-D)—
        - (I) in the case of an MA [eligible individual](/usc/42/239.md?p=a-6) who is enrolled in an [MA plan](/usc/42/1395w–101.md?p=a-3-B), at any time during the first 3 months of a year (beginning with 2019); or
        - (II) in the case of an individual who first becomes an MA [eligible individual](/usc/42/239.md?p=a-6) during a year (beginning with 2019) and enrolls in an [MA plan](/usc/42/1395w–101.md?p=a-3-B), during the first 3 months during such year in which the individual is an MA [eligible individual](/usc/42/239.md?p=a-6);

      such MA [eligible individual](/usc/42/239.md?p=a-6) may change the election under [subsection (a)(1)](#a-1).

      - (ii) **Limitation of one change during open enrollment period each year—** An individual may change the election pursuant to [clause (i)](#e-2-G-i) only once during the applicable 3-month period described in such clause in each year. The limitation under this clause shall not apply to changes in elections effected during an [annual, coordinated election period](#e-3-B) under [paragraph (3)](#e-3) or during a special enrollment period under [paragraph (4)](#e-4).
      - (iii) **Limited application to part D—** Clauses (i) and (ii) of this subparagraph shall only apply with respect to changes in enrollment in a [prescription drug plan](/usc/42/1395w–154.md?p=d-2) under part D in the case of an individual who, previous to such change in enrollment, is enrolled in a Medicare Advantage plan.
      - (iv) **Limitations on marketing—** Pursuant to [subsection (j)](#j), no unsolicited marketing or marketing materials may be sent to an individual described in [clause (i)](#e-2-G-i) during the continuous open enrollment and disenrollment period established for the individual under such clause, notwithstanding marketing guidelines established by the Centers for Medicare & Medicaid Services.
  - (3) **Annual, coordinated election period—**
    - (A) **In general—** Subject to [paragraph (5)](#e-5), each individual who is eligible to make an election under this section may change such election during an [annual, coordinated election period](#e-3-B).
    - (B) **Annual, coordinated election period—** For purposes of this section, the term “annual, coordinated election period” means—
      - (i) with respect to a year before 2002, the month of November before such year;
      - (ii) with respect to 2002, 2003, 2004, and 2005, the period beginning on November 15 and ending on December 31 of the year before such year;
      - (iii) with respect to 2006, the period beginning on November 15, 2005, and ending on May 15, 2006;
      - (iv) with respect to 2007, 2008, 2009, and 2010, the period beginning on November 15 and ending on December 31 of the year before such year; and
      - (v) with respect to 2012 and succeeding years, the period beginning on October 15 and ending on December 7 of the year before such year.
    - (C) **Medicare+Choice health information fairs—** During the fall season of each year (beginning with 1999) and during the period described in [subparagraph (B)(iii)](#e-3-B-iii), in conjunction with the annual coordinated election period defined in [subparagraph (B)](#e-3-B), the [Secretary](/usc/42/1301.md?p=a-6) shall provide for a nationally coordinated educational and publicity campaign to inform [Medicare+Choice eligible individuals](#a-3) about [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) and the election process provided under this section.
    - (D) **Special information campaigns—** During November 1998 the [Secretary](/usc/42/1301.md?p=a-6) shall provide for an educational and publicity campaign to inform [Medicare+Choice eligible individuals](#a-3) about the availability of [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1), and eligible organizations with risk-sharing contracts under [section 1395mm of this title](/usc/42/1395mm.md), offered in different areas and the election process provided under this section. During the period described in [subparagraph (B)(iii)](#e-3-B-iii), the [Secretary](/usc/42/1301.md?p=a-6) shall provide for an educational and publicity campaign to inform MA [eligible individuals](/usc/42/239.md?p=a-6) about the availability of [MA plans](/usc/42/1395w–101.md?p=a-3-B) ([including](/usc/42/1301.md?p=b) [MA–PD plans](/usc/42/1395w–151.md?p=a-9)) offered in different areas and the election process provided under this section.
  - (4) **Special election periods—** Effective as of January 1, 2006, an individual may discontinue an election of a Medicare+ÐChoice plan offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) other than during an [annual, coordinated election period](#e-3-B) and make a new election under this section if—
    - (A)
      - (i) the certification of the organization or plan under this part has been terminated, or the organization or plan has notified the individual of an impending termination of such certification; or
      - (ii) the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides, or has notified the individual of an impending termination or discontinuation of such plan;
    - (B) the individual is no longer eligible to elect the plan because of a change in the individual’s place of residence or other change in circumstances (specified by the [Secretary](/usc/42/1301.md?p=a-6), but not [including](/usc/42/1301.md?p=b) termination of the individual’s enrollment on the basis described in clause [(i)](#g-3-B-i) or [(ii)](#g-3-B-ii) of subsection (g)(3)(B));
    - (C) the individual demonstrates (in accordance with guidelines established by the [Secretary](/usc/42/1301.md?p=a-6)) that—
      - (i) the organization offering the plan substantially violated a material provision of the organization’s contract under this part in relation to the individual ([including](/usc/42/1301.md?p=b) the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality [standards](/usc/42/1320d.md?p=7)); or
      - (ii) the organization (or an agent or other entity acting on the organization’s behalf) materially misrepresented the plan’s provisions in marketing the plan to the individual; or
    - (D) the individual meets such other exceptional conditions as the [Secretary](/usc/42/1301.md?p=a-6) may provide.

    Effective as of January 1, 2006, an individual who, upon first becoming eligible for benefits under part A at age 65, enrolls in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) under this part, the individual may discontinue the election of such plan, and elect coverage under the original fee-for-service plan, at any time during the 12-month period beginning on the effective date of such enrollment.

  - (5) **Special rules for MSA plans—** Notwithstanding the preceding provisions of this subsection, an individual—
    - (A) may elect an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) only during—
      - (i) an initial open enrollment period described in [paragraph (1)](#e-1), or
      - (ii) an [annual, coordinated election period](#e-3-B) described in [paragraph (3)(B)](#e-3-B);
    - (B) subject to [subparagraph (C)](#e-5-C), may not discontinue an election of an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) except during the periods described in clause [(ii)](#e-5-A-ii) or (iii) of subparagraph (A) and under the first sentence of [paragraph (4)](#e-4); and
    - (C) who elects an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) during an [annual, coordinated election period](#e-3-B), and who never previously had elected such a plan, may revoke such election, in a manner determined by the [Secretary](/usc/42/1301.md?p=a-6), by not later than December 15 following the date of the election.
  - (6) **Open enrollment periods—** Subject to [paragraph (5)](#e-5), a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1)—
    - (A) shall accept elections or changes to elections during the initial enrollment periods described in [paragraph (1)](#e-1), during the period described in [paragraph (2)(F)](#e-2-F), during the month of November 1998 and during the [annual, coordinated election period](#e-3-B) under [paragraph (3)](#e-3) for each subsequent year, and during special election periods described in the first sentence of [paragraph (4)](#e-4); and
    - (B) may accept other changes to elections at such other times as the organization provides.
- (f) **Effectiveness of elections and changes of elections—**
  - (1) **During initial coverage election period—** An election of coverage made during the initial coverage election period under [subsection (e)(1)](#e-1) shall take effect upon the date the individual becomes entitled to benefits under part A and enrolled under part B, except as the [Secretary](/usc/42/1301.md?p=a-6) may provide (consistent with [section 1395q of this title](/usc/42/1395q.md)) in order to prevent retroactive coverage.
  - (2) **During continuous open enrollment periods—** An election or change of coverage made under [subsection (e)(2)](#e-2) shall take effect with the first day of the first calendar month following the date on which the election or change is made.
  - (3) **Annual, coordinated election period—** An election or change of coverage made during an [annual, coordinated election period](#e-3-B) (as defined in [subsection (e)(3)(B)](#e-3-B), other than the period described in [clause (iii)](#e-3-B-iii) of such subsection) in a year shall take effect as of the first day of the following year.
  - (4) **Other periods—** An election or change of coverage made during any other period under [subsection (e)(4)](#e-4) shall take effect in such manner as the [Secretary](/usc/42/1301.md?p=a-6) provides in a manner consistent (to the extent practicable) with protecting continuity of health benefit coverage.
- (g) **Guaranteed issue and renewal—**
  - (1) **In general—** Except as provided in this subsection, a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall provide that at any time during which elections are accepted under this section with respect to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by the organization, the organization will accept without restrictions individuals who are eligible to make such election.
  - (2) **Priority—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1), in relation to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) it offers, has a capacity limit and the number of [Medicare+Choice eligible individuals](#a-3) who elect the plan under this section exceeds the capacity limit, the organization may limit the election of individuals of the plan under this section but only if priority in election is provided—
    - (A) first to such individuals as have elected the plan at the time of the determination, and
    - (B) then to other such individuals in such a manner that does not discriminate, on a basis described in [section 1395w–22(b) of this title](/usc/42/1395w–22.md?p=b), among the individuals (who seek to elect the plan).

    The preceding sentence shall not apply if it would result in the enrollment of enrollees substantially nonrepresentative, as determined in accordance with [regulations](/usc/42/1395hh.md?p=a-1) of the [Secretary](/usc/42/1301.md?p=a-6), of the medicare population in the service area of the plan.

  - (3) **Limitation on termination of election—**
    - (A) **In general—** Subject to [subparagraph (B)](#g-3-B), a Medicare+ÐChoice organization may not for any reason terminate the election of any individual under this section for a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) it offers.
    - (B) **Basis for termination of election—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may terminate an individual’s election under this section with respect to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) it offers if—
      - (i) any Medicare+Choice monthly basic and supplemental beneficiary premiums required with respect to such plan are not paid on a timely basis (consistent with [standards](/usc/42/1320d.md?p=7) under [section 1395w–26 of this title](/usc/42/1395w–26.md) that provide for a grace period for late payment of such premiums),
      - (ii) the individual has engaged in disruptive behavior (as specified in such [standards](/usc/42/1320d.md?p=7)), or
      - (iii) the plan is terminated with respect to all individuals under this part in the area in which the individual resides.
    - (C) **Consequence of termination—**
      - (i) **Terminations for cause—** Any individual whose election is terminated under clause [(i)](#g-3-B-i) or [(ii)](#g-3-B-ii) of subparagraph (B) is deemed to have elected the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) option described in [subsection (a)(1)(A)](#a-1-A).
      - (ii) **Termination based on plan termination or service area reduction—** Any individual whose election is terminated under [subparagraph (B)(iii)](#g-3-B-iii) shall have a special election period under [subsection (e)(4)(A)](#e-4-A) in which to change coverage to coverage under another [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1). Such an individual who fails to make an election during such period is deemed to have chosen to change coverage to the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) option described in [subsection (a)(1)(A)](#a-1-A).
    - (D) **Organization obligation with respect to election forms—** Pursuant to a contract under [section 1395w–27 of this title](/usc/42/1395w–27.md), each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) receiving an election form under [subsection (c)(2)](#c-2) shall transmit to the [Secretary](/usc/42/1301.md?p=a-6) (at such time and in such manner as the [Secretary](/usc/42/1301.md?p=a-6) may specify) a copy of such form or such other information respecting the election as the [Secretary](/usc/42/1301.md?p=a-6) may specify.
- (h) **Approval of marketing material and application forms—**
  - (1) **Submission—** No marketing material or application form may be distributed by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) to (or for the use of) Medicare+ÐChoice [eligible individuals](/usc/42/239.md?p=a-6) unless—
    - (A) at least 45 days (or 10 days in the case described in [paragraph (5)](#h-5)) before the date of distribution the organization has submitted the material or form to the [Secretary](/usc/42/1301.md?p=a-6) for review, and
    - (B) the [Secretary](/usc/42/1301.md?p=a-6) has not disapproved the distribution of such material or form.
  - (2) **Review—** The [standards](/usc/42/1320d.md?p=7) established under [section 1395w–26 of this title](/usc/42/1395w–26.md) shall include guidelines for the review of any material or form submitted and under such guidelines the [Secretary](/usc/42/1301.md?p=a-6) shall disapprove (or later require the correction of) such material or form if the material or form is materially inaccurate or misleading or otherwise makes a material misrepresentation.
  - (3) **Deemed approval (1-stop shopping)—** In the case of material or form that is submitted under [paragraph (1)(A)](#h-1-A) to the [Secretary](/usc/42/1301.md?p=a-6) or a regional [office](/usc/42/3058f.md?p=1) of the Department of Health and Human Services and the [Secretary](/usc/42/1301.md?p=a-6) or the [office](/usc/42/3058f.md?p=1) has not disapproved the distribution of marketing material or form under [paragraph (1)(B)](#h-1-B) with respect to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) in an area, the [Secretary](/usc/42/1301.md?p=a-6) is deemed not to have disapproved such distribution in all other areas covered by the plan and organization except with regard to that portion of such material or form that is specific only to an area involved.
  - (4) **Prohibition of certain marketing practices—** Each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall conform to fair marketing [standards](/usc/42/1320d.md?p=7), in relation to [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) offered under this part, included in the [standards](/usc/42/1320d.md?p=7) established under [section 1395w–26 of this title](/usc/42/1395w–26.md). Such [standards](/usc/42/1320d.md?p=7)—
    - (A) shall not permit a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) to provide for, subject to [subsection (j)(2)(C)](#j-2-C), cash, gifts, prizes, or other monetary rebates as an inducement for enrollment or otherwise;
    - (B) may include a prohibition against a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) (or agent of such an organization) completing any portion of any election form used to carry out elections under this section on behalf of any individual;
    - (C) shall not permit a Medicare Advantage organization (or the agents, brokers, and other third parties representing such organization) to conduct the prohibited activities described in [subsection (j)(1)](#j-1); and
    - (D) shall only permit a Medicare Advantage organization (and the agents, brokers, and other third parties representing such organization) to conduct the activities described in [subsection (j)(2)](#j-2) in accordance with the limitations established under such subsection.
  - (5) **Special treatment of marketing material following model marketing language—** In the case of marketing material of an organization that uses, without [modification](/usc/42/7501.md?p=4), proposed model language specified by the [Secretary](/usc/42/1301.md?p=a-6), the period specified in [paragraph (1)(A)](#h-1-A) shall be reduced from 45 days to 10 days.
  - (6) **Required inclusion of plan type in plan name—** For plan years beginning on or after January 1, 2010, a Medicare Advantage organization must ensure that the name of each Medicare Advantage plan offered by the Medicare Advantage organization [includes](/usc/42/1301.md?p=b) the plan type of the plan (using [standard](/usc/42/1320d.md?p=7) terminology developed by the [Secretary](/usc/42/1301.md?p=a-6)).
  - (7) **Strengthening the ability of States to act in collaboration with the Secretary to address fraudulent or inappropriate marketing practices—**
    - (A) **Appointment of agents and brokers—** Each Medicare Advantage organization shall—
      - (i) only use agents and brokers who have been licensed under [State](/usc/42/1397n–12.md?p=6) law to sell Medicare Advantage plans offered by the Medicare Advantage organization;
      - (ii) in the case where a [State](/usc/42/1397n–12.md?p=6) has a [State](/usc/42/1397n–12.md?p=6) appointment law, abide by such law; and
      - (iii) report to the applicable [State](/usc/42/1397n–12.md?p=6) the termination of any such agent or broker, [including](/usc/42/1301.md?p=b) the reasons for such termination (as required under applicable [State](/usc/42/1397n–12.md?p=6) law).
    - (B) **Compliance with State information requests—** Each Medicare Advantage organization shall comply in a timely manner with any request by a [State](/usc/42/1397n–12.md?p=6) for information regarding the performance of a licensed agent, broker, or other third party representing the Medicare Advantage organization as part of an investigation by the [State](/usc/42/1397n–12.md?p=6) into the conduct of the agent, broker, or other third party.
- (i) **Effect of election of Medicare+Choice plan option—**
  - (1) **Payments to organizations—** Subject to sections [1395w–22(a)(5)](/usc/42/1395w–22.md?p=a-5), [1395w–23(a)(4)](/usc/42/1395w–23.md?p=a-4), [1395w–23(g)](/usc/42/1395w–23.md?p=g), [1395w–23(h)](/usc/42/1395w–23.md?p=h), [1395ww(d)(11)](/usc/42/1395ww.md?p=d-11), [1395ww(h)(3)(D)](/usc/42/1395ww.md?p=h-3-D), and [1395w–23(m)](/usc/42/1395w–23.md?p=m) of this title, payments under a contract with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under [section 1395w–23(a) of this title](/usc/42/1395w–23.md?p=a) with respect to an individual electing a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by the organization shall be instead of the amounts which (in the absence of the contract) would otherwise be payable under parts A and B for items and services furnished to the individual.
  - (2) **Only organization entitled to payment—** Subject to sections [1395w–23(a)(4)](/usc/42/1395w–23.md?p=a-4), [1395w–23(e)](/usc/42/1395w–23.md?p=e), [1395w–23(g)](/usc/42/1395w–23.md?p=g), [1395w–23(h)](/usc/42/1395w–23.md?p=h), [1395w–27(f)(2)](/usc/42/1395w–27.md?p=f-2), [1395w–27a(h)](/usc/42/1395w–27a.md?p=h), [1395ww(d)(11)](/usc/42/1395ww.md?p=d-11), and [1395ww(h)(3)(D)](/usc/42/1395ww.md?p=h-3-D) of this title, only the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall be entitled to receive payments from the [Secretary](/usc/42/1301.md?p=a-6) under this subchapter for services furnished to the individual.
  - (3) **FFS payment for expenses for kidney acquisitions—** Paragraphs [(1)](#i-1) and [(2)](#i-2) shall not apply with respect to expenses for [organ](/usc/42/274b.md?p=d-2) acquisitions for kidney transplants described in [section 1395w–22(a)(1)(B)(i) of this title](/usc/42/1395w–22.md?p=a-1-B-i).
- (j) **Prohibited activities described and limitations on the conduct of certain other activities—**
  - (1) **Prohibited activities described—** The following prohibited activities are described in this paragraph:
    - (A) **Unsolicited means of direct contact—** Any unsolicited means of direct contact of prospective enrollees, [including](/usc/42/1301.md?p=b) soliciting door-to-door or any outbound telemarketing without the prospective enrollee initiating contact.
    - (B) **Cross-selling—** The sale of other non-health related products (such as annuities and life insurance) during any sales or marketing activity or presentation conducted with respect to a Medicare Advantage plan.
    - (C) **Meals—** The provision of meals of any sort, regardless of value, to prospective enrollees at promotional and sales activities.
    - (D) **Sales and marketing in health care settings and at educational events—** Sales and marketing activities for the enrollment of individuals in Medicare Advantage plans that are conducted—
      - (i) in health care settings in areas where health care is delivered to individuals (such as [physician](/usc/42/1395cc–1.md?p=a-3-A) [offices](/usc/42/3058f.md?p=1) and pharmacies), except in the case where such activities are conducted in common areas in health care settings; and
      - (ii) at educational events.
  - (2) **Limitations—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish limitations with respect to at least the following:
    - (A) **Scope of marketing appointments—** The scope of any appointment with respect to the marketing of a Medicare Advantage plan. Such limitation shall require advance [agreement](/usc/42/1320b–8.md?p=a-3-A) with a prospective enrollee on the scope of the marketing appointment and documentation of such [agreement](/usc/42/1320b–8.md?p=a-3-A) by the Medicare Advantage organization. In the case where the marketing appointment is in [person](/usc/42/1301.md?p=a-3), such documentation shall be in writing.
    - (B) **Co-branding—** The use of the name or logo of a co-branded network provider on Medicare Advantage plan membership and marketing materials.
    - (C) **Limitation of gifts to nominal dollar value—** The offering of gifts and other promotional items other than those that are of nominal value (as determined by the [Secretary](/usc/42/1301.md?p=a-6)) to prospective enrollees at promotional activities.
    - (D) **Compensation—** The use of compensation other than as provided under guidelines established by the [Secretary](/usc/42/1301.md?p=a-6). Such guidelines shall ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their health care needs.
    - (E) **Required training, annual retraining, and testing of agents, brokers, and other third parties—** The use by a Medicare Advantage organization of any individual as an agent, broker, or other third party representing the organization that has not completed an initial [training](/usc/42/285e–2.md?p=b-2) and testing [program](/usc/42/274l–1.md?p=4) and does not complete an annual retraining and testing [program](/usc/42/274l–1.md?p=4).

# §1395w–22. Benefits and beneficiary protections

- (a) **Basic benefits—**
  - (1) **Requirement—**
    - (A) **In general—** Except as provided in [section 1395w–28(b)(3) of this title](/usc/42/1395w–28.md?p=b-3) for [MSA plans](/usc/42/1395w–28.md?p=b-3-A) and except as provided in [paragraph (6)](#a-6) for [MA regional plans](/usc/42/1395w–28.md?p=b-4), each [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) shall provide to members enrolled under this part, through providers and other [persons](/usc/42/1301.md?p=a-3) that meet the applicable requirements of this subchapter and part A of subchapter XI, [benefits under the original medicare fee-for-service program option](#a-1-B-i) (and, for plan years before 2006, additional benefits required under [section 1395w–24(f)(1)(A) of this title](/usc/42/1395w–24.md?p=f-1-A)).
    - (B) **Benefits under the original medicare fee-for-service program option defined—**
      - (i) **In general—** For purposes of this part, the term “benefits under the original medicare fee-for-service program option” means, subject to [subsection (m)](#m), those items and services (other than [hospice care](/usc/42/1395x.md?p=dd-1) or coverage for [organ](/usc/42/274b.md?p=d-2) acquisitions for kidney transplants, [including](/usc/42/1301.md?p=b) as covered under [section 1395rr(d) of this title](/usc/42/1395rr.md?p=d)) for which benefits are available under parts A and B to individuals entitled to benefits under part A and enrolled under part B, with [cost-sharing](/usc/42/18022.md?p=c-3-A) for those services as required under parts A and B or, subject to [clause (iii)](#a-1-B-iii), an actuarially equivalent level of [cost-sharing](/usc/42/18022.md?p=c-3-A) as determined in this part.
      - (ii) **Special rule for regional plans—** In the case of an [MA regional plan](/usc/42/1395w–28.md?p=b-4) in determining an actuarially equivalent level of [cost-sharing](/usc/42/18022.md?p=c-3-A) with respect to [benefits under the original medicare fee-for-service program option](#a-1-B-i), there shall only be taken into account, with respect to the application of [section 1395w–27a(b)(2) of this title](/usc/42/1395w–27a.md?p=b-2), such expenses only with respect to [subparagraph (A)](/usc/42/1395w–27a.md?p=b-2-A) of such section.
      - (iii) **Limitation on variation of cost sharing for certain benefits—** Subject to [clause (v)](#a-1-B-v), [cost-sharing](/usc/42/18022.md?p=c-3-A) for services described in [clause (iv)](#a-1-B-iv) shall not exceed the [cost-sharing](/usc/42/18022.md?p=c-3-A) required for those services under parts A and B.
      - (iv) **Services described—** The following services are described in this clause:
        - (I) Chemotherapy [administration](/usc/42/1301.md?p=a-10) services.
        - (II) Renal dialysis services (as defined in [section 1395rr(b)(14)(B) of this title](/usc/42/1395rr.md?p=b-14-B)).
        - (III) Skilled nursing care.
        - (IV) Clinical diagnostic [laboratory](/usc/42/300jj.md?p=10) test administered during any portion of the emergency period defined in paragraph (1)(B) of [section 1320b–5(g) of this title](/usc/42/1320b–5.md?p=g) beginning on or after March 18, 2020, for the detection of SARS–CoV–2 or the diagnosis of the virus that [causes](/usc/42/9908.md?p=c-2) COVID–19 and the [administration](/usc/42/1301.md?p=a-10) of such test.
        - (V) Specified COVID–19 testing-related services (as described in [section 1395l(cc)(1)](/usc/42/1395l.md?p=cc-1) of this title) for which payment would be payable under a specified outpatient payment provision described in [section 1395l(cc)(2)](/usc/42/1395l.md?p=cc-2) of this title.
        - (VI) A COVID–19 vaccine and its [administration](/usc/42/1301.md?p=a-10) described in [section 1395x(s)(10)(A) of this title](/usc/42/1395x.md?p=s-10-A).
        - (VII) A [drug](/usc/42/282.md?p=j-1-A-vii) or [biological product](/usc/42/287a.md?p=a-1) that is a selected [drug](/usc/42/282.md?p=j-1-A-vii) (as referred to in [section 1320f–1(c) of this title](/usc/42/1320f–1.md?p=c)).
        - (VIII) Such other services that the [Secretary](/usc/42/1301.md?p=a-6) determines appropriate ([including](/usc/42/1301.md?p=b) services that the [Secretary](/usc/42/1301.md?p=a-6) determines require a high level of predictability and transparency for beneficiaries).
      - (v) **Exception—** In the case of services described in [clause (iv)](#a-1-B-iv), other than subclauses [(IV)](#a-1-B-iv-IV), [(V)](#a-1-B-iv-V), and [(VI)](#a-1-B-iv-VI) of such clause, for which there is no [cost-sharing](/usc/42/18022.md?p=c-3-A) required under parts A and B, [cost-sharing](/usc/42/18022.md?p=c-3-A) may be required for those services in accordance with [clause (i)](#a-1-B-i).
      - (vi) **Prohibition of application of certain requirements for COVID–19 testing—** In the case of a product or service described in subclause (IV) or (V), respectively, of [clause (iv)](#a-1-B-iv) that is administered or furnished during any portion of the emergency period described in such subclause beginning on or after March 18, 2020, an [MA plan](/usc/42/1395w–101.md?p=a-3-B) may not impose any prior [authorization](/usc/42/4370m.md?p=3) or other utilization management requirements with respect to the coverage of such a product or service under such plan.
  - (2) **Satisfaction of requirement—**
    - (A) **In general—** A [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) (other than an [MSA plan](/usc/42/1395w–28.md?p=b-3-A)) offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) satisfies [paragraph (1)(A)](#a-1-A), with respect to benefits for items and services furnished other than through a provider or other [person](/usc/42/1301.md?p=a-3) that has a contract with the organization offering the plan, if the plan provides payment in an amount so that—
      - (i) the sum of such payment amount and any cost sharing provided for under the plan, is equal to at least
      - (ii) the total dollar amount of payment for such items and services as would otherwise be authorized under parts A and B ([including](/usc/42/1301.md?p=b) any balance billing permitted under such parts).
    - (B) **Reference to related provisions—** For provision relating to—
      - (i) limitations on balance billing against [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) for non-contract providers, see [subsection (k)](#k) and [section 1395cc(a)(1)(O) of this title](/usc/42/1395cc.md?p=a-1-O), and
      - (ii) limiting actuarial value of enrollee liability for covered benefits, see [section 1395w–24(e) of this title](/usc/42/1395w–24.md?p=e).
    - (C) **Election of uniform coverage determination—** In the case of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) that offers a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) in an area in which more than one [local coverage determination](/usc/42/1395y.md?p=l-6-B) is applied with respect to different parts of the area, the organization may elect to have the [local coverage determination](/usc/42/1395y.md?p=l-6-B) for the part of the area that is most beneficial to Medicare+Choice enrollees (as identified by the [Secretary](/usc/42/1301.md?p=a-6)) apply with respect to all Medicare+Choice enrollees enrolled in the plan.
  - (3) **Supplemental benefits—**
    - (A) **Benefits included subject to Secretary’s approval—** Subject to [subparagraph (D)](#a-3-D), each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may provide to individuals enrolled under this part, other than under an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) (without affording those individuals an option to decline the coverage), supplemental health care benefits that the [Secretary](/usc/42/1301.md?p=a-6) may approve. The [Secretary](/usc/42/1301.md?p=a-6) shall approve any such supplemental benefits unless the [Secretary](/usc/42/1301.md?p=a-6) determines that [including](/usc/42/1301.md?p=b) such supplemental benefits would substantially discourage enrollment by [Medicare+Choice eligible individuals](/usc/42/1395w–21.md?p=a-3) with the organization.
    - (B) **At enrollees’ option—**
      - (i) **In general—** Subject to [clause (ii)](#a-3-B-ii), a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may provide to individuals enrolled under this part supplemental health care benefits that the individuals may elect, at their option, to have covered.
      - (ii) **Special rule for MSA plans—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may not provide, under an [MSA plan](/usc/42/1395w–28.md?p=b-3-A), supplemental health care benefits that cover the deductible described in [section 1395w–28(b)(2)(B) of this title](/usc/42/1395w–28.md?p=b-2-B). In applying the previous sentence, health benefits described in [section 1395ss(u)(2)(B) of this title](/usc/42/1395ss.md?p=u-2-B) shall not be treated as covering such deductible.
    - (C) **Application to Medicare+Choice private fee-for-service plans—** Nothing in this paragraph shall be construed as preventing a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2) from offering supplemental benefits that include payment for some or all of the balance billing amounts permitted consistent with [subsection (k)](#k) and coverage of additional services that the plan finds to be medically necessary. Such benefits may include reductions in [cost-sharing](/usc/42/18022.md?p=c-3-A) below the actuarial value specified in [section 1395w–24(e)(4)(B) of this title](/usc/42/1395w–24.md?p=e-4-B).
    - (D) **Expanding supplemental benefits to meet the needs of chronically ill enrollees—**
      - (i) **In general—** For plan year 2020 and subsequent plan years, in addition to any supplemental health care benefits otherwise provided under this paragraph, an [MA plan](/usc/42/1395w–101.md?p=a-3-B), [including](/usc/42/1301.md?p=b) a [specialized MA plan for special needs individuals](/usc/42/1395w–28.md?p=b-6-A) (as defined in [section 1395w–28(b)(6) of this title](/usc/42/1395w–28.md?p=b-6)), may provide supplemental benefits described in [clause (ii)](#a-3-D-ii) to a [chronically ill enrollee](#a-3-D-iii) (as defined in [clause (iii)](#a-3-D-iii)).
      - (ii) **Supplemental benefits described—**
        - (I) **In general—** Supplemental benefits described in this clause are supplemental benefits that, with respect to a [chronically ill enrollee](#a-3-D-iii), have a reasonable expectation of improving or maintaining the health or overall function of the [chronically ill enrollee](#a-3-D-iii) and may not be limited to being primarily health related benefits.
        - (II) **Authority to waive uniformity requirements—** The [Secretary](/usc/42/1301.md?p=a-6) may, only with respect to supplemental benefits provided to a [chronically ill enrollee](#a-3-D-iii) under this subparagraph, waive the uniformity requirements under this part, as determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6).
      - (iii) **Chronically ill enrollee defined—** In this subparagraph, the term “chronically ill enrollee” means an enrollee in an [MA plan](/usc/42/1395w–101.md?p=a-3-B) that the [Secretary](/usc/42/1301.md?p=a-6) determines—
        - (I) has one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee;
        - (II) has a high risk of [hospitalization](/usc/42/1301.md?p=a-7) or other adverse health outcomes; and
        - (III) requires intensive care coordination.
  - (4) **Organization as secondary payer—** Notwithstanding any other provision of law, a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may (in the case of the provision of items and services to an individual under a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) under circumstances in which payment under this subchapter is made secondary pursuant to [section 1395y(b)(2) of this title](/usc/42/1395y.md?p=b-2)) charge or authorize the provider of such services to charge, in accordance with the charges allowed under a law, plan, or policy described in such section—
    - (A) the insurance carrier, employer, or other entity which under such law, plan, or policy is to pay for the provision of such services, or
    - (B) such individual to the extent that the individual has been paid under such law, plan, or policy for such services.
  - (5) **National coverage determinations and legislative changes in benefits—** If there is a [national coverage determination](/usc/42/1395y.md?p=l-6-A) or legislative change in benefits required to be provided under this part made in the period beginning on the date of an announcement under [section 1395w–23(b) of this title](/usc/42/1395w–23.md?p=b) and ending on the date of the next announcement under such section and the [Secretary](/usc/42/1301.md?p=a-6) [projects](/usc/42/11360.md?p=20) that the determination will result in a significant change in the costs to a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) of providing the benefits that are the subject of such [national coverage determination](/usc/42/1395y.md?p=l-6-A) and that such change in costs was not incorporated in the determination of the annual Medicare+Choice capitation rate under [section 1395w–23 of this title](/usc/42/1395w–23.md) included in the announcement made at the beginning of such period, then, unless otherwise required by law—
    - (A) such determination or legislative change in benefits shall not apply to contracts under this part until the first contract year that begins after the end of such period, and
    - (B) if such coverage determination or legislative change provides for coverage of additional benefits or coverage under additional circumstances, [section 1395w–21(i)(1) of this title](/usc/42/1395w–21.md?p=i-1) shall not apply to payment for such additional benefits or benefits provided under such additional circumstances until the first contract year that begins after the end of such period.

    The projection under the previous sentence shall be based on an analysis by the Chief Actuary of the Centers for Medicare & Medicaid Services of the actuarial costs associated with the coverage determination or legislative change in benefits.

  - (6) **Special benefit rules for regional plans—** In the case of an [MA plan](/usc/42/1395w–101.md?p=a-3-B) that is an [MA regional plan](/usc/42/1395w–28.md?p=b-4), benefits under the plan shall include the benefits described in paragraphs (1) and (2) of [section 1395w–27a(b) of this title](/usc/42/1395w–27a.md?p=b).
  - (7) **Limitation on cost-sharing for dual eligibles and qualified medicare beneficiaries—** In the case of an individual who is a full-benefit dual [eligible individual](/usc/42/239.md?p=a-6) (as defined in [section 1396u–5(c)(6) of this title](/usc/42/1396u–5.md?p=c-6)) or a qualified medicare beneficiary (as defined in [section 1396d(p)(1) of this title](/usc/42/1396d.md?p=p-1)) and who is enrolled in a specialized Medicare Advantage plan for [special needs individuals](/usc/42/1395w–28.md?p=b-6-B) described in [section 1395w–28(b)(6)(B)(ii) of this title](/usc/42/1395w–28.md?p=b-6-B-ii), the plan may not impose [cost-sharing](/usc/42/18022.md?p=c-3-A) that exceeds the amount of [cost-sharing](/usc/42/18022.md?p=c-3-A) that would be permitted with respect to the individual under subchapter XIX if the individual were not enrolled in such plan.
- (b) **Antidiscrimination—**
  - (1) **Beneficiaries—** A Medicare Advantage organization may not deny, limit, or condition the coverage or provision of benefits under this part, for individuals permitted to be enrolled with the organization under this part, based on any health status-related factor described in section 2702(a)(1) of the Public Health Service Act.[^1] The [Secretary](/usc/42/1301.md?p=a-6) shall not approve a plan of an organization if the [Secretary](/usc/42/1301.md?p=a-6) determines that the design of the plan and its benefits are likely to substantially discourage enrollment by certain MA [eligible individuals](/usc/42/239.md?p=a-6) with the organization.
  - (2) **Providers—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall not discriminate with respect to participation, reimbursement, or indemnification as to any provider who is acting within the scope of the provider’s license or certification under applicable [State](/usc/42/1397n–12.md?p=6) law, solely on the basis of such license or certification. This paragraph shall not be construed to prohibit a plan from [including](/usc/42/1301.md?p=b) providers only to the extent necessary to meet the needs of the plan’s enrollees or from establishing any measure designed to maintain quality and control costs consistent with the responsibilities of the plan.
- (c) **Disclosure requirements—**
  - (1) **Detailed description of plan provisions—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall disclose, in clear, accurate, and standardized form to each enrollee with a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by the organization under this part at the time of enrollment and at least annually thereafter, the following information regarding such plan:
    - (A) **Service area—** The plan’s service area.
    - (B) **Benefits—** Benefits offered under the plan, [including](/usc/42/1301.md?p=b) information described in [section 1395w–21(d)(3)(A) of this title](/usc/42/1395w–21.md?p=d-3-A) and exclusions from coverage and, if it is an [MSA plan](/usc/42/1395w–28.md?p=b-3-A), a comparison of benefits under such a plan with benefits under other [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1).
    - (C) **Access—** The number, mix, and distribution of plan providers, out-of-network coverage (if any) provided by the plan, any point-of-service option ([including](/usc/42/1301.md?p=b) the supplemental premium for such option), and, in the case of a specified MA plan (as defined in [paragraph (3)(C)](#c-3-C)), for plan year 2028 and subsequent plan years, the information described in [paragraph (3)(B)](#c-3-B).
    - (D) **Out-of-area coverage—** Out-of-area coverage provided by the plan.
    - (E) **Emergency coverage—** Coverage of emergency services, [including](/usc/42/1301.md?p=b)—
      - (i) the appropriate use of emergency services, [including](/usc/42/1301.md?p=b) use of the 911 telephone system or its local equivalent in emergency situations and an explanation of what constitutes an emergency situation;
      - (ii) the process and procedures of the plan for obtaining emergency services; and
      - (iii) the locations of (I) emergency departments, and (II) other settings, in which plan [physicians](/usc/42/1395cc–4.md?p=a-2-E) and [hospitals](/usc/42/1395dd.md?p=e-5) provide emergency services and post-stabilization care.
    - (F) **Supplemental benefits—** Supplemental benefits available from the organization offering the plan, [including](/usc/42/1301.md?p=b)—
      - (i) whether the supplemental benefits are optional,
      - (ii) the supplemental benefits covered, and
      - (iii) the [Medicare+Choice monthly supplemental beneficiary premium](/usc/42/1395w–28.md?p=c-4) for the supplemental benefits.
    - (G) **Prior authorization rules—** Rules regarding prior [authorization](/usc/42/4370m.md?p=3) or other review requirements that could result in nonpayment.
    - (H) **Plan grievance and appeals procedures—** All plan appeal or grievance rights and procedures.
    - (I) **Quality improvement program—** A description of the organization’s quality improvement [program](/usc/42/274l–1.md?p=4) under [subsection (e)](#e).
  - (2) **Disclosure upon request—** Upon request of a [Medicare+Choice eligible individual](/usc/42/1395w–21.md?p=a-3), a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) must provide the following information to such individual:
    - (A) The general coverage information and general comparative plan information made available under clauses (i) and (ii) of [section 1395w–21(d)(2)(A) of this title](/usc/42/1395w–21.md?p=d-2-A).
    - (B) Information on procedures used by the organization to control utilization of services and expenditures.
    - (C) Information on the number of grievances, redeterminations, and appeals and on the disposition in the aggregate of such matters.
    - (D) An overall summary description as to the method of compensation of participating [physicians](/usc/42/1395cc–4.md?p=a-2-E).
  - (3) **Provider directory accuracy—**
    - (A) **In general—** For plan year 2028 and subsequent plan years, each MA organization offering a [specified MA plan](#c-3-C) (as defined in [subparagraph (C)](#c-3-C)) shall, for each such plan offered by the organization—
      - (i) maintain, on a publicly available internet website, an accurate provider directory that [includes](/usc/42/1301.md?p=b) the information described in [subparagraph (B)](#c-3-B);
      - (ii) not less frequently than once every 90 days (or, in the case of a [hospital](/usc/42/1395dd.md?p=e-5) or any other [facility](/usc/42/11049.md?p=4) determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6), at a lesser frequency specified by the [Secretary](/usc/42/1301.md?p=a-6) but in no case less frequently than once every 12 months), verify the provider directory information of each provider listed in such directory and, if applicable, update such information;
      - (iii) if the organization is unable to verify such information with respect to a provider, include in such directory an indication that the information of such provider may not be up to date; and
      - (iv) [remove](/usc/42/9601.md?p=23) a provider from such directory within 5 business days if the organization determines that the provider is no longer a provider participating in the network of such plan.
    - (B) **Provider directory information—** The information described in this subparagraph is information enrollees may need to access covered benefits from a provider with which such organization offering such plan has an [agreement](/usc/42/1320b–8.md?p=a-3-A) for furnishing items and services covered under such plan, such as name, specialty, contact information, primary [office](/usc/42/3058f.md?p=1) or [facility](/usc/42/11049.md?p=4) addresses where items or services are furnished, whether the provider is accepting new patients, accommodations for people with disabilities, cultural and linguistic capabilities, and telehealth capabilities.
    - (C) **Specified MA plan—** In this paragraph, the term “specified MA plan” means—
      - (i) a [network-based plan](#d-5-C-i) (as defined in [subsection (d)(5)(C)](#d-5-C)); or
      - (ii) a Medicare Advantage private fee-for-service plan (as defined in [section 1395w–28(b)(2) of this title](/usc/42/1395w–28.md?p=b-2)) that meets the access [standards](/usc/42/1320d.md?p=7) under [subsection (d)(4)](#d-4), in whole or in part, through entering into contracts or [agreements](/usc/42/1320b–8.md?p=a-3-A) as provided for under [subparagraph (B)](#c-3-B) of such subsection.
- (d) **Access to services—**
  - (1) **In general—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) offering a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) may select the providers from whom the benefits under the plan are provided so long as—
    - (A) the organization makes such benefits available and accessible to each individual electing the plan within the plan service area with reasonable promptness and in a manner which assures continuity in the provision of benefits;
    - (B) when medically necessary the organization makes such benefits available and accessible 24 hours a day and 7 days a week;
    - (C) the plan provides for reimbursement with respect to services which are covered under subparagraphs [(A)](#d-1-A) and [(B)](#d-1-B) and which are provided to such an individual other than through the organization, if—
      - (i) the services were not [emergency services](#d-3-A) (as defined in [paragraph (3)](#d-3)), but (I) the services were medically necessary and immediately required because of an unforeseen illness, injury, or condition, and (II) it was not reasonable given the circumstances to obtain the services through the organization,
      - (ii) the services were renal dialysis services and were provided other than through the organization because the individual was temporarily out of the plan’s service area,
      - (iii) the services are maintenance care or post-stabilization care covered under the guidelines established under [paragraph (2)](#d-2), or
      - (iv) for plan year 2028 and subsequent plan years, in the case of a specified MA plan (as defined in [subsection (c)(3)(C)](#c-3-C)), the services were furnished by a provider that was not participating in the network of such plan but was listed in the provider directory of such plan on the date on which the appointment was made, as described in [paragraph (7)(A)](#d-7-A);
    - (D) the organization provides access to appropriate providers, [including](/usc/42/1301.md?p=b) credentialed specialists, for medically necessary [treatment](/usc/42/11851.md?p=11) and services; and
    - (E) coverage is provided for [emergency services](#d-3-A) (as defined in [paragraph (3)](#d-3)) without regard to prior [authorization](/usc/42/4370m.md?p=3) or the emergency care provider’s [contractual relationship](/usc/42/9601.md?p=35-A) with the organization.
  - (2) **Guidelines respecting coordination of post-stabilization care—** A [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) shall comply with such guidelines as the [Secretary](/usc/42/1301.md?p=a-6) may prescribe relating to promoting efficient and timely coordination of appropriate maintenance and post-stabilization care of an enrollee after the enrollee has been determined to be stable under [section 1395dd of this title](/usc/42/1395dd.md).
  - (3) **“Emergency services” defined—** In this subsection—
    - (A) **In general—** The term “emergency services” means, with respect to an individual enrolled with an organization, covered inpatient and outpatient services that—
      - (i) are furnished by a provider that is qualified to furnish such services under this subchapter, and
      - (ii) are needed to evaluate or stabilize an [emergency medical condition](#d-3-B) (as defined in [subparagraph (B)](#d-3-B)).
    - (B) **Emergency medical condition based on prudent layperson—** The term “emergency medical condition” means a medical condition manifesting itself by acute symptoms of sufficient severity ([including](/usc/42/1301.md?p=b) severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in—
      - (i) placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn [child](/usc/42/416.md?p=e)) in serious jeopardy,
      - (ii) serious impairment to bodily functions, or
      - (iii) serious dysfunction of any bodily [organ](/usc/42/274b.md?p=d-2) or part.
  - (4) **Assuring access to services in Medicare+Choice private fee-for-service plans—** In addition to any other requirements under this part, in the case of a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2), the organization offering the plan must demonstrate to the [Secretary](/usc/42/1301.md?p=a-6) that the organization has sufficient number and range of health care professionals and providers willing to provide services under the terms of the plan. Subject to paragraphs [(5)](#d-5) and [(6)](#d-6), the [Secretary](/usc/42/1301.md?p=a-6) shall find that an organization has met such requirement with respect to any [category](/usc/42/1395w–4.md?p=j-1) of health care professional or provider if, with respect to that [category](/usc/42/1395w–4.md?p=j-1) of provider—
    - (A) the plan has established payment rates for covered services furnished by that [category](/usc/42/1395w–4.md?p=j-1) of provider that are not less than the payment rates provided for under part A, part B, or both, for such services, or
    - (B) the plan has contracts or [agreements](/usc/42/1320b–8.md?p=a-3-A) (other than deemed contracts or [agreements](/usc/42/1320b–8.md?p=a-3-A) under [subsection (j)(6)](#j-6)) with a sufficient number and range of providers within such [category](/usc/42/1395w–4.md?p=j-1) to meet the access [standards](/usc/42/1320d.md?p=7) in [subparagraphs (A) through (E)](#d-1-A..d-1-E) of paragraph (1),

    or a combination of both. The previous sentence shall not be construed as restricting the [persons](/usc/42/1301.md?p=a-3) from whom enrollees under such a plan may obtain covered benefits, except that, if a plan entirely meets such requirement with respect to a [category](/usc/42/1395w–4.md?p=j-1) of health care professional or provider on the basis of [subparagraph (B)](#d-4-B), it may provide for a higher beneficiary copayment in the case of health care professionals and providers of that [category](/usc/42/1395w–4.md?p=j-1) who do not have contracts or [agreements](/usc/42/1320b–8.md?p=a-3-A) (other than deemed contracts or [agreements](/usc/42/1320b–8.md?p=a-3-A) under [subsection (j)(6)](#j-6)) to provide covered services under the terms of the plan.

  - (5) **Requirement of certain nonemployer Medicare Advantage private fee-for-service plans to use contracts with providers—**
    - (A) **In general—** For plan year 2011 and subsequent plan years, in the case of a Medicare Advantage private fee-for-service plan not described in paragraph (1) or (2) of [section 1395w–27(i) of this title](/usc/42/1395w–27.md?p=i) operating in a [network area](#d-5-B) (as defined in [subparagraph (B)](#d-5-B)), the plan shall meet the access [standards](/usc/42/1320d.md?p=7) under [paragraph (4)](#d-4) in that area only through entering into written contracts as provided for under [subparagraph (B)](#d-5-B) of such paragraph and not, in whole or in part, through the establishment of payment rates meeting the requirements under [subparagraph (A)](#d-5-A) of such paragraph.
    - (B) **Network area defined—** For purposes of [subparagraph (A)](#d-5-A), the term “network area” means, for a plan year, an area which the [Secretary](/usc/42/1301.md?p=a-6) identifies (in the [Secretary](/usc/42/1301.md?p=a-6)’s announcement of the proposed payment rates for the previous plan year under [section 1395w–23(b)(1)(B) of this title](/usc/42/1395w–23.md?p=b-1-B)) as having at least 2 [network-based plans](#d-5-C-i) (as defined in [subparagraph (C)](#d-5-C)) with enrollment under this part as of the first day of the year in which such announcement is made.
    - (C) **Network-based plan defined—**
      - (i) **In general—** For purposes of [subparagraph (B)](#d-5-B), the term “network-based plan” means—
        - (I) except as provided in [clause (ii)](#d-5-C-ii), a Medicare Advantage plan that is a coordinated care plan described in [section 1395w–21(a)(2)(A)(i) of this title](/usc/42/1395w–21.md?p=a-2-A-i);
        - (II) a network-based [MSA plan](/usc/42/1395w–28.md?p=b-3-A); and
        - (III) a reasonable cost reimbursement plan under [section 1395mm of this title](/usc/42/1395mm.md).
      - (ii) **Exclusion of non-network regional PPOS—** The term “[network-based plan](#d-5-C-i)” shall not include an [MA regional plan](/usc/42/1395w–28.md?p=b-4) that, with respect to the area, meets access adequacy [standards](/usc/42/1320d.md?p=7) under this part substantially through the authority of [section 422.112(a)(1)(ii) of title 42, Code of Federal Regulations](/cfr/42/422.112.md?p=a-1-ii), rather than through written contracts.
  - (6) **Requirement of all employer Medicare Advantage private fee-for-service plans to use contracts with providers—** For plan year 2011 and subsequent plan years, in the case of a Medicare Advantage private fee-for-service plan that is described in paragraph (1) or (2) of [section 1395w–27(i) of this title](/usc/42/1395w–27.md?p=i), the plan shall meet the access [standards](/usc/42/1320d.md?p=7) under [paragraph (4)](#d-4) only through entering into written contracts as provided for under [subparagraph (B)](#d-4-B) of such paragraph and not, in whole or in part, through the establishment of payment rates meeting the requirements under [subparagraph (A)](#d-4-A) of such paragraph.
  - (7) **Cost sharing for services furnished based on reliance on incorrect provider directory information—**
    - (A) **In general—** For plan year 2028 and subsequent plan years, if an enrollee in a specified MA plan (as defined in [subsection (c)(3)(C)](#c-3-C)) is furnished an item or service by a provider that is not participating in the network of such plan but is listed in the provider directory of such plan (as required to be provided to an enrollee pursuant to [subsection (c)(1)(C)](#c-1-C)) on the date on which the appointment is made, and if such item or service would otherwise be covered under such plan if furnished by a provider that is participating in the network of such plan, the MA organization offering such plan shall ensure that the enrollee is only responsible for the lesser of—
      - (i) the amount of cost sharing that would apply if such provider had been participating in the network of such plan; or
      - (ii) the amount of cost sharing that would otherwise apply (without regard to this subparagraph).
    - (B) **Notification requirement—** For plan year 2028 and subsequent plan years, each MA organization that offers a specified MA plan shall—
      - (i) notify enrollees of their [cost-sharing](/usc/42/18022.md?p=c-3-A) protections under this paragraph and make such notifications, to the extent practicable, by not later than the first day of an annual, coordinated election period under [section 1395w–21(e)(3) of this title](/usc/42/1395w–21.md?p=e-3) with respect to a year;
      - (ii) include information regarding such [cost-sharing](/usc/42/18022.md?p=c-3-A) protections in the provider directory of each specified MA plan offered by the MA organization.; and
      - (iii) notify enrollees of their [cost-sharing](/usc/42/18022.md?p=c-3-A) protections under this paragraph in the first explanation of benefits issued in a plan year.
- (e) **Quality improvement program—**
  - (1) **In general—** Each MA organization shall have an ongoing quality improvement [program](/usc/42/274l–1.md?p=4) for the purpose of improving the quality of care provided to enrollees in each [MA plan](/usc/42/1395w–101.md?p=a-3-B) offered by such organization.
  - (2) **Chronic care improvement programs—** As part of the quality improvement [program](/usc/42/274l–1.md?p=4) under [paragraph (1)](#e-1), each MA organization shall have a chronic care improvement [program](/usc/42/274l–1.md?p=4). Each chronic care improvement [program](/usc/42/274l–1.md?p=4) shall have a method for monitoring and identifying enrollees with multiple or sufficiently severe chronic conditions that meet criteria established by the organization for participation under the [program](/usc/42/274l–1.md?p=4).
  - (3) **Data—**
    - (A) **Collection, analysis, and reporting—**
      - (i) **In general—** Except as provided in clauses [(ii)](#e-3-A-ii) and [(iii)](#e-3-A-iii) with respect to plans described in such clauses and subject to [subparagraph (B)](#e-3-B), as part of the quality improvement [program](/usc/42/274l–1.md?p=4) under [paragraph (1)](#e-1), each MA organization shall provide for the collection, analysis, and reporting of data that permits the measurement of health outcomes and other indices of quality. With respect to MA private fee-for-service plans and [MSA plans](/usc/42/1395w–28.md?p=b-3-A), the requirements under the preceding sentence may not exceed the requirements under this subparagraph with respect to [MA local plans](/usc/42/1395w–28.md?p=b-5) that are [preferred provider organization plans](#e-3-A-iv), except that, for plan year 2010, the limitation under [clause (iii)](#e-3-A-iii) shall not apply and such requirements shall apply only with respect to administrative [claims](/usc/42/1320a–7a.md?p=i-2) data.
      - (ii) **Special requirements for specialized MA plans for special needs individuals—** In addition to the data required to be collected, analyzed, and reported under [clause (i)](#e-3-A-i) and notwithstanding the limitations under [subparagraph (B)](#e-3-B), as part of the quality improvement [program](/usc/42/274l–1.md?p=4) under [paragraph (1)](#e-1), each MA organization offering a specialized Medicare Advantage plan for [special needs individuals](/usc/42/1395w–28.md?p=b-6-B) shall provide for the collection, analysis, and reporting of data that permits the measurement of health outcomes and other indices of quality with respect to the requirements described in [paragraphs (2) through (5)](#f-2..f-5) of subsection (f). Such data may be based on [claims](/usc/42/1320a–7a.md?p=i-2) data and shall be at the plan level.
      - (iii) **Application to local preferred provider organizations and MA regional plans—** [Clause (i)](#e-3-A-i) shall apply to MA organizations with respect to [MA local plans](/usc/42/1395w–28.md?p=b-5) that are [preferred provider organization plans](#e-3-A-iv) and to [MA regional plans](/usc/42/1395w–28.md?p=b-4) only insofar as services are furnished by providers or services, [physicians](/usc/42/1395cc–4.md?p=a-2-E), and other health care [practitioners](/usc/42/1395a.md?p=b-6-C) and [suppliers](/usc/42/1395x.md?p=d) that have contracts with such organization to furnish services under such plans.
      - (iv) **Definition of preferred provider organization plan—** In this subparagraph, the term “preferred provider organization plan” means an [MA plan](/usc/42/1395w–101.md?p=a-3-B) that—
        - (I) has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan;
        - (II) provides for reimbursement for all covered benefits regardless of whether such benefits are provided within such network of providers; and
        - (III) is offered by an organization that is not licensed or organized under [State](/usc/42/1397n–12.md?p=6) law as a health maintenance organization.
    - (B) **Limitations—**
      - (i) **Types of data—** The [Secretary](/usc/42/1301.md?p=a-6) shall not collect under [subparagraph (A)](#e-3-A) data on quality, outcomes, and beneficiary satisfaction to facilitate consumer choice and [program](/usc/42/274l–1.md?p=4) [administration](/usc/42/1301.md?p=a-10) other than the types of data that were collected by the [Secretary](/usc/42/1301.md?p=a-6) as of November 1, 2003.
      - (ii) **Changes in types of data—** Subject to [subclause (iii)](#e-3-B-iii), the [Secretary](/usc/42/1301.md?p=a-6) may only change the types of data that are required to be submitted under [subparagraph (A)](#e-3-A) after submitting to Congress a report on the reasons for such changes that was prepared in consultation with MA organizations and private accrediting bodies.
      - (iii) **Construction—** Nothing in the[^2] subsection shall be construed as restricting the ability of the [Secretary](/usc/42/1301.md?p=a-6) to carry out the duties under [section 1395w–21(d)(4)(D) of this title](/usc/42/1395w–21.md?p=d-4-D).
  - (4) **Treatment of accreditation—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide that a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) is deemed to meet all the requirements described in any specific clause of [subparagraph (B)](#e-4-B) if the organization is [accredited](/usc/42/300w–9.md?p=c-2) (and periodically reaccredited) by a private accrediting organization under a process that the [Secretary](/usc/42/1301.md?p=a-6) has determined assures that the accrediting organization applies and enforces [standards](/usc/42/1320d.md?p=7) that meet or exceed the [standards](/usc/42/1320d.md?p=7) established under [section 1395w–26 of this title](/usc/42/1395w–26.md) to carry out the requirements in such clause.
    - (B) **Requirements described—** The provisions described in this subparagraph are the following:
      - (i) [Paragraphs (1) through (3)](#1..3) of this subsection (relating to quality improvement [programs](/usc/42/274l–1.md?p=4)).
      - (ii) [Subsection (b)](#b) (relating to antidiscrimination).
      - (iii) [Subsection (d)](#d) (relating to access to services).
      - (iv) [Subsection (h)](#h) (relating to confidentiality and accuracy of enrollee records).
      - (v) [Subsection (i)](#i) (relating to information on advance directives).
      - (vi) [Subsection (j)](#j) (relating to provider participation rules).
      - (vii) The requirements described in [section 1395w–104(j) of this title](/usc/42/1395w–104.md?p=j), to the extent such requirements apply under [section 1395w–131(c) of this title](/usc/42/1395w–131.md?p=c).
    - (C) **Timely action on applications—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine, within 210 days after the date the [Secretary](/usc/42/1301.md?p=a-6) receives an application by a private accrediting organization and using the criteria specified in [section 1395bb(a)(2) of this title](/usc/42/1395bb.md?p=a-2), whether the process of the private accrediting organization meets the requirements with respect to any specific clause in [subparagraph (B)](#e-4-B) with respect to which the application is made. The [Secretary](/usc/42/1301.md?p=a-6) may not deny such an application on the basis that it seeks to meet the requirements with respect to only one, or more than one, such specific clause.
    - (D) **Construction—** Nothing in this paragraph shall be construed as limiting the authority of the [Secretary](/usc/42/1301.md?p=a-6) under [section 1395w–27 of this title](/usc/42/1395w–27.md), [including](/usc/42/1301.md?p=b) the authority to terminate contracts with [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) under [subsection (c)(2)](/usc/42/1395w–27.md?p=c-2) of such section.
- (f) **Grievance mechanism—** Each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) must provide meaningful procedures for hearing and resolving grievances between the organization ([including](/usc/42/1301.md?p=b) any entity or individual through which the organization provides health care services) and enrollees with [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) of the organization under this part.
- (g) **Coverage determinations, reconsiderations, and appeals—**
  - (1) **Determinations by organization—**
    - (A) **In general—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall have a procedure for making determinations regarding whether an individual enrolled with the plan of the organization under this part is entitled to receive a health service under this section and the amount (if any) that the individual is required to pay with respect to such service. Subject to [paragraph (3)](#g-3), such procedures shall provide for such determination to be made on a timely basis.
    - (B) **Explanation of determination—** Such a determination that denies coverage, in whole or in part, shall be in writing and shall include a statement in understandable language of the reasons for the denial and a description of the reconsideration and appeals processes.
  - (2) **Reconsiderations—**
    - (A) **In general—** The organization shall provide for reconsideration of a determination described in [paragraph (1)(B)](#g-1-B) upon request by the enrollee involved. The reconsideration shall be within a time period specified by the [Secretary](/usc/42/1301.md?p=a-6), but shall be made, subject to [paragraph (3)](#g-3), not later than 60 days after the date of the receipt of the request for reconsideration.
    - (B) **Physician decision on certain reconsiderations—** A reconsideration relating to a determination to deny coverage based on a lack of medical necessity shall be made only by a [physician](/usc/42/1395cc–1.md?p=a-3-A) with appropriate expertise in the field of medicine which necessitates [treatment](/usc/42/11851.md?p=11) who is other than a [physician](/usc/42/1395cc–1.md?p=a-3-A) involved in the initial determination.
  - (3) **Expedited determinations and reconsiderations—**
    - (A) **Receipt of requests—**
      - (i) **Enrollee requests—** An enrollee in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) may request, either in writing or orally, an expedited determination under [paragraph (1)](#g-1) or an expedited reconsideration under [paragraph (2)](#g-2) by the Medicare+ÐChoice organization.
      - (ii) **Physician requests—** A [physician](/usc/42/1395cc–1.md?p=a-3-A), regardless whether the [physician](/usc/42/1395cc–1.md?p=a-3-A) is affiliated with the organization or not, may request, either in writing or orally, such an expedited determination or reconsideration.
    - (B) **Organization procedures—**
      - (i) **In general—** The [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall maintain procedures for expediting organization determinations and reconsiderations when, upon request of an enrollee, the organization determines that the application of the normal time frame for making a determination (or a reconsideration involving a determination) could seriously jeopardize the life or health of the enrollee or the enrollee’s ability to regain maximum function.
      - (ii) **Expedition required for physician requests—** In the case of a request for an expedited determination or reconsideration made under [subparagraph (A)(ii)](#g-3-A-ii), the organization shall expedite the determination or reconsideration if the request indicates that the application of the normal time frame for making a determination (or a reconsideration involving a determination) could seriously jeopardize the life or health of the enrollee or the enrollee’s ability to regain maximum function.
      - (iii) **Timely response—** In cases described in clauses [(i)](#g-3-B-i) and [(ii)](#g-3-B-ii), the organization shall notify the enrollee (and the [physician](/usc/42/1395cc–1.md?p=a-3-A) involved, as appropriate) of the determination or reconsideration under time limitations established by the [Secretary](/usc/42/1301.md?p=a-6), but not later than 72 hours of the time of receipt of the request for the determination or reconsideration (or receipt of the information necessary to make the determination or reconsideration), or such longer period as the [Secretary](/usc/42/1301.md?p=a-6) may permit in specified cases.
  - (4) **Independent review of certain coverage denials—** The [Secretary](/usc/42/1301.md?p=a-6) shall contract with an independent, outside entity to review and resolve in a timely manner reconsiderations that affirm denial of coverage, in whole or in part. The provisions of [section 1395ff(c)(5) of this title](/usc/42/1395ff.md?p=c-5) shall apply to independent outside entities under contract with the [Secretary](/usc/42/1301.md?p=a-6) under this paragraph.
  - (5) **Appeals—** An enrollee with a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under this part who is dissatisfied by reason of the enrollee’s failure to receive any health service to which the enrollee believes the enrollee is entitled and at no greater charge than the enrollee believes the enrollee is required to pay is entitled, if the amount in controversy is $100 or more, to a hearing before the [Secretary](/usc/42/1301.md?p=a-6) to the same extent as is provided in [section 405(b) of this title](/usc/42/405.md?p=b), and in any such hearing the [Secretary](/usc/42/1301.md?p=a-6) shall make the organization a party. If the amount in controversy is $1,000 or more, the individual or organization shall, upon notifying the other party, be entitled to judicial review of the [Secretary](/usc/42/1301.md?p=a-6)’s final decision as provided in [section 405(g) of this title](/usc/42/405.md?p=g), and both the individual and the organization shall be entitled to be parties to that judicial review. In applying subsections (b) and (g) of [section 405 of this title](/usc/42/405.md) as provided in this paragraph, and in applying [section 405(l)](/usc/42/405.md?p=l) of this title thereto, any reference therein to the [Commissioner](/usc/42/12302.md?p=1) of [Social](/usc/42/1397j.md?p=20) Security or the [Social](/usc/42/1397j.md?p=20) Security [Administration](/usc/42/1301.md?p=a-10) shall be considered a reference to the [Secretary](/usc/42/1301.md?p=a-6) or the Department of Health and Human Services, respectively. The provisions of [section 1395ff(b)(1)(E)(iii) of this title](/usc/42/1395ff.md?p=b-1-E-iii) shall apply with respect to dollar amounts specified in the first 2 sentences of this paragraph in the same manner as they apply to the dollar amounts specified in [section 1395ff(b)(1)(E)(i) of this title](/usc/42/1395ff.md?p=b-1-E-i).
- (h) **Confidentiality and accuracy of enrollee records—** Insofar as a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) maintains medical records or other [health information](/usc/42/300jj.md?p=4) regarding enrollees under this part, the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall establish procedures—
  - (1) to safeguard the privacy of any individually identifiable enrollee information;
  - (2) to maintain such records and information in a manner that is accurate and timely; and
  - (3) to assure timely access of enrollees to such records and information.
- (i) **Information on advance directives—** Each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall meet the requirement of [section 1395cc(f) of this title](/usc/42/1395cc.md?p=f) (relating to maintaining written policies and procedures respecting advance directives).
- (j) **Rules regarding provider participation—**
  - (1) **Procedures—** Insofar as a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) offers benefits under a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) through [agreements](/usc/42/1320b–8.md?p=a-3-A) with [physicians](/usc/42/1395cc–4.md?p=a-2-E), the organization shall establish reasonable procedures relating to the participation (under an [agreement](/usc/42/1320b–8.md?p=a-3-A) between a [physician](/usc/42/1395cc–1.md?p=a-3-A) and the organization) of [physicians](/usc/42/1395cc–4.md?p=a-2-E) under such a plan. Such procedures shall include—
    - (A) providing notice of the rules regarding participation,
    - (B) providing written notice of participation decisions that are adverse to [physicians](/usc/42/1395cc–4.md?p=a-2-E), and
    - (C) providing a process within the organization for appealing such adverse decisions, [including](/usc/42/1301.md?p=b) the presentation of information and views of the [physician](/usc/42/1395cc–1.md?p=a-3-A) regarding such decision.
  - (2) **Consultation in medical policies—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall consult with [physicians](/usc/42/1395cc–4.md?p=a-2-E) who have entered into participation [agreements](/usc/42/1320b–8.md?p=a-3-A) with the organization regarding the organization’s medical policy, quality, and medical management procedures.
  - (3) **Prohibiting interference with provider advice to enrollees—**
    - (A) **In general—** Subject to subparagraphs [(B)](#j-3-B) and [(C)](#j-3-C), a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) (in relation to an individual enrolled under a Medicare+ÐChoice plan offered by the organization under this part) shall not prohibit or otherwise restrict a covered [health care professional](#j-3-D) (as defined in [subparagraph (D)](#j-3-D)) from advising such an individual who is a patient of the professional about the health status of the individual or [medical care](/usc/42/1301.md?p=a-7) or [treatment](/usc/42/11851.md?p=11) for the individual’s condition or disease, regardless of whether benefits for such care or [treatment](/usc/42/11851.md?p=11) are provided under the plan, if the professional is acting within the lawful scope of practice.
    - (B) **Conscience protection—** [Subparagraph (A)](#j-3-A) shall not be construed as requiring a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) to provide, reimburse for, or provide coverage of a counseling or referral service if the Medicare+ÐChoice organization offering the plan—
      - (i) objects to the provision of such service on moral or religious grounds; and
      - (ii) in the manner and through the written instrumentalities such Medicare+ÐChoice organization deems appropriate, makes available information on its policies regarding such service to prospective enrollees before or during enrollment and to enrollees within 90 days after the date that the organization or plan adopts a change in policy regarding such a counseling or referral service.
    - (C) **Construction—** Nothing in [subparagraph (B)](#j-3-B) shall be construed to affect disclosure requirements under [State](/usc/42/1397n–12.md?p=6) law or under the [Employee](/usc/42/1320a–7h.md?p=e-7) Retirement [Income](/usc/42/292s.md?p=c-4) Security Act of 1974 [[29 U.S.C. 1001](/usc/29/1001.md) et seq.].
    - (D) **“Health care professional” defined—** For purposes of this paragraph, the term “health care professional” means a [physician](/usc/42/1395cc–1.md?p=a-3-A) (as defined in [section 1395x(r) of this title](/usc/42/1395x.md?p=r)) or other health care professional if coverage for the professional’s services is provided under the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) for the services of the professional. Such term [includes](/usc/42/1301.md?p=b) a podiatrist, optometrist, chiropractor, psychologist, dentist, [physician assistant](/usc/42/1395x.md?p=aa-5-A), physical or occupational therapist and therapy assistant, speech-language pathologist, audiologist, registered or licensed practical nurse ([including](/usc/42/1301.md?p=b) [nurse practitioner](/usc/42/1395x.md?p=aa-5-A), [clinical nurse specialist](/usc/42/1395x.md?p=aa-5-B), [certified registered nurse anesthetist](/usc/42/1395x.md?p=bb-2), and [certified nurse-midwife](/usc/42/1395x.md?p=gg-2)), licensed certified [social](/usc/42/1397j.md?p=20) worker, registered respiratory therapist, and certified respiratory therapy technician.
  - (4) **Limitations on physician incentive plans—**
    - (A) **In general—** No [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may operate any [physician incentive plan](#j-4-B) (as defined in [subparagraph (B)](#j-4-B)) unless the organization provides assurances satisfactory to the [Secretary](/usc/42/1301.md?p=a-6) that the following requirements are met:
      - (i) No specific payment is made directly or indirectly under the plan to a [physician](/usc/42/1395cc–1.md?p=a-3-A) or [physician](/usc/42/1395cc–1.md?p=a-3-A) group as an inducement to reduce or limit medically necessary services provided with respect to a specific individual enrolled with the organization.
      - (ii) If the plan places a [physician](/usc/42/1395cc–1.md?p=a-3-A) or [physician](/usc/42/1395cc–1.md?p=a-3-A) group at substantial financial risk (as determined by the [Secretary](/usc/42/1301.md?p=a-6)) for services not provided by the [physician](/usc/42/1395cc–1.md?p=a-3-A) or [physician](/usc/42/1395cc–1.md?p=a-3-A) group, the organization provides stop-loss protection for the [physician](/usc/42/1395cc–1.md?p=a-3-A) or group that is adequate and appropriate, based on [standards](/usc/42/1320d.md?p=7) developed by the [Secretary](/usc/42/1301.md?p=a-6) that take into account the number of [physicians](/usc/42/1395cc–4.md?p=a-2-E) placed at such substantial financial risk in the group or under the plan and the number of individuals enrolled with the organization who receive services from the [physician](/usc/42/1395cc–1.md?p=a-3-A) or group.
    - (B) **“Physician incentive plan” defined—** In this paragraph, the term “physician incentive plan” means any compensation arrangement between a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) and a [physician](/usc/42/1395cc–1.md?p=a-3-A) or [physician](/usc/42/1395cc–1.md?p=a-3-A) group that may directly or indirectly have the effect of reducing or limiting services provided with respect to individuals enrolled with the organization under this part.
  - (5) **Limitation on provider indemnification—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may not provide (directly or indirectly) for a health care professional, [provider of services](/usc/42/1395n.md?p=a-2), or other entity providing health care services (or group of such professionals, providers, or entities) to indemnify the organization against any liability resulting from a civil action brought for any damage caused to an enrollee with a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) of the organization under this part by the organization’s denial of medically necessary care.
  - (6) **Special rules for Medicare+Choice private fee-for-service plans—** For purposes of applying this part ([including](/usc/42/1301.md?p=b) [subsection (k)(1)](#k-1)) and [section 1395cc(a)(1)(O) of this title](/usc/42/1395cc.md?p=a-1-O), a [hospital](/usc/42/1395dd.md?p=e-5) (or other [provider of services](/usc/42/1395n.md?p=a-2)), a [physician](/usc/42/1395cc–1.md?p=a-3-A) or other health care professional, or other entity furnishing health care services is treated as having an [agreement](/usc/42/1320b–8.md?p=a-3-A) or contract in effect with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) (with respect to an individual enrolled in a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2) it offers), if—
    - (A) the provider, professional, or other entity furnishes services that are covered under the plan to such an enrollee; and
    - (B) before providing such services, the provider, professional, or other entity—
      - (i) has been informed of the individual’s enrollment under the plan, and
      - (ii) either—
        - (I) has been informed of the terms and conditions of payment for such services under the plan, or
        - (II) is given a reasonable opportunity to obtain information concerning such terms and conditions,

      in a manner reasonably designed to effect informed [agreement](/usc/42/1320b–8.md?p=a-3-A) by a provider.

    The previous sentence shall only apply in the absence of an explicit [agreement](/usc/42/1320b–8.md?p=a-3-A) between such a provider, professional, or other entity and the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1).

  - (7) **Promotion of e-prescribing by MA plans—**
    - (A) **In general—** An [MA–PD plan](/usc/42/1395w–151.md?p=a-9) may provide for a separate payment or otherwise provide for a differential payment for a participating [physician](/usc/42/1395cc–1.md?p=a-3-A) that prescribes [covered part D drugs](/usc/42/1395w–141.md?p=a-4-A) in accordance with an electronic prescription [drug](/usc/42/282.md?p=j-1-A-vii) [program](/usc/42/274l–1.md?p=4) that meets [standards](/usc/42/1320d.md?p=7) established under [section 1395w–104(e) of this title](/usc/42/1395w–104.md?p=e).
    - (B) **Considerations—** Such payment may take into consideration the costs of the [physician](/usc/42/1395cc–1.md?p=a-3-A) in implementing such a [program](/usc/42/274l–1.md?p=4) and may also be increased for those participating [physicians](/usc/42/1395cc–4.md?p=a-2-E) who significantly increase—
      - (i) formulary compliance;
      - (ii) lower cost, therapeutically equivalent alternatives;
      - (iii) reductions in adverse [drug](/usc/42/282.md?p=j-1-A-vii) interactions; and
      - (iv) efficiencies in filing prescriptions through reduced administrative costs.
    - (C) **Structure—** Additional or increased payments under this subsection may be structured in the same manner as medication therapy management fees are structured under [section 1395w–104(c)(2)(E)](/usc/42/1395w–104.md?p=c-2-E)[^1] of this title.
- (k) **Treatment of services furnished by certain providers—**
  - (1) **In general—** Except as provided in [paragraph (2)](#k-2), a [physician](/usc/42/1395cc–1.md?p=a-3-A) or other entity (other than a [provider of services](/usc/42/1395n.md?p=a-2)) that does not have a contract establishing payment amounts for services furnished to an individual enrolled under this part with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) described in [section 1395w–21(a)(2)(A) of this title](/usc/42/1395w–21.md?p=a-2-A) or with an organization offering an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) shall accept as payment in full for covered services under this subchapter that are furnished to such an individual the amounts that the [physician](/usc/42/1395cc–1.md?p=a-3-A) or other entity could collect if the individual were not so enrolled. Any penalty or other provision of law that applies to such a payment with respect to an individual entitled to benefits under this subchapter (but not enrolled with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under this part) also applies with respect to an individual so enrolled.
  - (2) **Application to Medicare+Choice private fee-for-service plans—**
    - (A) **Balance billing limits under Medicare+ÐChoice private fee-for-service plans in case of contract providers—**
      - (i) **In general—** In the case of an individual enrolled in a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2) under this part, a [physician](/usc/42/1395cc–1.md?p=a-3-A), [provider of services](/usc/42/1395n.md?p=a-2), or other entity that has a contract ([including](/usc/42/1301.md?p=b) through the operation of [subsection (j)(6)](#j-6)) establishing a payment rate for services furnished to the enrollee shall accept as payment in full for covered services under this subchapter that are furnished to such an individual an amount not to exceed ([including](/usc/42/1301.md?p=b) any deductibles, coinsurance, copayments, or balance billing otherwise permitted under the plan) an amount equal to 115 percent of such payment rate.
      - (ii) **Procedures to enforce limits—** The [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) that offers such a plan shall establish procedures, similar to the procedures described in [section 1395w–4(g)(1)(A) of this title](/usc/42/1395w–4.md?p=g-1-A), in order to carry out the previous sentence.
      - (iii) **Assuring enforcement—** If the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) fails to establish and enforce procedures required under [clause (ii)](#k-2-A-ii), the organization is subject to intermediate sanctions under [section 1395w–27(g) of this title](/usc/42/1395w–27.md?p=g).
    - (B) **Enrollee liability for noncontract providers—** For provision—
      - (i) establishing minimum payment rate in the case of noncontract providers under a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2), see [subsection (a)(2)](#a-2); or
      - (ii) limiting enrollee liability in the case of covered services furnished by such providers, see [paragraph (1)](#k-1) and [section 1395cc(a)(1)(O) of this title](/usc/42/1395cc.md?p=a-1-O).
    - (C) **Information on beneficiary liability—**
      - (i) **In general—** Each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) that offers a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2) shall provide that enrollees under the plan who are furnished services for which payment is sought under the plan are provided an appropriate explanation of benefits (consistent with that provided under parts A and B and, if applicable, under [medicare supplemental policies](/usc/42/1320d–9.md?p=b-2)) that [includes](/usc/42/1301.md?p=b) a clear statement of the amount of the enrollee’s liability ([including](/usc/42/1301.md?p=b) any liability for balance billing consistent with this subsection) with respect to payments for such services.
      - (ii) **Advance notice before receipt of in­patient hospital services and certain other services—** In addition, such organization shall, in its terms and conditions of payments to [hospitals](/usc/42/1395dd.md?p=e-5) for [inpatient hospital services](/usc/42/1395x.md?p=b) and for other services identified by the [Secretary](/usc/42/1301.md?p=a-6) for which the amount of the balance billing under [subparagraph (A)](#k-2-A) could be substantial, require the [hospital](/usc/42/1395dd.md?p=e-5) to provide to the enrollee, before furnishing such services and if the [hospital](/usc/42/1395dd.md?p=e-5) imposes balance billing under [subparagraph (A)](#k-2-A)—
        - (I) notice of the fact that balance billing is permitted under such subparagraph for such services, and
        - (II) a good faith estimate of the likely amount of such balance billing (if any), with respect to such services, based upon the presenting condition of the enrollee.
- (l) **Return to home skilled nursing facilities for covered post-hospital extended care services—**
  - (1) **Ensuring return to home SNF—**
    - (A) **In general—** In providing coverage of [post-hospital extended care services](/usc/42/1395x.md?p=i), a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) shall provide for such coverage through a [home skilled nursing facility](#l-4-A) if the following conditions are met:
      - (i) **Enrollee election—** The enrollee elects to receive such coverage through such [facility](/usc/42/11049.md?p=4).
      - (ii) **SNF agreement—** The [facility](/usc/42/11049.md?p=4) has a contract with the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) for the provision of such services, or the [facility](/usc/42/11049.md?p=4) agrees to accept substantially similar payment under the same terms and conditions that apply to similarly situated [skilled nursing facilities](/usc/42/1395i–3.md?p=a) that are under contract with the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) for the provision of such services and through which the enrollee would otherwise receive such services.
    - (B) **Manner of payment to home SNF—** The organization shall provide payment to the [home skilled nursing facility](#l-4-A) consistent with the contract or the [agreement](/usc/42/1320b–8.md?p=a-3-A) described in [subparagraph (A)(ii)](#l-1-A-ii), as the case may be.
  - (2) **No less favorable coverage—** The coverage provided under [paragraph (1)](#l-1) ([including](/usc/42/1301.md?p=b) scope of services, [cost-sharing](/usc/42/18022.md?p=c-3-A), and other criteria of coverage) shall be no less favorable to the enrollee than the coverage that would be provided to the enrollee with respect to a [skilled nursing facility](/usc/42/1395i–3.md?p=a) the [post-hospital extended care services](/usc/42/1395x.md?p=i) of which are otherwise covered under the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1).
  - (3) **Rule of construction—** Nothing in this subsection shall be construed to do the following:
    - (A) To require coverage through a [skilled nursing facility](/usc/42/1395i–3.md?p=a) that is not otherwise qualified to provide benefits under part A for medicare beneficiaries not enrolled in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1).
    - (B) To prevent a [skilled nursing facility](/usc/42/1395i–3.md?p=a) from refusing to accept, or imposing conditions upon the acceptance of, an enrollee for the receipt of [post-hospital extended care services](/usc/42/1395x.md?p=i).
  - (4) **Definitions—** In this subsection:
    - (A) **Home skilled nursing facility—** The term “home skilled nursing facility” means, with respect to an enrollee who is entitled to receive [post-hospital extended care services](/usc/42/1395x.md?p=i) under a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1), any of the following [skilled nursing facilities](/usc/42/1395i–3.md?p=a):
      - (i) **SNF residence at time of admission—** The [skilled nursing facility](/usc/42/1395i–3.md?p=a) in which the enrollee resided at the time of admission to the [hospital](/usc/42/1395dd.md?p=e-5) preceding the receipt of such [post-hospital extended care services](/usc/42/1395x.md?p=i).
      - (ii) **SNF in continuing care retirement community—** A [skilled nursing facility](/usc/42/1395i–3.md?p=a) that is providing such services through a [continuing care retirement community](#l-4-B) (as defined in [subparagraph (B)](#l-4-B)) which provided residence to the enrollee at the time of such admission.
      - (iii) **SNF residence of spouse at time of discharge—** The [skilled nursing facility](/usc/42/1395i–3.md?p=a) in which the spouse of the enrollee is residing at the time of discharge from such [hospital](/usc/42/1395dd.md?p=e-5).
    - (B) **Continuing care retirement community—** The term “continuing care retirement community” means, with respect to an enrollee in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1), an arrangement under which [housing](/usc/42/1490p–2.md?p=r-3) and health-related services are provided (or arranged) through an organization for the enrollee under an [agreement](/usc/42/1320b–8.md?p=a-3-A) that is effective for the life of the enrollee or for a specified period.
- (m) **Provision of additional telehealth benefits—**
  - (1) **MA plan option—** For plan year 2020 and subsequent plan years, subject to the requirements of [paragraph (3)](#m-3), an [MA plan](/usc/42/1395w–101.md?p=a-3-B) may provide [additional telehealth benefits](#m-2-A-i) (as defined in [paragraph (2)](#m-2)) to individuals enrolled under this part.
  - (2) **Additional telehealth benefits defined—**
    - (A) **In general—** For purposes of this subsection and [section 1395w–24 of this title](/usc/42/1395w–24.md):
      - (i) **Definition—** The term “additional telehealth benefits” means services—
        - (I) for which benefits are available under part B, [including](/usc/42/1301.md?p=b) services for which payment is not made under [section 1395m(m) of this title](/usc/42/1395m.md?p=m) due to the conditions for payment under such section; and
        - (II) that are identified for such year as clinically appropriate to furnish using electronic information and telecommunications technology when a [physician](/usc/42/1395cc–1.md?p=a-3-A) (as defined in [section 1395x(r) of this title](/usc/42/1395x.md?p=r)) or [practitioner](/usc/42/1395a.md?p=b-6-C) (described in [section 1395u(b)(18)(C) of this title](/usc/42/1395u.md?p=b-18-C)) providing the service is not at the same location as the plan enrollee.
      - (ii) **Exclusion of capital and infrastructure costs and investments—** The term “[additional telehealth benefits](#m-2-A-i)” does not include capital and infrastructure costs and investments relating to such benefits.
    - (B) **Public comment—** Not later than November 30, 2018, the [Secretary](/usc/42/1301.md?p=a-6) shall solicit comments on—
      - (i) what types of items and services ([including](/usc/42/1301.md?p=b) those provided through supplemental health care benefits, such as remote patient monitoring, secure messaging, store and forward technologies, and other non-face-to-face communication) should be considered to be [additional telehealth benefits](#m-2-A-i); and
      - (ii) the requirements for the provision or furnishing of such benefits (such as [training](/usc/42/285e–2.md?p=b-2) and coordination requirements).
  - (3) **Requirements for additional telehealth benefits—** The [Secretary](/usc/42/1301.md?p=a-6) shall specify requirements for the provision or furnishing of [additional telehealth benefits](#m-2-A-i), [including](/usc/42/1301.md?p=b) with respect to the following:
    - (A) [Physician](/usc/42/1395cc–1.md?p=a-3-A) or [practitioner](/usc/42/1395a.md?p=b-6-C) qualifications (other than licensure) and other requirements such as specific [training](/usc/42/285e–2.md?p=b-2).
    - (B) Factors necessary for the coordination of such benefits with other items and services [including](/usc/42/1301.md?p=b) those furnished in-[person](/usc/42/1301.md?p=a-3).
    - (C) Such other areas as determined by the [Secretary](/usc/42/1301.md?p=a-6).
  - (4) **Enrollee choice—** If an [MA plan](/usc/42/1395w–101.md?p=a-3-B) provides a service as an additional telehealth benefit (as defined in [paragraph (2)](#m-2))—
    - (A) the [MA plan](/usc/42/1395w–101.md?p=a-3-B) shall also provide access to such benefit through an in-[person](/usc/42/1301.md?p=a-3) visit (and not only as an additional telehealth benefit); and
    - (B) an individual enrollee shall have discretion as to whether to receive such service through the in-[person](/usc/42/1301.md?p=a-3) visit or as an additional telehealth benefit.
  - (5) **Treatment under MA—** For purposes of this subsection and [section 1395w–24 of this title](/usc/42/1395w–24.md), if a plan provides [additional telehealth benefits](#m-2-A-i), such [additional telehealth benefits](#m-2-A-i) shall be treated as if they were [benefits under the original Medicare fee-for-service program option](#a-1-B-i).
  - (6) **Construction—** Nothing in this subsection shall be construed as affecting the requirement under [subsection (a)(1)](#a-1) that [MA plans](/usc/42/1395w–101.md?p=a-3-B) provide enrollees with items and services (other than [hospice care](/usc/42/1395x.md?p=dd-1)) for which benefits are available under parts A and B, [including](/usc/42/1301.md?p=b) benefits available under [section 1395m(m) of this title](/usc/42/1395m.md?p=m).
- (n) **Provision of information relating to the safe disposal of certain prescription drugs—**
  - (1) **In general—** In the case of an individual enrolled under an MA or [MA–PD plan](/usc/42/1395w–151.md?p=a-9) who is furnished an in-home health risk assessment on or after January 1, 2021, such plan shall ensure that such assessment [includes](/usc/42/1301.md?p=b) information on the safe [disposal](/usc/42/2021b.md?p=7) of prescription [drugs](/usc/42/1395x.md?p=t-2-A) that are [controlled substances](/usc/42/11851.md?p=2) that meets the criteria established under [paragraph (2)](#n-2). Such information shall include information on [drug](/usc/42/282.md?p=j-1-A-vii) takeback [programs](/usc/42/274l–1.md?p=4) that meet such requirements determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6) and information on in-home [disposal](/usc/42/2021b.md?p=7).
  - (2) **Criteria—** The [Secretary](/usc/42/1301.md?p=a-6) shall, through rulemaking, establish criteria the [Secretary](/usc/42/1301.md?p=a-6) determines appropriate with respect to information provided to an individual to ensure that such information sufficiently educates such individual on the safe [disposal](/usc/42/2021b.md?p=7) of prescription [drugs](/usc/42/1395x.md?p=t-2-A) that are [controlled substances](/usc/42/11851.md?p=2).

# §1395w–23. Payments to Medicare+Choice organizations

- (a) **Payments to organizations—**
  - (1) **Monthly payments—**
    - (A) **In general—** Under a contract under [section 1395w–27 of this title](/usc/42/1395w–27.md) and subject to subsections [(e)](#e), [(g)](#g), [(i)](#i), and [(l)](#l) and [section 1395w–28(e)(4) of this title](/usc/42/1395w–28.md?p=e-4), the [Secretary](/usc/42/1301.md?p=a-6) shall make monthly payments under this section in advance to each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1), with respect to coverage of an individual under this part in a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) for a month, in an amount determined as follows:
      - (i) **Payment before 2006—** For years before 2006, the payment amount shall be equal to <sup>1</sup>⁄<sub>12</sub> of the annual MA capitation rate (as calculated under [subsection (c)(1)](#c-1)) with respect to that individual for that area, adjusted under [subparagraph (C)](#a-1-C) and reduced by the amount of any reduction elected under [section 1395w–24(f)(1)(E) of this title](/usc/42/1395w–24.md?p=f-1-E).
      - (ii) **Payment for original fee-for-service benefits beginning with 2006—** For years beginning with 2006, the amount specified in [subparagraph (B)](#a-1-B).
    - (B) **Payment amount for original fee-for-service benefits beginning with 2006—**
      - (i) **Payment of bid for plans with bids below benchmark—** In the case of a plan for which there are average per capita monthly savings described in section [1395w–24(b)(3)(C)](/usc/42/1395w–24.md?p=b-3-C) or [1395w–24(b)(4)(C)](/usc/42/1395w–24.md?p=b-4-C) of this title, as the case may be, the amount specified in this subparagraph is equal to the [unadjusted MA statutory non-drug monthly bid amount](/usc/42/1395w–24.md?p=b-2-E), adjusted under [subparagraph (C)](#a-1-C) and (if applicable) under subparagraphs [(F)](#a-1-F) and [(G)](#a-1-G), plus the amount (if any) of any rebate under [subparagraph (E)](#a-1-E).
      - (ii) **Payment of benchmark for plans with bids at or above benchmark—** In the case of a plan for which there are no average per capita monthly savings described in section [1395w–24(b)(3)(C)](/usc/42/1395w–24.md?p=b-3-C) or [1395w–24(b)(4)(C)](/usc/42/1395w–24.md?p=b-4-C) of this title, as the case may be, the amount specified in this subparagraph is equal to the [MA area-specific non-drug monthly benchmark amount](#j), adjusted under [subparagraph (C)](#a-1-C) and (if applicable) under subparagraphs [(F)](#a-1-F) and [(G)](#a-1-G).
      - (iii) **Payment of benchmark for MSA plans—** Notwithstanding clauses [(i)](#a-1-B-i) and [(ii)](#a-1-B-ii), in the case of an [MSA plan](/usc/42/1395w–28.md?p=b-3-A), the amount specified in this subparagraph is equal to the [MA area-specific non-drug monthly benchmark amount](#j), adjusted under [subparagraph (C)](#a-1-C).
      - (iv) **Authority to apply frailty adjustment under PACE payment rules for certain specialized MA plans for special needs individuals—**
        - (I) **In general—** Notwithstanding the preceding provisions of this paragraph, for plan year 2011 and subsequent plan years, in the case of a plan described in [subclause (II)](#a-1-B-iv-II), the [Secretary](/usc/42/1301.md?p=a-6) may apply the payment rules under [section 1395eee(d) of this title](/usc/42/1395eee.md?p=d) (other than [paragraph (3)](/usc/42/1395eee.md?p=d-3) of such section) rather than the payment rules that would otherwise apply under this part, but only to the extent necessary to reflect the costs of treating high concentrations of frail individuals.
        - (II) **Plan described—** A plan described in this subclause is a [specialized MA plan for special needs individuals](/usc/42/1395w–28.md?p=b-6-A) described in [section 1395w–28(b)(6)(B)(ii) of this title](/usc/42/1395w–28.md?p=b-6-B-ii) that is fully integrated with capitated contracts with [States](/usc/42/1397n–12.md?p=6) for Medicaid benefits, [including](/usc/42/1301.md?p=b) [long-term care](/usc/42/1397j.md?p=14-A), and that have similar average levels of frailty (as determined by the [Secretary](/usc/42/1301.md?p=a-6)) as the PACE [program](/usc/42/274l–1.md?p=4).
    - (C) **Demographic adjustment, including adjustment for health status—**
      - (i) **In general—** Subject to [subparagraph (I)](#a-1-I), the [Secretary](/usc/42/1301.md?p=a-6) shall adjust the payment amount under [subparagraph (A)(i)](#a-1-A-i) and the amount specified under subparagraph [(B)(i)](#a-1-B-i), [(B)(ii)](#a-1-B-ii), and [(B)(iii)](#a-1-B-iii) for such risk factors as age, disability status, gender, institutional status, and such other factors as the [Secretary](/usc/42/1301.md?p=a-6) determines to be appropriate, [including](/usc/42/1301.md?p=b) adjustment for health status under [paragraph (3)](#a-3), so as to ensure actuarial equivalence. The [Secretary](/usc/42/1301.md?p=a-6) may add to, modify, or substitute for such adjustment factors if such changes will improve the determination of actuarial equivalence.
      - (ii) **Application of coding adjustment—** For 2006 and each subsequent year:
        - (I) In applying the adjustment under [clause (i)](#a-1-C-i) for health status to payment amounts, the [Secretary](/usc/42/1301.md?p=a-6) shall ensure that such adjustment reflects changes in [treatment](/usc/42/11851.md?p=11) and coding [practices](/usc/42/17061.md?p=19) in the fee-for-service sector and reflects differences in coding patterns between Medicare Advantage plans and providers under part[^1] A and B to the extent that the [Secretary](/usc/42/1301.md?p=a-6) has identified such differences.
        - (II) In order to ensure payment accuracy, the [Secretary](/usc/42/1301.md?p=a-6) shall annually conduct an analysis of the differences described in [subclause (I)](#a-1-C-ii-I). The [Secretary](/usc/42/1301.md?p=a-6) shall complete such analysis by a date necessary to ensure that the results of such analysis are incorporated on a timely basis into the risk scores for 2008 and subsequent years. In conducting such analysis, the [Secretary](/usc/42/1301.md?p=a-6) shall use data submitted with respect to 2004 and subsequent years, as available and updated as appropriate.
        - (III) In calculating each year’s adjustment, the adjustment factor shall be for 2014, not less than the adjustment factor applied for 2010, plus 1.5 percentage points; for each of years 2015 through 2018, not less than the adjustment factor applied for the previous year, plus 0.25 percentage point; and for 2019 and each subsequent year, not less than 5.9 percent.
        - (IV) Such adjustment shall be applied to risk scores until the [Secretary](/usc/42/1301.md?p=a-6) implements risk adjustment using Medicare Advantage diagnostic, cost, and use data.
      - (iii) **Improvements to risk adjustment for special needs individuals with chronic health conditions—**
        - (I) **In general—** For 2011 and subsequent years, for purposes of the adjustment under [clause (i)](#a-1-C-i) with respect to individuals described in [subclause (II)](#a-1-C-iii-II), the [Secretary](/usc/42/1301.md?p=a-6) shall use a risk score that reflects the known underlying risk profile and chronic health status of similar individuals. Such risk score shall be used instead of the default risk score for new enrollees in Medicare Advantage plans that are not specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](/usc/42/1395w–28.md?p=b-6-B) (as defined in [section 1395w–28(b)(6) of this title](/usc/42/1395w–28.md?p=b-6)).
        - (II) **Individuals described—** An individual described in this subclause is a [special needs individual](/usc/42/1395w–28.md?p=b-6-B) described in subsection (b)(6)(B)(iii)[^2] who enrolls in a [specialized MA plan for special needs individuals](/usc/42/1395w–28.md?p=b-6-A) on or after January 1, 2011.
        - (III) **Evaluation—** For 2011 and periodically thereafter, the [Secretary](/usc/42/1301.md?p=a-6) shall evaluate and revise the risk adjustment system under this subparagraph in order to, as accurately as possible, account for higher medical and care coordination costs associated with frailty, individuals with multiple, comorbid chronic conditions, and individuals with a diagnosis of mental illness, and also to account for costs that may be associated with higher concentrations of beneficiaries with those conditions.
        - (IV) **Publication of evaluation and revisions—** The [Secretary](/usc/42/1301.md?p=a-6) shall publish, as part of an announcement under [subsection (b)](#b), a description of any evaluation conducted under [subclause (III)](#a-1-C-iii-III) during the preceding year and any revisions made under such subclause as a result of such evaluation.
    - (D) **Separate payment for Federal drug subsidies—** In the case of an enrollee in an [MA–PD plan](/usc/42/1395w–151.md?p=a-9), the MA organization offering such plan also receives—
      - (i) subsidies under [section 1395w–115 of this title](/usc/42/1395w–115.md) (other than under [subsection (g)](#g)); and
      - (ii) reimbursement for premium and [cost-sharing](/usc/42/18022.md?p=c-3-A) reductions for low-[income](/usc/42/292s.md?p=c-4) individuals under [section 1395w–114(c)(1)(C) of this title](/usc/42/1395w–114.md?p=c-1-C).
    - (E) **Payment of rebate for plans with bids below benchmark—** In the case of a plan for which there are average per capita monthly savings described in section [1395w–24(b)(3)(C)](/usc/42/1395w–24.md?p=b-3-C) or [1395w–24(b)(4)(C)](/usc/42/1395w–24.md?p=b-4-C) of this title, as the case may be, the amount specified in this subparagraph is the amount of the monthly rebate computed under [section 1395w–24(b)(1)(C)(i) of this title](/usc/42/1395w–24.md?p=b-1-C-i) for that plan and year (as reduced by the amount of any credit provided under [section 1395w–24(b)(1)(C)(iv)](/usc/42/1395w–24.md?p=b-1-C-iv)[^2] of this title).
    - (F) **Adjustment for intra-area variations—**
      - (i) **Intra-regional variations—** In the case of payment with respect to an [MA regional plan](/usc/42/1395w–28.md?p=b-4) for an MA [region](/usc/42/1395ww.md?p=d-2-D), the [Secretary](/usc/42/1301.md?p=a-6) shall also adjust the amounts specified under subparagraphs [(B)(i)](#a-1-B-i) and [(B)(ii)](#a-1-B-ii) in a manner to take into account variations in MA local payment rates under this part among the different [MA local areas](#d-2) included in such [region](/usc/42/1395ww.md?p=d-2-D).
      - (ii) **Intra-service area variations—** In the case of payment with respect to an [MA local plan](/usc/42/1395w–28.md?p=b-5) for a service area that covers more than one [MA local area](#d-2), the [Secretary](/usc/42/1301.md?p=a-6) shall also adjust the amounts specified under subparagraphs [(B)(i)](#a-1-B-i) and [(B)(ii)](#a-1-B-ii) in a manner to take into account variations in MA local payment rates under this part among the different [MA local areas](#d-2) included in such service area.
    - (G) **Adjustment relating to risk adjustment—** The [Secretary](/usc/42/1301.md?p=a-6) shall adjust payments with respect to [MA plans](/usc/42/1395w–101.md?p=a-3-B) as necessary to ensure that—
      - (i) the sum of—
        - (I) the monthly payment made under [subparagraph (A)(ii)](#a-1-A-ii); and
        - (II) the [MA monthly basic beneficiary premium](/usc/42/1395w–24.md?p=b-2-A) under [section 1395w–24(b)(2)(A) of this title](/usc/42/1395w–24.md?p=b-2-A); equals
      - (ii) the [unadjusted MA statutory non-drug monthly bid amount](/usc/42/1395w–24.md?p=b-2-E), adjusted in the manner described in [subparagraph (C)](#a-1-C) and, for an [MA regional plan](/usc/42/1395w–28.md?p=b-4), [subparagraph (F)](#a-1-F).
    - (H) **Special rule for end-stage renal disease—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish separate rates of payment to a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) with respect to classes of individuals determined to have end-stage renal disease and enrolled in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) of the organization. Such rates of payment shall be actuarially equivalent to rates that would have been paid with respect to other enrollees in the MA payment area (or such other area as specified by the [Secretary](/usc/42/1301.md?p=a-6)) under the provisions of this section as in effect before December 8, 2003. In accordance with [regulations](/usc/42/1395hh.md?p=a-1), the [Secretary](/usc/42/1301.md?p=a-6) shall provide for the application of the seventh sentence of [section 1395rr(b)(7) of this title](/usc/42/1395rr.md?p=b-7) to payments under this section covering the provision of renal dialysis [treatment](/usc/42/11851.md?p=11) in the same manner as such sentence applies to composite rate payments described in such sentence. In establishing such rates, the [Secretary](/usc/42/1301.md?p=a-6) shall provide for appropriate adjustments to increase each rate to reflect the demonstration rate ([including](/usc/42/1301.md?p=b) the risk adjustment methodology associated with such rate) of the [social](/usc/42/1397j.md?p=20) health maintenance organization end-stage renal disease capitation demonstrations (established by section 2355 of the Deficit Reduction Act of 1984, as amended by section 13567(b) of the Omnibus Budget Reconciliation Act of 1993), and shall compute such rates by taking into account such factors as renal [treatment](/usc/42/11851.md?p=11) modality, age, and the underlying [cause](/usc/42/9908.md?p=c-2) of the end-stage renal disease. The [Secretary](/usc/42/1301.md?p=a-6) may apply the competitive bidding methodology provided for in this section, with appropriate adjustments to account for the risk adjustment methodology applied to end stage renal disease payments.
    - (I) **Improvements to risk adjustment for 2019 and subsequent years—**
      - (i) **In general—** In order to determine the appropriate adjustment for health status under [subparagraph (C)(i)](#a-1-C-i), the following shall apply:
        - (I) **Taking into account total number of diseases or conditions—** The [Secretary](/usc/42/1301.md?p=a-6) shall take into account the total number of diseases or conditions of an individual enrolled in an [MA plan](/usc/42/1395w–101.md?p=a-3-B). The [Secretary](/usc/42/1301.md?p=a-6) shall make an additional adjustment under such subparagraph as the number of diseases or conditions of an individual increases.
        - (II) **Using at least 2 years of diagnostic data—** The [Secretary](/usc/42/1301.md?p=a-6) may use at least 2 years of diagnosis data.
        - (III) **Providing separate adjustments for dual eligible individuals—** With respect to individuals who are dually eligible for benefits under this subchapter and subchapter XIX, the [Secretary](/usc/42/1301.md?p=a-6) shall make separate adjustments for each of the following:
          - (aa) Full-benefit dual [eligible individuals](/usc/42/239.md?p=a-6) (as defined in [section 1396u–5(c)(6) of this title](/usc/42/1396u–5.md?p=c-6)).
          - (bb) Such individuals not described in [item (aa)](#a-1-I-i-III-aa).
        - (IV) **Evaluation of mental health and substance use disorders—** The [Secretary](/usc/42/1301.md?p=a-6) shall evaluate the impact of [including](/usc/42/1301.md?p=b) additional diagnosis codes related to mental health and substance use disorders in the risk adjustment model.
        - (V) **Evaluation of chronic kidney disease—** The [Secretary](/usc/42/1301.md?p=a-6) shall evaluate the impact of [including](/usc/42/1301.md?p=b) the severity of chronic kidney disease in the risk adjustment model.
        - (VI) **Evaluation of payment rates for end-stage renal disease—** The [Secretary](/usc/42/1301.md?p=a-6) shall evaluate whether other factors (in addition to those described in [subparagraph (H)](#a-1-H)) should be taken into consideration when computing payment rates under such subparagraph.
      - (ii) **Phased-in implementation—** The [Secretary](/usc/42/1301.md?p=a-6) shall phase-in any changes to risk adjustment payment amounts under [subparagraph (C)(i)](#a-1-C-i) under this subparagraph over a 3-year period, beginning with 2019, with such changes being fully implemented for 2022 and subsequent years.
      - (iii) **Opportunity for review and public comment—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide an opportunity for review of the proposed changes to such risk adjustment payment amounts under this subparagraph and a public comment period of not less than 60 days before implementing such changes.
  - (2) **Adjustment to reflect number of enrollees—**
    - (A) **In general—** The amount of payment under this subsection may be retroactively adjusted to take into account any difference between the actual number of individuals enrolled with an organization under this part and the number of such individuals estimated to be so enrolled in determining the amount of the advance payment.
    - (B) **Special rule for certain enrollees—**
      - (i) **In general—** Subject to [clause (ii)](#a-2-B-ii), the [Secretary](/usc/42/1301.md?p=a-6) may make retroactive adjustments under [subparagraph (A)](#a-2-A) to take into account individuals enrolled during the period beginning on the date on which the individual enrolls with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under a plan operated, sponsored, or contributed to by the individual’s employer or former employer (or the employer or former employer of the individual’s spouse) and ending on the date on which the individual is enrolled in the organization under this part, except that for purposes of making such retroactive adjustments under this subparagraph, such period may not exceed 90 days.
      - (ii) **Exception—** No adjustment may be made under [clause (i)](#a-2-B-i) with respect to any individual who does not certify that the organization provided the individual with the disclosure statement described in [section 1395w–22(c) of this title](/usc/42/1395w–22.md?p=c) at the time the individual enrolled with the organization.
  - (3) **Establishment of risk adjustment factors—**
    - (A) **Report—** The [Secretary](/usc/42/1301.md?p=a-6) shall develop, and submit to Congress by not later than March 1, 1999, a report on the method of risk adjustment of payment rates under this section, to be implemented under [subparagraph (C)](#a-3-C), that accounts for variations in per capita costs based on health status. Such report shall include an evaluation of such method by an outside, independent actuary of the actuarial soundness of the proposal.
    - (B) **Data collection—** In order to carry out this paragraph, the [Secretary](/usc/42/1301.md?p=a-6) shall require [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) (and eligible organizations with risk-sharing contracts under [section 1395mm of this title](/usc/42/1395mm.md)) to submit data regarding [inpatient hospital services](/usc/42/1395x.md?p=b) for periods beginning on or after July 1, 1997, and data regarding other services and other information as the [Secretary](/usc/42/1301.md?p=a-6) deems necessary for periods beginning on or after July 1, 1998. The [Secretary](/usc/42/1301.md?p=a-6) may not require an organization to submit such data before January 1, 1998.
    - (C) **Initial implementation—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall first provide for implementation of a risk adjustment methodology that accounts for variations in per capita costs based on health status and other demographic factors for payments by no later than January 1, 2000.
      - (ii) **Phase-in—** Except as provided in [clause (iv)](#a-3-C-iv), such risk adjustment methodology shall be implemented in a phased-in manner so that the methodology insofar as it makes adjustments to capitation rates for health status applies to—
        - (I) 10 percent of <sup>1</sup>⁄<sub>12</sub> of the annual Medicare+Choice capitation rate in 2000 and each succeeding year through 2003;
        - (II) 30 percent of such capitation rate in 2004;
        - (III) 50 percent of such capitation rate in 2005;
        - (IV) 75 percent of such capitation rate in 2006; and
        - (V) 100 percent of such capitation rate in 2007 and succeeding years.
      - (iii) **Data for risk adjustment methodology—** Such risk adjustment methodology for 2004 and each succeeding year, shall be based on data from inpatient [hospital](/usc/42/1395dd.md?p=e-5) and ambulatory settings.
      - (iv) **Full implementation of risk adjustment for congestive heart failure enrollees for 2001—**
        - (I) **Exemption from phase-in—** Subject to [subclause (II)](#a-3-C-iv-II), the [Secretary](/usc/42/1301.md?p=a-6) shall fully implement the risk adjustment methodology described in [clause (i)](#a-3-C-i) with respect to each individual who has had a qualifying congestive heart failure inpatient diagnosis (as determined by the [Secretary](/usc/42/1301.md?p=a-6) under such risk adjustment methodology) during the period beginning on July 1, 1999, and ending on June 30, 2000, and who is enrolled in a coordinated care plan that is the only coordinated care plan offered on January 1, 2001, in the service area of the individual.
        - (II) **Period of application—** [Subclause (I)](#a-3-C-iv-I) shall only apply during the 1-year period beginning on January 1, 2001.
    - (D) **Uniform application to all types of plans—** Subject to [section 1395w–28(e)(4) of this title](/usc/42/1395w–28.md?p=e-4), the methodology shall be applied uniformly without regard to the type of plan.
  - (4) **Payment rule for federally qualified health center services—** If an individual who is enrolled with an [MA plan](/usc/42/1395w–101.md?p=a-3-B) under this part receives a service from a [federally qualified health center](/usc/42/1395x.md?p=aa-4) that has a written [agreement](/usc/42/1320b–8.md?p=a-3-A) with the MA organization that offers such plan for providing such a service ([including](/usc/42/1301.md?p=b) any [agreement](/usc/42/1320b–8.md?p=a-3-A) required under [section 1395w–27(e)(3) of this title](/usc/42/1395w–27.md?p=e-3))—
    - (A) the [Secretary](/usc/42/1301.md?p=a-6) shall pay the amount determined under [section 1395l(a)(3)(B)](/usc/42/1395l.md?p=a-3-B) of this title directly to the [federally qualified health center](/usc/42/1395x.md?p=aa-4) not less frequently than quarterly; and
    - (B) the [Secretary](/usc/42/1301.md?p=a-6) shall not reduce the amount of the monthly payments under this subsection as a result of the application of [subparagraph (A)](#a-4-A).
- (b) **Annual announcement of payment rates—**
  - (1) **Annual announcements—**
    - (A) **For 2005—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine, and shall announce (in a manner intended to provide notice to interested parties), not later than the second Monday in May of 2004, with respect to each MA payment area, the following:
      - (i) **MA capitation rates—** The annual MA capitation rate for each MA payment area for 2005.
      - (ii) **Adjustment factors—** The risk and other factors to be used in adjusting such rates under [subsection (a)(1)(C)](#a-1-C) for payments for months in 2005.
    - (B) **For 2006 and subsequent years—** For a year after 2005—
      - (i) **Initial announcement—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine, and shall announce (in a manner intended to provide notice to interested parties), not later than the first Monday in April before the calendar year concerned, with respect to each MA payment area, the following:
        - (I) **MA capitation rates; MA local area benchmark—** The annual MA capitation rate for each MA payment area for the year.
        - (II) **Adjustment factors—** The risk and other factors to be used in adjusting such rates under [subsection (a)(1)(C)](#a-1-C) for payments for months in such year.
      - (ii) **Regional benchmark announcement—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine, and shall announce (in a manner intended to provide notice to interested parties), on a timely basis before the calendar year concerned, with respect to each MA [region](/usc/42/1395ww.md?p=d-2-D) and each [MA regional plan](/usc/42/1395w–28.md?p=b-4) for which a bid was submitted under [section 1395w–24 of this title](/usc/42/1395w–24.md), the MA [region](/usc/42/1395ww.md?p=d-2-D)-specific non-[drug](/usc/42/282.md?p=j-1-A-vii) monthly benchmark amount for that [region](/usc/42/1395ww.md?p=d-2-D) for the year involved.
      - (iii) **Benchmark announcement for CCA local areas—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine, and shall announce (in a manner intended to provide notice to interested parties), on a timely basis before the calendar year concerned, with respect to each CCA area (as defined in [section 1395w–29(b)(1)(A)](/usc/42/1395w–29.md)[^2] of this title), the CCA non-[drug](/usc/42/282.md?p=j-1-A-vii) monthly benchmark amount under [section 1395w–29(e)(1)](/usc/42/1395w–29.md)[^2] of this title for that area for the year involved.
  - (2) **Advance notice of methodological changes—** At least 45 days (or, in 2017 and each subsequent year, at least 60 days) before making the announcement under [paragraph (1)](#b-1) for a year, the [Secretary](/usc/42/1301.md?p=a-6) shall provide for notice to [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) of proposed changes to be made in the methodology from the methodology and assumptions used in the previous announcement and shall provide such organizations an opportunity (in 2017 and each subsequent year, of no less than 30 days) to comment on such proposed changes.
  - (3) **Explanation of assumptions—** In each announcement made under [paragraph (1)](#b-1), the [Secretary](/usc/42/1301.md?p=a-6) shall include an explanation of the assumptions and changes in methodology used in such announcement.
  - (4) **Continued computation and publication of county-specific per capita fee-for-service expenditure information—** The [Secretary](/usc/42/1301.md?p=a-6), through the Chief Actuary of the Centers for Medicare & Medicaid Services, shall provide for the computation and publication, on an annual basis beginning with 2001 at the time of publication of the annual Medicare+Choice capitation rates under [paragraph (1)](#b-1), of the following information for the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B (exclusive of individuals eligible for coverage under [section 426–1 of this title](/usc/42/426–1.md)) for each [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) for the second calendar year ending before the date of publication:
    - (A) [Total expenditures](/usc/42/1320f.md?p=c-5) per capita per month, computed separately for part A and for part B.
    - (B) The expenditures described in [subparagraph (A)](#b-4-A) reduced by the best estimate of the expenditures (such as graduate medical education and disproportionate share [hospital](/usc/42/1395dd.md?p=e-5) payments) not related to the payment of [claims](/usc/42/1320a–7a.md?p=i-2).
    - (C) The average risk factor for the covered population based on diagnoses reported for medicare inpatient services, using the same methodology as is expected to be applied in making payments under [subsection (a)](#a).
    - (D) Such average risk factor based on diagnoses for inpatient and other sites of service, using the same methodology as is expected to be applied in making payments under [subsection (a)](#a).
- (c) **Calculation of annual Medicare+Choice capitation rates—**
  - (1) **In general—** For purposes of this part, subject to paragraphs [(6)(C)](#c-6-C) and [(7)](#c-7), each annual Medicare+Choice capitation rate, for a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) that is an [MA local area](#d-2) for a contract year consisting of a calendar year, is equal to the largest of the amounts specified in the following subparagraph [(A)](#c-1-A), [(B)](#c-1-B), [(C)](#c-1-C), or [(D)](#c-1-D):
    - (A) **Blended capitation rate—** For a year before 2005, the sum of—
      - (i) the area-specific percentage (as specified under [paragraph (2)](#c-2) for the year) of the annual area-specific Medicare+Choice capitation rate for the [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2), as determined under [paragraph (3)](#c-3) for the year, and
      - (ii) the national percentage (as specified under [paragraph (2)](#c-2) for the year) of the input-price-adjusted annual national Medicare+Choice capitation rate, as determined under [paragraph (4)](#c-4) for the year,

      multiplied (for a year other than 2004) by the budget neutrality adjustment factor determined under [paragraph (5)](#c-5).

    - (B) **Minimum amount—** 12 multiplied by the following amount:
      - (i) For 1998, $367 (but not to exceed, in the case of an area outside the 50 [States](/usc/42/1397n–12.md?p=6) and the District of Columbia, 150 percent of the annual per capita rate of payment for 1997 determined under [section 1395mm(a)(1)(C) of this title](/usc/42/1395mm.md?p=a-1-C) for the area).
      - (ii) For 1999 and 2000, the minimum amount determined under [clause (i)](#c-1-B-i) or this clause, respectively, for the preceding year, increased by the national per capita Medicare+Choice growth percentage described in [paragraph (6)(A)](#c-6-A) applicable to 1999 or 2000, respectively.
      - (iii)
        - (I) Subject to [subclause (II)](#c-1-B-iii-II), for 2001, for any area in a [Metropolitan Statistical Area](#d-4-D) with a population of more than 250,000, $525, and for any other area $475.
        - (II) In the case of an area outside the 50 [States](/usc/42/1397n–12.md?p=6) and the District of Columbia, the amount specified in this clause shall not exceed 120 percent of the amount determined under [clause (ii)](#c-1-B-ii) for such area for 2000.
      - (iv) For 2002, 2003, and 2004, the minimum amount specified in this clause (or [clause (iii)](#c-1-B-iii)) for the preceding year increased by the national per capita Medicare+Choice growth percentage, described in [paragraph (6)(A)](#c-6-A) for that succeeding year.
    - (C) **Minimum percentage increase—**
      - (i) For 1998, 102 percent of the annual per capita rate of payment for 1997 determined under [section 1395mm(a)(1)(C) of this title](/usc/42/1395mm.md?p=a-1-C) for the [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2).
      - (ii) For 1999 and 2000, 102 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.
      - (iii) For 2001, 103 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for 2000.
      - (iv) For 2002 and 2003, 102 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.
      - (v) For 2004 and each succeeding year, the greater of—
        - (I) 102 percent of the annual MA capitation rate under this paragraph for the area for the previous year; or
        - (II) the annual MA capitation rate under this paragraph for the area for the previous year increased by the national per capita MA growth percentage, described in [paragraph (6)](#c-6) for that succeeding year, but not taking into account any adjustment under [paragraph (6)(C)](#c-6-C) for a year before 2004.
    - (D) **100 percent of fee-for-service costs—**
      - (i) **In general—** For each year specified in [clause (ii)](#c-1-D-ii), the adjusted average per capita cost for the year involved, determined under [section 1395mm(a)(4) of this title](/usc/42/1395mm.md?p=a-4) and adjusted as appropriate for the purpose of risk adjustment, for the MA payment area for individuals who are not enrolled in an [MA plan](/usc/42/1395w–101.md?p=a-3-B) under this part for the year, but adjusted to exclude costs attributable to payments under sections,[^3] 1395w–4(o), and[^3] 1395ww(n) and 1395ww(h) of this title.
      - (ii) **Periodic rebasing—** The provisions of [clause (i)](#c-1-D-i) shall apply for 2004 and for subsequent years as the [Secretary](/usc/42/1301.md?p=a-6) shall specify (but not less than once every 3 years).
      - (iii) **Inclusion of costs of VA and DOD military facility services to medicare-eligible beneficiaries—** In determining the adjusted average per capita cost under [clause (i)](#c-1-D-i) for a year, such cost shall be adjusted to include the [Secretary](/usc/42/1301.md?p=a-6)’s estimate, on a per capita basis, of the amount of additional payments that would have been made in the area involved under this subchapter if individuals entitled to benefits under this subchapter had not received services from [facilities](/usc/42/11049.md?p=4) of the Department of Defense or the Department of Veterans Affairs.
  - (2) **Area-specific and national percentages—** For purposes of [paragraph (1)(A)](#c-1-A)—
    - (A) for 1998, the “area-specific percentage” is 90 percent and the “national percentage” is 10 percent,
    - (B) for 1999, the “area-specific percentage” is 82 percent and the “national percentage” is 18 percent,
    - (C) for 2000, the “area-specific percentage” is 74 percent and the “national percentage” is 26 percent,
    - (D) for 2001, the “area-specific percentage” is 66 percent and the “national percentage” is 34 percent,
    - (E) for 2002, the “area-specific percentage” is 58 percent and the “national percentage” is 42 percent, and
    - (F) for a year after 2002, the “area-specific percentage” is 50 percent and the “national percentage” is 50 percent.
  - (3) **Annual area-specific Medicare+Choice capitation rate—**
    - (A) **In general—** For purposes of [paragraph (1)(A)](#c-1-A), subject to subparagraphs [(B)](#c-3-B) and [(E)](#c-3-E), the annual area-specific Medicare+Choice capitation rate for a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2)—
      - (i) for 1998 is, subject to [subparagraph (D)](#c-3-D), the annual per capita rate of payment for 1997 determined under [section 1395mm(a)(1)(C) of this title](/usc/42/1395mm.md?p=a-1-C) for the area, increased by the national per capita Medicare+Choice growth percentage for 1998 (described in [paragraph (6)(A)](#c-6-A)); or
      - (ii) for a subsequent year is the annual area-specific Medicare+Choice capitation rate for the previous year determined under this paragraph for the area, increased by the national per capita Medicare+Choice growth percentage for such subsequent year.
    - (B) **Removal of medical education from calculation of adjusted average per capita cost—**
      - (i) **In general—** In determining the area-specific Medicare+Choice capitation rate under [subparagraph (A)](#c-3-A) for a year (beginning with 1998), the annual per capita rate of payment for 1997 determined under [section 1395mm(a)(1)(C) of this title](/usc/42/1395mm.md?p=a-1-C) shall be adjusted to exclude from the rate the applicable percent (specified in [clause (ii)](#c-3-B-ii)) of the payment adjustments described in [subparagraph (C)](#c-3-C).
      - (ii) **Applicable percent—** For purposes of [clause (i)](#c-3-B-i), the applicable percent for—
        - (I) 1998 is 20 percent,
        - (II) 1999 is 40 percent,
        - (III) 2000 is 60 percent,
        - (IV) 2001 is 80 percent, and
        - (V) a succeeding year is 100 percent.
    - (C) **Payment adjustment—**
      - (i) **In general—** Subject to [clause (ii)](#c-3-C-ii), the payment adjustments described in this subparagraph are payment adjustments which the [Secretary](/usc/42/1301.md?p=a-6) estimates were payable during 1997—
        - (I) for the indirect costs of medical education under [section 1395ww(d)(5)(B) of this title](/usc/42/1395ww.md?p=d-5-B), and
        - (II) for [direct graduate medical education costs](/usc/42/256e.md?p=g-3) under [section 1395ww(h) of this title](/usc/42/1395ww.md?p=h).
      - (ii) **Treatment of payments covered under State hospital reimbursement system—** To the extent that the [Secretary](/usc/42/1301.md?p=a-6) estimates that an annual per capita rate of payment for 1997 described in [clause (i)](#c-3-C-i) reflects payments to [hospitals](/usc/42/1395dd.md?p=e-5) reimbursed under [section 1395f(b)(3) of this title](/usc/42/1395f.md?p=b-3), the [Secretary](/usc/42/1301.md?p=a-6) shall estimate a payment adjustment that is comparable to the payment adjustment that would have been made under [clause (i)](#c-3-C-i) if the [hospitals](/usc/42/1395dd.md?p=e-5) had not been reimbursed under such section.
    - (D) **Treatment of areas with highly variable payment rates—** In the case of a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) for which the annual per capita rate of payment determined under [section 1395mm(a)(1)(C) of this title](/usc/42/1395mm.md?p=a-1-C) for 1997 varies by more than 20 percent from such rate for 1996, for purposes of this subsection the [Secretary](/usc/42/1301.md?p=a-6) may substitute for such rate for 1997 a rate that is more [representative](/usc/42/3058f.md?p=5) of the costs of the enrollees in the area.
    - (E) **Inclusion of costs of DOD and VA military facility services to Medicare-eligible beneficiaries—** In determining the area-specific MA capitation rate under [subparagraph (A)](#c-3-A) for a year (beginning with 2004), the annual per capita rate of payment for 1997 determined under [section 1395mm(a)(1)(C) of this title](/usc/42/1395mm.md?p=a-1-C) shall be adjusted to include in the rate the [Secretary](/usc/42/1301.md?p=a-6)’s estimate, on a per capita basis, of the amount of additional payments that would have been made in the area involved under this subchapter if individuals entitled to benefits under this subchapter had not received services from [facilities](/usc/42/11049.md?p=4) of the Department of Defense or the Department of Veterans Affairs.
  - (4) **Input-price-adjusted annual national Medicare+Choice capitation rate—**
    - (A) **In general—** For purposes of [paragraph (1)(A)](#c-1-A), the input-price-adjusted annual national Medicare+Choice capitation rate for a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) for a year is equal to the sum, for all the types of medicare services (as classified by the [Secretary](/usc/42/1301.md?p=a-6)), of the product (for each such type of service) of—
      - (i) the national standardized annual Medicare+Choice capitation rate (determined under [subparagraph (B)](#c-4-B)) for the year,
      - (ii) the proportion of such rate for the year which is attributable to such type of services, and
      - (iii) an index that reflects (for that year and that type of services) the relative input price of such services in the area compared to the national average input price of such services.

      In applying [clause (iii)](#c-4-A-iii), the [Secretary](/usc/42/1301.md?p=a-6) may, subject to [subparagraph (C)](#c-4-C), apply those indices under this subchapter that are used in applying (or updating) national payment rates for specific areas and localities.

    - (B) **National standardized annual Medicare+ÐChoice capitation rate—** In [subparagraph (A)(i)](#c-4-A-i), the “national standardized annual Medicare+Choice capitation rate” for a year is equal to—
      - (i) the sum (for all [Medicare+Choice payment areas](/usc/42/1395w–28.md?p=c-2)) of the product of—
        - (I) the annual area-specific Medicare+ÐChoice capitation rate for that year for the area under [paragraph (3)](#c-3), and
        - (II) the average number of medicare beneficiaries residing in that area in the year, multiplied by the average of the risk factor weights used to adjust payments under [subsection (a)(1)(A)](#a-1-A) for such beneficiaries in such area; divided by
      - (ii) the sum of the products described in [clause (i)(II)](#c-4-B-i-II) for all areas for that year.
    - (C) **Special rules for 1998—** In applying this paragraph for 1998—
      - (i) medicare services shall be divided into 2 types of services: part A services and part B services;
      - (ii) the proportions described in [subparagraph (A)(ii)](#c-4-A-ii)—
        - (I) for part A services shall be the ratio (expressed as a percentage) of the national average annual per capita rate of payment for part A for 1997 to the total national average annual per capita rate of payment for parts A and B for 1997, and
        - (II) for part B services shall be 100 percent minus the ratio described in [subclause (I)](#c-4-C-ii-I);
      - (iii) for part A services, 70 percent of payments attributable to such services shall be adjusted by the index used under [section 1395ww(d)(3)(E) of this title](/usc/42/1395ww.md?p=d-3-E) to adjust payment rates for relative [hospital](/usc/42/1395dd.md?p=e-5) wage levels for [hospitals](/usc/42/1395dd.md?p=e-5) located in the payment area involved;
      - (iv) for part B services—
        - (I) 66 percent of payments attributable to such services shall be adjusted by the index of the [geographic area](/usc/42/11360.md?p=9) factors under [section 1395w–4(e) of this title](/usc/42/1395w–4.md?p=e) used to adjust payment rates for [physicians](/usc/42/1395cc–4.md?p=a-2-E)’ services furnished in the payment area, and
        - (II) of the remaining 34 percent of the amount of such payments, 40 percent shall be adjusted by the index described in [clause (iii)](#c-4-C-iii); and
      - (v) the index values shall be computed based only on the beneficiary population who are 65 years of age or older and who are not determined to have end stage renal disease.

      The [Secretary](/usc/42/1301.md?p=a-6) may continue to apply the rules described in this subparagraph (or similar rules) for 1999.

  - (5) **Payment adjustment budget neutrality factor—** For purposes of [paragraph (1)(A)](#c-1-A), for each year (other than 2004), the [Secretary](/usc/42/1301.md?p=a-6) shall determine a budget neutrality adjustment factor so that the aggregate of the payments under this part (other than those attributable to subsections [(a)(3)(C)(iv)](#a-3-C-iv), [(a)(4)](#a-4), and (i)) shall equal the aggregate payments that would have been made under this part if payment were based entirely on area-specific capitation rates.
  - (6) **“National per capita Medicare+Choice growth percentage” defined—**
    - (A) **In general—** In this part, the “national per capita Medicare+Choice growth percentage” for a year is the percentage determined by the [Secretary](/usc/42/1301.md?p=a-6), by March 1st before the beginning of the year involved, to reflect the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the projected per capita rate of growth in expenditures under this subchapter for an individual entitled to benefits under part A and enrolled under part B, excluding expenditures attributable to subsections (a)(7) and (o) of [section 1395w–4 of this title](/usc/42/1395w–4.md) and subsections (b)(3)(B)(ix) and (n) of [section 1395ww of this title](/usc/42/1395ww.md), reduced by the number of percentage points specified in [subparagraph (B)](#c-6-B) for the year. Separate determinations may be made for aged enrollees, disabled enrollees, and enrollees with end-stage renal disease.
    - (B) **Adjustment—** The number of percentage points specified in this subparagraph is—
      - (i) for 1998, 0.8 percentage points,
      - (ii) for 1999, 0.5 percentage points,
      - (iii) for 2000, 0.5 percentage points,
      - (iv) for 2001, 0.5 percentage points,
      - (v) for 2002, 0.3 percentage points, and
      - (vi) for a year after 2002, 0 percentage points.
    - (C) **Adjustment for over or under projection of national per capita Medicare+Choice growth percentage—** Beginning with rates calculated for 1999, before computing rates for a year as described in [paragraph (1)](#c-1), the [Secretary](/usc/42/1301.md?p=a-6) shall adjust all area-specific and national Medicare+Choice capitation rates (and beginning in 2000, the minimum amount) for the previous year for the differences between the projections of the national per capita Medicare+Choice growth percentage for that year and previous years and the current estimate of such percentage for such years, except that for purposes of [paragraph (1)(C)(v)(II)](#c-1-C-v-II), no such adjustment shall be made for a year before 2004.
  - (7) **Adjustment for national coverage determinations and legislative changes in benefits—** If the [Secretary](/usc/42/1301.md?p=a-6) makes a determination with respect to coverage under this subchapter or there is a change in benefits required to be provided under this part that the [Secretary](/usc/42/1301.md?p=a-6) [projects](/usc/42/11360.md?p=20) will result in a significant increase in the costs to Medicare+Choice of providing benefits under contracts under this part (for periods after any period described in [section 1395w–22(a)(5) of this title](/usc/42/1395w–22.md?p=a-5)), the [Secretary](/usc/42/1301.md?p=a-6) shall adjust appropriately the payments to such organizations under this part. Such projection and adjustment shall be based on an analysis by the Chief Actuary of the Centers for Medicare & Medicaid Services of the actuarial costs associated with the new benefits.
- (d) **MA payment area; MA local area; MA region defined—**
  - (1) **MA payment area—** In this part, except as provided in this subsection, the term “MA payment area” means—
    - (A) with respect to an [MA local plan](/usc/42/1395w–28.md?p=b-5), an [MA local area](#d-2) (as defined in [paragraph (2)](#d-2)); and
    - (B) with respect to an [MA regional plan](/usc/42/1395w–28.md?p=b-4), an MA [region](/usc/42/1395ww.md?p=d-2-D) (as established under [section 1395w–27a(a)(2) of this title](/usc/42/1395w–27a.md?p=a-2)).
  - (2) **MA local area—** The term “MA local area” means a county or equivalent area specified by the [Secretary](/usc/42/1301.md?p=a-6).
  - (3) **Rule for ESRD beneficiaries—** In the case of individuals who are determined to have end stage renal disease, the [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) shall be a [State](/usc/42/1397n–12.md?p=6) or such other payment area as the [Secretary](/usc/42/1301.md?p=a-6) specifies.
  - (4) **Geographic adjustment—**
    - (A) **In general—** Upon written request of the [chief executive officer](/usc/42/12511.md?p=9) of a [State](/usc/42/1397n–12.md?p=6) for a contract year (beginning after 1998) made by not later than February 1 of the previous year, the [Secretary](/usc/42/1301.md?p=a-6) shall make a geographic adjustment to a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) in the [State](/usc/42/1397n–12.md?p=6) otherwise determined under [paragraph (1)](#d-1) for [MA local plans](/usc/42/1395w–28.md?p=b-5)—
      - (i) to a [single](/usc/42/2304.md?p=m) statewide [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2),
      - (ii) to the metropolitan based system described in [subparagraph (C)](#d-4-C), or
      - (iii) to consolidating into a [single](/usc/42/2304.md?p=m) [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) noncontiguous counties (or equivalent areas described in [paragraph (1)(A)](#d-1-A)) within a [State](/usc/42/1397n–12.md?p=6).

      Such adjustment shall be effective for payments for months beginning with January of the year following the year in which the request is received.

    - (B) **Budget neutrality adjustment—** In the case of a [State](/usc/42/1397n–12.md?p=6) requesting an adjustment under this paragraph, the [Secretary](/usc/42/1301.md?p=a-6) shall initially (and annually thereafter) adjust the payment rates otherwise established under this section with respect to [MA local plans](/usc/42/1395w–28.md?p=b-5) for [Medicare+Choice payment areas](/usc/42/1395w–28.md?p=c-2) in the [State](/usc/42/1397n–12.md?p=6) in a manner so that the aggregate of the payments under this section for such plans in the [State](/usc/42/1397n–12.md?p=6) shall not exceed the aggregate payments that would have been made under this section for such plans for [Medicare+Choice payment areas](/usc/42/1395w–28.md?p=c-2) in the [State](/usc/42/1397n–12.md?p=6) in the absence of the adjustment under this paragraph.
    - (C) **Metropolitan based system—** The metropolitan based system described in this subparagraph is one in which—
      - (i) all the portions of each [metropolitan statistical area](#d-4-D) in the [State](/usc/42/1397n–12.md?p=6) or in the case of a [consolidated metropolitan statistical area](#d-4-D), all of the portions of each [primary metropolitan statistical area](#d-4-D) within the consolidated area within the [State](/usc/42/1397n–12.md?p=6), are treated as a [single](/usc/42/2304.md?p=m) [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2), and
      - (ii) all areas in the [State](/usc/42/1397n–12.md?p=6) that do not fall within a [metropolitan statistical area](#d-4-D) are treated as a [single](/usc/42/2304.md?p=m) [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2).
    - (D) **Areas—** In [subparagraph (C)](#d-4-C), the terms “metropolitan statistical area”, “consolidated metropolitan statistical area”, and “primary metropolitan statistical area” mean any area designated as such by the [Secretary](/usc/42/1301.md?p=a-6) of [Commerce](/usc/42/6311.md?p=7).
- (e) **Special rules for individuals electing MSA plans—**
  - (1) **In general—** If the amount of the [Medicare+Choice monthly MSA premium](/usc/42/1395w–24.md?p=b-2-D) (as defined in [section 1395w–24(b)(2)(C) of this title](/usc/42/1395w–24.md?p=b-2-C)) for an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) for a year is less than <sup>1</sup>⁄<sub>12</sub> of the annual Medicare+Choice capitation rate applied under this section for the area and year involved, the [Secretary](/usc/42/1301.md?p=a-6) shall deposit an amount equal to 100 percent of such difference in a Medicare+Choice MSA established (and, if applicable, designated) by the individual under [paragraph (2)](#e-2).
  - (2) **Establishment and designation of Medicare+Choice medical savings account as requirement for payment of contribution—** In the case of an individual who has elected coverage under an [MSA plan](/usc/42/1395w–28.md?p=b-3-A), no payment shall be made under [paragraph (1)](#e-1) on behalf of an individual for a month unless the individual—
    - (A) has established before the beginning of the month (or by such other deadline as the [Secretary](/usc/42/1301.md?p=a-6) may specify) a Medicare+Choice MSA (as defined in section 138(b)(2) of the Internal Revenue Code of 1986), and
    - (B) if the individual has established more than one such Medicare+Choice MSA, has designated one of such accounts as the individual’s Medicare+Choice MSA for purposes of this part.

    Under rules under this section, such an individual may change the designation of such account under [subparagraph (B)](#e-2-B) for purposes of this part.

  - (3) **Lump-sum deposit of medical savings account contribution—** In the case of an individual electing an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) effective beginning with a month in a year, the amount of the contribution to the Medicare+Choice MSA on behalf of the individual for that month and all successive months in the year shall be deposited during that first month. In the case of a termination of such an election as of a month before the end of a year, the [Secretary](/usc/42/1301.md?p=a-6) shall provide for a procedure for the recovery of deposits attributable to the remaining months in the year.
- (f) **Payments from Trust Funds—** The payment to a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under this section for individuals enrolled under this part with the organization and for payments under [subsection (l)](#l) and [subsection (m)](#m) and payments to a Medicare+Choice MSA under [subsection (e)(1)](#e-1) shall be made from the Federal [Hospital](/usc/42/1395dd.md?p=e-5) Insurance [Trust](/usc/42/12854.md?p=6) [Fund](/usc/42/12854.md?p=3) and the Federal Supplementary Medical Insurance [Trust](/usc/42/12854.md?p=6) [Fund](/usc/42/12854.md?p=3) in such proportion as the [Secretary](/usc/42/1301.md?p=a-6) determines reflects the relative weight that benefits under part A and under part B represents of the actuarial value of the total benefits under this subchapter. Payments to MA organizations for statutory [drug](/usc/42/282.md?p=j-1-A-vii) benefits provided under this subchapter are made from the [Medicare Prescription Drug Account](/usc/42/1395w–151.md?p=a-10) in the Federal Supplementary Medical Insurance [Trust](/usc/42/12854.md?p=6) [Fund](/usc/42/12854.md?p=3). Monthly payments otherwise payable under this section for October 2000 shall be paid on the first business day of such month. Monthly payments otherwise payable under this section for October 2001 shall be paid on the last business day of September 2001. Monthly payments otherwise payable under this section for October 2006 shall be paid on the first business day of October 2006.
- (g) **Special rule for certain inpatient hospital stays—** In the case of an individual who is receiving [inpatient hospital services](/usc/42/1395x.md?p=b) from a [subsection (d)](#d) [hospital](/usc/42/1395dd.md?p=e-5) (as defined in [section 1395ww(d)(1)(B) of this title](/usc/42/1395ww.md?p=d-1-B)), a rehabilitation [hospital](/usc/42/1395dd.md?p=e-5) described in [section 1395ww(d)(1)(B)(ii) of this title](/usc/42/1395ww.md?p=d-1-B-ii) or a distinct part rehabilitation [unit](/usc/42/1395w–114b.md?p=g-2) described in the matter following clause (v)[^2] of [section 1395ww(d)(1)(B) of this title](/usc/42/1395ww.md?p=d-1-B), or a [long-term care hospital](/usc/42/1395x.md?p=ccc) (described in [section 1395ww(d)(1)(B)(iv) of this title](/usc/42/1395ww.md?p=d-1-B-iv)) as of the effective date of the individual’s—
  - (1) election under this part of a Medicare+ÐChoice plan offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1)—
    - (A) payment for such services until the date of the individual’s discharge shall be made under this subchapter through the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) or the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) option described in [section 1395w–21(a)(1)(A) of this title](/usc/42/1395w–21.md?p=a-1-A) (as the case may be) elected before the election with such organization,
    - (B) the elected organization shall not be financially responsible for payment for such services until the date after the date of the individual’s discharge, and
    - (C) the organization shall nonetheless be paid the full amount otherwise payable to the organization under this part; or
  - (2) termination of election with respect to a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under this part—
    - (A) the organization shall be financially responsible for payment for such services after such date and until the date of the individual’s discharge,
    - (B) payment for such services during the stay shall not be made under [section 1395ww(d) of this title](/usc/42/1395ww.md?p=d) or other payment provision under this subchapter for inpatient services for the type of [facility](/usc/42/11049.md?p=4), [hospital](/usc/42/1395dd.md?p=e-5), or [unit](/usc/42/1395w–114b.md?p=g-2) involved, described in the matter preceding [paragraph (1)](#g-1), as the case may be, or by any succeeding [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1), and
    - (C) the terminated organization shall not receive any payment with respect to the individual under this part during the period the individual is not enrolled.
- (h) **Special rule for hospice care—**
  - (1) **Information—** A contract under this part shall require the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) to inform each individual enrolled under this part with a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by the organization about the availability of [hospice care](/usc/42/1395x.md?p=dd-1) if—
    - (A) a [hospice program](/usc/42/1395x.md?p=dd-2) participating under this subchapter is located within the organization’s service area; or
    - (B) it is common practice to refer patients to [hospice programs](/usc/42/1395x.md?p=dd-2) outside such service area.
  - (2) **Payment—** If an individual who is enrolled with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under this part makes an election under [section 1395d(d)(1) of this title](/usc/42/1395d.md?p=d-1) to receive [hospice care](/usc/42/1395x.md?p=dd-1) from a particular [hospice program](/usc/42/1395x.md?p=dd-2)—
    - (A) payment for the [hospice care](/usc/42/1395x.md?p=dd-1) furnished to the individual shall be made to the [hospice program](/usc/42/1395x.md?p=dd-2) elected by the individual by the [Secretary](/usc/42/1301.md?p=a-6);
    - (B) payment for other services for which the individual is eligible notwithstanding the individual’s election of [hospice care](/usc/42/1395x.md?p=dd-1) under [section 1395d(d)(1) of this title](/usc/42/1395d.md?p=d-1), [including](/usc/42/1301.md?p=b) services not related to the individual’s terminal illness, shall be made by the [Secretary](/usc/42/1301.md?p=a-6) to the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) or the provider or [supplier](/usc/42/1395x.md?p=d) of the service instead of payments calculated under [subsection (a)](#a); and
    - (C) the [Secretary](/usc/42/1301.md?p=a-6) shall continue to make monthly payments to the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) in an amount equal to the value of the additional benefits required under [section 1395w–24(f)(1)(A) of this title](/usc/42/1395w–24.md?p=f-1-A).
- (i) **New entry bonus—**
  - (1) **In general—** Subject to paragraphs [(2)](#i-2) and [(3)](#i-3), in the case of [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) in which a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) has not been [offered](#i-5) since 1997 (or in which all organizations that [offered](#i-5) a plan since such date have filed notice with the [Secretary](/usc/42/1301.md?p=a-6), as of October 13, 1999, that they will not be offering such a plan as of January 1, 2000, or filed notice with the [Secretary](/usc/42/1301.md?p=a-6) as of October 3, 2000, that they will not be offering such a plan as of January 1, 2001), the amount of the monthly payment otherwise made under this section shall be increased—
    - (A) only for the first 12 months in which any [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) is [offered](#i-5) in the area, by 5 percent of the total monthly payment otherwise computed for such payment area; and
    - (B) only for the subsequent 12 months, by 3 percent of the total monthly payment otherwise computed for such payment area.
  - (2) **Period of application—** [Paragraph (1)](#i-1) shall only apply to payment for [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) which are first [offered](#i-5) in a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) during the 2-year period beginning on January 1, 2000.
  - (3) **Limitation to organization offering first plan in an area—** [Paragraph (1)](#i-1) shall only apply to payment to the first [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) that offers a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) in each [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2), except that if more than one such organization first offers such a plan in an area on the same date, [paragraph (1)](#i-1) shall apply to payment for such organizations.
  - (4) **Construction—** Nothing in [paragraph (1)](#i-1) shall be construed as affecting the calculation of the annual Medicare+Choice capitation rate under [subsection (c)](#c) for any payment area or as applying to payment for any period not described in such paragraph and [paragraph (2)](#i-2).
  - (5) **Offered defined—** In this subsection, the term “offered” means, with respect to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) as of a date, that a [Medicare+Choice eligible individual](/usc/42/1395w–21.md?p=a-3) may enroll with the plan on that date, regardless of when the enrollment takes effect or when the individual obtains benefits under the plan.
- (j) **Computation of benchmark amounts—** For purposes of this part, subject to [subsection (o)](#o), the term “MA area-specific non-drug monthly benchmark amount” means for a month in a year—
  - (1) with respect to—
    - (A) a service area that is entirely within an [MA local area](#d-2), subject to [section 1395w–29(d)(2)(A)](/usc/42/1395w–29.md)[^2] of this title, an amount equal to <sup>1</sup>⁄<sub>12</sub> of the annual MA capitation rate under [subsection (c)(1)](#c-1) for the area for the year (or, for 2007, 2008, 2009, and 2010, <sup>1</sup>⁄<sub>12</sub> of the [applicable amount](#k-1) determined under [subsection (k)(1)](#k-1) for the area for the year; for 2011, <sup>1</sup>⁄<sub>12</sub> of the [applicable amount](#k-1) determined under [subsection (k)(1)](#k-1) for the area for 2010; and, beginning with 2012, <sup>1</sup>⁄<sub>12</sub> of the [blended benchmark amount](#n-1) determined under [subsection (n)(1)](#n-1) for the area for the year), adjusted as appropriate (for years before 2007) for the purpose of risk adjustment; or
    - (B) a service area that [includes](/usc/42/1301.md?p=b) more than one [MA local area](#d-2), an amount equal to the average of the amounts described in [subparagraph (A)](#j-1-A) for each such local MA area, weighted by the projected number of enrollees in the plan residing in the respective local MA areas (as used by the plan for purposes of the bid and disclosed to the [Secretary](/usc/42/1301.md?p=a-6) under [section 1395w–24(a)(6)(A)(iii) of this title](/usc/42/1395w–24.md?p=a-6-A-iii)), adjusted as appropriate (for years before 2007) for the purpose of risk adjustment; or
  - (2) with respect to an MA [region](/usc/42/1395ww.md?p=d-2-D) for a month in a year, the MA [region](/usc/42/1395ww.md?p=d-2-D)-specific non-[drug](/usc/42/282.md?p=j-1-A-vii) monthly benchmark amount, as defined in [section 1395w–27a(f) of this title](/usc/42/1395w–27a.md?p=f) for the [region](/usc/42/1395ww.md?p=d-2-D) for the year.
- (k) **Determination of applicable amount for purposes of calculating the benchmark amounts—**
  - (1) **Applicable amount defined—** For purposes of [subsection (j)](#j), subject to paragraphs [(2)](#k-2), [(4)](#k-4), and [(5)](#k-5), the term “applicable amount” means for an area—
    - (A) for 2007—
      - (i) if such year is not specified under [subsection (c)(1)(D)(ii)](#c-1-D-ii), an amount equal to the amount specified in [subsection (c)(1)(C)](#c-1-C) for the area for 2006—
        - (I) first adjusted by the rescaling factor for 2006 for the area (as made available by the [Secretary](/usc/42/1301.md?p=a-6) in the announcement of the rates on April 4, 2005, under [subsection (b)(1)](#b-1), but excluding any national adjustment factors for coding intensity and risk adjustment budget neutrality that were included in such factor); and
        - (II) then increased by the national per capita MA growth percentage, described in [subsection (c)(6)](#c-6) for 2007, but not taking into account any adjustment under [subparagraph (C)](#c-6-C) of such subsection for a year before 2004;
      - (ii) if such year is specified under [subsection (c)(1)(D)(ii)](#c-1-D-ii), an amount equal to the greater of—
        - (I) the amount determined under [clause (i)](#k-1-A-i) for the area for the year; or
        - (II) the amount specified in [subsection (c)(1)(D)](#c-1-D) for the area for the year; and
    - (B) for a subsequent year—
      - (i) if such year is not specified under [subsection (c)(1)(D)(ii)](#c-1-D-ii), an amount equal to the amount determined under this paragraph for the area for the previous year (determined without regard to paragraphs [(2)](#k-2), [(4)](#k-4), and [(5)](#k-5)), increased by the national per capita MA growth percentage, described in [subsection (c)(6)](#c-6) for that succeeding year, but not taking into account any adjustment under [subparagraph (C)](#c-6-C) of such subsection for a year before 2004; and
      - (ii) if such year is specified under [subsection (c)(1)(D)(ii)](#c-1-D-ii), an amount equal to the greater of—
        - (I) the amount determined under [clause (i)](#k-1-B-i) for the area for the year; or
        - (II) the amount specified in [subsection (c)(1)(D)](#c-1-D) for the area for the year.
  - (2) **Phase-out of budget neutrality factor—**
    - (A) **In general—** Except as provided in [subparagraph (D)](#k-2-D), in the case of 2007 through 2010, the applicable amount determined under [paragraph (1)](#k-1) shall be multiplied by a factor equal to 1 plus the product of—
      - (i) the percent determined under [subparagraph (B)](#k-2-B) for the year; and
      - (ii) the [applicable phase-out factor](#k-2-C) for the year under [subparagraph (C)](#k-2-C).
    - (B) **Percent determined—**
      - (i) **In general—** For purposes of [subparagraph (A)(i)](#k-2-A-i), subject to [clause (iv)](#k-2-B-iv), the percent determined under this subparagraph for a year is a percent equal to a fraction the numerator of which is described in [clause (ii)](#k-2-B-ii) and the denominator of which is described in [clause (iii)](#k-2-B-iii).
      - (ii) **Numerator based on difference between demographic rate and risk rate—**
        - (I) **In general—** The numerator described in this clause is an amount equal to the amount by which the demographic rate described in [subclause (II)](#k-2-B-ii-II) exceeds the risk rate described in [subclause (III)](#k-2-B-ii-III).
        - (II) **Demographic rate—** The demographic rate described in this subclause is the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the total payments that would have been made under this part in the year if all the monthly payment amounts for all [MA plans](/usc/42/1395w–101.md?p=a-3-B) were equal to <sup>1</sup>⁄<sub>12</sub> of the annual MA capitation rate under [subsection (c)(1)](#c-1) for the area and year, adjusted pursuant to [subsection (a)(1)(C)](#a-1-C).
        - (III) **Risk rate—** The risk rate described in this subclause is the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the total payments that would have been made under this part in the year if all the monthly payment amounts for all [MA plans](/usc/42/1395w–101.md?p=a-3-B) were equal to the amount described in [subsection (j)(1)(A)](#j-1-A) (determined as if this paragraph had not applied) under [subsection (j)](#j) for the area and year, adjusted pursuant to [subsection (a)(1)(C)](#a-1-C).
      - (iii) **Denominator based on risk rate—** The denominator described in this clause is equal to the total amount estimated for the year under [clause (ii)(III)](#k-2-B-ii-III).
      - (iv) **Requirements—** In estimating the amounts under the previous clauses, the [Secretary](/usc/42/1301.md?p=a-6) shall—
        - (I) use a complete set of the most recent and [representative](/usc/42/3058f.md?p=5) Medicare Advantage risk scores under [subsection (a)(3)](#a-3) that are available from the risk adjustment model announced for the year;
        - (II) adjust the risk scores to reflect changes in [treatment](/usc/42/11851.md?p=11) and coding [practices](/usc/42/17061.md?p=19) in the fee-for-service sector;
        - (III) adjust the risk scores for differences in coding patterns between Medicare Advantage plans and providers under the original Medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B to the extent that the [Secretary](/usc/42/1301.md?p=a-6) has identified such differences, as required in [subsection (a)(1)(C)](#a-1-C);
        - (IV) as necessary, adjust the risk scores for late data submitted by Medicare Advantage organizations;
        - (V) as necessary, adjust the risk scores for lagged cohorts; and
        - (VI) as necessary, adjust the risk scores for changes in enrollment in Medicare Advantage plans during the year.
      - (v) **Authority—** In computing such amounts the [Secretary](/usc/42/1301.md?p=a-6) may take into account the estimated health risk of enrollees in preferred provider organization plans ([including](/usc/42/1301.md?p=b) [MA regional plans](/usc/42/1395w–28.md?p=b-4)) for the year.
    - (C) **Applicable phase-out factor—** For purposes of [subparagraph (A)(ii)](#k-2-A-ii), the term “applicable phase-out factor” means—
      - (i) for 2007, 0.55;
      - (ii) for 2008, 0.40;
      - (iii) for 2009, 0.25; and
      - (iv) for 2010, 0.05.
    - (D) **Termination of application—** [Subparagraph (A)](#k-2-A) shall not apply in a year if the amount estimated under [subparagraph (B)(ii)(III)](#k-2-B-ii-III) for the year is equal to or greater than the amount estimated under [subparagraph (B)(ii)(II)](#k-2-B-ii-II) for the year.
  - (3) **No revision in percent—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) may not make any adjustment to the percent determined under [paragraph (2)(B)](#k-2-B) for any year.
    - (B) **Rule of construction—** Nothing in this subsection shall be construed to limit the authority of the [Secretary](/usc/42/1301.md?p=a-6) to make adjustments to the applicable amounts determined under [paragraph (1)](#k-1) as appropriate for purposes of updating data or for purposes of adopting an improved risk adjustment methodology.
  - (4) **Phase-out of the indirect costs of medical education from capitation rates—**
    - (A) **In general—** After determining the applicable amount for an area for a year under [paragraph (1)](#k-1) (beginning with 2010), the [Secretary](/usc/42/1301.md?p=a-6) shall adjust such applicable amount to exclude from such applicable amount the [phase-in percentage](#k-4-B-i) (as defined in [subparagraph (B)(i)](#k-4-B-i)) for the year of the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the standardized costs for payments under [section 1395ww(d)(5)(B) of this title](/usc/42/1395ww.md?p=d-5-B) in the area for the year. Any adjustment under the preceding sentence shall be made prior to the application of [paragraph (2)](#k-2).
    - (B) **Percentages defined—** For purposes of this paragraph:
      - (i) **Phase-in percentage—** The term “phase-in percentage” means, for an area for a year, the ratio (expressed as a percentage, but in no case greater than 100 percent) of—
        - (I) the [maximum cumulative adjustment percentage](#k-4-B-ii) for the year (as defined in [clause (ii)](#k-4-B-ii)); to
        - (II) the [standardized IME cost percentage](#k-4-B-iii) (as defined in [clause (iii)](#k-4-B-iii)) for the area and year.
      - (ii) **Maximum cumulative adjustment percentage—** The term “maximum cumulative adjustment percentage” means, for—
        - (I) 2010, 0.60 percent; and
        - (II) a subsequent year, the [maximum cumulative adjustment percentage](#k-4-B-ii) for the previous year increased by 0.60 percentage points.
      - (iii) **Standardized IME cost percentage—** The term “standardized IME cost percentage” means, for an area for a year, the per capita costs for payments under [section 1395ww(d)(5)(B) of this title](/usc/42/1395ww.md?p=d-5-B) (expressed as a percentage of the fee-for-service amount specified in [subparagraph (C)](#k-4-C)) for the area and the year.
    - (C) **Fee-for-service amount—** The fee-for-service amount specified in this subparagraph for an area for a year is the amount specified under [subsection (c)(1)(D)](#c-1-D) for the area and the year.
  - (5) **Exclusion of costs for kidney acquisitions from capitation rates—** After determining the applicable amount for an area for a year under [paragraph (1)](#k-1) (beginning with 2021), the [Secretary](/usc/42/1301.md?p=a-6) shall adjust such applicable amount to exclude from such applicable amount the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the standardized costs for payments for [organ](/usc/42/274b.md?p=d-2) acquisitions for kidney transplants covered under this subchapter ([including](/usc/42/1301.md?p=b) expenses covered under [section 1395rr(d) of this title](/usc/42/1395rr.md?p=d)) in the area for the year.
- (l) **Application of eligible professional incentives for certain MA organizations for adoption and meaningful use of certified EHR technology—**
  - (1) **In general—** Subject to paragraphs [(3)](#l-3) and [(4)](#l-4), in the case of a [qualifying MA organization](#l-5), the provisions of sections [1395w–4(o)](/usc/42/1395w–4.md?p=o) and [1395w–4(a)(7)](/usc/42/1395w–4.md?p=a-7) of this title shall apply with respect to [eligible professionals](/usc/42/1395l.md?p=z-3-B) described in [paragraph (2)](#l-2) of the organization who the organization attests under [paragraph (6)](#l-6) to be meaningful EHR users in a similar manner as they apply to [eligible professionals](/usc/42/1395l.md?p=z-3-B) under such sections. Incentive payments under [paragraph (3)](#l-3) shall be made to and payment adjustments under [paragraph (4)](#l-4) shall apply to such qualifying organizations.
  - (2) **Eligible professional described—** With respect to a [qualifying MA organization](#l-5), an [eligible professional](/usc/42/1395l.md?p=z-3-B) described in this paragraph is an [eligible professional](/usc/42/1395l.md?p=z-3-B) (as defined for purposes of [section 1395w–4(o)](/usc/42/1395w–4.md?p=o) of this title) who—
    - (A)
      - (i) is employed by the organization; or
      - (ii)
        - (I) is employed by, or is a partner of, an entity that through contract with the organization furnishes at least 80 percent of the entity’s Medicare patient care services to enrollees of such organization; and
        - (II) furnishes at least 80 percent of the professional services of the [eligible professional](/usc/42/1395l.md?p=z-3-B) covered under this subchapter to enrollees of the organization; and
    - (B) furnishes, on average, at least 20 hours per week of patient care services.
  - (3) **Eligible professional incentive payments—**
    - (A) **In general—** In applying [section 1395w–4(o)](/usc/42/1395w–4.md?p=o) of this title under [paragraph (1)](#l-1), instead of the additional payment amount under [section 1395w–4(o)(1)(A)](/usc/42/1395w–4.md?p=o-1-A) of this title and subject to [subparagraph (B)](#l-3-B), the [Secretary](/usc/42/1301.md?p=a-6) may substitute an amount determined by the [Secretary](/usc/42/1301.md?p=a-6) to the extent feasible and practical to be similar to the estimated amount in the aggregate that would be payable if payment for services furnished by such professionals was payable under part B instead of this part.
    - (B) **Avoiding duplication of payments—**
      - (i) **In general—** In the case of an [eligible professional](/usc/42/1395l.md?p=z-3-B) described in [paragraph (2)](#l-2)—
        - (I) that is eligible for the maximum incentive payment under [section 1395w–4(o)(1)(A)](/usc/42/1395w–4.md?p=o-1-A) of this title for the same payment period, the payment incentive shall be made only under such section and not under this subsection; and
        - (II) that is eligible for less than such maximum incentive payment for the same payment period, the payment incentive shall be made only under this subsection and not under [section 1395w–4(o)(1)(A)](/usc/42/1395w–4.md?p=o-1-A) of this title.
      - (ii) **Methods—** In the case of an [eligible professional](/usc/42/1395l.md?p=z-3-B) described in [paragraph (2)](#l-2) who is eligible for an incentive payment under [section 1395w–4(o)(1)(A)](/usc/42/1395w–4.md?p=o-1-A) of this title but is not described in [clause (i)](#l-3-B-i) for the same payment period, the [Secretary](/usc/42/1301.md?p=a-6) shall develop a process—
        - (I) to ensure that duplicate payments are not made with respect to an [eligible professional](/usc/42/1395l.md?p=z-3-B) both under this subsection and under [section 1395w–4(o)(1)(A)](/usc/42/1395w–4.md?p=o-1-A) of this title; and
        - (II) to collect data from Medicare Advantage organizations to ensure against such duplicate payments.
    - (C) **Fixed schedule for application of limitation on incentive payments for all eligible professionals—** In applying [section 1395w–4(o)(1)(B)(ii)](/usc/42/1395w–4.md?p=o-1-B-ii) of this title under [subparagraph (A)](#l-3-A), in accordance with rules specified by the [Secretary](/usc/42/1301.md?p=a-6), a [qualifying MA organization](#l-5) shall specify a year (not earlier than 2011) that shall be treated as the first payment year for all [eligible professionals](/usc/42/1395l.md?p=z-3-B) with respect to such organization.
  - (4) **Payment adjustment—**
    - (A) **In general—** In applying [section 1395w–4(a)(7) of this title](/usc/42/1395w–4.md?p=a-7) under [paragraph (1)](#l-1), instead of the payment adjustment being an applicable percent of the fee schedule amount for a year under such section, subject to [subparagraph (D)](#l-4-D), the payment adjustment under [paragraph (1)](#l-1) shall be equal to the percent specified in [subparagraph (B)](#l-4-B) for such year of the payment amount otherwise provided under this section for such year.
    - (B) **Specified percent—** The percent specified under this subparagraph for a year is 100 percent minus a number of percentage points equal to the product of—
      - (i) the number of percentage points by which the applicable percent (under [section 1395w–4(a)(7)(A)(ii) of this title](/usc/42/1395w–4.md?p=a-7-A-ii)) for the year is less than 100 percent; and
      - (ii) the Medicare [physician](/usc/42/1395cc–1.md?p=a-3-A) expenditure proportion specified in [subparagraph (C)](#l-4-C) for the year.
    - (C) **Medicare physician expenditure proportion—** The Medicare [physician](/usc/42/1395cc–1.md?p=a-3-A) expenditure proportion under this subparagraph for a year is the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the proportion, of the expenditures under parts A and B that are not attributable to this part, that are attributable to expenditures for [physicians](/usc/42/1395cc–4.md?p=a-2-E)’ services.
    - (D) **Application of payment adjustment—** In the case that a [qualifying MA organization](#l-5) attests that not all [eligible professionals](/usc/42/1395l.md?p=z-3-B) of the organization are meaningful EHR users with respect to a year, the [Secretary](/usc/42/1301.md?p=a-6) shall apply the payment adjustment under this paragraph based on the proportion of all such [eligible professionals](/usc/42/1395l.md?p=z-3-B) of the organization that are not meaningful EHR users for such year.
  - (5) **Qualifying MA organization defined—** In this subsection and [subsection (m)](#m), the term “qualifying MA organization” means a Medicare Advantage organization that is organized as a health maintenance organization (as defined in [section 300gg–91(b)(3) of this title](/usc/42/300gg–91.md?p=b-3)).
  - (6) **Meaningful EHR user attestation—** For purposes of this subsection and [subsection (m)](#m), a [qualifying MA organization](#l-5) shall submit an attestation, in a form and manner specified by the [Secretary](/usc/42/1301.md?p=a-6) which may include the submission of such attestation as part of submission of the initial bid under [section 1395w–24(a)(1)(A)(iv)](/usc/42/1395w–24.md)[^4] of this title, identifying—
    - (A) whether each [eligible professional](/usc/42/1395l.md?p=z-3-B) described in [paragraph (2)](#l-2), with respect to such organization is a meaningful EHR user (as defined in [section 1395w–4(o)(2)](/usc/42/1395w–4.md?p=o-2) of this title) for a year specified by the [Secretary](/usc/42/1301.md?p=a-6); and
    - (B) whether each eligible [hospital](/usc/42/1395dd.md?p=e-5) described in [subsection (m)(1)](#m-1),[^5] with respect to such organization, is a meaningful EHR user (as defined in [section 1395ww(n)(3) of this title](/usc/42/1395ww.md?p=n-3)) for an applicable period specified by the [Secretary](/usc/42/1301.md?p=a-6).
  - (7) **Posting on website—** The [Secretary](/usc/42/1301.md?p=a-6) shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names, business addresses, and business phone numbers of—
    - (A) each [qualifying MA organization](#l-5) receiving an incentive payment under this subsection for [eligible professionals](/usc/42/1395l.md?p=z-3-B) of the organization; and
    - (B) the [eligible professionals](/usc/42/1395l.md?p=z-3-B) of such organization for which such incentive payment is based.
  - (8) **Limitation on review—** There shall be no administrative or judicial review under [section 1395ff of this title](/usc/42/1395ff.md), [section 1395oo](/usc/42/1395oo.md) of this title, or otherwise, of—
    - (A) the methodology and [standards](/usc/42/1320d.md?p=7) for determining payment amounts and payment adjustments under this subsection, [including](/usc/42/1301.md?p=b) avoiding duplication of payments under [paragraph (3)(B)](#l-3-B) and the specification of rules for the fixed schedule for application of limitation on incentive payments for all [eligible professionals](/usc/42/1395l.md?p=z-3-B) under [paragraph (3)(C)](#l-3-C);
    - (B) the methodology and [standards](/usc/42/1320d.md?p=7) for determining [eligible professionals](/usc/42/1395l.md?p=z-3-B) under [paragraph (2)](#l-2); and
    - (C) the methodology and [standards](/usc/42/1320d.md?p=7) for determining a meaningful EHR user under [section 1395w–4(o)(2)](/usc/42/1395w–4.md?p=o-2) of this title, [including](/usc/42/1301.md?p=b) specification of the means of demonstrating meaningful EHR use under [section 1395w–4(o)(3)(C)](/usc/42/1395w–4.md?p=o-3-C)[^6] of this title and selection of measures under [section 1395w–4(o)(3)(B)](/usc/42/1395w–4.md?p=o-3-B)[^7] of this title.
- (m) **Application of eligible hospital incentives for certain MA organizations for adoption and meaningful use of certified EHR technology—**
  - (1) **Application—** Subject to paragraphs [(3)](#m-3) and [(4)](#m-4), in the case of a qualifying MA organization, the provisions of sections [1395ww(n)](/usc/42/1395ww.md?p=n) and [1395ww(b)(3)(B)(ix)](/usc/42/1395ww.md?p=b-3-B-ix) of this title shall apply with respect to eligible [hospitals](/usc/42/1395dd.md?p=e-5) described in [paragraph (2)](#m-2) of the organization which the organization attests under [subsection (l)(6)](#l-6) to be meaningful EHR users in a similar manner as they apply to eligible [hospitals](/usc/42/1395dd.md?p=e-5) under such sections. Incentive payments under [paragraph (3)](#m-3) shall be made to and payment adjustments under [paragraph (4)](#m-4) shall apply to such qualifying organizations.
  - (2) **Eligible hospital described—** With respect to a qualifying MA organization, an eligible [hospital](/usc/42/1395dd.md?p=e-5) described in this paragraph is an eligible [hospital](/usc/42/1395dd.md?p=e-5) (as defined in [section 1395ww(n)(6)(B) of this title](/usc/42/1395ww.md?p=n-6-B)) that is under common corporate governance with such organization and serves individuals enrolled under an [MA plan](/usc/42/1395w–101.md?p=a-3-B) offered by such organization.
  - (3) **Eligible hospital incentive payments—**
    - (A) **In general—** In applying [section 1395ww(n)(2) of this title](/usc/42/1395ww.md?p=n-2) under [paragraph (1)](#m-1), instead of the additional payment amount under [section 1395ww(n)(2) of this title](/usc/42/1395ww.md?p=n-2), there shall be substituted an amount determined by the [Secretary](/usc/42/1301.md?p=a-6) to be similar to the estimated amount in the aggregate that would be payable if payment for services furnished by such [hospitals](/usc/42/1395dd.md?p=e-5) was payable under part A instead of this part. In implementing the previous sentence, the [Secretary](/usc/42/1301.md?p=a-6)—
      - (i) shall, insofar as data to determine the discharge related amount under [section 1395ww(n)(2)(C) of this title](/usc/42/1395ww.md?p=n-2-C) for an eligible [hospital](/usc/42/1395dd.md?p=e-5) are not available to the [Secretary](/usc/42/1301.md?p=a-6), use such alternative data and methodology to estimate such discharge related amount as the [Secretary](/usc/42/1301.md?p=a-6) determines appropriate; and
      - (ii) shall, insofar as data to determine the medicare share described in [section 1395ww(n)(2)(D) of this title](/usc/42/1395ww.md?p=n-2-D) for an eligible [hospital](/usc/42/1395dd.md?p=e-5) are not available to the [Secretary](/usc/42/1301.md?p=a-6), use such alternative data and methodology to estimate such share, which data and methodology may include use of the inpatient-bed-days (or discharges) with respect to an eligible [hospital](/usc/42/1395dd.md?p=e-5) during the appropriate period which are attributable to both individuals for whom payment may be made under part A or individuals enrolled in an [MA plan](/usc/42/1395w–101.md?p=a-3-B) under a Medicare Advantage organization under this part as a proportion of the estimated total number of patient-bed-days (or discharges) with respect to such [hospital](/usc/42/1395dd.md?p=e-5) during such period.
    - (B) **Avoiding duplication of payments—**
      - (i) **In general—** In the case of a [hospital](/usc/42/1395dd.md?p=e-5) that for a payment year is an eligible [hospital](/usc/42/1395dd.md?p=e-5) described in [paragraph (2)](#m-2) and for which at least one-third of their discharges (or bed-days) of Medicare patients for the year are covered under part A, payment for the payment year shall be made only under [section 1395ww(n) of this title](/usc/42/1395ww.md?p=n) and not under this subsection.
      - (ii) **Methods—** In the case of a [hospital](/usc/42/1395dd.md?p=e-5) that is an eligible [hospital](/usc/42/1395dd.md?p=e-5) described in [paragraph (2)](#m-2) and also is eligible for an incentive payment under [section 1395ww(n) of this title](/usc/42/1395ww.md?p=n) but is not described in [clause (i)](#m-3-B-i) for the same payment period, the [Secretary](/usc/42/1301.md?p=a-6) shall develop a process—
        - (I) to ensure that duplicate payments are not made with respect to an eligible [hospital](/usc/42/1395dd.md?p=e-5) both under this subsection and under [section 1395ww(n) of this title](/usc/42/1395ww.md?p=n); and
        - (II) to collect data from Medicare Advantage organizations to ensure against such duplicate payments.
  - (4) **Payment adjustment—**
    - (A) Subject to [paragraph (3)](#m-3), in the case of a qualifying MA organization (as defined in [subsection (l)(5)](#l-5)), if, according to the attestation of the organization submitted under [subsection (l)(6)](#l-6) for an applicable period, one or more eligible [hospitals](/usc/42/1395dd.md?p=e-5) (as defined in [section 1395ww(n)(6)(B) of this title](/usc/42/1395ww.md?p=n-6-B)) that are under common corporate governance with such organization and that serve individuals enrolled under a plan offered by such organization are not meaningful EHR users (as defined in [section 1395ww(n)(3) of this title](/usc/42/1395ww.md?p=n-3)) with respect to a period, the payment amount payable under this section for such organization for such period shall be the percent specified in [subparagraph (B)](#m-4-B) for such period of the payment amount otherwise provided under this section for such period.
    - (B) **Specified percent.—** The percent specified under this subparagraph for a year is 100 percent minus a number of percentage points equal to the product of—
      - (i) the number of the percentage point reduction effected under [section 1395ww(b)(3)(B)(ix)(I) of this title](/usc/42/1395ww.md?p=b-3-B-ix-I) for the period; and
      - (ii) the Medicare [hospital](/usc/42/1395dd.md?p=e-5) expenditure proportion specified in [subparagraph (C)](#m-4-C) for the year.
    - (C) **Medicare hospital expenditure proportion.—** The Medicare [hospital](/usc/42/1395dd.md?p=e-5) expenditure proportion under this subparagraph for a year is the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the proportion, of the expenditures under parts A and B that are not attributable to this part, that are attributable to expenditures for [inpatient hospital services](/usc/42/1395x.md?p=b).
    - (D) **Application of payment adjustment.—** In the case that a qualifying MA organization attests that not all eligible [hospitals](/usc/42/1395dd.md?p=e-5) are meaningful EHR users with respect to an applicable period, the [Secretary](/usc/42/1301.md?p=a-6) shall apply the payment adjustment under this paragraph based on a methodology specified by the [Secretary](/usc/42/1301.md?p=a-6), taking into account the proportion of such eligible [hospitals](/usc/42/1395dd.md?p=e-5), or discharges from such [hospitals](/usc/42/1395dd.md?p=e-5), that are not meaningful EHR users for such period.
  - (5) **Posting on website—** The [Secretary](/usc/42/1301.md?p=a-6) shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format—
    - (A) a list of the names, business addresses, and business phone numbers of each qualifying MA organization receiving an incentive payment under this subsection for eligible [hospitals](/usc/42/1395dd.md?p=e-5) described in [paragraph (2)](#m-2); and
    - (B) a list of the names of the eligible [hospitals](/usc/42/1395dd.md?p=e-5) for which such incentive payment is based.
  - (6) **Limitations on review—** There shall be no administrative or judicial review under [section 1395ff of this title](/usc/42/1395ff.md), [section 1395oo](/usc/42/1395oo.md) of this title, or otherwise, of—
    - (A) the methodology and [standards](/usc/42/1320d.md?p=7) for determining payment amounts and payment adjustments under this subsection, [including](/usc/42/1301.md?p=b) avoiding duplication of payments under [paragraph (3)(B)](#m-3-B);
    - (B) the methodology and [standards](/usc/42/1320d.md?p=7) for determining eligible [hospitals](/usc/42/1395dd.md?p=e-5) under [paragraph (2)](#m-2); and
    - (C) the methodology and [standards](/usc/42/1320d.md?p=7) for determining a meaningful EHR user under [section 1395ww(n)(3) of this title](/usc/42/1395ww.md?p=n-3), [including](/usc/42/1301.md?p=b) specification of the means of demonstrating meaningful EHR use under [subparagraph (C)](/usc/42/1395ww.md?p=n-3-C) of such section and selection of measures under [subparagraph (B)](/usc/42/1395ww.md?p=n-3-B) of such section.
- (n) **Determination of blended benchmark amount—**
  - (1) **In general—** For purposes of [subsection (j)](#j), subject to paragraphs [(3)](#n-3), [(4)](#n-4), and [(5)](#n-5), the term “blended benchmark amount” means for an area—
    - (A) for 2012 the sum of—
      - (i) ½ of the applicable amount for the area and year; and
      - (ii) ½ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year; and
    - (B) for a subsequent year the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year.
  - (2) **Specified amount—**
    - (A) **In general—** The amount specified in this subparagraph for an area and year is the product of—
      - (i) the base payment amount specified in [subparagraph (E)](#n-2-E) for the area and year adjusted to take into account the phase-out in the indirect costs of medical education from capitation rates described in [subsection (k)(4)](#k-4) and, for 2021 and subsequent years, the exclusion of payments for [organ](/usc/42/274b.md?p=d-2) acquisitions for kidney transplants from the capitation rate as described in [subsection (k)(5)](#k-5); and
      - (ii) the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) for the area for the year specified under [subparagraph (B)](#n-2-B).
    - (B) **Applicable percentage—** Subject to [subparagraph (D)](#n-2-D), the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) specified in this subparagraph for an area for a year in the case of an area that is ranked—
      - (i) in the highest quartile under [subparagraph (C)](#n-2-C) for the previous year is 95 percent;
      - (ii) in the second highest quartile under such subparagraph for the previous year is 100 percent;
      - (iii) in the third highest quartile under such subparagraph for the previous year is 107.5 percent; or
      - (iv) in the lowest quartile under such subparagraph for the previous year is 115 percent.
    - (C) **Periodic ranking—** For purposes of this paragraph in the case of an area located—
      - (i) in 1 of the 50 [States](/usc/42/1397n–12.md?p=6) or the District of Columbia, the [Secretary](/usc/42/1301.md?p=a-6) shall rank such area in each year specified under [subsection (c)(1)(D)(ii)](#c-1-D-ii) based upon the level of the amount specified in [subparagraph (A)(i)](#n-2-A-i) for such areas; or
      - (ii) in a territory, the [Secretary](/usc/42/1301.md?p=a-6) shall rank such areas in each such year based upon the level of the amount specified in [subparagraph (A)(i)](#n-2-A-i) for such area relative to quartile rankings computed under [clause (i)](#n-2-C-i).
    - (D) **1-year transition for changes in applicable percentage—** If, for a year after 2012, there is a change in the quartile in which an area is ranked compared to the previous year, the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) for the area in the year shall be the average of—
      - (i) the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) for the area for the previous year; and
      - (ii) the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) that would otherwise apply for the area for the year.
    - (E) **Base payment amount—** Subject to subparagraphs [(F)](#n-2-F) and [(G)](#n-2-G), the base payment amount specified in this subparagraph—
      - (i) for 2012 is the amount specified in [subsection (c)(1)(D)](#c-1-D) for the area for the year; or
      - (ii) for a subsequent year that—
        - (I) is not specified under [subsection (c)(1)(D)(ii)](#c-1-D-ii), is the base amount specified in this subparagraph for the area for the previous year, increased by the national per capita MA growth percentage, described in [subsection (c)(6)](#c-6) for that succeeding year, but not taking into account any adjustment under [subparagraph (C)](#n-2-C) of such subsection for a year before 2004; and
        - (II) is specified under [subsection (c)(1)(D)(ii)](#c-1-D-ii), is the amount specified in [subsection (c)(1)(D)](#c-1-D) for the area for the year.
    - (F) **Application of indirect medical education phase-out—** The base payment amount specified in [subparagraph (E)](#n-2-E) for a year shall be adjusted in the same manner under [paragraph (4)](#k-4) of subsection (k) as the applicable amount is adjusted under such subsection.
    - (G) **Application of kidney acquisitions adjustment—** The base payment amount specified in [subparagraph (E)](#n-2-E) for a year (beginning with 2021) shall be adjusted in the same manner under [paragraph (5)](#k-5) of subsection (k) as the applicable amount is adjusted under such subsection.
  - (3) **Alternative phase-ins—**
    - (A) **4-year phase-in for certain areas—** If the difference between the applicable amount (as defined in [subsection (k)](#k)) for an area for 2010 and the projected 2010 benchmark amount (as defined in [subparagraph (C)](#n-3-C)) for the area is at least $30 but less than $50, the blended benchmark amount for the area is—
      - (i) for 2012 the sum of—
        - (I) ¾ of the applicable amount for the area and year; and
        - (II) ¼ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year;
      - (ii) for 2013 the sum of—
        - (I) ½ of the applicable amount for the area and year; and
        - (II) ½ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year;
      - (iii) for 2014 the sum of—
        - (I) ¼ of the applicable amount for the area and year; and
        - (II) ¾ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year; and
      - (iv) for a subsequent year the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year.
    - (B) **6-year phase-in for certain areas—** If the difference between the applicable amount (as defined in [subsection (k)](#k)) for an area for 2010 and the projected 2010 benchmark amount (as defined in [subparagraph (C)](#n-3-C)) for the area is at least $50, the blended benchmark amount for the area is—
      - (i) for 2012 the sum of—
        - (I) ⅚ of the applicable amount for the area and year; and
        - (II) ⅙ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year;
      - (ii) for 2013 the sum of—
        - (I) ⅔ of the applicable amount for the area and year; and
        - (II) ⅓ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year;
      - (iii) for 2014 the sum of—
        - (I) ½ of the applicable amount for the area and year; and
        - (II) ½ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year;
      - (iv) for 2015 the sum of—
        - (I) ⅓ of the applicable amount for the area and year; and
        - (II) ⅔ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year; and
      - (v) for 2016 the sum of—
        - (I) ⅙ of the applicable amount for the area and year; and
        - (II) ⅚ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year; and
      - (vi) for a subsequent year the amount specified in [paragraph (2)(A)](#n-2-A) for the area and year.
    - (C) **Projected 2010 benchmark amount—** The projected 2010 benchmark amount described in this subparagraph for an area is equal to the sum of—
      - (i) ½ of the applicable amount (as defined in [subsection (k)](#k)) for the area for 2010; and
      - (ii) ½ of the amount specified in [paragraph (2)(A)](#n-2-A) for the area for 2010 but determined as if there were substituted for the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) specified in [clause (ii)](#n-3-C-ii) of such paragraph the sum of—
        - (I) the applicable percent that would be specified under [subparagraph (B)](#n-2-B) of paragraph (2) (determined without regard to [subparagraph (D)](#n-2-D) of such paragraph) for the area for 2010 if any reference in such paragraph to “the previous year” were deemed a reference to 2010; and
        - (II) the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) increase that would apply to a qualifying plan in the area under [subsection (o)](#o) as if any reference in such subsection to 2012 were deemed a reference to 2010 and as if the determination of a qualifying county under [paragraph (3)(B)](#n-3-B) of such subsection were made for 2010.
  - (4) **Cap on benchmark amount—** In no case shall the blended benchmark amount for an area for a year (determined taking into account [subsection (o)](#o)) be greater than the applicable amount that would (but for the application of this subsection) be determined under [subsection (k)(1)](#k-1) for the area for the year.
  - (5) **Non-application to PACE plans—** This subsection shall not apply to payments to a PACE [program](/usc/42/274l–1.md?p=4) under [section 1395eee of this title](/usc/42/1395eee.md).
- (o) **Applicable percentage quality increases—**
  - (1) **In general—** Subject to the succeeding paragraphs, in the case of a [qualifying plan](#o-3-A-i) with respect to a year beginning with 2012, the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) under [subsection (n)(2)(B)](#n-2-B) shall be increased on a plan or contract level, as determined by the [Secretary](/usc/42/1301.md?p=a-6)—
    - (A) for 2012, by 1.5 percentage points;
    - (B) for 2013, by 3.0 percentage points; and
    - (C) for 2014 or a subsequent year, by 5.0 percentage points.
  - (2) **Increase for qualifying plans in qualifying counties—** The increase applied under [paragraph (1)](#o-1) for a [qualifying plan](#o-3-A-i) located in a [qualifying county](#o-3-B) for a year shall be doubled.
  - (3) **Qualifying plans and qualifying county defined; application of increases to low enrollment and new plans—** For purposes of this subsection:
    - (A) **Qualifying plan—**
      - (i) **In general—** The term “qualifying plan” means, for a year and subject to [paragraph (4)](#o-4), a plan that had a quality rating under [paragraph (4)](#o-4) of 4 stars or higher based on the most recent data available for such year.
      - (ii) **Application of increases to low enrollment plans—**
        - (I) **2012—** For 2012, the term “[qualifying plan](#o-3-A-i)” [includes](/usc/42/1301.md?p=b) an [MA plan](/usc/42/1395w–101.md?p=a-3-B) that the [Secretary](/usc/42/1301.md?p=a-6) determines is not able to have a quality rating under [paragraph (4)](#o-4) because of low enrollment.
        - (II) **2013 and subsequent years—** For 2013 and subsequent years, for purposes of determining whether an [MA plan](/usc/42/1395w–101.md?p=a-3-B) with low enrollment (as defined by the [Secretary](/usc/42/1301.md?p=a-6)) is included as a [qualifying plan](#o-3-A-i), the [Secretary](/usc/42/1301.md?p=a-6) shall establish a method to apply to [MA plans](/usc/42/1395w–101.md?p=a-3-B) with low enrollment (as defined by the [Secretary](/usc/42/1301.md?p=a-6)) the computation of quality rating and the rating system under [paragraph (4)](#o-4).
      - (iii) **Application of increases to new plans—**
        - (I) **In general—** A [new MA plan](#o-3-A-iii-II) that meets criteria specified by the [Secretary](/usc/42/1301.md?p=a-6) shall be treated as a [qualifying plan](#o-3-A-i), except that in applying [paragraph (1)](#o-1), the [applicable percentage](/usc/42/609.md?p=a-7-B-ii) under [subsection (n)(2)(B)](#n-2-B) shall be increased—
          - (aa) for 2012, by 1.5 percentage points;
          - (bb) for 2013, by 2.5 percentage points; and
          - (cc) for 2014 or a subsequent year, by 3.5 percentage points.
        - (II) **New MA plan defined—** The term “new MA plan” means, with respect to a year, a plan offered by an organization or sponsor that has not had a contract as a Medicare Advantage organization in the preceding 3-year period.
    - (B) **Qualifying county—** The term “qualifying county” means, for a year, a county—
      - (i) that has an MA capitation rate that, in 2004, was based on the amount specified in [subsection (c)(1)(B)](#c-1-B) for a [Metropolitan Statistical Area](#d-4-D) with a population of more than 250,000;
      - (ii) for which, as of December 2009, of the Medicare Advantage [eligible individuals](/usc/42/239.md?p=a-6) residing in the county at least 25 percent of such individuals were enrolled in Medicare Advantage plans; and
      - (iii) that has per capita fee-for-service spending that is lower than the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) for the year.
  - (4) **Quality determinations for application of increase—**
    - (A) **Quality determination—** The quality rating for a plan shall be determined according to a 5-star rating system (based on the data collected under [section 1395w–22(e) of this title](/usc/42/1395w–22.md?p=e)).
    - (B) **Plans that failed to report—** An [MA plan](/usc/42/1395w–101.md?p=a-3-B) which does not report data that enables the [Secretary](/usc/42/1301.md?p=a-6) to rate the plan for purposes of this paragraph shall be counted as having a rating of fewer than 3.5 stars.
    - (C) **Special rule for first 3 plan years for plans that were converted from a reasonable cost reimbursement contract—** For purposes of applying [paragraph (1)](#o-1) and [section 1395w–24(b)(1)(C) of this title](/usc/42/1395w–24.md?p=b-1-C) for the first 3 plan years under this part in the case of an [MA plan](/usc/42/1395w–101.md?p=a-3-B) to which deemed enrollment applies under [section 1395w–21(c)(4) of this title](/usc/42/1395w–21.md?p=c-4)—
      - (i) such plan shall not be treated as a [new MA plan](#o-3-A-iii-II) (as defined in [paragraph (3)(A)(iii)(II)](#o-3-A-iii-II)); and
      - (ii) in determining the star rating of the plan under [subparagraph (A)](#o-4-A), to the extent that Medicare Advantage data for such plan is not available for a measure used to determine such star rating, the [Secretary](/usc/42/1301.md?p=a-6) shall use data from the period in which such plan was a reasonable cost reimbursement contract.
    - (D) **Special rule to prevent the artificial inflation of star ratings after the consolidation of Medicare Advantage plans offered by a single organization—**
      - (i) **In general—** If—
        - (I) a Medicare Advantage organization has entered into more than one contract with the [Secretary](/usc/42/1301.md?p=a-6) with respect to the offering of Medicare Advantage plans; and
        - (II) on or after January 1, 2019, the [Secretary](/usc/42/1301.md?p=a-6) approves a request from the organization to consolidate the plans under one or more contract[^8] (in this subparagraph referred to as a “closed contract”) with the plans offered under a separate contract (in this subparagraph referred to as the “continuing contract”);

      with respect to the continuing contract, the [Secretary](/usc/42/1301.md?p=a-6) shall adjust the quality rating under the 5-star rating system and any quality increase under this subsection and rebate amounts under [section 1395w–24 of this title](/usc/42/1395w–24.md) to reflect an enrollment-weighted average of scores or ratings for the continuing and closed contracts, as determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6).

      - (ii) **Application—** An adjustment under [clause (i)](#o-4-D-i) shall apply for any year for which the quality rating of the continuing contract is based primarily on a measurement period that is prior to the first year in which a closed contract is no longer offered.
  - (5) **Exception for PACE plans—** This subsection shall not apply to payments to a PACE [program](/usc/42/274l–1.md?p=4) under [section 1395eee of this title](/usc/42/1395eee.md).
  - (6) **Quality measurement at the plan level for SNPs—**
    - (A) **In general—** Subject to [subparagraph (B)](#o-6-B), the [Secretary](/usc/42/1301.md?p=a-6) may require reporting of data under [section 1395w–22(e) of this title](/usc/42/1395w–22.md?p=e) for, and apply under this subsection, quality measures at the plan level for specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](/usc/42/1395w–28.md?p=b-6-B) instead of at the contract level.
    - (B) **Considerations—** Prior to applying quality measurement at the plan level under this paragraph, the [Secretary](/usc/42/1301.md?p=a-6) shall—
      - (i) take into consideration the minimum number of enrollees in a [specialized MA plan for special needs individuals](/usc/42/1395w–28.md?p=b-6-A) in order to determine if a statistically significant or valid measurement of quality at the plan level is possible under this paragraph;
      - (ii) take into consideration the impact of such application on plans that serve a disproportionate number of individuals dually eligible for benefits under this subchapter and under subchapter XIX;
      - (iii) if quality measures are reported at the plan level, ensure that [MA plans](/usc/42/1395w–101.md?p=a-3-B) are not required to provide duplicative information; and
      - (iv) ensure that such reporting does not interfere with the collection of encounter data submitted by MA organizations or the [administration](/usc/42/1301.md?p=a-10) of any changes to the [program](/usc/42/274l–1.md?p=4) under this part as a result of the collection of such data.
    - (C) **Application—** If the [Secretary](/usc/42/1301.md?p=a-6) applies quality measurement at the plan level under this paragraph—
      - (i) such quality measurement may include Medicare Health Outcomes Survey (HOS), Healthcare Effectiveness Data and Information Set (HEDIS), Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures and quality measures under part D; and
      - (ii) the [Secretary](/usc/42/1301.md?p=a-6) shall consider applying administrative actions, such as remedies described in [section 1395w–27(g)(2) of this title](/usc/42/1395w–27.md?p=g-2), at the plan level.
  - (7) **Determination of feasibility of quality measurement at the plan level for all MA plans—**
    - (A) **Determination of feasibility—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine the feasibility of requiring reporting of data under [section 1395w–22(e) of this title](/usc/42/1395w–22.md?p=e) for, and applying under this subsection, quality measures at the plan level for all [MA plans](/usc/42/1395w–101.md?p=a-3-B) under this part.
    - (B) **Consideration of change—** After making a determination under [subparagraph (A)](#o-7-A), the [Secretary](/usc/42/1301.md?p=a-6) shall consider requiring such reporting and applying such quality measures at the plan level as described in such subparagraph[^3]

# §1395w–24. Premiums and bid amounts

- (a) **Submission of proposed premiums, bid amounts, and related information—**
  - (1) **In general—**
    - (A) **Initial submission—** Not later than the second Monday in September of 2002, 2003, and 2004 (or the first Monday in June of each subsequent year), each MA organization shall submit to the [Secretary](/usc/42/1301.md?p=a-6), in a form and manner specified by the [Secretary](/usc/42/1301.md?p=a-6) and for each [MA plan](/usc/42/1395w–101.md?p=a-3-B) for the service area (or segment of such an area if permitted under [subsection (h)](#h)) in which it intends to be offered in the following year the following:
      - (i) The information described in paragraph [(2)](#a-2), [(3)](#a-3), [(4)](#a-4), or [(6)(A)](#a-6-A) for the type of plan and year involved.
      - (ii) The plan type for each plan.
      - (iii) The enrollment capacity (if any) in relation to the plan and area.
    - (B) **Beneficiary rebate information—** In the case of a plan required to provide a monthly rebate under [subsection (b)(1)(C)](#b-1-C) for a year, the MA organization offering the plan shall submit to the [Secretary](/usc/42/1301.md?p=a-6), in such form and manner and at such time as the [Secretary](/usc/42/1301.md?p=a-6) specifies, information on—
      - (i) the manner in which such rebate will be provided under [clause (ii)](#a-1-B-ii) of such subsection; and
      - (ii) the [MA monthly prescription drug beneficiary premium](#b-2-B) (if any) and the [MA monthly supplemental beneficiary premium](#b-2-C-i) (if any).
    - (C) **Paperwork reduction for offering of MA regional plans nationally or in multi-region areas—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish requirements for information submission under this subsection in a manner that promotes the offering of [MA regional plans](/usc/42/1395w–28.md?p=b-4) in more than one [region](/usc/42/1395ww.md?p=d-2-D) ([including](/usc/42/1301.md?p=b) all [regions](/usc/42/1395ww.md?p=d-2-D)) through the filing of consolidated information.
  - (2) **Information required for coordinated care plans before 2006—** For a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) described in [section 1395w–21(a)(2)(A) of this title](/usc/42/1395w–21.md?p=a-2-A) for a year before 2006, the information described in this paragraph is as follows:
    - (A) **Basic (and additional) benefits—** For benefits described in [section 1395w–22(a)(1)(A) of this title](/usc/42/1395w–22.md?p=a-1-A)—
      - (i) the adjusted community rate (as defined in [subsection (f)(3)](#f-3));
      - (ii) the [Medicare+Choice monthly basic beneficiary premium](/usc/42/1395w–28.md?p=c-4) (as defined in [subsection (b)(2)(A)](#b-2-A));
      - (iii) a description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in [subsection (e)(1)(A)](#e-1-A); and
      - (iv) if required under [subsection (f)(1)](#f-1), a description of the additional benefits to be provided pursuant to such subsection and the value determined for such proposed benefits under such subsection.
    - (B) **Supplemental benefits—** For benefits described in [section 1395w–22(a)(3) of this title](/usc/42/1395w–22.md?p=a-3)—
      - (i) the adjusted community rate (as defined in [subsection (f)(3)](#f-3));
      - (ii) the [Medicare+Choice monthly supplemental beneficiary premium](/usc/42/1395w–28.md?p=c-4) (as defined in [subsection (b)(2)(B)](#b-2-B)); and
      - (iii) a description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in [subsection (e)(2)](#e-2).
  - (3) **Requirements for MSA plans—** For an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) for any year, the information described in this paragraph is as follows:
    - (A) **Basic (and additional) benefits—** For benefits described in [section 1395w–22(a)(1)(A) of this title](/usc/42/1395w–22.md?p=a-1-A), the amount of the [Medicare+Choice monthly MSA premium](#b-2-D).
    - (B) **Supplemental benefits—** For benefits described in [section 1395w–22(a)(3) of this title](/usc/42/1395w–22.md?p=a-3), the amount of the Medicare+Choice monthly supplementary beneficiary premium.
  - (4) **Requirements for private fee-for-service plans before 2006—** For a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) described in [section 1395w–21(a)(2)(C) of this title](/usc/42/1395w–21.md?p=a-2-C) for benefits described in [section 1395w–22(a)(1)(A) of this title](/usc/42/1395w–22.md?p=a-1-A) for a year before 2006, the information described in this paragraph is as follows:
    - (A) **Basic (and additional) benefits—** For benefits described in [section 1395w–22(a)(1)(A) of this title](/usc/42/1395w–22.md?p=a-1-A)—
      - (i) the adjusted community rate (as defined in [subsection (f)(3)](#f-3));
      - (ii) the amount of the [Medicare+Choice monthly basic beneficiary premium](/usc/42/1395w–28.md?p=c-4);
      - (iii) a description of the deductibles, coinsurance, and copayments applicable under the plan, and the actuarial value of such deductibles, coinsurance, and copayments, as described in [subsection (e)(4)(A)](#e-4-A); and
      - (iv) if required under [subsection (f)(1)](#f-1), a description of the additional benefits to be provided pursuant to such subsection and the value determined for such proposed benefits under such subsection.
    - (B) **Supplemental benefits—** For benefits described in [section 1395w–22(a)(3) of this title](/usc/42/1395w–22.md?p=a-3), the amount of the [Medicare+Choice monthly supplemental beneficiary premium](/usc/42/1395w–28.md?p=c-4) (as defined in [subsection (b)(2)(B)](#b-2-B)).
  - (5) **Review—**
    - (A) **In general—** Subject to [subparagraph (B)](#a-5-B), the [Secretary](/usc/42/1301.md?p=a-6) shall review the adjusted community rates, the amounts of the basic and supplemental premiums, and values filed under paragraphs (2) and (4) of this subsection and shall approve or disapprove such rates, amounts, and values so submitted. The Chief Actuary of the Centers for Medicare & Medicaid Services shall review the actuarial assumptions and data used by the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) with respect to such rates, amounts, and values so submitted to determine the appropriateness of such assumptions and data.
    - (B) **Exception—** The [Secretary](/usc/42/1301.md?p=a-6) shall not review, approve, or disapprove the amounts submitted under [paragraph (3)](#a-3) or, in the case of an MA private fee-for-service plan, subparagraphs [(A)(ii)](#a-4-A-ii) and [(B)](#a-4-B) of paragraph (4).
    - (C) **Rejection of bids—**
      - (i) **In general—** Nothing in this section shall be construed as requiring the [Secretary](/usc/42/1301.md?p=a-6) to accept any or every bid submitted by an MA organization under this subsection.
      - (ii) **Authority to deny bids that propose significant increases in cost sharing or decreases in benefits—** The [Secretary](/usc/42/1301.md?p=a-6) may deny a bid submitted by an MA organization for an [MA plan](/usc/42/1395w–101.md?p=a-3-B) if it proposes significant increases in cost sharing or decreases in benefits offered under the plan.
  - (6) **Submission of bid amounts by MA organizations beginning in 2006—**
    - (A) **Information to be submitted—** For an [MA plan](/usc/42/1395w–101.md?p=a-3-B) (other than an [MSA plan](/usc/42/1395w–28.md?p=b-3-A)) for a plan year beginning on or after January 1, 2006, the information described in this subparagraph is as follows:
      - (i) The monthly aggregate bid amount for the provision of all items and services under the plan, which amount shall be based on average revenue requirements (as used for purposes of [section 300e–1(8) of this title](/usc/42/300e–1.md?p=8)) in the payment area for an enrollee with a national average risk profile for the factors described in [section 1395w–23(a)(1)(C) of this title](/usc/42/1395w–23.md?p=a-1-C) (as specified by the [Secretary](/usc/42/1301.md?p=a-6)).
      - (ii) The proportions of such bid amount that are attributable to—
        - (I) the provision of [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i) (as defined in [section 1395w–22(a)(1)(B) of this title](/usc/42/1395w–22.md?p=a-1-B)), [including](/usc/42/1301.md?p=b), for plan year 2020 and subsequent plan years, the provision of additional telehealth benefits as described in [section 1395w–22(m) of this title](/usc/42/1395w–22.md?p=m);
        - (II) the provision of [basic prescription drug coverage](/usc/42/1395w–151.md?p=a-1); and
        - (III) the provision of supplemental health care benefits.
      - (iii) The actuarial basis for determining the amount under [clause (i)](#a-6-A-i) and the proportions described in [clause (ii)](#a-6-A-ii) and such additional information as the [Secretary](/usc/42/1301.md?p=a-6) may require to verify such actuarial bases and the projected number of enrollees in each [MA local area](/usc/42/1395w–28.md?p=c-5).
      - (iv) A description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in [subsection (e)(4)(A)](#e-4-A).
      - (v) With respect to [qualified prescription drug coverage](/usc/42/1395w–151.md?p=a-15), the information required under [section 1395w–104 of this title](/usc/42/1395w–104.md), as incorporated under [section 1395w–111(b)(2) of this title](/usc/42/1395w–111.md?p=b-2), with respect to such coverage.

      In the case of a [specialized MA plan for special needs individuals](/usc/42/1395w–28.md?p=b-6-A), the information described in this subparagraph is such information as the [Secretary](/usc/42/1301.md?p=a-6) shall specify.

    - (B) **Acceptance and negotiation of bid amounts—**
      - (i) **Authority—** Subject to clauses [(iii)](#a-6-B-iii) and [(iv)](#a-6-B-iv), the [Secretary](/usc/42/1301.md?p=a-6) has the authority to negotiate regarding monthly bid amounts submitted under [subparagraph (A)](#a-6-A) (and the proportions described in [subparagraph (A)(ii)](#a-6-A-ii)), [including](/usc/42/1301.md?p=b) supplemental benefits provided under [subsection (b)(1)(C)(ii)(I)](#b-1-C-ii-I) and in exercising such authority the [Secretary](/usc/42/1301.md?p=a-6) shall have authority similar to the authority of the [Director](/usc/42/5061.md?p=1) of the [Office](/usc/42/3058f.md?p=1) of Personnel Management with respect to health benefits plans under [chapter 89](/usc/5/chptIII-sptG-ch89.md) of title 5.
      - (ii) **Application of FEHBP standard—** Subject to [clause (iv)](#a-6-B-iv), the [Secretary](/usc/42/1301.md?p=a-6) may only accept such a bid amount or proportion if the [Secretary](/usc/42/1301.md?p=a-6) determines that such amount and proportions are supported by the actuarial bases provided under [subparagraph (A)](#a-6-A) and reasonably and equitably reflects the revenue requirements (as used for purposes of [section 300e–1(8) of this title](/usc/42/300e–1.md?p=8)) of benefits provided under that plan.
      - (iii) **Noninterference—** In order to promote competition under this part and part D and in carrying out such parts, the [Secretary](/usc/42/1301.md?p=a-6) may not require any MA organization to contract with a particular [hospital](/usc/42/1395dd.md?p=e-5), [physician](/usc/42/1395cc–1.md?p=a-3-A), or other entity or individual to furnish items and services under this subchapter or require a particular price structure for payment under such a contract to the extent consistent with the [Secretary](/usc/42/1301.md?p=a-6)’s authority under this part.
      - (iv) **Exception—** In the case of a plan described in [section 1395w–21(a)(2)(C) of this title](/usc/42/1395w–21.md?p=a-2-C), the provisions of clauses [(i)](#a-6-B-i) and [(ii)](#a-6-B-ii) shall not apply and the provisions of [paragraph (5)(B)](#a-5-B), prohibiting the review, approval, or disapproval of amounts described in such paragraph, shall apply to the negotiation and rejection of the monthly bid amounts and the proportions referred to in [subparagraph (A)](#a-6-A).
- (b) **Monthly premium charged—**
  - (1) **In general—**
    - (A) **Rule for other than MSA plans—** Subject to the rebate under [subparagraph (C)](#b-1-C), the monthly amount (if any) of the premium charged to an individual enrolled in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) (other than an [MSA plan](/usc/42/1395w–28.md?p=b-3-A)) offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall be equal to the sum of the [Medicare+Choice monthly basic beneficiary premium](/usc/42/1395w–28.md?p=c-4), the Medicare+Choice monthly supplementary beneficiary premium (if any), and, if the plan provides [qualified prescription drug coverage](/usc/42/1395w–151.md?p=a-15), the [MA monthly prescription drug beneficiary premium](#b-2-B).
    - (B) **MSA plans—** The monthly amount of the premium charged to an individual enrolled in an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall be equal to the [Medicare+Choice monthly supplemental beneficiary premium](/usc/42/1395w–28.md?p=c-4) (if any).
    - (C) **Beneficiary rebate rule—**
      - (i) **Requirement—** The [MA plan](/usc/42/1395w–101.md?p=a-3-B) shall provide to the enrollee a monthly rebate equal to 75 percent (or the applicable rebate percentage specified in [clause (iii)](#b-1-C-iii) in the case of plan years beginning on or after January 1, 2012) of the average per capita savings (if any) described in paragraph [(3)(C)](#b-3-C) or [(4)(C)](#b-4-C), as applicable to the plan and year involved.
      - (ii) **Form of rebate for plan years before 2012—** For plan years before 2012, a rebate required under this subparagraph shall be provided through the application of the amount of the rebate toward one or more of the following:
        - (I) **Provision of supplemental health care benefits and payment for premium for supplemental benefits—** The provision of supplemental health care benefits described in [section 1395w–22(a)(3) of this title](/usc/42/1395w–22.md?p=a-3) in a manner specified under the plan, which may include the reduction of [cost-sharing](/usc/42/18022.md?p=c-3-A) otherwise applicable as well as additional health care benefits which are not [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i), or crediting toward an [MA monthly supplemental beneficiary premium](#b-2-C-i) (if any).
        - (II) **Payment for premium for prescription drug coverage—** Crediting toward the [MA monthly prescription drug beneficiary premium](#b-2-B).
        - (III) **Payment toward part B premium—** Crediting toward the premium imposed under part B (determined without regard to the application of subsections (b), (h), and (i) of [section 1395r of this title](/usc/42/1395r.md)).
      - (iii) **Applicable rebate percentage—** The applicable rebate percentage specified in this clause for a plan for a year, based on the system under [section 1395w–23(o)(4)(A)](/usc/42/1395w–23.md?p=o-4-A), is the sum of—
        - (I) the product of the old phase-in proportion for the year under [clause (iv)](#b-1-C-iv) and 75 percent; and
        - (II) the product of the new phase-in proportion for the year under [clause (iv)](#b-1-C-iv) and the final applicable rebate percentage under [clause (v)](#b-1-C-v).
      - (iv) **Old and new phase-in proportions—** For purposes of [clause (iv)](#b-1-C-iv)—
        - (I) for 2012, the old phase-in proportion is ⅔ and the new phase-in proportion is ⅓;
        - (II) for 2013, the old phase-in proportion is ⅓ and the new phase-in proportion is ⅔; and
        - (III) for 2014 and any subsequent year, the old phase-in proportion is 0 and the new phase-in proportion is 1.
      - (v) **Final applicable rebate percentage—** Subject to [clause (vi)](#b-1-C-vi), the final applicable rebate percentage under this clause is—
        - (I) in the case of a plan with a quality rating under such system of at least 4.5 stars, 70 percent;
        - (II) in the case of a plan with a quality rating under such system of at least 3.5 stars and less than 4.5 stars, 65 percent; and
        - (III) in the case of a plan with a quality rating under such system of less than 3.5 stars, 50 percent.
      - (vi) **Treatment of low enrollment and new plans—** For purposes of [clause (v)](#b-1-C-v)—
        - (I) for 2012, in the case of a plan described in subclause (I) of subsection (o)(3)(A)(ii),[^1] the plan shall be treated as having a rating of 4.5 stars; and
        - (II) for 2012 or a subsequent year, in the case of a new [MA plan](/usc/42/1395w–101.md?p=a-3-B) (as defined under subclause (III) of subsection (o)(3)(A)(iii)[^2]) that is treated as a qualifying plan pursuant to [subclause (I)](#b-1-C-vi-I) of such subsection, the plan shall be treated as having a rating of 3.5 stars.
      - (vii) **Disclosure relating to rebates—** The plan shall disclose to the [Secretary](/usc/42/1301.md?p=a-6) information on the form and amount of the rebate provided under this subparagraph or the actuarial value in the case of supplemental health care benefits.
      - (viii) **Application of part B premium reduction—** Insofar as an MA organization elects to provide a rebate under this subparagraph under a plan as a credit toward the part B premium under [clause (ii)(III)](#b-1-C-ii-III), the [Secretary](/usc/42/1301.md?p=a-6) shall apply such credit to reduce the premium under [section 1395r of this title](/usc/42/1395r.md) of each enrollee in such plan as provided in [section 1395s(i) of this title](/usc/42/1395s.md?p=i).
  - (2) **Premium and bid terminology defined—** For purposes of this part:
    - (A) **MA monthly basic beneficiary premium—** The term “MA monthly basic beneficiary premium” means, with respect to an [MA plan](/usc/42/1395w–101.md?p=a-3-B)—
      - (i) described in [section 1395w–23(a)(1)(B)(i) of this title](/usc/42/1395w–23.md?p=a-1-B-i) (relating to plans providing rebates), zero; or
      - (ii) described in [section 1395w–23(a)(1)(B)(ii) of this title](/usc/42/1395w–23.md?p=a-1-B-ii), the amount (if any) by which the [unadjusted MA statutory non-drug monthly bid amount](#b-2-E) (as defined in [subparagraph (E)](#b-2-E)) exceeds the applicable unadjusted [MA area-specific non-drug monthly benchmark amount](/usc/42/1395w–23.md?p=j) (as defined in [section 1395w–23(j) of this title](/usc/42/1395w–23.md?p=j)).
    - (B) **MA monthly prescription drug beneficiary premium—** The term “MA monthly prescription drug beneficiary premium” means, with respect to an [MA plan](/usc/42/1395w–101.md?p=a-3-B), the base beneficiary premium (as determined under paragraph [(2)](#b-2) or (8) (as applicable) of [section 1395w–113(a) of this title](/usc/42/1395w–113.md?p=a) and as adjusted under [section 1395w–113(a)(1)(B) of this title](/usc/42/1395w–113.md?p=a-1-B)), less the amount of rebate credited toward such amount under [subsection (b)(1)(C)(ii)(II)](#b-1-C-ii-II).
    - (C) **MA monthly supplemental beneficiary premium—**
      - (i) **In general—** The term “MA monthly supplemental beneficiary premium” means, with respect to an [MA plan](/usc/42/1395w–101.md?p=a-3-B), the portion of the aggregate monthly bid amount submitted under [clause (i)](#a-6-A-i) of subsection (a)(6)(A) for the year that is attributable under [clause (ii)(III)](#a-6-A-ii-III) of such subsection to the provision of supplemental health care benefits, less the amount of rebate credited toward such portion under [subsection (b)(1)(C)(ii)(I)](#b-1-C-ii-I).
      - (ii) **Application of MA monthly supplementary beneficiary premium—** For plan years beginning on or after January 1, 2012, any MA monthly supplementary beneficiary premium charged to an individual enrolled in an [MA plan](/usc/42/1395w–101.md?p=a-3-B) shall be used for the purposes, and in the priority order, described in [subclauses (I) through (III)](#b-1-C-iii-I..b-1-C-iii-III) of paragraph (1)(C)(iii).[^3]
    - (D) **Medicare+Choice monthly MSA premium—** The term “Medicare+Choice monthly MSA premium” means, with respect to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1), the amount of such premium filed under [subsection (a)(3)(A)](#a-3-A) for the plan.
    - (E) **Unadjusted MA statutory non-drug monthly bid amount—** The term “unadjusted MA statutory non-drug monthly bid amount” means the portion of the bid amount submitted under [clause (i)](#a-6-A-i) of subsection (a)(6)(A) for the year that is attributable under [clause (ii)(I)](#a-6-A-ii-I) of such subsection to the provision of [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i) (as defined in [section 1395w–22(a)(1)(B) of this title](/usc/42/1395w–22.md?p=a-1-B)).
  - (3) **Computation of average per capita monthly savings for local plans—** For purposes of [paragraph (1)(C)(i)](#b-1-C-i), the average per capita monthly savings referred to in such paragraph for an [MA local plan](/usc/42/1395w–28.md?p=b-5) and year is computed as follows:
    - (A) **Determination of statewide average risk adjustment for local plans—**
      - (i) **In general—** Subject to [clause (iii)](#b-3-A-iii), the [Secretary](/usc/42/1301.md?p=a-6) shall determine, at the same time rates are promulgated under [section 1395w–23(b)(1) of this title](/usc/42/1395w–23.md?p=b-1) (beginning with 2006) for each [State](/usc/42/1397n–12.md?p=6), the average of the risk adjustment factors to be applied under [section 1395w–23(a)(1)(C) of this title](/usc/42/1395w–23.md?p=a-1-C) to payment for enrollees in that [State](/usc/42/1397n–12.md?p=6) for [MA local plans](/usc/42/1395w–28.md?p=b-5).
      - (ii) **Treatment of States for first year in which local plan offered—** In the case of a [State](/usc/42/1397n–12.md?p=6) in which no [MA local plan](/usc/42/1395w–28.md?p=b-5) was offered in the previous year, the [Secretary](/usc/42/1301.md?p=a-6) shall estimate such average. In making such estimate, the [Secretary](/usc/42/1301.md?p=a-6) may use average risk adjustment factors applied to comparable [States](/usc/42/1397n–12.md?p=6) or applied on a national basis.
      - (iii) **Authority to determine risk adjustment for areas other than States—** The [Secretary](/usc/42/1301.md?p=a-6) may provide for the determination and application of risk adjustment factors under this subparagraph on the basis of areas other than [States](/usc/42/1397n–12.md?p=6) or on a plan-specific basis.
    - (B) **Determination of risk adjusted benchmark and risk-adjusted bid for local plans—** For each [MA plan](/usc/42/1395w–101.md?p=a-3-B) offered in a local area in a [State](/usc/42/1397n–12.md?p=6), the [Secretary](/usc/42/1301.md?p=a-6) shall—
      - (i) adjust the applicable [MA area-specific non-drug monthly benchmark amount](/usc/42/1395w–23.md?p=j) (as defined in [section 1395w–23(j)(1) of this title](/usc/42/1395w–23.md?p=j-1)) for the area by the average risk adjustment factor computed under [subparagraph (A)](#b-3-A); and
      - (ii) adjust the [unadjusted MA statutory non-drug monthly bid amount](#b-2-E) by such applicable average risk adjustment factor.
    - (C) **Determination of average per capita monthly savings—** The average per capita monthly savings described in this subparagraph for an [MA local plan](/usc/42/1395w–28.md?p=b-5) is equal to the amount (if any) by which—
      - (i) the risk-adjusted benchmark amount computed under [subparagraph (B)(i)](#b-3-B-i); exceeds
      - (ii) the risk-adjusted bid computed under [subparagraph (B)(ii)](#b-3-B-ii).
  - (4) **Computation of average per capita monthly savings for regional plans—** For purposes of [paragraph (1)(C)(i)](#b-1-C-i), the average per capita monthly savings referred to in such paragraph for an [MA regional plan](/usc/42/1395w–28.md?p=b-4) and year is computed as follows:
    - (A) **Determination of regionwide average risk adjustment for regional plans—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine, at the same time rates are promulgated under [section 1395w–23(b)(1) of this title](/usc/42/1395w–23.md?p=b-1) (beginning with 2006) for each MA [region](/usc/42/1395ww.md?p=d-2-D) the average of the risk adjustment factors to be applied under [section 1395w–23(a)(1)(C) of this title](/usc/42/1395w–23.md?p=a-1-C) to payment for enrollees in that [region](/usc/42/1395ww.md?p=d-2-D) for [MA regional plans](/usc/42/1395w–28.md?p=b-4).
      - (ii) **Treatment of regions for first year in which regional plan offered—** In the case of an MA [region](/usc/42/1395ww.md?p=d-2-D) in which no [MA regional plan](/usc/42/1395w–28.md?p=b-4) was offered in the previous year, the [Secretary](/usc/42/1301.md?p=a-6) shall estimate such average. In making such estimate, the [Secretary](/usc/42/1301.md?p=a-6) may use average risk adjustment factors applied to comparable [regions](/usc/42/1395ww.md?p=d-2-D) or applied on a national basis.
      - (iii) **Authority to determine risk adjustment for areas other than regions—** The [Secretary](/usc/42/1301.md?p=a-6) may provide for the determination and application of risk adjustment factors under this subparagraph on the basis of areas other than MA [regions](/usc/42/1395ww.md?p=d-2-D) or on a plan-specific basis.
    - (B) **Determination of risk-adjusted benchmark and risk-adjusted bid for regional plans—** For each [MA regional plan](/usc/42/1395w–28.md?p=b-4) offered in a [region](/usc/42/1395ww.md?p=d-2-D), the [Secretary](/usc/42/1301.md?p=a-6) shall—
      - (i) adjust the applicable [MA area-specific non-drug monthly benchmark amount](/usc/42/1395w–23.md?p=j) (as defined in [section 1395w–23(j)(2) of this title](/usc/42/1395w–23.md?p=j-2)) for the [region](/usc/42/1395ww.md?p=d-2-D) by the average risk adjustment factor computed under [subparagraph (A)](#b-4-A); and
      - (ii) adjust the [unadjusted MA statutory non-drug monthly bid amount](#b-2-E) by such applicable average risk adjustment factor.
    - (C) **Determination of average per capita monthly savings—** The average per capita monthly savings described in this subparagraph for an [MA regional plan](/usc/42/1395w–28.md?p=b-4) is equal to the amount (if any) by which—
      - (i) the risk-adjusted benchmark amount computed under [subparagraph (B)(i)](#b-4-B-i); exceeds
      - (ii) the risk-adjusted bid computed under [subparagraph (B)(ii)](#b-4-B-ii).
- (c) **Uniform premium and bid amounts—** Except as permitted under [section 1395w–27(i) of this title](/usc/42/1395w–27.md?p=i), the MA monthly bid amount submitted under [subsection (a)(6)](#a-6), the amounts of the MA monthly basic, prescription [drug](/usc/42/282.md?p=j-1-A-vii), and supplemental beneficiary premiums, and the MA monthly MSA premium charged under [subsection (b)](#b) of an MA organization under this part may not vary among individuals enrolled in the plan.
- (d) **Terms and conditions of imposing premiums—**
  - (1) **In general—** Each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall permit the payment of Medicare+Choice monthly basic, prescription [drug](/usc/42/282.md?p=j-1-A-vii), and supplemental beneficiary premiums on a monthly basis, may terminate election of individuals for a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) for failure to make premium payments only in accordance with [section 1395w–21(g)(3)(B)(i) of this title](/usc/42/1395w–21.md?p=g-3-B-i), and may not provide for cash or other monetary rebates as an inducement for enrollment or otherwise.
  - (2) **Beneficiary’s option of payment through withholding from social security payment or use of electronic funds transfer mechanism—** In accordance with [regulations](/usc/42/1395hh.md?p=a-1), an MA organization shall permit each enrollee, at the enrollee’s option, to make payment of premiums (if any) under this part to the organization through—
    - (A) withholding from benefit payments in the manner provided under [section 1395s of this title](/usc/42/1395s.md) with respect to monthly premiums under [section 1395r of this title](/usc/42/1395r.md);
    - (B) an electronic [funds](/usc/42/12854.md?p=3) transfer mechanism (such as automatic charges of an account at a [financial institution](/usc/42/666.md?p=a-17-D-i) or a credit or debit card account); or
    - (C) such other means as the [Secretary](/usc/42/1301.md?p=a-6) may specify, [including](/usc/42/1301.md?p=b) payment by an employer or under employment-based retiree health coverage (as defined in [section 1395w–132(c)(1) of this title](/usc/42/1395w–132.md?p=c-1)) on behalf of an [employee](/usc/42/1320a–7h.md?p=e-7) or former [employee](/usc/42/1320a–7h.md?p=e-7) (or dependent).

    All premium payments that are withheld under [subparagraph (A)](#d-2-A) shall be credited to the appropriate [Trust](/usc/42/12854.md?p=6) [Fund](/usc/42/12854.md?p=3) (or Account thereof), as specified by the [Secretary](/usc/42/1301.md?p=a-6), under this subchapter and shall be paid to the MA organization involved. No charge may be imposed under an [MA plan](/usc/42/1395w–101.md?p=a-3-B) with respect to the election of the payment option described in [subparagraph (A)](#d-2-A). The [Secretary](/usc/42/1301.md?p=a-6) shall consult with the [Commissioner](/usc/42/12302.md?p=1) of [Social](/usc/42/1397j.md?p=20) Security and the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury regarding methods for allocating premiums withheld under [subparagraph (A)](#d-2-A) among the appropriate [Trust](/usc/42/12854.md?p=6) [Funds](/usc/42/12854.md?p=3) and Account.

  - (3) **Information necessary for collection—** In order to carry out [paragraph (2)(A)](#d-2-A) with respect to an enrollee who has elected such paragraph to apply, the [Secretary](/usc/42/1301.md?p=a-6) shall transmit to the [Commissioner](/usc/42/12302.md?p=1) of [Social](/usc/42/1397j.md?p=20) Security—
    - (A) by the beginning of each year, the name, [social](/usc/42/1397j.md?p=20) security account number, consolidated monthly beneficiary premium described in [paragraph (4)](#d-4) owed by such enrollee for each month during the year, and other information determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6), in consultation with the [Commissioner](/usc/42/12302.md?p=1) of [Social](/usc/42/1397j.md?p=20) Security; and
    - (B) periodically throughout the year, information to update the information previously transmitted under this paragraph for the year.
  - (4) **Consolidated monthly beneficiary premium—** In the case of an enrollee in an [MA plan](/usc/42/1395w–101.md?p=a-3-B), the [Secretary](/usc/42/1301.md?p=a-6) shall provide a mechanism for the consolidation of—
    - (A) the [MA monthly basic beneficiary premium](#b-2-A) (if any);
    - (B) the [MA monthly supplemental beneficiary premium](#b-2-C-i) (if any); and
    - (C) the [MA monthly prescription drug beneficiary premium](#b-2-B) (if any).
- (e) **Limitation on enrollee liability—**
  - (1) **For basic and additional benefits before 2006—** For periods before 2006, in no event may—
    - (A) the [Medicare+Choice monthly basic beneficiary premium](/usc/42/1395w–28.md?p=c-4) (multiplied by 12) and the actuarial value of the deductibles, coinsurance, and copayments applicable on average to individuals enrolled under this part with a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) described in [section 1395w–21(a)(2)(A) of this title](/usc/42/1395w–21.md?p=a-2-A) of an organization with respect to required benefits described in [section 1395w–22(a)(1)(A) of this title](/usc/42/1395w–22.md?p=a-1-A) and additional benefits (if any) required under [subsection (f)(1)(A)](#f-1-A) for a year, exceed
    - (B) the actuarial value of the deductibles, coinsurance, and copayments that would be applicable on average to individuals entitled to benefits under part A and enrolled under part B if they were not members of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) for the year.
  - (2) **For supplemental benefits before 2006—** For periods before 2006, if the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) provides to its members enrolled under this part in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) described in [section 1395w–21(a)(2)(A) of this title](/usc/42/1395w–21.md?p=a-2-A) with respect to supplemental benefits described in [section 1395w–22(a)(3) of this title](/usc/42/1395w–22.md?p=a-3), the sum of the [Medicare+Choice monthly supplemental beneficiary premium](/usc/42/1395w–28.md?p=c-4) (multiplied by 12) charged and the actuarial value of its deductibles, coinsurance, and copayments charged with respect to such benefits may not exceed the adjusted community rate for such benefits (as defined in [subsection (f)(3)](#f-3)).
  - (3) **Determination on other basis—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that adequate data are not available to determine the actuarial value under paragraph [(1)(A)](#e-1-A), [(2)](#e-2), or [(4)](#e-4), the [Secretary](/usc/42/1301.md?p=a-6) may determine such amount with respect to all individuals in same [geographic area](/usc/42/11360.md?p=9), the [State](/usc/42/1397n–12.md?p=6), or in the [United States](/usc/42/1301.md?p=a-2), eligible to enroll in the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) involved under this part or on the basis of other appropriate data.
  - (4) **Special rule for private fee-for-service plans and for basic benefits beginning in 2006—** With respect to a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2) (other than a plan that is an [MSA plan](/usc/42/1395w–28.md?p=b-3-A)) and for periods beginning with 2006, with respect to an [MA plan](/usc/42/1395w–101.md?p=a-3-B) described in [section 1395w–21(a)(2)(A) of this title](/usc/42/1395w–21.md?p=a-2-A), in no event may—
    - (A) the actuarial value of the deductibles, coinsurance, and copayments applicable on average to individuals enrolled under this part with such a plan of an organization with respect to [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i), exceed
    - (B) the actuarial value of the deductibles, coinsurance, and copayments that would be applicable with respect to such benefits on average to individuals entitled to benefits under part A and enrolled under part B if they were not members of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) for the year.
- (f) **Requirement for additional benefits before 2006—**
  - (1) **Requirement—**
    - (A) **In general—** For years before 2006, each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) (in relation to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1), other than an [MSA plan](/usc/42/1395w–28.md?p=b-3-A), it offers) shall provide that if there is an excess amount (as defined in [subparagraph (B)](#f-1-B)) for the plan for a contract year, subject to the succeeding provisions of this subsection, the organization shall provide to individuals such additional benefits (as the organization may specify) in a value which the [Secretary](/usc/42/1301.md?p=a-6) determines is at least equal to the adjusted excess amount (as defined in [subparagraph (C)](#f-1-C)).
    - (B) **Excess amount—** For purposes of this paragraph, the “excess amount”, for an organization for a plan, is the amount (if any) by which—
      - (i) the average of the capitation payments made to the organization under [section 1395w–23 of this title](/usc/42/1395w–23.md) for the plan at the beginning of contract year, exceeds
      - (ii) the actuarial value of the required benefits described in [section 1395w–22(a)(1)(A) of this title](/usc/42/1395w–22.md?p=a-1-A) under the plan for individuals under this part, as determined based upon an [adjusted community rate](#f-3) described in [paragraph (3)](#f-3) (as reduced for the actuarial value of the coinsurance, copayments, and deductibles under parts A and B).
    - (C) **Adjusted excess amount—** For purposes of this paragraph, the “adjusted excess amount”, for an organization for a plan, is the excess amount reduced to reflect any amount withheld and reserved for the organization for the year under [paragraph (2)](#f-2).
    - (D) **Uniform application—** This paragraph shall be applied uniformly for all enrollees for a plan.
    - (E) **Premium reductions—**
      - (i) **In general—** Subject to [clause (ii)](#f-1-E-ii), as part of providing any additional benefits required under [subparagraph (A)](#f-1-A), a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may elect a reduction in its payments under [section 1395w–23(a)(1)(A) of this title](/usc/42/1395w–23.md?p=a-1-A) with respect to a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) and the [Secretary](/usc/42/1301.md?p=a-6) shall apply such reduction to reduce the premium under [section 1395r of this title](/usc/42/1395r.md) of each enrollee in such plan as provided in [section 1395s(i) of this title](/usc/42/1395s.md?p=i).
      - (ii) **Amount of reduction—** The amount of the reduction under [clause (i)](#f-1-E-i) with respect to any enrollee in a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1)—
        - (I) may not exceed 125 percent of the premium described under [section 1395r(a)(3) of this title](/usc/42/1395r.md?p=a-3); and
        - (II) shall apply uniformly to each enrollee of the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) to which such reduction applies.
    - (F) **Construction—** Nothing in this subsection shall be construed as preventing a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) from providing supplemental benefits (described in [section 1395w–22(a)(3) of this title](/usc/42/1395w–22.md?p=a-3)) that are in addition to the health care benefits otherwise required to be provided under this paragraph and from imposing a premium for such supplemental benefits.
  - (2) **Stabilization fund—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) may provide that a part of the value of an excess amount described in [paragraph (1)](#f-1) be withheld and reserved in the Federal [Hospital](/usc/42/1395dd.md?p=e-5) Insurance [Trust](/usc/42/12854.md?p=6) [Fund](/usc/42/12854.md?p=3) and in the Federal Supplementary Medical Insurance [Trust](/usc/42/12854.md?p=6) [Fund](/usc/42/12854.md?p=3) (in such proportions as the [Secretary](/usc/42/1301.md?p=a-6) determines to be appropriate) by the [Secretary](/usc/42/1301.md?p=a-6) for subsequent annual contract periods, to the extent required [to stabilize](/usc/42/300gg–19a.md?p=b-2-C) and prevent undue fluctuations in the additional benefits offered in those subsequent periods by the organization in accordance with such paragraph. Any of such value of the amount reserved which is not provided as additional benefits described in [paragraph (1)(A)](#f-1-A) to individuals electing the [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) of the organization in accordance with such paragraph prior to the end of such periods, shall revert for the use of such [trust](/usc/42/12854.md?p=6) [funds](/usc/42/12854.md?p=3).
  - (3) **Adjusted community rate—** For purposes of this subsection, subject to [paragraph (4)](#f-4), the term “adjusted community rate” for a service or services means, at the election of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1), either—
    - (A) the rate of payment for that service or services which the [Secretary](/usc/42/1301.md?p=a-6) annually determines would apply to an individual electing a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) under this part if the rate of payment were determined under a “community rating system” (as defined in [section 300e–1(8) of this title](/usc/42/300e–1.md?p=8), other than subparagraph (C)), or
    - (B) such portion of the weighted aggregate premium, which the [Secretary](/usc/42/1301.md?p=a-6) annually estimates would apply to such an individual, as the [Secretary](/usc/42/1301.md?p=a-6) annually estimates is attributable to that service or services,

    but adjusted for differences between the utilization characteristics of the individuals electing coverage under this part and the utilization characteristics of the other enrollees with the plan (or, if the [Secretary](/usc/42/1301.md?p=a-6) finds that adequate data are not available to adjust for those differences, the differences between the utilization characteristics of individuals selecting other Medicare+Choice coverage, or [Medicare+Choice eligible individuals](/usc/42/1395w–21.md?p=a-3) in the area, in the [State](/usc/42/1397n–12.md?p=6), or in the [United States](/usc/42/1301.md?p=a-2), eligible to elect Medicare+Choice coverage under this part and the utilization characteristics of the rest of the population in the area, in the [State](/usc/42/1397n–12.md?p=6), or in the [United States](/usc/42/1301.md?p=a-2), respectively).

  - (4) **Determination based on insufficient data—** For purposes of this subsection, if the [Secretary](/usc/42/1301.md?p=a-6) finds that there is insufficient enrollment experience to determine an average of the capitation payments to be made under this part at the beginning of a contract period or to determine (in the case of a newly operated [provider-sponsored organization](/usc/42/1395w–25.md?p=d-1) or other new organization) the [adjusted community rate](#f-3) for the organization, the [Secretary](/usc/42/1301.md?p=a-6) may determine such an average based on the enrollment experience of other contracts entered into under this part and may determine such a rate using data in the general commercial marketplace.
- (g) **Prohibition of State imposition of premium taxes—** No [State](/usc/42/1397n–12.md?p=6) may impose a premium tax or similar tax with respect to payments to [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) under [section 1395w–23 of this title](/usc/42/1395w–23.md) or premiums paid to such organizations under this part.
- (h) **Permitting use of segments of service areas—** The [Secretary](/usc/42/1301.md?p=a-6) shall permit a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) to elect to apply the provisions of this section uniformly to separate segments of a service area (rather than uniformly to an entire service area) as long as such segments are composed of one or more [Medicare+Choice payment areas](/usc/42/1395w–28.md?p=c-2).

# §1395w–25. Organizational and financial requirements for Medicare+Choice organizations; provider-sponsored organizations

- (a) **Organized and licensed under State law—**
  - (1) **In general—** Subject to paragraphs [(2)](#a-2) and [(3)](#a-3), a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall be organized and licensed under [State](/usc/42/1397n–12.md?p=6) law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each [State](/usc/42/1397n–12.md?p=6) in which it offers a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1).
  - (2) **Special exception for provider-sponsored organizations—**
    - (A) **In general—** In the case of a [provider-sponsored organization](#d-1) that seeks to offer a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) in a [State](/usc/42/1397n–12.md?p=6), the [Secretary](/usc/42/1301.md?p=a-6) shall waive the requirement of [paragraph (1)](#a-1) that the organization be licensed in that [State](/usc/42/1397n–12.md?p=6) if—
      - (i) the organization files an application for such waiver with the [Secretary](/usc/42/1301.md?p=a-6) by not later than November 1, 2002, and
      - (ii) the [Secretary](/usc/42/1301.md?p=a-6) determines, based on the application and other evidence presented to the [Secretary](/usc/42/1301.md?p=a-6), that any of the grounds for approval of the application described in subparagraph [(B)](#a-2-B), [(C)](#a-2-C), or [(D)](#a-2-D) has been met.
    - (B) **Failure to act on licensure application on a timely basis—** The ground for approval of such a waiver application described in this subparagraph is that the [State](/usc/42/1397n–12.md?p=6) has failed to complete action on a licensing application of the organization within 90 days of the date of the [State](/usc/42/1397n–12.md?p=6)’s receipt of a substantially complete application. No period before August 5, 1997, shall be included in determining such 90-day period.
    - (C) **Denial of application based on discriminatory treatment—** The ground for approval of such a waiver application described in this subparagraph is that the [State](/usc/42/1397n–12.md?p=6) has denied such a licensing application and—
      - (i) the [standards](/usc/42/1320d.md?p=7) or review process imposed by the [State](/usc/42/1397n–12.md?p=6) as a condition of approval of the license imposes any material requirements, procedures, or [standards](/usc/42/1320d.md?p=7) (other than solvency requirements) to such organizations that are not generally applicable to other entities engaged in a substantially similar business, or
      - (ii) the [State](/usc/42/1397n–12.md?p=6) requires the organization, as a condition of licensure, to offer any product or plan other than a Medicare+ÐChoice plan.
    - (D) **Denial of application based on application of solvency requirements—** With respect to waiver applications filed on or after the date of publication of solvency [standards](/usc/42/1320d.md?p=7) under [section 1395w–26(a) of this title](/usc/42/1395w–26.md?p=a), the ground for approval of such a waiver application described in this subparagraph is that the [State](/usc/42/1397n–12.md?p=6) has denied such a licensing application based (in whole or in part) on the organization’s failure to meet applicable solvency requirements and—
      - (i) such requirements are not the same as the solvency [standards](/usc/42/1320d.md?p=7) established under [section 1395w–26(a) of this title](/usc/42/1395w–26.md?p=a); or
      - (ii) the [State](/usc/42/1397n–12.md?p=6) has imposed as a condition of approval of the license documentation or information requirements relating to solvency or other material requirements, procedures, or [standards](/usc/42/1320d.md?p=7) relating to solvency that are different from the requirements, procedures, and [standards](/usc/42/1320d.md?p=7) applied by the [Secretary](/usc/42/1301.md?p=a-6) under [subsection (d)(2)](#d-2).

      For purposes of this paragraph, the term “solvency requirements” means requirements relating to solvency and other matters covered under the [standards](/usc/42/1320d.md?p=7) established under [section 1395w–26(a) of this title](/usc/42/1395w–26.md?p=a).

    - (E) **Treatment of waiver—** In the case of a waiver granted under this paragraph for a [provider-sponsored organization](#d-1) with respect to a [State](/usc/42/1397n–12.md?p=6)—
      - (i) **Limitation to State—** The waiver shall be effective only with respect to that [State](/usc/42/1397n–12.md?p=6) and does not apply to any other [State](/usc/42/1397n–12.md?p=6).
      - (ii) **Limitation to 36-month period—** The waiver shall be effective only for a 36-month period and may not be renewed.
      - (iii) **Conditioned on compliance with consumer protection and quality standards—** The continuation of the waiver is conditioned upon the organization’s compliance with the requirements described in [subparagraph (G)](#a-2-G).
      - (iv) **Preemption of State law—** Any provisions of law of that [State](/usc/42/1397n–12.md?p=6) which relate to the licensing of the organization and which prohibit the organization from providing coverage pursuant to a contract under this part shall be superseded.
    - (F) **Prompt action on application—** The [Secretary](/usc/42/1301.md?p=a-6) shall [grant](/usc/42/1397j.md?p=10) or deny such a waiver application within 60 days after the date the [Secretary](/usc/42/1301.md?p=a-6) determines that a substantially complete waiver application has been filed. Nothing in this section shall be construed as preventing an organization which has had such a waiver application denied from submitting a subsequent waiver application.
    - (G) **Application and enforcement of State consumer protection and quality standards—**
      - (i) **In general—** A waiver granted under this paragraph to an organization with respect to licensing under [State](/usc/42/1397n–12.md?p=6) law is conditioned upon the organization’s compliance with all consumer protection and quality [standards](/usc/42/1320d.md?p=7) insofar as such [standards](/usc/42/1320d.md?p=7)—
        - (I) would apply in the [State](/usc/42/1397n–12.md?p=6) to the organization if it were licensed under [State](/usc/42/1397n–12.md?p=6) law;
        - (II) are generally applicable to other [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) and plans in the [State](/usc/42/1397n–12.md?p=6); and
        - (III) are consistent with the [standards](/usc/42/1320d.md?p=7) established under this part.

      Such [standards](/usc/42/1320d.md?p=7) shall not include any [standard](/usc/42/1320d.md?p=7) preempted under [section 1395w–26(b)(3)(B) of this title](/usc/42/1395w–26.md).

      - (ii) **Incorporation into contract—** In the case of such a waiver granted to an organization with respect to a [State](/usc/42/1397n–12.md?p=6), the [Secretary](/usc/42/1301.md?p=a-6) shall incorporate the requirement that the organization (and [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) it offers) comply with [standards](/usc/42/1320d.md?p=7) under [clause (i)](#a-2-G-i) as part of the contract between the [Secretary](/usc/42/1301.md?p=a-6) and the organization under [section 1395w–27 of this title](/usc/42/1395w–27.md).
      - (iii) **Enforcement—** In the case of such a waiver granted to an organization with respect to a [State](/usc/42/1397n–12.md?p=6), the [Secretary](/usc/42/1301.md?p=a-6) may enter into an [agreement](/usc/42/1320b–8.md?p=a-3-A) with the [State](/usc/42/1397n–12.md?p=6) under which the [State](/usc/42/1397n–12.md?p=6) agrees to provide for monitoring and enforcement activities with respect to compliance of such an organization and its [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) with such [standards](/usc/42/1320d.md?p=7). Such monitoring and enforcement shall be conducted by the [State](/usc/42/1397n–12.md?p=6) in the same manner as the [State](/usc/42/1397n–12.md?p=6) enforces such [standards](/usc/42/1320d.md?p=7) with respect to other [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) and plans, without discrimination based on the type of organization to which the [standards](/usc/42/1320d.md?p=7) apply. Such an [agreement](/usc/42/1320b–8.md?p=a-3-A) shall specify or establish mechanisms by which compliance activities are undertaken, while not lengthening the time required to review and process applications for waivers under this paragraph.
    - (H) **Report—** By not later than December 31, 2001, the [Secretary](/usc/42/1301.md?p=a-6) shall submit to the Committee on Ways and Means and the Committee on [Commerce](/usc/42/6311.md?p=7) of the House of [Representatives](/usc/42/3058f.md?p=5) and the Committee on Finance of the Senate a report regarding whether the waiver process under this paragraph should be continued after December 31, 2002. In making such recommendation, the [Secretary](/usc/42/1301.md?p=a-6) shall consider, among other factors, the impact of such process on beneficiaries and on the long-term solvency of the [program](/usc/42/274l–1.md?p=4) under this subchapter.
  - (3) **Licensure does not substitute for or constitute certification—** The fact that an organization is licensed in accordance with [paragraph (1)](#a-1) does not deem the organization to meet other requirements imposed under this part.
- (b) **Assumption of full financial risk—** The [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall assume full financial risk on a prospective basis for the provision of the health care services for which benefits are required to be provided under [section 1395w–22(a)(1) of this title](/usc/42/1395w–22.md?p=a-1), except that the organization—
  - (1) may obtain insurance or make other [arrangements](/usc/42/1395x.md?p=w-1) for the cost of providing to any enrolled member such services the aggregate value of which exceeds such aggregate level as the [Secretary](/usc/42/1301.md?p=a-6) specifies from time to time,
  - (2) may obtain insurance or make other [arrangements](/usc/42/1395x.md?p=w-1) for the cost of such services provided to its enrolled members other than through the organization because medical necessity required their provision before they could be secured through the organization,
  - (3) may obtain insurance or make other [arrangements](/usc/42/1395x.md?p=w-1) for not more than 90 percent of the amount by which its costs for any of its fiscal years exceed 115 percent of its [income](/usc/42/292s.md?p=c-4) for such fiscal year, and
  - (4) may make [arrangements](/usc/42/1395x.md?p=w-1) with [physicians](/usc/42/1395cc–4.md?p=a-2-E) or other health care professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the [physicians](/usc/42/1395cc–4.md?p=a-2-E) or other health professionals or through the institutions.
- (c) **Certification of provision against risk of insolvency for unlicensed PSOs—**
  - (1) **In general—** Each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) that is a [provider-sponsored organization](#d-1), that is not licensed by a [State](/usc/42/1397n–12.md?p=6) under [subsection (a)](#a), and for which a waiver application has been approved under [subsection (a)(2)](#a-2), shall meet [standards](/usc/42/1320d.md?p=7) established under [section 1395w–26(a) of this title](/usc/42/1395w–26.md?p=a) relating to the financial solvency and capital adequacy of the organization.
  - (2) **Certification process for solvency standards for PSOs—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish a process for the receipt and approval of applications of a [provider-sponsored organization](#d-1) described in [paragraph (1)](#c-1) for certification (and periodic recertification) of the organization as meeting such solvency [standards](/usc/42/1320d.md?p=7). Under such process, the [Secretary](/usc/42/1301.md?p=a-6) shall act upon such a certification application not later than 60 days after the date the application has been received.
- (d) **“Provider-sponsored organization” defined—**
  - (1) **In general—** In this part, the term “provider-sponsored organization” means a public or [private entity](/usc/42/12181.md?p=6)—
    - (A) that is established or organized, and operated, by a [health care provider](#d-5), or group of affiliated [health care providers](#d-5),
    - (B) that provides a substantial proportion (as defined by the [Secretary](/usc/42/1301.md?p=a-6) in accordance with [paragraph (2)](#d-2)) of the health care items and services under the contract under this part directly through the provider or affiliated group of providers, and
    - (C) with respect to which the affiliated providers share, directly or indirectly, substantial financial risk with respect to the provision of such items and services and have at least a majority financial interest in the entity.
  - (2) **Substantial proportion—** In defining what is a “substantial proportion” for purposes of [paragraph (1)(B)](#d-1-B), the [Secretary](/usc/42/1301.md?p=a-6)—
    - (A) shall take into account the need for such an organization to assume responsibility for providing—
      - (i) significantly more than the majority of the items and services under the contract under this section through its own affiliated providers; and
      - (ii) most of the remainder of the items and services under the contract through providers with which the organization has an [agreement](/usc/42/1320b–8.md?p=a-3-A) to provide such items and services,

      in order to assure financial stability and to address the practical considerations involved in integrating the delivery of a wide range of service providers;

    - (B) shall take into account the need for such an organization to provide a limited proportion of the items and services under the contract through providers that are neither affiliated with nor have an [agreement](/usc/42/1320b–8.md?p=a-3-A) with the organization; and
    - (C) may allow for variation in the definition of substantial proportion among such organizations based on relevant differences among the organizations, such as their location in an urban or [rural area](/usc/42/1395ww.md?p=d-2-D).
  - (3) **Affiliation—** For purposes of this subsection, a provider is “affiliated” with another provider if, through contract, ownership, or otherwise—
    - (A) one provider, directly or indirectly, controls, is controlled by, or is under common control with the other,
    - (B) both providers are part of a controlled group of [corporations](/usc/42/1301.md?p=a-4) under section 1563 of the Internal Revenue Code of 1986,
    - (C) each provider is a participant in a lawful combination under which each provider shares substantial financial risk in connection with the organization’s operations, or
    - (D) both providers are part of an affiliated service group under [section 414](/usc/42/414.md) of such Code.
  - (4) **Control—** For purposes of [paragraph (3)](#d-3), control is presumed to exist if one party, directly or indirectly, owns, controls, or holds the power to vote, or proxies for, not less than 51 percent of the voting rights or governance rights of another.
  - (5) **“Health care provider” defined—** In this subsection, the term “health care provider” means—
    - (A) any individual who is engaged in the delivery of health care services in a [State](/usc/42/1397n–12.md?p=6) and who is required by [State](/usc/42/1397n–12.md?p=6) law or regulation to be licensed or certified by the [State](/usc/42/1397n–12.md?p=6) to engage in the delivery of such services in the [State](/usc/42/1397n–12.md?p=6), and
    - (B) any entity that is engaged in the delivery of health care services in a [State](/usc/42/1397n–12.md?p=6) and that, if it is required by [State](/usc/42/1397n–12.md?p=6) law or regulation to be licensed or certified by the [State](/usc/42/1397n–12.md?p=6) to engage in the delivery of such services in the [State](/usc/42/1397n–12.md?p=6), is so licensed.
  - (6) **Regulations—** The [Secretary](/usc/42/1301.md?p=a-6) shall issue [regulations](/usc/42/1395hh.md?p=a-1) to carry out this subsection.

# §1395w–26. Establishment of standards

- (a) **Establishment of solvency standards for provider-sponsored organizations—**
  - (1) **Establishment—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish, on an expedited basis and using a negotiated rulemaking process under subchapter III of [chapter 5](/usc/5/chptI-ch5.md) of title 5, [standards](/usc/42/1320d.md?p=7) described in [section 1395w–25(c)(1) of this title](/usc/42/1395w–25.md?p=c-1) (relating to the financial solvency and capital adequacy of the organization) that entities must meet to qualify as [provider-sponsored organizations](/usc/42/1395w–25.md?p=d-1) under this part.
    - (B) **Factors to consider for solvency standards—** In establishing solvency [standards](/usc/42/1320d.md?p=7) under [subparagraph (A)](#a-1-A) for [provider-sponsored organizations](/usc/42/1395w–25.md?p=d-1), the [Secretary](/usc/42/1301.md?p=a-6) shall consult with interested parties and shall take into account—
      - (i) the delivery system assets of such an organization and ability of such an organization to provide services directly to enrollees through affiliated providers,
      - (ii) alternative means of protecting against insolvency, [including](/usc/42/1301.md?p=b) reinsurance, unrestricted surplus, letters of credit, guarantees, organizational insurance coverage, partnerships with other licensed entities, and valuation attributable to the ability of such an organization to meet its service obligations through direct delivery of care, and
      - (iii) any [standards](/usc/42/1320d.md?p=7) developed by the National Association of Insurance [Commissioners](/usc/42/12302.md?p=1) specifically for risk-based health care delivery organizations.
    - (C) **Enrollee protection against insolvency—** Such [standards](/usc/42/1320d.md?p=7) shall include provisions to prevent enrollees from being held liable to any [person](/usc/42/1301.md?p=a-3) or entity for the Medicare+ÐChoice organization’s debts in the event of the organization’s insolvency.
  - (2) **Publication of notice—** In carrying out the rulemaking process under this subsection, the [Secretary](/usc/42/1301.md?p=a-6), after consultation with the National Association of Insurance [Commissioners](/usc/42/12302.md?p=1), the American Academy of Actuaries, organizations [representative](/usc/42/3058f.md?p=5) of medicare beneficiaries, and other interested parties, shall publish the notice provided for under [section 564(a) of title 5](/usc/5/564.md?p=a) by not later than 45 days after August 5, 1997.
  - (3) **Target date for publication of rule—** As part of the notice under [paragraph (2)](#a-2), and for purposes of this subsection, the “target date for publication” (referred to in section 564(a)(5) of such title) shall be April 1, 1998.
  - (4) **Abbreviated period for submission of comments—** In applying section 564(c) of such title under this subsection, “15 days” shall be substituted for “30 days”.
  - (5) **Appointment of negotiated rulemaking committee and facilitator—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide for—
    - (A) the appointment of a negotiated rulemaking committee under section 565(a) of such title by not later than 30 days after the end of the comment period provided for under section 564(c) of such title (as shortened under [paragraph (4)](#a-4)), and
    - (B) the nomination of a facilitator under section 566(c) of such title by not later than 10 days after the date of appointment of the committee.
  - (6) **Preliminary committee report—** The negotiated rulemaking committee appointed under [paragraph (5)](#a-5) shall report to the [Secretary](/usc/42/1301.md?p=a-6), by not later than January 1, 1998, regarding the committee’s progress on achieving a consensus with regard to the rulemaking proceeding and whether such consensus is likely to occur before 1 month before the target date for publication of the rule. If the committee reports that the committee has failed to make significant progress towards such consensus or is unlikely to reach such consensus by the target date, the [Secretary](/usc/42/1301.md?p=a-6) may terminate such process and provide for the publication of a rule under this subsection through such other methods as the [Secretary](/usc/42/1301.md?p=a-6) may provide.
  - (7) **Final committee report—** If the committee is not terminated under [paragraph (6)](#a-6), the rulemaking committee shall submit a report containing a proposed rule by not later than 1 month before the target date of publication.
  - (8) **Interim, final effect—** The [Secretary](/usc/42/1301.md?p=a-6) shall publish a rule under this subsection in the Federal Register by not later than the target date of publication. Such rule shall be effective and final immediately on an interim basis, but is subject to change and revision after public notice and opportunity for a period (of not less than 60 days) for public comment. In connection with such rule, the [Secretary](/usc/42/1301.md?p=a-6) shall specify the process for the timely review and approval of applications of entities to be certified as [provider-sponsored organizations](/usc/42/1395w–25.md?p=d-1) pursuant to such rules and consistent with this subsection.
  - (9) **Publication of rule after public comment—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide for consideration of such comments and republication of such rule by not later than 1 year after the target date of publication.
- (b) **Establishment of other standards—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish by regulation other [standards](/usc/42/1320d.md?p=7) (not described in [subsection (a)](#a)) for [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) and plans consistent with, and to carry out, this part. The [Secretary](/usc/42/1301.md?p=a-6) shall publish such [regulations](/usc/42/1395hh.md?p=a-1) by June 1, 1998. In order to carry out this requirement in a timely manner, the [Secretary](/usc/42/1301.md?p=a-6) may promulgate [regulations](/usc/42/1395hh.md?p=a-1) that take effect on an interim basis, after notice and pending opportunity for public comment.
  - (2) **Use of current standards—** Consistent with the requirements of this part, [standards](/usc/42/1320d.md?p=7) established under this subsection shall be based on [standards](/usc/42/1320d.md?p=7) established under [section 1395mm of this title](/usc/42/1395mm.md) to carry out analogous provisions of such section.
  - (3) **Relation to State laws—** The [standards](/usc/42/1320d.md?p=7) established under this part shall supersede any [State](/usc/42/1397n–12.md?p=6) law or regulation (other than [State](/usc/42/1397n–12.md?p=6) licensing laws or [State](/usc/42/1397n–12.md?p=6) laws relating to plan solvency) with respect to [MA plans](/usc/42/1395w–101.md?p=a-3-B) which are offered by MA organizations under this part.
  - (4) **Prohibition of midyear implementation of significant new regulatory requirements—** The [Secretary](/usc/42/1301.md?p=a-6) may not implement, other than at the beginning of a calendar year, [regulations](/usc/42/1395hh.md?p=a-1) under this section that impose new, significant regulatory requirements on a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) or plan.

# §1395w–27. Contracts with Medicare+Choice organizations

- (a) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall not permit the election under [section 1395w–21 of this title](/usc/42/1395w–21.md) of a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) offered by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under this part, and no payment shall be made under [section 1395w–23 of this title](/usc/42/1395w–23.md) to an organization, unless the [Secretary](/usc/42/1301.md?p=a-6) has entered into a contract under this section with the organization with respect to the offering of such plan. Such a contract with an organization may cover more than 1 [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1). Such contract shall provide that the organization agrees to comply with the applicable requirements and [standards](/usc/42/1320d.md?p=7) of this part and the terms and conditions of payment as provided for in this part.
- (b) **Minimum enrollment requirements—**
  - (1) **In general—** Subject to [paragraph (2)](#b-2), the [Secretary](/usc/42/1301.md?p=a-6) may not enter into a contract under this section with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) unless the organization has—
    - (A) at least 5,000 individuals (or 1,500 individuals in the case of an organization that is a [provider-sponsored organization](/usc/42/1395w–25.md?p=d-1)) who are receiving health benefits through the organization, or
    - (B) at least 1,500 individuals (or 500 individuals in the case of an organization that is a [provider-sponsored organization](/usc/42/1395w–25.md?p=d-1)) who are receiving health benefits through the organization if the organization primarily serves individuals residing outside of urbanized areas.
  - (2) **Application to MSA plans—** In applying [paragraph (1)](#b-1) in the case of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) that is offering an [MSA plan](/usc/42/1395w–28.md?p=b-3-A), [paragraph (1)](#b-1) shall be applied by substituting covered lives for individuals.
  - (3) **Allowing transition—** The [Secretary](/usc/42/1301.md?p=a-6) may waive the requirement of [paragraph (1)](#b-1) during the first 3 contract years with respect to an organization.
- (c) **Contract period and effectiveness—**
  - (1) **Period—** Each contract under this section shall be for a term of at least 1 year, as determined by the [Secretary](/usc/42/1301.md?p=a-6), and may be made automatically renewable from term to term in the absence of notice by either party of intention to terminate at the end of the current term.
  - (2) **Termination authority—** In accordance with procedures established under [subsection (h)](#h), the [Secretary](/usc/42/1301.md?p=a-6) may at any time terminate any such contract if the [Secretary](/usc/42/1301.md?p=a-6) determines that the organization—
    - (A) has failed substantially to carry out the contract;
    - (B) is carrying out the contract in a manner inconsistent with the efficient and effective [administration](/usc/42/1301.md?p=a-10) of this part; or
    - (C) no longer substantially meets the applicable conditions of this part.
  - (3) **Effective date of contracts—** The effective date of any contract executed pursuant to this section shall be specified in the contract, except that in no case shall a contract under this section which provides for coverage under an [MSA plan](/usc/42/1395w–28.md?p=b-3-A) be effective before January 1999 with respect to such coverage.
  - (4) **Previous terminations—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) may not enter into a contract with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) if a previous contract with that organization under this section was terminated at the request of the organization within the preceding 2-year period, except as provided in [subparagraph (B)](#c-4-B) and except in such other circumstances which warrant special consideration, as determined by the [Secretary](/usc/42/1301.md?p=a-6).
    - (B) **Earlier re-entry permitted where change in payment policy—** [Subparagraph (A)](#c-4-A) shall not apply with respect to the offering by a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) of a [Medicare+Choice plan](/usc/42/1395w–28.md?p=b-1) in a [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2) if during the 6-month period beginning on the date the organization notified the [Secretary](/usc/42/1301.md?p=a-6) of the intention to terminate the most recent previous contract, there was a legislative change enacted (or a regulatory change adopted) that has the effect of increasing payment amounts under [section 1395w–23 of this title](/usc/42/1395w–23.md) for that [Medicare+Choice payment area](/usc/42/1395w–28.md?p=c-2).
  - (5) **Contracting authority—** The authority vested in the [Secretary](/usc/42/1301.md?p=a-6) by this part may be performed without regard to such provisions of law or [regulations](/usc/42/1395hh.md?p=a-1) relating to the making, performance, amendment, or [modification](/usc/42/7501.md?p=4) of contracts of the [United States](/usc/42/1301.md?p=a-2) as the [Secretary](/usc/42/1301.md?p=a-6) may determine to be inconsistent with the furtherance of the purpose of this subchapter.
- (d) **Protections against fraud and beneficiary protections—**
  - (1) **Periodic auditing—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide for the annual auditing of the financial records ([including](/usc/42/1301.md?p=b) data relating to medicare utilization and costs, [including](/usc/42/1301.md?p=b) allowable costs under [section 1395w–27a(c) of this title](/usc/42/1395w–27a.md?p=c)) of at least one-third of the [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) offering [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) under this part. The Comptroller General shall monitor auditing activities conducted under this subsection.
  - (2) **Inspection and audit—** Each contract under this section shall provide that the [Secretary](/usc/42/1301.md?p=a-6), or any [person](/usc/42/1301.md?p=a-3) or organization designated by the [Secretary](/usc/42/1301.md?p=a-6)—
    - (A) shall have the right to timely inspect or otherwise evaluate (i) the quality, appropriateness, and timeliness of services performed under the contract, and (ii) the [facilities](/usc/42/11049.md?p=4) of the organization when there is reasonable evidence of some need for such [inspection](/usc/42/4851b.md?p=12), and
    - (B) shall have the right to timely audit and inspect any books and records of the [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) that pertain (i) to the ability of the organization to bear the risk of potential financial losses, or (ii) to services performed or determinations of amounts payable under the contract.
  - (3) **Enrollee notice at time of termination—** Each contract under this section shall require the organization to provide (and pay for) written notice in advance of the contract’s termination, as well as a description of alternatives for obtaining benefits under this subchapter, to each individual enrolled with the organization under this part.
  - (4) **Disclosure—**
    - (A) **In general—** Each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall, in accordance with [regulations](/usc/42/1395hh.md?p=a-1) of the [Secretary](/usc/42/1301.md?p=a-6), report to the [Secretary](/usc/42/1301.md?p=a-6) financial information which shall include the following:
      - (i) Such information as the [Secretary](/usc/42/1301.md?p=a-6) may require demonstrating that the organization has a fiscally sound operation.
      - (ii) A copy of the report, if any, filed with the [Secretary](/usc/42/1301.md?p=a-6) containing the information required to be reported under [section 1320a–3 of this title](/usc/42/1320a–3.md) by disclosing entities.
      - (iii) A description of transactions, as specified by the [Secretary](/usc/42/1301.md?p=a-6), between the organization and a [party in interest](#d-4-B). Such transactions shall include—
        - (I) any sale or [exchange](/usc/42/300gg–91.md?p=d-21), or leasing of any property between the organization and a [party in interest](#d-4-B);
        - (II) any furnishing for consideration of goods, services ([including](/usc/42/1301.md?p=b) management services), or [facilities](/usc/42/11049.md?p=4) between the organization and a [party in interest](#d-4-B), but not [including](/usc/42/1301.md?p=b) salaries paid to [employees](/usc/42/1320a–7h.md?p=e-7) for services provided in the normal course of their employment and health services provided to members by [hospitals](/usc/42/1395dd.md?p=e-5) and other providers and by staff, medical group (or groups), individual practice association (or associations), or any combination thereof; and
        - (III) any lending of money or other extension of credit between an organization and a [party in interest](#d-4-B).

      The [Secretary](/usc/42/1301.md?p=a-6) may require that information reported respecting an organization which controls, is controlled by, or is under common control with, another entity be in the form of a consolidated financial statement for the organization and such entity.

    - (B) **“Party in interest” defined—** For the purposes of this paragraph, the term “party in interest” means—
      - (i) any [director](/usc/42/5061.md?p=1), officer, partner, or [employee](/usc/42/1320a–7h.md?p=e-7) responsible for management or [administration](/usc/42/1301.md?p=a-10) of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1), any [person](/usc/42/1301.md?p=a-3) who is directly or indirectly the beneficial [owner](/usc/42/13641.md?p=4) of more than 5 percent of the equity of the organization, any [person](/usc/42/1301.md?p=a-3) who is the beneficial [owner](/usc/42/13641.md?p=4) of a mortgage, deed of [trust](/usc/42/12854.md?p=6), note, or other interest secured by, and valuing more than 5 percent of the organization, and, in the case of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) organized as a nonprofit [corporation](/usc/42/1301.md?p=a-4), an incorporator or member of such [corporation](/usc/42/1301.md?p=a-4) under applicable [State](/usc/42/1397n–12.md?p=6) [corporation](/usc/42/1301.md?p=a-4) law;
      - (ii) any entity in which a [person](/usc/42/1301.md?p=a-3) described in [clause (i)](#d-4-B-i)—
        - (I) is an officer or [director](/usc/42/5061.md?p=1);
        - (II) is a partner (if such entity is organized as a partnership);
        - (III) has directly or indirectly a beneficial interest of more than 5 percent of the equity; or
        - (IV) has a mortgage, deed of [trust](/usc/42/12854.md?p=6), note, or other interest valuing more than 5 percent of the assets of such entity;
      - (iii) any [person](/usc/42/1301.md?p=a-3) directly or indirectly controlling, controlled by, or under common control with an organization; and
      - (iv) any spouse, [child](/usc/42/416.md?p=e), or [parent](/usc/42/1396a.md?p=k-3) of an individual described in [clause (i)](#d-4-B-i).
    - (C) **Access to information—** Each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) shall make the information reported pursuant to [subparagraph (A)](#d-4-A) available to its enrollees upon reasonable request.
  - (5) **Loan information—** The contract shall require the organization to notify the [Secretary](/usc/42/1301.md?p=a-6) of loans and other special financial [arrangements](/usc/42/1395x.md?p=w-1) which are made between the organization and subcontractors, affiliates, and related parties.
  - (6) **Review to ensure compliance with care management requirements for specialized Medicare Advantage plans for special needs individuals—** In conjunction with the periodic audit of a specialized Medicare Advantage plan for [special needs individuals](/usc/42/1395w–28.md?p=b-6-B) under [paragraph (1)](#d-1), the [Secretary](/usc/42/1301.md?p=a-6) shall conduct a review to ensure that such organization offering the plan meets the requirements described in [section 1395w–28(f)(5) of this title](/usc/42/1395w–28.md?p=f-5).
- (e) **Additional contract terms—**
  - (1) **In general—** The contract shall contain such other terms and conditions not inconsistent with this part ([including](/usc/42/1301.md?p=b) requiring the organization to provide the [Secretary](/usc/42/1301.md?p=a-6) with such information) as the [Secretary](/usc/42/1301.md?p=a-6) may find necessary and appropriate.
  - (2) **Cost-sharing in enrollment-related costs—**
    - (A) **In general—** A [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) and a PDP sponsor under part D shall pay the fee established by the [Secretary](/usc/42/1301.md?p=a-6) under [subparagraph (B)](#e-2-B).
    - (B) **Authorization—** The [Secretary](/usc/42/1301.md?p=a-6) is authorized to charge a fee to each [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) with a contract under this part and each PDP sponsor with a contract under part D that is equal to the organization’s or sponsor’s pro rata share (as determined by the [Secretary](/usc/42/1301.md?p=a-6)) of the aggregate amount of fees which the [Secretary](/usc/42/1301.md?p=a-6) is directed to collect in a fiscal year. Any amounts collected shall be available without further appropriation to the [Secretary](/usc/42/1301.md?p=a-6) for the purpose of carrying out [section 1395w–21 of this title](/usc/42/1395w–21.md) (relating to enrollment and dissemination of information), [section 1395w–101(c) of this title](/usc/42/1395w–101.md?p=c), and [section 1395b–4 of this title](/usc/42/1395b–4.md) (relating to the health insurance counseling and assistance [program](/usc/42/274l–1.md?p=4)).
    - (C) **Authorization of appropriations—** There are authorized to be appropriated for the purposes described in [subparagraph (B)](#e-2-B) for each fiscal year beginning with fiscal year 2001 and ending with fiscal year 2005 an amount equal to $100,000,000, and for each fiscal year beginning with fiscal year 2006 an amount equal to $200,000,000, reduced by the amount of fees authorized to be collected under this paragraph and [section 1395w–112(b)(3)(D) of this title](/usc/42/1395w–112.md?p=b-3-D) for the fiscal year.
    - (D) **Limitation—** In any fiscal year the fees collected by the [Secretary](/usc/42/1301.md?p=a-6) under [subparagraph (B)](#e-2-B) shall not exceed the lesser of—
      - (i) the estimated costs to be incurred by the [Secretary](/usc/42/1301.md?p=a-6) in the fiscal year in carrying out the activities described in [section 1395w–21 of this title](/usc/42/1395w–21.md) and [section 1395w–101(c) of this title](/usc/42/1395w–101.md?p=c) and [section 1395b–4 of this title](/usc/42/1395b–4.md); or
      - (ii)
        - (I) $200,000,000 in fiscal year 1998;
        - (II) $150,000,000 in fiscal year 1999;
        - (III) $100,000,000 in fiscal year 2000;
        - (IV) the [Medicare+Choice portion](#e-2-E) (as defined in [subparagraph (E)](#e-2-E)) of $100,000,000 in fiscal year 2001 and each succeeding fiscal year before fiscal year 2006; and
        - (V) the [applicable portion](#e-2-F) (as defined in [subparagraph (F)](#e-2-F)) of $200,000,000 in fiscal year 2006 and each succeeding fiscal year.
    - (E) **Medicare+Choice portion defined—** In this paragraph, the term “Medicare+Choice portion” means, for a fiscal year, the ratio, as estimated by the [Secretary](/usc/42/1301.md?p=a-6), of—
      - (i) the average number of individuals enrolled in [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) during the fiscal year, to
      - (ii) the average number of individuals entitled to benefits under part A, and enrolled under part B, during the fiscal year.
    - (F) **Applicable portion defined—** In this paragraph, the term “applicable portion” means, for a fiscal year—
      - (i) with respect to MA organizations, the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the total proportion of expenditures under this subchapter that are attributable to expenditures made under this part ([including](/usc/42/1301.md?p=b) payments under part D that are made to such organizations); or
      - (ii) with respect to PDP sponsors, the [Secretary](/usc/42/1301.md?p=a-6)’s estimate of the total proportion of expenditures under this subchapter that are attributable to expenditures made to such sponsors under part D.
  - (3) **Agreements with federally qualified health centers—**
    - (A) **Payment levels and amounts—** A contract under this section with an MA organization shall require the organization to provide, in any written [agreement](/usc/42/1320b–8.md?p=a-3-A) described in [section 1395w–23(a)(4) of this title](/usc/42/1395w–23.md?p=a-4) between the organization and a [federally qualified health center](/usc/42/1395x.md?p=aa-4), for a level and amount of payment to the [federally qualified health center](/usc/42/1395x.md?p=aa-4) for services provided by such health center that is not less than the level and amount of payment that the plan would make for such services if the services had been furnished by a entity providing similar services that was not a [federally qualified health center](/usc/42/1395x.md?p=aa-4).
    - (B) **Cost-sharing—** Under the written [agreement](/usc/42/1320b–8.md?p=a-3-A) referred to in [subparagraph (A)](#e-3-A), a [federally qualified health center](/usc/42/1395x.md?p=aa-4) must accept the payment amount referred to in such subparagraph plus the Federal payment provided for in [section 1395l(a)(3)(B)](/usc/42/1395l.md?p=a-3-B) of this title as payment in full for services covered by the [agreement](/usc/42/1320b–8.md?p=a-3-A), except that such a health center may collect any amount of [cost-sharing](/usc/42/18022.md?p=c-3-A) permitted under the contract under this section, so long as the amounts of any deductible, coinsurance, or copayment comply with the requirements under [section 1395w–24(e) of this title](/usc/42/1395w–24.md?p=e).
  - (4) **Requirement for minimum medical loss ratio—** If the [Secretary](/usc/42/1301.md?p=a-6) determines for a contract year (beginning with 2014) that an [MA plan](/usc/42/1395w–101.md?p=a-3-B) has failed to have a medical loss ratio of at least .85—
    - (A) the [MA plan](/usc/42/1395w–101.md?p=a-3-B) shall remit to the [Secretary](/usc/42/1301.md?p=a-6) an amount equal to the product of—
      - (i) the total revenue of the [MA plan](/usc/42/1395w–101.md?p=a-3-B) under this part for the contract year; and
      - (ii) the difference between .85 and the medical loss ratio;
    - (B) for 3 consecutive contract years, the [Secretary](/usc/42/1301.md?p=a-6) shall not permit the enrollment of new enrollees under the plan for coverage during the second succeeding contract year; and
    - (C) the [Secretary](/usc/42/1301.md?p=a-6) shall terminate the plan contract if the plan fails to have such a medical loss ratio for 5 consecutive contract years.
  - (5) **Communicating plan corrective actions against opioids over-prescribers—**
    - (A) **In general—** Beginning with plan years beginning on or after January 1, 2021, a contract under this section with an MA organization shall require the organization to submit to the [Secretary](/usc/42/1301.md?p=a-6), through the process established under [subparagraph (B)](#e-5-B), information on the investigations, credible evidence of suspicious activities of a [provider of services](/usc/42/1395n.md?p=a-2) ([including](/usc/42/1301.md?p=b) a prescriber) or [supplier](/usc/42/1395x.md?p=d) related to fraud, and other actions taken by such plans related to [inappropriate prescribing](#e-5-C-i) of opioids.
    - (B) **Process—** Not later than January 1, 2021, the [Secretary](/usc/42/1301.md?p=a-6) shall, in consultation with stakeholders, establish a process under which [MA plans](/usc/42/1395w–101.md?p=a-3-B) and [prescription drug plans](/usc/42/1395w–154.md?p=d-2) shall submit to the [Secretary](/usc/42/1301.md?p=a-6) information described in [subparagraph (A)](#e-5-A).
    - (C) **Regulations—** For purposes of this paragraph, [including](/usc/42/1301.md?p=b) as applied under [section 1395w–112(b)(3)(D) of this title](/usc/42/1395w–112.md?p=b-3-D), the [Secretary](/usc/42/1301.md?p=a-6) shall, pursuant to rulemaking—
      - (i) specify a definition for the term “inappropriate prescribing” and a method for determining if a [provider of services](/usc/42/1395n.md?p=a-2) prescribes inappropriate prescribing; and
      - (ii) establish the process described in [subparagraph (B)](#e-5-B) and the types of information that shall be submitted through such process.
  - (6) **Provider directory accuracy analysis and reports—**
    - (A) **In general—** Beginning with plan years beginning on or after January 1, 2028, subject to [subparagraph (C)](#e-6-C), a contract under this section with an MA organization shall require the organization, for each specified [MA plan](/usc/42/1395w–101.md?p=a-3-B) (as defined in [section 1395w–22(c)(3)(C) of this title](/usc/42/1395w–22.md?p=c-3-C)) offered by the organization, to annually do the following:
      - (i) Conduct an analysis estimating the accuracy of the provider directory information of such plan using a random sample of providers included in such provider directory as follows:
        - (I) Such a random sample shall include a random sample of each specialty of providers with a high inaccuracy rate of provider directory information relative to other specialties of providers, as determined by the [Secretary](/usc/42/1301.md?p=a-6).
        - (II) For purposes of [subclause (I)](#e-6-A-i-I), one type of specialty may be providers specializing in mental health or substance use disorder [treatment](/usc/42/11851.md?p=11).
      - (ii) Submit to the [Secretary](/usc/42/1301.md?p=a-6) a report containing the results of the analysis conducted under [clause (i)](#e-6-A-i), [including](/usc/42/1301.md?p=b) an accuracy score for such provider directory information (as determined using a plan verification method specified by the [Secretary](/usc/42/1301.md?p=a-6) under [subparagraph (B)(i)](#e-6-B-i)).
    - (B) **Determination of accuracy score—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall specify plan verification methods, such as using telephonic verification or other approaches using data sources maintained by an MA organization or using publicly available data sets, that MA organizations may use for estimating accuracy scores of the provider directory information of specified [MA plans](/usc/42/1395w–101.md?p=a-3-B) offered by such organizations.
      - (ii) **Accuracy score methodology—** With respect to each such method specified by the [Secretary](/usc/42/1301.md?p=a-6) as described in [clause (i)](#e-6-B-i), the [Secretary](/usc/42/1301.md?p=a-6) shall specify a methodology for MA organizations to use in estimating such accuracy scores. Each such methodology shall take into account the administrative burden on plans and providers and the relative importance of certain provider directory information on enrollee ability to access care.
    - (C) **Exception—** The [Secretary](/usc/42/1301.md?p=a-6) may waive the requirements of this paragraph in the case of a specified [MA plan](/usc/42/1395w–101.md?p=a-3-B) with low enrollment (as defined by the [Secretary](/usc/42/1301.md?p=a-6)).
    - (D) **Transparency—** Beginning with plan years beginning on or after January 1, 2029, the [Secretary](/usc/42/1301.md?p=a-6) shall post accuracy scores (as reported under [subparagraph (A)(ii)](#e-6-A-ii)), in a machine readable file, on an internet website maintained by the Centers for Medicare & Medicaid Services.
- (f) **Prompt payment by Medicare+Choice organization—**
  - (1) **Requirement—** A contract under this part shall require a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) to provide prompt payment (consistent with the provisions of sections [1395h(c)(2)](/usc/42/1395h.md?p=c-2) and [1395u(c)(2)](/usc/42/1395u.md?p=c-2) of this title) of [claims](/usc/42/1320a–7a.md?p=i-2) submitted for services and supplies furnished to enrollees pursuant to the contract, if the services or supplies are not furnished under a contract between the organization and the provider or [supplier](/usc/42/1395x.md?p=d) (or in the case of a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2), if a [claim](/usc/42/1320a–7a.md?p=i-2) is submitted to such organization by an enrollee).
  - (2) **Secretary’s option to bypass noncomplying organization—** In the case of a Medicare+Choice eligible organization which the [Secretary](/usc/42/1301.md?p=a-6) determines, after notice and opportunity for a hearing, has failed to make payments of amounts in compliance with [paragraph (1)](#f-1), the [Secretary](/usc/42/1301.md?p=a-6) may provide for direct payment of the amounts owed to providers and [suppliers](/usc/42/1395x.md?p=d) (or, in the case of a [Medicare+Choice private fee-for-service plan](/usc/42/1395w–28.md?p=b-2), amounts owed to the enrollees) for covered services and supplies furnished to individuals enrolled under this part under the contract. If the [Secretary](/usc/42/1301.md?p=a-6) provides for the direct payments, the [Secretary](/usc/42/1301.md?p=a-6) shall provide for an appropriate reduction in the amount of payments otherwise made to the organization under this part to reflect the amount of the [Secretary](/usc/42/1301.md?p=a-6)’s payments (and the [Secretary](/usc/42/1301.md?p=a-6)’s costs in making the payments).
  - (3) **Incorporation of certain prescription drug plan contract requirements—** The following provisions shall apply to contracts with a Medicare Advantage organization offering an [MA–PD plan](/usc/42/1395w–151.md?p=a-9) in the same manner as they apply to contracts with a PDP sponsor offering a [prescription drug plan](/usc/42/1395w–154.md?p=d-2) under part D:
    - (A) **Prompt payment—** [Section 1395w–112(b)(4) of this title](/usc/42/1395w–112.md?p=b-4).
    - (B) **Submission of claims by pharmacies located in or contracting with long-term care facilities—** [Section 1395w–112(b)(5) of this title](/usc/42/1395w–112.md?p=b-5).
    - (C) **Regular update of prescription drug pricing standard—** [Section 1395w–112(b)(6) of this title](/usc/42/1395w–112.md?p=b-6).
    - (D) **Suspension of payments pending investigation of credible allegations of fraud by pharmacies—** [Section 1395w–112(b)(7) of this title](/usc/42/1395w–112.md?p=b-7).
    - (E) **Provision of information related to maximum fair prices—** [Section 1395w–112(b)(8) of this title](/usc/42/1395w–112.md?p=b-8).
    - (F) **Accountability of pharmacy benefit managers for violations of reasonable and relevant contract terms—** For plan years beginning on or after January 1, 2029, [section 1395w–112(b)(9) of this title](/usc/42/1395w–112.md?p=b-9).
    - (G) **Requirements relating to pharmacy benefit managers—** For plan years beginning on or after January 1, 2028, [section 1395w–112(h) of this title](/usc/42/1395w–112.md?p=h).
- (g) **Intermediate sanctions—**
  - (1) **In general—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) with a contract under this section—
    - (A) fails substantially to provide medically necessary items and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual;
    - (B) imposes premiums on individuals enrolled under this part in excess of the amount of the Medicare+Choice monthly basic and supplemental beneficiary premiums permitted under [section 1395w–24 of this title](/usc/42/1395w–24.md);
    - (C) acts to expel or to refuse to re-enroll an individual in [violation](/usc/42/2000e–16a.md?p=c) of the provisions of this part;
    - (D) engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by this part) by [eligible individuals](/usc/42/239.md?p=a-6) with the organization whose medical condition or history indicates a need for substantial future medical services;
    - (E) misrepresents or falsifies information that is furnished—
      - (i) to the [Secretary](/usc/42/1301.md?p=a-6) under this part, or
      - (ii) to an individual or to any other entity under this part;
    - (F) fails to comply with the applicable requirements of section [1395w–22(j)(3)](/usc/42/1395w–22.md?p=j-3) or [1395w–22(k)(2)(A)(ii)](/usc/42/1395w–22.md?p=k-2-A-ii) of this title;
    - (G) employs or contracts with any individual or entity that is excluded from participation under this subchapter under section [1320a–7](/usc/42/1320a–7.md) or [1320a–7a](/usc/42/1320a–7a.md) of this title for the provision of health care, utilization review, medical [social](/usc/42/1397j.md?p=20) work, or administrative services or employs or contracts with any entity for the provision (directly or indirectly) through such an excluded individual or entity of such services;
    - (H) except as provided under subparagraph (C) or (D) of [section 1395w–101(b)(1) of this title](/usc/42/1395w–101.md?p=b-1), enrolls an individual in any plan under this part without the prior consent of the individual or the designee of the individual;
    - (I) transfers an individual enrolled under this part from one plan to another without the prior consent of the individual or the designee of the individual or solely for the purpose of earning a [commission](/usc/42/2000ff.md?p=1);
    - (J) fails to comply with marketing restrictions described in subsections (h) and (j) of [section 1395w–21 of this title](/usc/42/1395w–21.md) or applicable implementing [regulations](/usc/42/1395hh.md?p=a-1) or guidance;
    - (K) fails to comply with the [standards](/usc/42/1320d.md?p=7) for reasonable and relevant contract terms and conditions under subparagraph (A)(ii) of [section 1395w–104(b)(1) of this title](/usc/42/1395w–104.md?p=b-1) or violates the provisions of [subparagraph (F)(i)(VIII)](/usc/42/1395w–104.md?p=b-1-F-i-VIII) of such section; or
    - (L) employs or contracts with any individual or entity who engages in the conduct described in [subparagraphs (A) through (K)](#g-A..g-K) of this paragraph;

    the [Secretary](/usc/42/1301.md?p=a-6) may provide, in addition to any other remedies authorized by law, for any of the remedies described in [paragraph (2)](#g-2). The [Secretary](/usc/42/1301.md?p=a-6) may provide, in addition to any other remedies authorized by law, for any of the remedies described in [paragraph (2)](#g-2), if the [Secretary](/usc/42/1301.md?p=a-6) determines that any [employee](/usc/42/1320a–7h.md?p=e-7) or agent of such organization, or any provider or [supplier](/usc/42/1395x.md?p=d) who contracts with such organization, has engaged in any conduct described in [subparagraphs (A) through (L)](#g-A..g-L) of this paragraph.

  - (2) **Remedies—** The remedies described in this paragraph are—
    - (A) civil money penalties of not more than $25,000 for each determination under [paragraph (1)](#g-1) or, with respect to a determination under subparagraph [(D)](#g-1-D) or [(E)(i)](#g-1-E-i) of such paragraph, of not more than $100,000 for each such determination, except with respect to a determination under [subparagraph (E)](#g-1-E),[^1] an assessment of not more than the amount claimed by such plan or plan sponsor based upon the misrepresentation or falsified information involved, plus, with respect to a determination under [paragraph (1)(B)](#g-1-B), double the excess amount charged in [violation](/usc/42/2000e–16a.md?p=c) of such paragraph (and the excess amount charged shall be deducted from the penalty and returned to the individual concerned), and plus, with respect to a determination under [paragraph (1)(D)](#g-1-D), $15,000 for each individual not enrolled as a result of the practice involved,
    - (B) suspension of enrollment of individuals under this part after the date the [Secretary](/usc/42/1301.md?p=a-6) notifies the organization of a determination under [paragraph (1)](#g-1) and until the [Secretary](/usc/42/1301.md?p=a-6) is satisfied that the basis for such determination has been corrected and is not likely to recur, or
    - (C) suspension of payment to the organization under this part for individuals enrolled after the date the [Secretary](/usc/42/1301.md?p=a-6) notifies the organization of a determination under [paragraph (1)](#g-1) and until the [Secretary](/usc/42/1301.md?p=a-6) is satisfied that the basis for such determination has been corrected and is not likely to recur.
  - (3) **Other intermediate sanctions—** In the case of a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) for which the [Secretary](/usc/42/1301.md?p=a-6) makes a determination under [subsection (c)(2)](#c-2) the basis of which is not described in [paragraph (1)](#g-1), the [Secretary](/usc/42/1301.md?p=a-6) may apply the following intermediate sanctions:
    - (A) Civil money penalties of not more than $25,000 for each determination under [subsection (c)(2)](#c-2) if the deficiency that is the basis of the determination has directly adversely affected (or has the substantial likelihood of adversely affecting) an individual covered under the organization’s contract.
    - (B) Civil money penalties of not more than $10,000 for each week beginning after the initiation of civil money penalty procedures by the [Secretary](/usc/42/1301.md?p=a-6) during which the deficiency that is the basis of a determination under [subsection (c)(2)](#c-2) exists.
    - (C) Suspension of enrollment of individuals under this part after the date the [Secretary](/usc/42/1301.md?p=a-6) notifies the organization of a determination under [subsection (c)(2)](#c-2) and until the [Secretary](/usc/42/1301.md?p=a-6) is satisfied that the deficiency that is the basis for the determination has been corrected and is not likely to recur.
    - (D) Civil monetary penalties of not more than $100,000, or such higher amount as the [Secretary](/usc/42/1301.md?p=a-6) may establish by regulation, where the finding under [subsection (c)(2)(A)](#c-2-A) is based on the organization’s termination of its contract under this section other than at a time and in a manner provided for under [subsection (a)](#a).
  - (4) **Civil money penalties—** The provisions of [section 1320a–7a](/usc/42/1320a–7a.md) (other than subsections [(a)](#a) and [(b)](#b)) of this title shall apply to a civil money penalty under paragraph [(2)](#g-2) or [(3)](#g-3) in the same manner as they apply to a civil money penalty or proceeding under [section 1320a–7a(a) of this title](/usc/42/1320a–7a.md?p=a).
- (h) **Procedures for termination—**
  - (1) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) may terminate a contract with a [Medicare+Choice organization](/usc/42/1395w–28.md?p=a-1) under this section in accordance with formal investigation and compliance procedures established by the [Secretary](/usc/42/1301.md?p=a-6) under which—
    - (A) the [Secretary](/usc/42/1301.md?p=a-6) provides the organization with the reasonable opportunity to develop and implement a corrective action plan to correct the deficiencies that were the basis of the [Secretary](/usc/42/1301.md?p=a-6)’s determination under [subsection (c)(2)](#c-2); and
    - (B) the [Secretary](/usc/42/1301.md?p=a-6) provides the organization with reasonable notice and opportunity for hearing ([including](/usc/42/1301.md?p=b) the right to appeal an initial decision) before terminating the contract.
  - (2) **Exception for imminent and serious risk to health—** [Paragraph (1)](#h-1) shall not apply if the [Secretary](/usc/42/1301.md?p=a-6) determines that a delay in termination, resulting from compliance with the procedures specified in such paragraph prior to termination, would pose an imminent and serious risk to the health of individuals enrolled under this part with the organization.
  - (3) **Delay in contract termination authority for plans failing to achieve minimum quality rating—** During the period beginning on December 13, 2016, and through the end of plan year 2018, the [Secretary](/usc/42/1301.md?p=a-6) may not terminate a contract under this section with respect to the offering of an [MA plan](/usc/42/1395w–101.md?p=a-3-B) by a Medicare Advantage organization solely because the [MA plan](/usc/42/1395w–101.md?p=a-3-B) has failed to achieve a minimum quality rating under the 5-star rating system under [section 1395w–23(o)(4)](/usc/42/1395w–23.md?p=o-4) of this title.
- (i) **Medicare+Choice program compatibility with employer or union group health plans—**
  - (1) **Contracts with MA organizations—** To facilitate the offering of [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1) under contracts between [Medicare+Choice organizations](/usc/42/1395w–28.md?p=a-1) and employers, [labor organizations](/usc/42/2000ff.md?p=2-C), or the trustees of a [fund](/usc/42/12854.md?p=3) established by one or more employers or [labor organizations](/usc/42/2000ff.md?p=2-C) (or combination thereof) to furnish benefits to the entity’s [employees](/usc/42/1320a–7h.md?p=e-7), former [employees](/usc/42/1320a–7h.md?p=e-7) (or combination thereof) or members or former members (or combination thereof) of the [labor organizations](/usc/42/2000ff.md?p=2-C), the [Secretary](/usc/42/1301.md?p=a-6) may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such [Medicare+Choice plans](/usc/42/1395w–28.md?p=b-1).
  - (2) **Employer sponsored MA plans—** To facilitate the offering of [MA plans](/usc/42/1395w–101.md?p=a-3-B) by employers, [labor organizations](/usc/42/2000ff.md?p=2-C), or the trustees of a [fund](/usc/42/12854.md?p=3) established by one or more employers or [labor organizations](/usc/42/2000ff.md?p=2-C) (or combination thereof) to furnish benefits to the entity’s [employees](/usc/42/1320a–7h.md?p=e-7), former [employees](/usc/42/1320a–7h.md?p=e-7) (or combination thereof) or members or former members (or combination thereof) of the [labor organizations](/usc/42/2000ff.md?p=2-C), the [Secretary](/usc/42/1301.md?p=a-6) may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such [MA plans](/usc/42/1395w–101.md?p=a-3-B). Notwithstanding [section 1395w–21(g) of this title](/usc/42/1395w–21.md?p=g), an [MA plan](/usc/42/1395w–101.md?p=a-3-B) described in the previous sentence may restrict the enrollment of individuals under this part to individuals who are beneficiaries and participants in such plan.

# §1395w–27a. Special rules for MA regional plans

- (a) **Regional service area; establishment of MA regions—**
  - (1) **Coverage of entire MA region—** The service area for an [MA regional plan](/usc/42/1395w–28.md?p=b-4) shall consist of an entire MA region established under [paragraph (2)](#a-2) and the provisions of [section 1395w–24(h) of this title](/usc/42/1395w–24.md?p=h) shall not apply to such a plan.
  - (2) **Establishment of MA regions—**
    - (A) **MA region—** For purposes of this subchapter, the term “MA region” means such a [region](/usc/42/1395ww.md?p=d-2-D) within the 50 [States](/usc/42/1397n–12.md?p=6) and the District of Columbia as established by the [Secretary](/usc/42/1301.md?p=a-6) under this paragraph.
    - (B) **Establishment—**
      - (i) **Initial establishment—** Not later than January 1, 2005, the [Secretary](/usc/42/1301.md?p=a-6) shall first establish and publish [MA regions](#a-2-A).
      - (ii) **Periodic review and revision of service areas—** The [Secretary](/usc/42/1301.md?p=a-6) may periodically review [MA regions](#a-2-A) under this paragraph and, based on such review, may revise such [regions](/usc/42/1395ww.md?p=d-2-D) if the [Secretary](/usc/42/1301.md?p=a-6) determines such revision to be appropriate.
    - (C) **Requirements for MA regions—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish, and may revise, [MA regions](#a-2-A) under this paragraph in a manner consistent with the following:
      - (i) **Number of regions—** There shall be no fewer than 10 [regions](/usc/42/1395ww.md?p=d-2-D), and no more than 50 [regions](/usc/42/1395ww.md?p=d-2-D).
      - (ii) **Maximizing availability of plans—** The [regions](/usc/42/1395ww.md?p=d-2-D) shall maximize the availability of [MA regional plans](/usc/42/1395w–28.md?p=b-4) to all MA [eligible individuals](/usc/42/239.md?p=a-6) without regard to health status, especially those residing in [rural areas](/usc/42/1395ww.md?p=d-2-D).
    - (D) **Market survey and analysis—** Before establishing [MA regions](#a-2-A), the [Secretary](/usc/42/1301.md?p=a-6) shall conduct a market survey and analysis, [including](/usc/42/1301.md?p=b) an examination of current insurance markets, to determine how the [regions](/usc/42/1395ww.md?p=d-2-D) should be established.
  - (3) **National plan—** Nothing in this subsection shall be construed as preventing an [MA regional plan](/usc/42/1395w–28.md?p=b-4) from being offered in more than one MA region ([including](/usc/42/1301.md?p=b) all [regions](/usc/42/1395ww.md?p=d-2-D)).
- (b) **Application of single deductible and catastrophic limit on out-of-pocket expenses—** An [MA regional plan](/usc/42/1395w–28.md?p=b-4) shall include the following:
  - (1) **Single deductible—** Any deductible for [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i) shall be a [single](/usc/42/2304.md?p=m) deductible (instead of a separate inpatient [hospital](/usc/42/1395dd.md?p=e-5) deductible and a part B deductible) and may be applied differentially for in-network services and may be waived for preventive or other items and services.
  - (2) **Catastrophic limit—**
    - (A) **In-network—** A catastrophic limit on out-of-pocket expenditures for in-network [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i).
    - (B) **Total—** A catastrophic limit on out-of-pocket expenditures for all [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i).
- (c) **Portion of total payments to an organization subject to risk for 2006 and 2007—**
  - (1) **Application of risk corridors—**
    - (A) **In general—** This subsection shall only apply to [MA regional plans](/usc/42/1395w–28.md?p=b-4) offered during 2006 or 2007.
    - (B) **Notification of allowable costs under the plan—** In the case of an MA organization that offers an [MA regional plan](/usc/42/1395w–28.md?p=b-4) in an MA region in 2006 or 2007, the organization shall notify the [Secretary](/usc/42/1301.md?p=a-6), before such date in the succeeding year as the [Secretary](/usc/42/1301.md?p=a-6) specifies, of—
      - (i) its total amount of costs that the organization incurred in providing benefits covered under the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) option for all enrollees under the plan in the [region](/usc/42/1395ww.md?p=d-2-D) in the year and the portion of such costs that is attributable to administrative expenses described in [subparagraph (C)](#c-1-C); and
      - (ii) its total amount of costs that the organization incurred in providing [rebatable integrated benefits](#c-1-D) (as defined in [subparagraph (D)](#c-1-D)) and with respect to such benefits the portion of such costs that is attributable to administrative expenses described in [subparagraph (C)](#c-1-C) and not described in clause (i) of this subparagraph.
    - (C) **Allowable costs defined—** For purposes of this subsection, the term “allowable costs” means, with respect to an [MA regional plan](/usc/42/1395w–28.md?p=b-4) for a year, the total amount of costs described in [subparagraph (B)](#c-1-B) for the plan and year, reduced by the portion of such costs attributable to administrative expenses incurred in providing the benefits described in such subparagraph.
    - (D) **Rebatable integrated benefits—** For purposes of this subsection, the term “rebatable integrated benefits” means such non-[drug](/usc/42/282.md?p=j-1-A-vii) supplemental benefits under subclause (I) of [section 1395w–24(b)(1)(C)(ii) of this title](/usc/42/1395w–24.md?p=b-1-C-ii) pursuant to a rebate under such section that the [Secretary](/usc/42/1301.md?p=a-6) determines are integrated with the benefits described in [subparagraph (B)(i)](#c-1-B-i).
  - (2) **Adjustment of payment—**
    - (A) **No adjustment if allowable costs within 3 percent of target amount—** If the [allowable costs](#c-1-C) for the plan for the year are at least 97 percent, but do not exceed 103 percent, of the [target amount](#c-2-D) for the plan and year, there shall be no payment adjustment under this subsection for the plan and year.
    - (B) **Increase in payment if allowable costs above 103 percent of target amount—**
      - (i) **Costs between 103 and 108 percent of target amount—** If the [allowable costs](#c-1-C) for the plan for the year are greater than 103 percent, but not greater than 108 percent, of the [target amount](#c-2-D) for the plan and year, the [Secretary](/usc/42/1301.md?p=a-6) shall increase the total of the monthly payments made to the organization offering the plan for the year under [section 1395w–23(a) of this title](/usc/42/1395w–23.md?p=a) by an amount equal to 50 percent of the difference between such [allowable costs](#c-1-C) and 103 percent of such [target amount](#c-2-D).
      - (ii) **Costs above 108 percent of target amount—** If the [allowable costs](#c-1-C) for the plan for the year are greater than 108 percent of the [target amount](#c-2-D) for the plan and year, the [Secretary](/usc/42/1301.md?p=a-6) shall increase the total of the monthly payments made to the organization offering the plan for the year under [section 1395w–23(a) of this title](/usc/42/1395w–23.md?p=a) by an amount equal to the sum of—
        - (I) 2.5 percent of such [target amount](#c-2-D); and
        - (II) 80 percent of the difference between such [allowable costs](#c-1-C) and 108 percent of such [target amount](#c-2-D).
    - (C) **Reduction in payment if allowable costs below 97 percent of target amount—**
      - (i) **Costs between 92 and 97 percent of target amount—** If the [allowable costs](#c-1-C) for the plan for the year are less than 97 percent, but greater than or equal to 92 percent, of the [target amount](#c-2-D) for the plan and year, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the total of the monthly payments made to the organization offering the plan for the year under [section 1395w–23(a) of this title](/usc/42/1395w–23.md?p=a) by an amount (or otherwise recover from the plan an amount) equal to 50 percent of the difference between 97 percent of the [target amount](#c-2-D) and such [allowable costs](#c-1-C).
      - (ii) **Costs below 92 percent of target amount—** If the [allowable costs](#c-1-C) for the plan for the year are less than 92 percent of the [target amount](#c-2-D) for the plan and year, the [Secretary](/usc/42/1301.md?p=a-6) shall reduce the total of the monthly payments made to the organization offering the plan for the year under [section 1395w–23(a) of this title](/usc/42/1395w–23.md?p=a) by an amount (or otherwise recover from the plan an amount) equal to the sum of—
        - (I) 2.5 percent of such [target amount](#c-2-D); and
        - (II) 80 percent of the difference between 92 percent of such [target amount](#c-2-D) and such [allowable costs](#c-1-C).
    - (D) **Target amount described—** For purposes of this paragraph, the term “target amount” means, with respect to an [MA regional plan](/usc/42/1395w–28.md?p=b-4) offered by an organization in a year, an amount equal to—
      - (i) the sum of—
        - (I) the total monthly payments made to the organization for enrollees in the plan for the year that are attributable to [benefits under the original medicare fee-for-service program option](/usc/42/1395w–22.md?p=a-1-B-i) (as defined in [section 1395w–22(a)(1)(B) of this title](/usc/42/1395w–22.md?p=a-1-B));
        - (II) the total of the [MA monthly basic beneficiary premium](/usc/42/1395w–24.md?p=b-2-A) collectable for such enrollees for the year; and
        - (III) the total amount of the rebates under [section 1395w–24(b)(1)(C)(ii) of this title](/usc/42/1395w–24.md?p=b-1-C-ii) that are attributable to [rebatable integrated benefits](#c-1-D); reduced by
      - (ii) the amount of administrative expenses assumed in the bid insofar as the bid is attributable to benefits described in clause [(i)(I)](#c-2-D-i-I) or [(i)(III)](#c-2-D-i-III).
  - (3) **Disclosure of information—**
    - (A) **In general—** Each contract under this part shall provide—
      - (i) that an MA organization offering an [MA regional plan](/usc/42/1395w–28.md?p=b-4) shall provide the [Secretary](/usc/42/1301.md?p=a-6) with such information as the [Secretary](/usc/42/1301.md?p=a-6) determines is necessary to carry out this subsection; and
      - (ii) that, pursuant to [section 1395w–27(d)(2)(B) of this title](/usc/42/1395w–27.md?p=d-2-B), the [Secretary](/usc/42/1301.md?p=a-6) has the right to inspect and audit any books and records of the organization that pertain to the information regarding costs provided to the [Secretary](/usc/42/1301.md?p=a-6) under [paragraph (1)(B)](#c-1-B).
    - (B) **Restriction on use of information—** Information disclosed or obtained pursuant to the provisions of this subsection may be used by officers, [employees](/usc/42/1320a–7h.md?p=e-7), and contractors of the Department of Health and Human Services only for the purposes of, and to the extent necessary in, carrying out this subsection.
- (d) **Organizational and financial requirements—**
  - (1) **In general—** In the case of an MA organization that is offering an [MA regional plan](/usc/42/1395w–28.md?p=b-4) in an MA region and—
    - (A) meets the requirements of [section 1395w–25(a)(1) of this title](/usc/42/1395w–25.md?p=a-1) with respect to at least one such [State](/usc/42/1397n–12.md?p=6) in such [region](/usc/42/1395ww.md?p=d-2-D); and
    - (B) with respect to each other [State](/usc/42/1397n–12.md?p=6) in such [region](/usc/42/1395ww.md?p=d-2-D) in which it does not meet requirements, it demonstrates to the satisfaction of the [Secretary](/usc/42/1301.md?p=a-6) that it has filed the necessary application to meet such requirements,

    the [Secretary](/usc/42/1301.md?p=a-6) may waive such requirement with respect to each [State](/usc/42/1397n–12.md?p=6) described in [subparagraph (B)](#d-1-B) for such period of time as the [Secretary](/usc/42/1301.md?p=a-6) determines appropriate for the timely processing of such an application by the [State](/usc/42/1397n–12.md?p=6) (and, if such application is denied, through the end of such plan year as the [Secretary](/usc/42/1301.md?p=a-6) determines appropriate to provide for a transition).

  - (2) **Selection of appropriate State—** In applying [paragraph (1)](#d-1) in the case of an MA organization that meets the requirements of [section 1395w–25(a)(1) of this title](/usc/42/1395w–25.md?p=a-1) with respect to more than one [State](/usc/42/1397n–12.md?p=6) in a [region](/usc/42/1395ww.md?p=d-2-D), the organization shall select, in a manner specified by the [Secretary](/usc/42/1301.md?p=a-6) among such [States](/usc/42/1397n–12.md?p=6), one [State](/usc/42/1397n–12.md?p=6) the rules of which shall apply in the case of the [States](/usc/42/1397n–12.md?p=6) described in [paragraph (1)(B)](#d-1-B).
- (e) **Repealed. Pub. L. 111–148, title X, § 10327(c)(1), Mar. 23, 2010, 124 Stat. 964—**
- (f) **Computation of applicable MA region-specific non-drug monthly benchmark amounts—**
  - (1) **Computation for regions—** For purposes of [section 1395w–23(j)(2) of this title](/usc/42/1395w–23.md?p=j-2) and this section, subject to [subsection (e)](#e), the term “MA region-specific non-drug monthly benchmark amount” means, with respect to an MA region for a month in a year, the sum of the 2 components described in [paragraph (2)](#f-2) for the [region](/usc/42/1395ww.md?p=d-2-D) and year. The [Secretary](/usc/42/1301.md?p=a-6) shall compute such benchmark amount for each MA region before the beginning of each annual, coordinated election period under [section 1395w–21(e)(3)(B) of this title](/usc/42/1395w–21.md?p=e-3-B) for each year (beginning with 2006).
  - (2) **2 components—** For purposes of [paragraph (1)](#f-1), the 2 components described in this paragraph for an MA region and a year are the following:
    - (A) **Statutory component—** The product of the following:
      - (i) **Statutory region-specific non-drug amount—** The [statutory region-specific non-drug amount](#f-3) (as defined in [paragraph (3)](#f-3)) for the [region](/usc/42/1395ww.md?p=d-2-D) and year.
      - (ii) **Statutory national market share—** The statutory national market share percentage, determined under [paragraph (4)](#f-4) for the year.
    - (B) **Plan-bid component—** The product of the following:
      - (i) **Weighted average of MA plan bids in region—** The weighted average of the plan bids for the [region](/usc/42/1395ww.md?p=d-2-D) and year (as determined under [paragraph (5)(A)](#f-5-A)).
      - (ii) **Non-statutory market share—** 1 minus the statutory national market share percentage, determined under [paragraph (4)](#f-4) for the year.
  - (3) **Statutory region-specific non-drug amount—** For purposes of [paragraph (2)(A)(i)](#f-2-A-i), the term “statutory region-specific non-drug amount” means, for an MA region and year, an amount equal the sum (for each [MA local area](/usc/42/1395w–28.md?p=c-5) within the [region](/usc/42/1395ww.md?p=d-2-D)) of the product of—
    - (A) [MA area-specific non-drug monthly benchmark amount](/usc/42/1395w–23.md?p=j) under [section 1395w–23(j)(1)(A) of this title](/usc/42/1395w–23.md?p=j-1-A) for that area and year; and
    - (B) the number of MA [eligible individuals](/usc/42/239.md?p=a-6) residing in the local area, divided by the total number of MA [eligible individuals](/usc/42/239.md?p=a-6) residing in the [region](/usc/42/1395ww.md?p=d-2-D).
  - (4) **Computation of statutory market share percentage—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall determine for each year a statutory national market share percentage that is equal to the proportion of MA [eligible individuals](/usc/42/239.md?p=a-6) nationally who were not enrolled in an [MA plan](/usc/42/1395w–101.md?p=a-3-B) during the [reference month](#f-4-B).
    - (B) **Reference month defined—** For purposes of this part, the term “reference month” means, with respect to a year, the most recent month during the previous year for which the [Secretary](/usc/42/1301.md?p=a-6) determines that data are available to compute the percentage specified in [subparagraph (A)](#f-4-A) and other relevant percentages under this part.
  - (5) **Determination of weighted average MA bids for a region—**
    - (A) **In general—** For purposes of [paragraph (2)(B)(i)](#f-2-B-i), the weighted average of plan bids for an MA region and a year is the sum, for [MA regional plans](/usc/42/1395w–28.md?p=b-4) described in [subparagraph (D)](#f-5-D) in the [region](/usc/42/1395ww.md?p=d-2-D) and year, of the products (for each such plan) of the following:
      - (i) **Monthly MA statutory non-drug bid amount—** The [unadjusted MA statutory non-drug monthly bid amount](/usc/42/1395w–24.md?p=b-2-E) for the plan.
      - (ii) **Plan’s share of MA enrollment in region—** The factor described in [subparagraph (B)](#f-5-B) for the plan.
    - (B) **Plan’s share of MA enrollment in region—**
      - (i) **In general—** Subject to the succeeding provisions of this subparagraph, the factor described in this subparagraph for a plan is equal to the number of individuals described in [subparagraph (C)](#f-5-C) for such plan, divided by the total number of such individuals for all [MA regional plans](/usc/42/1395w–28.md?p=b-4) described in [subparagraph (D)](#f-5-D) for that [region](/usc/42/1395ww.md?p=d-2-D) and year.
      - (ii) **Single plan rule—** In the case of an MA region in which only a [single](/usc/42/2304.md?p=m) [MA regional plan](/usc/42/1395w–28.md?p=b-4) is being offered, the factor described in this subparagraph shall be equal to 1.
      - (iii) **Equal division among multiple plans in year in which plans are first available—** In the case of an MA region in the first year in which any [MA regional plan](/usc/42/1395w–28.md?p=b-4) is offered, if more than one [MA regional plan](/usc/42/1395w–28.md?p=b-4) is offered in such year, the factor described in this subparagraph for a plan shall (as specified by the [Secretary](/usc/42/1301.md?p=a-6)) be equal to—
        - (I) 1 divided by the number of such plans offered in such year; or
        - (II) a factor for such plan that is based upon the organization’s estimate of projected enrollment, as reviewed and adjusted by the [Secretary](/usc/42/1301.md?p=a-6) to ensure reasonableness and as is certified by the Chief Actuary of the Centers for Medicare & Medicaid Services.
    - (C) **Counting of individuals—** For purposes of [subparagraph (B)(i)](#f-5-B-i), the [Secretary](/usc/42/1301.md?p=a-6) shall count for each [MA regional plan](/usc/42/1395w–28.md?p=b-4) described in [subparagraph (D)](#f-5-D) for an MA region and year, the number of individuals who reside in the [region](/usc/42/1395ww.md?p=d-2-D) and who were enrolled under such plan under this part during the [reference month](#f-4-B).
    - (D) **Plans covered—** For an MA region and year, an [MA regional plan](/usc/42/1395w–28.md?p=b-4) described in this subparagraph is an [MA regional plan](/usc/42/1395w–28.md?p=b-4) that is offered in the [region](/usc/42/1395ww.md?p=d-2-D) and year and was offered in the [region](/usc/42/1395ww.md?p=d-2-D) in the [reference month](#f-4-B).
- (g) **Election of uniform coverage determination—** Instead of applying [section 1395w–22(a)(2)(C) of this title](/usc/42/1395w–22.md?p=a-2-C) with respect to an [MA regional plan](/usc/42/1395w–28.md?p=b-4), the organization offering the plan may elect to have a [local coverage determination](/usc/42/1395y.md?p=l-6-B) for the entire MA region be the [local coverage determination](/usc/42/1395y.md?p=l-6-B) applied for any part of such [region](/usc/42/1395ww.md?p=d-2-D) (as selected by the organization).
- (h) **Assuring network adequacy—**
  - (1) **In general—** For purposes of enabling MA organizations that offer [MA regional plans](/usc/42/1395w–28.md?p=b-4) to meet applicable provider access requirements under [section 1395w–22 of this title](/usc/42/1395w–22.md) with respect to such plans, the [Secretary](/usc/42/1301.md?p=a-6) may provide for payment under this section to an [essential hospital](#h-4) that provides [inpatient hospital services](/usc/42/1395x.md?p=b) to enrollees in such a plan where the MA organization offering the plan certifies to the [Secretary](/usc/42/1301.md?p=a-6) that the organization was unable to reach an [agreement](/usc/42/1320b–8.md?p=a-3-A) between the [hospital](/usc/42/1395dd.md?p=e-5) and the organization regarding provision of such services under the plan. Such payment shall be available only if—
    - (A) the organization provides assurances satisfactory to the [Secretary](/usc/42/1301.md?p=a-6) that the organization will make payment to the [hospital](/usc/42/1395dd.md?p=e-5) for [inpatient hospital services](/usc/42/1395x.md?p=b) of an amount that is not less than the amount that would be payable to the [hospital](/usc/42/1395dd.md?p=e-5) under [section 1395ww of this title](/usc/42/1395ww.md) with respect to such services; and
    - (B) with respect to specific [inpatient hospital services](/usc/42/1395x.md?p=b) provided to an enrollee, the [hospital](/usc/42/1395dd.md?p=e-5) demonstrates to the satisfaction of the [Secretary](/usc/42/1301.md?p=a-6) that the [hospital](/usc/42/1395dd.md?p=e-5)’s costs of such services exceed the payment amount described in [subparagraph (A)](#h-1-A).
  - (2) **Payment amounts—** The payment amount under this subsection for [inpatient hospital services](/usc/42/1395x.md?p=b) provided by a [subsection (d)](#d) [hospital](/usc/42/1395dd.md?p=e-5) to an enrollee in an [MA regional plan](/usc/42/1395w–28.md?p=b-4) shall be, subject to the limitation of [funds](/usc/42/12854.md?p=3) under [paragraph (3)](#h-3), the amount (if any) by which—
    - (A) the amount of payment that would have been paid for such services under this subchapter if the enrollees were covered under the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) option and the [hospital](/usc/42/1395dd.md?p=e-5) were a [critical access hospital](/usc/42/1395x.md?p=mm-1); exceeds
    - (B) the amount of payment made for such services under [paragraph (1)(A)](#h-1-A).
  - (3) **Available amounts—** There shall be available for payments under this subsection—
    - (A) in 2006, $25,000,000; and
    - (B) in each succeeding year the amount specified in this paragraph for the preceding year increased by the market basket percentage increase (as defined in [section 1395ww(b)(3)(B)(iii) of this title](/usc/42/1395ww.md?p=b-3-B-iii)) for the fiscal year ending in such succeeding year.

    Payments under this subsection shall be made from the Federal [Hospital](/usc/42/1395dd.md?p=e-5) Insurance [Trust](/usc/42/12854.md?p=6) [Fund](/usc/42/12854.md?p=3).

  - (4) **Essential hospital—** In this subsection, the term “essential hospital” means, with respect to an [MA regional plan](/usc/42/1395w–28.md?p=b-4) offered by an MA organization, a [subsection (d)](#d) [hospital](/usc/42/1395dd.md?p=e-5) (as defined in [section 1395ww(d) of this title](/usc/42/1395ww.md?p=d)) that the [Secretary](/usc/42/1301.md?p=a-6) determines, based upon an application filed by the organization with the [Secretary](/usc/42/1301.md?p=a-6), is necessary to meet the requirements referred to in [paragraph (1)](#h-1) for such plan.

# §1395w–28. Definitions; miscellaneous provisions

- (a) **Definitions relating to Medicare+Choice organizations—** In this part—
  - (1) **Medicare+Choice organization—** The term “Medicare+Choice organization” means a public or [private entity](/usc/42/12181.md?p=6) that is certified under [section 1395w–26 of this title](/usc/42/1395w–26.md) as meeting the requirements and [standards](/usc/42/1320d.md?p=7) of this part for such an organization.
  - (2) **Provider-sponsored organization—** The term “[provider-sponsored organization](/usc/42/1395w–25.md?p=d-1)” is defined in [section 1395w–25(d)(1) of this title](/usc/42/1395w–25.md?p=d-1).
- (b) **Definitions relating to Medicare+Choice plans—**
  - (1) **Medicare+Choice plan—** The term “Medicare+Choice plan” means health benefits coverage offered under a policy, contract, or plan by a [Medicare+Choice organization](#a-1) pursuant to and in accordance with a contract under [section 1395w–27 of this title](/usc/42/1395w–27.md).
  - (2) **Medicare+Choice private fee-for-service plan—** The term “Medicare+Choice private fee-for-service plan” means a [Medicare+Choice plan](#b-1) that—
    - (A) reimburses [hospitals](/usc/42/1395dd.md?p=e-5), [physicians](/usc/42/1395cc–4.md?p=a-2-E), and other providers at a rate determined by the plan on a fee-for-service basis without placing the provider at financial risk;
    - (B) does not vary such rates for such a provider based on utilization relating to such provider; and
    - (C) does not restrict the selection of providers among those who are lawfully authorized to provide the covered services and agree to accept the terms and conditions of payment established by the plan.

    Nothing in [subparagraph (B)](#b-2-B) shall be construed to preclude a plan from varying rates for such a provider based on the specialty of the provider, the location of the provider, or other factors related to such provider that are not related to utilization, or to preclude a plan from increasing rates for such a provider based on increased utilization of specified preventive or screening services.

  - (3) **MSA plan—**
    - (A) **In general—** The term “MSA plan” means a Medicare+ÐChoice plan that—
      - (i) provides reimbursement for at least the items and services described in [section 1395w–22(a)(1) of this title](/usc/42/1395w–22.md?p=a-1) in a year but only after the enrollee incurs countable expenses (as specified under the plan) equal to the amount of an annual deductible (described in [subparagraph (B)](#b-3-B));
      - (ii) counts as such expenses (for purposes of such deductible) at least all amounts that would have been payable under parts A and B, and that would have been payable by the enrollee as deductibles, coinsurance, or copayments, if the enrollee had elected to receive benefits through the provisions of such parts; and
      - (iii) provides, after such deductible is met for a year and for all subsequent expenses for items and services referred to in [clause (i)](#b-3-A-i) in the year, for a level of reimbursement that is not less than—
        - (I) 100 percent of such expenses, or
        - (II) 100 percent of the amounts that would have been paid (without regard to any deductibles or coinsurance) under parts A and B with respect to such expenses,

      whichever is less.

    - (B) **Deductible—** The amount of annual deductible under an [MSA plan](#b-3-A)—
      - (i) for contract year 1999 shall be not more than $6,000; and
      - (ii) for a subsequent contract year shall be not more than the maximum amount of such deductible for the previous contract year under this subparagraph increased by the national per capita Medicare+Choice growth percentage under [section 1395w–23(c)(6) of this title](/usc/42/1395w–23.md?p=c-6) for the year.

      If the amount of the deductible under [clause (ii)](#b-3-B-ii) is not a multiple of $50, the amount shall be rounded to the nearest multiple of $50.

  - (4) **MA regional plan—** The term “MA regional plan” means an [MA plan](/usc/42/1395w–101.md?p=a-3-B) described in [section 1395w–21(a)(2)(A)(i) of this title](/usc/42/1395w–21.md?p=a-2-A-i)—
    - (A) that has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan;
    - (B) that provides for reimbursement for all covered benefits regardless of whether such benefits are provided within such network of providers; and
    - (C) the service area of which is one or more entire MA [regions](/usc/42/1395ww.md?p=d-2-D).
  - (5) **MA local plan—** The term “MA local plan” means an [MA plan](/usc/42/1395w–101.md?p=a-3-B) that is not an [MA regional plan](#b-4).
  - (6) **Specialized MA plans for special needs individuals—**
    - (A) **In general—** The term “specialized MA plan for special needs individuals” means an [MA plan](/usc/42/1395w–101.md?p=a-3-B) that exclusively serves [special needs individuals](#b-6-B) (as defined in [subparagraph (B)](#b-6-B)) and that, as of January 1, 2010, meets the applicable requirements of paragraph [(2)](#f-2), [(3)](#f-3), or [(4)](#f-4) of subsection (f), as the case may be.
    - (B) **Special needs individual—** The term “special needs individual” means an MA [eligible individual](/usc/42/239.md?p=a-6) who—
      - (i) is institutionalized (as defined by the [Secretary](/usc/42/1301.md?p=a-6));
      - (ii) is entitled to medical assistance under a [State](/usc/42/1397n–12.md?p=6) plan under subchapter XIX; or
      - (iii) meets such requirements as the [Secretary](/usc/42/1301.md?p=a-6) may determine would benefit from enrollment in such a specialized [MA plan](/usc/42/1395w–101.md?p=a-3-B) described in [subparagraph (A)](#b-6-A) for individuals with severe or disabling chronic conditions who—
        - (I) before January 1, 2022, have one or more comorbid and medically complex chronic conditions that are substantially disabling or life threatening, have a high risk of [hospitalization](/usc/42/1301.md?p=a-7) or other significant adverse health outcomes, and require specialized delivery systems across domains of care; and
        - (II) on or after January 1, 2022, have one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits[^1] overall health or function, have a high risk of [hospitalization](/usc/42/1301.md?p=a-7) or other adverse health outcomes, and require intensive care coordination and that is listed under [subsection (f)(9)(A)](#f-9-A).

      The [Secretary](/usc/42/1301.md?p=a-6) may apply rules similar to the rules of [section 1395eee(c)(4) of this title](/usc/42/1395eee.md?p=c-4) for continued eligibility of special needs individuals.

- (c) **Other references to other terms—**
  - (1) **Medicare+Choice eligible individual—** The term “[Medicare+Choice eligible individual](/usc/42/1395w–21.md?p=a-3)” is defined in [section 1395w–21(a)(3) of this title](/usc/42/1395w–21.md?p=a-3).
  - (2) **Medicare+Choice payment area—** The term “Medicare+Choice payment area” is defined in [section 1395w–23(d) of this title](/usc/42/1395w–23.md?p=d).
  - (3) **National per capita Medicare+Choice growth percentage—** The “national per capita Medicare+Choice growth percentage” is defined in [section 1395w–23(c)(6) of this title](/usc/42/1395w–23.md?p=c-6).
  - (4) **Medicare+Choice monthly basic beneficiary premium; Medicare+Choice monthly supplemental beneficiary premium—** The terms “Medicare+Choice monthly basic beneficiary premium” and “Medicare+Choice monthly supplemental beneficiary premium” are defined in [section 1395w–24(a)(2) of this title](/usc/42/1395w–24.md?p=a-2).
  - (5) **MA local area—** The term “MA local area” is defined in [section 1395w–23(d)(2) of this title](/usc/42/1395w–23.md?p=d-2).
- (d) **Coordinated acute and long-term care benefits under Medicare+Choice plan—** Nothing in this part shall be construed as preventing a [State](/usc/42/1397n–12.md?p=6) from coordinating benefits under a medicaid plan under subchapter XIX with those provided under a [Medicare+Choice plan](#b-1) in a manner that assures continuity of a full-range of acute care and [long-term care](/usc/42/1397j.md?p=14-A) services to poor elderly or disabled individuals eligible for benefits under this subchapter and under such plan.
- (e) **Restriction on enrollment for certain Medicare+Choice plans—**
  - (1) **In general—** In the case of a Medicare+Choice religious fraternal benefit society plan described in [paragraph (2)](#e-2), notwithstanding any other provision of this part to the contrary and in accordance with [regulations](/usc/42/1395hh.md?p=a-1) of the [Secretary](/usc/42/1301.md?p=a-6), the society offering the plan may restrict the enrollment of individuals under this part to individuals who are members of the church, convention, or group described in [paragraph (3)(B)](#e-3-B) with which the society is affiliated.
  - (2) **Medicare+Choice religious fraternal benefit society plan described—** For purposes of this subsection, a Medicare+Choice religious fraternal benefit society plan described in this paragraph is a [Medicare+Choice plan](#b-1) described in [section 1395w–21(a)(2) of this title](/usc/42/1395w–21.md?p=a-2) that—
    - (A) is offered by a religious fraternal benefit society described in [paragraph (3)](#e-3) only to members of the church, convention, or group described in [paragraph (3)(B)](#e-3-B); and
    - (B) permits all such members to enroll under the plan without regard to health status-related factors.

    Nothing in this subsection shall be construed as waiving any plan requirements relating to financial solvency.

  - (3) **“Religious fraternal benefit society” defined—** For purposes of [paragraph (2)(A)](#e-2-A), a “religious fraternal benefit society” described in this section is an organization that—
    - (A) is described in section 501(c)(8) of the Internal Revenue Code of 1986 and is exempt from taxation under [section 501(a)](/usc/42/501.md) of such Act;
    - (B) is affiliated with, carries out the tenets of, and shares a religious bond with, a church or convention or association of churches or an affiliated group of churches;
    - (C) offers, in addition to a Medicare+ÐChoice religious fraternal benefit society plan, health coverage to individuals not entitled to benefits under this subchapter who are members of such church, convention, or group; and
    - (D) does not impose any limitation on membership in the society based on any health status-related factor.
  - (4) **Payment adjustment—** Under [regulations](/usc/42/1395hh.md?p=a-1) of the [Secretary](/usc/42/1301.md?p=a-6), in the case of individuals enrolled under this part under a Medicare+Choice religious fraternal benefit society plan described in [paragraph (2)](#e-2), the [Secretary](/usc/42/1301.md?p=a-6) shall provide for such adjustment to the payment amounts otherwise established under [section 1395w–24 of this title](/usc/42/1395w–24.md) as may be appropriate to assure an appropriate payment level, taking into account the actuarial characteristics and experience of such individuals.
- (f) **Requirements regarding enrollment in specialized MA plans for special needs individuals—**
  - (1) **Requirements for enrollment—** In the case of a [specialized MA plan for special needs individuals](#b-6-A) (as defined in [subsection (b)(6)](#b-6)), notwithstanding any other provision of this part and in accordance with [regulations](/usc/42/1395hh.md?p=a-1) of the [Secretary](/usc/42/1301.md?p=a-6), the plan may restrict the enrollment of individuals under the plan to individuals who are within one or more classes of [special needs individuals](#b-6-B).
  - (2) **Additional requirements for institutional SNPS—** In the case of a [specialized MA plan for special needs individuals](#b-6-A) described in [subsection (b)(6)(B)(i)](#b-6-B-i), the applicable requirements described in this paragraph are as follows:
    - (A) Each individual that enrolls in the plan on or after January 1, 2010, is a [special needs individuals](#b-6-B) described in [subsection (b)(6)(B)(i)](#b-6-B-i). In the case of an individual who is living in the community but requires an institutional level of care, such individual shall not be considered a [special needs individual](#b-6-B) described in [subsection (b)(6)(B)(i)](#b-6-B-i) unless the determination that the individual requires an institutional level of care was made—
      - (i) using a [State](/usc/42/1397n–12.md?p=6) assessment tool of the [State](/usc/42/1397n–12.md?p=6) in which the individual resides; and
      - (ii) by an entity other than the organization offering the plan.
    - (B) The plan meets the requirements described in [paragraph (5)](#f-5).
    - (C) If applicable, the plan meets the requirement described in [paragraph (7)](#f-7).
  - (3) **Additional requirements for dual SNPS—** In the case of a [specialized MA plan for special needs individuals](#b-6-A) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii), the applicable requirements described in this paragraph are as follows:
    - (A) Each individual that enrolls in the plan on or after January 1, 2010, is a [special needs individuals](#b-6-B)[^2] described in [subsection (b)(6)(B)(ii)](#b-6-B-ii).
    - (B) The plan meets the requirements described in [paragraph (5)](#f-5).
    - (C) The plan provides each prospective enrollee, prior to enrollment, with a comprehensive written statement (using standardized content and format established by the [Secretary](/usc/42/1301.md?p=a-6)) that describes—
      - (i) the benefits and [cost-sharing](/usc/42/18022.md?p=c-3-A) protections that the individual is entitled to under the [State](/usc/42/1397n–12.md?p=6) Medicaid [program](/usc/42/274l–1.md?p=4) under subchapter XIX; and
      - (ii) which of such benefits and [cost-sharing](/usc/42/18022.md?p=c-3-A) protections are covered under the plan.

      Such statement shall be included with any description of benefits offered by the plan.

    - (D) The plan has a contract with the [State](/usc/42/1397n–12.md?p=6) Medicaid [agency](/usc/42/1397n–12.md?p=1) to provide benefits, or arrange for benefits to be provided, for which such individual is entitled to receive as medical assistance under subchapter XIX. Such benefits may include [long-term care](/usc/42/1397j.md?p=14-A) services consistent with [State](/usc/42/1397n–12.md?p=6) policy.
    - (E) If applicable, the plan meets the requirement described in [paragraph (7)](#f-7).
    - (F) The plan meets the requirements applicable under [paragraph (8)](#f-8).
  - (4) **Additional requirements for severe or disabling chronic condition SNPS—** In the case of a [specialized MA plan for special needs individuals](#b-6-A) described in [subsection (b)(6)(B)(iii)](#b-6-B-iii), the applicable requirements described in this paragraph are as follows:
    - (A) Each individual that enrolls in the plan on or after January 1, 2010, is a [special needs individual](#b-6-B) described in [subsection (b)(6)(B)(iii)](#b-6-B-iii).
    - (B) The plan meets the requirements described in [paragraph (5)](#f-5).
    - (C) If applicable, the plan meets the requirement described in [paragraph (7)](#f-7).
  - (5) **Care management requirements for all SNPs—**
    - (A) **In general—** Subject to [subparagraph (B)](#f-5-B), the requirements described in this paragraph are that the organization offering a [specialized MA plan for special needs individuals](#b-6-A)—
      - (i) have in place an evidenced-based model of care with appropriate networks of providers and specialists; and
      - (ii) with respect to each individual enrolled in the plan—
        - (I) conduct an initial assessment and an annual reassessment of the individual’s physical, psychosocial, and functional needs;
        - (II) develop a plan, in consultation with the individual as feasible, that identifies goals and objectives, [including](/usc/42/1301.md?p=b) measurable outcomes as well as specific services and benefits to be provided; and
        - (III) use an interdisciplinary team in the management of care.
    - (B) **Improvements to care management requirements for severe or disabling chronic condition SNPs—** For 2020 and subsequent years, in the case of a [specialized MA plan for special needs individuals](#b-6-A) described in [subsection (b)(6)(B)(iii)](#b-6-B-iii), the requirements described in this paragraph include the following:
      - (i) The interdisciplinary team under [subparagraph (A)(ii)(III)](#f-5-A-ii-III) [includes](/usc/42/1301.md?p=b) a team of providers with demonstrated expertise, [including](/usc/42/1301.md?p=b) [training](/usc/42/285e–2.md?p=b-2) in an applicable specialty, in treating individuals similar to the targeted population of the plan.
      - (ii) Requirements developed by the [Secretary](/usc/42/1301.md?p=a-6) to provide face-to-face encounters with individuals enrolled in the plan not less frequently than on an annual basis.
      - (iii) As part of the model of care under [clause (i)](#f-5-A-i) of subparagraph (A), the results of the initial assessment and annual reassessment under [clause (ii)(I)](#f-5-A-ii-I) of such subparagraph of each individual enrolled in the plan are addressed in the individual’s individualized care plan under [clause (ii)(II)](#f-5-A-ii-II) of such subparagraph.
      - (iv) As part of the annual evaluation and approval of such model of care, the [Secretary](/usc/42/1301.md?p=a-6) shall take into account whether the plan fulfilled the previous year’s goals (as required under the model of care).
      - (v) The [Secretary](/usc/42/1301.md?p=a-6) shall establish a minimum benchmark for each element of the model of care of a plan. The [Secretary](/usc/42/1301.md?p=a-6) shall only approve a plan’s model of care under this paragraph if each element of the model of care meets the minimum benchmark applicable under the preceding sentence.
  - (6) **Transition and exception regarding restriction on enrollment—**
    - (A) **In general—** Subject to [subparagraph (C)](#f-6-C), the [Secretary](/usc/42/1301.md?p=a-6) shall establish procedures for the transition of [applicable individuals](#f-6-B) to—
      - (i) a Medicare Advantage plan that is not a [specialized MA plan for special needs individuals](#b-6-A) (as defined in [subsection (b)(6)](#b-6)); or
      - (ii) the original medicare fee-for-service [program](/usc/42/274l–1.md?p=4) under parts A and B.
    - (B) **Applicable individuals—** For purposes of [clause (i)](#f-6-B-i), the term “applicable individual” means an individual who—
      - (i) is enrolled under a [specialized MA plan for special needs individuals](#b-6-A) (as defined in [subsection (b)(6)](#b-6)); and
      - (ii) is not within the 1 or more of the classes of [special needs individuals](#b-6-B) to which enrollment under the plan is restricted to.
    - (C) **Exception—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide for an exception to the transition described in [subparagraph (A)](#f-6-A) for a limited period of time for individuals enrolled under a [specialized MA plan for special needs individuals](#b-6-A) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii) who are no longer eligible for medical assistance under subchapter XIX.
    - (D) **Timeline for initial transition—** The [Secretary](/usc/42/1301.md?p=a-6) shall ensure that [applicable individuals](#f-6-B) enrolled in a [specialized MA plan for special needs individuals](#b-6-A) (as defined in [subsection (b)(6)](#b-6)) prior to January 1, 2010, are transitioned to a plan or the [program](/usc/42/274l–1.md?p=4) described in [subparagraph (A)](#f-6-A) by not later than January 1, 2013.
  - (7) **Authority to require special needs plans be NCQA approved—** For 2012 and subsequent years, the [Secretary](/usc/42/1301.md?p=a-6) shall require that a Medicare Advantage organization offering a [specialized MA plan for special needs individuals](#b-6-A) be approved by the National Committee for Quality Assurance (based on [standards](/usc/42/1320d.md?p=7) established by the [Secretary](/usc/42/1301.md?p=a-6)).
  - (8) **Increased integration of dual SNPs—**
    - (A) **Designated contact—** The [Secretary](/usc/42/1301.md?p=a-6), acting through the Federal Coordinated Health Care [Office](/usc/42/3058f.md?p=1) established under [section 1315b of this title](/usc/42/1315b.md), shall serve as a dedicated point of contact for [States](/usc/42/1397n–12.md?p=6) to address misalignments that arise with the integration of specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](#b-6-B) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii) under this paragraph and, consistent with such role, shall establish—
      - (i) a uniform process for disseminating to [State](/usc/42/1397n–12.md?p=6) Medicaid [agencies](/usc/42/1397n–12.md?p=1) information under this subchapter impacting contracts between such [agencies](/usc/42/1397n–12.md?p=1) and such plans under this subsection; and
      - (ii) basic resources for [States](/usc/42/1397n–12.md?p=6) interested in exploring such plans as a platform for integration, such as a model contract or other tools to achieve those goals.
    - (B) **Unified grievances and appeals process—**
      - (i) **In general—** Not later than April 1, 2020, the [Secretary](/usc/42/1301.md?p=a-6) shall establish procedures, to the extent feasible as determined by the [Secretary](/usc/42/1301.md?p=a-6), unifying grievances and appeals procedures under sections [1395w–22(f)](/usc/42/1395w–22.md?p=f), [1395w–22(g)](/usc/42/1395w–22.md?p=g), [1396a(a)(3)](/usc/42/1396a.md?p=a-3), [1396a(a)(5)](/usc/42/1396a.md?p=a-5), and [1396u–2(b)(4)](/usc/42/1396u–2.md?p=b-4) of this title for items and services provided by specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](#b-6-B) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii) under this subchapter and subchapter XIX. With respect to items and services described in the preceding sentence, procedures established under this clause shall apply in place of otherwise applicable grievances and appeals procedures. The [Secretary](/usc/42/1301.md?p=a-6) shall solicit comment in developing such procedures from [States](/usc/42/1397n–12.md?p=6), plans, beneficiaries and their [representatives](/usc/42/3058f.md?p=5), and other relevant stakeholders.
      - (ii) **Procedures—** The procedures established under [clause (i)](#f-8-B-i) shall be included in the plan contract under [paragraph (3)(D)](#f-3-D) and shall—
        - (I) adopt the provisions for the enrollee that are most protective for the enrollee and, to the extent feasible as determined by the [Secretary](/usc/42/1301.md?p=a-6), are compatible with unified timeframes and consolidated access to external review under an integrated process;
        - (II) take into account differences in [State](/usc/42/1397n–12.md?p=6) plans under subchapter XIX to the extent necessary;
        - (III) be easily navigable by an enrollee; and
        - (IV) include the elements described in [clause (iii)](#f-8-B-iii), as applicable.
      - (iii) **Elements described—** Both unified appeals and unified grievance procedures shall include, as applicable, the following elements described in this clause:
        - (I) [Single](/usc/42/2304.md?p=m) written notification of all applicable grievances and appeal rights under this subchapter and subchapter XIX. For purposes of this subparagraph, the [Secretary](/usc/42/1301.md?p=a-6) may waive the requirements under [section 1395w–22(g)(1)(B) of this title](/usc/42/1395w–22.md?p=g-1-B) when the specialized [MA plan](/usc/42/1395w–101.md?p=a-3-B) covers items or services under this part or under subchapter XIX.
        - (II) [Single](/usc/42/2304.md?p=m) pathways for resolution of any grievance or appeal related to a particular item or service provided by specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](#b-6-B) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii) under this subchapter and subchapter XIX.
        - (III) Notices written in plain language and available in a language and format that is accessible to the enrollee, [including](/usc/42/1301.md?p=b) in non-English languages that are prevalent in the service area of the specialized [MA plan](/usc/42/1395w–101.md?p=a-3-B).
        - (IV) Unified timeframes for grievances and appeals processes, such as an individual’s filing of a grievance or appeal, a plan’s acknowledgment and resolution of a grievance or appeal, and notification of decisions with respect to a grievance or appeal.
        - (V) Requirements for how the plan must process, track, and resolve grievances and appeals, to ensure beneficiaries are notified on a timely basis of decisions that are made throughout the grievance or appeals process and are able to easily determine the status of a grievance or appeal.
      - (iv) **Continuation of benefits pending appeal—** The unified procedures under [clause (i)](#f-8-B-i) shall, with respect to all benefits under parts A and B and subchapter XIX subject to appeal under such procedures, incorporate provisions under current law and implementing [regulations](/usc/42/1395hh.md?p=a-1) that provide continuation of benefits pending appeal under this subchapter and subchapter XIX.
    - (C) **Requirement for unified grievances and appeals—** For 2021 and subsequent years, the contract of a [specialized MA plan for special needs individuals](#b-6-A) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii) with a [State](/usc/42/1397n–12.md?p=6) Medicaid [agency](/usc/42/1397n–12.md?p=1) under [paragraph (3)(D)](#f-3-D) shall require the use of unified grievances and appeals procedures as described in [subparagraph (B)](#f-8-B).
    - (D) **Requirements for integration—**
      - (i) **In general—** For 2021 and subsequent years, a [specialized MA plan for special needs individuals](#b-6-A) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii) shall meet one or more of the following requirements, to the extent permitted under [State](/usc/42/1397n–12.md?p=6) law, for integration of benefits under this subchapter and subchapter XIX:
        - (I) The specialized [MA plan](/usc/42/1395w–101.md?p=a-3-B) must meet the requirements of contracting with the [State](/usc/42/1397n–12.md?p=6) Medicaid [agency](/usc/42/1397n–12.md?p=1) described in [paragraph (3)(D)](#f-3-D) in addition to coordinating long-term services and supports or behavioral health services, or both, by meeting an additional minimum set of requirements determined by the [Secretary](/usc/42/1301.md?p=a-6) through the Federal Coordinated Health Care [Office](/usc/42/3058f.md?p=1) established under [section 1315b of this title](/usc/42/1315b.md) based on input from stakeholders, such as notifying the [State](/usc/42/1397n–12.md?p=6) in a timely manner of [hospitalizations](/usc/42/1301.md?p=a-7), emergency room visits, and [hospital](/usc/42/1395dd.md?p=e-5) or [nursing home](/usc/42/1396g.md?p=e-1) discharges of enrollees, assigning one primary care provider for each enrollee, or sharing data that would benefit the coordination of items and services under this subchapter and the [State](/usc/42/1397n–12.md?p=6) plan under subchapter XIX. Such minimum set of requirements must be included in the contract of the specialized [MA plan](/usc/42/1395w–101.md?p=a-3-B) with the [State](/usc/42/1397n–12.md?p=6) Medicaid [agency](/usc/42/1397n–12.md?p=1) under such paragraph.
        - (II) The specialized [MA plan](/usc/42/1395w–101.md?p=a-3-B) must meet the requirements of a fully integrated plan described in [section 1395w–23(a)(1)(B)(iv)(II) of this title](/usc/42/1395w–23.md?p=a-1-B-iv-II) (other than the requirement that the plan have similar average levels of frailty, as determined by the [Secretary](/usc/42/1301.md?p=a-6), as the PACE [program](/usc/42/274l–1.md?p=4)), or enter into a capitated contract with the [State](/usc/42/1397n–12.md?p=6) Medicaid [agency](/usc/42/1397n–12.md?p=1) to provide long-term services and supports or behavioral health services, or both.
        - (III) In the case of a specialized [MA plan](/usc/42/1395w–101.md?p=a-3-B) that is offered by a [parent](/usc/42/1396a.md?p=k-3) organization that is also the [parent](/usc/42/1396a.md?p=k-3) organization of a [Medicaid managed care organization](/usc/42/1396b.md?p=m-1-A) providing long term services and supports or behavioral services under a contract under [section 1396b(m) of this title](/usc/42/1396b.md?p=m), the [parent](/usc/42/1396a.md?p=k-3) organization must assume clinical and financial responsibility for benefits provided under this subchapter and subchapter XIX with respect to any individual who is enrolled in both the specialized [MA plan](/usc/42/1395w–101.md?p=a-3-B) and the [Medicaid managed care organization](/usc/42/1396b.md?p=m-1-A).
      - (ii) **Suspension of enrollment for failure to meet requirements during initial period—** During the period of plan years 2021 through 2025, if the [Secretary](/usc/42/1301.md?p=a-6) determines that a [specialized MA plan for special needs individuals](#b-6-A) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii) has failed to comply with [clause (i)](#f-8-D-i), the [Secretary](/usc/42/1301.md?p=a-6) may provide for the application against the Medicare Advantage organization offering the plan of the remedy described in [section 1395w–27(g)(2)(B) of this title](/usc/42/1395w–27.md?p=g-2-B) in the same manner as the [Secretary](/usc/42/1301.md?p=a-6) may apply such remedy, and in accordance with the same procedures as would apply, in the case of an MA organization determined by the [Secretary](/usc/42/1301.md?p=a-6) to have engaged in conduct described in [section 1395w–27(g)(1) of this title](/usc/42/1395w–27.md?p=g-1). If the [Secretary](/usc/42/1301.md?p=a-6) applies such remedy to a Medicare Advantage organization under the preceding sentence, the organization shall submit to the [Secretary](/usc/42/1301.md?p=a-6) (at a time, and in a form and manner, specified by the [Secretary](/usc/42/1301.md?p=a-6)) information describing how the plan will come into compliance with [clause (i)](#f-8-D-i).
    - (E) **Study and report to Congress—**
      - (i) **In general—** Not later than March 15, 2022, and, subject to clause (iii), biennially thereafter through 2032, the Medicare Payment Advisory [Commission](/usc/42/2000ff.md?p=1) established under [section 1395b–6 of this title](/usc/42/1395b–6.md), in consultation with the Medicaid and CHIP Payment and Access [Commission](/usc/42/2000ff.md?p=1) established under [section 1396 of this title](/usc/42/1396.md), shall conduct (and submit to the [Secretary](/usc/42/1301.md?p=a-6) and the Committees on Ways and Means and [Energy](/usc/42/6311.md?p=7) and [Commerce](/usc/42/6311.md?p=7) of the House of [Representatives](/usc/42/3058f.md?p=5) and the Committee on Finance of the Senate a report on) a study to determine how specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](#b-6-B) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii) perform among each other based on data from Healthcare Effectiveness Data and Information Set (HEDIS) quality measures, reported on the plan level, as required under [section 1395w–22(e)(3) of this title](/usc/42/1395w–22.md?p=e-3) (or such other measures or data sources that are available and appropriate, such as encounter data and Consumer Assessment of Healthcare Providers and Systems data, as specified by such [Commissions](/usc/42/2000ff.md?p=1) as enabling an accurate evaluation under this subparagraph). Such study shall include, as feasible, the following comparison groups of specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](#b-6-B) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii):
        - (I) A comparison group of such plans that are described in [subparagraph (D)(i)(I)](#f-8-D-i-I).
        - (II) A comparison group of such plans that are described in [subparagraph (D)(i)(II)](#f-8-D-i-II).
        - (III) A comparison group of such plans operating within the Financial Alignment [Initiative](/usc/42/19131.md?p=1) demonstration for the period for which such plan is so operating and the demonstration is in effect, and, in the case that an integration option that is not with respect to specialized [MA plans](/usc/42/1395w–101.md?p=a-3-B) for [special needs individuals](#b-6-B) is established after the conclusion of the demonstration involved.
        - (IV) A comparison group of such plans that are described in [subparagraph (D)(i)(III)](#f-8-D-i-III).
        - (V) A comparison group of [MA plans](/usc/42/1395w–101.md?p=a-3-B), as feasible, not described in a previous subclause of this clause, with respect to the performance of such plans for enrollees who are [special needs individuals](#b-6-B) described in [subsection (b)(6)(B)(ii)](#b-6-B-ii).
      - (ii) **Additional reports—** Beginning with 2033 and every five years thereafter, the Medicare Payment Advisory [Commission](/usc/42/2000ff.md?p=1), in consultation with the Medicaid and CHIP Payment and Access [Commission](/usc/42/2000ff.md?p=1), shall conduct a study described in [clause (i)](#f-8-E-i).
  - (9) **List of conditions for clarification of the definition of a severe or disabling chronic conditions specialized needs individual—**
    - (A) **In general—** Not later than December 31, 2020, and every 5 years thereafter, subject to subparagraphs [(B)](#f-9-B) and [(C)](#f-9-C), the [Secretary](/usc/42/1301.md?p=a-6) shall convene a [panel](/usc/42/10362.md?p=16) of clinical advisors to establish and update a list of conditions that meet each of the following criteria:
      - (i) Conditions that meet the definition of a severe or disabling chronic condition under [subsection (b)(6)(B)(iii)](#b-6-B-iii) on or after January 1, 2022.
      - (ii) Conditions that require prescription [drugs](/usc/42/1395x.md?p=t-2-A), providers, and models of care that are unique to the specific population of enrollees in a [specialized MA plan for special needs individuals](#b-6-A) described in such subsection on or after such date and—
        - (I) as a result of access to, and enrollment in, such a [specialized MA plan for special needs individuals](#b-6-A), individuals with such condition would have a reasonable expectation of slowing or halting the progression of the disease, improving health outcomes and decreasing overall costs for individuals diagnosed with such condition compared to available options of care other than through such a [specialized MA plan for special needs individuals](#b-6-A); or
        - (II) have a low prevalence in the general population of beneficiaries under this subchapter or a disproportionally high per-beneficiary cost under this subchapter.
    - (B) **Inclusion of certain conditions—** The conditions listed under [subparagraph (A)](#f-9-A) shall include HIV/AIDS, end stage renal disease, and chronic and disabling mental illness.
    - (C) **Requirement—** In establishing and updating the list under [subparagraph (A)](#f-9-A), the [panel](/usc/42/10362.md?p=16) shall take into account the availability of varied benefits, [cost-sharing](/usc/42/18022.md?p=c-3-A), and supplemental benefits under the model described in paragraph (2) of [section 1395w–28(h) of this title](#h), [including](/usc/42/1301.md?p=b) the expansion under [paragraph (1)](#h-1) of such section.
- (g) **Special rules for senior housing facility plans—**
  - (1) **In general—** In the case of a Medicare Advantage senior [housing](/usc/42/1490p–2.md?p=r-3) [facility](/usc/42/11049.md?p=4) plan described in [paragraph (2)](#g-2), notwithstanding any other provision of this part to the contrary and in accordance with [regulations](/usc/42/1395hh.md?p=a-1) of the [Secretary](/usc/42/1301.md?p=a-6), the service area of such plan may be limited to a senior [housing](/usc/42/1490p–2.md?p=r-3) [facility](/usc/42/11049.md?p=4) in a [geographic area](/usc/42/11360.md?p=9).
  - (2) **Medicare Advantage senior housing facility plan described—** For purposes of this subsection, a Medicare Advantage senior [housing](/usc/42/1490p–2.md?p=r-3) [facility](/usc/42/11049.md?p=4) plan is a Medicare Advantage plan that—
    - (A) restricts enrollment of individuals under this part to individuals who reside in a continuing care retirement community (as defined in [section 1395w–22(l)(4)(B)](/usc/42/1395w–22.md?p=l-4-B) of this title);
    - (B) provides [primary care services](/usc/42/1395u.md?p=i-4) onsite and has a ratio of accessible [physicians](/usc/42/1395cc–4.md?p=a-2-E) to beneficiaries that the [Secretary](/usc/42/1301.md?p=a-6) determines is adequate;
    - (C) provides transportation services for beneficiaries to specialty providers outside of the [facility](/usc/42/11049.md?p=4); and
    - (D) has participated (as of December 31, 2009) in a [demonstration project](/usc/42/16281.md?p=d-2) established by the [Secretary](/usc/42/1301.md?p=a-6) under which such a plan was offered for not less than 1 year.
- (h) **National testing of Medicare Advantage Value-Based Insurance Design model—**
  - (1) **In general—** In implementing the Medicare Advantage Value-Based Insurance Design model that is being tested under [section 1315a(b) of this title](/usc/42/1315a.md?p=b), the [Secretary](/usc/42/1301.md?p=a-6) shall revise the testing of the model under such section to cover, effective not later than January 1, 2020, all [States](/usc/42/1397n–12.md?p=6).
  - (2) **Termination and modification provision not applicable until January 1, 2022—** The provisions of [section 1315a(b)(3)(B) of this title](/usc/42/1315a.md?p=b-3-B) shall apply to the Medicare Advantage Value-Based Insurance Design model, [including](/usc/42/1301.md?p=b) such model as revised under [paragraph (1)](#h-1), beginning January 1, 2022, but shall not apply to such model, as so revised, prior to such date.
  - (3) **Funding—** The [Secretary](/usc/42/1301.md?p=a-6) shall allocate [funds](/usc/42/12854.md?p=3) made available under [section 1315a(f)(1) of this title](/usc/42/1315a.md?p=f-1) to design, implement, and evaluate the Medicare Advantage Value-Based Insurance Design model, as revised under [paragraph (1)](#h-1).
- (i) **Program integrity transparency measures—**
  - (1) **Program integrity portal—**
    - (A) **In general—** Not later than 2 years after October 24, 2018, the [Secretary](/usc/42/1301.md?p=a-6) shall, after consultation with stakeholders, establish a secure internet website portal (or other successor technology) that would allow a secure path for communication between the [Secretary](/usc/42/1301.md?p=a-6), [MA plans](/usc/42/1395w–101.md?p=a-3-B) under this part, [prescription drug plans](/usc/42/1395w–154.md?p=d-2) under part D, and an [eligible entity](/usc/42/1397j.md?p=7) with a contract under [section 1395ddd of this title](/usc/42/1395ddd.md) (such as a Medicare [drug](/usc/42/282.md?p=j-1-A-vii) integrity contractor or an entity responsible for carrying out [program](/usc/42/274l–1.md?p=4) integrity activities under this part and part D) for the purpose of enabling through such portal (or other successor technology)—
      - (i) the referral by such plans of substantiated or suspicious activities, as defined by the [Secretary](/usc/42/1301.md?p=a-6), of a [provider of services](/usc/42/1395n.md?p=a-2) ([including](/usc/42/1301.md?p=b) a prescriber) or [supplier](/usc/42/1395x.md?p=d) related to fraud, waste, and [abuse](/usc/42/1397j.md?p=1) for initiating or assisting investigations conducted by the [eligible entity](/usc/42/1397j.md?p=7); and
      - (ii) data sharing among such [MA plans](/usc/42/1395w–101.md?p=a-3-B), [prescription drug plans](/usc/42/1395w–154.md?p=d-2), and the [Secretary](/usc/42/1301.md?p=a-6).
    - (B) **Required uses of portal—** The [Secretary](/usc/42/1301.md?p=a-6) shall disseminate the following information to [MA plans](/usc/42/1395w–101.md?p=a-3-B) under this part and [prescription drug plans](/usc/42/1395w–154.md?p=d-2) under part D through the secure internet website portal (or other successor technology) established under [subparagraph (A)](#i-1-A):
      - (i) Providers of services and [suppliers](/usc/42/1395x.md?p=d) that have been referred pursuant to [subparagraph (A)(i)](#i-1-A-i) during the previous 12-month period.
      - (ii) Providers of services and [suppliers](/usc/42/1395x.md?p=d) who are the subject of an active exclusion under [section 1320a–7 of this title](/usc/42/1320a–7.md) or who are subject to a suspension of payment under this subchapter pursuant to [section 1395y(o)](/usc/42/1395y.md?p=o) of this title or otherwise.
      - (iii) Providers of services and [suppliers](/usc/42/1395x.md?p=d) who are the subject of an active revocation of participation under this subchapter, [including](/usc/42/1301.md?p=b) for not satisfying conditions of participation.
      - (iv) In the case of such a plan that makes a referral under [subparagraph (A)(i)](#i-1-A-i) through the portal (or other successor technology) with respect to activities of substantiated or suspicious activities of fraud, waste, or [abuse](/usc/42/1397j.md?p=1) of a [provider of services](/usc/42/1395n.md?p=a-2) ([including](/usc/42/1301.md?p=b) a prescriber) or [supplier](/usc/42/1395x.md?p=d), if such provider ([including](/usc/42/1301.md?p=b) a prescriber) or [supplier](/usc/42/1395x.md?p=d) has been the subject of an administrative action under this subchapter or subchapter XI with respect to similar activities, a notification to such plan of such action so taken.
    - (C) **Rulemaking—** For purposes of this paragraph, the [Secretary](/usc/42/1301.md?p=a-6) shall, through rulemaking, specify what constitutes substantiated or suspicious activities of fraud, waste, and [abuse](/usc/42/1397j.md?p=1), using guidance such as what is provided in the Medicare [Program](/usc/42/274l–1.md?p=4) Integrity Manual 4.8. In carrying out this subsection, a fraud hotline tip (as defined by the [Secretary](/usc/42/1301.md?p=a-6)) without further evidence shall not be treated as sufficient evidence for substantiated fraud, waste, or [abuse](/usc/42/1397j.md?p=1).
    - (D) **HIPAA compliant information only—** For purposes of this subsection, communications may only occur if the communications are permitted under the Federal regulations (concerning the privacy of [individually identifiable health information](/usc/42/247d–11.md?p=g-1)) promulgated under [section 264(c)](/usc/42/264.md?p=c) of the Health Insurance Portability and Accountability Act of 1996.
  - (2) **Quarterly reports—** Beginning not later than 2 years after October 24, 2018, the [Secretary](/usc/42/1301.md?p=a-6) shall make available to [MA plans](/usc/42/1395w–101.md?p=a-3-B) under this part and [prescription drug plans](/usc/42/1395w–154.md?p=d-2) under part D in a timely manner (but no less frequently than quarterly) and using information submitted to an entity described in [paragraph (1)](#i-1) through the portal (or other successor technology) described in such paragraph or pursuant to [section 1395ddd of this title](/usc/42/1395ddd.md), information on fraud, waste, and [abuse](/usc/42/1397j.md?p=1) schemes and trends in identifying suspicious activity. Information included in each such report shall—
    - (A) include administrative actions, pertinent information related to opioid overprescribing, and other data determined appropriate by the [Secretary](/usc/42/1301.md?p=a-6) in consultation with stakeholders; and
    - (B) be anonymized information submitted by plans without identifying the source of such information.
  - (3) **Clarification—** Nothing in this subsection shall preclude or otherwise affect referrals to the Inspector General of the Department of Health and Human Services or other [law enforcement](/usc/42/1397j.md?p=13) entities.