Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare and Medicaid Programs; Contract Year 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly

B-332904

February 3, 2021

Chair
Ranking Member
Committee on Finance
United States Senate

The Honorable Frank Pallone, Jr.
Chairman
The Honorable Cathy McMorris Rodgers
Ranking Member
Committee on Energy and Commerce
House of Representatives

The Honorable Richard Neal
Chairman
The Honorable Kevin Brady
Republican Leader
Committee on Ways and Means
House of Representatives

Subject: Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare and Medicaid Programs; Contract Year 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) entitled “Medicare and Medicaid Programs; Contract Year 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly” (RIN: 0938-AT97).  We received the rule on January 19, 2021.  It was published in the Federal Register as a final rule on January 19, 2021.  86 Fed. Reg. 5864.  The effective date of the rule is March 22, 2021.

According to CMS, this final rule will revise regulations for the Medicare Advantage (Part C) program, Medicare Prescription Drug Benefit (Part D) program, Medicaid program, Medicare Cost Plan program, and Programs of All-Inclusive Care for the Elderly (PACE) to implement certain sections of the Bipartisan Budget Act of 2018 and the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment—(SUPPORT) for Patients and Communities Act (hereinafter referred to as the SUPPORT Act), enhance the Part C and D programs and the PACE program, codify several existing CMS policies, make required statutory changes, implement other technical changes, and make routine updates.  See generally Pub. L. No. 115-123, 132 Stat. 64 (Feb. 9, 2018); Pub. L. No. 115-271, 132 Stat. 3894 (Oct. 24, 2018).  CMS noted that, as stated in the final rule that appeared in the Federal Register on June 2, 2020, CMS is fulfilling its intention to address the remaining proposals from the February 2020 proposed rule here.  CMS stated, although the provisions adopted in this second final rule will be in effect during 2021, most provisions will apply to coverage beginning January 1, 2022.  CMS also stated that, notwithstanding the foregoing, for proposals from the February 2020 proposed rule that would codify statutory requirements that were already in effect prior to this rule's appearance in the Federal Register, CMS reminds organizations, plan sponsors, and other readers that the statutory provisions apply and will continue to be enforced.  CMS stated further that, similarly, for the proposals from the February 2020 proposed rule that would implement the statutory requirements in sections 2007 and 2008 of the SUPPORT Act, CMS intends to implement these statutory provisions consistent with their effective provisions.

Enclosed is our assessment of CMS’s compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.  If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to the subject matter of the rule, please contact Shari Brewster, Assistant General Counsel, at (202) 512-6398.

Shirley A. Jones
Managing Associate General Counsel

Enclosure

cc:  Calvin E. Dukes II
       Regulations Coordinator
       Department of Health and Human Services

ENCLOSURE

REPORT UNDER 5 U.S.C. § 801(a)(2)(A) ON A MAJOR RULE
ISSUED BY THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
CENTERS FOR MEDICARE & MEDICAID SERVICES,
ENTITLED
“MEDICARE AND MEDICAID PROGRAMS; CONTRACT YEAR 2022 POLICY AND
TECHNICAL CHANGES TO THE MEDICARE ADVANTAGE PROGRAM, MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM, MEDICAID PROGRAM, MEDICARE COST PLAN PROGRAM, AND PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY”
(RIN: 0938-AT97)

(i) Cost-benefit analysis

The Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) prepared a table with a qualitative analysis of the cost and benefits of this final rule.  In addition, CMS prepared an accounting statement showing the savings and costs associated with the provisions of this final rule for calendar years 2022 through 2031.  CMS estimated the annualized savings in 2021 dollars to be between $26.6 million at a 7 percent discount rate to $26.8 million at a 3 percent discount rate.  CMS also estimated the annualized cost in 2021 dollars to be between $23.6 million at a 7 percent discount rate to $23.3 million at a 3 percent discount rate.  CMS stated further that the net annualized savings of this rule will be about $2.9 to $3.4 million per year and the net raw savings over 10 years will be approximately $36.9 million.

(ii) Agency actions relevant to the Regulatory Flexibility Act (RFA), 5 U.S.C. §§ 603-605, 607, and 609

CMS certified that this final rule does not have a significant economic impact on a substantial number of small entities.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. §§ 1532-1535

CMS determined that this final rule is not anticipated to have an unfunded effect on state, local, or tribal governments, in the aggregate, or on the private sector of $156 million or more ($100 million in 1995 dollars, adjusted annually for inflation).

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

According to CMS, in the final rule issued on June 2, 2020, CMS addressed a selection of proposals from a proposed rule issued on February 18, 2020.  See generally 85 Fed. Reg. 33796; 85 Fed. Reg. 9002 (February 2020 Proposed Rule).  CMS stated in this final rule, it is addressing the remaining proposals from the February 2020 Proposed Rule with two exceptions:  1) Maximum Out-of-Pocket Limits for Medicare Parts A and B Services and 2) Service Category Cost Sharing Limits for Medicare Parts A and B Services and per Member per Month Actuarial Equivalence Cost Sharing.  CMS stated that it may address the two remaining proposals from the February 2020 Proposed Rule not included in this final rule in subsequent rulemaking.

According to CMS, it received approximately 667 timely pieces of correspondence containing multiple comments for the provisions implemented within this final rule from the February 2020 Proposed Rule.  CMS stated that comments were submitted by Medicare Advantage (MA) health plans, Part D sponsors, MA enrollee and beneficiary advocacy groups, trade associations, providers, pharmacies and drug companies, states, telehealth and health technology organizations, policy research organizations, actuarial and law firms, MACPAC, MedPAC, and other vendor and professional associations.  CMS also stated that summaries of the public comments received and its responses to those public comments are set forth in the various sections of this final rule under the appropriate headings.  CMS noted that some of the public comments received for the provisions implemented in this final rule were outside of the scope of the proposed rule.  CMS noted further that it did not make any proposals in the February 2020 Proposed Rule on these topics, and as such, these out-of-scope public comments were not addressed in this final rule.

Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501-3520

CMS determined that this final rule contains information collection requirements (ICRs) under the Act.  CMS stated that it will submit the following ICRs to the Office of Management and Budget (OMB) for review:  1) ICRs regarding improvements to care management requirements for special needs plans—OMB Control Number 0938-1296 (CMS-10565); 2) ICRs regarding mandatory drug management programs—OMB Control Number 0938-0964 (CMS-10141);
3) ICRs regarding beneficiaries with history of opioid-related overdose included in drug management programs—OMB Control Number 0938-0964 (CMS-10141); 4) ICRs regarding information on the safe disposal of prescription drugs; 5) ICRs regarding eligibility for medication therapy management programs—OMB Control Number 0938-10396 (CMS-1154); 6) ICRs regarding beneficiaries' education on opioid risks and alternative treatments—OMB Control Number 0938-0964 (CMS-10141); 7) ICRs regarding suspension of pharmacy payments pending investigations of credible allegations of fraud and program integrity transparency measures—OMB Control Number 0938-1383 (CMS-10724) for Medicare Advantage Plans and OMB Control Number 0938-1262 (CMS-10517) for Part D Plans; 8) ICRs regarding beneficiary real time benefit tool—OMB Control Number 0938-0763 (CMS-R-262); 9) ICRs regarding establishing pharmacy performance measure reporting requirements—OMB Control Number 0938-0992 (CMS-10185); and 10) ICRs regarding Programs of All-Inclusive Care for the Elderly—OMB Control Number 0938-0790 (CMS-R-244).  CMS estimated the total annual time burden for these ICRs to be 487,373 hours.  CMS also estimated the total cost in the first year to be $36,617,099 million and $22,964,175 in total cost for subsequent years.

Statutory authorization for the rule

CMS promulgated this final rule pursuant to section 9701 of title 31; and sections 263a, 300e, 300e-5, 300e-9, 405(a), 1302, 1320b-12, 1395, 1395x, 1395y, 1395w-101 through 1395w-152, 1395ff, 1395hh, 1395kk, 1395rr, 1395ww(k), 1395eee, and 1396u-4 of title 42, United States Code.

Executive Order No. 12866 (Regulatory Planning and Review)

CMS determined that this rule is economically significant under the Order as it may result in over $100 million in costs, benefits, or transfers annually. 

Executive Order No. 13132 (Federalism)

CMS determined that this final rule does not impose any substantial costs on state or local governments, preempt state law, or have federalism implications.