81_FR_90451 81 FR 90211 - Medicare Program; Conditions for Coverage for End-Stage Renal Disease Facilities-Third Party Payment

81 FR 90211 - Medicare Program; Conditions for Coverage for End-Stage Renal Disease Facilities-Third Party Payment

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

Federal Register Volume 81, Issue 240 (December 14, 2016)

Page Range90211-90228
FR Document2016-30016

This interim final rule with comment period implements new requirements for Medicare-certified dialysis facilities that make payments of premiums for individual market health plans. These requirements apply to dialysis facilities that make such payments directly, through a parent organization, or through a third party. These requirements are intended to protect patient health and safety; improve patient disclosure and transparency; ensure that health insurance coverage decisions are not inappropriately influenced by the financial interests of dialysis facilities rather than the health and financial interests of patients; and protect patients from mid-year interruptions in coverage.

Federal Register, Volume 81 Issue 240 (Wednesday, December 14, 2016)
[Federal Register Volume 81, Number 240 (Wednesday, December 14, 2016)]
[Rules and Regulations]
[Pages 90211-90228]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30016]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 494

[CMS-3337-IFC]
RIN 0938-AT11


Medicare Program; Conditions for Coverage for End-Stage Renal 
Disease Facilities--Third Party Payment

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

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule with comment period implements new 
requirements for Medicare-certified dialysis facilities that make 
payments of premiums for individual market health plans. These 
requirements apply to dialysis facilities that make such payments 
directly, through a parent organization, or through a third party. 
These requirements are intended to protect patient health and safety; 
improve patient disclosure and transparency; ensure that health 
insurance coverage decisions are not

[[Page 90212]]

inappropriately influenced by the financial interests of dialysis 
facilities rather than the health and financial interests of patients; 
and protect patients from mid-year interruptions in coverage.

DATES: Effective date: These regulations are effective on January 13, 
2017.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on January 11, 2017.

ADDRESSES: In commenting, please refer to file code CMS-3337-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed)
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-3337-IFC, P.O. Box 8010, 
Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-3337-IFC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period. For information on viewing public comments, 
see the beginning of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Lauren Oviatt, (410) 786-4683, for 
issues related to the ESRD Conditions for Coverage.
    Lina Rashid, (301) 492-4103, for issues related to individual 
market health plans.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following Web site as soon as possible after they have been 
received: http://regulations.gov. Follow the search instructions on 
that Web site to view public comments.
    Comments received timely will be also available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Background

A. Statutory and Regulatory Background

1. End-Stage Renal Disease, Medicare, and Medicaid
    End-Stage Renal Disease (ESRD) is a kidney impairment that is 
irreversible and permanent. Dialysis is a process for cleaning the 
blood and removing excess fluid artificially with special equipment 
when the kidneys have failed. People with ESRD require either a regular 
course of dialysis or kidney transplantation in order to live.
    Given the high costs and absolute necessity of transplantation or 
dialysis for people with failed kidneys, Medicare provides health care 
coverage to qualifying individuals diagnosed with ESRD, regardless of 
age, including coverage for kidney transplantation, maintenance 
dialysis, and other health care needs. The ESRD benefit was established 
by the Social Security Amendments of 1972 (Pub. L. 92-603). This 
benefit is not a separate program, but allows qualifying individuals of 
any age to become Medicare beneficiaries and receive coverage. Under 
the statute, individuals under 65 who are entitled to Medicare through 
the ESRD program, or individuals over age 65 who are diagnosed with 
ESRD while in Original Medicare, generally cannot enroll in Medicare 
Advantage. Additionally, as access to Medigap policies is generally 
governed by state law, individuals under age 65 who are entitled to 
Medicare through the ESRD program cannot sign up for a Medigap policy 
in many States.\1\
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    \1\ Medigap policies are available to people under age 65 with 
ESRD only in the following states: Colorado, Connecticut, Delaware, 
Florida, Georgia, Hawaii, Illinois, Louisiana, Maine, Maryland, 
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New 
Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, 
Pennsylvania, South Dakota, Tennessee, Texas, Oklahoma, and 
Wisconsin.
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    The ESRD Amendments of 1978 (Pub. L. 95-292), amended title XVIII 
of the Social Security Act (the Act) by adding section 1881 of the Act. 
Section 1881(b)(1) of the Act further authorizes the Secretary of the 
Department of Health and Human Services (the Secretary) to prescribe 
additional requirements (known as conditions for coverage or CfCs) that 
a facility providing dialysis and transplantation services to dialysis 
patients must meet to qualify for Medicare payment.
    Medicare pays for routine maintenance dialysis provided by 
Medicare-certified ESRD facilities, also known as dialysis facilities. 
To gain certification, the State survey agency performs an on-site 
survey of the facility to determine if it meets the ESRD CfCs at 42 CFR 
part 494. If a survey indicates that a facility is in compliance with 
the conditions, and all other Federal requirements are met, CMS then 
certifies the facility as qualifying for Medicare payment. Medicare 
payment for outpatient maintenance dialysis is limited to facilities 
meeting these conditions. The ESRD CfCs were first adopted in 1976 and 
comprehensively revised in 2008 (73 FR 20369). There are approximately 
6,737 Medicare-certified dialysis facilities in the United States, 
providing dialysis services and specialized care to people with ESRD.
    In addition to Medicare, Medicaid provides coverage for some people 
with ESRD. Many individuals enrolled in

[[Page 90213]]

Medicare may also qualify for full benefits under the Medicaid program 
on the basis of their income, receipt of Supplemental Security Income, 
being determined medically-needy, or other eligibility categories under 
the State Plan. In addition, low income individuals enrolled in 
Medicare may qualify for the Medicare Savings Program under which the 
state's Medicaid program covers some or all of the individual's 
Medicare premiums and, for some individuals, Medicare cost-sharing. 
Finally, some individuals who are not eligible for enrollment in 
Medicare may qualify for Medicaid.
    According to data published by the United States Renal Data System 
(USRDS), Medicare is the predominant payer of ESRD services in the 
United States, covering (as primary or secondary payer) about 88 
percent of the United States ESRD patients receiving hemodialysis in 
2014. Among those enrolled in Medicare on the basis of ESRD and 
receiving hemodialysis in 2015, CMS has determined 41 percent were 
enrolled in both Medicare and Medicaid (including full and partial 
duals). Among those enrolled in Medicare on the basis of ESRD under age 
65, 51 percent were dual enrollees.
2. The Affordable Care Act and Health Insurance Exchanges
    The Patient Protection and Affordable Care Act (Pub. L. 111-148) 
was enacted on March 23, 2010. The Health Care and Education 
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and revised 
several provisions of the Patient Protection and the Affordable Care 
Act, was enacted on March 30, 2010. In this interim final rule with 
comment, we refer to the two statutes collectively as the ``Affordable 
Care Act.''
    The Affordable Care Act reorganizes and amends the provisions of 
title XXVII of the Public Health Service Act (PHS Act) relating to 
group health plans and health insurance issuers in the group and 
individual markets. The Affordable Care Act enacted a set of reforms to 
make health insurance coverage more affordable and accessible to 
millions of Americans. These reforms include the creation of 
competitive marketplaces called Affordable Insurance Exchanges, or 
``Exchanges'' through which qualified individuals and qualified 
employers can purchase health insurance coverage.
    In addition, many individuals who enroll in qualified health plans 
(QHPs) through individual market Exchanges are eligible for advance 
payments of the premium tax credit (APTC) to make health insurance 
premiums more affordable, and cost-sharing reduction (CSR) payments to 
reduce out-of-pocket expenses for health care services. Individuals 
enrolled in Medicare or Medicaid are not eligible for APTC or CSRs. The 
Affordable Care Act also established a risk adjustment program and 
other measures that are intended to mitigate the potential impact of 
adverse selection and stabilize the price of health insurance in the 
individual and small group markets.
    The Public Health Service Act, as amended by the Affordable Care 
Act, generally prohibits group health plans and health insurance 
issuers offering group or individual health insurance coverage from 
imposing any preexisting condition exclusions. Health insurers can no 
longer charge different cost sharing or deny coverage to an individual 
because of a pre-existing health condition. Health insurance issuers 
also cannot limit benefits for that condition. The pre-existing 
condition provision does not apply to ``grandfathered'' individual 
health insurance policies.
    Beginning January 1, 2014, the Affordable Care Act prohibited 
insurers in the individual and group markets (with the exception of 
grandfathered individual plans) from imposing pre-existing condition 
exclusions. The Affordable Care Act's prohibition on pre-existing 
condition exclusions enables consumers to access necessary benefits and 
services, beginning from their first day of coverage. The law also 
requires insurance companies to guarantee the availability and 
renewability of non-grandfathered health plans to any applicant 
regardless of his or her health status, subject to certain exceptions. 
It imposes rating restrictions on issuers prohibiting non-grandfathered 
individual and small group market insurance plans from varying premiums 
based on an individual's health status. Issuers of such plans are now 
only allowed to vary premiums based on age, family size, geography, or 
tobacco use.
    In previous rulemaking, CMS outlined major provisions and 
parameters related to many Affordable Care Act programs. This includes 
regulations at 45 CFR 156.1250, which require, among other things, that 
issuers offering individual market QHPs, including stand-alone dental 
plans, and their downstream entities, accept premium payments made on 
behalf of QHP enrollees from the following third party entities (in the 
case of a downstream entity, to the extent the entity routinely 
collects premiums or cost sharing): (1) A Ryan White HIV/AIDS Program 
under title XXVI of the PHS Act; (2) an Indian tribe, tribal 
organization, or urban Indian organization; and (3) a local, state, or 
Federal government program, including a grantee directed by a 
government program to make payments on its behalf. This regulation made 
clear that it did not prevent issuers from contractually prohibiting 
other third party payments. The regulation also reiterated that CMS 
discouraged premium payments and cost sharing assistance by certain 
other entities, including hospitals and other health care providers, 
and discouraged issuers from accepting premium payments from such 
providers.\2\ Regulations at 45 CFR 156.1240 require issuers offering 
individual market QHPs to accept payment from individuals in the form 
of paper checks, cashier's checks, money orders, EFT, and all general-
purpose pre-paid debit cards. Regulations at 45 CFR 147.104 and 156.805 
prohibit issuers from discriminating against or employing marketing 
practices that discriminate against individuals with significant health 
care needs.
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    \2\ Patient Protection and Affordable Care Act; Third Party 
Payment of Qualified Health Plan Premiums; Final Rule, 79 FR 15240 
(March 14, 2014).
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3. Anti-Duplication
    Individuals who are already covered by Medicare generally cannot 
become concurrently enrolled in coverage in the individual market. 
Section 1882(d)(3) of the Act makes it unlawful to sell or issue a 
health insurance policy (including policies issued on and off 
Exchanges) to an individual entitled to benefits under Medicare Part A 
or enrolled under Medicare part B with the knowledge that the policy 
duplicates the health benefits to which the individual is entitled. 
Therefore, while an individual with ESRD is not required to apply for 
and enroll in Medicare, once they become covered by Medicare it is 
unlawful for them to be sold a commercial health insurance policy in 
the individual market if the seller knows the individual market policy 
would duplicate benefits to which the individual is entitled.\3\ CMS 
has, moreover, solicited comments in a recent proposed rulemaking about 
whether it is unlawful in most or all cases to knowingly renew coverage 
under the same circumstances.\4\
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    \3\ As discussed below, these anti-duplication standards--which 
govern the conduct of insurance companies, not health care 
providers--have not prevented inappropriate steering of individuals 
eligible for Medicare to individual market plans.
    \4\ Patient Protection and Affordable Care Act; HHS Notice of 
Benefit and Payment Parameters for 2018; Proposed Rule, 81 FR 61455 
(September 6, 2016).

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[[Page 90214]]

4. HHS Request for Information on Inappropriate Steering of Individuals 
Eligible for or Receiving Medicare and Medicaid Benefits to Individual 
Market Plans
    HHS has recently become concerned about the inappropriate 
``steering'' of individuals eligible for or entitled to Medicare or 
Medicaid into individual market plans. In particular, HHS is concerned 
that because individual market health plans typically provide 
significantly greater reimbursement to health care providers than 
public coverage like Medicare or Medicaid, providers and suppliers may 
be engaged in practices designed to encourage individual patients to 
forego public coverage for which they are eligible and instead enroll 
in an individual market plan.\5\ In other words, health care providers 
may be encouraging individual patients to make coverage decisions based 
on the financial interest of the health care provider, rather than the 
best interests of the individual patient. Further, as one tool to 
influence these coverage decisions, health care providers may be 
offering to pay for, or arrange payment for, the premium for the 
individual market plan.
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    \5\ Throughout this Interim Final Rule with Comment, the term 
``public coverage'' is intended to refer to Medicare and Medicaid, 
not to a group health plan or health insurance purchased in the 
individual market in a state. A qualified health plan (QHP) 
purchased through an Exchange is individual market coverage, not 
public coverage.
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    Based on these concerns, in August 2016, CMS issued a request for 
information (RFI), titled ``Request for Information: Inappropriate 
Steering of Individuals Eligible for or Receiving Medicare and Medicaid 
Benefits to Individual Market Plans'', which published in the Federal 
Register on August 23, 2016, seeking comment from the public regarding 
concerns about health care providers and provider-affiliated 
organizations steering people into coverage that was of financial 
benefit to the provider, without regard to the impact on the patient 
(81 FR 57554). In response to this RFI, we received over 800 public 
comments by the comment closing date of September 22, 2016. Commenters 
included: Patients; providers and provider-affiliated organizations 
involved in the financing of care for patients; health insurance 
companies; social workers who are involved in counseling patients about 
potential health care coverage options; and other stakeholders. While 
commenters discussed patients with a variety of health care needs, the 
overwhelming majority of comments focused on patients with ESRD.
    Comments indicated that dialysis facilities are involving 
themselves in ESRD patients' coverage decisions and that this practice 
is widespread. In addition, all commenters on the topic--including 
insurance companies, dialysis facilities, patients, and non-profit 
organizations--stated that they believe many dialysis facilities are 
paying for or arranging payments for individual market health care 
premiums for patients they serve.
    Comments show that some ESRD patients are satisfied with their 
current premium arrangements. In particular, more than 600 individuals 
currently receiving assistance for premiums participated in a letter 
writing campaign in response to the RFI and stated that charitable 
premium assistance supports patient choice and is valuable to avoid 
relying on ``taxpayer dollars.''
    However, comments also documented a range of concerning practices, 
with providers and suppliers influencing enrollment decisions in ways 
that put the financial interest of the supplier above the needs of 
patients. As explained further below, commenters detailed that dialysis 
facilities benefit financially when individuals enroll in individual 
market health care coverage. Comments also described that, even though 
it is financially beneficial to suppliers, enrollment in individual 
market coverage paid for by dialysis facilities or organizations 
affiliated with dialysis facilities can lead to three types of harm to 
patients: Negatively impacting their determination of readiness for a 
kidney transplant, potentially exposing patients to additional costs 
for health care services, and putting them at significant risk of a 
mid-year disruption in health care coverage. Based on these comments, 
HHS has concluded that the differences between providers' and 
suppliers' financial interests and patients' interests may result in 
providers and suppliers taking actions that put patients' lives and 
wellbeing at risk.

B. Individual Market Coverage Is in the Financial Interest of Dialysis 
Facilities

    All commenters who addressed the issue made clear that enrolling a 
patient in commercial coverage (including coverage in the individual 
market) rather than public coverage like Medicare and/or Medicaid is of 
significant financial benefit to dialysis facilities. For example, one 
comment cited reports from financial analysts estimating that 
commercial coverage generally pays dialysis facilities an average of 
four times more per treatment ($1,000 per treatment in commercial 
coverage, compared to $260 per treatment under public coverage). For a 
specific subset of individual market health plans--QHPs--the analysts 
estimated that the differential could be somewhat smaller, but that 
QHPs would still provide an average of an additional $600 per treatment 
when compared to public coverage. Based on these reports, dialysis 
facilities would be estimated to be paid at least $100,000 more per 
year per patient if a typical patient enrolled in commercial coverage 
rather than public coverage, despite providing the exact same services 
to patients. Another commenter estimated that a dialysis facility would 
earn an additional $234,000 per year per patient by enrolling a patient 
in commercial coverage rather than Medicaid ($312,000 per year rather 
than $78,000 per year). A number of other commenters explained that 
commercial coverage reimburses dialysis facilities at significantly 
higher rates overall. These figures are consistent with other sources 
of data. For example, USRDS data show that for individuals with ESRD 
enrolled in Medicare receiving hemodialysis, health care spending 
averaged $91,000 per individual in 2014, including dialysis and non-
dialysis services. By contrast, using the Truven MarketScan database, a 
widely-used database of health care claims, we estimate that average 
total spending for individuals with ESRD who are enrolled in commercial 
coverage was $187,000 in 2014. In addition, recent filings with a 
federal court by one insurance company concluded that commercial 
coverage could pay more than ten times more per treatment than public 
coverage ($4,000 per treatment rather than $300 per treatment).\6\
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    \6\ Davita encouraged some low-income patients to enroll in 
commercial plans; (Oct 23, 2016). http://www.stltoday.com/business/local/davita-encouraged-some-low-income-patients-to-enroll-in-commercial/article_ec5dc34e-ca4d-52e0-bc26-a3e56e1e2c85.html.
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    As described, the comments in response to the RFI, data related to 
CMS's administration of the risk adjustment program, and registry data 
from the USRDS demonstrate that dialysis facilities can be paid tens or 
even hundreds of thousands of dollars more per patient when patients 
enroll in individual market coverage rather than public coverage. On 
the other hand, the premiums for enrollment in individual market 
coverage average $4,200 per year according to data related to CMS's 
administration of the risk adjustment program. Dialysis facilities 
therefore have much to gain financially (on the order of tens or even 
hundreds of thousands of dollars per patient) by making a relatively 
small outlay to pay

[[Page 90215]]

an individual's premium to enroll in commercial coverage so as to 
receive a much larger payment for providing an identical set of health 
care services. This asymmetry creates a strong financial incentive for 
such providers to use premium payments to steer as many patients as 
possible to commercial plans.
    Commercial coverage pays at higher rates than public coverage for 
many health care services, and therefore this pattern could 
theoretically appear in a variety of contexts. Dialysis patients are, 
however, particularly vulnerable to harmful steering practices for a 
number of reasons. First, ESRD is the only health condition for which 
nearly all patients are eligible to apply for and enroll in Medicare 
coverage and with eligibility linked specifically to the diagnosis. 
Thus, individuals with ESRD face a unique situation where they have 
alternative public coverage options, but these coverage options may be 
less profitable from the perspective of the facilities providing their 
treatment due to lower reimbursement rates. Second, as described above, 
patients with ESRD must receive services from a dialysis facility 
several times per week for the remainder of their lives (unless and 
until they obtain a kidney transplant). This sort of ongoing receipt of 
specialized care from a particular facility is not typical of most 
health conditions and it creates especially strong incentives and 
opportunities for dialysis facilities to influence the coverage 
arrangements of the patients under their care.

C. Individual Market Coverage Supported by Third Parties Places 
Patients at Risk of Harm

    Supporting premium payments to facilitate enrollment of their 
patients in individual market coverage is, as illustrated above, in the 
financial interest of the dialysis facilities. It is often not, 
however, in the best interests of individual patients. The comments in 
response to the RFI illustrated three types of potential harm to 
patients that these arrangements create for ESRD patients: Negatively 
impacting patients' determination of readiness for a kidney transplant, 
potentially exposing patients to additional costs for health care 
services, and putting individuals at significant risk of a mid-year 
disruption in health care coverage.
    While each of these potential harms is itself cause for concern, 
they collectively underscore the complexity of the decision for a 
patient with ESRD of choosing between coverage options, decisions that 
have very significant consequences for these patients in particular. 
The involvement of their providers in incentivizing, and steering them 
to enroll in, individual market coverage is highly problematic absent 
safeguards to ensure both that the individual is making a decision 
fully informed of these complex tradeoffs and that the risk of a mid-
year disruption in health care coverage is eliminated. Each of these 
specific potential harms to the patient is discussed further below.
1. Interference With Transplant Readiness
    Access to kidney transplantation is a major and immediate concern 
for many patients with ESRD; transplantation is the recommended course 
of treatment for individuals with severe kidney disease, and is a life-
saving treatment, as the risk of death for transplant recipients is 
less than half of that for dialysis patients. In addition to improving 
health outcomes, receipt of a transplant can dramatically improve 
patients' quality of life; instead of being required to undergo 
dialysis several times per week, individuals who have received 
transplants are able to resume a more typical pattern of daily life, 
travel, and employment. Of the approximately 700,000 people with ESRD 
in the United States, more than 100,000 are on formal waiting lists to 
receive a kidney transplant. Further, in 2015 more than 80 percent of 
kidney transplants went to patients under age 65, suggesting that 
transplantation is of special concern to nonelderly patients, who are 
most likely to be targeted by dialysis facilities for enrollment in 
individual market coverage because they may not already be enrolled in 
Medicare.
    Therefore, any practice that interferes with patients' ability to 
pursue a kidney transplant is of significant concern. Even a small 
reduction in the likelihood of a patient receiving a transplant would 
be detrimental to a patient's health and wellbeing. The comments in 
response to the RFI support the conclusion that, today, enrollment in 
individual market coverage for which there are third party premium 
payments is hampering patients' ability to be determined ready for a 
kidney transplant. Comments make clear that, consistent with clinical 
guidelines, in order for a transplant center to determine that a 
patient is ready for a transplant, they must conclude that the 
individual will have access to continuous health care coverage. (This 
is necessary to ensure that the patient will have ongoing access to 
necessary monitoring and follow-up care, and to immunosuppressant 
medications, which must typically be taken for the lifetime of a 
transplanted organ to prevent rejection.) However, when individuals 
with ESRD are enrolled in individual market coverage supported by third 
parties, they may have difficulty demonstrating continued access to 
care due to loss of premium support after transplantation. Documents in 
the comment record indicate that major non-profits that receive 
significant financial support from dialysis facilities will support 
payment of health insurance premiums only for patients currently 
receiving dialysis. Documents in the record show that these non-profits 
will not continue to provide financial assistance once a patient 
receives a successful kidney transplant, nor will the non-profit cover 
any costs of the transplant itself, living donor care, post-surgical 
care, post-transplant immunosuppressive therapy, or long-term 
monitoring, which can cause significant issues for patients that cannot 
afford their coverage without financial support. This policy is 
consistent with the conclusion that these third party payments are 
being targeted based on the financial interest of the dialysis 
facilities who contribute to these non-profits, rather than the 
patients' interests. Once a patient has received a transplant, it is no 
longer in the dialysis facility's financial interest to continue to 
support premium payments, although there are severe consequences to 
individuals when that support ceases. If this occurs after 
transplantation, individuals enrolled in individual market coverage 
could be required to pay the full amount of the premium, which may be 
unaffordable for many patients who previously relied on third party 
premium assistance.
    Theoretically, individuals could arrange for Medicare coverage to 
begin at the time of transplantation, thereby demonstrating continued 
access to care. In practice, however, patients struggle to understand 
their coverage options and rapidly navigate the Medicare sign-up 
process during a period where they are particularly sick and preparing 
for major surgery. Some commenters to the RFI emphasized that this is 
an extremely vulnerable group of patients who have difficulty 
navigating their health insurance options. As evidenced by the rate of 
dually eligible individuals discussed above, many ESRD patients are low 
income and have limited access to the resources necessary to navigate 
these sorts of coverage transitions, and patients are particularly 
vulnerable during the short window when they are preparing for 
transplants. Consistent with this, a number of comments describe how 
these arrangements and patients' vulnerability and confusion

[[Page 90216]]

about alternative coverage both pre- and post-transplant have in fact 
interfered with patients' care. For example, one comment describes a 
family that was trying to obtain a transplant for a young child that 
had to arrange other coverage on an emergency basis to obtain their 
child's transplant. The family had allegedly been given inaccurate 
information by a dialysis facility about their coverage options and how 
private health insurance and Medicare would affect their child's 
transplant. Another commenter employed by a transplant facility 
described that ``many'' patients in individual market plans had ``their 
transplant evaluations discontinued or delayed while they worked to 
obtain appropriate and affordable insurance coverage.'' A number of 
other social workers who submitted comments in response to the RFI also 
identified these transplant access issues as a major concern.
2. Exposure to Additional Costs for Health Care Services
    In addition to impeding access to transplants, enrollment in 
individual market coverage, even when third parties cover costs, is 
financially disadvantageous for some patients with ESRD. That is, while 
it is in dialysis facilities' financial interest to support enrollment 
in the individual market, those arrangements may cause financial harms 
to patients that would have been avoided had the patients instead 
enrolled in public coverage.
    People with ESRD often have complex needs and receive care from a 
wide variety of health care providers and suppliers. Data from USRDS 
show that total health care spending per Medicare ESRD enrollee 
receiving hemodialysis averaged more than $91,000 in 2014, but spending 
on hemodialysis is only 32 percent of that amount, meaning that a 
typical patient may incur thousands of dollars in costs for other 
services. While some of the non-dialysis services these patients 
receive may also be provided by their dialysis facilities, half or more 
of Medicare spending on this population is for care that is likely 
delivered by other providers and suppliers, including creation and 
maintenance of vascular access, inpatient hospital care, skilled 
nursing facility services, home health services, palliative services, 
ambulance services, treatment for primary care and comorbid conditions, 
and prescription drugs. Thus, when considering the financial impact of 
coverage decisions, it is important to consider costs that a patient 
will incur for services received that go beyond dialysis.
a. Eligibility for Medicaid
    As described above, many people with ESRD are eligible for 
Medicaid. Indeed, more than half of ESRD Medicare enrollees under age 
65 are also enrolled in Medicaid.\7\ For many Medicaid enrollees, the 
health care costs for which they are financially responsible are 
negligible--and many face no cost-sharing or premiums at all. By 
contrast, consumers in the individual market were responsible for out-
of-pocket costs up to $7,150 in 2017.\8\ As described above, much of 
that out-of-pocket exposure is likely to be incurred outside of the 
dialysis facility so, even if a provider or non-profit covers out-of-
pocket costs related to dialysis, enrolling in an individual market 
plan rather than Medicaid exposes very-low income patients to thousands 
of dollars in out-of-pocket costs.\9\ Indeed, given the Medicaid income 
limits, this cost-sharing is likely to be an extraordinarily large 
fraction of their income. Further, Medicaid includes coverage for 
services not likely to be covered by individual market plans, such as 
non-emergency medical transportation (which can vary based on the state 
or type of Medicaid coverage), and patients will forego these benefits 
if they instead enroll in the individual market. It is possible for an 
individual to be enrolled in both Medicaid and individual market 
coverage,\10\ and Medicaid would, in theory, wrap around the individual 
market plan. Such an arrangement would be of great financial benefit to 
the dialysis facility, but would be unlikely to provide financial 
benefits to the individual (because the individual's cost sharing and 
benefits would often be the same as if they had enrolled only in 
Medicaid). Moreover, in practice, this arrangement creates a 
significant financial risk for low-income individuals, who will need to 
coordinate multiple types of coverage or else could find themselves 
receiving large bills from health care providers and suppliers not 
aware of their Medicaid coverage. Thus, it is very unlikely that it 
would be in such individual's financial interest to elect individual 
market coverage.
---------------------------------------------------------------------------

    \7\ This figure includes both individuals who are fully enrolled 
in Medicare and Medicaid, and individuals enrolled in Medicare and 
the Medicare Saving Program.
    \8\ Patient Protection and Affordable Care Act; HHS Notice of 
Payment and Benefit Parameters for 2017, (March 8, 2016); https://www.thefederalregister.org/fdsys/pkg/FR-2016-09-06/pdf/2016-20896.pdf.
    \9\ Because these individuals are eligible for Medicaid, they 
are generally prohibited from receiving cost-sharing reductions for 
enrolling in coverage through an Exchange.
    \10\ No APTC or CSR would be available to support enrollment in 
the individual market in this circumstance.
---------------------------------------------------------------------------

b. Eligible for Medicare But Not Medicaid
    For individuals with ESRD not eligible for Medicaid, enrolling in 
the individual market rather than Medicare may also pose significant 
financial risks. As noted above, these patients generally require 
access to a wide variety of services received outside of a dialysis 
facility. Patients with ESRD are generally enrolled in Original 
Medicare (including Part A and Part B) and can therefore receive 
services from any Medicare-participating provider or supplier. However, 
unlike Original Medicare, which provides access to a wide range of 
eligible providers and suppliers, and which has standard cost-sharing 
requirements for all Medicare-eligible providers and suppliers, 
individual market plans generally limit access to a set network of 
providers that is more restrictive than what is available to an 
Original Medicare beneficiary. If the individual sees providers or 
suppliers outside of that network, they will incur higher cost-sharing 
for necessary out-of-network services, and may have very limited 
coverage for non-emergency out-of-network health care.
    There may be other personal circumstances that lead to financial 
burden caused by enrolling in an individual market plan rather than 
Medicare. For example, individuals who are entitled to Part A and do 
not enroll in Part B generally will incur a Part B late enrollment 
penalty when they do ultimately enroll in Medicare Part B. Accordingly, 
an individual who enrolls in Part A based on ESRD but does not enroll 
in or drops Part B will generally be subject to a late enrollment 
penalty should they decide to enroll in Part B later while still 
entitled to Part A on the basis of ESRD. Individuals who receive a 
kidney transplant may also face higher cost-sharing for 
immunosuppressant drugs if they delay Medicare enrollment as 
immunosuppressive drugs are covered under Part B only if the transplant 
recipient established Part A effective with the month of the 
transplant.
    As noted above, for some members of this group, there is 
potentially an offsetting financial benefit from individual market 
coverage if total premiums and cost sharing are lower in an individual 
market plan with third party premium assistance than in Medicare. In 
particular, non-grandfathered individual markets plans are required to 
cap total annual out-of-pocket expenditures for essential health 
benefits at a fixed amount, the

[[Page 90217]]

maximum out-of-pocket limit, which is $7,150 in 2017. The individual 
may not be able to cap their annual out-of-pocket expenses in Medicare; 
while individuals over age 65 are eligible to enroll in Medicare 
Advantage or Medigap supplemental plans, which do cap annual expenses, 
individuals under age 65 with ESRD generally do not have such options 
in many states.\11\ However, third party assistance is also frequently 
available to offset out-of-pocket costs for Medicare enrollees. 
Moreover, if dialysis facilities were not providing assistance for 
individual market coverage on such a widespread basis, they might use 
these resources to make assistance for out-of-pocket Medicare costs 
even more widely available.
---------------------------------------------------------------------------

    \11\ Congress recently passed legislation that would allow 
people enrolled in Medicare on the basis of ESRD to select a 
Medicare Advantage plan beginning in 2021.
---------------------------------------------------------------------------

3. Risks of Mid-Year Disruption in Coverage
    Finally, the comments in response to the RFI demonstrate that there 
is a significant risk of mid-year disruptions in coverage for patients/
individuals who have individual market coverage for which third parties 
make premium payments. It is critically important that patients on 
dialysis have continuous access to health care coverage. Prior to 
transplantation this population requires an expensive health care 
service several times per week in order to live; any interruption in 
their access to care is serious and life-threatening. Moreover, as 
noted, this group generally has health care needs beyond dialysis that 
require care from a variety of medical professionals.
    However, the comments reveal that patients/individuals who have 
individual market coverage for which third parties make premium 
payments are presently at risk of having their coverage disrupted at 
any point during the year. CMS does not require that issuers accept 
premium payments made by third parties except in certain circumstances 
consistent with applicable legal requirements,\12\ and CMS has 
consistently discouraged issuers from accepting payments directly from 
health care providers.\13\ Many issuers have provisions in their 
contracts with enrollees that are intended to void the contract if 
payment is made by someone other than the enrollee. Issuers that 
provided comments in response to the RFI confirmed that they do not 
accept certain third party payments. One comment included a list of ten 
states where major issuers are known to reject these payments when 
identified. Comments from health care providers and non-profits 
described that entities that make third party payments to issuers have 
attempted to disguise their payments to circumvent detection by 
issuers. These comments also described how issuers are increasingly 
monitoring for and seeking to identify third party payments, and when 
issuers discover those payments, they are rejected. The lack of 
transparency around third party payments has therefore resulted in a 
situation in which patients are at significant and ongoing risk of 
losing access to coverage based on their issuer detecting payment of 
their premiums by parties other than the enrollee.
---------------------------------------------------------------------------

    \12\ 45 CFR 156.1250 requires issuers to accept third party 
payment from federal, state and local government programs, Ryan 
White/HIV Aids Programs and Indian Tribes, Tribal Organizations, and 
Urban Indian Organizations.
    \13\ Third Party Payments of Premiums for Qualified Health Plans 
in the Marketplaces, November 4, 2013, https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/third-party-qa-11-04-2013.pdf.
---------------------------------------------------------------------------

    When payments are rejected, commenters noted that individuals are 
typically unable to continue their coverage because of the increased 
financial burden. Indeed, patients may not even realize for some period 
that their premiums, which are being paid by third parties, are being 
rejected and that their coverage will be terminated if they do not have 
an ability to pay themselves. HHS received 600 comments from ESRD 
patients participating in a letter-writing campaign that describe the 
adverse impact on patients receiving third party payment premium 
assistance if those funds were no longer available. Other patients who 
commented described significant and unexpected disruptions in coverage 
such as no longer being able to afford the high cost of prescriptions 
and office visit copays, delays receiving dialysis treatments, or no 
longer being able to receive treatments. Due to the life-sustaining 
nature of dialysis, dialysis facilities are not permitted to 
involuntarily discharge patients, except in very limited circumstances. 
However, one of those circumstances is lack of payment (42 CFR 494.180 
(f)(1)). While we believe that such discharges are rare, and that 
dialysis facilities try to avoid them, they are permitted. Moreover, 
even when patients are able to enroll in other public coverage (which 
may have retroactive effective dates) disruptions in coverage still 
force patients to navigate a complicated set of coverage options. They 
may face gaps in care or be forced to appeal health care claims. 
Comments emphasized that many ESRD patients are low-income and do not 
have a great deal of familiarity with the health care system, leaving 
them more vulnerable to gaps in coverage. Therefore, any disruption in 
coverage is problematic and can interrupt patient care.
    In sum, the lack of transparency in how these payments are made and 
whether or not they are accepted means that patients are at risk of 
sudden gaps in coverage which may be dangerous to patients' health.

D. Conflict Between Dialysis Facilities' Financial Interest and 
Patients' Interest Has Led to Problematic Steering

    As described above, dialysis facilities have very meaningful 
financial incentives to have their patients enroll in individual market 
coverage rather than public coverage programs. However, enrollments in 
individual market coverage are often not in patients' best interest: It 
can complicate and potentially delay the process for obtaining a kidney 
transplant; is often financially costly for patients, especially when 
they are eligible for Medicaid; and places consumers at risk of a mid-
year coverage disruption. These risks make the task of deciding among 
coverage options complex for ESRD patients. Furthermore, the asymmetry 
between facilities' and patients' interests and information with 
respect to enrollment decisions creates a high likelihood that a 
conflict of interest will develop. Comments submitted in response to 
the RFI support the conclusion that this conflict of interest is 
harming patients, with dialysis facility patients being steered toward 
enrollment in individual market coverage with third party premium 
payments, rather than enrollment in the public coverage for which they 
are likely eligible and which is frequently the better coverage option 
for them.
    Many comments were submitted by social workers or other 
professionals who work or have worked with ESRD patients. Those 
comments describe a variety of ways in which dialysis facilities have 
attempted to influence coverage decisions made by patients or have 
failed to disclose information that is relevant to determining 
consumers' best interest. Specific practices described in comments 
include:
     Facilities engaging in systematic efforts to enroll people 
in the individual market, often targeting Medicaid enrollees, without 
assessing any personal needs. One commenter explained, ``My experience 
was that the provider wanted anyone [who] was Medicaid only to be 
educated about the opportunity to apply for an individual plan. . . . 
The goal was 100%

[[Page 90218]]

education, whether there was an assessed need or not. . . . Valuable 
hours of professional interventions were taken from direct patient care 
concerns and diverted to this.'' Another explained, ``There was a list 
of all Medicaid patients and the insurance management team was 
responsible for documenting why the patient did not switch to an 
individual market plan.'' Comments also described cases in which social 
worker compensation was linked to enrolling patients in individual 
market coverage.
     Patients are not always informed about eligibility for 
Medicare or Medicaid, or the benefits of those programs. For example, 
one social worker explained, ``The patient is frequently not educated 
about the benefits that are available with Medicaid (that is, 
transportation, dental, and other home support services).'' Another 
former social worker said that facility employees ``may not tell 
patients that they could be subject to premium penalties and 
potentially higher out-of-pocket costs than they would have with 
traditional Medicare.'' Another commenter said, ``Enrollment counselors 
offer no information about Medicare eligibility to members. In several 
cases members were not aware that they were Medicare eligible.''
     Patients are sometimes specifically discouraged from 
pursuing Medicare or Medicaid. One commenter said: ``In the transplant 
setting I have seen patients advised to delay in securing Medicare.'' 
Another employee at a dialysis facility relayed the story of a mother 
seeking a transplant for her daughter but being told by a dialysis 
facility not to enroll in Medicare. A transplant facility employee 
explained ``In some circumstances, the patient has been encouraged to 
drop their MediCal (Medicaid) coverage in favor of the individual 
market plan, without having a full understanding of the personal 
financial impact of doing so.''
     Patients are unaware that a dialysis facility is seeking 
to enroll them in the individual market and are not informed of this 
fact by their health care providers. As one commenter said, ``In 
numerous instances, these patients were already admitted at these 
facilities, and interviews have found that many were unaware they had 
insurance, let alone who was providing it.''
     Patients are not informed about how their third party 
premium support is linked to continued receipt of dialysis. For 
example, one comment explained, ``People receiving assistance don't 
realize that if they want a transplant the premiums will no longer get 
paid.''
     Facilities retaliate against social workers who attempt to 
disclose additional information to consumers. One commenter explained 
that they were ``reported to upper management of [dialysis 
corporations] for voicing my concerns of the impact this [enrollment in 
the individual market] will have on patients after transplant.''
     Social workers are concerned that patients' trust in 
health care providers is being manipulated to facilitate individual 
market enrollment. For example, comments explained that insurance 
counselors ``meet often with the patients establishing a relationship 
of trust'' before pursuing individual market enrollment. A commenter 
said, ``Most of us, who have some sophistication in health care 
coverage, are aware of how confusing it is to negotiate the information 
and reach the best decisions. Dialysis patients who may be less 
sophisticated and already highly stressed are vulnerable to being 
steered.'' Another commenter vividly explained, ``Patients . . . are in 
a vulnerable position when they come to a dialysis facility. I hope 
those of you reviewing these comments realize the power disequilibrium 
which exists when a patient is hooked up with needles in their arm, 
lifeblood running through their arms attached to a machine.''
    In addition, HHS's own data and information submitted in response 
to the RFI suggest that this inappropriate steering of patients may be 
accelerating over time. Insurance industry commenters stated that the 
number of enrollees in individual market plans receiving dialysis 
increased 2 to 5 fold in recent years. Based on concerns raised in the 
public comments in response to the RFI, we have reviewed administrative 
data on enrollment of patients with ESRD. Information available from 
the risk adjustment program in the individual market show that between 
2014 and 2015, the number of individual market enrollees with an ESRD 
diagnosis more than doubled.\14\ In some states increases were more 
rapid, with some states seeing more than five times as many patients 
with ESRD in the individual market in 2015 as in 2014. While increased 
enrollment in the individual market among individuals who have ESRD is 
not in itself evidence of inappropriate provider or supplier behavior, 
these changes in enrollment patterns raise concerns that the steering 
behavior commenters described may be becoming increasingly common over 
time.
---------------------------------------------------------------------------

    \14\ Risk adjustment applies to the entire individual market, 
including plans offered on and off an Exchange.
---------------------------------------------------------------------------

E. HHS Is Taking Immediate Regulatory Action To Protect Patients

    In the face of harms like those above, which go to essential 
patient safety and care in life-threatening circumstances, HHS is 
taking immediate regulatory action to prevent harms to patients. As 
described in more detail below, we are establishing new Conditions for 
Coverage standards (CfCs) for dialysis facilities. This standard 
applies to any dialysis facility that makes payments of premiums for 
individual market health plans (in any amount), whether directly, 
through a parent organization (such as a dialysis corporation), or 
through another entity (including by providing contributions to 
entities that make such payments). Dialysis facilities subject to the 
new standard will be required to make patients aware of potential 
coverage options and educate them about the benefits of each to improve 
transparency for consumers. Further, in order to ensure that patients' 
coverage is not disrupted mid-year, facilities must ensure that issuers 
are informed of and have agreed to accept the payments.\15\
---------------------------------------------------------------------------

    \15\ There are two potential ways to prevent mid-year 
disruptions in coverage--either requiring issuers to accept these 
payments or requiring facilities to disclose them and assure 
acceptance. Both would equally promote continuity of coverage for 
consumers. However, requiring issuers to accept payments in these 
circumstances would destabilize the individual market risk pool, a 
position CMS has consistently articulated since 2013, when we 
expressly discouraged issuers from accepting these third party 
payments from providers. The underlying policy considerations have 
not changed and therefore CMS is seeking to prevent mid-year 
disruption by requiring facilities to disclose payments and assure 
acceptance.
---------------------------------------------------------------------------

    This action is consistent with comments from dialysis facilities, 
non-profits, social workers, and issuers that generally emphasized 
disclosure and transparency as important components of a potential 
rulemaking. By focusing on transparency, we believe we can promote 
patients' best interests. CMS remains concerned, however, about the 
extent of the abuses reported. We are considering whether it would be 
appropriate to prohibit third party premium payments for individual 
market coverage completely for people with alternative public coverage. 
Given the magnitude of the potential financial conflict of interest and 
the abusive practices described above, we are unsure if disclosure 
standards will be sufficient to protect patients. We seek comments from 
stakeholders on whether patients would be better off if premium 
payments in this context were more strictly limited. We also seek 
comment on alternative options where

[[Page 90219]]

payments would be prohibited absent a showing that a third party 
payment was in the individual's best interest, and we seek comment on 
what such a showing would require and how it could prevent mid-year 
disruptions in coverage.

II. Provisions of the Interim Final Rule

    Through this Interim Final Rule with comment (IFC) we are 
implementing a number of disclosure requirements for dialysis 
facilities that make payments of premiums for individual market health 
plans, whether directly, through a parent organization, or through 
another entity, to ensure proper protections for those patients. These 
requirements are intended to ensure that patients are able to make 
insurance coverage decisions based on full and accurate information.
    As described in more detail below, we are establishing new CfC 
standards for dialysis facilities. New standards apply to any dialysis 
facility that makes payments of premiums for individual market health 
plans (in any amount), whether directly, through a parent organization 
(such as a dialysis corporation), or through another entity (including 
by providing contributions to entities that make such payments). While 
we remain concerned about any type of financial assistance that could 
be used to influence patients' coverage decisions, we believe these 
individual market premium payments are particularly prone to abuse 
because they are so closely tied to the type of coverage an individual 
selects. Further, as described above, such third party payments in the 
individual market uniquely put patients at risk of mid-year coverage 
disruption if their issuer discovers and rejects such payments. 
Dialysis facilities subject to the new standards will be required to 
make patients aware of potential coverage options and educate them 
about certain benefits and risks of each. Further, in order to ensure 
that patients' coverage is not disrupted mid-year, dialysis facilities 
must ensure that issuers are informed of and have agreed to accept such 
payments for the duration of the plan year.

A. Disclosures to Consumers: Patients' Right To Be Informed of Coverage 
Options and Third Party Premium Payments (42 CFR 494.70(c))

    In order to increase awareness of health coverage options for 
individuals receiving maintenance dialysis in Medicare-certified 
dialysis facilities, we are establishing a new patient rights standard 
under the CfCs at 42 CFR 494.70(c). This new standard applies only to 
those facilities that make payments of premiums for individual market 
health plans (in any amount), whether directly, through a parent 
organization (such as a dialysis corporation), or through another 
entity (including by providing contributions to entities that make such 
payments).
    Dialysis facilities that do not make premium payments, and do not 
make financial contributions to other entities that make such payments, 
are not subject to the new requirements.\16\ We recognize that dialysis 
facilities make charitable contributions to a variety of groups and 
causes. This rule applies only to those dialysis facilities that make 
payments of premiums for individual market health plans, whether 
directly, through a parent organization, or through another entity.
---------------------------------------------------------------------------

    \16\ A facility that makes payments of premiums for individual 
market coverage of its patients must comply with this standard. 
Similarly, a facility that makes a financial contribution to another 
organization, that is able to use the funds to make payments of 
premiums for individual market coverage of some dialysis patients 
must also comply, even when the contributions from the facility are 
not directly linked to the premium payments; we note, moreover, that 
mere recitation on a check that a contribution cannot be used for 
premium payments would not establish that an organization is unable 
to use the contribution for such payments. Further, an entity that 
makes contributions through a third party that in turn contributes 
to an entity that is able to use the contribution to make third 
party premium payments will still be subject to these standards. In 
contrast, a facility that does not make payments of premiums for 
individual market coverage and does not contribute to any 
organization that makes such payments, but does contribute to an 
organization that supports premiums for Medicare enrollment, would 
not be required to comply with this standard.
---------------------------------------------------------------------------

    At Sec.  494.70(c)(1), we detail the health insurance information 
that must be provided to all patients served by applicable facilities. 
These requirements establish that such information must cover how plans 
in the individual market will affect the patient's access to and costs 
for the providers and suppliers, services, and prescription drugs that 
are currently within the individual's care plan, as well as those 
likely to result from other documented health care needs. This must 
include an overview of the health-related and financial risks and 
benefits of the individual market plans available to the patient 
(including plans offered through and outside the Exchange). This 
information must reflect local, current plans, and thus would need to 
be updated at least annually to reflect changes to individual market 
plans. We expect that applicable dialysis facilities will meet this 
requirement by providing the required information upon an individual's 
admittance to the facility, and annually thereafter, on a timely basis 
for each plan year.
    While current costs to the patient are important, information about 
potential future costs related to the current health plan selection 
must also be addressed. In particular, we are requiring that coverage 
of transplantation and associated transplant costs must be included in 
information provided to patients. For example, some plans may not cover 
all costs typically covered by Medicare, such as necessary medical 
expenses for living donors. Kidney transplant patients who want 
Medicare to cover immunosuppressive drugs must have Part A at the time 
of the kidney transplant. Upon enrolling in Part B, Medicare will 
generally cover the immunosuppressive drugs. Therefore, the beneficiary 
must file for Part A no later than the 12th month after the month of 
the kidney transplant. Entitlement to Part A and Part B based on a 
kidney transplant terminates 36 months after the transplant. However, a 
beneficiary who establishes Part A entitlement effective with the month 
of the transplant is eligible for immunosuppressive drug coverage when 
subsequent entitlement to Part B is based on age or disability. 
Facilities must provide information regarding enrollment in Medicare, 
and clearly explain Medicare's benefits to the patient. Facilities must 
also provide individuals with information about Medicaid, including 
State eligibility requirements, and if there is any reason to believe 
the patient may be eligible, clearly explain the State's Medicaid 
benefits, including the Medicare Savings Programs.
    For other potential future effects, the facilities must provide 
information about penalties associated with late enrollment (or re-
enrollment) in Medicare Part B or Part D for those that have Medicare 
Part A as well as potential delays or gaps in coverage. Section 1839(b) 
of the Act outlines the Medicare premium--Part A (for those who are not 
eligible for premium-free Part A) and Part B late enrollment penalty. 
Individuals who do not enroll in Medicare premium--Part A or Medicare 
Part B when first eligible (that is, during their Initial Enrollment 
Period) will have to pay a late enrollment penalty should they decide 
to enroll at a later time. There are certain circumstances in which 
individuals are exempt from the late enrollment penalty, such as those 
who are eligible for Medicare based on Age or Disability, and did not 
enroll when first eligible because they had or have group health plan 
coverage based on their own or spouse's (or a family

[[Page 90220]]

member if Medicare is based on disability) current employment.
    Although an ESRD diagnosis may establish eligibility for Medicare 
regardless of age, it does not make individuals eligible for a Medicare 
Special Enrollment Period or provide relief from the late enrollment 
penalty. Thus, if an individual enrolls in Medicare Part A but does not 
enroll in Part B, or later drops Part B coverage, that individual will 
pay a Part B (and Part D) late enrollment penalty when ultimately 
enrolling, or reenrolling, in Medicare Part B (and Part D). 
Additionally, that individual will need to wait until the Medicare 
General Enrollment Period to apply for Medicare Part B. The General 
Enrollment Period runs from January 1 to March 31 each year, and Part B 
coverage becomes effective July 1 of the same year. Thus, individuals 
could face significant gaps in coverage while waiting for their 
Medicare Part B coverage to become effective. We note that late 
enrollment penalties and statutory enrollment periods do not apply to 
premium-free Part A.
    Information about potential costs to the patient is vitally 
important for patients considering individual market coverage. An 
individual may benefit in the short term by selecting a private health 
plan instead of enrolling in Medicare, but patients must be informed 
that those plans, or the particular costs and benefits of those plans, 
may only exist for a given plan year, and that the individual may be at 
a disadvantage (that is, late enrollment penalties for those that are 
enrolled in Medicare Part A) should they choose to enroll in Medicare 
Part B (or Part D) at a later date.
    At Sec.  494.70(c)(2) and (3), we require that applicable 
facilities provide information to all patients about available premium 
payments for individual market plans and the nature of the facility's 
or parent organization's contributions to such efforts and programs. 
This information must include, but is not limited to, limits on 
financial assistance and other information important for the patient to 
make an informed decision, including the reimbursements for services 
rendered that the facility would receive from each coverage option. For 
example, if premium payments are not guaranteed for an entire plan 
year, or funding is capped at a certain dollar amount, patients must be 
informed of such limits. Facilities also must inform patients if the 
premium payments are contingent on continued use of dialysis services 
or use of a particular facility, and would therefore be terminated in 
the event that the patient receives a successful kidney transplant or 
transfers to a different dialysis facility. Further, facilities must 
disclose to patients all aggregate amounts that support enrollment in 
individual market health plans provided to patients directly, to 
issuers directly, through the facility's parent organization, or 
through third parties.
    As with all patient rights standards for dialysis facilities, the 
information and disclosures required in Sec.  494.70(c) must be 
provided to all patients of applicable facilities, not just those new 
to a facility who have not yet enrolled in Medicare or Medicaid. This 
ensures that all patients are treated fairly and appropriately, and not 
treated differently based on their health care payer, as required by 
CMS regulations at 42 CFR 489.53(a)(2).

B. Disclosures to Issuers (42 CFR 494.180(k))

    In conjunction with these requirements for patient information and 
disclosures, we establish at Sec.  494.180(k), a new standard that 
requires facilities that make payments of premiums for individual 
market health plans, whether directly, through a parent organization, 
or through another entity to ensure that issuers are informed of and 
have agreed to accept the third party payments. Facilities should 
develop reasonable procedures for communicating with health insurance 
issuers in the individual market, and for obtaining and documenting 
that the issuer has agreed to accept such payments. If an issuer does 
not agree to accept the payments for the duration of the plan year, the 
facility shall not make payments of premiums and shall take reasonable 
steps to ensure that such payments are not made by any third parties to 
which the facility contributes.
    These requirements are intended to protect ESRD patients from 
avoidable interruptions in health insurance coverage mid-year by 
ensuring that they have access to full, accurate information about 
health coverage options. We intend to outline expectations for 
compliance in subsequent guidance. This rule does not alter the legal 
obligations or requirements placed on issuers, including with respect 
to the guaranteed availability and renewability requirements of the 
Public Health Service Act and non-discrimination-related regulations 
issued pursuant to the Affordable Care Act.\17\
---------------------------------------------------------------------------

    \17\ See 45 CFR 147.104, 156.225, 156.805.
---------------------------------------------------------------------------

C. Effective Date

    Because we are concerned that patients face risks that are not 
disclosed to them, and that they may be at risk of disruptions in 
coverage on an ongoing basis, we are taking action to ensure greater 
disclosure to consumers and to provide for smooth and continuous access 
to stable coverage when these rules are fully implemented. At the same 
time, we are mindful of the need for dialysis facilities that make 
payments of premiums for individual market health plans, whether 
directly, through a parent organization, or through another entity, to 
develop new procedures to comply with the standards established in this 
rule. Therefore, the requirements in this rule will become effective 
beginning January 13, 2017.
    We note that, in specific circumstances, individuals may not be 
eligible to enroll in Medicare Part A or Part B except during the 
General Enrollment Period, which runs from January 1 to March 31 and 
after which coverage becomes effective on July 1. These individuals may 
experience a temporary disruption in coverage between the effective 
date of the rule and the time when Medicare Part A and/or Part B 
coverage becomes effective. In light of these circumstances, while the 
standards under Sec.  494.180(k) will be effective beginning January 
13, 2017, if a facility is aware of a patient who is not eligible for 
Medicaid and is not eligible to enroll in Medicare Part A and/or Part B 
except during the General Enrollment Period, and the facility is aware 
that the patient intends to enroll in Medicare Part A and/or Part B 
during that period, the standards under Sec.  494.180(k) will not apply 
until July 1, 2017, with respect to payments made for that patient.

III. Waiver of Proposed Rulemaking and Delay in Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule in 
accordance with 5 U.S.C. 553(b) of the Administrative Procedure Act 
(APA) and section 1871(b)(1) of the Social Security Act. The notice of 
proposed rulemaking includes a reference to the legal authority under 
which the rule is proposed, and the terms and substance of the proposed 
rule or a description of the subjects and issues involved. This 
procedure can be waived, however, if an agency finds good cause that a 
notice-and-comment procedure is impracticable, unnecessary, or contrary 
to the public interest and incorporates a

[[Page 90221]]

statement of the finding and its reasons in the rule issued.
    HHS has determined that issuing this regulation as a proposed 
rulemaking, such that it would not become effective until after public 
comments are submitted, considered and responded to in a final rule, 
would be contrary to the public interest and would cause harm to 
patients. Based on the newly available evidence discussed in section I 
of this rule, that is, the responses to the August 2016 RFI, HHS has 
determined that the widespread practice of third parties making 
payments of premiums for individual market coverage places dialysis 
patients at significant risk of three kinds of harms: Having their 
ability to be determined ready for a kidney transplant negatively 
affected, being exposed to additional costs for health care services, 
and being exposed to a significant risk of a mid-year disruption in 
health care coverage. We believe these are unacceptable risks to 
patient health that will be greatly mitigated by this rulemaking, and 
that the delay caused by notice and comment rulemaking would continue 
to put patient health at risk. Given the risk of patient harm, notice 
and comment rulemaking would be contrary to the public interest. 
Therefore, we find good cause to waive notice and comment rulemaking 
and to issue this interim final rule with comment. We are providing a 
30-day public comment period.
    In addition, we ordinarily provide a 60-day delay in the effective 
date of the provisions of a rule in accordance with the APA (5 U.S.C. 
553(d)), which requires a 30-day delayed effective date, and the 
Congressional Review Act (5 U.S.C. 801(a)(3)), which requires a 60-day 
delayed effective date for major rules. However, we can waive the delay 
in the effective date if the Secretary finds, for good cause, that the 
delay is impracticable, unnecessary, or contrary to the public 
interest, and incorporates a statement of the finding and the reasons 
in the rule issued (5 U.S.C. 553(d)(3).
    In addition, the Congressional Review Act (5 U.S.C. 801(a)(3)) 
requires a 60-day delayed effective date for major rules. However, we 
can determine the effective date of the rule if the Secretary finds, 
for good cause, that notice and public procedure is impracticable, 
unnecessary, or contrary to the public interest, and incorporates a 
statement of the finding and the reasons in the rule issued (5 U.S.C. 
808(2)).
    As noted above, for good cause, we have found that notice and 
public procedure is contrary to the public interest. Accordingly, we 
have determined that it is appropriate to issue this regulation with an 
effective date 30 days from the date of publication. As described 
above, we believe patients are currently at risk of harm. Health-
related and financial risks are not fully disclosed to them, and they 
may have their transplant readiness delayed or face additional 
financial consequences because of coverage decisions that are not fully 
explained. Further, consumers are at risk of mid-year coverage 
disruptions. This is the time of year when patients often make 
enrollment decisions, with Open Enrollment in the individual market 
ongoing and General Enrollment Period for certain new enrollees in 
Medicare about to begin on January 1. We have therefore determined that 
the rule will become effective on January 13, 2017 to best protect 
consumers.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. This 
interim final rule with comment contains information collection 
requirements (ICRs) that are subject to review by OMB. A description of 
these provisions is given in the following paragraphs with an estimate 
of the annual burden, summarized in Table 1. In order to fairly 
evaluate whether an information collection should be approved by OMB, 
section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires 
that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of the interim final rule with comment that contain 
ICRs. We generally used data from the Bureau of Labor Statistics to 
derive average labor costs (including a 100 percent increase for fringe 
benefits and overhead) for estimating the burden associated with the 
ICRs.\18\
---------------------------------------------------------------------------

    \18\ See May 2015 Bureau of Labor Statistics, Occupational 
Employment Statistics, National Occupational Employment and Wage 
Estimates at http://www.bls.gov/oes/current/oes_stru.htm.
---------------------------------------------------------------------------

1. ICRs Regarding Patient Rights (Sec.  494.70(c))

    Under Sec.  494.70(c), HHS implements a number of requirements and 
establishes a new patient rights standard for Medicare-certified 
dialysis facilities that make payments of premiums for individual 
market health plans, whether directly, through a parent organization, 
or through another entity, to ensure proper protections for those 
patients. Those applicable facilities will be required, on an annual 
basis, to inform patients of health coverage options available to them, 
including Medicare and Medicaid and locally available individual market 
plans; enrollment periods for both Medicare and the individual market; 
the effects each option will have on the patients access to, and costs 
for the providers and suppliers, services, and prescription drugs that 
are currently within the individual's ESRD plan of care and other 
documented health care needs; coverage and anticipated costs for 
transplant services, including pre- and post-transplant care; any funds 
available to the patient for enrollment in an individual market health 
plan, including but not limited to limitations and any associated risks 
of such assistance; and current information about the facility's, or 
its parent organization's premium payments for patients, or to other 
third parties that make such premium payments to individual market 
health plans for individuals on dialysis.
    We assume that each applicable facility will develop a system to 
educate and inform each ESRD patient of their options and the effects 
of these options. For our purposes, we assume that each facility will 
develop a pamphlet containing information that compares the benefits 
and costs for each locally available individual market plan, Medicare, 
and Medicaid, and display it prominently in their facility. In 
addition, it is assumed that a facility staff such as a health care 
social worker will review the required information with the patient and 
answer any questions.
    There are 6,737 Medicare-certified dialysis facilities. As 
explained later in the regulatory impact analysis section, we estimate 
that approximately 90 percent, or 6,064, facilities make payments of 
premiums for individual market health plans, whether directly, through 
a parent organization, or through another entity, and therefore, will 
need to comply with these disclosure requirements. We estimate

[[Page 90222]]

that approximately 491,500 patients receive services at Medicare-
certified facilities. Therefore, on average, each facility provides 
dialysis services to approximately 73 patients annually. While we 
expect to detail in forthcoming guidance how dialysis facilities may 
comply with these requirements, we are providing an example of one type 
of disclosure, an informational pamphlet, to illustrate potential 
costs. We note, that we expect dialysis facilities will use various 
tools for disclosure including but not limited to informational 
pamphlets, handouts, etc. It is estimated that each facility will 
prepare, on average, a 6-page pamphlet that includes all required 
information. We estimate that an administrative assistant will spend 
approximately 40 hours (at an hourly rate of $37.86) on average to 
research the required information and develop a pamphlet. We estimate 
it will take an administrative manager (at an hourly rate of $91.20) 4 
hours to review the pamphlet. The total annual burden for each facility 
will be 44 hours with an equivalent cost of $1,879.20 ((40 hours x 
$37.86 hourly rate) + (4 hours x $91.20 hourly rate)). In order to 
print the pamphlet, we estimate that it will cost each facility $3.00 
(for a 6-page pamphlet at $0.50 per page). For all 6,064 facilities, 
the total annual burden will be 266,816 hours (44 hours x 6,064 
facilities) with an equivalent cost of approximately $11,395,469 
($1,879.20 annual burden cost x 6,064 facilities) and a total materials 
and printing cost of $1,328,016. It is anticipated that the burden to 
prepare the pamphlet will be lower in subsequent years since all that 
will be needed is to review and update plan information. We estimate 
that an administrative assistant will spend approximately 32 hours (at 
an hourly rate of $37.86) on average to update the information in the 
pamphlet, and it will take an administrative manager (at an hourly rate 
of $91.20) 3 hours to review it. The total annual burden for each 
facility will be 35 hours with an equivalent cost of approximately 
$1,485 ((32 hours x $37.86 hourly rate) + (3 hours x $91.20 hourly 
rate)). The total burden for all facilities will be 212,240 hours (35 
hours x 6,064 facilities) with an equivalent cost of approximately 
$9,005,768 ($1,485.12 annual burden cost x 6,064 facilities).
    In addition to providing a copy of the pamphlet to the patients, it 
is assumed that a health care social worker or other patient assistance 
personnel at each facility will review the information with the 
patients and obtain a signed acknowledgement form stating that the 
patient has received this information. We estimate that a lawyer (at an 
hourly rate of $131.02) will take 30 minutes to develop an 
acknowledgement form confirming that the required information was 
provided to be signed by the ESRD patient. The total burden for all 
6,064 facilities to develop the acknowledgement form in the initial 
year only will be 3,032 hours (0.5 hours x 6,064 facilities) with an 
equivalent cost of approximately $397,253 (($131.02 hourly rate x 0.5 
hours) x 6,064 facilities).
    We estimate that a health care social worker (at an hourly rate of 
$51.94) will take an average of 45 minutes to further educate each 
patient about their coverage options. The social worker will also 
obtain the patient's signature on the acknowledgement form and save a 
copy of the signed form for recordkeeping, incurring a materials and 
printing cost of $0.05 per form. The total annual burden for each 
facility will be 54.75 hours (0.75 hours x 73 patients) with an 
equivalent cost of approximately $2,844 ($51.94 hourly rate x 54.75 
hours), and approximately $4 in printing and materials cost. The total 
annual burden for all 6,064 facilities will be 332,004 hours 54.75 
hours x 6,064 facilities) with an equivalent cost of approximately 
$17,244,288 ($2,843.72 annual burden cost x 6,064 facilities), and 
approximately $22,134 in printing and materials cost.
    We will revise the information collection currently approved under 
OMB Control Number 0938-0386 to account for this additional burden.

2. ICRs Regarding Disclosure of Third Party Premium Payments, or 
Contributions to Such Payments, to Issuers (Sec.  494.180(k))

    Under Sec.  494.180(k), HHS is implementing a requirement for those 
dialysis facilities that make payments of premiums for individual 
market health plans, whether directly, through a parent organization, 
or through another entity, must ensure issuers are informed of and have 
agreed to accept the payments for the duration of the plan year.
    Based on comments received in response to the RFI, it is assumed 
that approximately 7,000 patients that receive such payments are 
enrolled in individual market plans. Therefore, we estimate that 6,064 
facilities will be required to send approximately 7,000 notices. It is 
assumed that these notices will be sent and returned electronically at 
minimal cost. We estimate that, for each facility during the initial 
year, it will take a lawyer one hour (at an hourly rate of $131.02) to 
draft a letter template notifying the issuer of third party payments 
and requesting assurance of acceptance for such payments. The total 
annual burden for all facilities during the initial year will be 6,064 
hours with an equivalent cost of approximately $794,505 ($131.02 x 
6,064 facilities). This is likely to be an overestimation since parent 
organizations will probably develop a single template for all 
individual facilities they own. We further estimate that it will 
require an administrative assistant approximately 30 minutes (at an 
hourly rate of $37.86) to insert customized information and email the 
notification to the issuer, send any follow-up communication, and then 
save copies of the responses for recordkeeping. The total annual burden 
for all facilities for sending the notifications will be 3,500 hours 
(7,000 notifications x 0.5 hours) with an equivalent cost of $132,510 
($37.86 hourly rate x 3,500 hours).
    There are an estimated 468 issuers in the individual market. It is 
assumed that the approximately 7,000 patients are uniformly distributed 
between these issuers. Issuers will incur a burden if they respond to 
the notifications from dialysis facilities and inform them whether or 
not they will accept third party payments. It is estimated that it will 
take a lawyer 30 minutes (at an hourly rate of $131.02) to review the 
notification and an administrative manager 30 minutes (at an hourly 
rate of $91.20) to approve or deny the request and respond to any 
follow-up communication. It will further take an administrative 
assistant approximately 30 minutes (at an hourly rate of $37.86) to 
respond electronically to the initial notification and any follow-up 
communications. The total annual burden for all issuers to respond to 
7,000 notifications will be 10,500 hours (1.5 hours x 7,000 
notifications) with an equivalent cost of $910,280 (10,500 hours x 
$86.69 average hourly rate per notification per issuer).
    We will revise the information collection currently approved under 
OMB Control Number 0938-0386 to account for this additional burden.

[[Page 90223]]



                                       Table 1--Annual Reporting, Recordkeeping and Disclosure Burden: First Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Hourly
                                                                       Burden     Total      labor                      Total capital/
    Regulation section(s)         OMB       Number of    Responses      per       annual    cost of   Total labor cost    maintenance    Total cost ($)
                              control No.  respondents                response    burden   reporting  of reporting ($)    costs  ($)
                                                                      (hours)    (hours)       ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient Rights (Sec.            0938-0386        6,064      442,672         44    266,816     $42.71    $11,395,468.80   $1,328,016.00    $12,723,484.80
 494.70 (c)) 0 Pamphlets....
Patient Rights (Sec.            0938-0386        6,064      442,672       0.75    332,004      51.94     17,244,287.76       22,133.60     17,266,421.36
 494.70 (c))--Patient
 Education and Recordkeeping
Patient Rights (Sec.            0938-0386        6,064        6,064        0.5      3,032     131.02        397,252.64            0.00        397,252.64
 494.70 (c))--
 acknowledgement form.......
Disclosure of Third Party       0938-0386        6,064        6,064          1      6,064     131.02        794,505.28            0.00        794,505.28
 Premium Assistance to
 Issuers (Sec.
 494.180(k))--letter
 template...................
Disclosure of Third Party       0938-0386        6,064        7,000        0.5      3,500      37.86           132,510            0.00           132,510
 Premium Assistance to
 Issuers (Sec.
 494.180(k))--notification
 from facility..............
Disclosure of Third Party       0938-0386          468        7,000        1.5     10,500      86.69           910,280            0.00           910,280
 Premium Assistance to
 Issuers (Sec.
 494.180(k))--issuer
 response...................
                             ---------------------------------------------------------------------------------------------------------------------------
    Total...................  ...........        6,532      911,472      48.25    621,916     481.24     30,874,304.48    1,350,149.60     32,224,454.08
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                    Table 2--Annual Reporting, Recordkeeping and Disclosure Burden: Subsequent Years
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Hourly
                                  OMB                                  Burden     Total      labor    Total labor cost  Total capital/
    Regulation section(s)       control     Number of    Responses      per       annual    cost of     of reporting      maintenance    Total cost  ($)
                                  No.      respondents                response    burden   reporting         ($)          costs  ($)
                                                                      (hours)    (hours)       ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient Rights (Sec.            0938-0386        6,064      442,672         35    212,240     $42.43     $9,005,767.68   $1,328,016.00    $10,333,783.68
 494.70 (c)) 0 Pamphlets....
Patient Rights (Sec.            0938-0386        6,064      442,672       0.75    332,004      51.94     17,244,287.76       22,133.60     17,266,421.36
 494.70 (c))--Patient
 Education and Recordkeeping
Disclosure of Third Party       0938-0386        6,064        7,000        0.5      3,500      37.86        132,510.00            0.00        132,510.00
 Premium Assistance to
 Issuers (Sec.
 494.180(k))--notification
 from facility..............
Disclosure of Third Party       0938-0386          468        7,000        1.5     10,500      86.69        910,280.00            0.00        910,280.00
 Premium Assistance to
 Issuers (Sec.
 494.180(k))--issuer
 response...................
                             ---------------------------------------------------------------------------------------------------------------------------
    Total...................  ...........        6,532      899,344      37.75    558,244     218.93     27,292,845.44    1,350,149.60     28,642,995.04
--------------------------------------------------------------------------------------------------------------------------------------------------------

    If you comment on these information collection requirements, please 
do either of the following:
    1. Submit your comments electronically as specified in the 
ADDRESSES section of this interim final rule with comment; or
    2. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: CMS Desk Officer, 
CMS-3337-IFC. Fax: (202) 395-6974; or Email: 
[email protected].

V. Regulatory Impact Analysis

A. Introduction

    This interim final rule with comment implements a number of 
requirements for Medicare-certified dialysis facilities that make 
payments of premiums for individual market health plans, whether 
directly, through a parent organization, or through another entity. It 
establishes a new patient rights standard applicable only to such 
facilities that they must provide patients with information on 
available health insurance options, including locally available 
individual market plans, Medicare, Medicaid, and CHIP coverage. This 
information must include the effects each option will have on the 
patient's access to, and costs for the providers and suppliers, 
services, and prescription drugs that are currently within the 
individual's ESRD plan of care as well as those likely to result from 
other documented health care needs. This must include an overview of 
the health-related and financial risks and benefits of the individual 
market plans available to the patient (including plans offered through 
and outside the Exchange). Patients must also receive information about 
all available financial assistance for enrollment in an individual 
market health plan and the limitations and associated risks of such 
assistance; including any and all current information about the 
facility's, or its parent organization's contributions to patients or 
third parties that subsidize enrollment in individual market health 
plans for individuals on dialysis.
    In addition, the interim final rule with comment establishes a new 
standard requiring dialysis facilities that make payments of premiums 
for individual market health plans, whether directly, through a parent 
organization, or through another entity, to disclose these payments to 
applicable issuers and requiring the contributing facility to obtain 
assurance from the issuer that the issuer will accept such payments for 
the duration of the plan year.

[[Page 90224]]

    These requirements are intended to ensure that patients are able to 
make coverage decisions based on full, accurate information, and are 
not inappropriately influenced by financial interests of dialysis 
facilities and suppliers, and to minimize the likelihood that coverage 
is interrupted midyear for these vulnerable patients.

B. Statement of Need

    This interim final rule with comment addresses concerns raised by 
commenters and by HHS regarding the inappropriate steering of patients 
with ESRD, especially those eligible for Medicare and Medicaid, into 
individual market health plans that offer significantly higher 
reimbursement rates compared to Medicare and Medicaid, without regard 
to the potential risks incurred by the patient. As discussed previously 
in the preamble, public comments received in response to the August 
2016 RFI indicated that dialysis facilities may be encouraging patients 
to move from one type of coverage into another based solely on the 
financial benefit to the dialysis facility, and without transparency 
about the potential consequences for the patient, in circumstances 
where these actions may result in harm to the individual.\19\ Further, 
enrollment trends indicate that the number of individual market 
enrollees with ESRD more than doubled between 2014 and 2015, which is 
not itself evidence of inappropriate behavior but does raise concerns 
that the steering behavior described by commenters may be becoming 
increasingly common, and without immediate rulemaking patients are at 
considerable risk of harm.
---------------------------------------------------------------------------

    \19\ Individuals who are already covered by Medicare generally 
cannot become enrolled in coverage in the individual market. Section 
1882(d)(3) of the Social Security Act makes it unlawful to sell or 
issue a health insurance policy (including policies issued on and 
off Exchanges) to an individual entitled to benefits under Medicare 
Part A or enrolled under Medicare part B with the knowledge that the 
policy duplicates the health benefits to which the individual is 
entitled. Therefore, while an individual with ESRD is not required 
to apply for and enroll in Medicare, once they become enrolled, it 
is unlawful for them to be sold a commercial health insurance policy 
in the individual market if the seller knows the individual market 
policy would duplicate benefits to which the individual is entitled. 
The financial consequences for patients moving from Medicare to 
private insurance--including late enrollment penalties for 
individuals in Medicare Part A but not Part B if they return to 
Medicare, and lack of coverage for certain drugs following a kidney 
transplant--are routinely not disclosed and may be unknown to 
patients. These financial consequences can have significant impact 
on patient care.
---------------------------------------------------------------------------

    This interim final rule with comment addresses these issues by 
implementing a number of requirements that will provide patients with 
the information they need to make informed decisions about their 
coverage and will help to ensure that their care is not at risk of 
disruptions, gaps in coverage, limited access to necessary treatment, 
or undermined by the providers' or suppliers' financial interests.

C. Overall Impact

    We have examined the effects of this rule as required by Executive 
Order 12866 (58 FR 51735, September 1993, Regulatory Planning and 
Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. 
L. 96-354), section 1102(b) of the Social Security Act, the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on 
Federalism, and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Order 12866 (58 FR 51735) directs agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects; distributive impacts; and equity). Executive 
Order 13563 (76 FR 3821, January 21, 2011) is supplemental to and 
reaffirms the principles, structures, and definitions governing 
regulatory review as established in Executive Order 12866.
    Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a rule--
(1) having an annual effect on the economy of $100 million or more in 
any one year, or adversely and materially affecting a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or state, local or tribal governments or communities 
(also referred to as ``economically significant''); (2) creating a 
serious inconsistency or otherwise interfering with an action taken or 
planned by another agency; (3) materially altering the budgetary 
impacts of entitlement grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order. A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year. 
We estimate that this rulemaking is ``economically significant'' as 
measured by the $100 million threshold, and hence also a major rule 
under the Congressional Review Act. Accordingly, we have prepared an 
RIA that to the best of our ability presents the costs and benefits of 
the rulemaking.

D. Impact Estimates and Accounting Table

    In accordance with OMB Circular A-4, Table 3 below depicts an 
accounting statement summarizing HHS' assessment of the benefits, 
costs, and transfers associated with this regulatory action. The period 
covered by the RIA is 2017 through 2026.
    HHS anticipates that the provisions of this interim final rule with 
comment will enhance patient protections and enable patients with ESRD 
to choose health insurance coverage that best suits their needs and 
improve their health outcomes. Providing patients with accurate 
information will help to ensure that patients are able to obtain 
necessary health care, reduce the likelihood of coverage gaps, as well 
as provide financial protection. Dialysis facilities and issuers will 
incur costs to comply with these requirements. If patients covered 
through individual market plans opt to move to (or return to) Medicare 
and Medicaid, then there will be a transfer of patient care costs to 
the Medicare and Medicaid programs. For those patients covered through 
individual market plans who chose to apply for and enroll in Medicare, 
there would be a transfer of premium payments from individual market 
issuers to the Medicare program. In accordance with Executive Order 
12866, HHS believes that the benefits of this regulatory action justify 
the costs.

                                            Table 3--Accounting Table
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Benefits:
----------------------------------------------------------------------------------------------------------------
Qualitative:
    * Provide patient protections and ensure that patients are able to make coverage decisions based on complete
     and accurate information, and are not inappropriately influenced by the financial interests of dialysis
     facilities.................................................................................................

[[Page 90225]]

 
    * Improve health outcomes for patients by ensuring that patients have coverage that best fits both current
     and future needs, including transplantation services.......................................................
    * Ensure that issuers will accept any premium assistance payments for the duration of the plan year and
     patients' coverage is not interrupted midyear..............................................................
----------------------------------------------------------------------------------------------------------------
Costs:                                               Estimate       Year dollar      Discount         Period
                                                      (millions)                    rate percent         covered
----------------------------------------------------------------------------------------------------------------
    Annualized Monetized........................           $29.1            2016               7       2017-2026
                                                            29.1            2016               3       2017-2026
----------------------------------------------------------------------------------------------------------------
Costs reflect administrative costs incurred by dialysis facilities and issuers to comply with ICRs.
----------------------------------------------------------------------------------------------------------------
Transfers:
    Annualized Monetized........................          $688.4            2016               7       2017-2026
                                                           688.4            2016               3       2017-2016
----------------------------------------------------------------------------------------------------------------
Transfers reflect transfer of patient care costs from individual market issuers to Medicare and Medicaid; out-of-
 pocket costs from dual eligible patients to Medicare and Medicaid; transfer of premium dollars from individual
 market issuers to Medicare; and transfer of reimbursements from dialysis facilities to individual market
 issuers if patients move from individual market plans to Medicare and Medicaid.
----------------------------------------------------------------------------------------------------------------

a. Number of Affected Entities
    There are 6,737 dialysis facilities across the country that are 
certified by Medicare, and an estimated 495,000 patients on dialysis. 
Based on USRDS data for recent years, we estimated that approximately 
99.3 percent or 491,500 patients receive services at Medicare-certified 
facilities. Therefore, each Medicare-certified facility is providing 
services to approximately 73 patients on average annually. As mentioned 
previously, data indicates that about 88 percent of ESRD patients 
receiving hemodialysis were covered by Medicare (as primary or 
secondary payer) in 2014. Data from the CMS risk adjustment program in 
the individual market (both on and off exchange) suggest that the 
number of enrollees with an ESRD diagnosis in the individual market 
more than doubled between 2014 and 2015. Although some of the increase 
could be due to increases in coding intensity and cross-year claims, 
the gross number is still significant and concerning. Comments received 
in response to the RFI suggest that the inappropriate steering of 
patients may be accelerating over time. Insurance industry commenters 
stated that the number of patients in individual market plans receiving 
dialysis increased 2 to 5 fold in recent years. We will continue to 
analyze these data to better understand trends in ESRD diagnoses as 
well as the extent to which individuals may be enrolled in both 
Medicare and individual market plans and implications for the anti-
duplication provision outlined in section 1882(d)(3) of the Act.
    There is no data on how many dialysis facilities make payments of 
premiums for individual market health plans, whether directly, through 
a parent organization, or through another entity. We believe that these 
practices are likely concentrated within large dialysis chains that 
together operate approximately 90 percent of dialysis facilities, and 
therefore estimate that approximately 6,064 facilities make payments of 
premiums for individual market health plans, whether directly, through 
a parent organization, or through another entity.
b. Anticipated Benefits, Costs and Transfers
    This interim final rule with comment implements a number of 
requirements for Medicare-certified dialysis facilities (as defined in 
42 CFR 494.10) that make payments of premiums for individual market 
health plans (in any amount), whether directly, through a parent 
organization (such as a dialysis corporation), or through another 
entity (including by providing contributions to entities that make such 
payments). Such facilities must provide patients with information on 
available health coverage options, including local, current individual 
market plans, Medicare, Medicaid, and CHIP coverage. This information 
must include; the effects each coverage option will have on the 
patient's access to, and costs for, the providers and suppliers, 
services, and prescription drugs that are currently within the 
individual's ESRD plan of care as well as those likely to result from 
other documented health care needs. This must include an overview of 
the health-related and financial risks and benefits of the individual 
market plans available to the patient (including plans offered through 
and outside the Exchange). Information on coverage of transplant-
associated costs must also be provided to patients, including pre- and 
post-transplant care. In addition, facilities must provide information 
about penalties associated with late enrollment in Medicare. Patients 
must also receive information about available financial assistance for 
enrollment in an individual market health plan and limitations and 
associated risks of such assistance; the financial benefit to the 
facility of enrolling the individual in an individual market plan as 
opposed to public plans; and current information about the facility's, 
or its parent organization's contributions to patients or third parties 
that make payments of premiums for individual market plans for 
individuals on dialysis.
    These requirements are intended to ensure that patients are able to 
make insurance coverage decisions based on full, accurate information, 
and not based on misleading, inaccurate, or incomplete information that 
prioritizes providers and suppliers' financial interests. It is likely 
that some patients will elect to apply for and enroll in Medicare and 
Medicaid (if eligible) instead of individual market plans once they are 
provided all the information as required. As previously discussed, 
Medicare (and Medicaid) enrollment will provide health benefits by 
reducing the likelihood of disruption of care, gaps in coverage, 
limited access to necessary treatment, denial of access to kidney 
transplants or delay in transplant readiness, and denial of post-
surgical care. By enrolling in Medicare (and Medicaid), many 
individuals can avoid potential financial loss due to Medicare late 
enrollment penalties; higher cost-sharing, especially for out-of-
network services; higher deductibles; and coverage limits in individual 
market plans. This is particularly true for the individuals eligible 
for Medicare based on ESRD who are also eligible for

[[Page 90226]]

Medicaid. While a patient with individual market coverage could be 
liable for out-of pocket costs of up to $7,150 in 2017, a patient 
dually enrolled in Medicare and Medicaid will have very limited, and in 
many cases no, out-of-pocket costs in addition to a wider range of 
eligible providers and suppliers.
    In addition, this interim final rule with comment establishes a new 
standard, applicable only to facilities that make payments of premiums 
for individual market health plans, whether directly, through a parent 
organization (such as a dialysis corporation), or through another 
entity (including by providing contributions to entities that make such 
payments), requiring that the facility disclose such payments to 
applicable issuers and obtain assurance from the issuer that they will 
accept such payments for the duration of the plan year. This will lead 
to improved health outcomes for patients by ensuring that coverage is 
not interrupted midyear for these vulnerable patients, leaving them in 
medical or financial jeopardy.
    Dialysis facilities that make premium payments for patients as 
discussed above will incur costs to comply with the provisions of this 
rule. The administrative costs related to the disclosure requirements 
have been estimated in the previous section.
    If patients elect to apply for and enroll in Medicare and Medicaid 
(if eligible) instead of individual market plans, the cost of their 
coverage will be transferred from the patients and the individual 
market issuers to the Medicare and Medicaid programs (if the patient is 
eligible for both). This will lead to increased spending for these 
programs. For the purpose of this analysis, we assume that 
approximately 50 percent of patients enrolled in individual market 
plans that receive third party premium payments will elect to apply for 
and enroll in Medicare. USRDS data show that for individuals with ESRD 
enrolled in Medicare receiving hemodialysis, total health care spending 
averaged $91,000 per person in 2014, including dialysis and non-
dialysis services. Therefore, if 3,500 patients switch to Medicare, the 
total transfer from individual market issuers to the Medicare program 
will be approximately $318,500,000. We assume that about 50 percent of 
patients that opt to enroll in Medicare will also be eligible for 
Medicaid and will have negligible or zero cost-sharing, rather than the 
maximum out-of-pocket cost of $7,150, which will be a transfer from the 
patients to the Medicare and Medicaid programs. Therefore, for 1,750 
dual eligible patients, the total transfer is estimated to be 
$12,512,500. For those patients covered through individual market plans 
who choose to enroll in Medicare there will also be a transfer of 
premium payments from the individual market issuers to the Medicare 
program. Assuming that patients will pay the standard Part B premium 
amount, which will be $134 in 2017, and an average Part D premium of 
$42.17,\20\ the total transfer for 3,500 patients is estimated to be 
$7,399,140. In addition, if patients move from individual market plans 
to Medicare, then reimbursements to dialysis facilities will be 
reduced, since individual market plans currently have higher 
reimbursement rates for dialysis services compared to Medicare, 
resulting in a transfer from dialysis facilities to issuers. As 
discussed previously, based on comments received, dialysis facilities 
are estimated to be paid at least $100,000 more per year per patient 
for a typical patient enrolled in commercial coverage rather than 
public coverage. For 3,500 patients, the total transfer from dialysis 
facilities to issuers is estimated to be at least $350,000,000.
---------------------------------------------------------------------------

    \20\ Source: Jack Hoadley et al., Medicare Part D: A First Look 
at Prescription Drug Plans in 2017, Kaiser Family Foundation, 
October 2016, http://kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-prescription-drug-plans-in-2017/.
---------------------------------------------------------------------------

E. Alternatives Considered

    Under the Executive Order, HHS is required to consider alternatives 
to issuing rules and alternative regulatory approaches. HHS considered 
not requiring any additional disclosures to patients. Providing complex 
information regarding available coverage options may not always help 
patients make the best decisions. In addition, disclosure requirements 
may not be as effective where financial conflicts of interest remain 
for the dialysis facilities. We also considered prohibiting outright 
contributions from dialysis suppliers to patients or third parties for 
individual market plan premiums, but determined that we wanted to have 
additional data before implementing additional restrictions. A ban 
could potentially cause financial hardship for some patients. On the 
other hand, dialysis facilities would not be able to use these 
contributions to steer patients towards individual market plans that 
are more in the financial interests of dialysis facilities rather than 
those of the patient. In the absence of additional data, it is not 
possible to estimate the costs, benefits and transfers associated with 
such a ban, whether the benefits would outweigh the costs, and whether 
it would be more effective in ending the practice of steering.
    HHS believes, however, that patients will benefit from having 
complete and accurate information regarding their options, especially 
information on Medicare and Medicaid and the financial and medical/
coverage consequences of each option. In addition, CMS can ensure 
compliance with the disclosure requirements through the survey and 
certification process. CMS plans to issue interpretive guidance and a 
survey protocol for the enforcement of the new standards by state 
surveyors to ensure that the facilities share appropriate information 
with patients.
    We also considered requiring issuers to accept all third party 
premium payments. However, requiring issuers to accept such payments 
could skew the individual market risk pool, a position CMS has 
consistently articulated since 2013, when we expressly discouraged 
issuers from accepting these premium payments from providers. We also 
received comments from issuers, social workers, and others in response 
to the RFI indicating that inappropriate steering practices could have 
the effect of skewing the insurance risk pool. The underlying policy 
considerations have not changed and therefore CMS is seeking to prevent 
mid-year disruption by requiring facilities to disclose payments and 
assure acceptance. In light of the comments received regarding dialysis 
facilities' practices in particular, and the unique health needs and 
coverage options available to this population, we are at this time 
imposing disclosure-related obligations only on the ESRD facilities 
themselves. This rule does not change the legal obligations or 
requirements placed on issuers.
    In addition, to determine whether further action is warranted, we 
seek comments from stakeholders on whether patients would be better off 
on balance if premium assistance originating from health care providers 
and suppliers were more strictly limited and disclosed. We also seek 
comment on alternative options where payments would be limited absent a 
showing that the individual market coverage was in the individual's 
best interest, and we seek comment on what such a showing would require 
and how it could prevent mid-year disruptions in coverage.

F. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the 
Administrative

[[Page 90227]]

Procedure Act (5 U.S.C. 551 et seq.) and that are likely to have a 
significant economic impact on a substantial number of small entities. 
Unless an agency certifies that a rule is not likely to have a 
significant economic impact on a substantial number of small entities, 
section 604 of RFA requires that the agency present a final regulatory 
flexibility analysis describing the impact of the rule on small 
entities and seeking public comment on such impact.
    The RFA generally defines a ``small entity'' as (1) a proprietary 
firm meeting the size standards of the Small Business Administration 
(SBA) (13 CFR 121.201); (2) a nonprofit organization that is not 
dominant in its field; or (3) a small government jurisdiction with a 
population of less than 50,000. (States and individuals are not 
included in the definition of ``small entity.'') HHS uses as its 
measure of significant economic impact on a substantial number of small 
entities a change in revenues of more than 3 to 5 percent.
    Because this provision is issued as a final rule without being 
preceded by a general notice of proposed rulemaking, a final regulatory 
analysis under section 604 of the Regulatory Flexibility Act (94 Stat. 
1167) is not required. Nevertheless, HHS estimates that approximately 
10 percent of Medicare-certified dialysis facilities are not part of a 
large chain and may qualify as small entities. It is not clear how many 
of these facilities make payments of premiums for individual market 
health plans, whether directly, through a parent organization, or 
through another entity. To the extent that they do so, these facilities 
will incur costs to comply with the provisions of this interim final 
rule with comment and experience a reduction in reimbursements if 
patients transfer from individual market coverage to Medicare. However, 
HHS believes that very few small entities, if any, make such payments. 
Therefore, HHS expects that this interim final rule with comment will 
not affect a substantial number of small entities. Accordingly, the 
Secretary certifies that a regulatory flexibility analysis is not 
required.
    In addition, section 1102(b) of the Social Security Act requires 
agencies to prepare a regulatory impact analysis if a rule may have a 
significant economic impact on the operations of a substantial number 
of small rural hospitals. This analysis must conform to the provisions 
of section 604 of the RFA. This interim final rule with comment will 
not affect small rural hospitals. Therefore, HHS has determined that 
this regulation will not have a significant impact on the operations of 
a substantial number of small rural hospitals.

G. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that includes a Federal mandate that could result in 
expenditure in any one year by state, local or tribal governments, in 
the aggregate, or by the private sector, of $100 million in 1995 
dollars, updated annually for inflation. In 2016, that threshold level 
is approximately $146 million.
    UMRA does not address the total cost of a rule. Rather, it focuses 
on certain categories of cost, mainly those ``Federal mandate'' costs 
resulting from--(1) imposing enforceable duties on state, local, or 
tribal governments, or on the private sector; or (2) increasing the 
stringency of conditions in, or decreasing the funding of, state, 
local, or tribal governments under entitlement programs.
    This interim final rule with comment includes no mandates on state, 
local, or tribal governments. Thus, this rule does not impose an 
unfunded mandate on state, local or tribal governments. As discussed 
previously, dialysis facilities that wish to make payments of premiums 
for individual market health plans (in any amount), whether directly, 
through a parent organization (such as a dialysis corporation), or 
through another entity (including by providing contributions to 
entities that make such payments), will incur administrative costs in 
order to comply with the provisions of this interim final rule with 
comment. Issuers will incur some administrative costs as well. However, 
consistent with policy embodied in UMRA, this interim final rule with 
comment has been designed to be the least burdensome alternative for 
state, local and tribal governments, and the private sector.

H. Federalism

    Executive Order 13132 outlines fundamental principles of 
federalism. It requires adherence to specific criteria by Federal 
agencies in formulating and implementing policies that have 
``substantial direct effects'' on the states, the relationship between 
the national government and states, or on the distribution of power and 
responsibilities among the various levels of government.
    This rule does not have direct effects on the states, the 
relationship between the Federal government and states, or on the 
distribution of power and responsibilities among various levels of 
government.

I. Congressional Review Act

    This interim final rule with comment is subject to the 
Congressional Review Act provisions of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.), which 
specifies that before a rule can take effect, the Federal agency 
promulgating the rule shall submit to each House of the Congress and to 
the Comptroller General a report containing a copy of the rule along 
with other specified information, and has been transmitted to the 
Congress and the Comptroller General for review.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 494

    Health facilities, Incorporation by reference, Kidney diseases, 
Medicare, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR Chapter IV as follows:

PART 494--CONDITIONS FOR COVERAGE FOR END-STAGE RENAL DISEASE 
FACILITIES

0
1. The authority citation for part 494 continues to read as follows:

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


0
2. Section 494.70 is amended by redesignating paragraph (c) as 
paragraph (d) and adding a new paragraph (c) to read as follows:


Sec.  494.70   Condition: Patients' rights.

* * * * *
    (c) Standard: Right to be informed of health coverage options. For 
patients of dialysis facilities that make payments of premiums for 
individual market health plans (in any amount), whether directly, 
through a parent organization (such as a dialysis corporation), or 
through another entity (including by providing contributions to 
entities that make such payments), the patient has the right to--
    (1) Be informed annually, on a timely basis for each plan year, of 
all available health coverage options, including but not limited to 
Medicare, Medicaid, CHIP and individual market plans. This must include 
information on:
    (i) How plans in the individual market will affect the patient's 
access to, and costs for the providers and suppliers, services, and 
prescription

[[Page 90228]]

drugs that are currently within the individual's ESRD plan of care as 
well as those likely to result from other documented health care needs. 
This must include an overview of the health-related and financial risks 
and benefits of the individual market plans available to the patient 
(including plans offered through and outside the Exchange).
    (ii) Medicare and Medicaid/Children's Health Insurance Coverage 
(CHIP) coverage, including Medicare Savings Programs, and how 
enrollment in those programs will affect the patient's access to and 
costs for health care providers, services, and prescription drugs that 
are currently within the individual's plan of care.
    (iii) Each option's coverage and anticipated costs associated with 
transplantation, including patient and living donor costs for pre- and 
post-transplant care.
    (2) Receive current information from the facility about premium 
assistance for enrollment in an individual market health plan that may 
be available to the patient from the facility, its parent organization, 
or third parties, including but not limited to limitations and any 
associated risks of such assistance.
    (3) Receive current information about the facility's, or its parent 
organization's, contributions to patients or third parties that 
subsidize the individual's enrollment in individual market health plans 
for individuals on dialysis, including the reimbursements for services 
rendered that the facility receives as a result of subsidizing such 
enrollment.
* * * * *

0
3. Section 494.180 is amended by adding a new paragraph (k) to read as 
follows:


Sec.  494.180   Condition: Governance.

* * * * *
    (k) Standard: Disclosure to Insurers of Payments of Premiums. (1) 
Facilities that make payments of premiums for individual market health 
plans (in any amount), whether directly, through a parent organization 
(such as a dialysis corporation), or through another entity (including 
by providing contributions to entities that make such payments) must--
    (i) Disclose to the applicable issuer each policy for which a third 
party payment described in this paragraph (k) will be made, and
    (ii) Obtain assurance from the issuer that the issuer will accept 
such payments for the duration of the plan year. If such assurances are 
not provided, the facility shall not make payments of premiums and 
shall take reasonable steps to ensure such payments are not made by the 
facility or by third parties to which the facility contributes as 
described in this paragraph (k).
    (2) If a facility is aware that a patient is not eligible for 
Medicaid and is not eligible to enroll in Medicare Part A and/or Part B 
except during the General Enrollment Period, and the facility is aware 
that the patient intends to enroll in Medicare Part A and/or Part B 
during that period, the standards under this paragraph (k) will not 
apply with respect to payments for that patient until July 1, 2017.

    Dated: November 28, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: November 29, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-30016 Filed 12-12-16; 4:15 pm]
BILLING CODE 4120-01-P



                                                              Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                                               90211

                                             J. Executive Order 12898: Federal                           the U.S. House of Representatives, and                              Authority: 42 U.S.C. 7401 et seq.
                                             Actions To Address Environmental                            the Comptroller General of the United                             Dated: December 8, 2016.
                                             Justice in Minority Populations and                         States prior to publication of the rule in
                                                                                                                                                                         Ron Curry,
                                             Low-Income Populations                                      the Federal Register. A major rule
                                                                                                         cannot take effect until 60 days after it                       Regional Administrator, Region 6.
                                                EPA believes the human health or
                                             environmental risk addressed by this                        is published in the Federal Register.                               40 CFR part 81 is amended as follows:
                                             action will not have potential                              This action is not a ‘‘major rule’’ as
                                             disproportionately high and adverse                         defined by 5 U.S.C. 804(2).                                     PART 81—DESIGNATION OF AREAS
                                             human health or environmental effects                          Under section 307(b)(1) of the CAA,                          FOR AIR QUALITY PLANNING
                                             on minority, low-income or indigenous                       petitions for judicial review of this                           PURPOSES
                                             populations. This action merely                             action must be filed in the United States
                                             determines that the HGB area failed to                      Court of Appeals for the appropriate                            ■ 1. The authority citation for part 81
                                             meet an ozone NAAQS attainment                              circuit by February 13, 2017. Filing a                          continues to read as follows:
                                             deadline, reclassifies the area, and sets                   petition for reconsideration by the
                                                                                                         Administrator of this final rule does not                           Authority: 42 U.S.C. 7401 et seq.
                                             the date when a revised SIP is due to
                                             EPA.                                                        affect the finality of this action for the
                                                                                                         purposes of judicial review nor does it                         Subpart SS—Texas
                                                The Congressional Review Act, 5
                                             U.S.C. 801 et seq., as added by the Small                   extend the time within which a petition
                                             Business Regulatory Enforcement                             for judicial review may be filed, and                           ■  2. In § 81.344, the table titled
                                             Fairness Act of 1996, generally provides                    shall not postpone the effectiveness of                         ‘‘Texas—2008 8-Hour Ozone NAAQS
                                             that before a rule may take effect, the                     such rule or action. This action may not                        (Primary and secondary)’’ is amended
                                             agency promulgating the rule must                           be challenged later in proceedings to                           by revising the entry for ‘‘Houston-
                                             submit a rule report, which includes a                      enforce its requirements. (See section                          Galveston-Brazoria, TX’’ to read as
                                             copy of the rule, to each House of the                      307(b)(2).)                                                     follows.
                                             Congress and to the Comptroller General
                                                                                                         List of Subjects in 40 CFR Part 81                              § 81.344      Texas.
                                             of the United States. EPA will submit a
                                             report containing this action and other                       Environmental protection, Air                                 *        *     *       *       *
                                             required information to the U.S. Senate,                    pollution control.

                                                                                                               TEXAS—2008 OZONE NAAQS
                                                                                                                    [Primary and secondary] 2

                                                                                                                                                  Designation                                     Classification
                                                                          Designated area
                                                                                                                                Date 1                       Type                     Date 1                    Type


                                                     *                    *                                *                             *                     *                           *                       *
                                             Houston-Galveston-Brazoria, TX: 2                                             ....................   Nonattainment ...............         1/13/17     Moderate.
                                                Brazoria County
                                                Chambers County
                                                Fort Bend County
                                                Galveston County
                                                Harris County
                                                Liberty County
                                                Montgomery County
                                                Waller County

                                                          *                        *                       *                             *                          *                       *                      *
                                                 1 This   date is July 20, 2012, unless otherwise noted.
                                                 2 Excludes    Indian country located in each area, unless otherwise noted.


                                             *       *        *       *      *                           DEPARTMENT OF HEALTH AND                                        ACTION:      Interim final rule with comment
                                             [FR Doc. 2016–29999 Filed 12–13–16; 8:45 am]                HUMAN SERVICES                                                  period.
                                             BILLING CODE 6560–50–P
                                                                                                         Centers for Medicare & Medicaid                                 SUMMARY:   This interim final rule with
                                                                                                         Services                                                        comment period implements new
                                                                                                                                                                         requirements for Medicare-certified
                                                                                                         42 CFR Part 494                                                 dialysis facilities that make payments of
                                                                                                                                                                         premiums for individual market health
                                                                                                         [CMS–3337–IFC]                                                  plans. These requirements apply to
                                                                                                                                                                         dialysis facilities that make such
                                                                                                         RIN 0938–AT11                                                   payments directly, through a parent
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                                                                                                         Medicare Program; Conditions for                                organization, or through a third party.
                                                                                                         Coverage for End-Stage Renal Disease                            These requirements are intended to
                                                                                                         Facilities—Third Party Payment                                  protect patient health and safety;
                                                                                                                                                                         improve patient disclosure and
                                                                                                         AGENCY: Centers for Medicare &                                  transparency; ensure that health
                                                                                                         Medicaid Services (CMS), HHS.                                   insurance coverage decisions are not


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                                             90212        Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                             inappropriately influenced by the                       Services, Department of Health and                    ESRD, regardless of age, including
                                             financial interests of dialysis facilities              Human Services, 7500 Security                         coverage for kidney transplantation,
                                             rather than the health and financial                    Boulevard, Baltimore, MD 21244–1850.                  maintenance dialysis, and other health
                                             interests of patients; and protect                         If you intend to deliver your                      care needs. The ESRD benefit was
                                             patients from mid-year interruptions in                 comments to the Baltimore address, call               established by the Social Security
                                             coverage.                                               telephone number (410) 786–9994 in                    Amendments of 1972 (Pub. L. 92–603).
                                             DATES: Effective date: These regulations                advance to schedule your arrival with                 This benefit is not a separate program,
                                             are effective on January 13, 2017.                      one of our staff members.                             but allows qualifying individuals of any
                                                Comment date: To be assured                             Comments erroneously mailed to the                 age to become Medicare beneficiaries
                                             consideration, comments must be                         addresses indicated as appropriate for                and receive coverage. Under the statute,
                                             received at one of the addresses                        hand or courier delivery may be delayed               individuals under 65 who are entitled to
                                             provided below, no later than 5 p.m. on                 and received after the comment period.                Medicare through the ESRD program, or
                                             January 11, 2017.                                       For information on viewing public                     individuals over age 65 who are
                                             ADDRESSES: In commenting, please refer
                                                                                                     comments, see the beginning of the                    diagnosed with ESRD while in Original
                                                                                                     SUPPLEMENTARY INFORMATION section.                    Medicare, generally cannot enroll in
                                             to file code CMS–3337–IFC. Because of
                                             staff and resource limitations, we cannot               FOR FURTHER INFORMATION CONTACT:                      Medicare Advantage. Additionally, as
                                             accept comments by facsimile (FAX)                      Lauren Oviatt, (410) 786–4683, for                    access to Medigap policies is generally
                                             transmission.                                           issues related to the ESRD Conditions                 governed by state law, individuals
                                                You may submit comments in one of                    for Coverage.                                         under age 65 who are entitled to
                                             four ways (please choose only one of the                   Lina Rashid, (301) 492–4103, for                   Medicare through the ESRD program
                                             ways listed)                                            issues related to individual market                   cannot sign up for a Medigap policy in
                                                1. Electronically. You may submit                    health plans.                                         many States.1
                                             electronic comments on this regulation                  SUPPLEMENTARY INFORMATION: Inspection                    The ESRD Amendments of 1978 (Pub.
                                             to http://www.regulations.gov. Follow                   of Public Comments: All comments                      L. 95–292), amended title XVIII of the
                                             the ‘‘Submit a comment’’ instructions.                  received before the close of the                      Social Security Act (the Act) by adding
                                                2. By regular mail. You may mail                     comment period are available for                      section 1881 of the Act. Section
                                             written comments to the following                       viewing by the public, including any                  1881(b)(1) of the Act further authorizes
                                             address ONLY: Centers for Medicare &                    personally identifiable or confidential               the Secretary of the Department of
                                             Medicaid Services, Department of                        business information that is included in              Health and Human Services (the
                                             Health and Human Services, Attention:                   a comment. We post all comments                       Secretary) to prescribe additional
                                             CMS–3337–IFC, P.O. Box 8010,                            received before the close of the                      requirements (known as conditions for
                                             Baltimore, MD 21244–8010.                               comment period on the following Web                   coverage or CfCs) that a facility
                                                Please allow sufficient time for mailed              site as soon as possible after they have              providing dialysis and transplantation
                                             comments to be received before the                      been received: http://regulations.gov.                services to dialysis patients must meet
                                             close of the comment period.                            Follow the search instructions on that                to qualify for Medicare payment.
                                                3. By express or overnight mail. You                 Web site to view public comments.                        Medicare pays for routine
                                             may send written comments to the                                                                              maintenance dialysis provided by
                                                                                                        Comments received timely will be
                                             following address ONLY: Centers for                                                                           Medicare-certified ESRD facilities, also
                                                                                                     also available for public inspection as
                                             Medicare & Medicaid Services,                                                                                 known as dialysis facilities. To gain
                                                                                                     they are received, generally beginning
                                             Department of Health and Human                                                                                certification, the State survey agency
                                                                                                     approximately 3 weeks after publication
                                             Services, Attention: CMS–3337–IFC,                                                                            performs an on-site survey of the facility
                                                                                                     of a document, at the headquarters of
                                             Mail Stop C4–26–05, 7500 Security                                                                             to determine if it meets the ESRD CfCs
                                                                                                     the Centers for Medicare & Medicaid
                                             Boulevard, Baltimore, MD 21244–1850.                                                                          at 42 CFR part 494. If a survey indicates
                                                                                                     Services, 7500 Security Boulevard,
                                                4. By hand or courier. Alternatively,                                                                      that a facility is in compliance with the
                                                                                                     Baltimore, Maryland 21244, Monday
                                             you may deliver (by hand or courier)                                                                          conditions, and all other Federal
                                                                                                     through Friday of each week from 8:30
                                             your written comments ONLY to the                                                                             requirements are met, CMS then
                                                                                                     a.m. to 4 p.m. To schedule an
                                             following addresses prior to the close of                                                                     certifies the facility as qualifying for
                                                                                                     appointment to view public comments,
                                             the comment period:                                                                                           Medicare payment. Medicare payment
                                                                                                     phone 1–800–743–3951.
                                                a. For delivery in Washington, DC—                                                                         for outpatient maintenance dialysis is
                                             Centers for Medicare & Medicaid                         I. Background                                         limited to facilities meeting these
                                             Services, Department of Health and                                                                            conditions. The ESRD CfCs were first
                                                                                                     A. Statutory and Regulatory Background
                                             Human Services, Room 445–G, Hubert                                                                            adopted in 1976 and comprehensively
                                             H. Humphrey Building, 200                               1. End-Stage Renal Disease, Medicare,                 revised in 2008 (73 FR 20369). There are
                                             Independence Avenue SW.,                                and Medicaid                                          approximately 6,737 Medicare-certified
                                             Washington, DC 20201                                       End-Stage Renal Disease (ESRD) is a                dialysis facilities in the United States,
                                                (Because access to the interior of the               kidney impairment that is irreversible                providing dialysis services and
                                             Hubert H. Humphrey Building is not                      and permanent. Dialysis is a process for              specialized care to people with ESRD.
                                             readily available to persons without                    cleaning the blood and removing excess                   In addition to Medicare, Medicaid
                                             Federal government identification,                      fluid artificially with special equipment             provides coverage for some people with
                                             commenters are encouraged to leave                      when the kidneys have failed. People                  ESRD. Many individuals enrolled in
                                             their comments in the CMS drop slots                    with ESRD require either a regular                      1 Medigap policies are available to people under
                                             located in the main lobby of the                        course of dialysis or kidney
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                                                                                                                                                           age 65 with ESRD only in the following states:
                                             building. A stamp-in clock is available                 transplantation in order to live.                     Colorado, Connecticut, Delaware, Florida, Georgia,
                                             for persons wishing to retain a proof of                   Given the high costs and absolute                  Hawaii, Illinois, Louisiana, Maine, Maryland,
                                             filing by stamping in and retaining an                  necessity of transplantation or dialysis              Massachusetts, Michigan, Minnesota, Mississippi,
                                                                                                                                                           Missouri, New Hampshire, New Jersey, New York,
                                             extra copy of the comments being filed.)                for people with failed kidneys, Medicare              North Carolina, Oklahoma, Oregon, Pennsylvania,
                                                b. For delivery in Baltimore, MD—                    provides health care coverage to                      South Dakota, Tennessee, Texas, Oklahoma, and
                                             Centers for Medicare & Medicaid                         qualifying individuals diagnosed with                 Wisconsin.



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                                                          Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                                 90213

                                             Medicare may also qualify for full                      (CSR) payments to reduce out-of-pocket                organization; and (3) a local, state, or
                                             benefits under the Medicaid program on                  expenses for health care services.                    Federal government program, including
                                             the basis of their income, receipt of                   Individuals enrolled in Medicare or                   a grantee directed by a government
                                             Supplemental Security Income, being                     Medicaid are not eligible for APTC or                 program to make payments on its behalf.
                                             determined medically-needy, or other                    CSRs. The Affordable Care Act also                    This regulation made clear that it did
                                             eligibility categories under the State                  established a risk adjustment program                 not prevent issuers from contractually
                                             Plan. In addition, low income                           and other measures that are intended to               prohibiting other third party payments.
                                             individuals enrolled in Medicare may                    mitigate the potential impact of adverse              The regulation also reiterated that CMS
                                             qualify for the Medicare Savings                        selection and stabilize the price of                  discouraged premium payments and
                                             Program under which the state’s                         health insurance in the individual and
                                                                                                                                                           cost sharing assistance by certain other
                                             Medicaid program covers some or all of                  small group markets.
                                                                                                        The Public Health Service Act, as                  entities, including hospitals and other
                                             the individual’s Medicare premiums
                                             and, for some individuals, Medicare                     amended by the Affordable Care Act,                   health care providers, and discouraged
                                             cost-sharing. Finally, some individuals                 generally prohibits group health plans                issuers from accepting premium
                                             who are not eligible for enrollment in                  and health insurance issuers offering                 payments from such providers.2
                                             Medicare may qualify for Medicaid.                      group or individual health insurance                  Regulations at 45 CFR 156.1240 require
                                                According to data published by the                   coverage from imposing any preexisting                issuers offering individual market QHPs
                                             United States Renal Data System                         condition exclusions. Health insurers                 to accept payment from individuals in
                                             (USRDS), Medicare is the predominant                    can no longer charge different cost                   the form of paper checks, cashier’s
                                             payer of ESRD services in the United                    sharing or deny coverage to an                        checks, money orders, EFT, and all
                                             States, covering (as primary or                         individual because of a pre-existing                  general-purpose pre-paid debit cards.
                                             secondary payer) about 88 percent of the                health condition. Health insurance                    Regulations at 45 CFR 147.104 and
                                             United States ESRD patients receiving                   issuers also cannot limit benefits for that           156.805 prohibit issuers from
                                             hemodialysis in 2014. Among those                       condition. The pre-existing condition                 discriminating against or employing
                                             enrolled in Medicare on the basis of                    provision does not apply to                           marketing practices that discriminate
                                             ESRD and receiving hemodialysis in                      ‘‘grandfathered’’ individual health                   against individuals with significant
                                             2015, CMS has determined 41 percent                     insurance policies.                                   health care needs.
                                             were enrolled in both Medicare and                         Beginning January 1, 2014, the
                                             Medicaid (including full and partial                    Affordable Care Act prohibited insurers               3. Anti-Duplication
                                             duals). Among those enrolled in                         in the individual and group markets
                                             Medicare on the basis of ESRD under                     (with the exception of grandfathered                     Individuals who are already covered
                                             age 65, 51 percent were dual enrollees.                 individual plans) from imposing pre-                  by Medicare generally cannot become
                                                                                                     existing condition exclusions. The                    concurrently enrolled in coverage in the
                                             2. The Affordable Care Act and Health                   Affordable Care Act’s prohibition on                  individual market. Section 1882(d)(3) of
                                             Insurance Exchanges                                     pre-existing condition exclusions                     the Act makes it unlawful to sell or
                                                The Patient Protection and Affordable                enables consumers to access necessary                 issue a health insurance policy
                                             Care Act (Pub. L. 111–148) was enacted                  benefits and services, beginning from                 (including policies issued on and off
                                             on March 23, 2010. The Health Care and                  their first day of coverage. The law also             Exchanges) to an individual entitled to
                                             Education Reconciliation Act of 2010                    requires insurance companies to                       benefits under Medicare Part A or
                                             (Pub. L. 111–152), which amended and                    guarantee the availability and                        enrolled under Medicare part B with the
                                             revised several provisions of the Patient               renewability of non-grandfathered                     knowledge that the policy duplicates
                                             Protection and the Affordable Care Act,                 health plans to any applicant regardless              the health benefits to which the
                                             was enacted on March 30, 2010. In this                  of his or her health status, subject to               individual is entitled. Therefore, while
                                             interim final rule with comment, we                     certain exceptions. It imposes rating                 an individual with ESRD is not required
                                             refer to the two statutes collectively as               restrictions on issuers prohibiting non-              to apply for and enroll in Medicare,
                                             the ‘‘Affordable Care Act.’’                            grandfathered individual and small                    once they become covered by Medicare
                                                The Affordable Care Act reorganizes                  group market insurance plans from                     it is unlawful for them to be sold a
                                             and amends the provisions of title                      varying premiums based on an
                                             XXVII of the Public Health Service Act                                                                        commercial health insurance policy in
                                                                                                     individual’s health status. Issuers of
                                             (PHS Act) relating to group health plans                                                                      the individual market if the seller
                                                                                                     such plans are now only allowed to vary
                                             and health insurance issuers in the                                                                           knows the individual market policy
                                                                                                     premiums based on age, family size,
                                             group and individual markets. The                       geography, or tobacco use.                            would duplicate benefits to which the
                                             Affordable Care Act enacted a set of                       In previous rulemaking, CMS outlined               individual is entitled.3 CMS has,
                                             reforms to make health insurance                        major provisions and parameters related               moreover, solicited comments in a
                                             coverage more affordable and accessible                 to many Affordable Care Act programs.                 recent proposed rulemaking about
                                             to millions of Americans. These reforms                 This includes regulations at 45 CFR                   whether it is unlawful in most or all
                                             include the creation of competitive                     156.1250, which require, among other                  cases to knowingly renew coverage
                                             marketplaces called Affordable                          things, that issuers offering individual              under the same circumstances.4
                                             Insurance Exchanges, or ‘‘Exchanges’’                   market QHPs, including stand-alone
                                             through which qualified individuals                     dental plans, and their downstream                       2 Patient Protection and Affordable Care Act;

                                             and qualified employers can purchase                    entities, accept premium payments                     Third Party Payment of Qualified Health Plan
                                                                                                                                                           Premiums; Final Rule, 79 FR 15240 (March 14,
                                             health insurance coverage.                              made on behalf of QHP enrollees from                  2014).
                                                In addition, many individuals who                    the following third party entities (in the
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                                                                                                                                                              3 As discussed below, these anti-duplication
                                             enroll in qualified health plans (QHPs)                 case of a downstream entity, to the                   standards—which govern the conduct of insurance
                                             through individual market Exchanges                     extent the entity routinely collects                  companies, not health care providers—have not
                                             are eligible for advance payments of the                premiums or cost sharing): (1) A Ryan                 prevented inappropriate steering of individuals
                                                                                                                                                           eligible for Medicare to individual market plans.
                                             premium tax credit (APTC) to make                       White HIV/AIDS Program under title                       4 Patient Protection and Affordable Care Act; HHS
                                             health insurance premiums more                          XXVI of the PHS Act; (2) an Indian tribe,             Notice of Benefit and Payment Parameters for 2018;
                                             affordable, and cost-sharing reduction                  tribal organization, or urban Indian                  Proposed Rule, 81 FR 61455 (September 6, 2016).



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                                             90214         Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                             4. HHS Request for Information on                          Comments indicated that dialysis                   treatment under public coverage). For a
                                             Inappropriate Steering of Individuals                   facilities are involving themselves in                specific subset of individual market
                                             Eligible for or Receiving Medicare and                  ESRD patients’ coverage decisions and                 health plans—QHPs—the analysts
                                             Medicaid Benefits to Individual Market                  that this practice is widespread. In                  estimated that the differential could be
                                             Plans                                                   addition, all commenters on the topic—                somewhat smaller, but that QHPs would
                                                                                                     including insurance companies, dialysis               still provide an average of an additional
                                                HHS has recently become concerned
                                                                                                     facilities, patients, and non-profit                  $600 per treatment when compared to
                                             about the inappropriate ‘‘steering’’ of
                                                                                                     organizations—stated that they believe                public coverage. Based on these reports,
                                             individuals eligible for or entitled to
                                                                                                     many dialysis facilities are paying for or            dialysis facilities would be estimated to
                                             Medicare or Medicaid into individual
                                                                                                     arranging payments for individual                     be paid at least $100,000 more per year
                                             market plans. In particular, HHS is
                                                                                                     market health care premiums for                       per patient if a typical patient enrolled
                                             concerned that because individual
                                                                                                     patients they serve.                                  in commercial coverage rather than
                                             market health plans typically provide                      Comments show that some ESRD                       public coverage, despite providing the
                                             significantly greater reimbursement to                  patients are satisfied with their current             exact same services to patients. Another
                                             health care providers than public                       premium arrangements. In particular,                  commenter estimated that a dialysis
                                             coverage like Medicare or Medicaid,                     more than 600 individuals currently                   facility would earn an additional
                                             providers and suppliers may be engaged                  receiving assistance for premiums                     $234,000 per year per patient by
                                             in practices designed to encourage                      participated in a letter writing campaign             enrolling a patient in commercial
                                             individual patients to forego public                    in response to the RFI and stated that                coverage rather than Medicaid
                                             coverage for which they are eligible and                charitable premium assistance supports                ($312,000 per year rather than $78,000
                                             instead enroll in an individual market                  patient choice and is valuable to avoid               per year). A number of other
                                             plan.5 In other words, health care                      relying on ‘‘taxpayer dollars.’’                      commenters explained that commercial
                                             providers may be encouraging                               However, comments also documented                  coverage reimburses dialysis facilities at
                                             individual patients to make coverage                    a range of concerning practices, with                 significantly higher rates overall. These
                                             decisions based on the financial interest               providers and suppliers influencing                   figures are consistent with other sources
                                             of the health care provider, rather than                enrollment decisions in ways that put                 of data. For example, USRDS data show
                                             the best interests of the individual                    the financial interest of the supplier                that for individuals with ESRD enrolled
                                             patient. Further, as one tool to influence              above the needs of patients. As                       in Medicare receiving hemodialysis,
                                             these coverage decisions, health care                   explained further below, commenters                   health care spending averaged $91,000
                                             providers may be offering to pay for, or                detailed that dialysis facilities benefit             per individual in 2014, including
                                             arrange payment for, the premium for                    financially when individuals enroll in                dialysis and non-dialysis services. By
                                             the individual market plan.                             individual market health care coverage.               contrast, using the Truven MarketScan
                                                Based on these concerns, in August                   Comments also described that, even                    database, a widely-used database of
                                             2016, CMS issued a request for                          though it is financially beneficial to                health care claims, we estimate that
                                             information (RFI), titled ‘‘Request for                 suppliers, enrollment in individual                   average total spending for individuals
                                             Information: Inappropriate Steering of                  market coverage paid for by dialysis                  with ESRD who are enrolled in
                                             Individuals Eligible for or Receiving                   facilities or organizations affiliated with           commercial coverage was $187,000 in
                                             Medicare and Medicaid Benefits to                       dialysis facilities can lead to three types           2014. In addition, recent filings with a
                                             Individual Market Plans’’, which                        of harm to patients: Negatively                       federal court by one insurance company
                                             published in the Federal Register on                    impacting their determination of                      concluded that commercial coverage
                                             August 23, 2016, seeking comment from                   readiness for a kidney transplant,                    could pay more than ten times more per
                                             the public regarding concerns about                     potentially exposing patients to                      treatment than public coverage ($4,000
                                             health care providers and provider-                     additional costs for health care services,            per treatment rather than $300 per
                                             affiliated organizations steering people                and putting them at significant risk of a             treatment).6
                                             into coverage that was of financial                     mid-year disruption in health care                       As described, the comments in
                                             benefit to the provider, without regard                 coverage. Based on these comments,                    response to the RFI, data related to
                                             to the impact on the patient (81 FR                     HHS has concluded that the differences                CMS’s administration of the risk
                                             57554). In response to this RFI, we                     between providers’ and suppliers’                     adjustment program, and registry data
                                             received over 800 public comments by                    financial interests and patients’ interests           from the USRDS demonstrate that
                                             the comment closing date of September                   may result in providers and suppliers                 dialysis facilities can be paid tens or
                                             22, 2016. Commenters included:                          taking actions that put patients’ lives               even hundreds of thousands of dollars
                                             Patients; providers and provider-                       and wellbeing at risk.                                more per patient when patients enroll in
                                             affiliated organizations involved in the                                                                      individual market coverage rather than
                                                                                                     B. Individual Market Coverage Is in the
                                             financing of care for patients; health                                                                        public coverage. On the other hand, the
                                                                                                     Financial Interest of Dialysis Facilities
                                             insurance companies; social workers                                                                           premiums for enrollment in individual
                                             who are involved in counseling patients                    All commenters who addressed the                   market coverage average $4,200 per year
                                             about potential health care coverage                    issue made clear that enrolling a patient             according to data related to CMS’s
                                             options; and other stakeholders. While                  in commercial coverage (including                     administration of the risk adjustment
                                             commenters discussed patients with a                    coverage in the individual market)                    program. Dialysis facilities therefore
                                             variety of health care needs, the                       rather than public coverage like                      have much to gain financially (on the
                                             overwhelming majority of comments                       Medicare and/or Medicaid is of                        order of tens or even hundreds of
                                             focused on patients with ESRD.                          significant financial benefit to dialysis             thousands of dollars per patient) by
                                                                                                     facilities. For example, one comment
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                                                                                                                                                           making a relatively small outlay to pay
                                               5 Throughout this Interim Final Rule with             cited reports from financial analysts
                                             Comment, the term ‘‘public coverage’’ is intended       estimating that commercial coverage                     6 Davita encouraged some low-income patients to

                                             to refer to Medicare and Medicaid, not to a group       generally pays dialysis facilities an                 enroll in commercial plans; (Oct 23, 2016). http://
                                             health plan or health insurance purchased in the                                                              www.stltoday.com/business/local/davita-
                                             individual market in a state. A qualified health plan
                                                                                                     average of four times more per treatment              encouraged-some-low-income-patients-to-enroll-in-
                                             (QHP) purchased through an Exchange is individual       ($1,000 per treatment in commercial                   commercial/article_ec5dc34e-ca4d-52e0-bc26-
                                             market coverage, not public coverage.                   coverage, compared to $260 per                        a3e56e1e2c85.html.



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                                                          Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                         90215

                                             an individual’s premium to enroll in                    particular. The involvement of their                  organ to prevent rejection.) However,
                                             commercial coverage so as to receive a                  providers in incentivizing, and steering              when individuals with ESRD are
                                             much larger payment for providing an                    them to enroll in, individual market                  enrolled in individual market coverage
                                             identical set of health care services. This             coverage is highly problematic absent                 supported by third parties, they may
                                             asymmetry creates a strong financial                    safeguards to ensure both that the                    have difficulty demonstrating continued
                                             incentive for such providers to use                     individual is making a decision fully                 access to care due to loss of premium
                                             premium payments to steer as many                       informed of these complex tradeoffs and               support after transplantation.
                                             patients as possible to commercial                      that the risk of a mid-year disruption in             Documents in the comment record
                                             plans.                                                  health care coverage is eliminated. Each              indicate that major non-profits that
                                                Commercial coverage pays at higher                   of these specific potential harms to the              receive significant financial support
                                             rates than public coverage for many                     patient is discussed further below.                   from dialysis facilities will support
                                             health care services, and therefore this                                                                      payment of health insurance premiums
                                             pattern could theoretically appear in a                 1. Interference With Transplant
                                                                                                     Readiness                                             only for patients currently receiving
                                             variety of contexts. Dialysis patients are,                                                                   dialysis. Documents in the record show
                                             however, particularly vulnerable to                        Access to kidney transplantation is a              that these non-profits will not continue
                                             harmful steering practices for a number                 major and immediate concern for many                  to provide financial assistance once a
                                             of reasons. First, ESRD is the only                     patients with ESRD; transplantation is                patient receives a successful kidney
                                             health condition for which nearly all                   the recommended course of treatment                   transplant, nor will the non-profit cover
                                             patients are eligible to apply for and                  for individuals with severe kidney                    any costs of the transplant itself, living
                                             enroll in Medicare coverage and with                    disease, and is a life-saving treatment, as           donor care, post-surgical care, post-
                                             eligibility linked specifically to the                  the risk of death for transplant                      transplant immunosuppressive therapy,
                                             diagnosis. Thus, individuals with ESRD                  recipients is less than half of that for              or long-term monitoring, which can
                                             face a unique situation where they have                 dialysis patients. In addition to                     cause significant issues for patients that
                                             alternative public coverage options, but                improving health outcomes, receipt of a               cannot afford their coverage without
                                             these coverage options may be less                      transplant can dramatically improve                   financial support. This policy is
                                             profitable from the perspective of the                  patients’ quality of life; instead of being           consistent with the conclusion that
                                             facilities providing their treatment due                required to undergo dialysis several                  these third party payments are being
                                             to lower reimbursement rates. Second,                   times per week, individuals who have                  targeted based on the financial interest
                                             as described above, patients with ESRD                  received transplants are able to resume               of the dialysis facilities who contribute
                                             must receive services from a dialysis                   a more typical pattern of daily life,
                                                                                                                                                           to these non-profits, rather than the
                                             facility several times per week for the                 travel, and employment. Of the
                                                                                                                                                           patients’ interests. Once a patient has
                                             remainder of their lives (unless and                    approximately 700,000 people with
                                                                                                                                                           received a transplant, it is no longer in
                                             until they obtain a kidney transplant).                 ESRD in the United States, more than
                                                                                                                                                           the dialysis facility’s financial interest
                                             This sort of ongoing receipt of                         100,000 are on formal waiting lists to
                                                                                                                                                           to continue to support premium
                                             specialized care from a particular                      receive a kidney transplant. Further, in
                                                                                                                                                           payments, although there are severe
                                             facility is not typical of most health                  2015 more than 80 percent of kidney
                                                                                                                                                           consequences to individuals when that
                                             conditions and it creates especially                    transplants went to patients under age
                                                                                                                                                           support ceases. If this occurs after
                                             strong incentives and opportunities for                 65, suggesting that transplantation is of
                                                                                                                                                           transplantation, individuals enrolled in
                                             dialysis facilities to influence the                    special concern to nonelderly patients,
                                                                                                     who are most likely to be targeted by                 individual market coverage could be
                                             coverage arrangements of the patients
                                                                                                     dialysis facilities for enrollment in                 required to pay the full amount of the
                                             under their care.
                                                                                                     individual market coverage because                    premium, which may be unaffordable
                                             C. Individual Market Coverage                           they may not already be enrolled in                   for many patients who previously relied
                                             Supported by Third Parties Places                       Medicare.                                             on third party premium assistance.
                                             Patients at Risk of Harm                                   Therefore, any practice that interferes               Theoretically, individuals could
                                                Supporting premium payments to                       with patients’ ability to pursue a kidney             arrange for Medicare coverage to begin
                                             facilitate enrollment of their patients in              transplant is of significant concern.                 at the time of transplantation, thereby
                                             individual market coverage is, as                       Even a small reduction in the likelihood              demonstrating continued access to care.
                                             illustrated above, in the financial                     of a patient receiving a transplant would             In practice, however, patients struggle to
                                             interest of the dialysis facilities. It is              be detrimental to a patient’s health and              understand their coverage options and
                                             often not, however, in the best interests               wellbeing. The comments in response to                rapidly navigate the Medicare sign-up
                                             of individual patients. The comments in                 the RFI support the conclusion that,                  process during a period where they are
                                             response to the RFI illustrated three                   today, enrollment in individual market                particularly sick and preparing for major
                                             types of potential harm to patients that                coverage for which there are third party              surgery. Some commenters to the RFI
                                             these arrangements create for ESRD                      premium payments is hampering                         emphasized that this is an extremely
                                             patients: Negatively impacting patients’                patients’ ability to be determined ready              vulnerable group of patients who have
                                             determination of readiness for a kidney                 for a kidney transplant. Comments make                difficulty navigating their health
                                             transplant, potentially exposing patients               clear that, consistent with clinical                  insurance options. As evidenced by the
                                             to additional costs for health care                     guidelines, in order for a transplant                 rate of dually eligible individuals
                                             services, and putting individuals at                    center to determine that a patient is                 discussed above, many ESRD patients
                                             significant risk of a mid-year disruption               ready for a transplant, they must                     are low income and have limited access
                                             in health care coverage.                                conclude that the individual will have                to the resources necessary to navigate
                                                While each of these potential harms is               access to continuous health care                      these sorts of coverage transitions, and
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                                             itself cause for concern, they                          coverage. (This is necessary to ensure                patients are particularly vulnerable
                                             collectively underscore the complexity                  that the patient will have ongoing access             during the short window when they are
                                             of the decision for a patient with ESRD                 to necessary monitoring and follow-up                 preparing for transplants. Consistent
                                             of choosing between coverage options,                   care, and to immunosuppressant                        with this, a number of comments
                                             decisions that have very significant                    medications, which must typically be                  describe how these arrangements and
                                             consequences for these patients in                      taken for the lifetime of a transplanted              patients’ vulnerability and confusion


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                                             90216        Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                             about alternative coverage both pre- and                a. Eligibility for Medicaid                           individual’s financial interest to elect
                                             post-transplant have in fact interfered                                                                       individual market coverage.
                                             with patients’ care. For example, one                      As described above, many people
                                                                                                     with ESRD are eligible for Medicaid.                  b. Eligible for Medicare But Not
                                             comment describes a family that was
                                                                                                     Indeed, more than half of ESRD                        Medicaid
                                             trying to obtain a transplant for a young
                                             child that had to arrange other coverage                Medicare enrollees under age 65 are also                 For individuals with ESRD not
                                             on an emergency basis to obtain their                   enrolled in Medicaid.7 For many                       eligible for Medicaid, enrolling in the
                                             child’s transplant. The family had                      Medicaid enrollees, the health care costs             individual market rather than Medicare
                                             allegedly been given inaccurate                         for which they are financially                        may also pose significant financial risks.
                                             information by a dialysis facility about                responsible are negligible—and many                   As noted above, these patients generally
                                             their coverage options and how private                  face no cost-sharing or premiums at all.              require access to a wide variety of
                                             health insurance and Medicare would                     By contrast, consumers in the                         services received outside of a dialysis
                                             affect their child’s transplant. Another                individual market were responsible for                facility. Patients with ESRD are
                                             commenter employed by a transplant                      out-of-pocket costs up to $7,150 in                   generally enrolled in Original Medicare
                                             facility described that ‘‘many’’ patients               2017.8 As described above, much of that               (including Part A and Part B) and can
                                             in individual market plans had ‘‘their                  out-of-pocket exposure is likely to be                therefore receive services from any
                                             transplant evaluations discontinued or                  incurred outside of the dialysis facility             Medicare-participating provider or
                                             delayed while they worked to obtain                     so, even if a provider or non-profit                  supplier. However, unlike Original
                                             appropriate and affordable insurance                    covers out-of-pocket costs related to                 Medicare, which provides access to a
                                             coverage.’’ A number of other social                    dialysis, enrolling in an individual                  wide range of eligible providers and
                                             workers who submitted comments in                       market plan rather than Medicaid                      suppliers, and which has standard cost-
                                             response to the RFI also identified these               exposes very-low income patients to                   sharing requirements for all Medicare-
                                             transplant access issues as a major                     thousands of dollars in out-of-pocket                 eligible providers and suppliers,
                                             concern.                                                costs.9 Indeed, given the Medicaid                    individual market plans generally limit
                                                                                                     income limits, this cost-sharing is likely            access to a set network of providers that
                                             2. Exposure to Additional Costs for                     to be an extraordinarily large fraction of            is more restrictive than what is available
                                             Health Care Services                                    their income. Further, Medicaid                       to an Original Medicare beneficiary. If
                                                                                                     includes coverage for services not likely             the individual sees providers or
                                                In addition to impeding access to
                                                                                                     to be covered by individual market                    suppliers outside of that network, they
                                             transplants, enrollment in individual
                                                                                                     plans, such as non-emergency medical                  will incur higher cost-sharing for
                                             market coverage, even when third
                                                                                                     transportation (which can vary based on               necessary out-of-network services, and
                                             parties cover costs, is financially
                                                                                                     the state or type of Medicaid coverage),              may have very limited coverage for non-
                                             disadvantageous for some patients with
                                                                                                     and patients will forego these benefits if            emergency out-of-network health care.
                                             ESRD. That is, while it is in dialysis                                                                           There may be other personal
                                             facilities’ financial interest to support               they instead enroll in the individual
                                                                                                     market. It is possible for an individual              circumstances that lead to financial
                                             enrollment in the individual market,                                                                          burden caused by enrolling in an
                                             those arrangements may cause financial                  to be enrolled in both Medicaid and
                                                                                                     individual market coverage,10 and                     individual market plan rather than
                                             harms to patients that would have been                                                                        Medicare. For example, individuals who
                                             avoided had the patients instead                        Medicaid would, in theory, wrap
                                                                                                     around the individual market plan.                    are entitled to Part A and do not enroll
                                             enrolled in public coverage.                                                                                  in Part B generally will incur a Part B
                                                                                                     Such an arrangement would be of great
                                                People with ESRD often have complex                  financial benefit to the dialysis facility,           late enrollment penalty when they do
                                             needs and receive care from a wide                      but would be unlikely to provide                      ultimately enroll in Medicare Part B.
                                             variety of health care providers and                    financial benefits to the individual                  Accordingly, an individual who enrolls
                                             suppliers. Data from USRDS show that                    (because the individual’s cost sharing                in Part A based on ESRD but does not
                                             total health care spending per Medicare                 and benefits would often be the same as               enroll in or drops Part B will generally
                                             ESRD enrollee receiving hemodialysis                    if they had enrolled only in Medicaid).               be subject to a late enrollment penalty
                                             averaged more than $91,000 in 2014, but                 Moreover, in practice, this arrangement               should they decide to enroll in Part B
                                             spending on hemodialysis is only 32                     creates a significant financial risk for              later while still entitled to Part A on the
                                             percent of that amount, meaning that a                  low-income individuals, who will need                 basis of ESRD. Individuals who receive
                                             typical patient may incur thousands of                  to coordinate multiple types of coverage              a kidney transplant may also face higher
                                             dollars in costs for other services. While              or else could find themselves receiving               cost-sharing for immunosuppressant
                                             some of the non-dialysis services these                 large bills from health care providers                drugs if they delay Medicare enrollment
                                             patients receive may also be provided                   and suppliers not aware of their                      as immunosuppressive drugs are
                                             by their dialysis facilities, half or more              Medicaid coverage. Thus, it is very                   covered under Part B only if the
                                             of Medicare spending on this                            unlikely that it would be in such                     transplant recipient established Part A
                                             population is for care that is likely                                                                         effective with the month of the
                                             delivered by other providers and                          7 This figure includes both individuals who are
                                                                                                                                                           transplant.
                                             suppliers, including creation and                       fully enrolled in Medicare and Medicaid, and             As noted above, for some members of
                                             maintenance of vascular access,                         individuals enrolled in Medicare and the Medicare     this group, there is potentially an
                                             inpatient hospital care, skilled nursing                Saving Program.                                       offsetting financial benefit from
                                                                                                       8 Patient Protection and Affordable Care Act; HHS
                                             facility services, home health services,                                                                      individual market coverage if total
                                                                                                     Notice of Payment and Benefit Parameters for 2017,
                                             palliative services, ambulance services,                (March 8, 2016); https://www.gpo.gov/fdsys/pkg/FR-
                                                                                                                                                           premiums and cost sharing are lower in
                                             treatment for primary care and                                                                                an individual market plan with third
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                                                                                                     2016-09-06/pdf/2016-20896.pdf.
                                             comorbid conditions, and prescription                     9 Because these individuals are eligible for        party premium assistance than in
                                             drugs. Thus, when considering the                       Medicaid, they are generally prohibited from          Medicare. In particular, non-
                                             financial impact of coverage decisions,                 receiving cost-sharing reductions for enrolling in    grandfathered individual markets plans
                                                                                                     coverage through an Exchange.
                                             it is important to consider costs that a                  10 No APTC or CSR would be available to support     are required to cap total annual out-of-
                                             patient will incur for services received                enrollment in the individual market in this           pocket expenditures for essential health
                                             that go beyond dialysis.                                circumstance.                                         benefits at a fixed amount, the


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                                                           Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                         90217

                                             maximum out-of-pocket limit, which is                   intended to void the contract if payment              have a great deal of familiarity with the
                                             $7,150 in 2017. The individual may not                  is made by someone other than the                     health care system, leaving them more
                                             be able to cap their annual out-of-pocket               enrollee. Issuers that provided                       vulnerable to gaps in coverage.
                                             expenses in Medicare; while individuals                 comments in response to the RFI                       Therefore, any disruption in coverage is
                                             over age 65 are eligible to enroll in                   confirmed that they do not accept                     problematic and can interrupt patient
                                             Medicare Advantage or Medigap                           certain third party payments. One                     care.
                                             supplemental plans, which do cap                        comment included a list of ten states                   In sum, the lack of transparency in
                                             annual expenses, individuals under age                  where major issuers are known to reject               how these payments are made and
                                             65 with ESRD generally do not have                      these payments when identified.                       whether or not they are accepted means
                                             such options in many states.11 However,                 Comments from health care providers                   that patients are at risk of sudden gaps
                                             third party assistance is also frequently               and non-profits described that entities               in coverage which may be dangerous to
                                             available to offset out-of-pocket costs for             that make third party payments to                     patients’ health.
                                             Medicare enrollees. Moreover, if                        issuers have attempted to disguise their              D. Conflict Between Dialysis Facilities’
                                             dialysis facilities were not providing                  payments to circumvent detection by                   Financial Interest and Patients’ Interest
                                             assistance for individual market                        issuers. These comments also described                Has Led to Problematic Steering
                                             coverage on such a widespread basis,                    how issuers are increasingly monitoring
                                             they might use these resources to make                  for and seeking to identify third party                  As described above, dialysis facilities
                                             assistance for out-of-pocket Medicare                   payments, and when issuers discover                   have very meaningful financial
                                             costs even more widely available.                       those payments, they are rejected. The                incentives to have their patients enroll
                                                                                                     lack of transparency around third party               in individual market coverage rather
                                             3. Risks of Mid-Year Disruption in                                                                            than public coverage programs.
                                             Coverage                                                payments has therefore resulted in a
                                                                                                                                                           However, enrollments in individual
                                                                                                     situation in which patients are at
                                                Finally, the comments in response to                                                                       market coverage are often not in
                                                                                                     significant and ongoing risk of losing
                                             the RFI demonstrate that there is a                                                                           patients’ best interest: It can complicate
                                                                                                     access to coverage based on their issuer
                                             significant risk of mid-year disruptions                                                                      and potentially delay the process for
                                                                                                     detecting payment of their premiums by
                                             in coverage for patients/individuals who                                                                      obtaining a kidney transplant; is often
                                                                                                     parties other than the enrollee.
                                             have individual market coverage for                                                                           financially costly for patients, especially
                                                                                                        When payments are rejected,                        when they are eligible for Medicaid; and
                                             which third parties make premium
                                                                                                     commenters noted that individuals are                 places consumers at risk of a mid-year
                                             payments. It is critically important that
                                                                                                     typically unable to continue their                    coverage disruption. These risks make
                                             patients on dialysis have continuous
                                                                                                     coverage because of the increased                     the task of deciding among coverage
                                             access to health care coverage. Prior to
                                                                                                     financial burden. Indeed, patients may                options complex for ESRD patients.
                                             transplantation this population requires
                                                                                                     not even realize for some period that                 Furthermore, the asymmetry between
                                             an expensive health care service several
                                                                                                     their premiums, which are being paid                  facilities’ and patients’ interests and
                                             times per week in order to live; any
                                                                                                     by third parties, are being rejected and              information with respect to enrollment
                                             interruption in their access to care is
                                                                                                     that their coverage will be terminated if             decisions creates a high likelihood that
                                             serious and life-threatening. Moreover,
                                                                                                     they do not have an ability to pay                    a conflict of interest will develop.
                                             as noted, this group generally has health
                                                                                                     themselves. HHS received 600                          Comments submitted in response to the
                                             care needs beyond dialysis that require
                                                                                                     comments from ESRD patients                           RFI support the conclusion that this
                                             care from a variety of medical
                                                                                                     participating in a letter-writing                     conflict of interest is harming patients,
                                             professionals.
                                                                                                     campaign that describe the adverse                    with dialysis facility patients being
                                                However, the comments reveal that
                                                                                                     impact on patients receiving third party              steered toward enrollment in individual
                                             patients/individuals who have
                                                                                                     payment premium assistance if those                   market coverage with third party
                                             individual market coverage for which
                                                                                                     funds were no longer available. Other                 premium payments, rather than
                                             third parties make premium payments
                                                                                                     patients who commented described                      enrollment in the public coverage for
                                             are presently at risk of having their
                                                                                                     significant and unexpected disruptions                which they are likely eligible and which
                                             coverage disrupted at any point during
                                                                                                     in coverage such as no longer being able              is frequently the better coverage option
                                             the year. CMS does not require that
                                                                                                     to afford the high cost of prescriptions              for them.
                                             issuers accept premium payments made
                                                                                                     and office visit copays, delays receiving                Many comments were submitted by
                                             by third parties except in certain
                                                                                                     dialysis treatments, or no longer being               social workers or other professionals
                                             circumstances consistent with
                                                                                                     able to receive treatments. Due to the                who work or have worked with ESRD
                                             applicable legal requirements,12 and
                                                                                                     life-sustaining nature of dialysis,                   patients. Those comments describe a
                                             CMS has consistently discouraged
                                                                                                     dialysis facilities are not permitted to              variety of ways in which dialysis
                                             issuers from accepting payments
                                                                                                     involuntarily discharge patients, except              facilities have attempted to influence
                                             directly from health care providers.13
                                                                                                     in very limited circumstances. However,               coverage decisions made by patients or
                                             Many issuers have provisions in their
                                                                                                     one of those circumstances is lack of                 have failed to disclose information that
                                             contracts with enrollees that are
                                                                                                     payment (42 CFR 494.180 (f)(1)). While                is relevant to determining consumers’
                                                11 Congress recently passed legislation that would   we believe that such discharges are rare,             best interest. Specific practices
                                             allow people enrolled in Medicare on the basis of       and that dialysis facilities try to avoid             described in comments include:
                                             ESRD to select a Medicare Advantage plan                them, they are permitted. Moreover,                      • Facilities engaging in systematic
                                             beginning in 2021.                                      even when patients are able to enroll in              efforts to enroll people in the individual
                                                12 45 CFR 156.1250 requires issuers to accept
                                                                                                     other public coverage (which may have                 market, often targeting Medicaid
                                             third party payment from federal, state and local
                                                                                                     retroactive effective dates) disruptions              enrollees, without assessing any
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                                             government programs, Ryan White/HIV Aids
                                             Programs and Indian Tribes, Tribal Organizations,       in coverage still force patients to                   personal needs. One commenter
                                             and Urban Indian Organizations.                         navigate a complicated set of coverage                explained, ‘‘My experience was that the
                                                13 Third Party Payments of Premiums for
                                                                                                     options. They may face gaps in care or                provider wanted anyone [who] was
                                             Qualified Health Plans in the Marketplaces,
                                             November 4, 2013, https://www.cms.gov/CCIIO/
                                                                                                     be forced to appeal health care claims.               Medicaid only to be educated about the
                                             Resources/Fact-Sheets-and-FAQs/Downloads/third-         Comments emphasized that many ESRD                    opportunity to apply for an individual
                                             party-qa-11-04-2013.pdf.                                patients are low-income and do not                    plan. . . . The goal was 100%


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                                             90218        Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                             education, whether there was an                           • Facilities retaliate against social                 commenters described may be becoming
                                             assessed need or not. . . . Valuable                    workers who attempt to disclose                         increasingly common over time.
                                             hours of professional interventions were                additional information to consumers.
                                                                                                                                                             E. HHS Is Taking Immediate Regulatory
                                             taken from direct patient care concerns                 One commenter explained that they
                                                                                                                                                             Action To Protect Patients
                                             and diverted to this.’’ Another                         were ‘‘reported to upper management of
                                             explained, ‘‘There was a list of all                    [dialysis corporations] for voicing my                     In the face of harms like those above,
                                             Medicaid patients and the insurance                     concerns of the impact this [enrollment                 which go to essential patient safety and
                                             management team was responsible for                     in the individual market] will have on                  care in life-threatening circumstances,
                                             documenting why the patient did not                     patients after transplant.’’                            HHS is taking immediate regulatory
                                             switch to an individual market plan.’’                                                                          action to prevent harms to patients. As
                                                                                                       • Social workers are concerned that
                                             Comments also described cases in                                                                                described in more detail below, we are
                                                                                                     patients’ trust in health care providers is
                                             which social worker compensation was                                                                            establishing new Conditions for
                                                                                                     being manipulated to facilitate
                                             linked to enrolling patients in                                                                                 Coverage standards (CfCs) for dialysis
                                                                                                     individual market enrollment. For
                                             individual market coverage.                                                                                     facilities. This standard applies to any
                                                                                                     example, comments explained that
                                                • Patients are not always informed                                                                           dialysis facility that makes payments of
                                                                                                     insurance counselors ‘‘meet often with                  premiums for individual market health
                                             about eligibility for Medicare or
                                                                                                     the patients establishing a relationship                plans (in any amount), whether directly,
                                             Medicaid, or the benefits of those
                                                                                                     of trust’’ before pursuing individual                   through a parent organization (such as
                                             programs. For example, one social
                                                                                                     market enrollment. A commenter said,                    a dialysis corporation), or through
                                             worker explained, ‘‘The patient is
                                                                                                     ‘‘Most of us, who have some                             another entity (including by providing
                                             frequently not educated about the
                                                                                                     sophistication in health care coverage,                 contributions to entities that make such
                                             benefits that are available with
                                                                                                     are aware of how confusing it is to                     payments). Dialysis facilities subject to
                                             Medicaid (that is, transportation, dental,
                                                                                                     negotiate the information and reach the                 the new standard will be required to
                                             and other home support services).’’
                                                                                                     best decisions. Dialysis patients who                   make patients aware of potential
                                             Another former social worker said that
                                             facility employees ‘‘may not tell patients              may be less sophisticated and already                   coverage options and educate them
                                             that they could be subject to premium                   highly stressed are vulnerable to being                 about the benefits of each to improve
                                             penalties and potentially higher out-of-                steered.’’ Another commenter vividly                    transparency for consumers. Further, in
                                             pocket costs than they would have with                  explained, ‘‘Patients . . . are in a                    order to ensure that patients’ coverage is
                                             traditional Medicare.’’ Another                         vulnerable position when they come to                   not disrupted mid-year, facilities must
                                             commenter said, ‘‘Enrollment                            a dialysis facility. I hope those of you                ensure that issuers are informed of and
                                             counselors offer no information about                   reviewing these comments realize the                    have agreed to accept the payments.15
                                             Medicare eligibility to members. In                     power disequilibrium which exists                          This action is consistent with
                                             several cases members were not aware                    when a patient is hooked up with                        comments from dialysis facilities, non-
                                             that they were Medicare eligible.’’                     needles in their arm, lifeblood running                 profits, social workers, and issuers that
                                                • Patients are sometimes specifically                through their arms attached to a                        generally emphasized disclosure and
                                             discouraged from pursuing Medicare or                   machine.’’                                              transparency as important components
                                             Medicaid. One commenter said: ‘‘In the                    In addition, HHS’s own data and                       of a potential rulemaking. By focusing
                                             transplant setting I have seen patients                 information submitted in response to                    on transparency, we believe we can
                                             advised to delay in securing Medicare.’’                the RFI suggest that this inappropriate                 promote patients’ best interests. CMS
                                             Another employee at a dialysis facility                 steering of patients may be accelerating                remains concerned, however, about the
                                             relayed the story of a mother seeking a                 over time. Insurance industry                           extent of the abuses reported. We are
                                             transplant for her daughter but being                   commenters stated that the number of                    considering whether it would be
                                             told by a dialysis facility not to enroll               enrollees in individual market plans                    appropriate to prohibit third party
                                             in Medicare. A transplant facility                      receiving dialysis increased 2 to 5 fold                premium payments for individual
                                             employee explained ‘‘In some                            in recent years. Based on concerns                      market coverage completely for people
                                             circumstances, the patient has been                     raised in the public comments in                        with alternative public coverage. Given
                                             encouraged to drop their MediCal                        response to the RFI, we have reviewed                   the magnitude of the potential financial
                                             (Medicaid) coverage in favor of the                     administrative data on enrollment of                    conflict of interest and the abusive
                                             individual market plan, without having                  patients with ESRD. Information                         practices described above, we are
                                             a full understanding of the personal                    available from the risk adjustment                      unsure if disclosure standards will be
                                             financial impact of doing so.’’                         program in the individual market show                   sufficient to protect patients. We seek
                                                • Patients are unaware that a dialysis               that between 2014 and 2015, the                         comments from stakeholders on
                                             facility is seeking to enroll them in the               number of individual market enrollees                   whether patients would be better off if
                                             individual market and are not informed                  with an ESRD diagnosis more than                        premium payments in this context were
                                             of this fact by their health care                       doubled.14 In some states increases were                more strictly limited. We also seek
                                             providers. As one commenter said, ‘‘In                  more rapid, with some states seeing                     comment on alternative options where
                                             numerous instances, these patients were                 more than five times as many patients
                                             already admitted at these facilities, and               with ESRD in the individual market in
                                                                                                                                                                15 There are two potential ways to prevent mid-

                                             interviews have found that many were                                                                            year disruptions in coverage—either requiring
                                                                                                     2015 as in 2014. While increased                        issuers to accept these payments or requiring
                                             unaware they had insurance, let alone                   enrollment in the individual market                     facilities to disclose them and assure acceptance.
                                             who was providing it.’’                                 among individuals who have ESRD is                      Both would equally promote continuity of coverage
                                                • Patients are not informed about                    not in itself evidence of inappropriate                 for consumers. However, requiring issuers to accept
                                             how their third party premium support                                                                           payments in these circumstances would destabilize
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                                                                                                     provider or supplier behavior, these                    the individual market risk pool, a position CMS has
                                             is linked to continued receipt of                       changes in enrollment patterns raise                    consistently articulated since 2013, when we
                                             dialysis. For example, one comment                      concerns that the steering behavior                     expressly discouraged issuers from accepting these
                                             explained, ‘‘People receiving assistance                                                                        third party payments from providers. The
                                                                                                                                                             underlying policy considerations have not changed
                                             don’t realize that if they want a                         14 Risk adjustment applies to the entire individual   and therefore CMS is seeking to prevent mid-year
                                             transplant the premiums will no longer                  market, including plans offered on and off an           disruption by requiring facilities to disclose
                                             get paid.’’                                             Exchange.                                               payments and assure acceptance.



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                                                          Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                           90219

                                             payments would be prohibited absent a                   market health plans (in any amount),                       While current costs to the patient are
                                             showing that a third party payment was                  whether directly, through a parent                      important, information about potential
                                             in the individual’s best interest, and we               organization (such as a dialysis                        future costs related to the current health
                                             seek comment on what such a showing                     corporation), or through another entity                 plan selection must also be addressed.
                                             would require and how it could prevent                  (including by providing contributions to                In particular, we are requiring that
                                             mid-year disruptions in coverage.                       entities that make such payments).                      coverage of transplantation and
                                             II. Provisions of the Interim Final Rule                   Dialysis facilities that do not make                 associated transplant costs must be
                                                                                                     premium payments, and do not make                       included in information provided to
                                                Through this Interim Final Rule with                 financial contributions to other entities               patients. For example, some plans may
                                             comment (IFC) we are implementing a                     that make such payments, are not                        not cover all costs typically covered by
                                             number of disclosure requirements for                   subject to the new requirements.16 We                   Medicare, such as necessary medical
                                             dialysis facilities that make payments of               recognize that dialysis facilities make                 expenses for living donors. Kidney
                                             premiums for individual market health                   charitable contributions to a variety of                transplant patients who want Medicare
                                             plans, whether directly, through a                      groups and causes. This rule applies
                                             parent organization, or through another                                                                         to cover immunosuppressive drugs must
                                                                                                     only to those dialysis facilities that                  have Part A at the time of the kidney
                                             entity, to ensure proper protections for                make payments of premiums for
                                             those patients. These requirements are                                                                          transplant. Upon enrolling in Part B,
                                                                                                     individual market health plans, whether                 Medicare will generally cover the
                                             intended to ensure that patients are able               directly, through a parent organization,
                                             to make insurance coverage decisions                                                                            immunosuppressive drugs. Therefore,
                                                                                                     or through another entity.                              the beneficiary must file for Part A no
                                             based on full and accurate information.                    At § 494.70(c)(1), we detail the health
                                                As described in more detail below, we                                                                        later than the 12th month after the
                                                                                                     insurance information that must be                      month of the kidney transplant.
                                             are establishing new CfC standards for                  provided to all patients served by
                                             dialysis facilities. New standards apply                                                                        Entitlement to Part A and Part B based
                                                                                                     applicable facilities. These requirements               on a kidney transplant terminates 36
                                             to any dialysis facility that makes
                                                                                                     establish that such information must
                                             payments of premiums for individual                                                                             months after the transplant. However, a
                                                                                                     cover how plans in the individual
                                             market health plans (in any amount),                                                                            beneficiary who establishes Part A
                                                                                                     market will affect the patient’s access to
                                             whether directly, through a parent                                                                              entitlement effective with the month of
                                                                                                     and costs for the providers and
                                             organization (such as a dialysis                                                                                the transplant is eligible for
                                                                                                     suppliers, services, and prescription
                                             corporation), or through another entity                                                                         immunosuppressive drug coverage
                                                                                                     drugs that are currently within the
                                             (including by providing contributions to                                                                        when subsequent entitlement to Part B
                                                                                                     individual’s care plan, as well as those
                                             entities that make such payments).                                                                              is based on age or disability. Facilities
                                                                                                     likely to result from other documented
                                             While we remain concerned about any                                                                             must provide information regarding
                                             type of financial assistance that could be              health care needs. This must include an
                                                                                                                                                             enrollment in Medicare, and clearly
                                             used to influence patients’ coverage                    overview of the health-related and
                                                                                                                                                             explain Medicare’s benefits to the
                                             decisions, we believe these individual                  financial risks and benefits of the
                                                                                                                                                             patient. Facilities must also provide
                                             market premium payments are                             individual market plans available to the
                                                                                                     patient (including plans offered through                individuals with information about
                                             particularly prone to abuse because they                                                                        Medicaid, including State eligibility
                                             are so closely tied to the type of                      and outside the Exchange). This
                                                                                                     information must reflect local, current                 requirements, and if there is any reason
                                             coverage an individual selects. Further,                                                                        to believe the patient may be eligible,
                                             as described above, such third party                    plans, and thus would need to be
                                                                                                     updated at least annually to reflect                    clearly explain the State’s Medicaid
                                             payments in the individual market                                                                               benefits, including the Medicare
                                             uniquely put patients at risk of mid-year               changes to individual market plans. We
                                                                                                     expect that applicable dialysis facilities              Savings Programs.
                                             coverage disruption if their issuer
                                                                                                     will meet this requirement by providing                    For other potential future effects, the
                                             discovers and rejects such payments.
                                                                                                     the required information upon an                        facilities must provide information
                                             Dialysis facilities subject to the new
                                             standards will be required to make                      individual’s admittance to the facility,                about penalties associated with late
                                             patients aware of potential coverage                    and annually thereafter, on a timely                    enrollment (or re-enrollment) in
                                             options and educate them about certain                  basis for each plan year.                               Medicare Part B or Part D for those that
                                             benefits and risks of each. Further, in                                                                         have Medicare Part A as well as
                                             order to ensure that patients’ coverage is
                                                                                                       16 A facility that makes payments of premiums for     potential delays or gaps in coverage.
                                                                                                     individual market coverage of its patients must         Section 1839(b) of the Act outlines the
                                             not disrupted mid-year, dialysis                        comply with this standard. Similarly, a facility that
                                             facilities must ensure that issuers are                 makes a financial contribution to another
                                                                                                                                                             Medicare premium—Part A (for those
                                             informed of and have agreed to accept                   organization, that is able to use the funds to make     who are not eligible for premium-free
                                             such payments for the duration of the                   payments of premiums for individual market              Part A) and Part B late enrollment
                                                                                                     coverage of some dialysis patients must also            penalty. Individuals who do not enroll
                                             plan year.                                              comply, even when the contributions from the
                                                                                                     facility are not directly linked to the premium         in Medicare premium—Part A or
                                             A. Disclosures to Consumers: Patients’                  payments; we note, moreover, that mere recitation       Medicare Part B when first eligible (that
                                             Right To Be Informed of Coverage                        on a check that a contribution cannot be used for       is, during their Initial Enrollment
                                             Options and Third Party Premium                         premium payments would not establish that an            Period) will have to pay a late
                                             Payments (42 CFR 494.70(c))                             organization is unable to use the contribution for
                                                                                                     such payments. Further, an entity that makes            enrollment penalty should they decide
                                               In order to increase awareness of                     contributions through a third party that in turn        to enroll at a later time. There are
                                             health coverage options for individuals                 contributes to an entity that is able to use the        certain circumstances in which
                                                                                                     contribution to make third party premium                individuals are exempt from the late
                                             receiving maintenance dialysis in
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                                                                                                     payments will still be subject to these standards. In
                                             Medicare-certified dialysis facilities, we              contrast, a facility that does not make payments of     enrollment penalty, such as those who
                                             are establishing a new patient rights                   premiums for individual market coverage and does        are eligible for Medicare based on Age
                                             standard under the CfCs at 42 CFR                       not contribute to any organization that makes such      or Disability, and did not enroll when
                                                                                                     payments, but does contribute to an organization
                                             494.70(c). This new standard applies                    that supports premiums for Medicare enrollment,
                                                                                                                                                             first eligible because they had or have
                                             only to those facilities that make                      would not be required to comply with this               group health plan coverage based on
                                             payments of premiums for individual                     standard.                                               their own or spouse’s (or a family


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                                             90220        Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                             member if Medicare is based on                          the event that the patient receives a                  C. Effective Date
                                             disability) current employment.                         successful kidney transplant or transfers                 Because we are concerned that
                                                Although an ESRD diagnosis may                       to a different dialysis facility. Further,             patients face risks that are not disclosed
                                             establish eligibility for Medicare                      facilities must disclose to patients all               to them, and that they may be at risk of
                                             regardless of age, it does not make                     aggregate amounts that support                         disruptions in coverage on an ongoing
                                             individuals eligible for a Medicare                     enrollment in individual market health                 basis, we are taking action to ensure
                                             Special Enrollment Period or provide                    plans provided to patients directly, to                greater disclosure to consumers and to
                                             relief from the late enrollment penalty.                issuers directly, through the facility’s               provide for smooth and continuous
                                             Thus, if an individual enrolls in                       parent organization, or through third                  access to stable coverage when these
                                             Medicare Part A but does not enroll in                  parties.                                               rules are fully implemented. At the
                                             Part B, or later drops Part B coverage,
                                                                                                        As with all patient rights standards                same time, we are mindful of the need
                                             that individual will pay a Part B (and
                                                                                                     for dialysis facilities, the information               for dialysis facilities that make
                                             Part D) late enrollment penalty when
                                             ultimately enrolling, or reenrolling, in                and disclosures required in § 494.70(c)                payments of premiums for individual
                                             Medicare Part B (and Part D).                           must be provided to all patients of                    market health plans, whether directly,
                                             Additionally, that individual will need                 applicable facilities, not just those new              through a parent organization, or
                                             to wait until the Medicare General                      to a facility who have not yet enrolled                through another entity, to develop new
                                             Enrollment Period to apply for Medicare                 in Medicare or Medicaid. This ensures                  procedures to comply with the
                                             Part B. The General Enrollment Period                   that all patients are treated fairly and               standards established in this rule.
                                             runs from January 1 to March 31 each                    appropriately, and not treated                         Therefore, the requirements in this rule
                                             year, and Part B coverage becomes                       differently based on their health care                 will become effective beginning January
                                             effective July 1 of the same year. Thus,                payer, as required by CMS regulations at               13, 2017.
                                             individuals could face significant gaps                 42 CFR 489.53(a)(2).                                      We note that, in specific
                                             in coverage while waiting for their                                                                            circumstances, individuals may not be
                                                                                                     B. Disclosures to Issuers (42 CFR                      eligible to enroll in Medicare Part A or
                                             Medicare Part B coverage to become                      494.180(k))
                                             effective. We note that late enrollment                                                                        Part B except during the General
                                             penalties and statutory enrollment                         In conjunction with these                           Enrollment Period, which runs from
                                             periods do not apply to premium-free                    requirements for patient information                   January 1 to March 31 and after which
                                             Part A.                                                 and disclosures, we establish at                       coverage becomes effective on July 1.
                                                Information about potential costs to                 § 494.180(k), a new standard that                      These individuals may experience a
                                             the patient is vitally important for                    requires facilities that make payments of              temporary disruption in coverage
                                             patients considering individual market                  premiums for individual market health                  between the effective date of the rule
                                             coverage. An individual may benefit in                  plans, whether directly, through a                     and the time when Medicare Part A
                                             the short term by selecting a private                   parent organization, or through another                and/or Part B coverage becomes
                                             health plan instead of enrolling in                     entity to ensure that issuers are                      effective. In light of these
                                             Medicare, but patients must be informed                 informed of and have agreed to accept                  circumstances, while the standards
                                             that those plans, or the particular costs               the third party payments. Facilities                   under § 494.180(k) will be effective
                                             and benefits of those plans, may only                   should develop reasonable procedures                   beginning January 13, 2017, if a facility
                                             exist for a given plan year, and that the               for communicating with health                          is aware of a patient who is not eligible
                                             individual may be at a disadvantage                     insurance issuers in the individual                    for Medicaid and is not eligible to enroll
                                             (that is, late enrollment penalties for                 market, and for obtaining and                          in Medicare Part A and/or Part B except
                                             those that are enrolled in Medicare Part                documenting that the issuer has agreed                 during the General Enrollment Period,
                                             A) should they choose to enroll in                      to accept such payments. If an issuer                  and the facility is aware that the patient
                                             Medicare Part B (or Part D) at a later                  does not agree to accept the payments                  intends to enroll in Medicare Part A
                                             date.                                                   for the duration of the plan year, the                 and/or Part B during that period, the
                                                At § 494.70(c)(2) and (3), we require                facility shall not make payments of                    standards under § 494.180(k) will not
                                             that applicable facilities provide                      premiums and shall take reasonable                     apply until July 1, 2017, with respect to
                                             information to all patients about                                                                              payments made for that patient.
                                                                                                     steps to ensure that such payments are
                                             available premium payments for
                                                                                                     not made by any third parties to which                 III. Waiver of Proposed Rulemaking
                                             individual market plans and the nature
                                                                                                     the facility contributes.                              and Delay in Effective Date
                                             of the facility’s or parent organization’s
                                             contributions to such efforts and                          These requirements are intended to                    We ordinarily publish a notice of
                                             programs. This information must                         protect ESRD patients from avoidable                   proposed rulemaking in the Federal
                                             include, but is not limited to, limits on               interruptions in health insurance                      Register and invite public comment on
                                             financial assistance and other                          coverage mid-year by ensuring that they                the proposed rule in accordance with 5
                                             information important for the patient to                have access to full, accurate information              U.S.C. 553(b) of the Administrative
                                             make an informed decision, including                    about health coverage options. We                      Procedure Act (APA) and section
                                             the reimbursements for services                         intend to outline expectations for                     1871(b)(1) of the Social Security Act.
                                             rendered that the facility would receive                compliance in subsequent guidance.                     The notice of proposed rulemaking
                                             from each coverage option. For example,                 This rule does not alter the legal                     includes a reference to the legal
                                             if premium payments are not guaranteed                  obligations or requirements placed on                  authority under which the rule is
                                             for an entire plan year, or funding is                  issuers, including with respect to the                 proposed, and the terms and substance
                                             capped at a certain dollar amount,                      guaranteed availability and renewability               of the proposed rule or a description of
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                                             patients must be informed of such                       requirements of the Public Health                      the subjects and issues involved. This
                                             limits. Facilities also must inform                     Service Act and non-discrimination-                    procedure can be waived, however, if an
                                             patients if the premium payments are                    related regulations issued pursuant to                 agency finds good cause that a notice-
                                             contingent on continued use of dialysis                 the Affordable Care Act.17                             and-comment procedure is
                                             services or use of a particular facility,                                                                      impracticable, unnecessary, or contrary
                                             and would therefore be terminated in                      17 See   45 CFR 147.104, 156.225, 156.805.           to the public interest and incorporates a


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                                                          Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                             90221

                                             statement of the finding and its reasons                determined that it is appropriate to                  1. ICRs Regarding Patient Rights
                                             in the rule issued.                                     issue this regulation with an effective               (§ 494.70(c))
                                                HHS has determined that issuing this                 date 30 days from the date of                            Under § 494.70(c), HHS implements a
                                             regulation as a proposed rulemaking,                    publication. As described above, we                   number of requirements and establishes
                                             such that it would not become effective                 believe patients are currently at risk of             a new patient rights standard for
                                             until after public comments are                         harm. Health-related and financial risks              Medicare-certified dialysis facilities that
                                             submitted, considered and responded to                  are not fully disclosed to them, and they             make payments of premiums for
                                             in a final rule, would be contrary to the               may have their transplant readiness                   individual market health plans, whether
                                             public interest and would cause harm to                 delayed or face additional financial                  directly, through a parent organization,
                                             patients. Based on the newly available                  consequences because of coverage                      or through another entity, to ensure
                                             evidence discussed in section I of this                 decisions that are not fully explained.               proper protections for those patients.
                                             rule, that is, the responses to the August              Further, consumers are at risk of mid-                Those applicable facilities will be
                                             2016 RFI, HHS has determined that the                   year coverage disruptions. This is the                required, on an annual basis, to inform
                                             widespread practice of third parties                    time of year when patients often make                 patients of health coverage options
                                             making payments of premiums for                         enrollment decisions, with Open                       available to them, including Medicare
                                             individual market coverage places                       Enrollment in the individual market                   and Medicaid and locally available
                                             dialysis patients at significant risk of                ongoing and General Enrollment Period                 individual market plans; enrollment
                                             three kinds of harms: Having their                      for certain new enrollees in Medicare                 periods for both Medicare and the
                                             ability to be determined ready for a                    about to begin on January 1. We have                  individual market; the effects each
                                             kidney transplant negatively affected,                  therefore determined that the rule will               option will have on the patients access
                                             being exposed to additional costs for                   become effective on January 13, 2017 to               to, and costs for the providers and
                                             health care services, and being exposed                 best protect consumers.                               suppliers, services, and prescription
                                             to a significant risk of a mid-year                                                                           drugs that are currently within the
                                             disruption in health care coverage. We                  IV. Collection of Information
                                                                                                     Requirements                                          individual’s ESRD plan of care and
                                             believe these are unacceptable risks to                                                                       other documented health care needs;
                                             patient health that will be greatly                        Under the Paperwork Reduction Act                  coverage and anticipated costs for
                                             mitigated by this rulemaking, and that                  of 1995, we are required to provide 30-               transplant services, including pre- and
                                             the delay caused by notice and                          day notice in the Federal Register and                post-transplant care; any funds available
                                             comment rulemaking would continue to                    solicit public comment before a                       to the patient for enrollment in an
                                             put patient health at risk. Given the risk              collection of information requirement is              individual market health plan,
                                             of patient harm, notice and comment                     submitted to the Office of Management                 including but not limited to limitations
                                             rulemaking would be contrary to the                     and Budget (OMB) for review and                       and any associated risks of such
                                             public interest. Therefore, we find good                approval. This interim final rule with                assistance; and current information
                                             cause to waive notice and comment                       comment contains information                          about the facility’s, or its parent
                                             rulemaking and to issue this interim                    collection requirements (ICRs) that are               organization’s premium payments for
                                             final rule with comment. We are                         subject to review by OMB. A description               patients, or to other third parties that
                                             providing a 30-day public comment                       of these provisions is given in the                   make such premium payments to
                                             period.                                                 following paragraphs with an estimate                 individual market health plans for
                                                In addition, we ordinarily provide a                 of the annual burden, summarized in                   individuals on dialysis.
                                             60-day delay in the effective date of the               Table 1. In order to fairly evaluate                     We assume that each applicable
                                             provisions of a rule in accordance with                 whether an information collection                     facility will develop a system to educate
                                             the APA (5 U.S.C. 553(d)), which                        should be approved by OMB, section                    and inform each ESRD patient of their
                                             requires a 30-day delayed effective date,               3506(c)(2)(A) of the Paperwork                        options and the effects of these options.
                                             and the Congressional Review Act (5                     Reduction Act of 1995 requires that we                For our purposes, we assume that each
                                             U.S.C. 801(a)(3)), which requires a 60-                 solicit comment on the following issues:              facility will develop a pamphlet
                                             day delayed effective date for major                       • The need for the information                     containing information that compares
                                             rules. However, we can waive the delay                  collection and its usefulness in carrying             the benefits and costs for each locally
                                             in the effective date if the Secretary                  out the proper functions of our agency.               available individual market plan,
                                             finds, for good cause, that the delay is                   • The accuracy of our estimate of the              Medicare, and Medicaid, and display it
                                             impracticable, unnecessary, or contrary                 information collection burden.                        prominently in their facility. In
                                             to the public interest, and incorporates                   • The quality, utility, and clarity of             addition, it is assumed that a facility
                                             a statement of the finding and the                      the information to be collected.                      staff such as a health care social worker
                                             reasons in the rule issued (5 U.S.C.                       • Recommendations to minimize the                  will review the required information
                                             553(d)(3).                                              information collection burden on the                  with the patient and answer any
                                                In addition, the Congressional Review                affected public, including automated                  questions.
                                             Act (5 U.S.C. 801(a)(3)) requires a 60-                 collection techniques.                                   There are 6,737 Medicare-certified
                                             day delayed effective date for major                       We are soliciting public comment on                dialysis facilities. As explained later in
                                             rules. However, we can determine the                    each of these issues for the following                the regulatory impact analysis section,
                                             effective date of the rule if the Secretary             sections of the interim final rule with               we estimate that approximately 90
                                             finds, for good cause, that notice and                  comment that contain ICRs. We                         percent, or 6,064, facilities make
                                             public procedure is impracticable,                      generally used data from the Bureau of                payments of premiums for individual
                                             unnecessary, or contrary to the public                  Labor Statistics to derive average labor              market health plans, whether directly,
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                                             interest, and incorporates a statement of               costs (including a 100 percent increase               through a parent organization, or
                                             the finding and the reasons in the rule                 for fringe benefits and overhead) for                 through another entity, and therefore,
                                             issued (5 U.S.C. 808(2)).                               estimating the burden associated with                 will need to comply with these
                                                As noted above, for good cause, we                   the ICRs.18                                           disclosure requirements. We estimate
                                             have found that notice and public
                                             procedure is contrary to the public                      18 See May 2015 Bureau of Labor Statistics,          Occupational Employment and Wage Estimates at
                                             interest. Accordingly, we have                          Occupational Employment Statistics, National          http://www.bls.gov/oes/current/oes_stru.htm.



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                                             90222        Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                             that approximately 491,500 patients                     facility will review the information with             required to send approximately 7,000
                                             receive services at Medicare-certified                  the patients and obtain a signed                      notices. It is assumed that these notices
                                             facilities. Therefore, on average, each                 acknowledgement form stating that the                 will be sent and returned electronically
                                             facility provides dialysis services to                  patient has received this information.                at minimal cost. We estimate that, for
                                             approximately 73 patients annually.                     We estimate that a lawyer (at an hourly               each facility during the initial year, it
                                             While we expect to detail in                            rate of $131.02) will take 30 minutes to              will take a lawyer one hour (at an
                                             forthcoming guidance how dialysis                       develop an acknowledgement form                       hourly rate of $131.02) to draft a letter
                                             facilities may comply with these                        confirming that the required                          template notifying the issuer of third
                                             requirements, we are providing an                       information was provided to be signed                 party payments and requesting
                                             example of one type of disclosure, an                   by the ESRD patient. The total burden                 assurance of acceptance for such
                                             informational pamphlet, to illustrate                   for all 6,064 facilities to develop the               payments. The total annual burden for
                                             potential costs. We note, that we expect                acknowledgement form in the initial                   all facilities during the initial year will
                                             dialysis facilities will use various tools              year only will be 3,032 hours (0.5 hours              be 6,064 hours with an equivalent cost
                                             for disclosure including but not limited                × 6,064 facilities) with an equivalent                of approximately $794,505 ($131.02 ×
                                             to informational pamphlets, handouts,                   cost of approximately $397,253                        6,064 facilities). This is likely to be an
                                             etc. It is estimated that each facility will            (($131.02 hourly rate × 0.5 hours) ×                  overestimation since parent
                                             prepare, on average, a 6-page pamphlet                  6,064 facilities).                                    organizations will probably develop a
                                             that includes all required information.                    We estimate that a health care social
                                                                                                                                                           single template for all individual
                                             We estimate that an administrative                      worker (at an hourly rate of $51.94) will
                                                                                                                                                           facilities they own. We further estimate
                                             assistant will spend approximately 40                   take an average of 45 minutes to further
                                                                                                                                                           that it will require an administrative
                                             hours (at an hourly rate of $37.86) on                  educate each patient about their
                                                                                                                                                           assistant approximately 30 minutes (at
                                             average to research the required                        coverage options. The social worker will
                                                                                                     also obtain the patient’s signature on the            an hourly rate of $37.86) to insert
                                             information and develop a pamphlet.
                                                                                                     acknowledgement form and save a copy                  customized information and email the
                                             We estimate it will take an
                                                                                                     of the signed form for recordkeeping,                 notification to the issuer, send any
                                             administrative manager (at an hourly
                                                                                                     incurring a materials and printing cost               follow-up communication, and then
                                             rate of $91.20) 4 hours to review the
                                             pamphlet. The total annual burden for                   of $0.05 per form. The total annual                   save copies of the responses for
                                             each facility will be 44 hours with an                  burden for each facility will be 54.75                recordkeeping. The total annual burden
                                             equivalent cost of $1,879.20 ((40 hours                 hours (0.75 hours × 73 patients) with an              for all facilities for sending the
                                             × $37.86 hourly rate) + (4 hours × $91.20               equivalent cost of approximately $2,844               notifications will be 3,500 hours (7,000
                                             hourly rate)). In order to print the                    ($51.94 hourly rate × 54.75 hours), and               notifications x 0.5 hours) with an
                                             pamphlet, we estimate that it will cost                 approximately $4 in printing and                      equivalent cost of $132,510 ($37.86
                                             each facility $3.00 (for a 6-page                       materials cost. The total annual burden               hourly rate × 3,500 hours).
                                             pamphlet at $0.50 per page). For all                    for all 6,064 facilities will be 332,004                 There are an estimated 468 issuers in
                                             6,064 facilities, the total annual burden               hours 54.75 hours × 6,064 facilities)                 the individual market. It is assumed that
                                             will be 266,816 hours (44 hours × 6,064                 with an equivalent cost of                            the approximately 7,000 patients are
                                             facilities) with an equivalent cost of                  approximately $17,244,288 ($2,843.72                  uniformly distributed between these
                                             approximately $11,395,469 ($1,879.20                    annual burden cost × 6,064 facilities),               issuers. Issuers will incur a burden if
                                             annual burden cost × 6,064 facilities)                  and approximately $22,134 in printing                 they respond to the notifications from
                                             and a total materials and printing cost                 and materials cost.                                   dialysis facilities and inform them
                                             of $1,328,016. It is anticipated that the                  We will revise the information                     whether or not they will accept third
                                             burden to prepare the pamphlet will be                  collection currently approved under                   party payments. It is estimated that it
                                             lower in subsequent years since all that                OMB Control Number 0938–0386 to                       will take a lawyer 30 minutes (at an
                                             will be needed is to review and update                  account for this additional burden.                   hourly rate of $131.02) to review the
                                             plan information. We estimate that an                                                                         notification and an administrative
                                                                                                     2. ICRs Regarding Disclosure of Third
                                             administrative assistant will spend                                                                           manager 30 minutes (at an hourly rate
                                                                                                     Party Premium Payments, or
                                             approximately 32 hours (at an hourly                                                                          of $91.20) to approve or deny the
                                                                                                     Contributions to Such Payments, to
                                             rate of $37.86) on average to update the                                                                      request and respond to any follow-up
                                                                                                     Issuers (§ 494.180(k))
                                             information in the pamphlet, and it will                                                                      communication. It will further take an
                                             take an administrative manager (at an                      Under § 494.180(k), HHS is
                                                                                                                                                           administrative assistant approximately
                                             hourly rate of $91.20) 3 hours to review                implementing a requirement for those
                                                                                                                                                           30 minutes (at an hourly rate of $37.86)
                                             it. The total annual burden for each                    dialysis facilities that make payments of
                                                                                                                                                           to respond electronically to the initial
                                             facility will be 35 hours with an                       premiums for individual market health
                                                                                                                                                           notification and any follow-up
                                             equivalent cost of approximately $1,485                 plans, whether directly, through a
                                                                                                                                                           communications. The total annual
                                             ((32 hours × $37.86 hourly rate) + (3                   parent organization, or through another
                                                                                                                                                           burden for all issuers to respond to
                                             hours × $91.20 hourly rate)). The total                 entity, must ensure issuers are informed
                                                                                                                                                           7,000 notifications will be 10,500 hours
                                             burden for all facilities will be 212,240               of and have agreed to accept the
                                                                                                                                                           (1.5 hours × 7,000 notifications) with an
                                             hours (35 hours × 6,064 facilities) with                payments for the duration of the plan
                                                                                                                                                           equivalent cost of $910,280 (10,500
                                             an equivalent cost of approximately                     year.
                                                                                                        Based on comments received in                      hours × $86.69 average hourly rate per
                                             $9,005,768 ($1,485.12 annual burden
                                                                                                                                                           notification per issuer).
                                             cost × 6,064 facilities).                               response to the RFI, it is assumed that
                                                In addition to providing a copy of the               approximately 7,000 patients that                        We will revise the information
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                                             pamphlet to the patients, it is assumed                 receive such payments are enrolled in                 collection currently approved under
                                             that a health care social worker or other               individual market plans. Therefore, we                OMB Control Number 0938–0386 to
                                             patient assistance personnel at each                    estimate that 6,064 facilities will be                account for this additional burden.




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                                                                 Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                                                90223

                                                                            TABLE 1—ANNUAL REPORTING, RECORDKEEPING AND DISCLOSURE BURDEN: FIRST YEAR
                                                                                                                                                                         Hourly                          Total
                                                                                                                                           Burden            Total                   Total labor
                                                                                                                                                                          labor                         capital/
                                                                                          OMB                  Number of                     per            annual                     cost of                         Total cost
                                                 Regulation section(s)                                                       Responses                                   cost of                      maintenance
                                                                                        control No.           respondents                 response          burden                    reporting                           ($)
                                                                                                                                                                        reporting                        costs
                                                                                                                                           (hours)          (hours)                      ($)
                                                                                                                                                                            ($)                           ($)

                                             Patient Rights (§ 494.70
                                               (c)) 0 Pamphlets ............             0938–0386                  6,064       442,672          44         266,816       $42.71    $11,395,468.80    $1,328,016.00   $12,723,484.80
                                             Patient Rights (§ 494.70
                                               (c))—Patient Education
                                               and Recordkeeping .......                 0938–0386                  6,064       442,672        0.75         332,004        51.94     17,244,287.76       22,133.60     17,266,421.36
                                             Patient Rights (§ 494.70
                                               (c))—acknowledgement
                                               form ................................    0938–0386                   6,064         6,064         0.5           3,032       131.02        397,252.64             0.00      397,252.64
                                             Disclosure of Third Party
                                               Premium Assistance to
                                               Issuers (§ 494.180(k))—
                                               letter template ................          0938–0386                  6,064         6,064              1        6,064       131.02        794,505.28             0.00      794,505.28
                                             Disclosure of Third Party
                                               Premium Assistance to
                                               Issuers (§ 494.180(k))—
                                               notification from facility ..             0938–0386                  6,064         7,000         0.5           3,500        37.86            132,510            0.00         132,510
                                             Disclosure of Third Party
                                               Premium Assistance to
                                               Issuers (§ 494.180(k))—
                                               issuer response .............             0938–0386                   468          7,000         1.5          10,500        86.69            910,280            0.00         910,280

                                                   Total ...........................   ....................         6,532       911,472       48.25         621,916       481.24     30,874,304.48     1,350,149.60    32,224,454.08


                                                                    TABLE 2—ANNUAL REPORTING, RECORDKEEPING AND DISCLOSURE BURDEN: SUBSEQUENT YEARS
                                                                                                                                                                         Hourly         Total            Total
                                                                                                                                           Burden            Total
                                                                                            OMB                                                                           labor         labor           capital/
                                                                                                               Number of                     per            annual                                                     Total cost
                                                 Regulation section(s)                     control                           Responses                                   cost of       cost of        maintenance
                                                                                                              respondents                 response          burden                                                        ($)
                                                                                            No.                                                                         reporting     reporting          costs
                                                                                                                                           (hours)          (hours)         ($)           ($)             ($)

                                             Patient Rights (§ 494.70
                                               (c)) 0 Pamphlets ............             0938–0386                  6,064       442,672          35         212,240       $42.43     $9,005,767.68    $1,328,016.00   $10,333,783.68
                                             Patient Rights (§ 494.70
                                               (c))—Patient Education
                                               and Recordkeeping .......                 0938–0386                  6,064       442,672        0.75         332,004        51.94     17,244,287.76       22,133.60     17,266,421.36
                                             Disclosure of Third Party
                                               Premium Assistance to
                                               Issuers (§ 494.180(k))—
                                               notification from facility ..             0938–0386                  6,064         7,000         0.5           3,500        37.86        132,510.00             0.00      132,510.00
                                             Disclosure of Third Party
                                               Premium Assistance to
                                               Issuers (§ 494.180(k))—
                                               issuer response .............             0938–0386                   468          7,000         1.5          10,500        86.69        910,280.00             0.00      910,280.00

                                                   Total ...........................   ....................         6,532       899,344       37.75         558,244       218.93     27,292,845.44     1,350,149.60    28,642,995.04



                                                If you comment on these information                                     or through another entity. It establishes                   assistance for enrollment in an
                                             collection requirements, please do                                         a new patient rights standard applicable                    individual market health plan and the
                                             either of the following:                                                   only to such facilities that they must                      limitations and associated risks of such
                                                1. Submit your comments                                                 provide patients with information on                        assistance; including any and all current
                                             electronically as specified in the                                         available health insurance options,                         information about the facility’s, or its
                                             ADDRESSES section of this interim final                                    including locally available individual                      parent organization’s contributions to
                                             rule with comment; or                                                      market plans, Medicare, Medicaid, and                       patients or third parties that subsidize
                                                2. Submit your comments to the                                          CHIP coverage. This information must                        enrollment in individual market health
                                             Office of Information and Regulatory                                       include the effects each option will have                   plans for individuals on dialysis.
                                             Affairs, Office of Management and                                          on the patient’s access to, and costs for
                                             Budget, Attention: CMS Desk Officer,                                                                                                      In addition, the interim final rule with
                                                                                                                        the providers and suppliers, services,
                                             CMS–3337–IFC. Fax: (202) 395–6974; or                                                                                                  comment establishes a new standard
                                                                                                                        and prescription drugs that are currently
                                             Email: OIRA_submission@omb.eop.gov.                                                                                                    requiring dialysis facilities that make
                                                                                                                        within the individual’s ESRD plan of
                                                                                                                                                                                    payments of premiums for individual
                                             V. Regulatory Impact Analysis                                              care as well as those likely to result
                                                                                                                                                                                    market health plans, whether directly,
                                                                                                                        from other documented health care
                                             A. Introduction                                                                                                                        through a parent organization, or
                                                                                                                        needs. This must include an overview of
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                                                                                                                                                                                    through another entity, to disclose these
                                               This interim final rule with comment                                     the health-related and financial risks
                                                                                                                        and benefits of the individual market                       payments to applicable issuers and
                                             implements a number of requirements
                                                                                                                        plans available to the patient (including                   requiring the contributing facility to
                                             for Medicare-certified dialysis facilities
                                             that make payments of premiums for                                         plans offered through and outside the                       obtain assurance from the issuer that the
                                             individual market health plans, whether                                    Exchange). Patients must also receive                       issuer will accept such payments for the
                                             directly, through a parent organization,                                   information about all available financial                   duration of the plan year.



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                                             90224         Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                                These requirements are intended to                   undermined by the providers’ or                        President’s priorities, or the principles
                                             ensure that patients are able to make                   suppliers’ financial interests.                        set forth in the Executive Order. A
                                             coverage decisions based on full,                                                                              regulatory impact analysis (RIA) must
                                                                                                     C. Overall Impact
                                             accurate information, and are not                                                                              be prepared for major rules with
                                             inappropriately influenced by financial                    We have examined the effects of this                economically significant effects ($100
                                             interests of dialysis facilities and                    rule as required by Executive Order                    million or more in any 1 year. We
                                             suppliers, and to minimize the                          12866 (58 FR 51735, September 1993,                    estimate that this rulemaking is
                                             likelihood that coverage is interrupted                 Regulatory Planning and Review), the                   ‘‘economically significant’’ as measured
                                             midyear for these vulnerable patients.                  Regulatory Flexibility Act (RFA)                       by the $100 million threshold, and
                                                                                                     (September 19, 1980, Pub. L. 96–354),                  hence also a major rule under the
                                             B. Statement of Need                                    section 1102(b) of the Social Security                 Congressional Review Act. Accordingly,
                                                This interim final rule with comment                 Act, the Unfunded Mandates Reform                      we have prepared an RIA that to the best
                                             addresses concerns raised by                            Act of 1995 (Pub. L. 104–4), Executive                 of our ability presents the costs and
                                             commenters and by HHS regarding the                     Order 13132 on Federalism, and the                     benefits of the rulemaking.
                                             inappropriate steering of patients with                 Congressional Review Act (5 U.S.C.
                                             ESRD, especially those eligible for                     804(2)).                                               D. Impact Estimates and Accounting
                                             Medicare and Medicaid, into individual                     Executive Order 12866 (58 FR 51735)                 Table
                                             market health plans that offer                          directs agencies to assess all costs and                  In accordance with OMB Circular A–
                                             significantly higher reimbursement rates                benefits of available regulatory                       4, Table 3 below depicts an accounting
                                             compared to Medicare and Medicaid,                      alternatives and, if regulation is                     statement summarizing HHS’
                                             without regard to the potential risks                   necessary, to select regulatory                        assessment of the benefits, costs, and
                                             incurred by the patient. As discussed                   approaches that maximize net benefits                  transfers associated with this regulatory
                                             previously in the preamble, public                      (including potential economic,                         action. The period covered by the RIA
                                             comments received in response to the                    environmental, public health and safety                is 2017 through 2026.
                                             August 2016 RFI indicated that dialysis                 effects; distributive impacts; and                        HHS anticipates that the provisions of
                                             facilities may be encouraging patients to               equity). Executive Order 13563 (76 FR                  this interim final rule with comment
                                             move from one type of coverage into                     3821, January 21, 2011) is supplemental                will enhance patient protections and
                                             another based solely on the financial                   to and reaffirms the principles,                       enable patients with ESRD to choose
                                             benefit to the dialysis facility, and                   structures, and definitions governing                  health insurance coverage that best suits
                                             without transparency about the                          regulatory review as established in                    their needs and improve their health
                                             potential consequences for the patient,                 Executive Order 12866.                                 outcomes. Providing patients with
                                             in circumstances where these actions                       Section 3(f) of Executive Order 12866               accurate information will help to ensure
                                             may result in harm to the individual.19                 defines a ‘‘significant regulatory action’’            that patients are able to obtain necessary
                                             Further, enrollment trends indicate that                as an action that is likely to result in a             health care, reduce the likelihood of
                                             the number of individual market                         rule—(1) having an annual effect on the                coverage gaps, as well as provide
                                             enrollees with ESRD more than doubled                   economy of $100 million or more in any                 financial protection. Dialysis facilities
                                             between 2014 and 2015, which is not                     one year, or adversely and materially                  and issuers will incur costs to comply
                                             itself evidence of inappropriate behavior               affecting a sector of the economy,                     with these requirements. If patients
                                             but does raise concerns that the steering               productivity, competition, jobs, the                   covered through individual market
                                             behavior described by commenters may                    environment, public health or safety, or               plans opt to move to (or return to)
                                             be becoming increasingly common, and                    state, local or tribal governments or                  Medicare and Medicaid, then there will
                                             without immediate rulemaking patients                   communities (also referred to as                       be a transfer of patient care costs to the
                                             are at considerable risk of harm.                       ‘‘economically significant’’); (2) creating            Medicare and Medicaid programs. For
                                                This interim final rule with comment                 a serious inconsistency or otherwise                   those patients covered through
                                             addresses these issues by implementing                  interfering with an action taken or                    individual market plans who chose to
                                             a number of requirements that will                      planned by another agency; (3)                         apply for and enroll in Medicare, there
                                             provide patients with the information                   materially altering the budgetary                      would be a transfer of premium
                                             they need to make informed decisions                    impacts of entitlement grants, user fees,              payments from individual market
                                             about their coverage and will help to                   or loan programs or the rights and                     issuers to the Medicare program. In
                                             ensure that their care is not at risk of                obligations of recipients thereof; or (4)              accordance with Executive Order 12866,
                                             disruptions, gaps in coverage, limited                  raising novel legal or policy issues                   HHS believes that the benefits of this
                                             access to necessary treatment, or                       arising out of legal mandates, the                     regulatory action justify the costs.

                                                                                                           TABLE 3—ACCOUNTING TABLE

                                             Benefits:

                                             Qualitative:
                                                * Provide patient protections and ensure that patients are able to make coverage decisions based on complete and accurate information,
                                                    and are not inappropriately influenced by the financial interests of dialysis facilities.

                                                19 Individuals who are already covered by            benefits to which the individual is entitled.          private insurance—including late enrollment
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                                             Medicare generally cannot become enrolled in            Therefore, while an individual with ESRD is not        penalties for individuals in Medicare Part A but not
                                             coverage in the individual market. Section              required to apply for and enroll in Medicare, once     Part B if they return to Medicare, and lack of
                                             1882(d)(3) of the Social Security Act makes it          they become enrolled, it is unlawful for them to be    coverage for certain drugs following a kidney
                                             unlawful to sell or issue a health insurance policy     sold a commercial health insurance policy in the
                                                                                                                                                            transplant—are routinely not disclosed and may be
                                             (including policies issued on and off Exchanges) to     individual market if the seller knows the individual
                                             an individual entitled to benefits under Medicare       market policy would duplicate benefits to which        unknown to patients. These financial consequences
                                             Part A or enrolled under Medicare part B with the       the individual is entitled. The financial              can have significant impact on patient care.
                                             knowledge that the policy duplicates the health         consequences for patients moving from Medicare to



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                                                              Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                                           90225

                                                                                                             TABLE 3—ACCOUNTING TABLE—Continued
                                                   * Improve health outcomes for patients by ensuring that patients have coverage that best fits both current and future needs, including
                                                     transplantation services.
                                                   * Ensure that issuers will accept any premium assistance payments for the duration of the plan year and patients’ coverage is not inter-
                                                     rupted midyear.

                                             Costs:                                                                                                       Estimate         Year dollar          Discount          Period
                                                                                                                                                          (millions)                          rate percent       covered

                                                   Annualized Monetized ..............................................................................            $29.1              2016                    7   2017–2026
                                                                                                                                                                   29.1              2016                    3   2017–2026

                                             Costs reflect administrative costs incurred by dialysis facilities and issuers to comply with ICRs.

                                             Transfers:
                                                 Annualized Monetized ..............................................................................            $688.4               2016                    7   2017–2026
                                                                                                                                                                 688.4               2016                    3   2017–2016

                                             Transfers reflect transfer of patient care costs from individual market issuers to Medicare and Medicaid; out-of-pocket costs from dual eligible
                                               patients to Medicare and Medicaid; transfer of premium dollars from individual market issuers to Medicare; and transfer of reimbursements
                                               from dialysis facilities to individual market issuers if patients move from individual market plans to Medicare and Medicaid.



                                             a. Number of Affected Entities                                     parent organization, or through another                     facilities must provide information
                                                There are 6,737 dialysis facilities                             entity. We believe that these practices                     about penalties associated with late
                                             across the country that are certified by                           are likely concentrated within large                        enrollment in Medicare. Patients must
                                             Medicare, and an estimated 495,000                                 dialysis chains that together operate                       also receive information about available
                                             patients on dialysis. Based on USRDS                               approximately 90 percent of dialysis                        financial assistance for enrollment in an
                                                                                                                facilities, and therefore estimate that                     individual market health plan and
                                             data for recent years, we estimated that
                                                                                                                approximately 6,064 facilities make                         limitations and associated risks of such
                                             approximately 99.3 percent or 491,500
                                                                                                                payments of premiums for individual                         assistance; the financial benefit to the
                                             patients receive services at Medicare-
                                                                                                                market health plans, whether directly,                      facility of enrolling the individual in an
                                             certified facilities. Therefore, each
                                                                                                                through a parent organization, or                           individual market plan as opposed to
                                             Medicare-certified facility is providing
                                                                                                                through another entity.                                     public plans; and current information
                                             services to approximately 73 patients on
                                             average annually. As mentioned                                     b. Anticipated Benefits, Costs and                          about the facility’s, or its parent
                                             previously, data indicates that about 88                           Transfers                                                   organization’s contributions to patients
                                             percent of ESRD patients receiving                                                                                             or third parties that make payments of
                                                                                                                   This interim final rule with comment                     premiums for individual market plans
                                             hemodialysis were covered by Medicare                              implements a number of requirements
                                             (as primary or secondary payer) in 2014.                                                                                       for individuals on dialysis.
                                                                                                                for Medicare-certified dialysis facilities
                                             Data from the CMS risk adjustment                                  (as defined in 42 CFR 494.10) that make                        These requirements are intended to
                                             program in the individual market (both                             payments of premiums for individual                         ensure that patients are able to make
                                             on and off exchange) suggest that the                              market health plans (in any amount),                        insurance coverage decisions based on
                                             number of enrollees with an ESRD                                   whether directly, through a parent                          full, accurate information, and not based
                                             diagnosis in the individual market more                            organization (such as a dialysis                            on misleading, inaccurate, or
                                             than doubled between 2014 and 2015.                                corporation), or through another entity                     incomplete information that prioritizes
                                             Although some of the increase could be                             (including by providing contributions to                    providers and suppliers’ financial
                                             due to increases in coding intensity and                           entities that make such payments). Such                     interests. It is likely that some patients
                                             cross-year claims, the gross number is                             facilities must provide patients with                       will elect to apply for and enroll in
                                             still significant and concerning.                                  information on available health                             Medicare and Medicaid (if eligible)
                                             Comments received in response to the                               coverage options, including local,                          instead of individual market plans once
                                             RFI suggest that the inappropriate                                 current individual market plans,                            they are provided all the information as
                                             steering of patients may be accelerating                           Medicare, Medicaid, and CHIP coverage.                      required. As previously discussed,
                                             over time. Insurance industry                                      This information must include; the                          Medicare (and Medicaid) enrollment
                                             commenters stated that the number of                               effects each coverage option will have                      will provide health benefits by reducing
                                             patients in individual market plans                                on the patient’s access to, and costs for,                  the likelihood of disruption of care, gaps
                                             receiving dialysis increased 2 to 5 fold                           the providers and suppliers, services,                      in coverage, limited access to necessary
                                             in recent years. We will continue to                               and prescription drugs that are currently                   treatment, denial of access to kidney
                                             analyze these data to better understand                            within the individual’s ESRD plan of                        transplants or delay in transplant
                                             trends in ESRD diagnoses as well as the                            care as well as those likely to result                      readiness, and denial of post-surgical
                                             extent to which individuals may be                                 from other documented health care                           care. By enrolling in Medicare (and
                                             enrolled in both Medicare and                                      needs. This must include an overview of                     Medicaid), many individuals can avoid
                                             individual market plans and                                        the health-related and financial risks                      potential financial loss due to Medicare
                                             implications for the anti-duplication                              and benefits of the individual market                       late enrollment penalties; higher cost-
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                                             provision outlined in section 1882(d)(3)                           plans available to the patient (including                   sharing, especially for out-of-network
                                             of the Act.                                                        plans offered through and outside the                       services; higher deductibles; and
                                                There is no data on how many                                    Exchange). Information on coverage of                       coverage limits in individual market
                                             dialysis facilities make payments of                               transplant-associated costs must also be                    plans. This is particularly true for the
                                             premiums for individual market health                              provided to patients, including pre- and                    individuals eligible for Medicare based
                                             plans, whether directly, through a                                 post-transplant care. In addition,                          on ESRD who are also eligible for


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                                             90226        Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                             Medicaid. While a patient with                          eligible patients, the total transfer is                would be more effective in ending the
                                             individual market coverage could be                     estimated to be $12,512,500. For those                  practice of steering.
                                             liable for out-of pocket costs of up to                 patients covered through individual                        HHS believes, however, that patients
                                             $7,150 in 2017, a patient dually enrolled               market plans who choose to enroll in                    will benefit from having complete and
                                             in Medicare and Medicaid will have                      Medicare there will also be a transfer of               accurate information regarding their
                                             very limited, and in many cases no, out-                premium payments from the individual                    options, especially information on
                                             of-pocket costs in addition to a wider                  market issuers to the Medicare program.                 Medicare and Medicaid and the
                                             range of eligible providers and                         Assuming that patients will pay the                     financial and medical/coverage
                                             suppliers.                                              standard Part B premium amount,                         consequences of each option. In
                                                In addition, this interim final rule                 which will be $134 in 2017, and an                      addition, CMS can ensure compliance
                                             with comment establishes a new                          average Part D premium of $42.17,20 the                 with the disclosure requirements
                                             standard, applicable only to facilities                 total transfer for 3,500 patients is                    through the survey and certification
                                             that make payments of premiums for                      estimated to be $7,399,140. In addition,                process. CMS plans to issue interpretive
                                             individual market health plans, whether                 if patients move from individual market                 guidance and a survey protocol for the
                                             directly, through a parent organization                 plans to Medicare, then reimbursements                  enforcement of the new standards by
                                             (such as a dialysis corporation), or                    to dialysis facilities will be reduced,                 state surveyors to ensure that the
                                             through another entity (including by                    since individual market plans currently                 facilities share appropriate information
                                             providing contributions to entities that                have higher reimbursement rates for                     with patients.
                                             make such payments), requiring that the                 dialysis services compared to Medicare,                    We also considered requiring issuers
                                             facility disclose such payments to                      resulting in a transfer from dialysis                   to accept all third party premium
                                             applicable issuers and obtain assurance                 facilities to issuers. As discussed                     payments. However, requiring issuers to
                                             from the issuer that they will accept                   previously, based on comments                           accept such payments could skew the
                                             such payments for the duration of the                   received, dialysis facilities are estimated             individual market risk pool, a position
                                             plan year. This will lead to improved                   to be paid at least $100,000 more per                   CMS has consistently articulated since
                                             health outcomes for patients by                         year per patient for a typical patient                  2013, when we expressly discouraged
                                             ensuring that coverage is not interrupted               enrolled in commercial coverage rather                  issuers from accepting these premium
                                             midyear for these vulnerable patients,                  than public coverage. For 3,500 patients,               payments from providers. We also
                                             leaving them in medical or financial                    the total transfer from dialysis facilities             received comments from issuers, social
                                             jeopardy.                                               to issuers is estimated to be at least                  workers, and others in response to the
                                                Dialysis facilities that make premium                $350,000,000.                                           RFI indicating that inappropriate
                                             payments for patients as discussed                                                                              steering practices could have the effect
                                             above will incur costs to comply with                   E. Alternatives Considered                              of skewing the insurance risk pool. The
                                             the provisions of this rule. The                           Under the Executive Order, HHS is                    underlying policy considerations have
                                             administrative costs related to the                     required to consider alternatives to                    not changed and therefore CMS is
                                             disclosure requirements have been                       issuing rules and alternative regulatory                seeking to prevent mid-year disruption
                                             estimated in the previous section.                      approaches. HHS considered not                          by requiring facilities to disclose
                                                If patients elect to apply for and enroll                                                                    payments and assure acceptance. In
                                                                                                     requiring any additional disclosures to
                                             in Medicare and Medicaid (if eligible)                                                                          light of the comments received
                                                                                                     patients. Providing complex information
                                             instead of individual market plans, the                                                                         regarding dialysis facilities’ practices in
                                                                                                     regarding available coverage options
                                             cost of their coverage will be transferred                                                                      particular, and the unique health needs
                                                                                                     may not always help patients make the
                                             from the patients and the individual                                                                            and coverage options available to this
                                                                                                     best decisions. In addition, disclosure
                                             market issuers to the Medicare and                                                                              population, we are at this time imposing
                                                                                                     requirements may not be as effective
                                             Medicaid programs (if the patient is                                                                            disclosure-related obligations only on
                                                                                                     where financial conflicts of interest
                                             eligible for both). This will lead to                                                                           the ESRD facilities themselves. This rule
                                                                                                     remain for the dialysis facilities. We
                                             increased spending for these programs.                                                                          does not change the legal obligations or
                                             For the purpose of this analysis, we                    also considered prohibiting outright
                                                                                                     contributions from dialysis suppliers to                requirements placed on issuers.
                                             assume that approximately 50 percent of                                                                            In addition, to determine whether
                                             patients enrolled in individual market                  patients or third parties for individual
                                                                                                                                                             further action is warranted, we seek
                                             plans that receive third party premium                  market plan premiums, but determined
                                                                                                                                                             comments from stakeholders on
                                             payments will elect to apply for and                    that we wanted to have additional data
                                                                                                                                                             whether patients would be better off on
                                             enroll in Medicare. USRDS data show                     before implementing additional
                                                                                                                                                             balance if premium assistance
                                             that for individuals with ESRD enrolled                 restrictions. A ban could potentially
                                                                                                                                                             originating from health care providers
                                             in Medicare receiving hemodialysis,                     cause financial hardship for some
                                                                                                                                                             and suppliers were more strictly limited
                                             total health care spending averaged                     patients. On the other hand, dialysis
                                                                                                                                                             and disclosed. We also seek comment
                                             $91,000 per person in 2014, including                   facilities would not be able to use these
                                                                                                                                                             on alternative options where payments
                                             dialysis and non-dialysis services.                     contributions to steer patients towards
                                                                                                                                                             would be limited absent a showing that
                                             Therefore, if 3,500 patients switch to                  individual market plans that are more in
                                                                                                                                                             the individual market coverage was in
                                             Medicare, the total transfer from                       the financial interests of dialysis
                                                                                                                                                             the individual’s best interest, and we
                                             individual market issuers to the                        facilities rather than those of the patient.
                                                                                                                                                             seek comment on what such a showing
                                             Medicare program will be                                In the absence of additional data, it is
                                                                                                                                                             would require and how it could prevent
                                             approximately $318,500,000. We                          not possible to estimate the costs,
                                                                                                                                                             mid-year disruptions in coverage.
                                             assume that about 50 percent of patients                benefits and transfers associated with
                                             that opt to enroll in Medicare will also                such a ban, whether the benefits would                  F. Regulatory Flexibility Act
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                                             be eligible for Medicaid and will have                  outweigh the costs, and whether it                        The Regulatory Flexibility Act (5
                                             negligible or zero cost-sharing, rather                                                                         U.S.C. 601 et seq.) (RFA) imposes
                                                                                                       20 Source: Jack Hoadley et al., Medicare Part D: A
                                             than the maximum out-of-pocket cost of                                                                          certain requirements with respect to
                                                                                                     First Look at Prescription Drug Plans in 2017,
                                             $7,150, which will be a transfer from the               Kaiser Family Foundation, October 2016, http://
                                                                                                                                                             Federal rules that are subject to the
                                             patients to the Medicare and Medicaid                   kff.org/medicare/issue-brief/medicare-part-d-a-first-   notice and comment requirements of
                                             programs. Therefore, for 1,750 dual                     look-at-prescription-drug-plans-in-2017/.               section 553(b) of the Administrative


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                                                          Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations                                             90227

                                             Procedure Act (5 U.S.C. 551 et seq.) and                operations of a substantial number of                 responsibilities among various levels of
                                             that are likely to have a significant                   small rural hospitals.                                government.
                                             economic impact on a substantial
                                                                                                     G. Unfunded Mandates Reform Act                       I. Congressional Review Act
                                             number of small entities. Unless an
                                             agency certifies that a rule is not likely                 Section 202 of the Unfunded                           This interim final rule with comment
                                             to have a significant economic impact                   Mandates Reform Act (UMRA) of 1995                    is subject to the Congressional Review
                                             on a substantial number of small                        requires that agencies assess anticipated             Act provisions of the Small Business
                                             entities, section 604 of RFA requires                   costs and benefits before issuing any                 Regulatory Enforcement Fairness Act of
                                             that the agency present a final                         rule that includes a Federal mandate                  1996 (5 U.S.C. 801 et seq.), which
                                             regulatory flexibility analysis describing              that could result in expenditure in any               specifies that before a rule can take
                                             the impact of the rule on small entities                one year by state, local or tribal                    effect, the Federal agency promulgating
                                             and seeking public comment on such                      governments, in the aggregate, or by the              the rule shall submit to each House of
                                             impact.                                                 private sector, of $100 million in 1995               the Congress and to the Comptroller
                                                The RFA generally defines a ‘‘small                  dollars, updated annually for inflation.              General a report containing a copy of
                                             entity’’ as (1) a proprietary firm meeting              In 2016, that threshold level is                      the rule along with other specified
                                             the size standards of the Small Business                approximately $146 million.                           information, and has been transmitted
                                             Administration (SBA) (13 CFR 121.201);                     UMRA does not address the total cost               to the Congress and the Comptroller
                                             (2) a nonprofit organization that is not                of a rule. Rather, it focuses on certain              General for review.
                                             dominant in its field; or (3) a small                   categories of cost, mainly those ‘‘Federal               In accordance with the provisions of
                                             government jurisdiction with a                          mandate’’ costs resulting from—(1)                    Executive Order 12866, this regulation
                                             population of less than 50,000. (States                 imposing enforceable duties on state,                 was reviewed by the Office of
                                             and individuals are not included in the                 local, or tribal governments, or on the               Management and Budget.
                                             definition of ‘‘small entity.’’) HHS uses               private sector; or (2) increasing the                 List of Subjects in 42 CFR Part 494
                                             as its measure of significant economic                  stringency of conditions in, or
                                                                                                                                                             Health facilities, Incorporation by
                                             impact on a substantial number of small                 decreasing the funding of, state, local, or
                                                                                                                                                           reference, Kidney diseases, Medicare,
                                             entities a change in revenues of more                   tribal governments under entitlement
                                                                                                                                                           Reporting and recordkeeping
                                             than 3 to 5 percent.                                    programs.
                                                                                                                                                           requirements.
                                                Because this provision is issued as a                   This interim final rule with comment
                                                                                                                                                             For the reasons set forth in the
                                             final rule without being preceded by a                  includes no mandates on state, local, or
                                                                                                                                                           preamble, the Centers for Medicare &
                                             general notice of proposed rulemaking,                  tribal governments. Thus, this rule does
                                                                                                                                                           Medicaid Services amends 42 CFR
                                             a final regulatory analysis under section               not impose an unfunded mandate on
                                                                                                                                                           Chapter IV as follows:
                                             604 of the Regulatory Flexibility Act (94               state, local or tribal governments. As
                                             Stat. 1167) is not required. Nevertheless,              discussed previously, dialysis facilities             PART 494—CONDITIONS FOR
                                             HHS estimates that approximately 10                     that wish to make payments of                         COVERAGE FOR END-STAGE RENAL
                                             percent of Medicare-certified dialysis                  premiums for individual market health                 DISEASE FACILITIES
                                             facilities are not part of a large chain                plans (in any amount), whether directly,
                                             and may qualify as small entities. It is                through a parent organization (such as                ■ 1. The authority citation for part 494
                                             not clear how many of these facilities                  a dialysis corporation), or through                   continues to read as follows:
                                             make payments of premiums for                           another entity (including by providing                  Authority: Secs. 1102 and 1871 of the
                                             individual market health plans, whether                 contributions to entities that make such              Social Security Act (42 U.S.C. 1302 and
                                             directly, through a parent organization,                payments), will incur administrative                  1395hh).
                                             or through another entity. To the extent                costs in order to comply with the
                                                                                                                                                           ■ 2. Section 494.70 is amended by
                                             that they do so, these facilities will                  provisions of this interim final rule with
                                                                                                                                                           redesignating paragraph (c) as paragraph
                                             incur costs to comply with the                          comment. Issuers will incur some
                                                                                                                                                           (d) and adding a new paragraph (c) to
                                             provisions of this interim final rule with              administrative costs as well. However,
                                                                                                                                                           read as follows:
                                             comment and experience a reduction in                   consistent with policy embodied in
                                             reimbursements if patients transfer from                UMRA, this interim final rule with                    § 494.70   Condition: Patients’ rights.
                                             individual market coverage to Medicare.                 comment has been designed to be the                   *     *     *      *     *
                                             However, HHS believes that very few                     least burdensome alternative for state,                 (c) Standard: Right to be informed of
                                             small entities, if any, make such                       local and tribal governments, and the                 health coverage options. For patients of
                                             payments. Therefore, HHS expects that                   private sector.                                       dialysis facilities that make payments of
                                             this interim final rule with comment                                                                          premiums for individual market health
                                                                                                     H. Federalism
                                             will not affect a substantial number of                                                                       plans (in any amount), whether directly,
                                             small entities. Accordingly, the                           Executive Order 13132 outlines                     through a parent organization (such as
                                             Secretary certifies that a regulatory                   fundamental principles of federalism. It              a dialysis corporation), or through
                                             flexibility analysis is not required.                   requires adherence to specific criteria by            another entity (including by providing
                                                In addition, section 1102(b) of the                  Federal agencies in formulating and                   contributions to entities that make such
                                             Social Security Act requires agencies to                implementing policies that have                       payments), the patient has the right to—
                                             prepare a regulatory impact analysis if                 ‘‘substantial direct effects’’ on the states,           (1) Be informed annually, on a timely
                                             a rule may have a significant economic                  the relationship between the national                 basis for each plan year, of all available
                                             impact on the operations of a substantial               government and states, or on the                      health coverage options, including but
                                             number of small rural hospitals. This                   distribution of power and
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                                                                                                                                                           not limited to Medicare, Medicaid, CHIP
                                             analysis must conform to the provisions                 responsibilities among the various                    and individual market plans. This must
                                             of section 604 of the RFA. This interim                 levels of government.                                 include information on:
                                             final rule with comment will not affect                    This rule does not have direct effects               (i) How plans in the individual
                                             small rural hospitals. Therefore, HHS                   on the states, the relationship between               market will affect the patient’s access to,
                                             has determined that this regulation will                the Federal government and states, or on              and costs for the providers and
                                             not have a significant impact on the                    the distribution of power and                         suppliers, services, and prescription


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                                             90228        Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Rules and Regulations

                                             drugs that are currently within the                     reasonable steps to ensure such                       converted to a final rule, without
                                             individual’s ESRD plan of care as well                  payments are not made by the facility or              change.
                                             as those likely to result from other                    by third parties to which the facility
                                                                                                                                                           III. Executive Orders 12866 and 13563
                                             documented health care needs. This                      contributes as described in this
                                             must include an overview of the health-                 paragraph (k).                                           Executive Orders (E.O.s) 12866 and
                                             related and financial risks and benefits                   (2) If a facility is aware that a patient          13563 direct agencies to assess all costs
                                             of the individual market plans available                is not eligible for Medicaid and is not               and benefits of available regulatory
                                             to the patient (including plans offered                 eligible to enroll in Medicare Part A                 alternatives and, if regulation is
                                             through and outside the Exchange).                      and/or Part B except during the General               necessary, to select regulatory
                                                (ii) Medicare and Medicaid/Children’s                Enrollment Period, and the facility is                approaches that maximize net benefits
                                             Health Insurance Coverage (CHIP)                        aware that the patient intends to enroll              (including potential economic,
                                             coverage, including Medicare Savings                    in Medicare Part A and/or Part B during               environmental, public health and safety
                                             Programs, and how enrollment in those                   that period, the standards under this                 effects, distributive impacts, and
                                             programs will affect the patient’s access               paragraph (k) will not apply with                     equity). E.O. 13563 emphasizes the
                                             to and costs for health care providers,                 respect to payments for that patient                  importance of quantifying both costs
                                             services, and prescription drugs that are               until July 1, 2017.                                   and benefits, of reducing costs, of
                                             currently within the individual’s plan of                                                                     harmonizing rules, and of promoting
                                                                                                       Dated: November 28, 2016.
                                             care.                                                                                                         flexibility. This is not a significant
                                                                                                     Andrew M. Slavitt,                                    regulatory action and, therefore, was not
                                                (iii) Each option’s coverage and                     Acting Administrator, Centers for Medicare
                                             anticipated costs associated with                                                                             subject to review under section 6(b) of
                                                                                                     & Medicaid Services.                                  E.O. 12866, Regulatory Planning and
                                             transplantation, including patient and                    Dated: November 29, 2016.
                                             living donor costs for pre- and post-                                                                         Review, dated September 30, 1993. This
                                                                                                     Sylvia M. Burwell,                                    rule is not a major rule under 5 U.S.C.
                                             transplant care.
                                                (2) Receive current information from                 Secretary, Department of Health and Human             804.
                                                                                                     Services.
                                             the facility about premium assistance                                                                         IV. Regulatory Flexibility Act
                                                                                                     [FR Doc. 2016–30016 Filed 12–12–16; 4:15 pm]
                                             for enrollment in an individual market                                                                           NASA does not expect this final rule
                                             health plan that may be available to the                BILLING CODE 4120–01–P
                                                                                                                                                           to have a significant economic impact
                                             patient from the facility, its parent                                                                         on a substantial number of small entities
                                             organization, or third parties, including                                                                     within the meaning of the Regulatory
                                             but not limited to limitations and any                  NATIONAL AERONAUTICS AND
                                                                                                     SPACE ADMINISTRATION                                  Flexibility Act, 5 U.S.C. 601, et seq. A
                                             associated risks of such assistance.                                                                          final regulatory flexibility analysis has
                                                (3) Receive current information about                                                                      been performed and is summarized as
                                             the facility’s, or its parent                           48 CFR Parts 1816, 1832, 1842, and
                                                                                                     1852                                                  follows:
                                             organization’s, contributions to patients                                                                        The purpose of this rule is to
                                             or third parties that subsidize the                     RIN 2700–AE34                                         implement revisions to the NASA
                                             individual’s enrollment in individual                                                                         voucher submittal and payment process.
                                             market health plans for individuals on                  NASA Federal Acquisition Regulation
                                                                                                                                                           These revisions are necessary due to
                                             dialysis, including the reimbursements                  Supplement: Revised Voucher
                                                                                                                                                           section 893 of the National Defense
                                             for services rendered that the facility                 Submission & Payment Process (NFS
                                                                                                                                                           Authorization Act for Fiscal Year 2016
                                             receives as a result of subsidizing such                Case 2016–N025)
                                                                                                                                                           (Pub. L. 114–92) prohibiting DCAA from
                                             enrollment.                                             AGENCY:  National Aeronautics and                     performing audit work for non-Defense
                                             *       *    *      *     *                             Space Administration.                                 Agencies. This rule removes an
                                             ■ 3. Section 494.180 is amended by                      ACTION: Final rule.                                   outdated NFS payment clause and its
                                             adding a new paragraph (k) to read as                                                                         associated prescription relative to the
                                             follows:                                                SUMMARY:  NASA has adopted as final,                  NASA voucher submittal and payment
                                                                                                     without change, an interim rule                       process and replaces it with a new
                                             § 494.180   Condition: Governance.                      amending the NASA Federal                             clause that revises NASA’s current cost
                                             *       *    *     *     *                              Acquisition Regulation Supplement                     voucher submission and payment
                                                (k) Standard: Disclosure to Insurers of              (NFS) to implement revisions to the                   process to ensure the continued prompt
                                             Payments of Premiums. (1) Facilities                    voucher submittal and payment process.                payment to its suppliers.
                                             that make payments of premiums for                      DATES: Effective: December 14, 2016.                     No comments were received in
                                             individual market health plans (in any                  FOR FURTHER INFORMATION CONTACT: Mr.                  response to the initial regulatory
                                             amount), whether directly, through a                    John J. Lopez, telephone 202–358–3740.                flexibility analysis.
                                             parent organization (such as a dialysis                 SUPPLEMENTARY INFORMATION:                               This rule applies to contractors
                                             corporation), or through another entity                                                                       requesting payment under cost
                                             (including by providing contributions to                I. Background:                                        reimbursement contracts. An analysis of
                                             entities that make such payments)                          NASA published an interim rule in                  data in the Federal Procurement Data
                                             must—                                                   the Federal Register at 81 FR 63143 on                System (FPDS) revealed that cost
                                                (i) Disclose to the applicable issuer                September 14, 2016, to amend the                      reimbursement contracts are primarily
                                             each policy for which a third party                     NASA Federal Acquisition Regulation                   awarded to large businesses. FPDS data
                                             payment described in this paragraph (k)                 Supplement (NFS) to implement                         compiled over the past three fiscal years
                                             will be made, and                                                                                             (FY 2013 through FY 2015) showed an
rmajette on DSK2TPTVN1PROD with RULES




                                                                                                     revisions to the voucher submittal and
                                                (ii) Obtain assurance from the issuer                payment process.                                      average of 311 active cost
                                             that the issuer will accept such                                                                              reimbursement NASA contracts, of
                                             payments for the duration of the plan                   II. Discussion and Analysis                           which 141 (approximately 45%) were
                                             year. If such assurances are not                           There were no public comments                      awarded to small businesses. However,
                                             provided, the facility shall not make                   submitted in response to the interim                  there is no significant economic or
                                             payments of premiums and shall take                     rule. The interim rule has been                       administrative cost impact to small or


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Document Created: 2016-12-14 00:48:23
Document Modified: 2016-12-14 00:48:23
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionInterim final rule with comment period.
ContactLauren Oviatt, (410) 786-4683, for issues related to the ESRD Conditions for Coverage.
FR Citation81 FR 90211 
RIN Number0938-AT11
CFR AssociatedHealth Facilities; Incorporation by Reference; Kidney Diseases; Medicare and Reporting and Recordkeeping Requirements

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