E8-22592. Medicare Program; Revisions to the Medicare Advantage and Part D Prescription Drug Contract Determinations, Appeals, and Intermediate Sanctions Processes; Correcting Amendment

AGENCY:

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

ACTION:

Final rule; correcting amendment.

SUMMARY:

In the December 5, 2007 issue of the Federal Register, we published a final rule finalizing the Medicare program provisions relating to contract determinations involving Medicare Advantage (MA) organizations and Medicare Part D prescription drug plan sponsors, including eliminating the reconsideration process for review of contract determinations, revising the provisions related to appeals of contract determinations, and clarifying the process for MA organizations and Part D sponsors to complete corrective action plans. In that final rule, we also clarified the intermediate sanction and civil money penalty provisions that apply to MA organizations and Part D sponsors, modified elements of MA organizations and Part D sponsors' compliance plans, retained voluntary self-reporting for Part D sponsors, implemented voluntary self-reporting for MA organizations, and revised provisions to ensure HHS has access to the books and records of MA organizations and Part D sponsors' first tier, downstream, and related entities. This correcting amendment corrects a limited number of technical and typographical errors identified in the December 5, 2007 final rule.

DATES:

These correcting amendments are effective September 26, 2008, except for the amendment to § 423.505, which is effective on January 1, 2009. The correcting amendments for § 422.756(d) and § 423.756(d) are applicable beginning January 4, 2008.

FOR FURTHER INFORMATION CONTACT:

Christine Reinhard [phone]. Stephanie Blaydes Kaisler [phone].

SUPPLEMENTARY INFORMATION:

I. Background

In FR Doc. 07-5946 (72 FR 68700 through 68741), the final rule entitled, “Revisions to the Medicare Advantage and Part D Prescription Drug Contract Determinations, Appeals, and Intermediate Sanctions Processes,” there were technical errors that have been identified and corrected in the regulations text of this correcting amendment. We note that correcting two of these technical errors, found at § 422.756(d) and § 423.756(d), ensure that certain existing provisions which were never intended to be the subject of notice and comment rulemaking, remain in place for the benefit of all affected parties, including MA organizations and Part D sponsors. The provisions in this correcting amendment for § 422.756(d) and § 423.756(d) are effective as if they were included in the final rule published December 5, 2007. Accordingly, the corrections are effective retroactive to January 4, 2008, the effective date of most of the provisions of the final rule. However, the provisions in this correcting amendment for § 423.505 are effective January 1, 2009 since these particular provisions in § 423.505 were not set to take effect until January 1, 2009.

II. Summary of Errors in the Regulations Text

On pages 68726 and 68735 of the December 5, 2007 final rule, there were technical errors made in the regulation text of § 422.756(d) and § 423.756(d). Specifically, a typographical error in our amendatory instructions caused us to inadvertently omit from the Code of Federal Regulations (CFR) existing paragraphs § 422.756(d)(3) and § 423.756(d)(3) regarding the duration of an MA and Part D intermediate sanction, respectively. We note that these existing provisions were not intended to be revised in the December 5, 2007 final rule (72 FR 68700 through 68741).

On page 68732 of the December 5, 2007 final rule, our amendatory instruction indicated that we were revising § 423.505(i)(2)(i). However, when we set out the changed regulations text, we inadvertently revised paragraph (i)(2)(ii) instead of paragraph (i)(2)(i). This typographical error, if not corrected, would have inadvertently deleted from the CFR the current paragraph at § 423.505(i)(2)(ii) regarding the 10-year record retention requirement as of January 1, 2009, the effective date of this provision as specified in the final rule. The correct § 423.505(i)(2)(i) should read “HHS, the Comptroller General, or their designees have the right to audit, evaluate and inspect any books, contracts, records, including medical records, and documentation of the first tier, downstream, and related entities involving transactions related to CMS' contract with the Part D sponsor.” As stated above, the existing § 423.505(i)(2)(ii), which references the 10-year record retention requirements, remains in the CFR unchanged.

In § 423.505(i)(3)(iii) the term “related entity” is incorrectly used twice in the same sentence, so we have removed this duplication. In addition, we inadvertently included MA organization in § 423.505(i)(3)(iv) which only applies to Part D sponsors. We have revised the language accordingly.

III. Waiver of Proposed Rulemaking and Delay in Effective Date

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a rule take effect in accordance with section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we can waive this notice and comment procedure if the Secretary finds, for good cause, that the notice and comment process is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons therefore in the notice.

Section 553(d) of the APA ordinarily requires a 30-day delay in effective date of final rules after the date of their publication in the Federal Register. This 30-day delay in effective date can be waived, however, if an agency finds for good cause that the delay is impracticable, unnecessary, or contrary to the public interest, and the agency incorporates a statement of the findings and its reasons in the rule issued.

The provisions of this correcting amendment regarding the duration of sanctions at § 422.756(d) and § 423.756(d) make no substantive changes and are intended to restore provisions which were inadvertently removed from the CFR. These provisions were not revised in the final rule but were dropped because of a typographical error in our amendatory instructions. We must reinstate these provisions in the CFR to ensure that CMS may lift sanctions on MA and Part D plans as appropriate.

In addition, a typographical error in our regulations text would have inadvertently removed the current § 423.505(i)(2)(ii) from the CFR as of the effective date for these provisions on January 1, 2009. We are taking this opportunity to correct this error in the CFR to ensure that the 10-year record retention requirements for Part D sponsors remains in the CFR unchanged. Without this correcting amendment, the Medicare Part D regulations could have been construed as being silent on the 10-year Part D recordkeeping requirement which could create confusion and uncertainty for affected parties regarding CMS' policy on this issue.

Finally, we are also taking this opportunity to correct typographical errors in § 423.505(i)(3)(iii) and (iv).

Because we are issuing this correcting amendment based on typographical errors, we find that undertaking further notice and comment procedures to incorporate these corrections into the December 5, 2007 final rule is unnecessary and contrary to the public interest.

For the same reasons, we are also waiving the 30-day delay in effective date for § 422.756(d) and § 423.756(d) in this correcting amendment. We believe that it is in the public interest to ensure that the December 5, 2007 final rule accurately state the current law and CMS policy. Thus, delaying the effective date of these corrections would be contrary to the public interest. Therefore, we also find good cause to waive the 30-day delay in effective date for § 422.756(d) and § 423.756(d).

List of Subjects

42 CFR Parts 422 and 423

Accordingly, 42 CFR chapter IV is corrected by making the following correcting amendments to parts 422 and 423.

PART 422—MEDICARE ADVANTAGE PROGRAM

1. The authority citation for part 422 continues to read as follows:

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

2. Section 422.756 is amended by adding paragraph (d)(3) to read as follows:

§ 422.756

Procedures for imposing intermediate sanctions and civil money penalties.

* * * * *

(d) * * *

(3) Duration of sanction. The sanction remains in effect until CMS notifies the MA organization that CMS is satisfied that the basis for imposing the sanction has been corrected and is not likely to recur.

* * * * *

PART 423—VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

3. The authority citation for part 423 continues to read as follows:

Authority: Secs. 1102, 1860D-1 through 1860D-42, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-152, and 1395hh).

4. Section 423.505 is amended by—

A. Revising paragraph (i)(2)(i).

B. Revising paragraph (i)(2)(ii).

C. Revising paragraph (i)(3)(iii).

D. Revising paragraph (i)(3) (iv).

The revisions read as follows:

§ 423.505

Contract provisions.

* * * * *

(i) * * *

(2) * * *

(i) HHS, the Comptroller General, or their designees have the right to audit, evaluate, and inspect any books, contracts, records, including medical records, and documentation of the first tier, downstream, and related entities involving transactions related to CMS' contract with the Part D sponsor.

(ii) HHS', the Comptroller General's, or their designee's right to inspect, evaluate, and audit any pertinent information for any particular contract period exists through 10 years from the final date of the contract period or from the date of completion of any audit, whichever is later.

(3) * * *

(iii) A provision requiring that any services or other activity performed by a first tier, downstream, and related entity in accordance with a contract or written agreement are consistent and comply with the Part D sponsor's contractual obligations.

(iv) A provision requiring the Part D sponsor's first tier, downstream, and related entities to produce upon request by CMS, or its designees, any books, contracts, records, including medical records and documentation of the Part D sponsor, relating to the Part D program, to either the sponsor to provide to CMS, or directly to CMS or its designees.

* * * * *

5. Section 423.756 is amended by adding paragraph (d)(3) to read as follows:

§ 423.756

Procedures for imposing intermediate sanctions and civil money penalties.

* * * * *

(d) * * *

(3) Duration of sanction. The sanction remains in effect until CMS notifies the Part D sponsor that CMS is satisfied that the basis for imposing the sanction is corrected and is not likely to recur.

* * * * *

(Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program)

Dated: September 16, 2008.

Ann C. Agnew,

Executive Secretary to the Department.