E6-19799. Medicare Program; Decisions Affecting Medicare Advantage Plans Deemed by Joint Commission for the Accreditation of Health Care Organizations

AGENCY:

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

ACTION:

Notice.

SUMMARY:

This notice announces our decisions regarding deemed status of Joint Commission for the Accreditation of Health Care Organization-accredited Medicare Advantage plans. These decisions follow business decisions made by Joint Commission for the Accreditation of Health Care Organization in late 2005 which affect its deeming operations beginning January 1, 2006 and continue until Joint Commission for the Accreditation of Health Care Organization's deeming authority expires on March 24, 2008.

DATES:

Effective January 1, 2006 through March 24, 2008.

FOR FURTHER INFORMATION CONTACT:

Shaheen Halim, [phone].

I. Background on Medicare Advantage Deeming Program

Under the Medicare program, eligible beneficiaries may receive covered services through a managed care organization (MCO) that has a Medicare Advantage (MA) (formerly, Medicare+Choice) contract with the Centers for Medicare & Medicaid Services (CMS). The regulations specifying the Medicare requirements that must be met in order for an MCO to enter into an MA contract with CMS are located at 42 CFR part 22. These regulations implement Part C of Title XVIII of the Social Security Act (the Act), which specifies the services that an MCO must provide and the requirements that the organization must meet to be an MA contractor. Other relevant sections of the Act are Parts A and B of Title XVIII and Part A of Title XI pertaining to the provision of services by Medicare certified providers and suppliers.

Generally, for an MCO to be an MA organization, the MCO must be licensed by the State as a risk bearing organization as set forth in part 422 of our regulations. Additionally, the MCO must file an application demonstrating that it meets other Medicare requirements in part 422 of our regulations. Following approval of the MA contract, we engage in routine monitoring and oversight audits of the MA organization to ensure continued compliance. The monitoring and oversight audit process is comprehensive and uses a written protocol that itemizes the Medicare requirements the MA organization must meet. As an alternative for meeting some Medicare requirements, an MA organization may be exempt from CMS monitoring of certain requirements in subsets listed in section 1852(e)(4)(B) of the Act as a result of an MA organization's accreditation by a CMS-approved accrediting organization (AO). We “deem” that the Medicare requirements are met based on a determination that the AO's standards are at least as stringent as Medicare requirements.

Organizations that apply for MA deeming authority are generally recognized by the industry as entities that accredit MCO's that are licensed as a health maintenance organization (HMO) or a preferred provider organization (PPO). As we specify at § 422.157(b)(2) of our regulations, the term for which an AO may be approved by CMS may not exceed 6 years. For continuing approval, the AO must re-apply to CMS. The Joint Commission for the Accreditation of Health Care Organizations (JCAHO) was granted deeming authority for Medicare Advantage HMOs and PPOs on March 22, 2002 in all six of the deemable areas set forth in 42 CFR 422.156(b) at the time. JCAHO was granted approval for deeming authority through March 24, 2008, and to date JCAHO has deemed 2 MA plans via accreditation.

II. JCAHO Termination of Deeming Activities

On November 9, 2005, JCAHO notified us of its decision to discontinue its network accreditation program and that, beginning January 1, 2006, it would not provide new accreditation to any MA organizations. JCAHO indicated that it intended to continue to provide technical support and monitoring for the two MA organizations that received JCAHO accreditation prior to January 1, 2006, until each plan's current term of JCAHO accreditation expires.

III. CMS Decisions Regarding JCAHO and its Deemed MA Plans

We decided to allow JCAHO's deeming authority to expire, as it normally would, on March 24, 2008. Thus, MA plans currently accredited by JCAHO under its network accreditation program will retain their deemed status until their current terms of accreditation expire. However, the period of time between January 1, 2006 and March 24, 2008, JCAHO will not accept new requests to deem MA plans.

Authority: Section 1852(e)(4) of the Social Security Act.

(Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program (42 U.S.C. 1395w-22(e)(4))

Dated: November 9, 2006.

Leslie V. Norwalk,

Acting Administrator, Centers for Medicare & Medicaid Services.