§ 1395w-27a. Special rules for MA regional plans
(a)
Regional service area; establishment of MA regions
(2)
Establishment of MA regions
(A)
MA region
For purposes of this subchapter, the term “MA region” means such a region within the 50 States and the District of Columbia as established by the Secretary under this paragraph.
(B)
Establishment
(b)
Application of single deductible and catastrophic limit on out-of-pocket expenses
An MA regional plan shall include the following:
(1)
Single deductible
Any deductible for benefits under the original medicare fee-for-service program option shall be a single deductible (instead of a separate inpatient hospital deductible and a part B deductible) and may be applied differentially for in-network services and may be waived for preventive or other items and services.
(c)
Portion of total payments to an organization subject to risk for 2006 and 2007
(1)
Application of risk corridors
(B)
Notification of allowable costs under the plan
In the case of an MA organization that offers an MA regional plan in an MA region in 2006 or 2007, the organization shall notify the Secretary, before such date in the succeeding year as the Secretary specifies, of—
(i)
its total amount of costs that the organization incurred in providing benefits covered under the original medicare fee-for-service program option for all enrollees under the plan in the region in the year and the portion of such costs that is attributable to administrative expenses described in subparagraph (C); and
(ii)
its total amount of costs that the organization incurred in providing rebatable integrated benefits (as defined in subparagraph (D)) and with respect to such benefits the portion of such costs that is attributable to administrative expenses described in subparagraph (C) and not described in clause (i) of this subparagraph.
(C)
Allowable costs defined
For purposes of this subsection, the term “allowable costs” means, with respect to an MA regional plan for a year, the total amount of costs described in subparagraph (B) for the plan and year, reduced by the portion of such costs attributable to administrative expenses incurred in providing the benefits described in such subparagraph.
(D)
Rebatable integrated benefits
For purposes of this subsection, the term “rebatable integrated benefits” means such non-drug supplemental benefits under subclause (I) of section
1395w–24
(b)(1)(C)(ii) of this title pursuant to a rebate under such section that the Secretary determines are integrated with the benefits described in subparagraph (B)(i).
(2)
Adjustment of payment
(A)
No adjustment if allowable costs within 3 percent of target amount
If the allowable costs for the plan for the year are at least 97 percent, but do not exceed 103 percent, of the target amount for the plan and year, there shall be no payment adjustment under this subsection for the plan and year.
(B)
Increase in payment if allowable costs above 103 percent of target amount
(i)
Costs between 103 and 108 percent of target amount
If the allowable costs for the plan for the year are greater than 103 percent, but not greater than 108 percent, of the target amount for the plan and year, the Secretary shall increase the total of the monthly payments made to the organization offering the plan for the year under section
1395w–23
(a) of this title by an amount equal to 50 percent of the difference between such allowable costs and 103 percent of such target amount.
(ii)
Costs above 108 percent of target amount
If the allowable costs for the plan for the year are greater than 108 percent of the target amount for the plan and year, the Secretary shall increase the total of the monthly payments made to the organization offering the plan for the year under section
1395w–23
(a) of this title by an amount equal to the sum of—
(C)
Reduction in payment if allowable costs below 97 percent of target amount
(i)
Costs between 92 and 97 percent of target amount
If the allowable costs for the plan for the year are less than 97 percent, but greater than or equal to 92 percent, of the target amount for the plan and year, the Secretary shall reduce the total of the monthly payments made to the organization offering the plan for the year under section
1395w–23
(a) of this title by an amount (or otherwise recover from the plan an amount) equal to 50 percent of the difference between 97 percent of the target amount and such allowable costs.
(ii)
Costs below 92 percent of target amount
If the allowable costs for the plan for the year are less than 92 percent of the target amount for the plan and year, the Secretary shall reduce the total of the monthly payments made to the organization offering the plan for the year under section
1395w–23
(a) of this title by an amount (or otherwise recover from the plan an amount) equal to the sum of—
(D)
Target amount described
For purposes of this paragraph, the term “target amount” means, with respect to an MA regional plan offered by an organization in a year, an amount equal to—
(i)
the sum of—
(I)
the total monthly payments made to the organization for enrollees in the plan for the year that are attributable to benefits under the original medicare fee-for-service program option (as defined in section
1395w–22
(a)(1)(B) of this title);
(II)
the total of the MA monthly basic beneficiary premium collectable for such enrollees for the year; and
(III)
the total amount of the rebates under section
1395w–24
(b)(1)(C)(ii) of this title that are attributable to rebatable integrated benefits; reduced by
(3)
Disclosure of information
(A)
In general
Each contract under this part shall provide—
(B)
Restriction on use of information
Information disclosed or obtained pursuant to the provisions of this subsection may be used by officers, employees, and contractors of the Department of Health and Human Services only for the purposes of, and to the extent necessary in, carrying out this subsection.
(d)
Organizational and financial requirements
(1)
In general
In the case of an MA organization that is offering an MA regional plan in an MA region and—
(A)
meets the requirements of section
1395w–25
(a)(1) of this title with respect to at least one such State in such region; and
(B)
with respect to each other State in such region in which it does not meet requirements, it demonstrates to the satisfaction of the Secretary that it has filed the necessary application to meet such requirements,
the Secretary may waive such requirement with respect to each State described in subparagraph (B) for such period of time as the Secretary determines appropriate for the timely processing of such an application by the State (and, if such application is denied, through the end of such plan year as the Secretary determines appropriate to provide for a transition).
(2)
Selection of appropriate State
In applying paragraph (1) in the case of an MA organization that meets the requirements of section
1395w–25
(a)(1) of this title with respect to more than one State in a region, the organization shall select, in a manner specified by the Secretary among such States, one State the rules of which shall apply in the case of the States described in paragraph (1)(B).
(e)
Stabilization Fund
(1)
Establishment
The Secretary shall establish under this subsection an MA Regional Plan Stabilization Fund (in this subsection referred to as the “Fund”) which shall be available for two purposes:
(2)
Funding
(A)
Initial funding
(B)
Additional funding from savings
(i)
In general
There shall also be made available to the Fund, 50 percent of savings described in clause (ii).
(ii)
Savings
The savings described in this clause are 25 percent of the average per capita savings described in section
1395w–24
(b)(4)(C) of this title for which monthly rebates are provided under section
1395w–24
(b)(1)(C) of this title in the fiscal year involved that are attributable to MA regional plans.
(iii)
Availability
Funds made available under this subparagraph shall be transferred into a special account in the Treasury from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in the proportion specified in section
1395w–23
(f) of this title on a monthly basis.
(3)
Plan entry funding
(A)
In general
Funding is available under this paragraph for a year only as follows:
(i)
National plan
For a national bonus payment described in subparagraph (B) for the offering by a single MA organization of an MA regional plan in each MA region in the year, but only if there was not such a plan offered in each such region in the previous year. Funding under this clause is only available with respect to any individual MA organization for a single year, but may be made available to more than one such organization in the same year.
(B)
National bonus payment
The national bonus payment under this subparagraph shall—
(i)
be available to an MA organization only if the organization offers MA regional plans in every MA region;
(C)
Regional payment adjustment
(i)
In general
The increased amount under this subparagraph for an MA regional plan in an MA region for a year shall be an amount, determined by the Secretary, based on the bid submitted for such plan (or plans) and shall be available to all MA regional plans offered in such region and year. Such amount may be based on the mean, mode, or median, or other measure of such bids and may vary from region to region. The Secretary may not limit the number of plans or bids in a region.
(ii)
Multi-year funding
(I)
In general
Subject to amounts available under paragraph (5), funding under this subparagraph shall be available for a period determined by the Secretary.
(II)
Report
If the Secretary determines that funding will be provided for a second consecutive year with respect to an MA region, the Secretary shall submit to the Congress a report that describes the underlying market dynamics in the region and that includes recommendations concerning changes in the payment methodology otherwise provided for MA regional plans under this part.
(iii)
Application to all plans in a region
Funding under this subparagraph with respect to an MA region shall be made available with respect to all MA regional plans offered in the region.
(iv)
Limitation on availability of plan retention funding in next year
If an increased amount is made available under this subparagraph with respect to an MA region for a period determined by the Secretary under clause (ii)(I), in no case shall funding be available under paragraph (4) with respect to MA regional plans offered in the region in the year following such period.
(D)
Application
Any additional payment under this paragraph provided for an MA regional plan for a year shall be treated as if it were an addition to the benchmark amount otherwise applicable to such plan and year, but shall not be taken into account in the computation of any benchmark amount for any subsequent year.
(4)
Plan retention funding
(A)
In general
Funding is available under this paragraph for a year with respect to MA regional plans offered in an MA region for the increased amount specified in subparagraph (B) but only if the region meets the requirements of subparagraphs (C) and (E).
(B)
Payment increase
The increased amount under this subparagraph for an MA regional plan in an MA region for a year shall be an amount, determined by the Secretary, that does not exceed the greater of—
(ii)
such amount as (when added to the benchmark amount applicable to the region) will result in the ratio of—
(I)
such additional amount plus the benchmark amount computed under section
1395w–24
(b)(4)(B)(i) of this title for the region and year, to the adjusted average per capita cost for the region and year, as estimated by the Secretary under section
1395mm
(a)(4) of this title and adjusted as appropriate for the purpose of risk adjustment; being equal to
(C)
Regional requirements
The requirements of this subparagraph for an MA region for a year are as follows:
(i)
Notification of plan exit
The Secretary has received notice (in such form and manner as the Secretary specifies) before a year that one or more MA regional plans that were offered in the region in the previous year will not be offered in the succeeding year.
(ii)
Regional plans available from fewer than 2 MA organizations in the region
The Secretary determines that if the plans referred to in clause (i) are not offered in the year, fewer than 2 MA organizations will be offering MA regional plans in the region in the year involved.
(iii)
Percentage enrollment in MA regional plans below national average
For the previous year, the Secretary determines that the average percentage of MA eligible individuals residing in the region who are enrolled in MA regional plans is less than the average percentage of such individuals in the United States enrolled in such plans.
(D)
Application
Any additional payment under this paragraph provided for an MA regional plan for a year shall be treated as if it were an addition to the benchmark amount otherwise applicable to such plan and year, but shall not be taken into account in the computation of any benchmark amount for any subsequent year.
(E)
2-consecutive-year limitation
(i)
In general
In no case shall any funding be available under this paragraph in an MA region in a period of consecutive years that exceeds 2 years.
(ii)
Report
If the Secretary determines that funding will be provided under this paragraph for a second consecutive year with respect to an MA region, the Secretary shall submit to the Congress a report that describes the underlying market dynamics in the region and that includes recommendations concerning changes in the payment methodology otherwise provided for MA regional plans under this part.
(5)
Funding limitation
(A)
In general
The total amount expended from the Fund as a result of the application of this subsection through the end of a calendar year may not exceed the amount available to the Fund as of the first day of such year. For purposes of this subsection, amounts that are expended under this subchapter insofar as such amounts would not have been expended but for the application of this subsection shall be counted as amounts expended as a result of such application.
(B)
Application of limitation
The Secretary may obligate funds from the Fund for a year only if the Secretary determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services and the appropriate budget officer certify) that there are available in the Fund at the beginning of the year sufficient amounts to cover all such obligations incurred during the year consistent with subparagraph (A). The Secretary shall take such steps, in connection with computing additional payment amounts under paragraphs (3) and (4) and including limitations on enrollment in MA regional plans receiving such payments, as will ensure that sufficient funds are available to make such payments for the entire year. Funds shall only be made available from the Fund pursuant to an apportionment made in accordance with applicable procedures.
(6)
Secretary reports
Not later than April 1 of each year (beginning in 2008), the Secretary shall submit a report to Congress and the Comptroller General of the United States that includes—
(A)
a detailed description of—
(i)
the total amount expended as a result of the application of this subsection in the previous year compared to the total amount that would have been expended under this subchapter in the year if this subsection had not been enacted;
(f)
Computation of applicable MA region-specific non-drug monthly benchmark amounts
(1)
Computation for regions
For purposes of section
1395w–23
(j)(2) of this title and this section, subject to subsection (e) of this section, the term “MA region-specific non-drug monthly benchmark amount” means, with respect to an MA region for a month in a year, the sum of the 2 components described in paragraph (2) for the region and year. The Secretary shall compute such benchmark amount for each MA region before the beginning of each annual, coordinated election period under section
1395w–21
(e)(3)(B) of this title for each year (beginning with 2006).
(2)
2 components
For purposes of paragraph (1), the 2 components described in this paragraph for an MA region and a year are the following:
(A)
Statutory component
The product of the following:
(3)
Statutory region-specific non-drug amount
For purposes of paragraph (2)(A)(i), the term “statutory region-specific non-drug amount” means, for an MA region and year, an amount equal the sum (for each MA local area within the region) of the product of—
(4)
Computation of statutory market share percentage
(A)
In general
The Secretary shall determine for each year a statutory national market share percentage that is equal to the proportion of MA eligible individuals nationally who were not enrolled in an MA plan during the reference month.
(B)
Reference month defined
For purposes of this part, the term “reference month” means, with respect to a year, the most recent month during the previous year for which the Secretary determines that data are available to compute the percentage specified in subparagraph (A) and other relevant percentages under this part.
(5)
Determination of weighted average MA bids for a region
(A)
In general
For purposes of paragraph (2)(B)(i), the weighted average of plan bids for an MA region and a year is the sum, for MA regional plans described in subparagraph (D) in the region and year, of the products (for each such plan) of the following:
(B)
Plan’s share of MA enrollment in region
(i)
In general
Subject to the succeeding provisions of this subparagraph, the factor described in this subparagraph for a plan is equal to the number of individuals described in subparagraph (C) for such plan, divided by the total number of such individuals for all MA regional plans described in subparagraph (D) for that region and year.
(ii)
Single plan rule
In the case of an MA region in which only a single MA regional plan is being offered, the factor described in this subparagraph shall be equal to 1.
(iii)
Equal division among multiple plans in year in which plans are first available
In the case of an MA region in the first year in which any MA regional plan is offered, if more than one MA regional plan is offered in such year, the factor described in this subparagraph for a plan shall (as specified by the Secretary) be equal to—
(C)
Counting of individuals
For purposes of subparagraph (B)(i), the Secretary shall count for each MA regional plan described in subparagraph (D) for an MA region and year, the number of individuals who reside in the region and who were enrolled under such plan under this part during the reference month.
(g)
Election of uniform coverage determination
Instead of applying section
1395w–22
(a)(2)(C) of this title with respect to an MA regional plan, the organization offering the plan may elect to have a local coverage determination for the entire MA region be the local coverage determination applied for any part of such region (as selected by the organization).
(h)
Assuring network adequacy
(1)
In general
For purposes of enabling MA organizations that offer MA regional plans to meet applicable provider access requirements under section
1395w–22 of this title with respect to such plans, the Secretary may provide for payment under this section to an essential hospital that provides inpatient hospital services to enrollees in such a plan where the MA organization offering the plan certifies to the Secretary that the organization was unable to reach an agreement between the hospital and the organization regarding provision of such services under the plan. Such payment shall be available only if—
(A)
the organization provides assurances satisfactory to the Secretary that the organization will make payment to the hospital for inpatient hospital services of an amount that is not less than the amount that would be payable to the hospital under section
1395ww of this title with respect to such services; and
(2)
Payment amounts
The payment amount under this subsection for inpatient hospital services provided by a subsection (d) hospital to an enrollee in an MA regional plan shall be, subject to the limitation of funds under paragraph (3), the amount (if any) by which—
(3)
Available amounts
There shall be available for payments under this subsection—
(B)
in each succeeding year the amount specified in this paragraph for the preceding year increased by the market basket percentage increase (as defined in section
1395ww
(b)(3)(B)(iii) of this title) for the fiscal year ending in such succeeding year.
Payments under this subsection shall be made from the Federal Hospital Insurance Trust Fund.
(4)
Essential hospital
In this subsection, the term “essential hospital” means, with respect to an MA regional plan offered by an MA organization, a subsection (d) hospital (as defined in section
1395ww
(d) of this title) that the Secretary determines, based upon an application filed by the organization with the Secretary, is necessary to meet the requirements referred to in paragraph (1) for such plan.