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Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Rules and Regulations eligible entities to develop and test new models for the delivery of health care services in eligible counties in order to improve access to and better integrate the delivery of acute care, extended care, and other health care services to Medicare beneficiaries in no more than four States.
Budget neutrality estimates for the demonstration described in the preamble of this rule are based on the time period from August 1, 2016 through July 31, 2019
referred to in this section as the initial period of the demonstration. Section 129 of the Consolidated Appropriations Act Pub. L.
116159 extends the FCHIP Demonstration by 5 years referred to in this section as the extension period of the demonstration.
The FCHIP Demonstration will resume on January 1, 2022, and CAHs participating in the demonstration project during the extension period shall begin such participation in the cost reporting year that begins on or after January 1. The initial period of the demonstration included three intervention prongs, under which specific waivers of Medicare payment rules allowed for enhanced payment: Telehealth, skilled nursing facility/nursing facility services, and ambulance services. These waivers were implemented with the goal of increasing access to care with no net increase in costs.
We also discussed this policy in the FY 2018
IPPS/LTCH PPS final rule 82 FR 38294
through 38296, the FY 2019 IPPS/LTCH PPS
final rule 83 FR 41516 through 41517, the FY 2020 IPPS/LTCH PPS final rule 84 FR
42427 and 42428 and the FY 2021 IPPS/
LTCH PPS final rule 85 FR 588894 through 58896, but did not make any changes to the policy that was adopted in FY 2017.
We specified the payment enhancements for the demonstration initial period and selected CAHs for participation with the goal of maintaining the budget neutrality of the demonstration on its own terms that is, the demonstration would produce savings from reduced transfers and admissions to other health care providers, thus offsetting any increase in payments resulting from the demonstration. However, because of the small size of this demonstration program and uncertainty associated with projected Medicare utilization and costs, in the FY
2017 IPPS/LTCH PPS final rule we adopted a contingency plan 81 FR 57064 through 57065 to ensure that the budget neutrality requirement in section 123 of Public Law 110275 would be met. Accordingly, if analysis of claims data for the Medicare beneficiaries receiving services at each of the participating CAHs, as well as of other data sources, including cost reports, shows that increases in Medicare payments under the demonstration during the 3-year initial period are not sufficiently offset by reductions elsewhere, we will recoup the additional expenditures attributable to the demonstration through a reduction in payments to all CAHs nationwide. The demonstration was projected to impact payments to participating CAHs under both Medicare Part A and Part B. Thus, in the event that we determine that aggregate payments under the demonstration exceed the payments that would otherwise have been made, we will recoup payments through
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reductions of Medicare payments to all CAHs under both Medicare Part A and Part B.
Because of the small scale of the demonstration, it would not be feasible to implement budget neutrality by reducing payments only to the participating CAHs.
Therefore, our policy was to make the reduction to payments to all CAHs, not just those participating in the demonstration, because the FCHIP demonstration is specifically designed to test innovations that affect delivery of services by this provider category. As we explained in the FY 2017
IPPS/LTCH PPS final rule 81 FR 57064
through 57065, we believe that the language of the statutory budget neutrality requirement at section 123g1B of the Act permits the agency to implement the budget neutrality provision in this manner. The statutory language merely refers to ensuring that aggregate payments made by the Secretary do not exceed the amount which the Secretary estimates would have been paid if the demonstration project was not implemented, and does not identify the range across which aggregate payments must be held equal.
Under the policy finalized in the FY 2017
IPPS/LTCH PPS final rule, in the event the demonstration is found not to have been budget neutral, any excess costs will be recouped over a period of 3 cost reporting years, beginning in CY 2020. In the FY 2021
IPPS/LTCH PPS final rule 85 FR 58895, we stated that based on the currently available data, the determination of budget neutrality results was preliminary and the amount of any reduction to CAH payments that would be needed in order to recoup excess costs under the demonstration remained uncertain.
Therefore, we revised the policy originally adopted in the FY 2017 IPPS/LTCH PPS final rule, to delay the implementation of any budget neutrality adjustment and stated that we would revisit this policy in rulemaking for FY 2022, when we expected to have complete data for the inital demonstration period. Based on the data and actuarial analysis described previously, we have concluded the initial period of the FCHIP
demonstration covering the time period August 1, 2016, to July 31, 2019 has satisfied the budget neutrality requirement described in section 123g1B of Public Law 110
275. Therefore, we are not applying a budget neutrality payment offset to payments to CAHs in FY 2022. This policy will have no impact for any national payment system for FY 2022.
9. Effects of the Policy Regarding Medicaid Enrollment of Medicare Providers and Suppliers for Purposes of Processing Claims for Cost Sharing for Services Furnished to Dually Eligible Beneficiaries In section X.A. of the preamble of this final rule, we discuss our provision regarding Medicaid enrollment of Medicare providers and suppliers for purposes of processing claims for cost-sharing for services furnished to dually eligible beneficiaries.
Under section 1902a10E of the Act, States are liable for Medicare cost-sharing amounts for certain beneficiaries dually eligible for Medicare and Medicaid, including those in the Qualified Medicare Beneficiary QMB program. Per section 1905p3 of the Act, this cost-sharing
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liability includes costs incurred with respect to a QMB regardless of whether the costs incurred were for items and services covered under the Medicaid State plan. Nevertheless, some States in the past have hindered some Medicare providers from enrolling in Medicaid. As a result, these non-Medicaidenrolled providers may not be able to submit a claim for payment of Medicare cost-sharing.
Because some States at times have not met their obligation at section 1905p3 of the Act to determine Medicare cost-sharing liability, we are finalizing the addition of a new paragraph d to 42 CFR 455.410 to specify, in part, how States must meet this obligation. Specifically, we propose that by January 1, 2023, for purposes of determining Medicare cost-sharing liability, state Medicaid programs must accept enrollment from all Medicare-enrolled providers and suppliers even if a provider or supplier is of a type that the State would not otherwise enroll in the state Medicaid program, if the provider otherwise meets all other Federal Medicaid enrollment requirements, including, but not limited to, all applicable provisions of 42 CFR part 455, subparts B
and E.
We solicited comment on the cost and savings resulting from this policy. We received comments from close to 50
stakeholders on the new regulation as detailed in section X.A, however no comments on the impact analysis. However, we have further considered and revised this estimated impact since the proposed rule.
There are three areas where this policy would have impact; listed here and discussed in further detail later in this section.
Updating state Medicaid systems with other provider types and cost-sharing logic.
New providers and suppliers enrolling in state Medicaid systems.
Reducing Medicare bad debt appeals.
We are unable to estimate the change in Medicaid program costs or on Medicare bad debt payments in this analysis because States have flexibility to choose their cost-sharing payment methodology for different provider types in their Medicaid State plan, and we do not have a clear basis for assumptions about their future choices. States can choose to pay Medicare cost-sharing at the Medicare rate, which means the State pays the amount that Medicare establishes as the cost-sharing amount. States can also choose to pay Medicare cost-sharing using the Medicaid State plan rate, which means the State takes into consideration the amount that Medicare paid when determining the amount if any that the State will pay to bring the providers total payment up to the Medicaid State plan rate. Usually, the Medicaid State plan rate is lower than the Medicare rate Medicare paid amount, resulting in no additional Medicare cost-sharing payment to the provider from the State. However, if the Medicaid State plan rate is higher than the Medicare rate Medicare paid amount, the State would then pay the difference between the Medicare paid amount and the Medicaid State plan rate. States can also choose to apply a lesserof policy, in which States pay the lesser of the cost-sharing based on the Medicare rate or the Medicaid State plan rate. Lastly, States can pay at a negotiated rate.

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