CMS Pub. 100-16, ch. 11, § 70.2

MA organizations non-renewing their MA contracts must continue to meet the following

requirements through the remainder of their final contract year.

1. Financial Audits - CMS is required by statute to audit at least one-third of MA

organizations' financial records each year. Such records include all pertinent

financial records (including data relating to Medicare utilization, costs, and

development of the bid). Therefore, those audits started for the current year must

be completed. This will assure that Medicare beneficiaries received appropriate

benefits at proper price levels.

2. Corrective Action Plans (CAP) - MA organizations operating under a corrective

action plan must continue to fulfill the requirements of the plan through

December 31 of the final contract year.

3. Health Employer and Data Information Set (HEDIS®) / Consumer

Assessment of Health Plans Study (CAHPS) - Non-renewing MA organizations

will not be required to submit HEDIS® data results from their final MA contract

year. (For example, MA organizations non-renewing their MA contract January 1,

2001, would not be required to submit HEDIS® results from the year 2000

measurement year.) Non-renewing MA organizations are similarly not required to

participate in the CAHPS survey for the final year of their MA contract by

submitting names and telephones numbers for telephone follow-up on non-

respondents.

4. Physician Incentive Plan (PIP) Requirements - Non-renewing organizations

must continue to provide assurances satisfactory to CMS that they are meeting the

requirements specified at §422.208 and must continue to disclose to beneficiaries

who request it the information specified AT §422.210. Organizations with

incentive arrangements at substantial financial risk must assure that physicians

have adequate stop-loss protection.

5. Quality Improvement) - MA organizations are required by regulation and

contract to operate quality improvement programs as specified in 42 CFR 422.152

of the regulations and Chapter 5 of the manual. These requirements include

chronic care improvement programs, quality improvement projects as well as

measuring performance, and reporting on performance, as requested.

• For Projects in Their Third Year - During the MA organization's final

contract year, the MA organizations must complete the project data

collection and continue any quality improvement initiatives;

• For Projects in their Second Year (unless the second year of a Quality

Improvement project is the project's completion year) - During the MA

organization's final contract year, the organization must continue its

quality improvement initiatives but need not continue data collection; and

• For Projects in Their First Year - During the MA organization's final

contract year, the organizations may discontinue the project altogether.

However, if a health care intervention has been started designed to

improve the health status of enrollees, the MA organization must continue

to provide that care until the actual end of the MA contract.

The following are MA requirements for which non-renewing organizations remain

responsible beyond December 31 of the final contract year:

1. Maintenance of Records - MA organizations are required to maintain and

provide CMS access to books, records, and other documents related to the

operation of an MA contract. Under 42 CFR 422.504(d) and (e), MA

organizations are to maintain these records, and allow CMS access to them, for 10

years from the termination date of the contract or the date of the completion of

any audit. In the case of service area reductions, MA organizations must maintain

these records, and allow CMS access to them, for 10 years from the date from

which service in a particular county was discontinued. This also includes contract

terminations that result from a decision by an MA organization not to renew its

MA contract with CMS.

2. Continuation of Care - Terminating MA organizations and those plans reducing

their service areas may, in certain situations, be responsible for costs incurred for

Medicare beneficiaries hospitalized beyond the last day of the contracts. If a

Medicare beneficiary is hospitalized in a prospective payment (PPS) hospital, the

MA organization is responsible for all Part A inpatient hospital services until the

beneficiary is discharged, as stated at 42 CFR 422.318(c). Original Medicare or

the beneficiary's next Medicare-contracting managed care organization will

assume payment for all services covered under Part B after the terminating MA

organization's MA contract ends. If a Medicare beneficiary is in a non-PPS

hospital, your organization is responsible for the covered charges through the last

day of your contract or, for plans reducing their service areas, the last day in

which service in a particular county are discontinued.

With respect to enrollees receiving care in a skilled nursing facility (SNF) upon

the termination of the MA contract, terminating MA organizations are financially

liable for such care through December 31 of the final contract year. After that

date, Medicare beneficiaries continuing a SNF stay may receive coverage through

either fee-for-service Medicare or enrollment in another MA plan. Assuming that

the SNF stay is Medicare covered, the number of days of the beneficiary's SNF

stay while enrolled in the MA plan will be counted toward the 100-day Medicare

limit. For example, if a beneficiary entered a SNF on December 1, 2005, and was

disenrolled on December 31, 2005, 31 days of the stay would be covered by the

MA organization, leaving 69 days of fee-for-service coverage beginning January

1, 2006. Those beneficiaries who enroll in another MA plan will receive SNF

coverage beginning January 1, 2006, according to the CMS-approved benefit

package offered by that plan. MA organizations reducing their service areas must

apply this SNF coverage policy to their enrollees who reside in the discontinued

portion of the service area.

For more information on the kinds of facilities that trigger the continuation of care

provisions see 42 CFR 422.318(a).

3. Pending Appeals - The MA contract and the regulations at 42 CFR 422.504(a)(3)

require MA organizations to provide access to benefits for the duration of their

contracts. Also the language at 42 CFR 422.618(b) requires MA organizations to

"pay for, authorize, or provide" the services that the Center for Health Dispute

Resolution (CHDR) determines should have been covered by the organization. As

such, MA organizations are obligated to process any appeals for services which

would have been provided or paid for while Medicare beneficiaries were enrolled

in the plan. Reconsiderations and appeals decided in favor of the Medicare

beneficiary after the date that the MA organization's contract terminates are the

obligation of the (former) MA organization – regardless of when the decision is

effectuated.

4. Retroactive Payment Adjustments - For terminating MA organizations, once

the MA contract has been terminated and the MA organization is no longer

receiving payments from CMS, the organization will still be required to reimburse

CMS for any overpayments. Also, the MA organization will still have the right to

seek reimbursement from CMS for any previously identified underpayments to

the extent permitted by applicable law. MA organizations seeking payment

adjustments should report corrected information within 45 days of the contract

termination date to the CMS contractor responsible for retroactive payment

adjustment data processing. These data include, but are not limited to, adjustments

based on changes to enrollments, Medicaid status, and institutional status for Part

C demographic payment which date from the period during which the contract

was effective. The reporting of corrected information will trigger the CMS

retroactive payment adjustment process. The reported corrections will be verified

and applied to your (former) members' records. These corrections will be included

as a part of your final payment reconciliation.

CMS will complete final reconciliation of its accounts with the MA organization

within approximately nine months of the termination date of the MA contract.

However, it is important to note that completion of final reconciliation may be

delayed in the event that the organization fails to comply with remaining data

submission requirements.