Medicare Parts C and D Universal Audit Guide

MEDICARE PART C & PART D UNIVERSAL
AUDIT GUIDE
VERSION 1

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Appendix A

CHAPTER 1: ENROLLMENT AND DISENROLLMENT
ER01

Correct Enrollment Election

ER02

Enrollment Election Receipt- Dated

ER03

Enrollment Effective Date (Timeliness)

ER04

Incomplete Enrollment Requests

ER05

Enrollment Acknowledgement (Timeliness)

ER06

Enrollment Acknowledgement (Notice Content)

ER07

Denial of Enrollment Prior to Transmission to CMS (Timeliness)

ER08

Denial of Enrollment Prior to Transmission to CMS (Notice Content)

ER09

Submission of Enrollment Transactions to CMS

ER10

Retroactive Enrollment Requests

ER11

EGHP-Employer/Union Group Retroactive Enrollment

ER12

Appropriate Follow-Up on Changes in State and County Code

ER13

Prohibition of Health Screening

ER14

Working Aged Survey

ER15

Appropriate and Timely Action

ER16

Group Enrollment into Employer/Union Sponsored Plans

ER17

Requirement To Set Employer Group Health Plan (EGHP) Enrollment “Flag” For All Employer Group Enrollments

ER18

Enrollment Forms

ER19

Cancellations of Enrollment Requests

ER21

Auto and Facilitated-Enrollment of Full Benefit Dual-Eligible Beneficiaries and Other Low Income Subsidy Eligible Beneficiaries

ER22

Determination of Enrollment Periods

3

ER23

Confirmation of Enrollment for Members of Employer/Union Group Receiving Employer Subsidy

ER24

Ensuring and Confirming Enrollees’ Eligibility to Enroll in an Employer/Union Sponsored Part D Plan

ER25

Enrollment for SNP plans

ER26

Dual Eligible Enrollment

DN01

Compliant Disenrollment Process

DN02

Voluntary Disenrollment (Timeliness)

DN03

Voluntary Disenrollment (Notice Content)

DN04

Refund of Premium

DN05

Involuntary Disenrollment for Non-Payment of Premium (Optional)

DN06

Involuntary Disenrollment for Move Out of Service Area

DN07

Compliant Retroactive Disenrollment Requests

DN08

Involuntary Disenrollment for Disruptive Behavior

DN09

Involuntary Disenrollment for Fraud or Abuse

DN10

Inappropriate Encouragement to Disenroll

DN11

Submission of Appropriate Disenrollment Reason Code

DN12

Denial of Disenrollment Requests

DN13

Cancellations of Disenrollment Requests

DN14

Required Disenrollment for Loss of Part D Eligibility

DN15

Required Disenrollment for Death of Individual

DN16

Transmission of Disenrollments to CMS

DN17

Involuntary Disenrollment Due to Change in Status of Special Need Individuals

CHAPTER 2: LATE ENROLLMENT PENALTY

4

LP01

Determining and Reporting Creditable Coverage Period

LP02

Creditable Coverage Attestation Process

LP03

Changes Due to LIS Eligibility and Subsequent IEPs

LP04

Notification of Late Enrollment Penalty

LP05

Late Enrollment Penalty Billing Requirements

LP06

LEP Reconsideration Process

CHAPTER 3: PROVIDER COMMUNICATION AND RELATIONS
PC01

Toll-Free Pharmacy Technical Help Call Center

PC02

Provision of Notice Regarding Formulary Changes

PC03

Toll-Free Exceptions and Appeals Call Center

PR01

Participation and Termination Procedures

PR02

Consultation with Physicians and Subcontracted Physician Groups

PR03

Credentialing Requirements for Physicians and Other Health Care Professionals

PR04

Process for Consultation with Health Care Professionals Regarding Credentialing

PR05

Credentialing Requirements for Facilities

PR06

Discrimination Against Health Care Professionals Prohibited

PR07

No Prohibition on Health Care Professional Advice to Patients

PR08

Uniform Payment Rule for Non-network PFFS Plans

PR09

Enforcement of Balance Billing Limit for PFFS plans

PR10

Advance Notice for hospital services

PR11

Rules describing deemed contracting providers for PFFS plans

PR12

Provider Payment Appeal System

5

PR13

Effective Provider Outreach

CHAPTER 4: MARKETING
MR01

Appropriate Submission and Distribution of Marketing Materials

MR02

Disclosure of Required Deemable Information to Beneficiaries

MR03

Disclosure of Required Non-Deemable Information to Beneficiaries

MR04

Information Provided to Beneficiaries Upon Request

MR05

Marketing Materials: Enrollment and Understanding of Plan Rules

MR06

Appropriate Notice Given to Members Before Plan Rule Change

MR07

Allocation of Marketing Resources to Disabled

MR08

No Engagement in Activities Which Mislead, Confuse, or Misrepresent the Sponsoring Organization

MR09

Good Faith Effort to Provide Written Notice of the Termination of a Contracted Provider

MR10

Materials Provided for Significant Non-English Speaking Population

MR11

File and Use Marketing Materials

MR12

Requirements for Pre-enrollment Marketing Materials

MR13

Public Notification of Enrollment Period

MR14

Plan Responsibility for Persons Employed or Contracted to Perform Marketing

MR15

Provision of Notices Regarding Formulary Changes

MR16

Requirements for Annual Post-Enrollment Materials

MR17

Toll-Free Customer Call Center

MR18

Internet Website

MR19

Explanation of Benefits

MR20

Low Income Subsidy Rider Requirement

MR21

Marketing Materials Disclaimer for PFFS plans

6

MR22

PFFS Marketing Material Prohibited Content

MR23

Description of Plan Rules and Provider Deeming

MR24

Outbound Education and Verification Calls

MR25

Planned Marketing and Sales Events

MR26

Disclosure of Required Non-Deemable Information to Beneficiaries

MR27

Targeted Marketing to Special Needs Individuals

CHAPTER 5: BENEFITS AND BENEFICIARY PROTECTIONS
AA01

Adequate and Appropriate Provider Network

AA02

Adequate and Appropriate Access to Care

AA03

PCP Panel Established and Maintained

AA04

Necessary Specialty Care Provided

AA05

Services Provided with Cultural Competence

AA06

Access to Services Under an MA Private Fee-for-service Plan (Sufficient Access)

AA07

Freedom of Choice

AA08

Access to Covered Services for Regional PPOs

CS01

Appropriate Compliance with Cost Sharing Rules for MA Regional Plans

HA01

Initial Health Assessment Conducted

CC01

Continuity of Care Through Community Arrangements

CC02

Timely Communication of Clinical Information

CC03

Standards for Member Input into Treatment Plan/Advance Directives

CC04

Member Health Record Uses Established Standards

AD01

No Member Discrimination in Delivery of Health Care

DG01

Oversight of Delegated Entities with Chapter 4 Responsibilities

7

CHAPTER 6: QUALITY IMPROVEMENT AND ASSURANCE
QY01

QI Program That is Evaluated Annually

QY02

Adequate Health Information System

QY03

Appropriate Utilization Management Program

QY04

Significant Problems Corrected

QY05

Oversight of Delegated Entities with Chapter 5 Responsibilities

QY06

Chronic Care Improvement Program

QY07

Quality Improvement Projects

QY08

Appropriate Utilization Management Program for Regional PPO Plans

QY09

MA Regional Plan Application of Local Coverage Policy Determinations Across Multiple Local Coverage Areas Within the Region

QY10

Model of Care for SNP

QA01

Standards for Pharmacy Practice

QA02

Concurrent Drug Utilization Review

QA03

Retrospective Drug Utilization Review

QA04

Internal Medication Error Identification and Reduction Systems

QA05

Provision of Quality Assurance Information

CHAPTER 7: CONTRACTS
CN01

Required Contract Provisions: Privacy and Confidentiality

CN02

Required Contract Provisions: Prompt Payment

CN03

Required Contract Provisions: Hold Harmless

CN04

Required Contract Provisions: Abide by Federal Requirements

CN05

Required Contract Provisions: Compliance with Sponsoring Organization's Policies and Procedures

8

CN06

Required Contract Provisions for Deemable Activities: Delegation Requirements

CN07

Required Contract Provisions for Non-Deemable Activities: Delegation Requirements

CN09

Maintenance of Records

CN10

Access to Facilities and Records

CN11

Required Contract Provisions: PBM/Any Subcontractor Performing Key Part D Functions

CN12

Required Contract Provisions: Long-Term Care Pharmacies

CN13

Required Contract Provisions: I/T/U Pharmacies

CN14

Required Contract Provisions: Home Infusion Pharmacies

CN15

Required Contract Provisions for Dual Eligible SNP: Subsetting

CN16

Required Contract Provisions: Institutional SNP Contracting

CHAPTER 8: ORGANIZATIONAL/COVERAGE DETERMINATIONS, APPEALS AND GRIEVANCES
OC01

Correct Claim Determinations

OC02

Reasonable Reimbursement for Covered Services

OC03

Timely Payment of Non-Contracting Provider Clean Claims

OC04

Interest on Clean Claims Paid Late

OC05

Timely Adjudication of Non-Clean Claims

OC06

Claims Denials (Notice Content)

OC07

Medicare Secondary Payer (Claims)

OP01

Adverse Standard Pre-Service Organization Determinations (Timeliness)

OP02

Adverse Standard Pre-Service Organization Determinations (Notice Content)

OP03

Receipt and Documentation of Expedited Organization Determination Requests

OP04

Requests for Expedited Organization Determinations (Timeliness)

9

OP05

Adverse Expedited Organization Determinations (Notice Content)

OP06

Organization Determination Extensions (Notice Content)

OP07

Decision Not to Expedite an Organization Determination (Notice Content)

OP08

Correctly Distinguishes Between Organization Determinations and Reconsiderations

OP09

OPTIONAL: Favorable Standard Pre-Service Organization Determinations (Timeliness)

OP10

Detailed Explanation of Non-Coverage (Timeliness)

OP11

Detailed Explanation of Non-Coverage (Notice Content)

OP12

Effectuation of QIO Decision Reversals

OP13

Detailed Notice of Discharge of Inpatient Hospital Care

RC01

Favorable Claims Reconsiderations (Timeliness)

RC02

Adverse Claims Reconsiderations (Timeliness)

RC03

Effectuation of Third Party Claims Reconsideration Reversals

RP01

Favorable Standard Pre-Service Reconsiderations (Timeliness)

RP02

Adverse Standard Pre-Service Reconsiderations (Timeliness)

RP03

Effectuation of Third Party Standard Pre-Service Reconsideration Reversals

RP04

Receipt and Documentation of Expedited Reconsideration Requests

RP05

Requests for Expedited Reconsiderations (Timeliness)

RP06

Decisions Not to Expedite Reconsideration (Notice Content)

RP07

Effectuation of Third-Party Expedited Reconsideration Reversals

RP08

Reconsideration Extensions (Notice Content)

GV01

Organization Determinations and Reconsiderations Not Categorized as Grievances

GV02

Grievance Decision Notification (Timeliness)

GV03

Grievance Decision Notification (Notice Content)

10

GV04

Method of Grievance Decision Notification

GV05

Grievance Policies and Procedures

GV06

Grievance response – Quality of Care

GV07

Timely Response to Expedited Grievances

CD01

Notices in Network Pharmacies

CD02

Coverage Determination Policies and Procedures

CD03

Timely Notification of Standard Coverage Determination

CD04

Notice Requirements for Denied Standard Coverage Determinations

CD05

Decision to Accept or Deny a Request to Expedite a Coverage Determination

CD06

Timely Notification Following Decision to Deny Request to Expedite a Coverage Determination

CD07

Notice Requirements Following Decision Not to Expedite a Coverage Determination

CD08

Timely Notification of Expedited Coverage Determination

CD09

Notice Requirements for Expedited Coverage Determinations

CD10

Effect of Failure to Provide Timely Notice on a Standard or Expedited Coverage Determination Request

CE01

Exceptions Procedures and Criteria (Tiered Cost-Sharing)

CE02

Exceptions Procedures and Criteria (Non-Formulary Drugs)

CE03

Approval of Tiering and Non-Formulary Exceptions Requests

RE01

Acceptance of Standard Reconsideration Requests

RE02

Appropriate Person(s) Conduct the Reconsideration

RE03

Request for Redeterminations (Standard)

RE04

Request for Redeterminations (Expedited)

RE05

Decision to Accept or Deny a Request to Expedite a Redetermination

RE06

Actions Following Decision to Deny a Request to Expedite a Redetermination

11

RE07

Timely Notification and Effectuation of Standard Redetermination

RE08

Timely Notification of Expedited Redetermination and Request for Medical Information

RE09

Effectuation of Expedited Coverage Redeterminations

RE10

Redeterminations – Who Must Conduct Review

RE11

Timely Transfer of Requested Case File to IRE

RE12

Prompt Auto-Forwarding of Case to IRE if Adjudication Timeframe is Missed

RV01

Effectuation of Third Party Reversals (Standard)

RV02

Effectuation of Third Party Reversals – Benefits (Expedited)

CHAPTER 9: PRIVACY AND CONFIDENTIALITY
CF01

Use of SSN/HICN

CF02

Confidentiality of Member Information

CHAPTER 10: DRUG UTILIZATION MANAGEMENT, AND ELECTRONIC PRESCRIBING DRUG UTILIZAITON MANAGEMENT
DM01

Incentives to Reduce Costs

DM02

Preventing Over and Under Utilization

EP01

Electronic Prescribing

CHAPTER 11: PHARMACY ACCESS
PH01

Network Retail Pharmacy Access

PH02

Access to Home Infusion Pharmacies

PH03

Access to Long-Term Care Pharmacies

PH04

Access to I/T/U Pharmacies

PH05

Any Willing Pharmacy Provision

PH06

Level Playing Field Between Mail Order and Retail Network Pharmacies

12

PH07

Out-of-Network Pharmacy Access

PH08

Access to Vaccines in Physician Office

CHAPTER 12: FORMULARY, TRANSITION PROCESS, AND PHARMACY AND THERAPEUTICS COMMITTEE
FM01

Formulary Requirements

FM02

Formulary Maintenance Requirements

FM03

Provision of Notice Regarding Formulary Changes

FM04

Appropriate Claim Adjudication Regarding Formulary Tier Placement and Corresponding Copayment/Co-insurance

TP01

Transition Process in the Retail Setting

TP02

Transition Process for Residents of Long-Term Care Facilities

TP03

Notice Requirement for Temporary Transition Fills

PT01

Formulary Development and Review by a Pharmacy and Therapeutics Committee

PT02

Pharmacy and Therapeutics Committee Membership

PT03

Pharmacy and Therapeutics Committee Decisions

PT04

Pharmacy and Therapeutics Committee Consideration of the Therapeutic Advantages of Prescription Drugs

PT05

Pharmacy and Therapeutics Committee Review of Utilization Management Processes

PT06

Pharmacy and Therapeutics Committee Annual Evaluation of Part D Sponsor’s Plan Treatment Protocols

PT07

Pharmacy and Therapeutics Committee Annual Approval of Therapeutic Classes

PT08

Pharmacy and Therapeutics Committee Review of New Chemical Entities and Clinical Indicators

CHAPTER 13: MEDICATION THERAPY MANAGEMENT
MT01

Medication Therapy Management Program Design

MT02

Targeted Medicare Beneficiaries

MT03

Use of Experts in Developing the Medication Therapy Management Program

13

CHAPTER 14: COORDINATION OF BENEFITS / TRUE OUT OF POCKET COSTS
CB01

Collecting and Updating Enrollees’ Other Health Insurance Information

CB02

Coordination of Benefits with Other Prescription Drug Coverage

CB03

TrOOP Status at Disenrollment

CHAPTER 15: COMPLIANCE PROGRAM
CP01

Written Policies, Procedures and Standards on Conduct

CP02

Compliance Officer, Compliance Committee and High Level Oversight

CP03

Effective Training and Education

CP04

Effective Lines of Communication

CP05

Well Publicized Disciplinary Standards

CP06

Effective System for Routine Monitoring, Auditing and Identification of Compliance Risks

CP07

Procedures and Systems for Prompts Response to Compliance Issues

CP08

FDR Oversight

CHAPTER 17: CLAIMS PROCESSING AND PAYMENT
CL01

Online Claims Processing System

CL02

Data Elements Needed to Link Medicare Parts A, B, and D Data

CL03

Processing Systems

CL04

Disputed Claims

PA01

Certification of Claims Data

PA02

Submission of Prescription Drug Event (PDE) Data and Direct and Indirect Remuneration (DIR) Data

PA03

Overpayment and Underpayment Requirements

14

PA04

Pharmaceutical Manufacturer Rebates Requirements

CHAPTER 18: LICENSURE AND FINANCIAL SOLVENCY
LS01

Financial Solvency and Capital Adequacy Standards

LS02

Financial Reporting Requirements

LS03

Financial Solvency Standards for Employer/Union Direct Contract Plans

CHAPTER 20: EMPLOYER GROUP HEALTH PLAN PREMIUMS
SU801

Premium Requirements for Employer/Union Sponsored Plans

SU802

Low Income Premium Subsidy Amount Pass Through for Employer/Union Sponsored Plans

15

CHAPTER 1: ENROLLMENT AND DISENROLLMENT
ER01

Correct Enrollment Election
Elections must be completed by the beneficiary or representative, authorized under laws of the state.

ER02

42 C.F.R. § 422.60(c)(1); Medicare Managed Care Manual Ch. 2
42 CFR §423.32(b)(i); Prescription Drug Benefit Manual Ch. 3
Enrollment Election Receipt - Dated
Elections (and required documentation) are dated as of the date they are received by the Sponsoring Organization in a manner
acceptable to CMS.

ER03

42 C.F.R. § 422.60(e)(1)-(2); Medicare Managed Care Manual Ch. 2
42 CFR §423.32(c); Prescription Drug Benefit Manual Ch. 3
Enrollment Effective Date (Timeliness)
The Sponsoring Organization enrolls Medicare beneficiaries with a correct effective date and election period type based on
the appropriate election period.

ER04

ER05

42 C.F.R. § 422.62; § 422.68; Medicare Managed Care Manual Ch. 2
42 CFR § 423.38; § 423.40; Prescription Drug Benefit Manual Ch. 3
Incomplete Enrollment Requests
The Sponsoring Organization must correctly identify incomplete enrollment elections and follow CMS requirements for
requesting information from the beneficiaries to make the elections complete. The entity must also document its efforts to
obtain the missing information or documentation.
42 C.F.R. § 422.60(e); Medicare Managed Care Manual Ch. 2
42 CFR §423.32(c); Prescription Drug Benefit Manual Ch. 3
Enrollment Acknowledgement (Timeliness)
The Sponsoring Organization notifies the beneficiary of receipt of the enrollment election and confirmation of enrollment
acceptance within timeframes specified by CMS. This may be done with two separate notices or one combined notice as
specified by CMS.
42 C.F.R. § 422.60(e)(3); Medicare Managed Care Manual Ch. 2
16

42 C.F.R. § 423.32(d); Prescription Drug Benefit Manual Ch. 3
ER06

ER07

ER08

ER09

ER10

Enrollment Acknowledgment (Notice Content)
The written acknowledgement notice and confirmation of enrollment acceptance, sent in response to the beneficiary’s
enrollment election, meets CMS requirements and specifies the correct effective date of enrollment.
42 C.F.R. § 422.60(e)(3); Medicare Managed Care Manual Ch. 2
42 CFR § 423.32(d); Prescription Drug Benefit Manual Ch. 3
Denial of Enrollment Prior to Transmission to CMS (Timeliness)
The Sponsoring Organization correctly notifies beneficiaries of denial of enrollment within timeframes specified by CMS.
42 C.F.R. § 422.60(e)(3); Medicare Managed Care Manual Ch. 2
42 C.F.R. § 423.32(c); Prescription Drug Benefit Manual Ch. 3
Denial of Enrollment Prior to Transmission to CMS (Notice Content)
The Sponsoring Organization gives beneficiaries denial notice that meets CMS requirements. If the MA plan is currently
enrolled to capacity, the notice explains the procedures that will be followed when vacancies occur.
42 C.F.R. § 422.60(e)(3)-(4); Medicare Managed Care Manual Ch. 2
42 C.F.R. § 423.32(c); Prescription Drug Benefit Manual Ch. 3
Submission of Enrollment Transactions to CMS
The Sponsoring Organization follows CMS guidelines for submitting enrollment transactions to CMS.
42 C.F.R. § 422.60(e)(5); Medicare Managed Care Manual Ch. 2, & Appendix 2, Plan
Communication Users Guide
42 CFR § 423.32(c); Prescription Drug Benefit Manual Ch. 3
Retroactive Enrollment Requests
The Sponsoring Organization requests retroactive enrollments, when appropriate, and adheres to CMS requirements in
requesting retroactive enrollments from the Regional Office or Program Safeguard Contractor.
42 C.F.R. § 422.60; Medicare Managed Care Manual Ch. 2, Medicare Managed Care Manual Ch. 19
42 CFR § 423.32; Prescription Drug Benefit Manual Ch. 3

17

ER11

ER12

ER13

EGHP – Employer/Union Group Retroactive Enrollment
When appropriate and allowed, the Sponsoring Organization accepts retroactive enrollment requests for Employer/Union
Group Health Plan (EGHP) applicants.
42 C.F.R. § 422.60(f); Medicare Managed Care Manual Ch. 2
42 CFR § 423.32; Prescription Drug Benefit Manual Ch. 3
Appropriate Follow-Up on Changes in State and County Code
The Sponsoring Organization reviews the CMS Transaction Reply/Monthly Activity Report listings and the Maintenance
Records upon receipt and appropriately follows-up on any notification of a potential change in residence for its members
reported to it by CMS.
42 C.F.R. § 422.50(a)(3); Medicare Managed Care Manual Ch. 2; Medicare Managed Care
Manual Ch. 19
Prescription Drug Benefit Manual Ch. 3
Prohibition of Health Screening
The Sponsoring Organization does not deny or discourage enrollment on the basis of health status, except for ESRD, as
provided in CMS guidance (including exceptions). SNPs may limit enrollment to individuals who meet the additional
eligibility requirements.
42 C.F.R. § 422.50(a); § 422.110(a)-(b); BIPA; Medicare Managed Care Manual Ch. 2

ER14

ER15

Working Aged Survey
Sponsoring Organizations will be required to notify each beneficiary of his/her other payer information as reflected in the
COB file from CMS and request the beneficiary to review the information and report back only updates (that is, corrections
to existing information and new coverage information) to the sponsor.
2010 CMS Call Letter
Appropriate and Timely Action
Upon receipt of a TRR, Sponsoring Organization must update their records to accurately reflect each individual’s enrollment
status.
Medicare Managed Care Manual Ch. 2
Prescription Drug Benefit Manual Ch. 3
18

ER16

Group Enrollment into Employer/Union Sponsored Plans
The entity must use either a group enrollment process that meets specific CMS group enrollment requirements or individual
enrollment forms. The group enrollment procedures must include provision of a specific notice to beneficiaries not less than
21 calendar days prior to the effective date of enrollment. The information must include how to opt out, the consequences of
doing so, the summary of benefits, how to get more information on the plan and Medicare, and all required authorization and
release language.
42 CFR § 422.60(c); Medicare Managed Care Manual Ch. 2; Medicare Managed Care Manual Ch. 9
42 C.F.R. § 423.32(b); Prescription Drug Benefit Manual Ch. 3; Prescription Drug Benefit Manual Ch. 12

ER17

ER18

ER19

Requirement To Set Employer Group Health Plan (EGHP ) Enrollment “ Flag” For All Employer Group Enrollments
The EGHP (Employer Group Health Plan) Flag field must be set to “Y” when submitting enrollment transactions for any
beneficiary who is a member of an employer or union group (this includes enrollments in “800 series” plans and employersponsored group enrollments in individual plans).
Medicare Advantage and Prescription Drug Plans - Plan Communications User’s Guide and Appendices
Care Manual Ch. 9; Prescription Drug Benefit Manual Ch. 12
Enrollment Forms
The Sponsoring Organization must have and accept a paper enrollment form, and may use any other enrollment mechanism
that has been approved by CMS.
42 CFR § 422.60(c)(1); Medicare Managed Care Manual Ch. 2
42 CFR § 423.32(b); Prescription Drug Benefit Manual Ch. 3
Cancellations of Enrollment Requests
If a beneficiary verbally requests a cancellation of an enrollment request, the Sponsoring Organization must document the
request and process the cancellation. The Sponsoring Organization must provide written notification to the beneficiary
within the timeframes specified by CMS. The written notice to acknowledge a request to cancel enrollment must meet CMS
requirements. Note: Requests for cancellation must be received by the Sponsor prior to effective date of enrollment.
Medicare Managed Care Manual Ch. 2
Prescription Drug Benefit Manual Ch. 3

19

ER20

Auto- and Facilitated-Enrollment of Full Benefit Dual-Eligible Beneficiaries and Other Low Income Subsidy Eligible
Beneficiaries
The Sponsoring Organization must accept auto- and facilitated-enrollments and distribute plan materials in accordance with
CMS procedures for full benefit dual eligible and other low income subsidy eligible beneficiaries who have failed to enroll in
a Part D plan.
42 CFR § 423.34(d); Prescription Drug Benefit Manual Ch. 3; Medicare Managed Care Manual Ch. 2

ER21

ER22

ER23

ER24

ER25

Determination of Enrollment Periods
The Sponsoring Organization must have policies and procedures to determine the enrollment period of each enrollment
request and to verify an individual’s eligibility for a Special Enrollment Period, as defined in CMS enrollment guidance.
42 CFR § 422.62; 42 CFR § 422.68; Medicare Managed Care Manual Ch. 2
42 CFR § 423.38; Prescription Drug Benefit Manual Ch. 3
Confirmation of Enrollment for Members of Employer/Union Group Receiving Employer Subsidy
The Sponsoring Organization must meet CMS requirements for obtaining a confirmation of the intent to enroll from any
individual who attempts to enroll in the Part D plan, but whose enrollment is conditionally rejected by CMS due to a detected
match indicating that the beneficiary may have existing employer or union drug coverage.
Prescription Drug Benefit Manual Ch. 3
Ensuring and Confirming Enrollees’ Eligibility to Enroll in an Employer/Union Sponsored Part D Plan
Sponsoring Organizations may only enroll retirees and Part D eligible spouses and dependents of these retirees. No active
employees or their Part D eligible spouses and dependents may be enrolled.
Note: The employer/union’s ordinary eligibility rules in addition to Medicare eligibility govern enrollment and eligibility.
Section 1860D-22(B) of the Social Security Act
Prescription Drug Benefit Manual Ch. 12
Enrollment for SNP plans
The Sponsoring Organization must enroll SNP-eligible enrollees into a SNP plan according to CMS guidelines.
42 C.F.R. § 422.2, 422.4(a)(1)(iv)(A-B), and 422.52; Medicare Managed Care Manual Ch. 2
Dual Eligible Enrollment (Note: This element is only applicable if auditing a Dual Eligible SNP)
The Sponsoring Organization must designate the type of dual eligible population it will serve and ensure that its enrollment
20

practices are consistent with this designation.

DN01

DN02

42 C.F.R. § 422.52, Medicare Managed Care Manual Ch. 2
Compliant Disenrollment Process
The Sponsoring Organization disenrolls Medicare members, when appropriate, upon receipt of a request for disenrollment.
The Sponsoring Organization annotates its own system and the CMS system with the correct disenrollment effective date.
42 C.F.R. § 422.66(b); § 422.74; Medicare Managed Care Manual Ch. 2
Prescription Drug Benefit Manual Ch. 3
Voluntary Disenrollment (Timeliness)
The Sponsoring Organization sends the disenrollment notice to the member within timeframes specified by CMS.

DN03

42 C.F.R. § 422.66(b)(3); Medicare Managed Care Manual Ch. 2
42 C.F.R. § 423.36; Prescription Drug Benefit Manual Ch. 3
Voluntary Disenrollment (Notice Content)
The Sponsoring Organization sends the disenrollment notice to the member in a format specified by CMS, providing the
correct effective date of disenrollment.

DN04

42 C.F.R. § 422.66(b)(3)(ii)-(iii); Manual Ch. 2
42 C.F.R. § 423.36; Prescription Drug Benefit Manual Ch. 3
Refund of Premium
The Sponsoring Organization must refund all amounts incorrectly collected from its Medicare members or from others on
their behalf.

DN05

42 C.F.R. § 422.270(b)
Involuntary Disenrollment for Non-Payment of Premium (Optional)
The Sponsoring Organization may involuntarily disenroll Medicare members who fail to pay monthly basic or supplementary
premiums only after demonstrating to CMS that the Sponsoring Organization has made reasonable efforts to collect the
unpaid premium amount, including notifying the individual that the premiums are delinquent, providing the individual with a
grace period to pay past premiums due, and advising the individual that failure to pay will result in termination. An
Sponsoring Organization may not disenroll members for failure to pay premiums (or notify them of impending
disenrollment) in cases where the member has requested that premiums be withheld from his/her Social Security benefit
check, or any individual considered to be in premium withhold status by CMS, as outlined in the Manual
21

Chapter 2.
The Sponsoring Organization may only disenroll the Medicare member when the Sponsoring Organization has not received
payment within a grace period of a minimum of 1 calendar month that begins on the first day of the month for which the
premium was not paid. The effective date of disenrollment is the first day of the month after the grace period ends.

DN06

DN07

DN08

42 C.F.R. § 422.74(d)(1); Medicare Managed Care Manual Ch. 2
42 C.F.R. § 423.44(b)(1)(i); § 423.44(c); § 423.44(d)(1); Prescription Drug Benefit Manual Ch. 3
Involuntary Disenrollment for Move Out of Service Area
The Sponsoring Organization must disenroll Medicare members who permanently leave the approved plan service area, or
who reside outside the approved plan service area for more than six (6) months, unless they move into an approved plan
continuation area and the member has elected the continuation of enrollment option, or the plan offers a visitor/traveler
program. Member notice is required prior to transmission of the disenrollment to CMS.
42 C.F.R. § 422.74(d)(4); Medicare Managed Care Manual Ch. 2
42 C.F.R. § 423.44(b)(2)(i); § 423.44(c); § 423.44(d)(5); Prescription Drug Benefit Manual Ch. 3
Compliant Retroactive Disenrollment Requests
The Sponsoring Organization correctly submits requests to the CMS Regional Office, or Program Safeguard Contractor, for
retroactive disenrollments that are permitted by the CMS policy in the MA Enrollment Guidelines. Supporting information
is included in accordance with CMS policy.
42 C.F.R. § 422.66(b)(5); Medicare Managed Care Manual Ch. 2
42 CFR § 423.36(c); Prescription Drug Benefit Manual Ch. 3
Involuntary Disenrollment for Disruptive Behavior
The Sponsoring Organization may request disenrollment of a Medicare member for disruptive behavior only when the
behavior substantially impairs the Sponsoring Organization’s ability to furnish services to the member or other members.
The Sponsoring Organization may only disenroll a member for disruptive behavior if it has met the requirements of the MA
Enrollment Guidelines and with CMS approval.
42 C.F.R. § 422.74(d)(2); Medicare Managed Care Manual Ch. 2; Prescription Drug Benefit Manual Ch. 3

DN09

Involuntary Disenrollment for Fraud or Abuse
The Sponsoring Organization may disenroll Medicare members when they commit fraud or permit abuse of their enrollment
cards. Fraud is limited to knowingly providing, during the election process, fraudulent information that materially affects the
22

determination of the members’ eligibility to enroll in an MA plan. Abuse of members’ enrollment cards includes
intentionally permitting others to use their enrollment cards to obtain services under the MA plan. The Sponsoring
Organization disenrolls Medicare members for fraud or abuse only after the Sponsoring Organization mails the members a
written notice that includes an explanation of the members’ right to a hearing under the Sponsoring Organization’s grievance
procedures. The Sponsoring Organization disenrolls members effective the first day of the calendar month after the month in
which notice is sent to the members of the intended action. When an Sponsoring Organization disenrolls a member for this
reason, it must immediately notify the CMS RO.

DN10

DN11

DN12

DN13

42 C.F.R. § 422.74(d)(3); Medicare Managed Care Manual Ch. 2
Prescription Drug Benefit Manual Ch. 3
Inappropriate Encouragement to Disenroll
The Sponsoring Organization does not, orally or in writing, or by any action or inaction, request or encourage a Medicare
member to disenroll.
42 C.F.R. § 422.74(a)(2) and (b)(1)-(2); Medicare Managed Care Manual Ch. 2
42 CFR §423.44(a-b); Prescription Drug Benefit Manual Ch. 3
Submission of Appropriate Disenrollment Reason Code
The Sponsoring Organization submits the appropriate disenrollment reason code with disenrollment transactions.
October 9, 2007 Memo from Henry Chao; Plan Communications User Guide
Denial of Disenrollment Requests
If the Sponsoring Organization receives a disenrollment request that it must deny, it must notify the enrollee within 10
calendar days of the receipt of the request, and must include the reason for the denial.
Medicare Managed Care Manual Ch. 2
Prescription Drug Benefit Manual Ch. 3
Cancellations of Disenrollment Requests
If a beneficiary verbally requests a cancellation of a disenrollment request, the Sponsoring Organization must document the
request and process the cancellation. The Sponsoring Organization must send a notice within 10 calendar days of the receipt
of the cancellation request to the individual that states that the cancellation is being processed. Note: Requests for
cancellation must be received by the Sponsor prior to effective date of disenrollment.
Medicare Managed Care Manual Ch. 2
23

DN14

Prescription Drug Benefit Manual Ch. 3
Required Disenrollment for Loss of Part D Eligibility
The Sponsoring Organization must disenroll an individual who loses eligibility for Part D as a result of loss of entitlement to
Medicare and provide the individual notice of the disenrollment within 10 calendar days of notification via the TRR.

DN15

42 CFR § 423.44(b)(2)(ii); § 423.44(c); § 423.44(d)(3)
Prescription Drug Benefit Manual Ch. 3
Required Disenrollment for Death of Individual
The Sponsoring Organization must disenroll an individual upon death of the individual and give the estate notice of the
disenrollment within 10 calendar days of notification via the TRR.

DN16

42 CFR § 423.44(b)(2)(iii); § 423.44(c)(2); § 423.44(d)(4)
Prescription Drug Benefit Manual Ch. 3
Medicare Managed Care Manual Ch. 2
Transmission of Disenrollments to CMS
For all voluntary disenrollment requests that the Sponsoring Organization does not deny, the Sponsoring Organization must
submit the disenrollment transaction to CMS within 7 calendar days of receipt of a complete disenrollment request from an
enrollee.

DN17

42 CFR § 422.66(b)(2)(i); Medicare Managed Care Manual Ch. 2;
42 CFR § 423.36(b)(1)
Prescription Drug Benefit Manual Ch. 3
Involuntary Disenrollment Due to Change in Status of Special Need Individuals
If the Sponsoring Organization determines that the member no longer meets the SNP eligibility criteria for that plan, it must
continue enrollment of that member as a deemed eligible if it can reasonably be expected that the member will be eligible
again within a the established deeming period (e.g., dual eligibles that temporarily loses their Medicaid eligibility). The
Sponsoring Organization must have policies and procedures that establish a deeming period from at least 30 days but not to
exceed 6 months for deemed eligibility and must apply the policy consistently to all members. The Sponsoring Organization
must not retroactively disenroll a beneficiary and must provide no less than 30 days notice prior to termination.
42 C.F.R. § 422.2; § 422.52(d) and (f)(2); § 422.74(b)(2)(iv); Medicare Managed Care Manual Ch. 2

24

LP01

LP02

LP03

LP04

CHAPTER 2: LATE ENROLLMENT PENALTY
Determining and Reporting Creditable Coverage Period
The Sponsoring Organization shall make a creditable coverage determination for each member and report its determination to
CMS, in accordance with CMS requirements.
42 CFR § 423.46;
Prescription Drug Benefit Manual, Ch. 4; Updated Guidance on Creditable Coverage Period Determinations and the Late
Enrollment Penalty Memo (April 11, 2008) and Reporting Creditable Coverage Information for Former Plan Members Memo
(November 26, 2008); Updated Guidance on Creditable Coverage Period Determinations and the Late Enrollment Penalty
Memo (April 11, 2008) and Reporting Creditable Coverage Information for Former Plan Members Memo (November 26,
2008)
Creditable Coverage Attestation Process
The Sponsoring Organization shall adhere to CMS requirements in sending and processing creditable coverage attestation
forms.
Prescription Drug Benefit Manual, Ch. 4; Updated Guidance on Creditable Coverage Period Determinations and Late
Enrollment Penalty Memo (April 11, 2008)
Changes Due to LIS Eligibility and Subsequent IEPs
In cases where an enrollee who is paying a late enrollment penalty becomes LIS eligible, the penalty is removed effective with
the start of LIS eligibility.
In cases where the enrollee is eligible for Medicare prior to turning age 65, the Sponsoring Organization shall have processes in
place to identify those enrollees who will have a new Initial Enrollment Period (IEP) upon turning age 65 and will notify CMS
and the enrollee according to CMS requirements.
Prescription Drug Benefit Manual, Ch. 4; Updated Guidance on Creditable Coverage Period Determinations and Late
Enrollment Penalty HPMS Memo (April 11, 2008)
Notification of Late Enrollment Penalty
The Sponsoring Organization shall provide timely notification to the beneficiary of the imposition of, or adjustment to, the Late
Enrollment Penalty.
42 CFR § 423.46;
Prescription Drug Benefit Manual, Ch. 4; Updated Guidance on Creditable Coverage Period Determinations and
Late Enrollment Penalty Memo (April 11, 2008)
25

LP05

LP06

Late Enrollment Penalty Billing Requirements
The Sponsoring Organization shall bill the beneficiary for the Late Enrollment Penalty in accordance with CMS requirements.
42 CFR § 423.286(d)(3), 423.780(e);
Prescription Drug Benefit Manual, Ch. 4; Updated Guidance on Creditable Coverage Period Determinations and
Late Enrollment Penalty Memo (April 11, 2008)
LEP Reconsideration Process
An enrollee, or his or her representative, may request reconsideration of a decision to impose a late enrollment penalty within
the timeframe specified by CMS. The Sponsoring Organization shall cooperate with the Independent Review Entity (IRE) in
the late enrollment penalty reconsideration process and shall provide required LEP reconsideration-related information to
members and CMS.
42 C.F.R. §423.46; Prescription Drug Benefit Manual, Ch. 18; Updated Guidance on Creditable Coverage Period
Determinations and Late Enrollment Penalty Memo (April 11, 2008); Reporting Creditable Coverage Information for
Former Plan Members Memo (November 26, 2008)

26

PC01

PC02

CHAPTER 3: PROVIDER COMMUNICATION AND RELATIONS
Toll-free Pharmacy Technical Help Call Center
The Sponsoring Organization must operate a toll-free pharmacy technical help call center or make available call support to
respond to inquiries from pharmacies and providers regarding the applicant’s Medicare prescription drug benefit.
42 CFR § 423.128(d)(1)(i-ii)
Prescription Drug Benefit Manual Ch.3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Provision of Notice Regarding Formulary Changes
Prior to removing a covered Part D drug from its formulary, or making any change in the preferred or tiered cost-sharing
status of a covered Part D drug, a Sponsoring Organization must provide at least 60 days notice to CMS, State
Pharmaceutical Assistance Programs (as defined in 42 CFR 423.454), entities providing other prescription drug coverage
(as described in 42 CFR 423.464(f)(1), authorized prescribers, network pharmacies, and pharmacists prior to the date such
change becomes effective.
To the extent possible, sponsors may elect to provide State Pharmaceutical Assistance Programs, entities providing other
prescription drug coverage (as described in 42 CFR 423.464(f)(1), authorized prescribers, network pharmacies, and
pharmacists an annual notice providing information on the sponsor’s formulary change policy (i.e., length of notice,
methods of communication with beneficiaries, and any electronic notices providers may receive at the point-of-sale
regarding formulary status) and the sponsor’s Web site where these entities can verify the formulary status of particular
drugs.

PC03

42 CFR § 423.120(b)(5)(i); § 423.120(b)(5)(iii); § 423.578(d)
Prescription Drug Benefit Manual Ch.3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans;
Prescription Drug Benefit Manual Ch. 6.
Toll-Free Exceptions and Appeals Call Center
The Sponsoring Organization must operate a toll-free call center to respond to physicians and other providers for
information related to exceptions and prior authorizations, as well as beneficiary appeals.
Prescription Drug Benefit Manual Ch.3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Prescription Drug Benefit Manual Ch. 18

27

PR01

PR02

PR03

PR04

PR05

PR06

Participation and Termination Procedures
The Sponsoring Organization must have written policies and procedures and a process for rules of physician participation
and adverse participation decisions.
42 C.F.R. § 422.202(a) and (d); Medicare Managed Care Manual Ch. 6
Consultation with Physicians and Subcontracted Physician Groups
The Sponsoring Organization must establish a formal mechanism to consult with the physicians and subcontracted groups
that have agreed to provide services regarding the organization’s medical policy, quality improvement programs, and
medical management procedures.
42 C.F.R. § 422.202(b) and (c); Medicare Managed Care Manual Ch. 6
Credentialing Requirements for Physicians and Other Health Care Professionals
The Sponsoring Organization must follow a documented process for physicians and other health care professionals
regarding initial credentialing and recredentialing.
42 C.F.R. § 422.204(b)(2); Medicare Managed Care Manual Ch. 6
Process for Consultation with Health Care Professionals Regarding Credentialing
The Sponsoring Organization must have a process for health care professionals’ input in the credentialing and
recredentialing process.
42 C.F.R. § 422.204(b)(2)(iii); Medicare Managed Care Manual Ch. 6
Credentialing Requirements for Facilities
The Sponsoring Organization must have written policies and procedures for selection and evaluation of providers and
follow a documented process for facilities regarding initial credentialing and recredentialing.
42 C.F.R. § 422.204(b)(1) ; Medicare Managed Care Manual Ch. 6
Discrimination Against Health Care Professionals Prohibited
In selecting practitioners and Sponsoring Organization may not discriminate, in terms of participation, reimbursement, or
indemnification, against any health care professional who is acting within the scope of his/her license or certification under
State law, solely on the basis of the license or certification.
42 C.F.R. § 422.205; Medicare Managed Care Manual Ch. 6

28

PR07

PR08

PR09

PR10

No Prohibition on Health Care Professional Advice to Patients
ASponsoring Organization may not prohibit a health care professional from advising or advocating on behalf of a patient.
42 C.F.R. § 422.206(a) and (b); Medicare Managed Care Manual Ch. 6
Uniform Payment Rule for Non-network PFFS Plans
All contracting or deemed to be contracting providers must be reimbursed on a fee-for-service basis at a uniform payment
rate for all items and services regardless of whether the contract is signed or deemed. All non-contracted providers must be
reimbursed the amount the provider would have received under Original Medicare.
42 C.F.R. § 422.216 (a)
Enforcement of Balance Billing Limit for PFFS plans
Contracted providers and providers deemed to be contracting providers may charge enrollees no more than any cost
sharing and balance billing allowed by the plan. The Sponsoring Organization may permit balance billing no greater than
15 percent of the established uniform payment rate for contracted and deemed to be contracting providers. The Sponsoring
Organization must specify the amount of balance billing allowed in its contracts with providers and terms and conditions of
payment for deemed providers. The Sponsoring Organization must enforce any balance billing limit that it has established
for the PFFS the plan.
42 C.F.R. § 422.216 (b) and ( c)
Advance Notice for hospital services
A PFFS plan that allows balance billing must require in its terms and conditions of payment to hospitals that the hospital
provide an advance notice before furnishing any services for which balance billing could amount to $500 or more. The
hospital notice must contain: notice that balance billing is permitted for those services; and a good faith estimate of the
likely amount of balance billing and the amount of any deductible, coinsurance, and copayment that may be due in addition
to the balance billing amount.
42 C.F.R. § 422.216(d)(2)

29

PR11

PR12

PR13

Rules describing deemed contracting providers for PFFS plans
Any provider furnishing health services is deemed as having a contract in effect if, 1) the services are covered under the
plan, 2) before being furnished to enrollees of the PFFS plan the provider was informed that the individual was enrolled in
the plan, and 3) the provider was given a reasonable opportunity to learn the terms and conditions of payment under the
plan.
42 C.F.R. § 422.216 (f)
Provider Payment Appeal System
MA private fee-for-service plans must establish and maintain a payment appeal system under which providers may have
their payment claims reviewed in the event that a provider believes he was paid less than he would have been paid under
Original Medicare. Providers must demonstrate that they have not received proper payment and the plan must then pay the
difference between what the provider originally received and what he would have received under Original Medicare.
42 C.F.R. § 422.114
Effective Provider Outreach
PFFS plans must conduct effective outreach to providers to help them understand how PFFS plans work and to overcome
any resistance that may be particularly caused by concerns about the timeliness and accuracy of payments.
2009 Call Letter; May 25, 2007 Memo to Medicare Advantage Private Fee-for-Service (PFFS) Plans

30

MR01

CHAPTER 4: MARKETING
Appropriate Submission and Distribution of Marketing Materials
The Sponsoring Organization follows the requirements contained in the regulations and Medicare Marketing Guidelines for
submission and distribution of marketing materials, including appropriate timelines and content of model, non-model, and
File & Use materials.

MR02

42 C.F.R. § 422.2262(a)(1) and 422.2264, Section 103 of MIPPA; 42 C.F.R. § 423.2262(a)(1); Medicare Managed Care
Manual Ch.3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and
1876 Cost Plans
Disclosure of Required Deemable Information to Beneficiaries
The Sponsoring Organization provides information on advance directives, emergency services, and policies on MA plan
counseling or referral services that the Sponsoring Organization will not provide due to a “conscience” objection in
accordance with CMS requirements.

MR03

42 C.F.R. § 422.111(a) and (b); § 422.2264(a)(4); § 422.128; § 422.206(b)(2);
Medicare Managed Care Manual Ch. 4
Disclosure of Required Non-Deemable Information to Beneficiaries
At the time of enrollment and annually thereafter, the Sponsoring Organization must disclose to each beneficiary electing
an MA plan, in a clear, accurate, and consistent form, the information required by CMS.

MR04

MR05

42 C.F.R. § 422.111(a) and (b); § 422. 2264(a);
Medicare Managed Care Manual Ch. 3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Information Provided to Beneficiaries Upon Request
A Sponsoring Organization must provide the information required by CMS upon the request of a beneficiary.
42 C.F.R. § 422.111(c) and (f); § 422.210; 42 CFR § 423.120(b)(7); § 423.128(c); § 423.128(d)(3); § 423.505(f)(3); §
423.514(a)(3); Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing
Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Marketing Materials: Enrollment and Understanding of Plan Rules
The Sponsoring Organization establishes and maintains a system for confirming that enrolled members are enrolled in the
MA plan and that they understand the rules applicable under the plan.
42 C.F.R. § 422.2272(b)
31

MR06

MR07

MR08

Appropriate Notice Given to Members Before Plan Rule Change
If the Sponsoring Organization intends to change its rules for an MA plan, it must give notice to all members at least 30
days before the intended effective date of the change.
42 C.F.R. § 422.111(d)(3); Medicare Managed Care Manual Ch. 4
Allocation of Marketing Resources to Disabled
The Sponsoring Organization demonstrates that marketing resources are allocated to the disabled Medicare population as
well as beneficiaries ages 65 and over. Please note: “Disabled” is used in this element per the definition in the Americans
with Disabilities Act.
42 C.F.R. § 422. 2272(a);
42 C.F.R. § 423.2272(a);
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
No Engagement in Activities Which Mislead, Confuse, or Misrepresent the Sponsoring Organization
The Sponsoring Organization does not engage in activities which materially mislead, confuse, or misrepresent the
Sponsoring Organization. The Sponsoring Organization may not:
Claim recommendation or endorsement by CMS or Medicare or the Department of Health and Human Services, or
that CMS, Medicare, or the Department of Health and Human Services recommend that beneficiaries enroll in the
plan
Make erroneous written or oral statements including any statement, claim, or promise that conflicts with, materially
alters, or erroneously expands upon the information contained in CMS-approved materials
Use providers or provider groups to distribute printed information comparing benefits of different health plans,
unless the materials have the concurrence of all Sponsoring Organizations involved and the materials have received
prior approval from CMS;
Use providers to accept enrollment applications or offer inducement to persuade beneficiaries to join plans
Use providers to offer anything of value to induce plan enrollees to select them as a provider
Accept plan applications in provider offices or other places where health care is delivered except in the case where
such activities are conducted in common areas in the health care setting
Conduct sales presentations or distribute and accept plan applications at educational events
Provide meals regardless of value at sales events
Use names or logos of cobranded network providers on plan membership and marketing materials
Market non-health related products to prospective enrollees during any MA or Part D sales activity or presentation
32

Market health related products beyond the scope agreed upon by the beneficiary and documented by the plan prior
to the appointment
Use a plan name that does not include the plan type (effective 2010)
Employ MA plan names which suggest that a plan is not available to all Medicare beneficiaries (Does not apply to
plan names in effect on or before July 31, 2000)
Offer gifts or payment as an inducement to enroll in the organization
Offer cash gifts, including charitable contributions made on behalf of people attending a marketing presentation,
and including gift certificates and gift cards that can be readily converted to cash
Engage in any discriminatory marketing practice, such as targeted marketing to Medicare beneficiaries from higher
income areas, without making comparable efforts to enroll Medicare beneficiaries from lower income areas
Use high pressure sales tactics to enroll a beneficiary into a plan or require an in-home appointment;
Send unsolicited e-mails unless the Medicare beneficiary agrees to receive e-mails
Buy or rent e-mail lists to distribute information about MA plans
Conduct door-to-door solicitation of Medicare beneficiaries or through other unsolicited means of direct contact,
including contacting the beneficiary without the beneficiary initiating contact
Distribute marketing materials before expiration of the 45-day or 10-day period
Engage in any other marketing activity prohibited by CMS in its marketing guidance

MR09

42 C.F.R. § 422. 2268; 42 C.F.R. § 423.2268;
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
Good Faith Effort to Provide Written Notice of the Termination of a Contracted Provider
The Sponsoring Organization makes a good faith effort to provide written notice of the termination of a PCP to all members
who are patients of that PCP, or for termination of a non-PCP provider to all patients seen on a regular basis, at least 30
days prior to the termination effective date.

MR10

42 C.F.R. § 422.111(e); Medicare Managed Care Manual Ch. 11;
Medicare Managed Care Manual Ch. 3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Materials Provided for Significant Non-English Speaking Population
For markets with a significant non-English speaking population, the Sponsoring Organization provides materials in the
language of these individuals.

33

MR11

MR12

MR13

MR14

MR15

42 C.F.R. § 422. 2264(4)(e); 42 C.F.R. § 423(3)(e);
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
File and Use Marketing Materials
The Sponsoring Organization must certify that qualified materials for File and Use Certification comply with CMS
requirements, and must wait 5 days to distribute these materials. The Sponsoring Organization must submit at least 90% of
materials that qualify for File and Use Certification under this process. If a Sponsoring Organization has File and Use
Eligible status, it must submit qualified materials to CMS 5 days prior to use.
42 CFR § 423.2262(b)(1)(2);
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
Requirements for Pre-enrollment Marketing Materials
The Sponsoring Organization’s pre-enrollment marketing materials must provide, in a format, print size, and using standard
terminology specified by CMS, the information required by CMS to Medicare beneficiaries interested in enrolling.
42 CFR § 423.22.64(a); § 423.2264(3)(c); § 423.2264(3)(d);
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
Public Notification of Enrollment Period
The Sponsoring Organization must notify the general public of its enrollment period in an appropriate manner throughout
its service area.
42 CFR § 423.2264(3)(b)
Plan Responsibility for Persons Employed or Contracted to Perform Marketing
The Sponsoring Organization must meet CMS requirements for any person directly employed or contracted to market the
plan to ensure that beneficiaries receive truthful and accurate information
42 CFR § 423.2272(c)(d), § 423.2274, § 423.2268;
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
Provision of Notices Regarding Formulary Changes
Prior to removing a covered Part D drug from its formulary or making any negative changes to utilization management or
34

to the preferred or tiered cost-sharing status of a covered Part D drug, the Sponsoring Organization must provide a written
notice to affected enrollees at least 60 days prior to the date the change becomes effective, or provide such enrollee with a
60 day supply of the Part D drug under the same terms as previously allowed, and written notice of the negative formulary
change at the time an affected enrollee requests a refill of the Part D drug. If the change involves immediate removal of a
Part D drug deemed unsafe by the Food and Drug Administration (FDA) or removed from the market by the manufacturer,
the Sponsoring Organization must provide retrospective notice to the affected enrollees.

MR16

MR17

MR18

42 CFR § 423.120(b)(5)(i-iii); § 423.120(b)(7); § 423.578(d);
Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Requirements for Annual Post-Enrollment Materials
The Sponsoring Organization must distribute annual post-enrollment materials as required by CMS, to each enrollee in a
clear, accurate, and standardized form at the time of enrollment and at least annually thereafter. This information must be
provided in writing, if requested. In addition, the Sponsoring Organization must provide written information about its
grievance and appeals procedures and the process for quality of care complaints available to the enrollee through the
Quality Improvement Organization (QIO) process.
42 CFR § 423.120(b)(7); § 423.128(a)(3); § 423.128(b); § 423.128(d)(3); § 423.505(f)(3); § 423.562(a)(2);
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
Toll-free Customer Call Center
The Sponsoring Organization must have a toll-free customer call center that provides customer telephone service in
accordance with CMS requirements. The Sponsoring Organization must provide CMS with information related to the
operations of its customer call center according to guidelines specified by CMS.
42 CFR § 423.128(d)(1); § 423.514(a)
Internet Website
The Sponsoring Organization must have an Internet website that meets CMS marketing guidelines, including providing a
current formulary for its Part D plan that is updated at least monthly and providing current and prospective Part D enrollees
with at least 60 days notice regarding the removal or negative change to utilization management or the preferred or tiered
cost-sharing status of a drug on the formulary.
42 CFR § 423.120(b)(7); § 423.128(d)(2);
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
35

MR19

MR20

MR21

MR22

MAs, MA-PDs, PDPs, and 1876 Cost Plans
Explanation of Benefits
The Sponsoring Organization must provide enrollees with a written explanation of benefits (EOB) in a form easily
understandable to enrollees and in accordance with CMS requirements, at least on a monthly basis for those months in
which the enrollees use their Part D benefits.
42 CFR § 423.128(e);
Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Low Income Subsidy Rider Requirement
The Sponsoring Organization must send an individualized Low Income Subsidy (LIS) Rider to the Evidence of Coverage to
any member who qualifies for the subsidy or has a change in his/her LIS eligibility status during the year. The Sponsoring
Organization must send the LIS Rider within 30 days of learning of the change in a member’s subsidy status.
Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
Marketing Materials Disclaimer for PFFS plans
A Sponsoring Organization offering PFFS plans must prominently display the required PFFS disclaimer in all materials
(with exceptions as noted in the marketing guidelines), including but not limited to advertisements, enrollment materials,
web-based information, and materials used at sales presentations by both employed and contracted sales agents of the
Sponsoring Organization in public venues, and private meetings with beneficiaries.
42 C.F.R. § 422.80(e)(2)(ii); May 25, 2007 Memo to Medicare Advantage Private Fee-for-Service (PFFS) Plans; 2009 Call
Letter;
Medicare Managed Care Manual Ch. 3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
PFFS Marketing Material Prohibited Content
Sponsoring Organizations offering PFFS plans are prohibited from using any materials or making any presentations that
imply PFFS plans function as Medicare supplement plans or use terms such as “Medicare Supplement replacement”.
Sponsoring Organizations may not describe PFFS plans as plans that cover expenses that Original Medicare does not cover
nor as plans that offer Medicare supplemental benefits. Any statement indicating that enrollees may see any provider must
also include, the phrase “. . . who agrees to accept our terms and conditions of payment.”
42 C.F.R. § 422.80(e)(1)(iv); May 25, 2007 Memo to Medicare Advantage Private Fee-for-Service (PFFS) Plans;
Medicare Managed Care Manual Ch. 3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
36

MR23

Description of Plan Rules and Provider Deeming
Sponsoring Organizations must provide enrollees with a complete description of plan rules, including detailed information about
a provider’s choice whether to accept plan terms and conditions of payment. A leaflet containing all of the information in the
CMS model beneficiary and provider leaflet must be included in all enrollment kits that prospective enrollees receive. This
leaflet must be available on the plan’s website for beneficiaries who enroll online.

42 CFR 422.80(e)(1)(ix); May 25, 2007 Memo to Medicare Advantage Private Fee-for-Service (PFFS) Plans;
MR24

Outbound Education and Verification Calls
All Sponsoring Organizations offering PFFS plans are required to conduct outbound education and verification calls to all
applicants to ensure beneficiaries requesting enrollment understand the plan rules, except enrollments into employer or
union sponsored PFFS plans or switches from one PFFS plan to another PFFS plan offered by the same MA organization.

MR25

42 C.F.R. § 422.80(e)(2)(ii); May 25, 2007 Memo to Medicare Advantage Private Fee-for-Service (PFFS) Plans;
Medicare Managed Care Manual Ch. 3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Planned Marketing and Sales Events
Sponsoring Organizations must provide CMS with listings of planned marketing and sales events in a format and within
timeframes required by CMS.

MR26

Medicare Managed Care Manual Ch. 3 and Prescription Drug Benefit Manual Ch. 2 - Medicare Marketing Guidelines for
MAs, MA-PDs, PDPs, and 1876 Cost Plans
Disclosure of Required Non-Deemable Information to Beneficiaries
At the time of enrollment and annually thereafter, the Sponsoring Organization must disclose to each beneficiary electing
an MA plan, in a clear, accurate, and consistent form, the information required by CMS.

MR27

42 C.F.R. § 422.111(a), (b) (1) – (11) and (f); § 422.80(c); Medicare Managed Care Manual Chapter 3; CMS Guidance to
Regional PPOs on Ensuring Enrollee Access to Covered Services Using Methods Other than Written Agreements with
Providers
Targeted Marketing to Special Needs Individuals
The Sponsoring Organization must ensure that all SNP-related marketing materials adequately address the eligibility
criteria of the SNP. The Sponsoring Organization also must ensure that all SNP-related marketing materials are made
accessible to all eligible individuals.

37

Interim Guidance Regarding MA Special Needs Plans for Dual Eligible and Institutionalized Individuals;
Medicare Managed Care Manual Ch. 3 - Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans

38

AA01

AA02

AA03

AA04

AA05

AA06

CHAPTER 5: BENEFITS AND BENEFICIARY PROTECTIONS
Adequate and Appropriate Provider Network
The Sponsoring Organization maintains and monitors a network of appropriate providers that is sufficient to provide adequate
access to and availability of covered services.
42 C.F.R. § 422.112(a)(1); Medicare Managed Care Manual Ch. 4
Adequate and Appropriate Access to Care
The Sponsoring Organization has written standards for timeliness of access to care and member services that meet or exceed
such standards as may be established by CMS, continuously monitors its provider networks’ compliance with these standards,
and takes corrective action as necessary. The Sponsoring Organization ensures that the hours of operation of its providers are
convenient to and do not discriminate against members. When medically necessary, the Sponsoring Organization makes
services available 24 hours a day, 7 days a week.
42 C.F.R. § 422.112(a)(6)(i) and (a)(7); Medicare Managed Care Manual Ch. 4
PCP Panel Established and Maintained
The Sponsoring Organization establishes, maintains, and monitors a panel of primary care providers from which the member
may select a personal primary care provider.
42 C.F.R. § 422.112(a)(2); Medicare Managed Care Manual Ch. 4
Necessary Specialty Care Provided
The Sponsoring Organization provides or arranges for necessary specialty care.
42 C.F.R. § 422.112(a)(3); Medicare Managed Care Manual Ch. 4
Services Provided with Cultural Competence
The Sponsoring Organization ensures that all services, both clinical and non-clinical, are accessible to all members and are
provided in a culturally competent manner, including those with limited English proficiency or reading skills and those with
diverse cultural and ethnic backgrounds.
42 C.F.R. § 422.112(a)(8); Medicare Managed Care Manual Ch. 4
Access to Services Under an MA Private Fee-for-service Plan (Sufficient Access)
A Sponsoring Organization offering a non-network PFFS plan establishes a provider "deeming" process to provide access to
its enrolled beneficiaries and demonstrates access by paying amounts that are at least the Medicare payment rate.
39

AA07

AA08

CS01

HA01

CC01

CC02

42 CFR 422.114 (a)(2)(i)
Freedom of Choice
Sponsoring Organizations offering PFFS plans must permit enrollees to obtain services from any entity that is authorized to
provide services under Medicare Part A and Part B and agrees to provide services under the terms and conditions of the plan.
42 C.F.R. § 422.114(b)
Access to Covered Services for Regional PPOs
In areas where the MA regional plan does not meet access standards through a contracted network, it provides access to
covered services through one or more of the following alternate mechanisms:
1. Allowing enrollees to access services from non-network providers at in-network cost sharing levels, and /or
2. Other CMS – approved methods
42 C.F.R. § 422.112(a)(1) and (c); Medicare Managed Care Manual Ch. 4; CMS Guidance to Regional PPOs on Ensuring
Beneficiary Access to Covered Services Using Methods Other than Written Agreements with Providers
Appropriate Compliance with Cost Sharing Rules for MA Regional Plans
The MA Regional Plan tracks the deductible (if any) and catastrophic limits and makes the proper notification when
deductibles/limits are reached.
42 C.F.R. § 422.101(d)
Initial Health Assessment Conducted
The Sponsoring Organization makes a good faith effort to conduct an initial health assessment of all new members within 90
days of the effective date of enrollment.
42 C.F.R. § 422.112(b)(4)(i); Medicare Managed Care Manual Ch. 4
Continuity of Care Through Community Arrangements
All Sponsoring Organizations that offer coordinated care plans (CCPs) must ensure continuity of care and integration of
services through arrangements with community and social service programs generally available through contracting or noncontracting providers.
42 C.F.R. § 422.112(b)(3); Medicare Managed Care Manual Ch. 4
Timely Communication of Clinical Information
All Sponsoring Organizations that offer CCPs must ensure continuity and coordination of care through procedures for timely
40

communication of clinical information among contracted network providers, with the member, and with his/her designees (if
applicable).

CC03

CC04

AD01

DG01

42 C.F.R. § 422.112(b)(4)(iii) and (5); § 422.118(d); Medicare Managed Care Manual Ch. 4
Standards for Member Input into Treatment Plan/Advance Directives
The Sponsoring Organization must establish written standards for provider consideration of member input into the proposed
treatment plan and for advance directives.
42 C.F.R. § 422.112(a)(7)(iii); § 422.128; Medicare Managed Care Manual Ch. 4
Member Health Record Uses Established Standards
All Sponsoring Organizations that offer CCPs must ensure that each contracted provider furnishing services to members
maintains member health records in accordance with standards established by the Sponsoring Organization, which take into
account professional standards.
42 C.F.R. § 422.112(b)(4)(ii); Medicare Managed Care Manual Ch. 4
No Member Discrimination in Delivery of Health Care
The Sponsoring Organization implements procedures to ensure that members are not discriminated against in the delivery of
health care services consistent with the benefits covered in their policy based on race, ethnicity, national origin, religion, sex,
age, mental or physical disability or medical condition, such as ESRD, sexual orientation, claims experience, medical history,
evidence of insurability (including conditions arising out of acts of domestic violence), disability, genetic information, or
source of payment.
42 C.F.R. § 422.110; Medicare Managed Care Manual Ch. 4
Oversight of Delegated Entities with Chapter 4 Responsibilities
If any of the activities or responsibilities for the above elements in Medicare Managed Care Chapter 4 are delegated to other
parties, the Sponsoring Organization must oversee them per CMS standards.
42 C.F.R. § 422.504(i); Medicare Managed Care Manual Ch. 11

41

QY01

QY02

QY03

QY04

QY05

QY06

QY07

CHAPTER 6: QUALITY IMPROVEMENT AND ASSURANCE
QI Program That is Evaluated Annually
The Sponsoring Organization must have an ongoing quality improvement (QI) program that is formally evaluated at least
annually.
42 C.F.R. § 422.152(a), (c), (d), and (f)(2); Medicare Managed Care Manual Ch. 5
Adequate Health Information System
The Sponsoring Organization must maintain a health information system that collects, integrates, analyzes, and reports data
necessary to implement its QI program.
42 C.F.R. § 422.152(f)(1); Medicare Managed Care Manual Ch. 5
Appropriate Utilization Management Program
If the Sponsoring Organization offers a coordinated care plan, or a local PPO that is licensed as an HMO, the Sponsoring
Organization must employ a utilization management program that meets CMS requirements for each plan.
42 C.F.R. § 422.101(b)(1)-(5); § 422.152(b)(1), (2), and (4); Medicare Managed Care Manual Ch. 5
Significant Problems Corrected
The Sponsoring Organization corrects significant systematic problems that come to its attention through internal
surveillance, complaints, or other mechanisms.
42 C.F.R. § 422.152(f)(3); Medicare Managed Care Manual Ch. 5
Oversight of Delegated Entities with Chapter 5 Responsibilities
If any of the activities or responsibilities for the above elements, QY01-QY05 or QY08-QY09, in Chapter 5 are delegated
to other parties, the Sponsoring Organization must oversee them per CMS standards.
42 C.F.R. § 422.504(i); Medicare Managed Care Manual Ch. 11
Chronic Care Improvement Program
The Sponsoring Organization must have a chronic care improvement program (CCIP)
42 C.F.R. § 422.152(a)(1) and (c)
Quality Improvement Projects
The Sponsoring Organization must successfully complete annual QI projects that focus on both clinical and non-clinical
areas and submit the project reports to the evaluation entity.
42

QY08

QY09

QY10

QA01

QA02

QA03

42 C.F.R. § 422.152(d); Medicare Managed Care Manual Ch. 5
Appropriate Utilization Management Program for Regional PPO Plans
If the Sponsoring Organization uses written protocols for utilization management, it must employ a utilization management
program that meets CMS requirements for each plan.
42 C.F.R. § 422.152(e)(2)(iii); Medicare Managed Care Manual Ch. 5
MA Regional Plan Application of Local Coverage Policy Determinations Across Multiple Local Coverage Areas Within
the Region
If an MA regional plan that covers multiple local coverage policy areas elects the option of applying a single local coverage
policy across its region, the regional plan must uniformly apply its policy determinations to all parts of the MA region.
42 C.F.R. § 422.101(b)(4) and (5)
Model of Care for SNP
The Sponsoring Organization must have an established Model of Care for the SNP that describes the approach to providing
specialized care to the SNP’s target population.
42 C.F.R. § 422.152(a)(1) and (c); Medicare Managed Care Manual Ch. 5
Standards for Pharmacy Practice
The Sponsoring Organization must require network providers to comply with minimum standards for pharmacy practice as
established by the States.
42 CFR § 423.153(c)(1); Prescription Drug Benefit Manual, Ch. 7
Concurrent Drug Utilization Review
The Sponsoring Organization must have concurrent Drug Utilization Review (DUR) systems, policies, and procedures
designed to ensure that a review of the prescribed drug therapy is performed before each prescription is dispensed to an
enrollee at the point of sale or distribution.
42 CFR § 423.153(c)(2); Prescription Drug Benefit Manual, Ch. 7
Retrospective Drug Utilization Review
The Sponsoring Organization must have retrospective Drug Utilization Review (DUR) systems, policies, and procedures
designed to ensure ongoing periodic examination of claims data and other records, through computerized drug claims
processing and information retrieval systems, in order to identify patterns of inappropriate or medically unnecessary care
43

among enrollees in the Part D plan, or associated with specific drugs or groups of drugs.

QA04

QA05

42 CFR § 423.153(c)(3); Prescription Drug Benefit Manual, Ch. 7
Internal Medication Error Identification and Reduction Systems
The Sponsoring Organization must have internal medication error identification and reduction measures and systems that
address ways to reduce medication errors and adverse drug interactions, and improve medication use.
42 CFR § 423.153(c)(4); Prescription Drug Benefit Manual, Ch. 7
Provision of Quality Assurance Information
The Sponsoring Organization must provide CMS with information concerning the plan’s quality assurance measures and
systems to reduce medication errors and adverse drug interactions, and improve medication use.
42 CFR § 423.153(c)(5)

44

CN01

CN02

CN03

CN04

CN05

CHAPTER 7: CONTRACTS
Required Contract Provisions: Privacy and Confidentiality
The Sponsoring Organization’s written contracts with first tier and downstream entities must contain the provisions that
contracting providers agree to safeguard beneficiary privacy and confidentiality, consistent with all Federal and State laws,
and ensure accuracy of beneficiary medical, health, and enrollment information and records.
42 C.F.R. § 422.118; Medicare Managed Care Manual Ch. 11;
42 C.F.R. § 423.136
Required Contract Provisions: Prompt Payment
The Sponsoring Organization’s written contracts with first tier and downstream entities must contain a prompt payment
provision.
42 C.F.R. § 422.520(b); Medicare Managed Care Manual Ch. 11
Required Contract Provisions: Hold Harmless
The Sponsoring Organization’s written contracts with first tier and downstream entities must contain a provision that
Medicare members are held harmless for payment of fees that are the legal obligation of the Sponsoring Organization.
42 C.F.R. § 422.504(g)(1)(i) and (i)(3)(i); Medicare Managed Care Manual Ch. 11;
42 C.F.R. § 423.505(g)(1)(i) and (i)(3)(i)
Required Contract Provisions: Abide by Federal Requirements
The Sponsoring Organization’s written contracts with first tier and downstream entities must contain a provision to show
that the contracting entity will: comply with Medicare laws, regulations, reporting requirements, and CMS instructions;
agree to audits and inspection by CMS and/or its designees; cooperate, assist, and provide information, as requested; and
maintain records a minimum of 10 years.
42 C.F.R. § 422.504(e)(4), (h), (i)(2), and (i)(4)(v); Medicare Managed Care Manual Ch. 11;
42 C.F.R. § 423.505(e)(4), (h), (i)(2), and (i)(4)(iv)
Required Contract Provisions: Compliance with Sponsoring Organization’s Policies and Procedures
The Sponsoring Organization’s written contracts with first tier and downstream entities must specify that providers agree
to comply with the Sponsoring Organization’s policies and procedures.
42 C.F.R. § 422.504(i)(4)(v); Medicare Managed Care Manual Ch. 11;
45

CN06

CN07

CN08

CN09

CN10

42 C.F.R. § 423.505(i)(4)(iv)
Required Contract Provisions for Deemable Activities: Delegation Requirements
The Sponsoring Organization’s written contracts with any entity that performs deemable activities that are delegated under
its contract with CMS, must contain provisions that specify that the entity adhere to the delegation requirements in the MA
regulation.
42 C.F.R. § 422.504(i)(4); Medicare Managed Care Manual Ch. 11
Required Contract Provisions for Non-Deemable Activities: Delegation Requirements
The Sponsoring Organization’s written contracts with any entity that performs non-deemable activities that are delegated
under its contract with CMS must contain provisions that specify that the entity adhere to the delegation requirements in
the MA regulation.
42 C.F.R. § 422.504(i)(4); Medicare Managed Care Manual Ch. 11
Maintenance of Records
The Sponsoring Organization must maintain, for 10 years, books, records, documents, and other evidence of accounting
procedures and practices adhering to specified requirements. The Sponsoring Organization must maintain records for a
period greater than 10 years if CMS requires based upon special need, termination, dispute, or alleged or possible fraud
and abuse, based on audit findings. The Sponsoring Organization must file and retain enrollment and disenrollment
requests for the current contract period and 10 prior periods.
42 CFR § 423.36(b)(3); § 423.505(d); § 423.505(e)(1)(iii); § 423.505(e)(4);
42 C.F.R. §422.66(b)(3)(iv); § 422.504(d); § 422.504(e)(1)(iii); § 422.504(e)(4)
Medicare Managed Care Manual Ch. 2; Prescription Drug Benefit Manual Ch. 3
Access to Facilities and Records
The Sponsoring Organization must provide the Department of Health and Human Services (HHS), the Comptroller
General, or their designee access to its facilities and records.
42 CFR § 422.504(e); 42 CFR § 423.505(e)
Required Contract Provisions: PBM/Any Subcontractor Performing Key Part D Functions
The Sponsoring Organization’s written contracts with first tier, downstream, and related entities (including PBMs) must
comply with all CMS requirements.
42 CFR § 423.505(e)(2); § 423.505(g)(1)(i); § 423.505(i)(2-5)
46

CN11

CN12

CN13

CN14

CN15

Required Contract Provisions: Long-Term Care Pharmacies
The Sponsoring Organization’s written contracts with network long-term care pharmacies must include the CMS-specified
performance and service criteria for long-term care pharmacies.
42 CFR § 423.120(a)(5)
Prescription Drug Benefit Manual, Ch. 5 – Benefits and Beneficiary Protections
Required Contract Provisions: I/T/U Pharmacies
The Sponsoring Organization’s written contracts with network Indian Health Service, Indian Tribe and Tribal
Organization, and Urban Indian Organization (I/T/U) pharmacies must contain standard contracting terms and conditions
conforming to the model addendum that CMS provides.
42 CFR § 423.120(a)(6)
Indian Health Addendum to Medicare Part D Plan Agreement
Required Contract Provisions: Home Infusion Pharmacies
The Sponsoring Organization’s written contracts with network home infusion pharmacies must include CMS-specified
provisions that address Part D drugs delivered in the home setting.
42 CFR § 423.120(a)(4)
Required Contract Provisions for Dual Eligible SNP: Subsetting
Sponsoring Organizations offering service to a subset of the dual eligible population must have an agreement between the
Sponsoring Organization and the State Medicaid agency.
Medicare Managed Care Manual Ch. 2
Required Contract Provisions: Institutional SNP Contracting
Sponsoring Organizations offering an institutional SNP to serve residents of Long Term Care (LTC) facilities must have a
contractual arrangement with the LTC facility that includes all required elements.
Medicare Managed Care Manual Ch. 2

47

OC01

OC02

OC03

CHAPTER 8: ORGANIZATIONAL/COVERAGE DETERMINATIONS, APPEALS AND GRIEVANCES
Correct Claim Determinations
The Sponsoring Organization must make correct claim determinations, which include developing the claim for additional
information, when necessary, for:
Services obtained from a non-contracting provider when the services were authorized by a contracted provider or the
Sponsoring Organization;
Ambulance services dispatched through 911;
Emergency services;
Urgently needed services;
Post-stabilization care services; and
Renal dialysis services that Medicare members obtain while temporarily out of the service area.
An entity offering a PFFS plan must make correct claim determinations for all provider types.
42 C.F.R. § 422.100(a) and (b)(1); § 422.114(b); § 422.132; § 422.504(g)(1); Manual Ch. 4
Reasonable Reimbursement for Covered Services
The Sponsoring Organization must provide reasonable reimbursement for:
Services obtained from a non-contracting provider when the services were authorized by a contracted provider or the
Sponsoring Organization;
Ambulance services dispatched through 911;
Emergency services;
Urgently needed services;
Post-stabilization care services;
Renal dialysis services that Medicare members obtain while temporarily out of the service area; and
Services for which coverage has been denied by the Sponsoring Organization but found to be services the member was
entitled to upon appeal.
An entity offering a PFFS plan must make correct claim determinations all provider types.
42 C.F.R. § 422.100(a) and (b)(1)-(2); 422.114(b); Manual Ch. 4
Timely Payment of Non-Contracting Provider Clean Claims
The Sponsoring Organization must pay 95 percent of “clean” claims from non-contracting providers within 30 calendar days
of receipt.
48

OC04

OC05

OC06

OC07

OP01

OP02

42 C.F.R. § 422.500; § 422.520(a)(1); Manual Ch. 11; Ch. 13
Interest on Clean Claims Paid Late
If the Sponsoring Organization pays clean claims from non-contracting providers in over 30 calendar days, it must pay interest
in accordance with § 1816 (c)(2)(B) and § 1842(c)(2)(B).
42 C.F.R. § 422.520(a)(2); Manual Ch. 11
Timely Adjudication of Non-Clean Claims
The Sponsoring Organization must pay or deny all non-contracted claims that do not meet the definition of “clean claims”
within 60 calendar days of receipt.
42 C.F.R. § 422.520(a)(3); Manual Ch. 11; Ch. 13
Claim Denials (Notice Content)
If an Sponsoring Organization denies payment, the written denial notice (CMS-10003-Notice of Denial of Payment (NDP)), or
an RO-approved modification of the NDP, must be sent to the member. The written denial must clearly state the service
denied and the specific denial reason. The notice must also inform the enrollee of his or her right to a standard reconsideration
and describe the appeal process.
42 C.F.R. § 422.568(d) and (e); Manual Ch. 13
Medicare Secondary Payer (Claims)
The Sponsoring Organization must have procedures to identify payers that are primary to Medicare, determine the amounts
payable, and coordinate benefits.
42 C.F.R. § 422.108; Manual Ch. 4
Adverse Standard Pre-Service Organization Determinations (Timeliness)
If the Sponsoring Organization makes an adverse standard pre-service organization determination, it must notify the member
in writing using the CMS-10003-NDMC (Notice of Denial of Medical Coverage), or an RO-approved modification of the
NDMC, of its decision as expeditiously as the member’s health condition requires, but no later than 14 calendar days after
receiving the request (or an additional 14 days if an extension is justified).
42 C.F.R. § 422.568(a)
Adverse Standard Pre-Service Organization Determinations (Notice Content)
If the Sponsoring Organization makes an adverse standard pre-service organization determination, the written CMS-10003NDMC (Notice of Denial of Medical Coverage), or an RO-approved modification of the NDMC, must be sent to the member
49

and must clearly state the service denied and the specific denial reason. The notice must also inform the enrollee of his or her
right to a standard or expedited reconsideration, including the rights to, and conditions for, obtaining an expedited
reconsideration, as well as describe the appeal process.

OP03

OP04

42 C.F.R. § 422.568(d) and (e)
Receipt and Documentation of Expedited Organization Determination Requests
The Sponsoring Organization must establish an efficient and convenient means for individuals (including members, their
applicable representatives, or their physicians) to submit oral or written requests for expedited organization determinations,
document all oral requests in writing, and maintain the documentation in a case file.
42 C.F.R. § 422.570(c)(1)
Requests for Expedited Organization Determinations (Timeliness)
The Sponsoring Organization must promptly decide whether to expedite an organization determination based on regulatory
requirements. If the Sponsoring Organization decides not to expedite an organization determination, it must automatically
transfer the request to the standard timeframe, promptly provide oral notice to the member of the decision not to expedite, and
provide written notice within 3 calendar days of the oral notice.
If the Sponsoring Organization makes an expedited organization determination (favorable or adverse), it must notify the
member in writing as expeditiously as the member’s health requires, but no later than 72 hours after receiving the request (or
an additional 14 calendar days if an extension is justified). If the Sponsoring Organization first notifies the member of its
expedited determination orally, it must mail written confirmation to the member within 3 calendar days of the oral notification.

OP05

OP06

42 C.F.R. § 422.570(c)(2) and (d); § 422.572(a)-(c)
Adverse Expedited Organization Determinations (Notice Content)
If the Sponsoring Organization makes an adverse expedited organization determination, the written CMS-10003-NDMC
(Notice of Denial of Medical Coverage), or an RO-approved modification of the NDMC, must be sent to the member and must
clearly state the service denied and the specific denial reason. The notice must also inform the enrollee of his or her right to a
standard or expedited reconsideration, including the rights to, and conditions for, obtaining an expedited reconsideration, as
well as describe the appeal process.
42 C.F.R. § 422.572(e)
Organization Determination Extensions (Notice Content)
If an extension is granted for an organization determination, the written notice to the member must include the reasons for the
delay, and inform the member of the right to file an expedited grievance if he or she disagrees with the decision to grant an
50

extension.

OP07

OP08

OP09

OP10

OP11

42 C.F.R. § 422.568(a); § 422.572(b); Medicare Managed Care Manual Ch. 13
Decision Not to Expedite an Organization Determination (Notice Content)
If the Sponsoring Organization decides not to expedite an organization determination, the notice to the member of the decision
not to expedite must explain that the Sponsoring Organization will process the request using the 14-day standard timeframe,
inform the member of the right to file an expedited grievance if he or she disagrees with the decision not to expedite, inform
the member of the right to resubmit a request for an expedited determination with any physician’s support, and provide
instructions about the Sponsoring Organization grievance process and its timeframes.
42 C.F.R. § 422.570(d)(2)
Correctly Distinguishes Between Organization Determinations and Reconsiderations
The Sponsoring Organization must correctly distinguish between organization determinations and reconsiderations.
42 C.F.R. § 422.564(b); § 422.566(b); § 422.580
OPTIONAL: Favorable Standard Pre-Service Organization Determinations (Timeliness)
If the Sponsoring Organization makes a favorable standard pre-service organization determination, it must notify the member
of its determination as expeditiously as the member’s health condition requires, but no later than 14 calendar days after
receiving the request (or an additional 14 days if an extension is justified).
42 C.F.R. § 422.568(a)
Detailed Explanation of Non-Coverage (Timeliness)
The Sponsoring Organization, upon notification by the QIO that an enrollee has filed a request for a fast-track appeal, must
send the written CMS-10095-B (Detailed Explanation of Non-Coverage) to the enrollee by the close of business on the day the
QIO notification is received
42 C.F.R. § 422.626(e)
Detailed Explanation of Non-Coverage (Notice Content)
The Sponsoring Organization must include in the Detailed Explanation of Non-Coverage (CMS-10095-B) an explanation as to
why the provider services are no longer reasonable or necessary, or are no longer covered; the applicable Medicare rule,
instruction, or policy including citations, and how the enrollee may obtain copies of such documents; and other facts or
information relevant to the non-coverage decision.
42 C.F.R. § 422.626(e)
51

OP12

OP13

RC01

RC02

Effectuation of QIO Decision Reversals
If a QIO reverses a Sponsoring Organization’s determination decision to terminate SNF, HHA, or CORF services, the
Sponsoring Organization must provide the enrollee with a new notice consistent with §422.624(b).
42 C.F.R. § 422.626(e)(5)
Detailed Notice of Discharge of Inpatient Hospital Care
Prior to discharging the individual or lowering the level of care within the hospital setting, the Sponsoring Organization must
secure concurrence from the physician responsible for the enrollee’s inpatient care. When the QIO has notified an Sponsoring
Organization that an enrollee has requested an immediate review of an Sponsoring Organization or hospital’s determination
that inpatient care is no longer necessary, the Sponsoring Organization must, directly or by delegation, provide the Detailed
Notice of Discharge to the enrollee as soon as possible but no later than noon of the day after the QIO’s notification. The
detailed notice must include a detailed explanation of why services are either no longer reasonable and necessary or are no
longer covered in an inpatient hospital setting; a description of any applicable Medicare coverage rule, instruction, or other
Medicare policy used in this determination, including information about how the enrollee may obtain a copy of the Medicare
policy; any applicable MA organization policy, contract provision, or rationale upon which the discharge determination was
based; and facts specific to the enrollee and relevant to the coverage determination sufficient to advise the enrollee of the
applicability of the coverage rule or policy to the enrollee’s case. During the review process, the plan ensures that all
information the QIO needs to make its determination is provided, either directly (with hospital cooperation) or by delegation,
no later than noon of the day after the QIO notifies the Sponsoring Organization that a request for an immediate review has
been received from the enrollee.
42 C.F.R. § 422.620(c)(1) and (d), 422.622(e)(1), (e)(2), and (f)(3)
Favorable Claims Reconsiderations (Timeliness)
If the Sponsoring Organization makes a reconsidered determination on a request for payment that is completely favorable to
the member, it must issue written notice of its reconsidered determination to the member and pay the claim no later than 60
calendar days after receiving the reconsideration request.
42 C.F.R. § 422.590(b)(1); Manual Ch. 13
Adverse Claims Reconsiderations (Timeliness)
If the Sponsoring Organization affirms, in whole or in part, its adverse organization determination, or fails to provide the
member with a reconsideration determination within 60 days of receipt of the request (which constitutes an affirmation of its
adverse organization determination), it must forward the case to CMS’ independent review entity no later than 60 calendar
days after receiving the reconsideration request.
52

The Sponsoring Organization concurrently notifies the member that it has forwarded the case to CMS’ independent review
entity.

RC03

RP01

RP02

RP03

42 C.F.R. § 422.590(b)(2), (c), and (e)
Effectuation of Third-Party Claims Reconsideration Reversals
If the Sponsoring Organization’s determination is reversed in whole or in part by the independent review entity, the
Sponsoring Organization must pay for the service no later than 30 calendar days from the date it receives the notice reversing
the organization determination. The Sponsoring Organization must also inform the independent review entity that the
organization has effectuated the decision.
If the Sponsoring Organization’s determination is reversed in whole or in part by an ALJ, or at a higher level of appeal, the
Sponsoring Organization must authorize or provide the service under dispute as expeditiously as the member’s health requires,
but no later than 60 days from the date it received notice of the reversal.
42 C.F.R. § 422.618(b)(2) and (c); Medicare Managed Care Manual Ch. 13
Favorable Standard Pre-Service Reconsiderations (Timeliness)
If the Sponsoring Organization makes a fully favorable decision on a standard pre-service reconsideration, it must issue a
decision to the member, and authorize or provide the service, as expeditiously as the member’s health requires, but no later
than 30 calendar days after receiving the reconsideration request (or an additional 14 calendar days if an extension is justified).
42 C.F.R. § 422.590(a)(1) Medicare Managed Care Manual Ch. 13
Adverse Standard Pre-Service Reconsiderations (Timeliness)
If the Sponsoring Organization is unable to make a fully favorable decision on a standard pre-service reconsideration, it must
forward the case to CMS’ independent review entity as expeditiously as the member’s health requires, but no later than 30
calendar days after receiving the reconsideration request (or an additional 14 calendar days if an extension is justified). The
Sponsoring Organization must concurrently notify the member of this action.
42 C.F.R. § 422.590(a)(2) and (e)
Effectuation of Third-Party Standard Pre-Service Reconsideration Reversals
If the Sponsoring Organization’s determination is reversed in whole or in part by the independent review entity, the
Sponsoring Organization must authorize the service within 72 hours from the date it receives the notice reversing the
determination, or provide the service as quickly as the member’s health requires (but no later than 14 calendar days from that
date). The Sponsoring Organization must also inform the independent review entity that the organization has effectuated the
decision.
53

If the Sponsoring Organization’s determination is reversed in whole or in part by an ALJ, or at a higher level of appeal, the
Sponsoring Organization must authorize or provide the service under dispute as expeditiously as the member’s health requires,
but no later than 60 days from the date it received notice of the reversal.

RP04

RP05

42 C.F.R. § 422.618(b)(1) and (c) ; Medicare Managed Care Manual Ch. 13
Receipt and Documentation of Expedited Reconsideration Requests
The Sponsoring Organization must establish an efficient and convenient means for individuals to submit oral or written
requests for expedited reconsiderations, document all oral requests in writing, and maintain the documentation in a case file.
42 C.F.R. § 422.584(c)(1) §422.586; Medicare Managed Care Manual Ch. 13
Requests for Expedited Reconsiderations (Timeliness)
The Sponsoring Organization must promptly decide whether to expedite a reconsideration based on regulatory requirements.
If the Sponsoring Organization decides not to expedite a reconsideration, it must automatically transfer the request to the
standard timeframe, provide prompt oral notice to the member of the decision not to expedite, and provide written notice
within 3 calendar days of the oral notice.
If the Sponsoring Organization decides to expedite the reconsideration, it must make a determination and notify the member as
expeditiously as the member’s health requires, but no later than 72 hours from the time it receives the request for
reconsideration (or an additional 14 calendar days if an extension is justified).
If the Sponsoring Organization makes an expedited reconsideration determination that is fully favorable to the member, it
must authorize or provide the service as expeditiously as the member’s health requires, but no later than 72 hours from the
time it receives the request for reconsideration (or an additional 14 calendar days if an extension is justified). If the
Sponsoring Organization first notifies the member of its fully favorable expedited determination orally, it must mail written
confirmation to the member within 3 calendar days of the oral notification.
If the Sponsoring Organization affirms, in whole or in part, its adverse expedited organization determination, it must forward
the case to CMS’ independent review entity as expeditiously as the member’s health requires, but not later than 24 hours after
the decision. If the Sponsoring Organization fails to provide the member with the results of its reconsideration within the
timeframes specified above (as expeditiously as the member’s health condition requires or within 72 hours), this failure
constitutes an adverse reconsideration determination, and the Sponsoring Organization must submit the file to CMS’
independent review entity within 24 hours. The Sponsoring Organization must concurrently notify the member in writing that
it has forwarded the case file to CMS’ independent review entity.
54

42 C.F.R. § 422.584(c)(2) and (d); § 422.590(d)(1)-(3) and (5), (e), and (f); Medicare Managed Care Manual Ch. 13
RP06

RP07

Decisions Not to Expedite a Reconsideration (Notice Content)
If the Sponsoring Organization decides not to expedite a reconsideration, the notice to the member of the decision not to
expedite must explain that the Sponsoring Organization will process the request using the standard timeframe, inform the
member of the right to file a grievance if he or she disagrees with the decision not to expedite, inform the member of the right
to resubmit a request for an expedited reconsideration with any physician’s support, and provide instructions about the
Sponsoring Organization grievance process and its timeframes.
42 C.F.R. § 422.584(d)(2) Medicare Managed Care Manual Ch. 13
Effectuation of Third-Party Expedited Reconsideration Reversals
If the Sponsoring Organization’s determination is reversed in whole or in part by the independent review entity, the
Sponsoring Organization must authorize or provide the service under dispute as expeditiously as the member’s health requires
but no later than 72 hours after the date it receives notice reversing the determination. The Sponsoring Organization must also
inform the independent review entity that the organization has effectuated the decision.
If the Sponsoring Organization’s determination is reversed in whole or in part by an ALJ, or at a higher level of appeal, the
Sponsoring Organization must authorize or provide the service under dispute as expeditiously as the member’s health requires,
but no later than 60 days from the date it received notice of the reversal. The Sponsoring Organization must also inform the
independent outside entity that the organization has effectuated the decision.

RP08

GV01

42 C.F.R. § 422.619(b) and (c) Medicare Managed Care Manual Ch. 13
Reconsideration Extensions (Notice Content)
If the Sponsoring Organization grants an extension on a reconsideration, the written notice to the member must include the
reasons for the delay, and inform the member of the right to file an expedited grievance if he or she disagrees with the decision
to grant an extension.
42 C.F.R. § 422.590(a)(1); 42 C.F.R. § 422.590(d)(2) Medicare Managed Care Manual
Organization Determinations and Reconsiderations Not Categorized as Grievances
The Sponsoring Organization must correctly distinguish between organization determinations, reconsiderations, and
grievances and process them through the appropriate mechanisms.
42 C.F.R. § 422.564(b); § 422.566(b); § 422.580; Manual Ch. 13; 42 CFR § 423.564(b)
55

GV02

Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Grievance Decision Notification (Timeliness)
The Sponsoring Organization must notify the member of its decision as expeditiously as the case requires based on the
member’s health status but no later than 30 days after the receipt date of the oral or written grievance. If the complaint
involves an Sponsoring Organization’s decision to invoke an extension relating to an organization determination or
reconsideration, or the complaint involves an Sponsoring Organization’s refusal to grant an enrollee’s request for an expedited
organization determination or expedited reconsideration, the Sponsoring Organization must respond to an enrollee’s grievance
within 24 hours.
Exception: If the member requests an extension, or if the Sponsoring Organization justifies a need for information and
documents that the delay is in the interest of the member, the Sponsoring Organization may extend the 30-day timeframe up to
an additional 14 days. In this case, the Sponsoring Organization must immediately notify the member in writing of the reasons
for the delay.

GV03

GV04

GV05

42 C.F.R. § 422.564(e)(1)-(2) and(f)
42 CFR § 423.564(e)(1-2)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Grievance Decision Notification (Notice Content)
The Sponsoring Organization must inform the member of the disposition of the grievance. For quality of care issues, the
Sponsoring Organization must also include a description of the member’s right to file a written complaint with the QIO.
42 C.F.R. § 422.564(e)(3)
Method of Grievance Decision Notification
The Sponsoring Organization must respond to written grievances in writing. The Sponsoring Organization must respond to
oral grievances either orally or in writing, unless the member requests a written response. The Sponsoring Organization must
respond to all grievances related to quality of care in writing, regardless of how the grievance was submitted.
42 C.F.R. § 422.564(e)(3)
42 CFR § 423.564(e)(3)(i-ii)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Grievance Policies and Procedures
The Sponsoring Organization must establish and maintain policies and procedures for tracking and addressing the timely
hearing and resolution of all oral and written enrollee grievances including but not limited to the following: fraud and abuse,
enrollment/disenrollment, benefit package, pharmacy access/network, marketing, customer service, confidentiality/privacy,
56

and quality of care. The Sponsoring Organization must also maintain records of such grievances.

GV06

GV07

CD01

CD02

42 CFR § 423.562(a)(1)(i); § 423.564(a-b); § 423.564(g)
PDP Solicitation
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Medicare Part D Reporting Requirements
Grievance Response – Quality of Care
The Sponsoring Organization must respond in writing to all grievances related to the quality of care. The response must
include a description of the enrollee’s right to file a written complaint with the Quality Improvement Organization (QIO). If a
complaint is submitted to the QIO, the Sponsoring Organization must cooperate with the QIO in resolving the complaint.
42 CFR § 423.564(e)(3)(iii)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Timely Response to Expedited Grievances
The Sponsoring Organization must respond to an enrollee’s grievance within 24 hours if the complaint involves a refusal by
the Sponsoring Organization to grant an enrollee’s request to expedite a coverage determination or redetermination, and the
enrollee has not yet purchased or received the drug that is in dispute.
42 CFR § 423.564(f)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Notices in Network Pharmacies
The Sponsoring Organization must arrange with its network pharmacies to post or distribute notices instructing enrollees to
contact their plans to obtain a coverage determination or request an exception if they disagree with the information provided
by the pharmacist.
42 CFR § 423.562(a)(3)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Coverage Determination Policies and Procedures
The Sponsoring Organization must establish and maintain policies and procedures for tracking and addressing the timely
review and resolution of all enrollee requests for coverage determinations (expedited and standard) regarding basic coverage
and supplemental benefits, and the amount, including cost sharing, if any, that the enrollee is required to pay for a drug. These
procedures must address unplanned transitions, and actions that are coverage determinations as defined in § 423.566(b).
The Sponsoring Organization must establish and maintain efficient and convenient means for individuals (including enrollees,
57

their appointed representatives, or their prescribing physicians or other authorized prescribers) to submit oral or written
requests for coverage determinations, document all oral requests in writing, and maintain the documentation in a case file.
The Sponsoring Organization must establish and maintain policies and procedures for tracking and addressing the timely
review and resolution of all requests for re-determinations received both orally and in writing.

CD03

42 CFR § 423.566(a); § 423.566(b); § 423.566(c); § 423.570(c)(1-2)
Medicare Part D Reporting Requirements
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Timely Notification of Standard Coverage Determination
In response to a request for a standard coverage determination, the Sponsoring Organization must notify the enrollee (and the
prescribing physician or other authorized prescriber involved, as appropriate) of its determination as expeditiously as the
enrollee’s health condition requires, but no later than 72 hours after receipt of the request, or, for an exceptions request, the
physician’s or other authorized prescriber’s supporting statement. If the coverage determination was denied and the initial
notification was provided orally, the Sponsoring Organization must send the written notice to the enrollee within 3 calendar
days of the oral notice.
For favorable determinations concerning payment, the Sponsoring Organization must authorize payment and notify the
enrollee within 72 hours after receiving the request, or, for an exceptions request, after receiving the physician's or other
authorized prescriber’s supporting statement. The Sponsoring Organization must also make payment (i.e., mail the payment)
within 30 calendar days after receiving the request, or, for an exceptions request, after receiving the physician's or other
authorized prescriber’s supporting statement. Note: This element also applies to out-of-network (OON) paper claims
submitted by beneficiaries or their appointed representatives.

CD04

42 CFR § 423.568(a-b); § 423.568(e)
PDP Solicitation
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Notice Requirements for Denied Standard Coverage Determinations
If the Sponsoring Organization makes an adverse standard coverage determination, in whole or in part, it must provide the
enrollee with written notification, using approved notice language that is readable and understandable, states the specific
reasons for the denial, and informs the enrollee of his or her right to a redetermination.
42 CFR § 423.568(c-d)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
58

CD05

CD06

CD07

CD08

Decision to Accept or Deny a Request to Expedite a Coverage Determination
The Sponsoring Organization must promptly and correctly determine whether a complaint is a standard coverage
determination or an expedited coverage determination. The Sponsoring Organization must have a means for issuing prompt
decisions on whether to expedite a coverage determination. A Sponsoring Organization must expedite if it determines, based
on the enrollee’s request, or as indicated in the prescribing physician’s or other authorized prescriber’s request, that applying
the standard timeframe for making a coverage determination may seriously jeopardize the enrollee’s life, health, or ability to
regain maximum function.
42 CFR § 423.570(c)(3)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Timely Notification Following Decision to Deny Request to Expedite a Coverage Determination
If the Sponsoring Organization decides not to expedite a coverage determination, it must automatically transfer the request to
the standard timeframe, provide prompt oral notice to the enrollee and prescribing physician or other authorized prescriber of
the decision not to expedite, and provide equivalent written notice within 3 calendar days of the oral notice.
42 CFR § 423.570(d); § 423.572(a)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Notice Requirements Following Decision Not to Expedite a Coverage Determination
If a Sponsoring Organization does not grant a request to expedite a coverage determination, the Sponsoring Organization must
provide notice of the denial. The notice must provide an explanation that the Sponsoring Organization must process the
request using the 72 hour timeframe for standard determinations; inform the enrollee of the right to file an expedited
grievance; inform the enrollee of the right to resubmit a request for an expedited determination with the prescribing
physician’s or other authorized prescriber’s support; and provide instructions about the Part D plan’s grievance process and its
timeframes.
42 CFR § 423.570(d)(2)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Timely Notification of Expedited Coverage Determination
The Sponsoring Organization must make its expedited coverage determination and notify the enrollee of its decision (adverse
or favorable), as expeditiously as the enrollee’s health condition requires, but no later than 24 hours after receiving the request,
or, for an exceptions request, the physician’s or other authorized prescriber’s supporting statement. If the decision is adverse
and the Sponsoring Organization first notifies the enrollee or prescribing physician or other authorized prescriber (if
appropriate) of the determination orally, the Sponsoring Organization must mail written confirmation to the enrollee within 3
calendar days of the oral notification.
59

CD09

CD10

CE01

CE02

42 CFR § 423.570(e); § 423.572(a-b); § 423.572(d)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Notice Requirements for Expedited Coverage Determinations
The notice of any expedited coverage determination must state the specific reasons for the determination in understandable
language. If the determination is not completely favorable, the notice must also: (i) include information concerning the
enrollee’s right to a redetermination; (ii) describe both the standard and expedited redetermination processes, including the
enrollee’s right to request, and conditions for obtaining, an expedited redetermination, and the rest of the appeals process; and
(iii) comply with any other requirements specified by CMS.
42 CFR § 423.572(c)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Effect of Failure to Provide Timely Notice on a Standard or Expedited Coverage Determination Request
If the Sponsoring Organization fails to make a decision on a standard or expedited coverage determination request and provide
notice of the decision within the required timeframe, the failure constitutes an adverse determination, and the Sponsoring
Organization must forward the enrollee’s request to the IRE within 24 hours of the expiration of the adjudication timeframe.
The Sponsoring Organization must also inform the enrollee, within 24 hours of the expiration of the adjudication timeframe,
when the case is forwarded to the IRE.
42 CFR § 423.578(c)(2)
Prescription Drug Benefit Manual, Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Exceptions Procedures and Criteria (Tiered Cost-Sharing)
The Sponsoring Organization must establish and maintain reasonable and complete exceptions procedures, subject to CMS’
approval, for exceptions requests to the Sponsoring Organization’s tiered cost-sharing structure. The exceptions procedures
must address situations where a formulary’s tiering structure changes during the year, and an enrollee is using a drug affected
by the change. The Sponsoring Organization must grant an exception for non-preferred drugs when medically necessary and
consistent with the prescribing physician’s or other authorized prescriber’s statement that meets CMS criteria. The Sponsoring
Organization’s tiered cost-sharing exceptions process and exception criteria must meet CMS requirements.
42 CFR § 423.578(a)(1-2); § 423.578(a)(4)
Medicare Part D Reporting Requirements
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Exceptions Procedures and Criteria (Non-Formulary Drugs)
The Sponsoring Organization must establish and maintain exceptions procedures, subject to CMS’ approval , for receipt of an
60

off-formulary drug. The Sponsoring Organization must grant an exception for a non-formulary Part D drug whenever it
determines that the drug is medically necessary, consistent with the prescribing physician’s or other authorized prescriber’s
statement that meets CMS criteria, and that the drug would be covered but for the fact that it is an off-formulary drug. The
Sponsoring Organization’s formulary exceptions process and exception criteria must meet CMS requirements.

CE03

42 CFR § 423.578(b); § 423.578(b)(1); § 423.578(b)(2); § 423.578(b)(5)
Medicare Part D Reporting Requirements
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Approval of Tiering and Non-Formulary Exceptions Requests
Following approval of a request for a tiering or a non-formulary exception, the Sponsoring Organization cannot require an
approval for a refill or a new prescription following the initial prescription for the remainder of the plan year, provided that (i)
the enrollee’s prescribing physician or other authorized prescriber continues to prescribe the drug; (ii) the drug continues to be
considered safe for treating the enrollee’s disease or medical condition; and (iii) the enrollment period has not expired.
For tiering exceptions, the Sponsoring Organization must permit enrollees to obtain an approved non-preferred drug at the
more favorable cost-sharing terms applicable to drugs in the preferred tier. For approved non-formulary exceptions, the
Sponsoring Organization has the flexibility to determine what level of cost-sharing applies to all non-formulary drugs
approved under the exceptions process, so long as the designated level is one of its existing cost-sharing tiers.

RE01

RE02

42 CFR § 423.578(c)(3); § 423.578(c)(4)(i-ii)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Acceptance of Standard Reconsideration Requests
The Sponsoring Organization must accept written requests for standard reconsiderations of requests for services or payment
filed within 60 calendar days of the notice of the organization determination (or if good cause is shown, accepts written
requests for standard reconsideration after 60 calendar days).
42 C.F.R. § 422.582(a)-(c) § 422.586; Medicare Managed Care Manual Ch. 13
Appropriate Person(s) Conduct the Reconsideration
A person or persons who were not involved in making the organization determination must conduct the reconsideration.
When the issue is a denial based on lack of medical necessity, the reconsidered determination must be made by a physician
with the expertise in the field of medicine that is appropriate for the service at issue. The physician making the reconsidered
determination need not be, in all cases, of the same specialty or subspecialty as the treating physician.
42 C.F.R. § 422.590(g)(1)-(2) Medicare Managed Care Manual
61

RE03

Request for Redeterminations (Standard)
The Sponsoring Organization must have policies, procedures, and systems in place that allow it to accept written requests for
standard redeterminations of coverage determinations filed by enrollees, or a prescribing physician or other authorized
prescriber acting on behalf of an enrollee, within 60 calendar days of the notice of the coverage determination. The
Sponsoring Organization may extend the filing deadline if the enrollee or prescribing physician or other authorized prescriber
shows good cause. The Sponsoring Organization must provide the enrollee or prescribing physician or other authorized
prescriber with a reasonable opportunity to hand-deliver or present in writing, evidence and allegations of fact or law related to
the issue in dispute.
42 CFR § 423.582(a-b); § 423.586 § 423.600(a)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals

RE04

RE05

Request for Redeterminations (Expedited)
The Sponsoring Organization must establish and maintain an efficient and convenient means for an enrollee or a prescribing
physician or other authorized prescriber acting on behalf of an enrollee to submit oral or written requests for expedited
redeterminations within 60 calendar days of the notice of the coverage determination, document all oral requests in writing,
and maintain the documentation in a case file. The Sponsoring Organization may extend the filing deadline if the
enrollee/physician/other prescriber shows good cause. The Sponsoring Organization must provide the enrollee or the
prescribing physician or other authorized prescriber with a reasonable opportunity to present in person or in writing evidence
and allegations of fact or law related to the issue in dispute. Since the opportunity to submit evidence is limited, the
Sponsoring Organization must inform the enrollee or the prescribing physician or other authorized prescriber of the conditions
for submitting such evidence.
42 CFR § 423.584(c)(1); § 423.586
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Decision to Accept or Deny a Request to Expedite a Redetermination
The Sponsoring Organization must promptly decide whether to expedite the redetermination if the prescribing physician or
other authorized prescriber indicates, or it determines, based on the enrollee’s request,, that applying the standard timeframe
for making a redetermination may seriously jeopardize the enrollee’s life, health, or ability to regain maximum function.
42 CFR § 423.584(c)(2)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
62

RE06

RE07

Actions Following Decision to Deny a Request to Expedite a Redetermination
If the Sponsoring Organization denies a request to expedite a redetermination, it must automatically transfer the request to the
standard redetermination timeframe, provide prompt oral notice to the enrollee and prescribing physician or other authorized
prescriber, according to CMS requirements, and provide equivalent written notice within 3 calendar days of the oral notice.
42 CFR § 423.584(d-e)
Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
Timely Notification and Effectuation of Standard Redetermination
If the Sponsoring Organization makes a redetermination that is favorable for the enrollee, or affirms in whole or in part its
original adverse coverage determination, it must notify the enrollee (and the prescribing physician or other authorized
prescriber involved, as appropriate) in writing of its redetermination as expeditiously as the enrollee’s health condition
requires, but no later than 7 calendar days from the date it received the request for a standard redetermination, meeting CMS
requirements. If the Sponsor’s decision is adverse, it must send the Request for Reconsideration to the enrollee (and the
prescribing physician or other authorized prescriber involved, as appropriate) with the written adverse redetermination notice.
For favorable redeterminations for the enrollee, the Sponsoring Organization must effectuate it as expeditiously as the
enrollee’s health condition requires, but no later than 7 calendar days from the date it receives the request.
For favorable redeterminations concerning payment for the enrollee, the Sponsoring Organization must authorize the payment
within 7 calendar days from the date it receives the request for redetermination. It must then make the payment no later than
30 calendar days after the date it receives the request for redetermination
42 CFR § 423.590(a)(1-2); § 423.590(b); § 423.590(g)(1-4); § 423.636(a)(1-2)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals

RE08

Timely Notification of Expedited Redetermination and Request for Medical Information
If a Sponsoring Organization grants a request to expedite a redetermination, it must complete its redetermination and give the
enrollee (and the prescribing physician or other authorized prescriber involved, as appropriate), notice of its decision as
expeditiously as the enrollee’s health condition requires but no later than 72 hours after receiving the request. If the Sponsor’s
decision is adverse, it must send written notice of the decision and the Request for Reconsideration to the enrollee (and the
prescribing physician or other authorized prescriber involved, as appropriate). If medical information is necessary, the
Sponsoring Organization must make the request within 24 hours of receiving the initial request for an expedited
redetermination.
42 CFR § 423.584(e); § 423.590(d);
63

Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
RE09

Effectuation of Expedited Coverage Redeterminations
If, on an expedited redetermination of a request for benefit, the Sponsoring Organization reverses, in whole or in part, its
coverage determination, it must authorize or provide the benefit under dispute as expeditiously as the enrollee’s health
requires, but no later than 72 hours after the date the Sponsoring Organization receives the request for redetermination.
42 CFR § 423.638(a)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals

RE10

Redeterminations – Who Must Conduct Review
The Sponsoring Organization must ensure that a person or persons who were not involved in making the coverage
determination conducts the redetermination. When the issue is a denial based on lack of medical necessity, the Sponsoring
Organization must ensure the redetermination is made by a physician with the expertise in the field of medicine that is
appropriate for the services at issue. The physician making the redetermination need not, in all cases, be of the same specialty
or subspecialty as the prescribing physician.
42 CFR § 423.590(f)(1-2)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals

RE11

Timely Transfer of Requested Case File to IRE
In cases where a reconsideration request has been filed and the IRE has requested the enrollee's file, the Sponsoring
Organization must transfer the case file to the IRE within 24 hours (expedited requests) or 48 hours (standard requests) from
the time it receives the IRE’s request for the case file.
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals

RE12

Prompt Auto-Forwarding of Case to IRE if Adjudication Timeframe is Missed
If the Sponsoring Organization fails to make a decision on a standard or expedited redetermination request and provide notice
of the decision within the required timeframe, the failure constitutes an adverse determination, and the Sponsoring
Organization must forward the appeal request to the IRE within 24 hours of the expiration of the adjudication timeframe. The
Sponsoring Organization must also inform the enrollee, within 24 hours of the expiration of the adjudication timeframe, when
the case is forwarded to the IRE.
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42 CFR § 423.590(c); 423.590(e)
Prescription Drug Benefit Manual, Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals
RV01

Effectuation of Third Party Reversals (Standard)
If, on appeal of a request for benefit, the Sponsoring Organization 's determination is reversed in whole or in part by the
Independent Review Entity (IRE), or at a higher level of appeal, the Sponsoring Organization must authorize or provide the
benefit under dispute as expeditiously as the enrollee’s health requires but no later than 72 hours after the date it receives
notice reversing the determination. The Sponsoring Organization must also inform the IRE that the organization has
effectuated the decision.
If, on appeal of a request for payment, the Sponsoring Organization's determination is reversed in whole or in part by the
Independent Review Entity (IRE), or at a higher level of appeal, the Sponsoring Organization must authorize the payment
within 72 hours, and make payment no later than 30 calendar days from the date it receives notice reversing the coverage
determination. The Sponsoring Organization must also inform the IRE that the organization has effectuated the decision.
42 CFR § 423.636(b)(1-2)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals

RV02

Effectuation of Third Party Reversals – Benefits (Expedited)
If the expedited determination or expedited redetermination for benefits by the Sponsoring Organization is reversed in whole
or in part by the Independent Review Entity (IRE), or at a higher level of appeal, the Sponsoring Organization must authorize
or provide the benefit under dispute as expeditiously as the enrollee’s health requires but no later than 24 hours after the date it
receives notice reversing the determination. The Sponsoring Organization must also inform the IRE that the organization has
effectuated the decision.
42 CFR § 423.638(b)
Prescription Drug Benefit Manual: Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeals

65

CHAPTER 9: PRIVACY AND CONFIDENTIALITY
CF01

CF02

Use of SSN/HICN
The Sponsoring Organization must use a number other than an enrollee’s Social Security Number (SSN) or Healthcare
Insurance Claim Number (HICN) on enrollee identification cards.
PDP Solicitation
Medicare Marketing Guidelines
Confidentiality of Member Information
The Sponsoring Organization implements procedures to ensure the confidentiality of member medical records and other
member information.
42 C.F.R. § 422.118; 42 C.F.R. § 423.136; Medicare Managed Care Manual Ch. 4

66

DM01

CHAPTER 10: DRUG UTILIZATION MANAGEMENT, AND ELECTRONIC PRESCRIBING DRUG
UTILIZATION MANAGEMENT
Incentives to Reduce Costs
The Sponsoring Organization must have a reasonable and appropriate Drug Utilization Management (DUM) program that
establishes incentives to reduce costs when medically appropriate.
42 CFR § 423.153(b)(1)
Prescription Drug Benefit Manual, Chapter 7 – Medication Therapy Management and Quality Improvement Program

DM02

EP01

Preventing Over and Under Utilization
The Sponsoring Organization must have a reasonable and appropriate Drug Utilization Management (DUM) program that
maintains policies and systems to assist in preventing over and under utilization of prescription medications.
42 CFR § 423.153(b)(2)
Prescription Drug Benefit Manual, Chapter 7 – Medication Therapy Management and Quality Improvement Program;
Prescription Drug Benefit Manual, Chapter 6 – Part D Drugs and Formulary Requirements
Electronic Prescribing
The Sponsoring Organization must establish and maintain an electronic prescription drug program that complies with the
adopted standards.
42 CFR § 423.159; § 423.160

67

CHAPTER 11: PHARMACY ACCESS
PH01

PH02

PH03

PH04

PH05

Network Retail Pharmacy Access
The Sponsoring Organization must meet CMS standards for convenient access to Part D drugs via contracted retail
pharmacies.
42 CFR § 423.120(a)(1-2)
Prescription Drug Benefit Manual, Chapter 5- Benefits and Beneficiary Protections. Note: This element is waived for
Pacific Territories [Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands] and the U.S.
Virgin Islands.
Access to Home Infusion Pharmacies
The Sponsoring Organization must provide adequate access to home infusion pharmacies consistent with CMS guidelines and
instructions.
42 CFR § 423.120(a)(4)
Prescription Drug Benefit Manual, Chapter 5- Benefits and Beneficiary Protections
Access to Long-Term Care Pharmacies
The Sponsoring Organization must offer standard contracting terms and conditions, including performance and service
criteria, to all long-term care (LTC) pharmacies in its Part D plan service area. The Sponsoring Organization must contract
with a sufficient number of LTC pharmacies to provide all of its plans’ institutionalized enrollees convenient access to longterm care pharmacies.
42 CFR § 423.120(a)(5)
Prescription Drug Benefit Manual, Chapter 5- Benefits and Beneficiary Protections
Access to I/T/U Pharmacies
The Sponsoring Organization must offer standard contracting terms and conditions conforming to the model addendum that
CMS provides, to all Indian Health Service, Indian Tribe and Tribal Organization, and Urban Indian Organization (I/T/U)
pharmacies in its Part D plan service area. The Sponsoring Organization must provide convenient access to Indian Health
Service, Indian Tribe and Tribal Organization, and Urban Indian Organization (I/T/U) pharmacies.
42 CFR § 423.120(a)(6)
Prescription Drug Benefit Manual, Chapter 5 - Benefits and Beneficiary Protections
Any Willing Pharmacy Provision
The Sponsoring Organization must contract with any pharmacy that meets the plan’s standard contracting terms and
conditions (the “any willing pharmacy” requirement), or meet CMS criteria for a waiver of the any willing pharmacy
68

requirement.

PH06

PH07

PH08

42 CFR § 423.120(a)(8)(i)
Prescription Drug Benefit Manual, Chapter 5 - Benefits and Beneficiary Protections
Level Playing Field Between Mail Order and Retail Network Pharmacies
The Sponsoring Organization must permit its enrollees to receive benefits, including an extended day supply of covered Part D
drugs, at some of its retail network pharmacies in addition to its network mail-order pharmacy. The Sponsoring Organization
must contract with a sufficient number of network retail pharmacies so as to ensure that enrollees have reasonable access to
the same extended day supply benefits at retail that are available at mail-order. A sponsor may choose to require that enrollees
choosing to receive extended day supply of covered Part D drugs at a network retail pharmacy rather than a network mailorder pharmacy be responsible for any higher cost-sharing amount associated with obtaining those benefits at a network
pharmacy. Any such increase in cost-sharing must be limited to the “differential in charge” to the sponsor in terms of any
difference between higher contract rates at a network retail pharmacy as opposed to a network mail-order pharmacy for that
benefit. Enrollee cost-sharing must never exceed what the enrollee would have paid at the same retail pharmacy had the
enrollee had his or her prescription filled in multiple 1-month supply increments at retail pharmacy rates. Note: This element
is not applicable if Part D plan does not offer extended day supplies of covered Part D drugs via its mail order service.
42 CFR § 423.120(a)(10)
Prescription Drug Benefit Manual, Chapter 5- Benefits and Beneficiary Protections
Out-of-Network Pharmacy Access
The Sponsoring Organization must provide adequate access to covered Part D drugs dispensed at out-of-network pharmacies
when enrollees cannot reasonably be expected to obtain such drugs at a network pharmacy, provided they do not access
covered Part D drugs at an out-of-network pharmacy on a routine basis. The Sponsoring Organization must have reasonable
rules to appropriately limit out-of-network access to Part D drugs.
42 CFR § 423.124(a)(1); § 423.124(c)
Prescription Drug Benefit Manual, Chapter 5 - Benefits and Beneficiary Protections
Access to Vaccines in Physician Office
The Sponsoring Organization must provide adequate access to vaccines and other covered Part D drugs that are appropriately
dispensed and administered by a physician in a physician’s office.
42 CFR § 423.124(a)(2)
Prescription Drug Benefit Manual, Chapter 5 - Benefits and Beneficiary Protections
69

FM01

FM02

FM03

FM04

CHAPTER 12: FORMULARY, TRANSITION PROCESS, AND PHARMACY AND THERAPEUTICS
COMMITTEE
Formulary Requirements
The Sponsoring Organization must use a CMS-approved Part D plan formulary.
42 CFR § 423.120(b)(2)
Formulary Maintenance Requirements
The Sponsoring Organization must follow CMS requirements regarding changes to a Part D plan formulary.
42 CFR § 423.120(b)(4); § 423.120(b)(6)
Prescription Drug Benefit Manual: Chapter 6
Provision of Notice Regarding Formulary Changes
The Sponsoring Organization must provide at least 60 days notice to CMS, State Pharmaceutical Assistance Programs
(SPAPs), and entities providing other prescription drug coverage prior to removing a covered Part D drug from its formulary
or making any negative changes to utilization management or the preferred or tiered cost-sharing status of a covered Part D
drug. If the change involves immediate removal of a Part D drug deemed unsafe by the Food and Drug Administration (FDA)
or removed from the market by the manufacturer, the Sponsoring Organization must provide retrospective notice to the parties
listed above.
42 CFR § 423.120(b)(5)(i); § 423.120(b)(5)(iii); § 423.578(d)
Medicare Marketing Guidelines for MAs, MA-PDs, PDPs, and 1876 Cost Plans
Prescription Drug Benefit Manual: Chapter 6
Appropriate Claim Adjudication Regarding Formulary Tier Placement and Corresponding Copayment/Co-insurance
Sponsoring Organizations have the option to employ a formulary in their effort to provide qualified prescription drug
coverage. Depending on type of prescription drug benefit offered (standard prescription drug coverage, alternative prescription
drug coverage, or enhanced alternative drug coverage) Sponsoring Organizations may implement a number of different tools
to manage the formulary, including a multi-tiered formulary structure, co-payments, and co-insurance. Additionally, the
statute provides that for certain LIS beneficiaries defined co-payments must be adjudicated at the point-of-sale (i.e., brand vs.
generic). At the point-of-sale Sponsoring Organizations must ensure their network pharmacies apply accurate cost-sharing as
established in their approved benefit design (and communicated via the plan’s explanation of coverage and summary of
benefits) and, for LIS beneficiaries, statutory co-payment amounts.
42 CFR § 423.120(b); § 423.104; § 423.782
70

TP01

TP02

TP03

PT01

PT02

Transition Process in the Retail Setting
The Sponsoring Organization must have and implement an appropriate transition process in accordance with CMS
requirements for beneficiaries to obtain non-formulary Part D drugs in a retail setting or via home infusion, safety-net, or
I/T/U pharmacies.
42 CFR § 423.120(b)(3)
Prescription Drug Benefit Manual: Chapter 6
Transition Process for Residents of Long-Term Care Facilities
The Sponsoring Organization must have and implement an appropriate transition process in accordance with CMS
requirements for beneficiaries to obtain non-formulary Part D drugs in a long-term care setting.
42 CFR § 423.120(b)(3)
Prescription Drug Benefit Manual: Chapter 6
Notice Requirement for Temporary Transition Fills
If the Sponsoring Organization provides a temporary fill for a non-formulary Part D drug under its transition process, it must
provide the enrollee with appropriate written notice regarding the transition process within three business days of the
temporary fill.
42 CFR § 423.120(b)(3)
Prescription Drug Benefit Manual: Chapter 6
Formulary Development and Review by a Pharmacy and Therapeutics Committee
The Sponsoring Organization’s formulary must be developed and reviewed by a Pharmacy and Therapeutics Committee.
42 CFR § 423.120(b)(1)
Pharmacy and Therapeutics Committee Membership
The Sponsoring Organization’s Pharmacy and Therapeutics Committee must include a majority of members who are practicing
physicians and/or practicing pharmacists; include at least one practicing physician and at least one practicing pharmacist who
are independent and free of conflict with respect to the Part D organization and pharmaceutical manufacturers; and include at
least one practicing physician and one practicing pharmacist who are experts regarding care of elderly or disabled individuals.
The Sponsoring Organization must also report to CMS changes made to its Pharmacy and Therapeutics Committee
membership during the contract year.
42 CFR § 423.120(b)(1)(i-iii)
Prescription Drug Benefit Manual: Chapter 6
71

PT03

PT04

PT05

PT06

PT07

PT08

Medicare Part D Reporting Requirements
Pharmacy and Therapeutics Committee Decisions
The Pharmacy and Therapeutics Committee must base clinical decisions on the strength of scientific evidence and standards of
practice, including assessing peer-reviewed medical literature, pharmacoeconomic studies, outcomes research data, and other
such information as it determines appropriate.
42 CFR § 423.120(b)(1)(iv)
Prescription Drug Benefit Manual: Chapter 6
Pharmacy and Therapeutics Committee Consideration of the Therapeutic Advantages of Prescription Drugs
The Pharmacy and Therapeutics Committee must consider whether the inclusion of a particular Part D drug in a formulary or
formulary tier has any therapeutic advantages in terms of safety and efficacy.
42 CFR § 423.120(b)(1)(v)
Prescription Drug Benefit Manual: Chapter 6
Pharmacy and Therapeutics Committee Review of Utilization Management Processes
The Pharmacy and Therapeutics Committee reviews policies that guide exceptions and other utilization management
processes, including drug utilization review, quantity limits, generic substitution, and therapeutic interchange, and provides
recommendations regarding the procedures for medical review of non-formulary drug requests.
42 CFR § 423.120(b)(1)(vi)
Prescription Drug Benefit Manual: Chapter 6
Pharmacy and Therapeutics Committee Annual Evaluation of Part D Sponsor’s Plan Treatment Protocols
The Pharmacy and Therapeutics Committee evaluates, analyzes and recommends treatment protocols and procedures for the
timely use of and access to both formulary and non-formulary drug products, at least annually in accordance with CMS
requirements.
42 CFR § 423.120(b)(1)(vii)
Prescription Drug Benefit Manual: Chapter 6
Pharmacy and Therapeutics Committee Annual Approval of Therapeutic Classes
The Pharmacy and Therapeutics Committee will approve inclusion or exclusion of the therapeutic classes in the formulary on
an annual basis.
Prescription Drug Benefit Manual: Chapter 6
Pharmacy and Therapeutics Committee Review of New Chemical Entities and Clinical Indicators
72

The Pharmacy and Therapeutics Committee must make a reasonable effort to review within 90 days and make a decision on
each new chemical entity, and new FDA clinical indicators within 180 days of its release onto the market. The Pharmacy and
Therapeutics Committee must review and make a decision within 90 days for new drugs or newly approved uses for drugs
within the six classes of clinical concern. At the end of the 90 day period, drugs within the six classes of clinical concern must
be added to Part D plan formularies.
Prescription Drug Benefit Manual: Chapter 6

73

MT01

CHAPTER 13: MEDICATION THERAPY MANAGEMENT
Medication Therapy Management Program Design
The Sponsoring Organization must implement a CMS-approved Medication Therapy Management Program (MTMP) and
must follow CMS requirements regarding mid-year changes to an approved MTMP.
42 CFR § 423.153(d)(1)
Prescription Drug Benefit Manual, Chapter 7 – Medication Therapy Management and Quality Improvement Program

MT02

Targeted Medicare Beneficiaries
The Sponsoring Organization must have a Medication Therapy Management Program (MTMP) that targets enrollees who (i)
have multiple chronic diseases; (ii) are taking multiple covered Part D drugs; and (iii) are likely to incur annual costs for
covered Part D drugs that exceed a predetermined level as specified by the Secretary .
42 CFR § 423.153(d)(2)
Prescription Drug Benefit Manual, Chapter 7 – Medication Therapy Management and Quality Improvement Program

MT03

Use of Experts in Developing the Medication Therapy Management Program
The Sponsoring Organization must develop the Medication Therapy Management Program (MTMP) in cooperation with
licensed and practicing pharmacists and physicians.
42 CFR § 423.153(d)(3)
Prescription Drug Benefit Manual, Chapter 7 – Medication Therapy Management and Quality Improvement Program

74

CB01

CB02

CB03

CHAPTER 14: COORDINATION OF BENEFITS / TRUE OUT OF POCKET COSTS
Collecting and Updating Enrollees’ Other Health Insurance Information
The Sponsoring Organization must have a system which the sponsor uses to collect and update information from enrollees
about their other health insurance, including whether such insurance covers outpatient prescription drugs, and must report that
information to the Coordination of Benefits (COB) Contractor.
Medicare Prescription Drug Benefit Manual, Chapter 14-Coordination of Benefits
Coordination of Benefits with Other Prescription Drug Coverage
The Sponsoring Organization must have a system which is used for exchanging payment information and coordinating
benefits with other health insurance. The Sponsoring Organization must permit State Pharmacy Assistance Programs (SPAPs)
and entities providing other prescription drug coverage to coordinate benefits with the Part D plan, including payment of
premiums and coverage and payment for supplemental prescription drug benefits. The Sponsoring Organization must track
the expenditures for covered Part D drugs made by other payers for purposes of determining where a Part D plan enrollee is in
the benefit.
42 CFR § 423.464(a); § 423.464(f)(2-3)
Medicare Prescription Drug Benefit Manual, Chapter 14-Coordination of Benefits
CMS Instructions: Requirements for Submitting Prescription Drug Event Data
TrOOP Status at Disenrollment
The entity must provide the beneficiary’s gross covered drug spend and true out-of-pocket (TrOOP) balance to the beneficiary
as of the effective date of disenrollment, and if the disenrollment is due to a mid-year plan change, provides a report of these
beneficiary data to the new plan of record.
Medicare Prescription Drug Benefit Manual, Chapter 14-Coordination of Benefits

75

CHAPTER 15: COMPLIANCE
PROGRAM
CP01

Written Policies, Procedures and Standards of Conduct
The Sponsoring Organization must establish a compliance program that consists of written policies, procedures, and
standards of conduct articulating the organization’s commitment to comply with all applicable Federal and State standards,
including the CMS Part D User’s Manual, by the time a contract with CMS is signed. These policies and procedures must
articulate the specific procedures personnel should follow when performing their duties.
42 CFR §422.503(b)(4)(vi)(A)
42 CFR § 423.504(b)(4)(vi)(A)
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Prescription Drug Benefit Manual Chapter 9 – Compliance Program Guides

CP02

Compliance Officer, Compliance Committee and High Level Oversight
The Sponsoring Organization must have and implement a compliance program that designates a compliance officer and
compliance committee accountable to senior management. The Part D Compliance Officer and compliance committee
functions may not be delegated or subcontracted.
42 CFR §422.503(b)(4)(vi)(B),
42 CFR § 423.504(b)(4)(vi)(B)
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Prescription Drug Benefit Manual Chapter 9 – Compliance Program Guides

CP03

Effective Training and Education
The Sponsoring Organization must have and implement a compliance program that includes effective training and education
between the compliance officer and Sponsor employees, managers and directors, first-tier, downstream, and related entities.
42 CFR §422.503(b)(4)(vi)(C)
42 CFR § 423.504(b)(4)(vi)(C)
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Prescription Drug Benefit Manual Chapter 9 – Compliance Program Guides
76

CP04

Effective Lines of Communication
The Sponsoring Organization must have and implement a compliance program that includes effective lines of
communication between the compliance officer and Sponsor employees, contractors, first tier, downstream, and related
entities, directors, members of the compliance committee, and company leadership.
42 CFR §422.503(b)(4)(vi)(D)
42 CFR § 423.504(b)(4)(vi)(D)
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Prescription Drug Benefit Manual Chapter 9 – Compliance Program Guides

CP05

Well Publicized Disciplinary Standards
The Sponsoring Organization must have and implement a compliance program that includes the enforcement of standards
through
well-publicized disciplinary guidelines that are approved by the organization’s governing body or a committee of the
governing body.
42 CFR §422.503(b)(4)(vi)(E)
42 CFR § 423.504(b)(4)(vi)(E)
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Prescription Drug Benefit Manual Chapter 9 – Compliance Program Guides

77

Effective System for Routing Monitoring, Auditing and Identification of Compliance Risks
The Sponsoring Organization must have and implement a compliance program that includes procedures for effective
internal monitoring and auditing.
42 CFR §422.503(b)(4)(vi)(F)
42 CFR § 423.504(b)(4)(vi)(F)
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Prescription Drug Benefit Manual Chapter 9 – Compliance Program Guides
Procedures And System for Prompt Response to Compliance Issues.
The Sponsoring Organization must have and implement a compliance program that includes procedures to ensure a prompt
response to detected offenses relating to the organization’s contract as a Sponsoring Organization, and must conduct a timely,
reasonable inquiry upon discovery of evidence of misconduct related to payment or delivery of prescription drug items or
services under the contract. The Sponsoring Organization must also develop and conduct appropriate corrective actions in
response to identified violations.
42 CFR §422.503(b)(4)(vi)(G)
42 CFR § 423.504(b)(4)(vi)(G)
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Prescription Drug Benefit Manual Chapter 9 – Compliance Program Guides
FDR Oversight
The Sponsoring Organization must have and implement a compliance program that includes a comprehensive plan to
detect, correct, and prevent fraud, waste, and abuse.
42 CFR § 422.503(b)(4)(vi)
42 CFR § 423.504(b)(4)(vi)
Medicare Managed Care Manual Chapter 21 – Compliance Program Guidelines
Prescription Drug Benefit Manual Chapter 9 – Compliance Program Guides
78

CL01

CHAPTER 17: CLAIMS PROCESSING AND PAYMENT
Online Claims Processing System
The Sponsoring Organization must develop and operate a real-time online claims processing system that operates according to CMS
standards.

CL02

PDP Solicitation
Data Elements Needed to Link Medicare Parts A, B and D Data
The Sponsoring Organization must submit claims data that can be linked at the individual level to Medicare Parts A and B data.

CL03

42 CFR § 423.329(b)(3)(i); § 422.310
Instructions: Requirements for Submitting Prescription Drug Event Data
Processing Systems
The Sponsoring Organization has a detailed claims adjudication process including flow charts, claims management, data capture and
claims data retrieval processes.

CL04

PDP Solicitation
Disputed Claims
The Sponsoring Organization must have and implement policies and procedures surrounding disputed claims.

PA01

PDP Solicitation
Certification of Claims Data
The entity’s Chief Executive Officer (CEO), Chief Financial Officer (CFO), or an individual delegated with the authority to sign on
behalf of one of these officers, and who reports directly to the officer, or first-tier or downstream entity, must certify each submission
of claims data are accurate, complete, and truthful and acknowledge that the claims data will be used for the purpose of obtaining
Federal reimbursement.
42 CFR § 423.505(k)(3)

79

PA02

PA03

PA04

Submission of Prescription Drug Event (PDE) Data and Direct and Indirect Remuneration (DIR) Data
By May 31 following the end of a coverage year, the Sponsoring Organization must provide to CMS PDE data that will be used to
reconcile the reinsurance subsidy, low income cost-sharing subsidies, and risk corridors. By June 30 following the end of a coverage
year, the Sponsoring Organization must provide to CMS DIR data that will be used to reconcile the reinsurance subsidy and risk
corridors. (Due to operational considerations, these deadlines may be altered for any given year.)
42 CFR § 423.336(c)(1); § 423.343(c)(1); § 423.343(d)(1)
Overpayment and Underpayment Requirements
The Sponsoring Organization must develop and have available to CMS upon request, policies and procedures that include a
description of how overpayments and underpayments are handled, as well as recovery procedures. The Sponsoring Organization
must also report to CMS data related to overpayments associated with Part D benefits.
Medicare Part D Reporting Requirements
Pharmaceutical Manufacturer Rebates Requirements
The Sponsoring Organization must provide CMS with information related to pharmaceutical manufacturer rebates, discounts, and
other price concessions according to guidelines specified by CMS.
42 CFR § 423.514(a)
Medicare Part D Reporting Requirements

80

LS01

LS02

CHAPTER 18: LICENSURE AND FINANCIAL SOLVENCY
Financial Solvency and Capital Adequacy Standards
A Sponsoring Organization that is not licensed by a state must maintain reasonable financial solvency and capital adequacy in
accordance with CMS standards.
42 CFR § 423.420(b)
PDP Solicitation
Financial Reporting Requirements
The Sponsoring Organization must have an effective procedure to develop, compile, evaluate, and report to CMS, enrollees, and the
general public, information demonstrating that it has a fiscally sound operation.
Note: CMS waived Direct Contract EGWPs’ requirements to report financial information to beneficiaries and the general public to
the extent required by other law (including ERISA or securities law).

LS03

42 CFR § 423.505(f)(1)(i); § 423.514(a)(4); § 423.514(f) Direct Employer/Union-Only Group Financial Reporting Requirements –
Contract Year (CY) 2006 (April 13, 2006), Prescription Drug Benefit Manual: Chapter 12 – Employer/Union-Only Group Waiver
Plans; Medicare Managed Care Manual Ch. 9; Medicare Part D Reporting Requirements
Financial Solvency Standards for Employer/Union Direct Contract Plans
The Sponsoring Organization must meet and show that its fiscal soundness is commensurate with its financial risk and that the
Sponsor can assure that claims for benefits paid for by CMS and beneficiaries are covered.
42 CFR § 423.401(a)(1); § 423.420(b); § 423.504(b)(2)
Additional Part D Waiver Guidance for Employer/Union Retiree Coverage (March 9, 2005)
Prescription Drug Benefit Manual: Chapter 12 – Employer/Union Sponsored Group Health Plans

81

CHAPTER 20: EMPLOYER GROUP HEALTH PLAN PREMIUMS
SU801

SU802

Premium Requirements for Employer/Union Sponsored Plans
The Sponsoring Organization must charge all enrollees in a particular employer/union sponsored group waiver plan in the same
market area the same premium amount for the same benefits. Sponsor may vary the premium between defined market areas within
the same employer/union sponsored plan. Premium variation may only be based on objective market information demonstrating
verifiable differences in drug costs between market areas. An employer/union may subsidize different amounts for different classes
of enrollees in the employer/union-only group plan provided such classes are reasonable and based on objective business criteria,
such as years of service, date of retirement, business location, job category, and nature of compensation (e.g., salaried v. hourly).
Different classes cannot be based on eligibility for the Low Income Subsidy (LIS).
Prescription Drug Benefit Manual: Chapter 12;
Manual Chapter 9
Low Income Premium Subsidy Amount Pass Through for Employer/Union Sponsored Plans
The Sponsoring Organization must first use the monthly premium subsidy amount for all beneficiaries eligible for the Low Income
Subsidy (LIS) to reduce the portion of the monthly beneficiary premium paid for by the beneficiary, with any remainder then used to
reduce the employer/union’s premium contribution.
Prescription Drug Benefit Manual: Chapter 12 – Employer/Union Sponsored Group Health Plans

82