Medicare Program; Contract Year 2027 and Certain Contract Year 2026 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program

Section 1860D-13(b) of the Act contains provisions related to late enrollment penalties (LEPs), which are increases in monthly beneficiary premiums for individuals without creditable coverage for a continuous period of Part D eligibility of 63 days or longer prior to Part D enrollment. Per section 1860D-13(b)(5) of the Act, coverage meets the creditable coverage requirement “only if the coverage is determined (in a manner specified by the Secretary) to provide coverage of the cost of prescription drugs the actuarial value of which (as defined by the Secretary) to the individual equals or exceeds the actuarial value of standard prescription drug coverage.”

The allowable methodologies used to determine creditable coverage have been updated a few times since the start of the Part D program, including most recently for CY 2025 and CY 2026 in the Final CY 2025 Part D Redesign Program Instructions and Final CY 2026 Part D Redesign Program Instructions.\25\ Under changes to Part D made by the IRA, the definition of creditable prescription drug coverage at Sec. 423.56(a) was modified in these Program Instructions. Prior to the Final CY 2025 Part D

Redesign Program Instructions, Sec. 423.56(a) specified that prescription drug coverage would be considered creditable “only if the actuarial value of the coverage equals or exceeds the actuarial value of defined standard prescription drug coverage under Part D in effect at the start of such plan year, not taking into account the value of any discount or coverage provided during the coverage gap, and demonstrated through the use of generally accepted actuarial principles and in accordance with CMS guidelines.” We now describe historical changes to the creditable coverage definition and allowable methodologies in greater detail.

\25\ Draft CY 2025 Part D Redesign Program Instructions available at https://www.cms.gov/files/document/draft-cy-2025-part-d-redesign-program-instruction.pdf.

Final CY 2025 Part D Redesign Program Instructions available at https://www.cms.gov/files/document/final-cy-2025-part-d-redesign-program-instructions.pdf.

Draft CY 2026 Part D Redesign Program Instructions available at https://www.cms.gov/files/document/draft-cy-2026-part-d-redesign-program-instructions.pdf.

Final CY 2026 Part D Redesign Program Instructions available at https://www.cms.gov/files/document/final-cy-2026-part-d-redesign-program-instruction.pdf.

Since the start of the Part D program in 2006, CMS, consistent with section 1860D-13 of the Act, has permitted an entity offering a group health plan that is not applying for the retiree drug subsidy (RDS) under section 1860D-22(a) of the Act \26\ to use either actuarial equivalence testing or the creditable coverage “simplified determination methodology” to determine whether its prescription drug coverage is creditable. Some group health plans would undertake considerable workloads in conducting in-house actuarial testing, while others would use the simplified approach presented in the “Updated Creditable Coverage Guidance,” which we released on September 18, 2009. Under the simplified approach, coverage would be considered creditable if it:

\26\ The attestation of actuarial equivalence requirements for qualified retiree prescription drug plans (also known as plans receiving the Retiree Drug Subsidy) are set forth in section 1860D- 22 of the Act and codified in Sec. 423.884.

Provides coverage for brand and generic prescriptions;

Provides reasonable access to retail providers;

The plan is designed to pay on average at least 60 percent of participants' prescription drug expenses; and

Satisfies at least one of the following:

++ The prescription drug coverage has no annual benefit maximum or a maximum annual benefit payable by the plan of at least $25,000.

++ The prescription drug coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 annually per Medicare eligible individual.

++ For entities that have integrated health coverage, the integrated health plan has no more than a $250 deductible per year, has no annual benefit maximum, or a maximum annual benefit payable by the plan of at least $25,000, and has no less than a $1,000,000 lifetime combined benefit maximum.

The IRA eliminated the coverage gap phase and sunset the Coverage Gap Discount Program (CGDP) effective December 31, 2024. The Medicare Part D Manufacturer Discount Program (Manufacturer Discount Program) replaced the CGDP beginning January 1, 2025. The IRA revised section 1860D-22(a)(2)(A) of the Act to specify that any discount provided pursuant to the Manufacturer Discount Program established by the IRA under section 1860D-14C of the Act is not taken into account when determining the actuarial value of qualified retiree coverage. Additionally, section 1860D-14C(g)(1)(B) of the Act excludes enrollees in a qualified retiree prescription drug plan from the definition of applicable beneficiary for the purposes of the Manufacturer Discount Program. The changes made by the IRA required us to revise the existing regulatory definition of creditable prescription drug coverage in Sec. 423.56(a). Under the requirement in section 11201(f) of the IRA that we use program instruction or other forms of program guidance to implement section 11201 of the IRA for 2025 and 2026, we issued a revised regulatory definition of creditable prescription drug coverage in Sec. 423.56(a) in the Final CY 2025 Part D Redesign Program Instructions and Final CY 2026 Part D Redesign Program Instructions. In 2025 and 2026, the definition of creditable prescription drug coverage reads as follows (bolded and italicized text indicates the language we added in light of the IRA):

Creditable prescription drug coverage means:

Any of the following types of coverage listed in paragraph (b) of this section only if the actuarial value of the coverage equals or exceeds the actuarial value of defined standard prescription drug coverage under Part D in effect at the start of such plan year, not taking into account the value of any discount provided under section 1860D-14C of the Social Security Act, and demonstrated through the use of generally accepted actuarial principles and in accordance with CMS guidelines.

In the Draft CY 2025 Part D Redesign Program Instructions, we proposed that because of the IRA changes to the Part D benefit, the simplified determination methodology would no longer be a valid methodology to determine whether such an entity's prescription drug coverage is creditable as of 2025. For instance, the increased plan liability in the catastrophic phase of the defined standard benefit requires sponsors to pay more than the 60 percent specified in the current simplified determination methodology and, therefore, continuing to use 60 percent would not satisfy requirements for actuarial equivalence for creditable coverage. We received several comments on the Draft CY 2025 Part D Redesign Program Instructions that raised concerns about the potential risk that a large number of Part D eligible individuals would no longer have creditable coverage through their group health plan if the existing simplified determination methodology were no longer available for 2025. Commenters were also concerned that group health plan sponsors would not have sufficient time to consider the impact of the Part D benefit changes made by the IRA to make decisions about their benefit offerings in time for 2025 coverage.

In response to those comments, in the Final CY 2025 Part D Redesign Program Instructions we recognized the IRA's sweeping changes to the Part D benefit in CY 2025, which, if coupled with the retirement of the creditable simplified determination methodology, could pose various challenges for group health plan sponsors and could have an adverse effect on certain Part D eligible individuals who could lose creditable coverage and be at risk for the Part D LEP. After consideration of the comments received and available options to mitigate potential disruptive effects of the Part D redesign on the group health plan market and the Part D eligible individuals served by such group health plans, we decided for CY 2025 to continue to permit use of the creditable coverage simplified determination methodology, without modification to the existing parameters, for group health plan sponsors not applying for the RDS. By permitting continued use of the creditable coverage simplified determination methodology for 2025, we stated we would have additional time to better assess the various impacts of the Part D redesign and evaluate modifications to this methodology to ensure Part D eligible individuals with creditable coverage continue to have prescription drug coverage that is at least as good as defined standard Part D coverage. We committed to re-evaluating the continued use of the existing simplified determination methodology, or establish a revised one, for 2026.

For 2026, the Final CY 2026 Part D Redesign Program Instructions adopted a revised simplified determination methodology for non-RDS group health plans to determine whether their prescription drug coverage is creditable. Under the revised simplified determination methodology, coverage is

deemed to provide prescription drug coverage with an actuarial value that equals or exceeds the actuarial value of defined standard Part D coverage if it meets all of the following standards:

Provides reasonable coverage for brand name and generic prescription drugs and biological products.

Provides reasonable access to retail pharmacies.

Is designed to pay on average at least 72 percent of participants' prescription drug expenses.

The revised simplified determination methodology retained some parameters of the prior methodology, such as a requirement for reasonable coverage of brand and generic prescription drugs and reasonable retail pharmacy access. We added coverage of biological products due to changes in the prescription drug landscape since the prior methodology was developed. We removed the requirements related to annual and lifetime benefit maximums because changes to the health insurance landscape under the Affordable Care Act have essentially eliminated such limitations among group health plans. We also removed requirements related to an annual deductible, because outside of the Medicare program it is unusual for health and drug coverage to be separate benefits, and integrated health and drug plans could have a significantly higher deductible than standard Part D coverage but still offer comparable drug coverage. Although plans with higher annual deductibles (including high deductible health plans) might have appeared less likely to meet the requirement to pay at least 72 percent of prescription drug expenses, such risk may be mitigated through other aspects of the benefit such as not applying a deductible to preventive (that is, maintenance) medications, a reasonable and supportable allocation of the deductible attributable to prescription drug expenses, or offering lower cost sharing than standard Part D coverage once the deductible is met.

Under the revised simplified methodology for 2026, the group health plan coverage must be designed to pay at least 72 percent of participants' prescription drug expenses, versus 60 percent under the prior methodology. We made this revision because of program changes in Part D--in particular, the benefit changes mandated by the IRA, which significantly enhanced the Part D defined standard benefit. These changes--which included a $35 cost sharing cap on a month's supply of each covered insulin product, access to recommended adult vaccines without cost sharing, the implementation of an annual out-of-pocket threshold ($2,100 for CY 2026), and the elimination of the coverage gap phase of the benefit--increased the proportion of drug costs paid by the Part D plan sponsor. In light of the more robust Part D benefit under the IRA, we determined that the 60 percent value was no longer an accurate representation of the value of the Part D benefit and that group health plan coverage for 2026 should be designed to pay on average at least 72 percent of participants' prescription drug expenses in order to provide coverage to the individual that equals or exceeds the actuarial value of standard Part D coverage, as required by section 1860D-13(b)(5) of the Act. We estimated the actuarial value of the defined standard benefit for 2026 using 2023 Part D claims experience under the projected 2026 benefit structure. The 2026 benefit parameters were deflated to a 2023 dollar basis. We estimated that the actuarial value increased to 72 percent, primarily as a result of the changes made by the IRA to the Part D defined standard benefit.

The Draft CY 2026 Part D Redesign Program Instructions stated that non-RDS group health plans could make the determination of creditable coverage either by (1) determining whether the actuarial value of the coverage equals or exceeds the actuarial value of defined standard Part D coverage, demonstrated through generally accepted actuarial principles, or (2) using the revised simplified determination methodology described previously. In response to comments received requesting a phased in approach to this change, in the Final CY 2026 Part D Redesign Program Instructions, we decided to allow for a transition year whereby non-RDS group health plans that opted to make the determination of creditable coverage through the simplified determination methodology were permitted for 2026 to use either the 2009 simplified determination methodology (that is, among other requirements, at least 60 percent of prescription drug expenses) or the revised simplified determination methodology (that is, among other requirements, at least 72 percent of prescription drug expenses) to determine whether their prescription drug coverage is creditable. We determined that this transitional policy for CY 2026 was appropriate to minimize potential risks to the employer group market and to Part D eligible individuals who may no longer have access to creditable coverage through an employer plan. In the Final CY 2026 Part D Redesign Program Instructions, we also stated our intention to propose to no longer permit use of the 2009 simplified determination methodology for CY 2027.

As the IRA's directive to implement the Part D redesign by program instruction or other forms of program guidance expires in 2027, we proposed codifying in Sec. 423.56(a) the revised definition of creditable coverage in the Final CY 2026 Part D Redesign Program Instructions to account for the Manufacturer Discount Program. We also proposed to amend Sec. 423.56(a) to sunset use of the 2009 simplified determination methodology and codify the revised simplified determination methodology, starting with 2027. In Sec. 423.56(a), we proposed to require that non-RDS group health plans may either use actuarial equivalence testing under Sec. 423.56(a)(1) or the revised simplified determination methodology under Sec. 423.56(a)(2) and in place for CY 2026, with one modification from 72 to 73 percent of prescription drug costs the non-RDS group health plan must cover compared with coverage under a Part D defined standard plan.

To determine the percent of prescription drug costs that must be covered to be creditable, our modeling is based on the prescription drug event (PDE) data for a recent year. We modify the claims line by line to adjust for benefit differences while maintaining actual utilization patterns. For the purposes of determining what the simplified determination value should be for a given future year, we readjudicate all claims as they would have been paid under the defined standard benefit design for the year we are projecting. This process also requires estimating the benefit parameters for the year of interest and deflating the values to align with the historical PDE experience year we are using in our projection. After the PDE records are adjusted to the benefit design of the future year, we aggregate the results to determine the average percentage of gross drug cost that would be covered by a defined standard plan. We use this value rounded to the nearest whole percentage point as the minimum percent of participants' prescription drug expenses that the non-RDS health plan benefit needs to be designed to pay in order to qualify as creditable coverage.

As discussed and consistent with the methodology described previously in this section, we estimated the actuarial value of the defined standard benefit for 2026 using 2023 Part D claims experience under the projected 2026 benefit levels deflated to a 2023 dollar basis to arrive at the requirement that a

non-RDS health plan's benefit must be designed to pay on average 72 percent of participants' prescription drug expenses to meet the conditions of the revised simplified determination methodology. For 2027, this model estimates an actuarial value of 73 percent for the defined standard benefit. In subsequent years, this value is projected to increase, ultimately reaching 75 percent in 2030 and stabilizing thereafter. Accordingly, we proposed a minimum of 73 percent instead of 72 percent for 2027. We further proposed that we would update this figure for future years in a time and manner as we determine, consistent with the actuarial equivalence requirements in section 1860D-13(b)(5) of the Act and the methodology described earlier in this section. We intend to update the percentage via subregulatory guidance, such as a memo issued by the Health Plan Management System (HPMS). We would release this guidance in advance of the yearly Part D bid submission deadline for non-RDS group health plans to take into account as they prepare for the following year.

As described previously, the proposed changes to Sec. 423.56 would retire the simplified approach presented in the “Updated Creditable Coverage Guidance” that we released on September 18, 2009, and generally proposed to codify the options available to plans in the Final CY 2026 Part D Redesign Program Instructions: choosing between conducting actuarial equivalence testing themselves or the revised simplified determination methodology. Non-RDS plans using either approach in the proposed Sec. 423.56(a) can attest to the creditable coverage of their plan offerings, thereby ensuring individuals in creditable non-RDS plans will not owe an LEP upon enrollment in a Part D plan. The proposed Sec. 423.56 requirements have mostly been previously implemented and our proposal in this rulemaking is similar to the ways plans assessed creditable coverage in 2026. We do not believe that the proposed changes to the regulatory text would have a significant impact on plan sponsors or individuals. There is no change to paperwork burden to plans or individuals.

Comment: Several commenters stated their support for the proposed creditable coverage methodology, citing that it appropriately balances a few considerations: the need to have standards that accurately capture the value of Part D coverage; the need to let patients make informed decisions about whether they have adequate prescription drug coverage; the need to minimize paperwork burdens on non-Medicare plans; and the need to protect taxpayers from the increase in the cost of Medicare Part D that would occur if eligible individuals were able to wait to enroll until they had high prescription drug expenses without any penalty.

Response: We thank commenters for their support.

Comment: A commenter asked whether we account for the selected drug subsidies under section 1860D-14D of the Act and federal reinsurance under 1860D-15(b)(1)(B) of the Act with respect to selected drugs in the determination of creditable coverage. They requested that CMS treat selected drug subsidies under sections 1860D-14D of the Act and federal reinsurance under 1860D-15(b)(1)(B) with respect to selected drugs analogously to manufacturer discounts under section 1860D-14C and exclude them from the creditable coverage methodology. The commenter stated that excluding these amounts from the creditable coverage methodology would be consistent with the approach established for the Manufacturer Discount Program and help employer-sponsored group health plans continue to provide creditable prescription drug coverage, including retiree drug coverage through the Retiree Drug Subsidy (RDS) program, as more drugs become selected over time.

Response: CMS thanks the commenter for their input. As stated in the Final CY 2025 Part D Redesign Program Instructions, CMS determines actuarial equivalence based on plan liability and does not include subsidies such as low income cost sharing (LICS). Consistent with the existing policy, federal reinsurance in the catastrophic phase is included in the plan paid amount. The value of any selected drug subsidy under section 1860D-14D of the Act is not included in the determination of actuarial value.

To clarify the existing policy that the selected drug subsidy is excluded from the determination of actuarial equivalence, we have revised Sec. 423.56(a) to state that the actuarial value of creditable prescription drug coverage “equals or exceeds the actuarial value of defined standard prescription drug coverage under Part D in effect at the start of such plan year, not taking into account the value of any discount provided under section 1860D-14C of the Act or of any selected drug subsidy under section 1860D-14D of the Act” (bold indicates new text).

Comment: A few commenters were supportive of codifying the revised simplified determination methodology but requested a delay in moving to the 73 percent of prescription drug costs that a plan must cover for it to be considered creditable. A couple commenters requested a 1-year delay and another commenter suggested starting to phase in 66 percent of prescription drug expenses in 2027 and move to 73 percent in 2028. The commenter questioned if CMS does not adopt a phase-in approach, to allow a 1-year grace period of allowing plans to continue to use the existing simplified determination methodology.

Response: We appreciate the support of codifying the revised simplified determination methodology and do not believe that further delay or grace periods for adopting this methodology are justified at this time. In the Final CY 2026 Part D Redesign Program Instructions, we provided a grace period that permitted non-RDS group health plans to use either the existing simplified determination methodology or the revised simplified determination methodology to determine whether their prescription drug coverage is creditable. In those instructions, we emphasized that the grace period was for CY 2026 only and that for CY 2027 and subsequent years, CMS intended to propose to no longer permit use of the existing simplified determination methodology. As explained in the Final CY 2025 Part D Redesign Program Instructions and Final CY 2026 Part D Redesign Program Instructions, there were significant changes to the Part D program that took effect in those years under the IRA's Part D redesign that warranted a transitional delay to a revised simplified determination methodology. We believe that plans now have adequate experience under the new benefit design to incorporate the changes we proposed and are finalizing in this rulemaking. Additionally, as discussed above, plans have been on notice that we intended to retire the existing simplified determination methodology in favor of transitioning to one that more accurately reflects the actuarial value of a defined standard Part D plan in accordance with section 1860D-13(b)(5) of the Act. For 2027, we are finalizing the percent value at 73 percent. For 2028 and going forward, we will release the percentage of prescription drug costs to use in the creditable coverage methodology with enough time for group health plans to take into account when designing their plan benefits.

Comment: A commenter highlighted the timing of releasing guidance in future years that would, as needed, update the percentage value of prescription drug expenses and requested that it be released in a timely manner--ideally at the same time the

Part D Defined Standard benefit parameters are released.

Response: We thank the commenter and agree. We would release this guidance in advance of the yearly bid submission deadline for Part D plan sponsors so that they may consider the guidance as they prepare their bids and group health plans to design their plan benefits. This timing would align with the release of the Part D Defined Standard benefit parameters as the commenter suggests.

We appreciate all of the comments on this proposal and are largely finalizing this provision as proposed, with one modification to specify in Sec. 423.56(a) that the value of any selected drug subsidy under section 1860D-14D of the Act is not included in the determination of actuarial value.

Section 6065 of the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act (Pub. L. 115-271) added subparagraph (D) to section 1860D-4(c)(4) of the Act, which requires the Secretary to identify Part D outlier prescribers of opioids, using the valid prescriber National Provider Identifier (NPI) included on claims for covered part D drugs, and notify those prescribers that they have been identified as outliers. The notifications provided to prescribers identified as outliers include information on how the prescriber compares to other prescribers within the same specialty and geographic area, as well as resources on proper prescribing methods.

The Secretary is required to establish thresholds for identifying whether a prescriber is an outlier based on prescribers in the same specialty and geographic area, with certain exclusions. We currently define outlier prescribers as those in the top 25th percentile when compared to their peers (that is, prescribers in the same National Plan & Provider Enumeration System (NPPES) taxonomy and State) for both (1) co-prescribing opioids and benzodiazepines, and (2) the average daily morphine milligram equivalent (MME) prescribed to those patients. Exclusions to this methodology include (1) beneficiaries who have cancer or sickle cell disease diagnosis, are enrolled in hospice, or reside in a long-term care facility; and (2) providers subject to a current CMS or HHS Office of Inspector General (“HHS-OIG”) investigation. Over time, should the opioid crisis continue to evolve and CDC practice guidelines change, we will make further adjustments to the methodology, as appropriate, to ensure beneficiary safety, as well as alignment with clinical standards and regulatory requirements that govern the Medicare Part D program. Our current outlier prescriber methodology is available on the CMS website (https://www.cms.gov/files/document/methodology-comparison.pdf), and any future updates to the methodology will be made at this website location.

Section 6065 of the SUPPORT Act also established additional requirements for outlier prescribers that are identified by us as “persistent” at section 1860D-4(c)(4)(D)(v) of the Act, although it does not provide criteria or thresholds to determine persistently identified outlier prescribers of opioids. First, we may require a persistent outlier to enroll in the Medicare program but only after other appropriate remedies have been provided, such as receiving technical assistance on best practices related to prescribing opioid and non-opioid pain management therapies through entities funded through section 6052 of the SUPPORT Act. Second, we are required to communicate information on such prescribers to Part D plan sponsors no less frequently than annually. Considering the significant implications of being identified as an outlier prescriber of opioids, including a persistent outlier, we believe it prudent to clearly outline the key criteria for such a designation in regulation. 2. Proposed Provisions

First, to reflect the requirements surrounding the Secretary's identification of an outlier prescriber of opioids under section 1860D- 4(c)(4)(D)(ii) of the Act, we proposed to define an outlier prescriber of opioids as a statistical outlier when compared to their peers based on NPPES taxonomy and state. Second, given the potential impact(s) of being identified as a persistent outlier prescriber of opioids (for example, the potential for becoming a lead for a Part D plan sponsor investigation), we proposed and sought public comment on what criteria should apply for designation as a persistent outlier prescriber of opioids. We proposed to establish a threshold to identify persistent outlier prescribers of opioids as those outlier prescribers who receive three consecutive outlier prescriber notifications from us based on the same methodology. If there is an update to the methodology, only prescribers that have been identified three times by the same methodology would be considered “persistent.” We sought comments on this threshold.

Specifically, we proposed to add a paragraph (f) under Sec. 423.504:

(f) Outlier Prescribers of Opioids.

++ CMS will identify and send notifications to outlier prescribers of opioids, which includes information about how the prescriber compares to other specified prescribers and resources on proper prescribing methods.

++ At least annually, CMS will communicate information about persistent outlier prescribers of opioids to all Part D plan sponsors.

We also proposed to add the following definitions under Sec. 423.4:

Outlier prescriber of opioids means a prescriber who is a statistical outlier compared to their peers in a specialty and geographic area.

Specialty means the National Plan and Provider Enumeration System (NPPES) taxonomy of a prescriber.

Geographic area means the State in which a prescriber is practicing.

Persistent outlier prescriber of opioids means an outlier prescriber identified by CMS in three consecutive outlier prescriber notifications.

We received public comments on these provisions in the proposed rule. The following is a summary of the comments we received and our responses.

Comment: Several commenters suggested that the statistical identification of outlier prescribers may disproportionately affect those prescribers that treat patients with chronic pain or complex diagnoses and ultimately affect proper pain management and palliative care of beneficiaries. A commenter suggested that the use of a statistical methodology could identify prescribers whose prescribing is clinically appropriate and suggests identifying outliers by considering beneficiary specific clinical factors, comorbidities, and treatment history.

Response: CMS appreciates the commenters' insights and considerations for the prescribers of our beneficiaries with chronic pain and complex care. CMS agrees with commenters that statistical analyses may identify outlier prescribers that care for patients with unique circumstances that result in prescribing patterns that vary from the norm, yet are still clinically appropriate. As such, CMS acknowledges this point in the annual outlier prescriber notifications and encourages prescribers to utilize the information to review their current prescribing habits and take advantage of educational resources and programs to remain current on treatment guidelines. While CMS notes that utilizing

beneficiary specific clinical factors, comorbidities, and treatment history would allow for a robust review of individual prescriber habits, it is unrealistic for CMS to do that on a broad scale for all prescribers as part of an educational analysis and would require the review of medical records. CMS would encourage prescribers notified as outliers to internally review their medical records to ensure that they are prescribing appropriately based on their patients' individual health and care plans.

Comment: Several commenters supported the current excluded patient groups within CMS's methodology. Some commenters suggested that beneficiaries in palliative care should be excluded. Another commenter recommended that in addition to beneficiaries with cancer pain, those beneficiaries with cancer treatment related pain should also be excluded.

Response: CMS, beginning with the 2027 letters is aligning the exclusion criteria for beneficiaries with other CMS initiatives and the definition of an exempted beneficiary at Sec. 423.100, including beneficiaries in hospice or receiving palliative or end of life care; residing in a long-term care facility; being treated for cancer-related pain; or with sickle cell disease. Of note, in a CMS final rule (89 FR 30448) the definition at Sec. 423.100 shifted the terminology from `active cancer-related pain' to `cancer-related pain' effective January 1, 2025. CMS currently utilizes a year look-back period to identify beneficiaries with past cancer treatment.

Comment: Several commenters recommended maintaining a standardized statistical methodology to improve transparency and prevent variation, in addition to a standardized notification letter and prescriber education materials. These commenters recommended CMS refine the methodology to keep up with changing opioid practice and consider accounting for intermittent benzodiazepine use.

Response: CMS currently maintains both a methodology and aggregate data summary for public consumption found at https://www.cms.gov/about-cms/story-page/prescribing-opioids. The methodology and aggregate data are updated annually to align with the latest outlier prescriber notifications. CMS does refine the methodology regularly and considers changes to guidelines and will continue to do so going forward, including appropriate thresholds for being identified as an outlier. Annually, in each notification to prescribers identified as an outlier, CMS provides standardized language, including educational resources for the prescriber to reference for up-to-date opioid prescribing best practices. In identifying outlier prescribers, CMS currently only considers beneficiaries receiving a benzodiazepine that overlaps with an opioid for a consecutive 30 days but thanks the commenters for their suggestion and will continue to refine the methodology, as necessary.

Comment: Commenters noted that guidelines no longer set thresholds as these limited access to care for beneficiaries in the high-risk groups. A commenter recommended CMS limit the prescribing threshold to the top 5 or 10 percent as a 25 percent threshold is overly-broad.

Response: CMS acknowledges the Centers for Disease Control and Prevention (CDC) 2022 opioid guideline update and shift from morphine milliequivalent (MME) thresholds. CMS does not utilize a single MME threshold for this analysis but rather uses a comparative analysis of prescriber habits according to specialty and state to determine outlier prescribers of opioids. CMS also notes that the annual outlier prescriber letters are based on a statistical methodology, and CMS clearly recognizes that an outlier may be prescribing within clinical norms for certain patient populations and still be identified as an outlier. CMS does refine the methodology regularly and considers changes to guidelines and will continue to do so going forward, including appropriate thresholds for being identified as an outlier.

Comment: A commenter also recommended that CMS establish an appeals process for being identified as an outlier.

Response: CMS takes no administrative action based on the outlier prescriber identification. These letters are solely an identification that the identified prescribers are statistically different than other prescribers in their same specialty and state in an effort to provide education on prescribing practices. As such, no appeals process is necessary.

Comment: Several other commentors were in support of the proposals and definitions for identifying outliers and persistent outliers but a commenter expressed that CMS's support is critical as plan sponsors may not have all information necessary to identify potential outliers on a provider and beneficiary level. It was recommended that CMS continue to release the methodologies and updates on the website.

Response: CMS thanks the commenters for their support and will continue to release the methodologies and updates on the website, https://www.cms.gov/about-cms/story-page/prescribing-opioids.

Comment: A few commenters questioned the utilization of NPPES for prescriber specialty as it is dependent on a prescriber updating their taxonomy and using an appropriate taxonomy code. A commenter suggested CMS consider the order of taxonomy codes in NPPES. A few commenters recommended the need for consideration of subspecialties as some complex patients are treated by physicians of a subspecialty under a more general primary specialty. A commenter recommended that CMS consider different thresholds for different specialties.

Response: CMS thanks the commenters for their suggestions on further refining the taxonomy of a prescriber by subspecialty. CMS will consider this going forward. CMS encourages prescribers to update NPPES accordingly when taxonomy changes occur to ensure they are up to date and accurate.

Comment: A commenter opposed CMS's proposed methodology and recommended that CMS work collaboratively with physician groups and other stakeholders to develop alternative approaches that ensure continued access to care, eliminate arbitrary prescribing thresholds, and avoid targeting physicians treating complex patients. A commenter suggested that the proposal to report persistent outliers would lead Part D plan sponsors to refuse patient prescriptions from the prescribers and lead to patient harm. Additionally, a commenter suggested that CMS clarify what the Part D plan sponsors' expectations were for the information received on persistent outliers. Another commenter suggested that CMS provide plan sponsors with flexibility in overseeing the appropriate use of opioid therapies and to collaborate with plan sponsors. One commenter suggested that CMS and plan sponsors review for outlier prescribers prescribing based on specialty-specific norms and allow for clinical review before adverse actions are imposed.

Response: Section 6065 of the SUPPORT Act requires CMS to identify outlier prescribers of opioids based on specialty and geographic area and provide notification annually to such providers. CMS collaborated with external stakeholders to establish the thresholds CMS utilizes to determine a prescriber is an outlier and continuously works with plan sponsors and other stakeholders to ensure oversight of the Part D program and provide the best outcomes for Medicare

beneficiaries. Consistent with section 1860D-4(c)(4)(D)(v) of the Act, CMS will issue a persistent outlier prescriber report to plan sponsors in an effort for increased transparency and provide investigative leads. CMS understands the concerns from commenters regarding the potential for unsubstantiated penalties on the prescribers identified as persistent outliers; however, this report will identify outliers across the Medicare Part D program and assist plan sponsors that may have limited views of trends and schemes within their own data. CMS will direct plan sponsors to not act solely on the information in the report without performing their own internal fraud, waste, and abuse efforts that substantiate their actions, thereby allowing plan sponsors to maintain autonomy to review any persistent outliers for specialty norms and conduct clinical review in accordance with their organizations policies and procedures. CMS will continue to clarify in each outlier prescriber notification letter that each prescriber's unique circumstances may result in prescribing patterns that vary from the norm yet are still clinically appropriate.

Comment: A few commenters recommended CMS identify persistent outliers more frequently than annually to ensure proper oversight. Another commenter suggested that CMS provide a list of all outliers to Part D plan sponsors, not just those that are classified as persistent. One commenter recommended reviewing outlier prescribing behavior every 6 months to not only identify prescribers by statistical comparison but also percent increase in their prescribing. Additionally, a commenter recommended CMS look at prescribing trends.

Response: CMS appreciates the feedback and clarifies that alternative options have been considered. Providing persistent outlier letters more frequently than annually is allowable in accordance with section 1860D-4(c)(4)(D)(v) of the Act; however, CMS believes prescribers should have the opportunity to make prescribing adjustments, if necessary, prior to being identified as an outlier on subsequent notification. Annual outlier notifications allow prescribers identified as an outlier to have approximately 6 months of time to make prescribing changes after receiving the outlier letter. CMS also disagrees with releasing all outlier prescribers to plan sponsors annually as the statutory requirement, section 1860D-4(c)(4)(D)(v) of the Act, applies to only those outliers identified as persistent. CMS believes that one annual identification does not establish a pattern of behavior. In response to a commenter recommending that CMS look at prescriber trends, CMS does evaluate trends internally and externally posts a data summary chart for outliers identified by state each year on the CMS website.\27\

\27\ See: https://www.cms.gov/files/document/opioid-benzodiazepine-prescribing-patterns.pdf.

Comment: A commenter suggested that plan sponsors have additional requirements to offer education, peer consultation, pain management, and addiction specialists, as well ensure beneficiaries have access to medication-assisted therapy and a variety of counseling options. Another commenter recommends CMS consider additional steps to deter persistent outlier prescriber behavior beyond technical assistance and Medicare provider enrollment.

Response: CMS appreciates the suggestion to have plan sponsors provide additional education and services to both outlier providers and their beneficiaries. CMS will consider recommending to plan sponsors that they offer services that align with their current organization's contracts with both prescribers and beneficiaries in their networks. CMS will also continue to review and assess other steps that can be taken to address outlier prescribers.

After consideration of the public comments we received, we are finalizing the provisions as proposed. Section 6065 of the SUPPORT Act (Pub. L. 115-271) and section 1860D-4(c)(4)(D)(v) of the Act requires CMS to notify outlier prescribers based on specialty and state and provide information about persistent outliers to plan sponsors annually. While CMS received comments and feedback on specific methodology considerations, CMS is not adopting these comments in this final rule. Considerations and recommendations for exclusion criteria, thresholds, postings of methodology and other documents, and frequency of reporting will all be considered by CMS annually through program instruction or otherwise as we continue to refine the methodology and enhance our oversight of the Medicare Part D program.

The Inflation Reduction Act of 2022 (Pub. L. 117-169) made several amendments to Part D of Title XVIII of the Act, including adding section 1860D-14C of the Act, which describes the Manufacturer Discount Program; section 1860D-14D of the Act, which describes the Selected Drug Subsidy Program; and section 1860D-15(h) of the Act, which describes the temporary retrospective subsidy for the reduction in cost-sharing and deductible for adult vaccines recommended by the advisory committee on immunization practices (ACIP) and insulin. The temporary retrospective subsidy for ACIP-recommended adult vaccines and insulin was limited to contract year 2023 and is hereinafter referred to as the Inflation Reduction Act Subsidy Amount (IRASA).

In subregulatory guidance, we described the reconciliation and payment determination processes for the Manufacturer Discount Program, selected drug subsidy, and IRASA.\28\ For the Manufacturer Discount Program and the selected drug subsidy, we make monthly prospective payments for estimated costs submitted with bids, then make final payments based on the plan's actual costs after a coverage year after obtaining all of the information necessary to determine the amount of payment through cost-based reconciliations.

\28\ See the HPMS memorandum, Revised Medicare Part D Manufacturer Discount Program Final Guidance, December 20, 2024 (available at https://www.cms.gov/files/document/revised-manufacturer-discount-programfinal-guidance122024.pdf); Final CY 2026 Part D Redesign Program Instructions (available at https://www.cms.gov/files/document/final-cy-2026-part-d-redesign-program-instruction.pdf); and HPMS memorandum, PDE Reporting Instructions for Implementing the Cost Sharing Maximums Established by the Inflation Reduction Act for Covered Insulin Products and ACIP- Recommended Vaccines for Contract Year 2023, September 26, 2022 (available https://www.cms.gov/files/document/2023-pde-reporting-instructions.pdf).

IRASA is the difference between the beneficiary cost-sharing for a covered insulin product or an ACIP-recommended adult vaccine under the plan's 2023 benefit design and the applicable statutory maximum cost- sharing ($35 for each covered insulin product and $0 for ACIP- recommended adult vaccines). The difference was reimbursed by Medicare during the 2023 Part D payment reconciliation. We proposed to amend Sec. 423.308 to add the definition of Inflation Reduction Act Subsidy Amount (IRASA).

We proposed that the Manufacturer Discount Program reconciliation, selected drug subsidy reconciliation, and IRASA reconciliation payment determinations would be payment determinations that may be reopened by CMS under Sec. 423.346 and would also be appealable by the Part D sponsors under Sec. 423.350. Therefore, we proposed to update the existing regulation concerning the reopening of final payment determinations and the existing payment appeals regulation by

adding the Manufacturer Discount Program reconciliation, selected drug subsidy reconciliation, and IRASA reconciliation payment determinations. We also proposed to amend the time for filing a payment appeal under the existing payment appeals provision. 1. Definition of Inflation Reduction Act Subsidy Amount (IRASA)

Section 1860D-2(b)(9) of the Act imposes a $35 monthly limit on cost sharing for a month's supply of each covered insulin product throughout all phases of the Part D benefit for CYs 2023, 2024, and 2025. For CY 2026 and each subsequent year, this limit is the lesser of: (1) $35, (2) an amount equal to 25 percent of the maximum fair price established for the covered insulin product in accordance with Part E of title XI of the Act, or (3) an amount equal to 25 percent of the negotiated price, as defined in Sec. 423.100, of the covered insulin product under the Part D Prescription Drug Plan (PDP) or Medicare Advantage Prescription Drug (MA-PD) plan. Section 1860D- 2(b)(8) of the Act requires the elimination of beneficiary cost sharing for ACIP-recommended adult vaccines that are administered in accordance with the ACIP recommendation (hereafter referred to as “ACIP- recommended adult vaccines”) under a Part D plan throughout the entire Part D benefit beginning January 1, 2023. Section 1860D-15(h) of the Act requires that a temporary retrospective subsidy be paid to Part D plans for the reduction in cost sharing and the elimination of the deductible for ACIP-recommended adult vaccines and covered insulin products during the 2023 plan year--the Inflation Reduction Act Subsidy Amount (IRASA).

We proposed to amend Sec. 423.308 to add the definition of Inflation Reduction Act Subsidy Amount (IRASA). Under our proposed rule, Inflation Reduction Act Subsidy Amount (IRASA) would mean a temporary retrospective subsidy paid to Part D plan sponsors for contract year 2023 for the statutory reduction in cost-sharing and deductible for covered insulin products or for advisory committee on immunization practices (ACIP)-recommended adult vaccines administered in accordance with the ACIP recommendation and is equal to the difference between the following: (1) The beneficiary cost-sharing for a covered insulin product or an ACIP-recommended adult vaccine under the plan's approved bid submitted under Sec. 423.265 for contract year 2023, and (2) the applicable statutory maximum cost-sharing for the covered insulin product or for the ACIP-recommended adult vaccine for contract year 2023.

We did not receive comments on this section of the proposed rule and are finalizing the definition of Inflation Reduction Act Subsidy Amount (IRASA) at Sec. 423.308 as proposed. 2. Reopenings

Under the authority under section 1860D-15(f)(1)(B) of the Act, the Secretary has the right to inspect and audit any books and records of a Part D sponsor or MA organization that pertain to the information regarding costs provided to the Secretary. We stated in our final rule, “Medicare Program; Medicare Prescription Drug Benefit,” which appeared in the January 28, 2005, Federal Register (70 FR, 4316), that this right to inspect and audit would not be meaningful, if upon finding mistakes under such audits, the Secretary was not able to reopen final payment determinations. Therefore, we established the reopening provision at Sec. 423.346, which allows CMS, at its discretion, to reopen and revise initial or reconsidered specified payment determinations. Section 423.346(a) lists the payment determinations that we may reopen and revise. These payment determinations include the final amount of direct subsidy described in Sec. 423.329(a)(1), final reinsurance payments described in Sec. 423.329(c), the final amount of the low-income subsidy described in Sec. 423.329(d), and final risk corridor payments as described in Sec. 423.336. In our final rule, “Medicare Program; Contract Year 2016 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs,” which appeared in the February 12, 2015 Federal Register (80 FR 7936), we added the Coverage Gap Discount Program reconciliation payment to the list of payment determinations that we may reopen and revise.

We proposed to amend Sec. 423.346(a) to add the Manufacturer Discount Program reconciliation payment determination, the selected drug subsidy reconciliation payment determination, and the IRASA reconciliation payment determination to the list of payment determinations that we may reopen and revise. Under our proposal, these payment determinations would be subject to reopening consistent with the current reopening guidelines described at Sec. 423.346, which are explained in detail in our final rule, “Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Program for Contract Year 2024--Remaining Provisions and Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly (PACE),” which appeared in the April 23, 2024 Federal Register (89 FR 30460) (hereinafter referred to as the Contract Year 2025 Final Rule).

Under our proposal, the selected drug subsidy reconciliation payment determination and the IRASA reconciliation payment determination would be included in scheduled global reopenings and could be included in targeted reopenings, which are defined at Sec. 423.308 (definition of Reopening). However, similar to the Coverage Gap Discount Program reconciliation payment determination, we anticipate that we would rarely reopen the Manufacturer Discount Program reconciliation payment determination. This is because Manufacturer Discount Program invoicing continues after the Manufacturer Discount Program reconciliation, and sponsors receive payments from the pharmaceutical manufacturers for a total of 17 quarters.\29\ Under our proposal and similar to current guidance in the CY 2025 Final Rule, we would also be able to reopen and revise the Manufacturer Discount Program reconciliation, selected drug subsidy reconciliation, and the IRASA reconciliation payment determinations, as necessary, to correct certain issues such as a CMS-identified problem with an internal CMS file that we used in a payment reconciliation.

\29\ See the Medicare Part D Coverage Gap Discount Program (CGDP) and Manufacturer Discount Program (MDP) Calendar, available at https://tpadministrator.com/internet/tpaw3_files.nsf/F/ TPACGDP_MDP_Calendar_2024-2028_12062024.pdf/$FILE/ CGDP_MDP_Calendar_2024-2028_12062024.pdf.

We did not receive comments on this section of the proposed rule and are finalizing the amendments to Sec. 423.346(a) as proposed. 3. Payment Appeals

Section 1860D-15(d)(1) of the Act gives the Secretary broad authority to develop payment methodologies for payments described in section 1860D-15 of the Act, and we use this broad authority to establish a payment appeals process. Accordingly, in our final rule, “Medicare Program; Medicare Prescription Drug Benefit,” which appeared in the January 28, 2005 Federal Register (70 FR 4316), we added Sec. 423.350 to establish a payment appeals process for the reconciled health status risk adjustment of the direct subsidy as provided in Sec. 423.343(b); the reconciled reinsurance payments under Sec. 423.343(c); the

reconciled final payments made for low-income cost sharing subsidies provided in Sec. 423.343(d); and the final risk-sharing payments made under Sec. 423.336. In our final rule, “Medicare Program; Contract Year 2016 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs,” which appeared in the February 12, 2015 Federal Register (80 FR 7938), we added the reconciled Coverage Gap Discount Program payment to the list of payment determinations that could be appealed under Sec. 423.350.

We proposed to amend Sec. 423.350(a)(1) to add the following payment determinations that would be subject to appeal under Sec. 423.350--the reconciled IRASA payment for contract year 2023, reconciled Manufacturer Discount Program payment, and reconciled selected drug subsidy payment. We note that the IRASA reconciliation payment for contract year 2023 has already been made to Part D sponsors. In subregulatory guidance, we explained that the Part D sponsors could appeal the IRASA reconciliation payment determination.\30\ We proposed to include the IRASA reconciliation payment determination in the appeals provision for consistency with the proposed updates to Sec. 423.346, under which we would be able to reopen the IRASA reconciliation payment determination. Indeed, we anticipate that we would reopen the IRASA reconciliation during the global reopening of the contract year 2023 Part D payment reconciliation. Under our proposal, the reopened IRASA reconciliation payment determination would be appealable under Sec. 423.350.

\30\ HPMS memorandum, Completion of the 2023 Final Part D Payment Reconciliation and the 2023 Inflation Reduction Act Subsidy Amount (IRASA) Reconciliation, September 27, 2024 (available at https://www.cms.gov/about-cms/information-systems/hpms/hpms-memos-archive-weekly/hpms-memos-wk-4-september-23-27).

The Part D payment appeals process only applies to perceived errors in the application of our payment methodology. The payment information submitted by the Part D sponsor cannot be appealed through this process. Part D sponsors are expected to submit payment information correctly and within the established timeframes. We codified at Sec. 423.350(a)(2) that payment information submitted to us under Sec. 423.322 and reconciled under the various payment provisions is final and may not be appealed nor may the appeals process be used to submit new information after the submission of information necessary to determine retroactive adjustments and reconciliations. We proposed to amend the regulation at Sec. 423.350(a)(2) to add language specifying that information that is submitted and reconciled or used in the payment calculations for the Manufacturer Discount Program reconciliation, the selected drug subsidy reconciliation, and the IRASA reconciliation are final and would not be appealable nor would the appeals process be used to submit new information after the submission of information necessary to determine these retroactive adjustments and reconciliations.

We also proposed to amend Sec. 423.350(a)(2) to add a reference to Sec. 423.336, which describes the risk corridor payment, to correct an inadvertent omission. The information that is submitted and used in the payment calculations under Sec. 423.336 is final and would not be appealable nor would the appeals process be used to submit new information after the submission of information necessary to determine that payment determination.

We did not receive comments on this section of the proposed rule and are finalizing the amendments to Payment appeals at Sec. 423.350(a)(1) and (a)(2) as proposed. 4. Payment Appeals--Time for Filing

Under existing Sec. 423.350(b)(1), the payment appeal (specifically, the request for reconsideration of the payment determination) must be filed within 15 days from the date of the final payment. We proposed two amendments to Sec. 423.350(b)(1) to reflect actual practice. First, we proposed to amend 15 days to 15 calendar days. Second, we proposed that the appeal deadline would be based on the release of the reconciliation reports to the Part D sponsors, as opposed to the date of the final payment. The reconciliation reports that CMS releases to the Part D sponsors are detailed reports that specify the inputs and results of the payment reconciliation at the plan-level. These detailed reports allow plans to understand how their Part D payment reconciliation was calculated by us. Part D sponsors currently appeal their payment determinations based on information in the reconciliation reports. Therefore, we proposed to update that the time for filing an appeal would be within 15 calendar days from the date we issue the payment reconciliation report for the payment determination that is being appealed by the Part D sponsor.

We did not receive comments on this section of the proposed rule and are finalizing the amendments to payment appeals at Sec. 423.350(b)(1) as proposed.

The provisions described in this section of the final rule are consistent with our current guidance and requirements. The changes are updates that do not place additional requirements on Part D sponsors, nor do they place any additional burden on the Part D sponsors or their pharmacy benefit managers (PBMs).

Part D sponsors' compliance with this reopening process is evidenced by each Part D sponsor's signed attestation certifying the cost data (under Sec. 423.505(k)(3) and (5)) that we use in each of the reopenings. In addition, the burden associated with the submission of cost data is already approved under the OMB control numbers 0938- 0982 (CMS-10174) and 0938-0964 (CMS-10141).

We believe that the payment appeals process at Sec. 423.350 is an administrative action or investigation with respect to a specific party, which is exempt from the COI process. Therefore, as our changes do not result in additional burden, we have not included a discussion of this provision in the COI section of this rule.

We are not scoring this provision in the Regulatory Impact Analysis section because industry is already complying with this process.

We did not receive comments on this proposal and are finalizing this provision without modification.

The “Medicare and Medicaid Programs; Contract Year 2026 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly Final Rule” appeared in the April 15, 2025, Federal Register (90 FR 15792), hereafter referred to as the April 2025 final rule. In this rule, CMS codified new regulation language at 42 CFR 422.102(f)(1)(iii)(G) that cannabis products are not allowable Special Supplemental Benefits for the Chronically Ill (SSBCI), as they are illegal substances under federal law.

Section 10113 of the Agriculture Improvement Act of 2018, also known as the 2018 Farm Bill (Pub. L. 115-334 \31\), added a definition of “hemp” to the Agricultural Marketing Act of 1946. Under this definition, “[t]he term

`hemp' means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis.” In addition, section 12619 of the 2018 Farm Bill amended the Controlled Substances Act (CSA) to exclude hemp from the CSA's definition of marijuana.\32\ The Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, amended the definition of hemp to exclude any cannabinoids that are not naturally found or produced in the cannabis plant, cannabinoids that are synthesized outside of the plant, and final form products for human use that contain more than 0.4 milligrams per container combined total of naturally occurring tetrahydrocannabinols and other naturally produced cannabinoids determined by the Secretary of Health and Human Services to have the same effect. This amended definition of hemp takes effect on November 12th, 2026. Consequently, hemp and hemp-derived cannabis products that meet the current 2018 definition are not federally controlled substances through November 11th, 2026, and those that meet the amended definition beginning on November 12th, 2026, will remain not federally controlled substances as of that date under current law as of the time of this rulemaking. If such products comply with all other applicable federal laws, including any future changes to the definition of hemp and applicable provisions of the Federal Food, Drug, and Cosmetic Act (FFDCA), then they are not illegal under federal law. To reflect this distinction, CMS proposed amending Sec. 422.102(f)(1)(iii)(G) to state more precisely that cannabis products that are illegal under applicable State or Federal law, including the FFDCA, are not allowable as SSBCI.

\31\ Agriculture Improvement Act of 2018, H.R.2, 115th Congress (2018). https://www.congress.gov/bill/115th-congress/house-bill/2.

\32\ Defining Hemp: A Fact Sheet. https://www.congress.gov/crs- product/ R44742#:~:text=The%202018%20farm%20bill%20further,regulations%2C%20an d%20applicable%20state%20regulations.

In December 2018, FDA completed its evaluation of three generally recognized as safe (GRAS) notices for the following hemp seed-derived food ingredients: hulled hemp seed, hemp seed protein powder, and hemp seed oil.\33\ FDA had no questions at that time about the notifier's conclusion that the ingredients were GRAS for their intended use in food. An ingredient that meets the GRAS standard can be used in food without being required to undergo premarket review and approval by FDA for that intended use.\34\ CMS also noted in the Contract Year 2027 proposed rule \35\ (90 FR 54940) that while the prescription drug Epidiolex meets the definition of hemp under the 2018 Farm Bill, because it is covered under Medicare Part D, it would not be permitted to be offered as a Part C supplemental benefit.

\33\ https://www.fda.gov/food/hfp-constituent-updates/fda-responds-three-gras-notices-hemp-seed-derived-ingredients-use-human-food.

\34\ https://www.fda.gov/food/food-ingredients-packaging/generally-recognized-safe-gras.

\35\ Medicare Program; Contract Year 2027 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program (90 FR 54894).

Therefore, this regulation will allow MA organizations to offer hulled hemp seed, hemp seed protein powder, and hemp seed oil, consistent with FDA's review of the GRAS notices, as SSBCI to qualifying enrollees, to the extent otherwise appropriate as SSBCI and under federal and applicable state law. Additionally, at the time of this rulemaking, any cannabis product with a delta-9 THC content above the 0.3 percent threshold is still considered marijuana, remains a Schedule I controlled substance, and therefore is illegal under federal law and would be subject to CMS's prohibition. Barring subsequent legal changes, any product that does not comply with the amended definition of hemp after the November 12th, 2026 effective date will be a Schedule I controlled substance and therefore will be illegal under federal law \36\ and subject to CMS's prohibition.

\36\ Under the Controlled Substances Act, Schedule I controlled substances may only be used for research purposes by practitioners who are registered with DEA to conduct such research. 21 U.S.C. 822(b), 823(g)(2).

Section 1852(a)(3)(D)(ii)(I) of the Act requires that an item or service offered as an SSBCI must have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee. There may be situations in which foods containing one or more of these three specific ingredients meet the “reasonable expectation of improving or maintaining the health or overall function” standard for SSBCI. For example, there is evidence that hemp seed protein powder may offer nutritional benefits.\37\ CMS reminds MA organizations about the importance of ensuring that the items and services provided to enrollees, including any foods containing these specific hemp-derived ingredients, meet the requirements for being offered as an SSBCI. CMS notes that should MA organizations choose to offer any of these three hemp-derived ingredients, they would be subject to all applicable SSBCI requirements under Sec. 422.102(f), including the bibliography requirements for SSBCI items and services set forth at Sec. 422.102(f)(3) to demonstrate through relevant acceptable evidence that the item has a reasonable expectation of improving or maintaining the health or overall function of a chronically ill enrollee.

\37\ https://www.sciencedirect.com/science/article/pii/S221345302200235X.

The amended language also clarifies that MA organizations remain prohibited from covering any cannabis product, including any hemp- derived cannabis product, that is illegal under state law within their service area regardless of the product's federal legal status.

CMS solicited comment on the proposed amendments and thanks commenters for their input. In the following section, CMS describes the comments received and CMS's corresponding responses.

Comment: Several commenters expressed support for the proposal.

Response: CMS appreciates this support of the proposal.

Comment: Many commenters found the proposal to be overly restrictive. Several commenters urged CMS to allow plans to cover all hemp-derived THC or CBD products that meet federal hemp standards under the 2018 Farm Bill (0.3 percent delta-9 THC dry-weight threshold), while others expressed concern that overly restrictive THC limits would eliminate full-spectrum products. Commenters also requested CMS distinguish between non-psychoactive industrial hemp grain products and hemp-derived cannabinoid products, noting that the proposed 0.4 mg per- container THC threshold was operationally unworkable for bulk agricultural commodities.

Response: CMS appreciates commenters' feedback and would like to take this opportunity to provide additional clarification regarding certain aspects of the proposal, including CMS's role in the regulation of cannabis-derived products. CMS's authority does not extend to the direct regulation of cannabis-derived products. Moreover, given the regulation of cannabis-derived products is relatively nascent at both the federal and state levels, CMS does not address the specific technical applications of such laws directly in the regulation text to provide maximum flexibility for MA plans to be able to adapt their SSBCI offerings as the legal landscape changes.

As outlined in the Contract Year 2027 proposed rule and this final rule, current regulations prohibit all cannabis products from being offered as SSBCI. Here, CMS acknowledges that not all cannabis products are illegal under federal law and is amending the regulation to accurately reflect this distinction. At the time of this rulemaking, there are only three products that are permissible under applicable state and federal law and therefore may be covered as SSBCI. Those products are hulled hemp seed, hemp seed protein powder, and hemp seed oil. However, should additional products become allowable as the law continues to evolve, this regulation would allow MA plans in a subsequent plan year the option to increase their offerings without requiring additional rulemaking from CMS. Therefore, should other cannabis-derived products become allowable as SSBCI due to changes in state or federal law, MA plans must wait until their next bid submission for the following plan year to add these items to their list of covered SSBCI.

CMS notes that the reference to the FFDCA in the text of the regulation is not necessary because the regulation's reference to current applicable federal law includes the FFDCA. Therefore, CMS is finalizing the regulation with a modification to read as follows, “Cannabis products that are illegal under applicable State or Federal law.”

Comment: Multiple commenters emphasized the therapeutic benefits of hemp-derived CBD and other cannabinoid products for various medical conditions including chronic pain, cancer, and dementia. Some commenters argued that further investment in cannabinoid products could improve health outcomes and reduce healthcare costs. Others indicated a need for further research.

Response: CMS appreciates these recommendations, however given that CMS does not regulate cannabis and hemp-derived cannabis products, many of these comments were outside the scope of this proposal. CMS would like to note that while the current list of products that are available to be offered as SSBCI is limited, should additional products become allowable in the future CMS will accept a variety of evidence from MA plans to meet the bibliography requirement set forth at 42 CFR 422.102(f)(3), including randomized control trials, case studies or internal analyses to demonstrate that the proposed benefits meet the “reasonable expectation” that the benefit improves or maintains the overall health or function of the enrollee. CMS encourages MA plans that wish to offer these products as SSBCI to monitor emerging studies regarding the efficacy of these products.

Comment: A commenter recommended that CMS conduct a cost-benefit analysis of hemp coverage, specifically examining potential Medicare savings from reduced hospitalizations and emergency room visits if hemp were covered by MA plans.

Response: CMS thanks the commenter for their input, however this comment is outside the scope of this proposal. The amendment to the regulation text is meant to ensure conformity with federal and state law. CMS did not propose to evaluate the clinical benefit or cost of hemp coverage in MA but will consider it as laws evolve.

Comment: Another commenter recommended that CMS clarify how its proposals regarding treatment of cannabis and hemp products as SSBCI would apply if the Administration finalizes policies to reschedule marijuana from Schedule I to Schedule III of the Controlled Substances Act.

Response: CMS appreciates this comment and the opportunity to clarify, especially in light of Executive Order (E.O.) 14370, “Increasing Medical Marijuana and Cannabidiol Research,” which was issued on December 18, 2025. The E.O. directs the Attorney General to expedite the rulemaking process to reschedule marijuana from Schedule I to Schedule III under the Controlled Substances Act, among other things. Should cannabis be rescheduled to Schedule III, this would change its status under the Controlled Substance Act. However, rescheduling alone would not automatically make cannabis products allowable SSBCI unless the relevant products also meet other applicable State and Federal laws, including the FFDCA.

Comment: Another commenter noted that in light of possible changes to acceptable SSBCI benefits, CMS should have a clear process and timeline to solicit feedback and receive public input on permissible SSBCI and ensure that plans have sufficient time to analyze this information for their advanced planning for annual submissions of bid and benefit packages.

Response: CMS appreciates this comment, and as CMS did here, any changes to SSBCI requirements will be made by requesting public comment on a proposed regulation through a Notice of Proposed Rulemaking (NPRM). However, CMS regulations do not include an exhaustive list of every qualifying item or service that meets the requirements for CMS approval as SSBCI. CMS will ensure that updates to bid instructions and other relevant sub-regulatory guidance are timely and provide sufficient advance notice to MA plans. As a reminder, CMS releases guidance every spring regarding standards for bid review and evaluation prior to the bid submission. In these memos and other guidance, CMS includes references to resource mailboxes for MA benefit questions and MA policy questions. These mailboxes are open year-round for plans and other stakeholders to submit questions, including questions regarding supplemental benefits. MA organizations that are looking to cover new or novel benefits are strongly encouraged to raise those to CMS well in advance of bid submission to allow ample time for the MA organization to provide, and for CMS to review, information explaining how the applicable statutory and regulatory standards are met for the proposed benefits without the time pressures of the bid review process. This is especially true regarding cannabis and cannabidiol products, as the legal landscape continues to quickly evolve.

CMS notes that MA plans are prohibited from making mid-year benefit changes pursuant to 42 CFR 422.254(a)(5), which prohibits MA plans from changing benefits, cost-sharing and premiums for an MA plan after they begin marketing for the prospective plan year. Therefore, should other cannabis-derived products become allowable as SSBCI due to changes in state or federal law, MA plans must wait to add these items to their list of covered SSBCI in their next bid submission for the following plan year.

CMS appreciates commenters' input in this area and is finalizing the proposed amendment to regulation text with a modification. CMS is finalizing that 42 CFR 422.102(f)(1)(iii)(G) be amended as follows: “Cannabis products that are illegal under applicable State or Federal law.”

A. Coordination of Election Mechanisms for MA and Part D (Sec. Sec. 422.62, 422.66, 423.32, 423.36, and 423.38)

Section 1851(c) of the Act provides the Secretary with the authority to establish a process by which MA enrollment elections (hereinafter referred to as “elections”) are made and changed, including the form and manner in which they are changed. Section 1851(e)(4)(D) of the Act provides the Secretary with the authority to establish Special Election Periods for exceptional conditions, during which individuals may make

elections. Section 1860D-1(b)(1)(B) of the Act directs the Secretary to use rules related to enrollment, disenrollment, termination, and change of enrollment for Part D sponsors that are similar to those established for MA plans under specified subsections of section 1851 of the Act. Section 1860D-1(b)(1)(B)(ii) of the Act specifies that the Secretary shall use section 1851(c) of the Act, other than paragraph (3)(A) and paragraph (4) of such section, for Part D rules relating to exercise of choice.

Consistent with these sections of the Act, in 1998, we published a final rule (63 FR 34968) to codify the Part C election process required under section 1851(c) of the Act at Sec. 422.66. In 2005, we published a final rule (70 FR 4194) to codify the Part D election process required under section 1860D-1(b)(1)(B) of the Act at Sec. Sec. 423.32 and 423.36. The Parts C and D subpart B regulations set forth our requirements with respect to the election process under Sec. Sec. 422.60 (election process), 422.66 (coordination of enrollment and disenrollment through MA organizations), 423.32 (enrollment process), and 423.36 (disenrollment process).

MA election requests, with few exceptions, are submitted by the individual requesting enrollment in or disenrollment from a particular MA plan. In certain circumstances, namely passive enrollment (a process where CMS initiates enrollment into another plan in cases of immediate plan terminations, harm to beneficiaries, or for the promotion of integrated care with state Medicaid agency approval) and default enrollment (a process available only for integrated D-SNP enrollments), CMS directly enrolls individuals and transmits an enrollment transaction to the plan, which bypasses the usual process discussed later in this section.

Current Part C regulations at Sec. 422.60(e) specify that MA organizations must have effective systems for receiving, controlling, and processing election requests. After satisfying those requirements and accepting an individual's election request, the MA organization transmits the information necessary for CMS to add the individual to its records as an enrollee of the MA organization. Current Part C regulations at Sec. Sec. 422.66(a) and (b) specify that elections may be made by filing appropriate election forms with the MA organization or through other mechanisms as determined by CMS. The same process is mirrored in current Part D regulations at Sec. Sec. 423.32(a) through (d) and 423.36(a) and (b), whereby the Part D sponsor receives an election request from an individual and then submits necessary information to CMS.

Outside of circumstances where CMS directly enrolls an individual into a plan (passive, default enrollment, etc.) most election requests are filed with the MA organization or Part D sponsor, though the election form or mechanism may differ. Election mechanisms are how an individual communicates their election request to the MA organization or Part D sponsor, whether on paper, over the phone, electronically, etc. Even if an individual uses a CMS-operated election mechanism (1- 800-MEDICARE or the Online Enrollment Center), the election request is still filed with the plan for processing.

Historically, CMS has regulated the required content of election mechanisms under the “form and manner” authority specified at section 1851(c)(1) of the Act and codified at Sec. Sec. 422.60(c), 422.66(a), 423.32(a), and 423.36(a). Consistent with section 1851(e)(4) of the Act, CMS has required CMS approval for certain election periods. For example, consistent with the provisions in section 1851(e)(4)(C) providing that a SEP may be available where an “individual demonstrates (in accordance with guidelines established by the Secretary) that . . . the organization offering the plan substantially violated a material provision of the organization's contract under this part in relation to the individual . . . ,” CMS's current regulations governing the special enrollment period (SEP) for contract violation (Sec. Sec. 422.62(b)(3) and 423.38(c)(8)) provide that the SEP is available where an individual demonstrates to CMS that specified criteria have been met. This SEP is only available once CMS determines that a contract violation has occurred. An individual alleging a contract violation must call 1-800-MEDICARE to explain their circumstances and demonstrate to CMS that there was a violation. Once eligibility is demonstrated, the individual can elect a new plan or disenroll from their current plan and the election request is subsequently transmitted to the plan to process. The requirement that the individual demonstrate eligibility to CMS has been in place since the SEP was first codified in a 1998 final rule (63 FR 34968, 34980) and the process to demonstrate eligibility to CMS is also described in section 30.6.28 of the Medicare Advantage and Part D Enrollment and Disenrollment Guidance, see also MA-PD Plan Communications User Guide, pg. 3-38.

There are other SEPs that are currently only available with prior CMS approval, provided by CMS sending a notice or election request to the MA organization or Part D sponsor. These SEPs are: SEP for individuals who disenroll in connection with CMS sanction (Sec. Sec. 422.62(b)(5) and 423.38(c)(12)); SEP for individuals who were not adequately informed of a loss of creditable prescription drug coverage (Sec. Sec. 422.62(b)(20) and 423.38(c)(2)); and SEP for other exceptional circumstances (Sec. Sec. 422.62(b)(27) and 423.38(c)(36)). As described in CMS's Medicare Advantage and Part D Enrollment and Disenrollment Guidance, Section 30.6, in order for CMS to review that appropriate circumstances apply to allow for an SEP based on a CMS sanction, an individual not receiving adequate information about loss of creditable prescription drug coverage, or other exceptional circumstances, plans must have prior approval from CMS to submit enrollment transactions based on these SEPs.

We proposed to codify our current policy that for elections that are made based on certain special election periods, the beneficiary at issue must either have CMS approval for the use of that SEP through the use of a CMS-operated election mechanism (for example, 1-800-MEDICARE or the Online Enrollment Center (OEC)) or other means, such as enrollee receipt of a notice. We proposed this change to codify longstanding guidance and practice requiring CMS approval for certain SEPs. This policy allows for control over election periods and mechanisms to ensure appropriate use and allows us to delineate a clear process for each election. To accomplish this, we proposed to establish at Sec. Sec. 422.66(g), 423.32(k), and 423.36(g) the requirement that elections may require CMS approval based on the use of specified SEPs. CMS approval would be provided for plan elections either through the use of a CMS-operated election mechanism or through the individual's receipt of a notice which explains eligibility for the SEP and election instructions. As CMS approval would be an eligibility criterion of the SEP, MA organizations and Part D plan sponsors may not transmit elections to CMS using the specified SEPs without prior CMS approval. We proposed to codify these limitations for the following SEPs:

SEP for individuals who disenroll in connection with CMS sanction (Sec. Sec. 422.62(b)(5) and 423.38(c)(12));

SEP for individuals who were not adequately informed of a loss of creditable prescription drug coverage (Sec. Sec. 422.62(b)(20) and 423.38(c)(2));

SEP for contract violation (Sec. Sec. 422.62(b)(3) and 423.38(c)(8));

SEP for other exceptional circumstances (Sec. Sec. 422.62(b)(27) and 423.38(c)(36)).

These limitations were proposed to be codified at Sec. Sec. 422.62(b)(3), (b)(5), (b)(20), (b)(23), (b)(27), and 423.38(c)(2), (c)(8), (c)(12), and (c)(36). Language was added to each SEP we proposed to limit to require CMS approval. The language indicates that CMS approval is required and references how CMS approval will be indicated, either through providing a notice or the acceptance of an election through a CMS-operated mechanism. These limitations and applicable SEPs are also described at Sec. Sec. 422.66(g)(2), 423.32(k)(2), and 423.36(g)(2).

We proposed to codify these limitations in order to better oversee the use of SEPs which may not be appropriate for plans to use without prior CMS eligibility determination and approval. It would, for example, be inappropriate for an organization to evaluate the claim that another organization violated their contract with an individual, or that the individual was impacted by conduct that was sanctioned by CMS. In those cases, other organizations are not neutral arbiters of eligibility as they have a financial interest in deeming the conduct of other organizations as a contract violation or they lack the complete information about the circumstances of the sanctioned conduct. The SEP for individuals who were not adequately informed of a loss of creditable prescription drug coverage is similarly justified as requiring CMS approval prior to the election request being filed with the plan for processing. The eligibility determination for this SEP also requires evaluation of the conduct of another organization or entity and whether they provided adequate notice of the loss of creditable coverage. We believe these SEP limitations would prevent organizations, who do not have appropriate context, from incorrectly determining eligibility. This is especially true for the SEP for other exceptional circumstances, which covers situations not otherwise captured in the SEPs in regulation. This SEP is determined on a case- by-case basis for circumstances that warrant an enrollment opportunity given the exceptional conditions experienced by the individual. In these types of cases, only CMS can appropriately consider the circumstances of an individual's eligibility.

In order to best facilitate CMS approval prior to the election request being filed with the plan, these SEPs should only be available through a CMS-operated mechanism, to allow the approval for the SEP to be sent to the plan along with the election request for processing. The requirement for certain SEPs to be approved by CMS first, before the election is filed with the plan, does not preclude the involvement of an agent or broker assisting the enrollee. The enrollee can meet with an agent/broker for assistance in selecting the best plan for the enrollee. The enrollee can then use the CMS mechanism, for example, call 1-800-MEDICARE on their own or with the assistance of the agent/ broker. 1-800-MEDICARE and the OEC are capable of capturing the involvement of the agent/broker and transmitting that information to the newly selected plan when CMS sends the approved election request.

As the pre-existing limitations have been long-standing, previously implemented and are currently being followed by plan sponsors, in the Contract Year 2027 proposed rule, we concluded that the changes to the regulatory text would not adversely impact plan sponsors, individuals, or agents/brokers, nor would the changes have any impact on the Medicare Trust Funds or result in a paperwork burden. We also stated that all information impacts related to the procedural steps plans must take to receive and process election requests have already been accounted for under OMB control numbers 0938-0753 (CMS-R-267) for Part C and 0938-0964 (CMS-10141) for Part D.

CMS solicited comments on this proposal as well as comments on how these SEPs can be further improved for beneficiaries. The following is a summary of the comments we received and our responses.

Comment: Many commenters expressed support for the proposal to codify limits to certain SEPs that would require prior CMS approval, via receipt of a notice or election through a CMS-operated mechanism.

Response: We thank the commenters for their support.

Comment: A commenter opposed this proposal and recommended CMS allow agents and brokers to assist individuals to enroll directly with a new election mechanism instead of limiting elections to existing CMS- operated mechanisms.

Response: We thank the commenters for their suggestion to create a new election mechanism that would allow agents and brokers to assist individuals more directly. However, we disagree that a new mechanism is necessary to maintain the ability for agents and brokers to assist individuals. As we stated in the proposal, agents and brokers are still able to assist individuals making elections using these SEPs and have their involvement captured by 1-800-MEDICARE and the OEC by providing their National Producer Number, which is transmitted to the plan along with the enrollment request. We believe that the existing process allows agents and brokers to actively guide individuals with their plan options and during their election request and results in no additional burden to the plan.

Comment: A commenter opposed this proposal and stated that these SEPs are not used regularly but broadening the SEPs could lead to more churn. The commenter also suggested that educational materials on these SEPs be updated and designed with the reader's health literacy level in mind.

Response: We thank the commenter for their suggestion to improve educational materials and will bear in mind the readability of materials when updating guidance and education materials regarding codification of this proposal. We disagree with the commenter's statement that these SEPs are being broadened by the proposed changes and could lead to enrollment churn. This proposal codifies existing restrictions on these SEPs, which puts guardrails on them, and does not broaden their availability. Therefore, codifying these requirements is likely to result in no change or reduce enrollment churn.

Comment: A commenter opposed the inclusion of the SEP for other exceptional circumstances in this proposal. The commenter stated that requiring CMS approval would place an undue burden on beneficiaries wishing to make an election, particularly for individuals looking to enroll in a C-SNP.

Response: We thank the commenter for this perspective on how the SEP for other exceptional circumstances might be used by individuals wishing to enroll in a C-SNP. However, we disagree with the suggestion that the SEP for other exceptional circumstances not be limited to situations in which CMS approval is provided via notice or use of a CMS-operated election mechanism. As stated previously, we proposed to codify these limitations in order to better oversee the use of SEPs that may not be appropriate for plans to use without prior CMS eligibility determination and approval. This is especially true for the SEP for other exceptional circumstances, which covers situations not otherwise captured in the SEPs in regulation and is determined on a case-by-case basis. We believe that CMS is the only party that

can reasonably make these SEP determinations. We remind the commenter that this limitation does not apply to an SEP that is relevant to enrollment in a C-SNP, the SEP for individuals who are eligible or are found ineligible to enroll in a C-SNP (Sec. 422.62(b)(13)), which is designed to allow for an enrollment in a C-SNP that serves individuals with specific severe or disabling chronic conditions.

Comment: A commenter opposed this proposal and stated that the change would have significant operational impacts on plans. Additionally, the comment stated that beneficiaries may not understand the enrollment process through CMS-operated mechanisms, which may delay enrollments and result in continuity of care issues. The commenter stated that plans would need to implement systems changes to validate these SEPs, update workflows, and train staff and agents to prevent enrollment errors.

Response: We appreciate the commenter's perspective on potential impacts of this proposal. However, we disagree that this change would result in additional burden. As stated previously, the limitation on these SEPs is already implemented and long-standing. Additionally, the procedural steps plans must take to receive and process election requests and its impacts have already been accounted for in existing burden calculations and plans should not need to make procedural changes in response to this proposal if they are currently following long-standing enrollment guidance.

Comment: A commenter in support of this proposal also suggested that CMS similarly limit the SEP for individuals affected by a government-entity declared disaster or other emergency to only CMS- operated election mechanisms.

Response: We thank the commenter for their support and their suggestion. We will consider limiting the SEP for individuals affected by a government-entity declared disaster or other emergency to only CMS-operated election mechanisms in future rulemaking.

Comment: Several commenters in support of this proposal requested clarification on whether individuals will be expected to provide a copy of a notice of SEP eligibility or otherwise provide documentation to prove their eligibility for these SEPs. The commenters also recommended that the availability of State Health Insurance Assistance Programs (SHIPs) should be promoted whenever individuals need assistance with the SEPs.

Response: We thank the commenters for their requests for clarification and recommendations. Individuals will not be expected to provide a copy of a notice of SEP eligibility when enrolling through a CMS-operated mechanism, or other mechanism when allowed. Currently, only the SEP for individuals who disenroll in connection with CMS sanction requires receipt of a notice for SEP eligibility, in which case they will not be expected to provide the notice or other documentation to establish eligibility, they must only attest that they received the notice about SEP eligibility; the other SEPs are approved through the use of a CMS-operated mechanism, eligibility in these cases is established through attestations made to CMS during the election, such as verbal attestations of the conditions of eligibility made to a 1-800-MEDICARE customer service representative. We will consider the commenters' suggestions about referring individuals to SHIPs when developing guidance and educational materials for these SEPs.

Comment: A commenter in support of this proposal recommended that CMS improve existing guidance and educational materials on these SEPs and mention the availability of agent/broker assistance.

Response: We thank the commenter for their support and recommendations. We will update our guidance and educational materials to reflect the codification of this proposal and explain the availability of agent/broker assistance where appropriate.

Comment: A commenter asked for clarification on whether current regulations allow CMS to create SEPs in response to plans providing false information related to provider networks.

Response: This comment is outside of the scope of the final rule as this proposal did not discuss creating new SEPs.

After consideration of the public comments we received, we are finalizing this proposal without modification.