Nonrenewal of contract.
(a) Nonrenewal by an MA organization.
An MA organization may elect not to renew its contract with CMS as of the end of the term of the contract for any reason provided it meets the timeframes for doing so set forth in paragraphs (a)(2) and (a)(3) of this section.
If an MA organization does not intend to renew its contract, it must notify—
CMS in writing, by the first Monday in June of the year in which the contract would end;
Each Medicare enrollee by mail at least 90 calendar days before the date on which the nonrenewal is effective. The MA organization must also provide information about alternative enrollment options by doing one or more of the following:
Provide a CMS approved written description of alternative MA plan, MA-PD plan, and PDP options available for obtaining qualified Medicare services within the beneficiaries' region.
Place outbound calls to all affected enrollees to ensure beneficiaries know who to contact to learn about their enrollment options.
CMS may accept a nonrenewal notice submitted after the first Monday in June if—
The MA organization notifies its Medicare enrollees in accordance with paragraph (a)(2)(ii) of this section; and
Acceptance is not inconsistent with the effective and efficient administration of the Medicare program.
If an MA organization does not renew a contract under this paragraph (a), CMS will not enter into a contract with the organization for 2 years unless there are special circumstances that warrant special consideration, as determined by CMS.
During the same 2-year period as specified in paragraph (a)(4) of this section, CMS will not contract with an organization whose covered persons also served as covered persons for the non-renewing sponsor. A “covered person” as used in this paragraph means one of the following:
All owners of nonrenewed or terminated organizations who are natural persons, other than shareholders who have an ownership interest of less than 5 percent.
An owner in whole or part interest in any mortgage, deed of trust, note or other obligation secured (in whole or in part) by the organization, or any of the property or assets thereof, which whole or part interest is equal to or exceeds 5 percent of the total property, and assets of the organization.
A member of the board of directors or board of trustees of the entity, if the organization is organized as a corporation.
(b) CMS decision not to renew.
CMS may elect not to authorize renewal of a contract for any of the following reasons:
The MA organization has not fully implemented or shown discernable progress in implementing quality improvement projects as defined in § 422.152(d).
For any of the reasons listed in § 422.510(a), which would also permit CMS to terminate the contract.
The MA organization has committed any of the acts in § 422.752(a) that would support the imposition of intermediate sanctions or civil money penalties under subpart O of this part.
The contract must be nonrenewed as to an individual MA plan if that plan does not have a sufficient number of enrollees to establish that it is a viable independent plan option.
(2) Notice of non-renewal.
CMS provides notice of its decision not to authorize renewal of a contract as follows:
To the MA organization by August 1 of the contract year.
To each of the MA organization's Medicare enrollees by mail at least 90 calendar days before the date on which the nonrenewal is effective, or at the conclusion of the appeals process if applicable.
(3) Opportunity to develop and implement a corrective action plan.
Before providing a notice of intent of nonrenewal of the contract, CMS will provide the MA organization with notice specifying the MA organization's deficiencies and a reasonable opportunity of at least 30 calendar days to develop and implement a corrective action plan to correct the deficiencies.
The MA organization is solely responsible for the identification, development, and implementation of its corrective action plan and for demonstrating to CMS that the underlying deficiencies have been corrected within the time period specified by CMS in the notice requesting corrective action.
(4) Notice of appeal rights.
CMS gives the MA organization written notice of its right to appeal the decision not to renew in accordance with § 422.644.
[63 FR 35099, June 26, 1998, as amended at 65 FR 40328, June 29, 2000; 67 FR 13289, Mar. 22, 2002; 70 FR 4737, Jan. 28, 2005; 72 FR 68723, Dec. 5, 2007; 74 FR 1542, Jan. 12, 2009; 75 FR 19811, Apr. 15, 2010; 76 FR 21568, Apr. 15, 2011]