42 CFR § 422.514 - Enrollment requirements.

§ 422.514 Enrollment requirements.

(a) Minimum enrollment rules. Except as provided in paragraph (b) of this section, CMS does not enter into a contract under this subpart unless the organization meets the following minimum enrollment requirement -

(1) At least 5,000 individuals (or 1,500 individuals if the organization is a PSO) are enrolled for the purpose of receiving health benefits from the organization; or

(2) At least 1,500 individuals (or 500 individuals if the organization is a PSO) are enrolled for purposes of receiving health benefits from the organization and the organization primarily serves individuals residing outside of urbanized areas as defined in § 412.62(f) (or, in the case of a PSO, the PSO meets the requirements in § 422.352(c)).

(3) Except as provided for in paragraph (b) of this section, an MA organization must maintain a minimum enrollment as defined in paragraphs (a)(1) and (a)(2) of this section for the duration of its contract.

(b) Minimum enrollment waiver. For a contract applicant that does not meet the applicable requirement of paragraph (a) of this section at application for an MA contract, CMS may waive the minimum enrollment requirement for the first 3 years of the contract. To receive a waiver, a contract applicant must demonstrate to CMS's satisfaction that it is capable of administering and managing an MA contract and is able to manage the level of risk required under the contract during the first 3 years of the contract. Factors that CMS takes into consideration in making this evaluation include the extent to which -

(1) The contract applicant management and providers have previous experience in managing and providing health care services under a risk-based payment arrangement to at least as many individuals as the applicable minimum enrollment for the entity as described in paragraph (a) of this section; or

(2) The contract applicant has the financial ability to bear financial risk under an MA contract. In determining whether an organization is capable of bearing risk, CMS considers factors such as the organization's management experience as described in paragraph (b)(1) of this section and stop-loss insurance that is adequate and acceptable to CMS; and

(3) The contract applicant is able to establish a marketing and enrollment process that allows it to meet the applicable enrollment requirement specified in paragraph (a) of this section before completion of the third contract year.

(c) Failure to meet enrollment requirements. CMS may elect not to renew its contract with an MA organization that fails to meet the applicable enrollment requirement in paragraph (a) of this section.

(d) Rule on dual eligible enrollment. In any state where there is a dual eligible special needs plan or any other plan authorized by CMS to exclusively enroll individuals entitled to medical assistance under a state plan under title XIX, CMS does not:

(1) Enter into a contract under this subpart, for plan year 2022 and subsequent years, for a new MA plan that -

(i) Is not a specialized MA plan for special needs individuals as defined in § 422.2; and

(ii) Projects enrollment in its bid submitted under § 422.254 that 80 percent or more enrollees of the plan's total enrollment are enrollees entitled to medical assistance under a state plan under title XIX.

(2) Renew a contract under this subpart, for plan year 2023 and subsequent years, for an MA plan that -

(i) Is not a specialized MA plan for special needs individuals as defined in § 422.2; and

(ii) Has actual enrollment, as determined by CMS using the January enrollment of the current year, consisting of 80 percent or more of enrollees who are entitled to medical assistance under a state plan under title XIX, unless the MA plan has been active for less than 1 year and has enrollment of 200 or fewer individuals at the time of such determination.

(e) Transition process and procedures.

(1) For coverage effective January 1 of the next year, and subject to the disclosure requirements described in paragraph (e)(2) of this section, an MA organization may transition enrollees in a plan specified in paragraph (d)(2) of this section into another MA plan or plans (including into a dual eligible special needs plan for enrollees who are eligible for such a plan) offered by the MA organization, or another MA organization that shares the same parent organization as the MA organization, for which the individual is eligible in accordance with §§ 422.50 through 422.53 if the MA plan or plans receiving such enrollment -

(i) Would not meet the criteria in paragraph (d)(2)(ii) of this section, as determined in the procedures described in paragraph (e)(3) of this section, with the addition of the newly enrolled individuals (unless such plan is a Specialized MA plan for Special Needs Individuals as defined in § 422.2);

(ii) Is an MA-PD plan described at § 422.2;

(iii) Has a combined Part C and Part D premium of $0.00 for individuals eligible for the premium subsidy for full subsidy eligible individuals described in § 423.780(a) of this chapter; and

(iv) Is of the same plan type (for example, HMO or PPO) as the plan specified in paragraph (d)(2) of this section.

(2) An MA organization may transition individuals under paragraph (e)(1) of this section without requiring the individual to file the election form under § 422.66(a) if -

(i) The enrolled individual is eligible to enroll in the MA plan; and

(ii) The MA-PD plan into which individuals are transitioned describes changes to MA-PD benefits and provides information about the MA-PD plan in the Annual Notice of Change, which must be sent consistent with § 422.111(a), (d), and (e).

(3) For the purpose of approving a MA organization to transition enrollment under this paragraph (e), CMS determines whether a non-SNP MA plan would meet the criteria in paragraph (d)(2) of this section by adding the cohort of individuals identified by the MA organization for enrollment in a non-SNP MA plan to the April enrollment of such plan and calculating the resulting percentage of dual eligible enrollment.

(4) In cases where an MA organization does not transition current enrollees under paragraph (e)(1) of this section, the MA organization must send a written notice to enrollees who are not transitioned, consistent with § 422.506(a)(2).

(f) Special considerations. Actions taken pursuant to paragraph (d) of this section warrant special consideration to exempt affected MA organizations from the denial of an application for a new contract or service area expansion in accordance with §§ 422.502(b)(3) and (4), 422.503(b)(6) and (7), 422.506(a)(3) and (4), 422.508(c) and (d), and 422.512(e)(1) and (2).

[63 FR 35099, June 26, 1998, as amended at 65 FR 40328, June 29, 2000; 83 FR 16734, Apr. 16, 2018; 85 FR 33908, June 2, 2020]

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