100-16 Medicare Managed Care Manual: Chapter 17f - Subchapter F - Benefits and Beneficiary Protections

Medicare Managed Care Manual
Chapter 17 - Subchapter F
Benefits and Beneficiary Protections
Table of Contents
(Rev. 77, 10-28-05)
10 - General Requirements
10.1 - Medicare Covered Services
10.2 - Emergent and Urgent Care
10.3 - Optional Supplemental Benefits
10.4 - Prescription Drug Coverage
10.5 - Waiting Periods and Exclusions Not Present In Original Medicare
10.6 - Services, Supplies and DME
10.7 - Cost-Sharing and Deductibles
10.8 - Cap On Beneficiary Monetary Responsibility
10.9 - Electronic Deduction of Premium
10.10 - Services without Authorization
10.11 - Provider Enrollee Relationships
10.12 - Non-Contracting Physician Assistant
10.13 - Part B Services from a Non Plan Provider
20 - Requirements of Specific Benefits
20.1 - General Guidelines for Benefits
20.2 - Chiropractic Services
20.3 - Drugs That Are Covered Under Original Medicare
20.4 - Drug Benefit Cap
20.5 - Prescription Drug Card
20.6 - Authorization and Cost-Sharing
30 - Hospice
40 - Financial Responsibility
40.1 - Financial Responsibility - General
40.2 - Refunds and Recoupment
40.3 - Refunds by Lump Sum Payments
40.4 - Refund by Premium Adjustment or Lump Sum Payment or Both
40.5 - Recoupment
50 - Out-of-Area, Out-of-Network and Extended Absence
60 - Cost Employer Group Health Plans (EGHP)
70 - Medicare Secondary Payer
70.1 - The Basic Rule
70.2 - Collection From GHPs and LGHPs
70.3 - MSP Rules and State Laws
80 - National Coverage Determinations and Legislative Changes in Benefits
80.1 - Definitions
80.2 - General Rules
80.3 - Sources for Obtaining Information

90 - Discrimination Against Beneficiaries Prohibited
90.1 - General Prohibition
90.2 - Additional Requirements
90.3 - A Medicare Cost Plan’s Responsibility
100 - Disclosure Requirements
110 - Confidentiality and Records
120 - Availability, Accessibility, and Continuity
120.1 - The Basic Rule
120.2 - Certification
120.3 - Provider Adequacy
120.4 - Availability
120.5 - Accessibility
120.6 - Continuity of Care
120.7 - Recordkeeping
130 - Information on Advance Directives
130.1 - Definition
130.2 - The Basic Rule
130.3 - State Law Primary
130.4 - Content of Enrollee Information and Other Medicare cost plan Obligations
130.5 - Incapacitated Enrollees
130.6 - Community Education Requirements
130.7 - Medicare Cost Organization Rights
130.8 - Appeal and Anti-Discrimination Rights
10 - General Requirements
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
These guidelines reflect CMS’s current interpretation of the provisions of the Cost
Statute and Regulations (Chapter 42 of the Code of Federal Regulations, Parts 417)
pertaining to benefits and beneficiary protections. These guidelines were developed after
careful evaluation by CMS of current technology, coverage rules, and industry practices
with respect to plan design, in light of recent changes to the Cost program enacted in the
Medicare Modernization Act. The guidance set forth in this document may be subject to
change as technology and industry practices in plan design and administration continue
to evolve, and as CMS gains more experience administering the Cost program and its
new health plan options.
(42 CFR 417.440) This §10, presents details and requirements related to the provision of
benefits that are general in nature and not specific to any particular service. The
following section, §20, presents details and requirements related to the provision of
specific services.
10.1 - Medicare Covered Services

(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(From §4.10.9 of the Medicare Managed Care Manual, Pub. 100-16) Medicare cost
plans, (that is, HMOs or CMPs) must generally provide coverage of, by furnishing,
arranging for, or making payment for, all medically necessary and appropriate services,
including supplies and DME, that are covered by Part A and Part B of original Medicare
(if the enrollee is entitled to benefits under both parts) or by Medicare Part B (if the
enrollee is entitled only to benefits under Part B) that are available to beneficiaries
residing in the plan’s geographic area.
The services are considered available if either the sources of services are located in the
Medicare cost plan’s approved geographic area or it is common practice to refer patients
to sources outside that geographic area (42 CFR 417.414(b)(2)).
(42 CFR 417.401) The term geographic area refers to the area found by CMS to be the
area within which the Medicare cost plan furnishes, or arranges for furnishing, the full
range of services that it offers to its Medicare enrollees.
Administration of the Medicare program is governed by title XVIII of the Social Security
Act (the Act). Under the Medicare program, the scope of benefits available to eligible
beneficiaries is prescribed by law and divided into several main parts. Part A is the
hospital insurance program and Part B is the voluntary supplementary medical insurance
program.
The scope of the benefits under Part A and Part B is defined in the Act. The scopes of
Part A and Part B are discussed in §1812 and §1832 of the Act respectively, while §1861
of the Act lays out the definition of medical and other health services. Each Medicare
cost plan must offer at least all Part A benefits (other than hospice care) and all Part B
benefits (or all Part B benefits to those entitled to only Part B) to all individuals residing
in the area served by the plan in all benefit packages in its authorized geographic area.
Some benefit categories are defined more broadly than others. Specific health care
services must fit into one of these benefit categories, and not be otherwise excluded for
coverage under the Medicare program.
The Act does not contain a comprehensive list of specific items or services eligible for
Medicare coverage. Rather, it lists categories of items and services, and vests in the
Secretary the authority to make determinations about which specific items and services
within these categories can be covered under the Medicare program. That is, the Act
allows Medicare to cover medical devices, surgical procedures and diagnostic services,
but generally does not identify specific covered or excluded items or services. Further
guidance is presented in the Code of Federal Regulations and CMS interpretations.
Medicare payment is contingent upon a determination that:
• 	A service meets a benefit category;

• 	Is not specifically excluded from coverage; and
• 	The item or service is “reasonable and necessary.”
Section 1862(a)(1)(A) of the Act states that, subject to certain limited exceptions, no
payment may be made for any expenses incurred for items or services that are not
“reasonable and necessary” for the diagnosis and treatment of illness or injury or to
improve the functioning of a malformed body member. These authorities are exercised to
make coverage determinations regarding whether a specific item or service meets one of
the broadly defined benefit categories and can be covered under the Medicare program.
National coverage decisions are published on the National Coverage Web site - for
further information please see §80 of this subchapter.
In the absence of a specific National Coverage Decision, coverage decisions are made at
the discretion of local contractors. A Medicare cost plan is required to follow any local
medical review policies (LMRP) issued by the fiscal intermediaries and carriers in its
geographic area.
10.2 - Emergent and Urgent Care
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR 417.401) Each Medicare enrollee is entitled to receive timely and reasonable
payment directly (or have payment made on his or her behalf) for services he or she
obtained from a provider or supplier outside the Medicare cost plan if those services are:
• 	Emergency services or urgently needed services as defined below. The Medicare
cost plan must pay for emergent and urgently needed services even from
providers and suppliers outside the Medicare cost plan and even in the absence of
the Medicare cost plan’s prior approval (42 CFR 417.414(c)); or
• 	Services denied by the Medicare cost plan and found upon appeal to be services
the enrollee was entitled to have furnished by the Medicare cost plan.
Emergency Services means covered inpatient or outpatient services that are furnished by
an appropriate source other than the Medicare cost plan that:
• 	Are needed immediately because of an injury or sudden illness; or
• 	Are such that the time required to reach the Medicare cost plan’s providers or
suppliers (or alternatives authorized by the Medicare cost plan) would mean risk
of permanent damage to the enrollee’s health.
Once initiated, the services continue to be considered emergency services as long as (a)
transfer of the enrollee to the Medicare cost plan’s source of health care or authorized
alternative is precluded because of risk to the enrollee’s health or because transfer would

be unreasonable, given the distance and the nature of the medical condition; and (b) such
services must be, or appear to be, needed immediately.
All procedures performed during evaluation and treatment of an emergency condition
related to the care of that condition must be covered. For example, if the attending
physician orders diagnostic pulmonary angiography as part of the evaluation for a
member who is treated in an emergency room for chest pain, then a retrospective review,
cannot decide that the angiography was unnecessary and refuse coverage.
The Medicare cost plan is not responsible for the care provided for an unrelated non-
emergency problem during treatment for an emergency situation. For example, the
Medicare cost plan is not responsible for any costs, such as a biopsy, associated with
treatment of skin lesions performed by the attending physician who is treating a fracture.
If there is a disagreement over the stability of the patient for transfer to another inpatient
facility, the judgment of the attending physician at the transferring facility prevails and is
binding on the Medicare cost plan.
Urgently Needed Services means covered services that are needed by an enrollee who is
temporarily absent from the Medicare cost plan’s geographic area and that:
• 	Are required in order to prevent serious deterioration of the enrollee’s health as a
result of unforeseen injury or illness; and
• 	Cannot be delayed until the enrollee returns to the Medicare cost plan’s
geographic area.
The Medicare cost plan need not pay for post-stabilization services offered outside of its
network or not approved by the Medicare cost plan if:
• 	These services are not emergency;
• 	These services are not urgently needed; and
• 	These services are not offered by the Medicare cost plan as a basic or optional
supplemental benefit.
However, medically necessary follow-up care to emergency and urgent care is covered, if
the care cannot be delayed without adverse medical effects.
Routine out-of-area renal dialysis is covered only under original Medicare.
10.3 - Optional Supplemental Benefits
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
In addition to offering a basic benefit package (that is, Medicare-covered benefits), each
Medicare cost plan may offer (for election by the enrollee and without regard to health
status) optional supplemental services or benefits - that is, services or benefits that are in
addition to those included in the basic benefits. All optional supplemental benefits must

be offered for a period of at least 30 consecutive days to both new plan enrollees and to
all current enrollees of a plan at least once a year.
Although a Medicare cost plan may limit the availability of optional supplemental
benefits to current enrollees as described above, enrollees may voluntarily drop or
discontinue optional supplemental benefits any time during the contract year upon proper
advance notice to the Medicare cost plan.
The Medicare cost plan may not set health status standards for those enrollees whom it
will accept for these optional supplemental services.
States may mandate that non-Medicare benefits be offered to Medicare cost plan
enrollees as optional supplemental benefits.
10.4 - Prescription Drug Coverage
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(70 FR 4243, Jan 28, 2005) A Medicare cost plan offering a cost plan may, but is not
required to, offer prescription drug coverage. There are three methods of offering
prescription drug coverage in a cost plan:
1) 	No Offering of a Part D Plan
The Medicare cost plan may elect not to offer qualified Part D coverage. In such
a case the Medicare cost plan may offer non-qualified prescription drug coverage
as an optional supplemental benefit. This non-qualified prescription drug
coverage may be, but is not required to be, creditable, as defined in 42 CFR
423.56. Enrollees of a cost plan not offering qualified Part D coverage may elect
to concurrently enroll in a Prescription Drug Plan (PDP).
2) 	Offering of Basic, Part D Coverage
An organization may elect to offer a Medicare cost plan that provides basic part
D coverage. If the organization so elects, then this Part D coverage must be
offered as an optional supplemental benefit; that is, an enrollee has the option,
but not the obligation, to purchase Part D coverage under the plan. All enrollees
who purchase the Part D coverage offered by the Medicare cost plan must
receive coverage of Part A and Part B, [or Part B only (for beneficiaries who are
not entitled to Part A)] benefits under that cost plan. If the enrollee elects not to
elect the Part D coverage offered by the Medicare cost plan, then such an
enrollee may concurrently enroll in a Prescription Drug Plan (PDP). A
Medicare cost plan offering qualified Part D coverage, may not offer non-
qualified prescription drug coverage. (See 42 CFR 423.104(f)(4).)
3) Offering of Both Basic and Enhanced Alternative Part D Coverage

The Medicare cost plan may elect to offer both basic and enhanced alternative
Part D coverage as optional supplemental benefits. An enrollee may then elect to
either: 	(a) Purchase the basic Part D coverage; (b) Purchase the enhanced
alternative Part D coverage; or (c) To purchase neither. If the enrollee elects not
to elect part D coverage through the cost plan, the enrollee retains his/her right
to concurrently enroll in another Prescription Drug Plan (PDP). A Medicare
cost plan offering qualified Part D coverage, may not offer non-qualified
prescription drug coverage. (See 42 CFR 423.104(f)(4).)
If a Medicare cost plan offers qualified Part D coverage then the funding for the
Part D coverage is separate from the CMS funding for Part A and/or B coverage
(42 CFR 417.534(c)). Consequently, a Medicare cost plan may not apply
reductions or non-collection of deductibles and coinsurance for Part A and/or B
services to subsidize Part D coverage.
See §60 of this chapter for information on benefits in a Medicare cost employer
group health plan.
10.5 - Waiting Periods and Exclusions Not Present In Original Medicare
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(Chapter 4, §20.6 of the Medicare Managed Care Manual) All beneficiaries must be
provided all medically necessary benefits covered in the plan in which they enroll
(including supplemental benefits) at the time of their initial enrollment. Waiting periods
or exclusions from coverage, due to pre-existing conditions, are not permitted. However,
a Medicare cost plan can deny coverage of Medicare-covered services when the services
do not meet the standard of being medically necessary and appropriate. In addition, a
Medicare cost plan may impose limitations or exclusions on Medicare-covered benefits
to the extent that such limitations or exclusions are present in the original Medicare
statute or regulations.
10.6 - Services, Supplies and DME
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
Each Medicare enrollee is entitled to receive:
• 	Health care services;
• 	Supplies, and
• 	DME;
either:
• 	Directly from; or

• 	Through arrangements made by the Medicare cost plan.
10.7 - Cost-Sharing and Deductibles
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR 417.452(a)(3)) The sum of the amounts the Medicare cost plan charges its
Medicare enrollees for Medicare deductibles and coinsurance may not exceed, on the
average, the actuarial value of the deductible and coinsurance the Medicare enrollees
otherwise would have been liable for had they not enrolled in the Medicare cost plan.
10.8 - Cap On Beneficiary Monetary Responsibility
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(Chapter 4, §10.4 of the Medicare Managed Care Manual): A Medicare cost plan
enrollee should never pay more than the plan required cost sharing – coinsurance,
deductibles and copays. This cap on beneficiary liability holds even:
• 	If a provider or delegated provider declares insolvency resulting in a plan loss;
• 	If a non-contracted provider which provided services to the enrollee, for emergent
or urgent care is entitled to balanced billing; and
• 	This cap on beneficiary liability prohibits a plan from requiring a beneficiary to
first pay a contracted provider, except for copayments, and then receive
reimbursement from the Medicare cost organization.
10.9 - Electronic Deduction of Premium
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
• 	A Medicare cost plan offering a Part D benefit must offer the option to enrollees
of having their Part D premiums deducted electronically from their Social
Security payment;
• 	The cost plan or CMP may also offer the option of electronically paying for
premiums from sources other than their Social Security Payment, but may not
charge or discount for this option.
• 	The cost plan or CMP is not required to offer enrollees the option of electronic
payment of non-Part D premiums.
10.10 - Services without Authorization

(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
If a Cost plan enrollee receives services:
• 	Under the direction or authorization of a plan physician;
• 	Correctly identifies himself or herself as a member of that plan to the contracted
provider before receiving the items or services; and
• 	(The enrollee) has not been informed that he or she is liable for the costs of such
services,
then the plan must cover such services. 	This means that the plan does not have the
right, after a service is received, to retroactively overturn a plan physician's decision
that an item or service is medically reasonable and necessary. 	For example, a plan
cannot retroactively deny a contracted physician's referral of a member for specialty
care even when there are plan preauthorization requirements. 	In such a case the
plan cannot penalize the member if a contracting provider fails to follow plan
preauthorization rules.
An enrollee is considered informed that he or she is liable for the costs of a service if:
• 	The enrollee should be expected to know the service is not covered by Medicare
or under the plan, e.g., acupuncture; or
• 	The contracting provider explicitly advises the enrollee prior to the service or
referral that the service is not or will not be covered.
Although a plan may require the Medicare enrollee to receive prior authorization from a
primary care physician or a gatekeeper before specialty care is received, if a plan
physician provides or directs a beneficiary to receive a covered Medicare service without
following the plan’s internal procedures, then the plan must pay for the service. A
beneficiary who has already received a service may not be penalized if the authorizing
physician's referral was improper or the specialist delivered the service without the
necessary authorization.
The enrollee should never pay more than the plan required cost sharing - coinsurance,
deductibles and copays.
10.11 - Provider Enrollee Relationships
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The CMS encourages a personal relationship between providers and enrollees. As such,
providers are frequently called upon to give advice and referrals. It is of the utmost
importance that a provider who refers a patient to a provider of a non-covered service

ensures that the enrollee is aware of his or her obligation to pay for such non-covered
services.
10.12 - Non-Contracting Physician Assistant
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
A service provided to a cost plan or CMP enrollee who properly requested this service
from a contracted physician who employs a non-contracted physician assistant is
classified as a plan provided service. Therefore the physician assistant cannot look to the
member for direct reimbursement. The cost-plan member must be held-harmless from
incurring costs that exceed the copay that is otherwise applicable to the service in
question.
10.13 - Part B Services from a Non Plan Provider
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
When a Medicare Cost Plan is legally obligated to cover services provided by a non-plan
provider, who provided plan-covered part B services to one of its enrollees, then the cost
plan must indemnify the member from incurring liability greater than the cost sharing
due under the plan. In such a case, the deductibles and co-insurance normally due under
original Medicare must be reduced by the plan on behalf of the enrollee to the cost
sharing amounts that otherwise apply in the Medicare Cost Plan for such services.
20 - Requirements of Specific Benefits
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
20.1 - General Guidelines for Benefits
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
All benefits that are part of the Medicare Cost Plan must satisfy the following guidelines:
• 	All benefits must be directly health-related, that is, health care services or items
whose primary purpose is to prevent or cure, actual or imminent, illness or injury
for which the MA plan incurs a cost that is not solely administrative;
• 	All benefits must be offered uniformly to all enrollees;
• 	All benefits must be explicitly mentioned in the appropriate marketing vehicles.
20.2 - Chiropractic Services

(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
Section 1861(r) of the Social Security Act provides the definition of a physician for
Medicare coverage purposes, which includes a chiropractor for treatment of manual
manipulation of the spine to correct a subluxation. (As a standard Medicare Part B
benefit, manual manipulation of the spine to correct a subluxation must be made
available to enrollees of cost plans.) The statute specifically references manual
manipulation of the spine to correct a subluxation as a physician service. Thus,
Medicare cost plan organizations offering cost plans must use physicians, which include
chiropractors, to perform this service. They may not use non-physician physical
therapists for manual manipulation of the spine to correct a subluxation. Medicare cost
plans may continue to use physical therapists to treat enrollees for conditions not
requiring physician services as defined in §1861 (r) of the Social Security Act.
20.3 - Drugs That Are Covered Under Original Medicare
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(Chapter 4, §20.9 of the Medicare Managed Care Manual) For this subsection, the term
“drug” means “drug or biological.” As indicated in §10.1, a Medicare cost plan must
provide its enrollees with coverage of all drugs covered under original Medicare Part B.
Part B Medicare covers drugs in a limited number of cases including the following:
• 	Drugs that the Medicare cost plan enrollee takes while using durable medical
equipment (such as nebulizers) that were authorized by the enrollee’s
Medicare cost plan;
• 	Clotting factors if the enrollee is diagnosed with specific blood-clotting
disorders;
• 	Immunosuppressive drugs, if the enrollee had an organ transplant that was
covered by Medicare;
• 	Injectable osteoporosis drugs, if the enrollee has a bone fracture that a doctor
certifies was related to post-menopausal osteoporosis, and cannot self-
administer the drug;
• 	Antigens;
• 	Certain oral anti-cancer drugs and anti-nausea drugs; and
• 	Erythropoietin by injection if the member has end-stage renal disease and
needs this drug to treat anemia.

• 	Not Usually Self-Administered (NUSA) Drugs. 	If a drug is defined as: 	(a)
not usually self-administered (NUSA) by the carrier in the area covered by the
Medicare cost plan, and (b) the drug is delivered incident to a physician
service, then it is classified as a Medicare-covered drug under Part B. Some
Medicare cost plans contract with specialty pharmacies to supply NUSA
drugs to their providers, instead of having the provider purchase and bill the
plan. If the drugs are furnished incident to a physician's service and they are
covered in that setting by the carrier whose coverage decisions are followed
by the Medicare cost plan, they are still classified as Part B drugs --
regardless of the payment arrangements.
A Medicare cost plan cannot make their own determinations of what is a
Medicare-covered Part B drug; rather carriers make these determinations.
A NUSA drug obtained by an enrollee at a pharmacy is not covered under
Part B.
20.4 - Drug Benefit Caps
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(Chapter 4, §20.8 of the Medicare Managed Care Manual)
As outlined above in §10.4, under certain circumstances, a Medicare cost plan may offer
coverage for outpatient prescription drugs that would not normally be covered under the
original Medicare program. The CMS has approved non-Medicare prescription drug
benefits that provide for annual, quarterly and monthly caps on the dollar amount of
benefits available to enrolled members. A Medicare cost plan may also pro-rate an
annual drug benefit that has an annual cap. Pro-rating of the annual cap is permitted
according to the member’s enrollment date, since this would be similar to, but more
generous than, a quarterly or monthly cap. (42 CFR 417.104(a)(4)(ii)) The tracking of
out of pocket maximums is the responsibility of the enrollee, not the plan. As indicated in
§100 of this subchapter, the Medicare cost plan must clearly notify the beneficiary of this
limitation.
20.5 - Prescription Drug Card
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
Although transitional assistance funds may remain available in 2006, enrollment in the
Drug Card program ends on December 31, 2005.
20.6 - Authorization and Cost-Sharing
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)

Medicare cost plans:
• 	Must permit in-network direct access to influenza vaccines;
• 	May not impose cost sharing for influenza vaccines; and
• 	Must permit in-network direct access to screening mammographies.
• 	Non-emergent non-urgent-care services that Medicare cost plan enrollees obtain
from non-network providers, when not referred, are covered under original
Medicare and subject to Medicare Fee-for-Service coinsurance and deductible
requirements.
30 - Hospice
(Rev. 61, 09-03-04)
A Medicare cost plan is not reimbursed through the §1876 cost Program for the provision
of Hospice care. Medicare-covered Hospice care may only be furnished by a Medicare
Certified Hospice. An enrollee may elect hospice care if they are entitled to Part A
Medicare benefits and if a physician certifies the enrollee as terminally ill.
(42 CFR 417.423(2)(b)) Individuals who have already made a hospice election may not
enroll in a Medicare cost plan. However an individual who makes a hospice election
while enrolled in a Medicare cost plan may remain with the Medicare cost plan during
the hospice election.
(42 CFR 417.414(b)(3)) Each Medicare cost plan must inform their Medicare enrollees
about the availability of hospice care if:
• 	A hospice participating in Medicare is located within the Medicare cost plan’s
geographic area; or
• 	It is common practice to refer patients to hospices outside the geographic area.
(42 CFR 417.440( c )) An individual enrolled in a Medicare cost plan who elects to
receive hospice care waives the right to receive from the Medicare cost plan any
Medicare services that:
• 	Are equivalent to hospice care; or
• 	Are related to the terminal condition for which the enrollee elected hospice care
or to a related condition.

However, since the Medicare cost plan continues to receive interim payments during the
period of hospice election, they must also continue to provide and pay for all non-hospice
related care that the Medicare member seeks from the Medicare cost plan provided that:
• 	His or her attending physician is an employee or contractor of the Medicare cost
plan;
• 	His or her attending physician is not an employee of the Hospice; and
• 	His or her attending physician does not receive compensation from the hospice
for these activities.
In the event an enrollee elects hospice care the relevant start and termination dates of
coverage are discussed in the subpart of this cost chapter dealing with enrollment.
40 - Financial Responsibility
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
40.1 - Financial Responsibility - General
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR 417.414( c )) The Medicare cost plan assumes financial responsibility to
provide reasonable reimbursement to its enrollees for:
• 	Emergency services; and
• 	Urgently needed services (as defined above);
even:
• 	From providers and suppliers outside the Medicare cost plan;
and even:
• 	In the absence of the Medicare cost plan’s prior approval.
The Medicare cost plan also assumes financial responsibility for:
• 	Services that were initially denied, but later granted, due to an appeal by the
enrollee.

(42 CFR 417.452) A Medicare cost plan may impose:
• 	Deductibles;
• 	Coinsurance; or
• 	Copays;
for any of the services which it provides except for influenza vaccines for which no
copays may be charged.
The Medicare cost plan may impose annual, semi-annual, quarterly, monthly or any other
periodic limits on the Optional Supplemental Benefits it offers its enrollees provided
these limits are not prohibited by State law.
The Medicare cost plan may not impose caps on any Medicare covered benefit unless
original Medicare also imposes a cap (for example, the 100-day limit on SNF benefits).
The deductibles and coinsurances may be paid by or on behalf of the enrollee in the form
of a:
• 	Premium;
• 	Membership fee;
• 	Charge per unit; or
• 	Other similar charge.
(42 CFR 417.454) The Medicare cost plan must agree to charge its Medicare enrollees
only for the:
• 	Deductible and coinsurance amounts applicable to furnished Medicare covered
services;
• 	Premium and cost-sharing charges for services offered as supplemental benefits
provided that the sum of the amounts the Medicare cost plan charges its Medicare
enrollees for these services does not exceed the actuarial value for those services
(42 CFR 417.452(d)(3));
• 	Charges for services not covered under the plan; and
• 	Services for which Medicare is not the primary payer if payment for the services
has been made to the enrollee (42 CFR 417.528(b)(2)).
40.2 - Refunds and Recoupment

(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR 417.456(b)) A Medicare cost plan must agree to refund all amounts incorrectly
collected from its Medicare enrollees, or from others on behalf of the enrollees, and any
other amounts due the enrollees or others on their behalf.
(42 CFR 417.456(a)) Amounts incorrectly collected means amounts collected that are
in excess of those due to:
• 	Deductibles;
• 	Coinsurances;
• 	Non-covered Medicare services (which are not supplemental benefits);
• 	Services for which Medicare is not the primary payer; or
• 	Supplemental benefit premiums and copays.
Amounts incorrectly collected include amounts collected when the enrollee was
believed not entitled to Medicare benefits, and the services were furnished while the
person was enrolled in the cost plan, if the enrollee is later determined, upon appeal, to
have been entitled to Medicare benefits and CMS is liable for these payments.
Other amounts due means amounts due a Medicare enrollee for services obtained
outside the Medicare cost plan if they were:
• 	Emergency services;
• 	Urgently needed services for which the Medicare cost plan has assumed financial
responsibility; or
• 	On appeal, found to be services the enrollee was entitled to have furnished by the
Medicare cost plan.
In general a Medicare cost plan may make payments to enrollees either in the form of
lump sum payments, premium adjustment, or both.
40.3 - Refunds by Lump Sum Payments

(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR 417.456(c)) A Medicare cost plan must make refunds to its current and former
Medicare enrollees, or to others who have made payments on behalf of enrollees, by
lump sum payment for the following:
• 	Incorrectly collected amounts that were not collected as premiums;
• 	Other amounts due; and
• 	All amounts due, if the Medicare cost plan is going out of business.
40.4 - Refund by Premium Adjustment or Lump Sum Payment or Both
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
A Medicare cost plan may make refund by adjustment of future premiums, by lump sum
payment, or by a combination of both methods, for:
• 	Amounts that were incorrectly collected in the form of premiums; or
• 	For amounts that were incorrectly collected through a combination of premium
payments and other charges.
If an enrollee has died or cannot be located after reasonable effort by the Medicare cost
plan, the Medicare cost plan must make the refund in accordance with State law.
If the Medicare cost plan does not make refunds in accordance with the above payment
methods by the end of the contract period following the contract period during which an
amount was determined to be due an enrollee, CMS reduces its payment to the Medicare
cost plan by the amounts incorrectly collected or otherwise due, and arranges for those
amounts to be paid to the Medicare enrollee.
40.5 - Recoupment
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR 417.458) A Medicare cost plan agrees not to recoup deductible and coinsurance
amounts for which Medicare enrollees were liable in a previous contract period except in
the following circumstances:
• 	The Medicare cost plan failed to collect the deductible and coinsurance amounts
during the contract period in which they were due because of:

o 	Underestimation of the actuarial value of the deductible and coinsurance
amounts; or
o 	A billing error;
• 	The Medicare cost plan has identified the amounts and obtained advance CMS
approval of the recoupment and the method and timing of recoupment;
• 	The Medicare cost plan collects these amounts no later than the end of the
contract period following the contract period during which they were found to be
due.
50 - Out-of-Area, Out-of-Network and Extended Absence
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
Services obtained from non-network providers (when not referred) are covered under the
Fee-For-Service program (and thus subject to Medicare Fee-For-Service coinsurance and
deductible requirements), unless they are emergency or urgently needed services. For
emergency or urgently needed services the Medicare cost plan is liable for
reimbursement and the contracted member cost sharing applies. Emergency and urgently
needed services are defined in §10.2 of this subpart.
As discussed in further detail in the enrollment section of this chapter Medicare cost
plans must disenroll an individual if that individual has permanently moved from the
Medicare cost plan’s geographic area. An uninterrupted absence of 90 days is deemed to
be a permanent move and the individual must be disenrolled unless the Medicare cost
plan offers an extended absence option (42 CFR 417.460).
A Medicare cost plan that chooses to offer an extended absence option may retain
members who temporarily (more than 90 days but less than one year) leave the
geographic area but remain in the United States either:
• 	By paying for all covered services for such members based on mutually agreeable
restrictions; or
• 	By providing services through an affiliated organization (42 CFR 417.460(f)(2)).
(42 CFR 417.460(f)(2)(ii)-(iii)) A Medicare cost plan that chooses to exercise this
exception must make the option available to all Medicare enrollees who are absent for an
extended period from their geographic areas. However, a Medicare cost plan may limit
this option to enrollees who go to a geographic area served by an affiliated Medicare cost
plan.

When a Medicare cost plan offers an extended absence option it must provide all Part A
and Part B services; however, non-Part D supplemental benefits may be discontinued on
leaving the geographic area as long as the member is not required to continue paying the
premium or portion of a premium that corresponds to these services.
60 - Cost Employer Group Health Plans (EGHP)
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR.440(b)) In general, since enrollment in a Medicare cost plan is at the
organizational (not the plan) level, therefore, all enrollees of Medicare cost plan must
receive the same basic package for the same cost-sharing or copayment amounts.
However, employer groups can negotiate privately an EGHP on behalf of employer
group members. An EGHP:
• 	May elect only some, but not all of the optional supplemental benefits offered by
Medicare cost plan for its members;
• 	May “buy-down” premium and cost-sharing for its members; and
• 	May negotiate for benefits not covered by Medicare. Such privately negotiated
non-Medicare benefits (with their associated premiums and copays) are deemed
“outside” the CMS Medicare contract.
70 - Medicare Secondary Payer
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
70.1 - The Basic Rule
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The rules for Medicare Secondary payer are covered with computational detail in
Chapter 17B of the Medicare Managed Care Manual. The following also apply to
Medicare cost plans:
70.2 - Collection From GHPs and LGHPs
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
When a Medicare Cost Plan is the secondary payer to an employer group health plan, the
coordination of benefits occurs in the aggregate through the cost report process. This
process results in a copayment as part of the Medicare cost plan benefit package for
which every enrollee is liable. Therefore, there is no coordination of benefits on a

beneficiary-specific basis that would relieve an enrollee with employer group health plan
coverage of his or her cost sharing obligation under the Medicare cost plan. As a result,
the enrollee remains liable for payment of the Medicare cost plan’s cost sharing
regardless of whether Medicare is primary or secondary. However, under 42 CFR
417.454, which addresses beneficiary financial protection contained in the contract
between the Medicare cost plan and CMS, the Medicare cost plan is responsible for
relieving the beneficiary of responsibility for payment of health care costs other than cost
sharing, and therefore, the Medicare cost plan must relieve the enrollee of his or her
liability under the terms of the employer group health plan.
For example, if the employer group health plan (the primary payer) has a copayment of
$20 and the Medicare cost plan has a copayment of $10 for the service the beneficiary
received, the beneficiary cannot be liable to pay more than the plan copayment of $10.
The Medicare cost plan must absolve the beneficiary of the liability for any amount in
excess of the plan copayment of $10.
70.3 - MSP Rules and State Laws
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The following guidelines govern the imposition of taxes on payments related to Cost
plans.
Payments by CMS, for the reasonable costs of cost plans, for covered Medicare Part A
and B services, under an §1876 cost contract, do not technically represent a premium,
but rather a reimbursement, under the Medicare program, for benefits to which Medicare
enrollees are entitled. Therefore States cannot impose a premium tax on these payments.
Non-Part D Premiums charged to cost plan members for the actuarial value of fee-for-
service deductibles and coinsurance are properly construed as premiums and would be
correctly subject to State taxes.
For premiums related to the Part D offering of a cost plan, there is specific preemption
and waiver of State taxes. See Chapter 17b of the Medicare Managed Care Manual,
§410 - Taxes Assessed Against the Medicare cost plan. Also see the preamble to Subpart
J, 70 FR January 28, 2005.
(70 FR 4666, Jan 28. 2005) Other than the specific preemption authority related to the
Part D benefits offered by a cost plan, there is no specific preemption authority provided
to cost plans. Therefore, to the extent State law does not invalidate or conflict with
Federal law and regulation related to cost plans, States have the authority to require
compliance with applicable State authority.

80 - National Coverage Determinations and Legislative Changes in
Benefits
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
80.1 - Definitions
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(Chapter 4, §90 of the Medicare Managed Care Manual) A National Coverage
determination (NCD) is a determination by CMS about whether or not a particular item
or service is covered nationally under Medicare. A Medicare cost plan must comply with
all NCDs.
A legislative change in benefits refers to new Medicare coverage of an item or service
mandated by the Congress.
80.2 - General Rules
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
Medicare coverage policies specify which benefits are provided under the Medicare
program and under what circumstances (including the clinical criteria under which the
item or service must be provided). Medicare coverage policies have several sources:
1. 	National coverage determinations made by CMS;
2. 	Other coverage guidelines and instructions issued by CMS (e.g., Program
Memoranda and Program Transmittals);
3. 	Legislative changes in benefits; and
4. 	Local medical review policies established by Medicare contractors for local areas.
As indicated in §10.1 of this subpart Medicare cost plans must provide all Medicare-
covered benefits. Consequently, Medicare cost plans, must furnish, arrange, or pay for
all new NCDs and legislative changes as soon as they take effect. This is true
independent of whether the NCD or legislative change meets a criterion for significant
cost. A determination of significant cost has no relevance to the Medicare cost plan
program. For these services or benefits, the Medicare enrollee will be responsible for
Medicare cost plan cost sharing as approved by CMS. The costs incurred by the
Medicare cost plan for furnishing of these benefits may be included on their annual cost
report.
80.3 - Sources for Obtaining Information

(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
In an effort to make the coverage process more open, understandable, and predictable,
CMS has redesigned its Medicare coverage process. Part of the redesign includes using
the Internet to inform interested parties about how national coverage determinations are
made and the progress of each issue under coverage review.
• 	The Medicare Coverage Homepage
The Medicare Coverage Homepage, located at http://cms.hhs.gov/coverage/ has
links that:
o 	Provide a listing of all National Coverage Determinations; and
o 	Enable you to Search the Database.
Both pending and closed coverage determinations are listed. For each coverage
topic CMS provides a staff name and e-mail link so interested parties can use the
Internet to send questions and to provide feedback.
• 	The NCD Manual:
The Medicare National Coverage Determinations Manual, Pub. 100-3, is the
primary record of Medicare national coverage policies, and includes a discussion
of the circumstances under which items and services are covered. This manual
may be accessed at http://cms.hhs.gov/manuals/103_cov_determ.
• 	Program Transmittals
Additional information on new coverage can be found in the Program
Transmittals that transmit CMS’ new policies and procedures. Links to the
Program Transmittals may be found at http://cms.hhs.gov/manuals/transmittals.
90 - Discrimination Against Beneficiaries Prohibited
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
90.1 - General Prohibition

(Chapter 4, §100 of the Medicare Managed Care Manual) Except for not enrolling most
individuals who have been medically determined to have end-stage renal disease, and
except for not enrolling enrollees who have already elected hospice, a Medicare cost plan
may not deny, limit, or condition the coverage or furnishing of benefits to individuals
eligible to enroll in Medicare cost plan on the basis of any factor that is related to health
status, including, but not limited to the following:
• 	Medical condition, including mental, as well as physical illness;
• 	Claims experience;
• 	Receipt of health care;
• 	Medical history;
• 	Genetic information;
• 	Evidence of insurability, including conditions arising out of acts of domestic
violence; and
• 	Disability.
An individual who develops end-stage renal disease while enrolled in a health plan
offered by the Medicare cost plan organization, is eligible to elect a cost plan. For
additional guidance on eligibility and enrollment see Chapter 17d of this manual,
“Medicare Cost Plan Enrollment and Disenrollment Instructions.”
90.2 - Additional Requirements
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
A Medicare cost plan is also required to observe the provisions of the Civil Rights Act,
Age Discrimination Act, Rehabilitation Act of 1973, and Americans with Disabilities
Act.
90.3 - A Medicare Cost Plan’s Responsibility
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
A Medicare cost plan must ensure that they have procedures in place to ensure that
members are not discriminated against in the delivery of health care services consistent
with the benefits covered in their policy based on race, ethnicity, national origin, religion,
sex, age, mental or physical disability, sexual orientation, genetic information, or source
of payment.

100 - Disclosure Requirements
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR 417.436) A Medicare cost plan must offer its plan to Medicare beneficiaries
and provide to those interested in enrolling, adequate written descriptions of the Medicare
cost plan’s rules, procedures, benefits, fees and other charges, services, and other
information necessary for beneficiaries to make an informed decision about enrollment.
The Medicare cost plan must furnish a copy of the rules to each Medicare enrollee at the
time of enrollment and at least annually thereafter. If a Medicare cost plan changes its
rules, it must submit the changes to CMS in accordance with proper procedure and notify
its Medicare enrollees of the changes at least 30 days before the effective date of the
changes.
A Medicare cost plan must maintain written rules that deal with, but need not be limited
to the following:
• 	All benefits provided under the contract;
• 	To the extent the plan offers Part D as an MA-PD plan, the information at 42
CFR 423.128;
• 	How and where to obtain services from or through the Medicare cost plan;
• 	The restrictions on coverage for services furnished from sources outside the
Medicare cost plan, other than emergency services and urgently needed services;
• 	The obligation of the Medicare cost plan to assume financial responsibility and
provide reasonable reimbursement for emergency services and urgently needed
services;
• 	Any services other than the emergency or urgently needed services that the
Medicare cost plan chooses to provide from sources outside the Medicare cost
plan;
• 	The fact that the enrollee may receive services through any Medicare provider and
supplier at Medicare cost-sharing levels;
• 	Premium information, including the amount (or if the amount cannot be included,
the telephone number of the source from which this information may be obtained)
and the procedures for paying premiums and other charges for which enrollees
may be liable;
• 	Grievance and appeal procedures;
• 	Disenrollment rights;

• 	The obligation of an enrollee who is leaving the Medicare cost plan’s geographic
area for more than 90 days to notify the Medicare cost plan of the move or
extended absence and the Medicare cost plan’s policies concerning retention of
enrollees who leave the geographic area for more than 90 days;
• 	The expiration date of the Medicare contract with CMS and notice that both CMS
and the Medicare cost plan are authorized by law to terminate or refuse to renew
the contract, and that termination or nonrenewal of the contract may result in
termination of the individual’s enrollment in the Medicare cost plan;
• 	Advance directives (see §130 below); and
• 	Any other matters that CMS may prescribe.
For further information on disclosure see the subpart of this chapter that deals with
Marketing materials.
110 - Confidentiality and Records
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
General Rule
For any medical records or other health and enrollment information it maintains with
respect to enrollees, a Medicare cost plan must establish procedures to do the following:
• 	Abide by all Federal and state laws regarding confidentiality and disclosure of
medical records, or other health and enrollment information. The Medicare cost
plan must safeguard the privacy of any information that identifies a particular
enrollee and have procedures that specify:
o 	For what purposes the information will be used within the organization
and
o 	To whom and for what purposes it will disclose the information outside
the organization;
• 	Ensure that medical information is released only in accordance with applicable
Federal or state law, or pursuant to court orders or subpoenas;
• 	Maintain the records and information in an accurate and timely manner; and
• 	Ensure timely access by enrollees to the records and information that pertains to
them.

120 - Availability, Accessibility, and Continuity
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
120.1 - The Basic Rule
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(42 CFR 417.416 supplemented with material from the Medicare Managed Care Manual)
The Medicare cost plan must ensure that the:
• 	Basic required services; and
• 	Any other optional supplemental services;
for which the Medicare enrollee has contracted are:
• 	Available;
• 	Accessible; and
• 	Furnished in a manner that ensures continuity.
120.2 - Certification
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The Medicare cost plan must furnish the required services to its Medicare enrollees
through providers and suppliers that meet applicable Medicare statutory definitions and
implementing regulations.
• 	Hospitals, SNFs, HHAs, CORFs, and providers of outpatient physical therapy or
speech-language pathology services must meet the applicable conditions of
participation in Medicare;
• 	Suppliers must meet the conditions for coverage or conditions for certification of
their services;
• 	If more than one type of practitioner is qualified to furnish a particular service, the
Medicare cost plan may select the type of practitioner to be used.
120.3 - Provider Adequacy

(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The provider networks for Medicare enrollees must be sufficient to deliver both:
• 	Inpatient; and
• 	Outpatient services;
for both:
• 	Primary; and
• 	Specialty services;
to both:
• 	Current; and
• 	Expected Medicare members.
The obligation on the Medicare cost plan to provide services remains even if there is a
loss of providers in a portion of the geographic area. Medicare cost plans must inform
members, in writing, 30 days before a physician or supplier terminates affiliation.
120.4 - Availability
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
Generally, a Medicare cost plan is obligated to provide all Medicare covered services,
even if Medicare certified facilities are not available in the geographic area. For example,
if Fee-For-Service beneficiaries commonly seek services in another town outside the
geographic area then the Medicare cost plan must provide these services to its enrollees
in a similar manner.
120.5 - Accessibility
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The Medicare cost plan must ensure that the required services and any other services for
which Medicare enrollees have contracted are accessible, with reasonable promptness, to
the enrollees with respect to:
• 	Geographic location;
• 	Hours of operation;

• 	Provision of after hours service; and
• 	Medically necessary emergency services must be available twenty-four hours a
day, seven days a week.
A general rule of thumb is the 30-30 rule that asserts that services must be available
either within 30 miles of an enrollee’s residence or within 30 minutes travel time.
Exceptions however may be made if usual travel patterns for Fee-For-Service
beneficiaries in parts of the geographic area exceed these amounts (as happens for
example, in rural areas).
The Medicare cost plan must have systems in place to collect data and evaluate the
availability and accessibility of services provided or arranged for by the Medicare cost
plan. Some typical factors that are evaluated are:
• 	Waiting times;
• 	Member complaints;
• 	Emergency and urgent care;
• 	Requests for changes of primary care physicians;
• 	Physician requests to close their practice to new patients;
• 	Referrals; and
• 	Back-up arrangements.
120.6 - Continuity of Care
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
Continuity of care refers to the continuous flow of care in a timely and appropriate
manner. Continuity includes:
• 	Linkages between primary and specialty care;
• 	Coordination among specialists;
• 	Appropriate combinations of prescribed medications;
• 	Coordinated use of ancillary services;
• 	Appropriate discharge planning; and

• 	Timely placement at different levels of care including hospital, skilled nursing
and home health care.
(42 CFR 417.407(f), 42 CFR 417.122(b)) In the case of insolvency the HMO must
continue to provide benefits to all enrollees for the duration of the contract period for
which payment was made.
120.7 - Recordkeeping
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The Medicare cost plan must maintain a health (including medical) recordkeeping system
through which pertinent information relating to the health care of its Medicare enrollees
is accumulated and is readily available to appropriate professionals.
130 - Information on Advance Directives
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
(Chapter 4, §160 of the Medicare Managed Care Manual)
130.1 - Definition
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
Advance directives are written instructions, such as living wills or durable powers of
attorney for health care, recognized under state law and signed by a patient, that explain
the patient’s wishes concerning the provision of health care if the patient becomes
incapacitated and is unable to make those wishes known.
130.2 - The Basic Rule
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The Medicare cost plan must:
• 	Maintain written policies and procedures that meet the requirements for advance
directives that are set forth in this section; and
• 	Provide to its adult enrollees, at the time of initial enrollment, written information
on their rights under the law of the state in which the Medicare cost plan
furnishes services to make decisions concerning their medical care, including the
right to accept or refuse medical or surgical treatment, and the right to formulate
advance directives.

The Medicare cost plan is permitted to contract with other entities to furnish information
concerning advance directive requirements. However, the organization remains legally
responsible for ensuring that the requirements of this section are met. The details of what
written information must be given to the enrollee as well as other obligations of the
Medicare cost plan are outlined below.
130.3 - State Law Primary
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The Medicare cost plan program’s advance directive requirements, which Fee-For-
Service providers have been following for some years, are guidelines, which refer to state
law, whether statutory or recognized by the courts of the State. Therefore, Medicare cost
plans must comply with the advance directive requirements of the states in which they
provide services. The CMS cannot give detailed guidelines as to what constitutes best
efforts in each state. Medicare regulations give Medicare cost plans and states a great
deal of flexibility, and CMS is prepared to work with the HMO and CMP (and the state,
if needed) to ensure that advance directive requirements conform to Federal law.
Changes in State law must be reflected in the information HMOs and CMPs provide their
enrollees as soon as possible, but no later than 90 days after the effective date of the state
law or the date of the court order.
130.4 - Content of Enrollee Information and Other Medicare cost plan
Obligations
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The written information provided to enrollees must, at a minimum, include a description
of the Medicare cost plan’s written policies on advance directives including an
explanation of the following:
• 	That the organization cannot refuse care or otherwise discriminate against an
individual based on whether or not the individual has executed an advance
directive;
• 	The right to file a complaint about an organization’s noncompliance with advance
directive requirements, and where to file the complaint;
• 	That the plan must document in a prominent part of the individual’s current
medical record whether or not the individual has executed an advance directive;
• 	That the Medicare cost plan is required to comply with State law;

• 	That the Medicare cost plan must educate its staff about its policies and
procedures for advance directives; and
• 	That the Medicare cost plan must provide for community education regarding
advance directives.
If the Medicare cost plan cannot implement an advance directive as a matter of
conscience, it must issue a clear and precise written statement of this limitation. The
statement must include information that:
• 	Explains the differences between institution-wide objections based on conscience
and those that may be raised by individual physicians;
• 	Identifies the state legal authority permitting such objection; and
• 	Describes the range of medical conditions or procedures affected by the
conscience objection.
130.5 - Incapacitated Enrollees
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
If an enrollee is incapacitated at the time of initial enrollment and is unable to receive
information due to an incapacitating condition, the Medicare cost plan may give advance
directive information to the enrollee’s family or surrogate.
The Medicare cost plan is not relieved of its obligation to provide this information to the
enrollee once he or she is no longer incapacitated or unable to receive such information.
Follow-up procedures must be in place to ensure that the information is given to the
individual directly at the appropriate time.
130.6 - Community Education Requirements
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The Medicare cost plan must provide for community education regarding advance
directives either directly or in concert with other providers or entities. Separate
community education materials may be developed and used, at the discretion of the
Medicare cost plan, for separate parts of the community. Although the same written
materials are not required for all settings, the material should define what constitutes an
advance directive, emphasizing that an advance directive is designed to enhance an
incapacitated individual’s control over medical treatment, and describe applicable state
law concerning advance directives. A Medicare cost plan must be able to document its
community education efforts.
130.7 - Medicare Cost Organization Rights

(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
The Medicare cost plan is not required to provide care that conflicts with an advance
directive. The Medicare cost plan is not required to implement an advance directive if, as
a matter of conscience, the Medicare cost plan cannot implement an advance directive
and state law allows any health care provider or any agent of the provider to
conscientiously object.
130.8 - Appeal and Anti-Discrimination Rights
(Rev. 77, Issued: 10-28-05, Effective Date: 10-28-05)
A Medicare cost plan may not condition the provision of care or otherwise discriminate
against an individual based on whether or not the individual has executed an advance
directive. Furthermore, the Medicare cost plan must inform individuals that complaints
concerning noncompliance with the advance directive requirements may be filed with the
State Survey and Certification Agency.