42 U.S.C. § 1395w-27
The Secretary shall not permit the election under section 1395w-21 of this title of a Medicare+Choice plan offered by a Medicare+Choice organization under this part, and no payment shall be made under section 1395w-23 of this title to an organization, unless the Secretary has entered into a contract under this section with the organization with respect to the offering of such plan. Such a contract with an organization may cover more than 1 Medicare+Choice plan. Such contract shall provide that the organization agrees to comply with the applicable requirements and standards of this part and the terms and conditions of payment as provided for in this part.
Subject to paragraph (2), the Secretary may not enter into a contract under this section with a Medicare+Choice organization unless the organization has-
In applying paragraph (1) in the case of a Medicare+Choice organization that is offering an MSA plan, paragraph (1) shall be applied by substituting covered lives for individuals.
The Secretary may waive the requirement of paragraph (1) during the first 3 contract years with respect to an organization.
Each contract under this section shall be for a term of at least 1 year, as determined by the Secretary, and may be made automatically renewable from term to term in the absence of notice by either party of intention to terminate at the end of the current term.
In accordance with procedures established under subsection (h), the Secretary may at any time terminate any such contract if the Secretary determines that the organization-
The effective date of any contract executed pursuant to this section shall be specified in the contract, except that in no case shall a contract under this section which provides for coverage under an MSA plan be effective before January 1999 with respect to such coverage.
The Secretary may not enter into a contract with a Medicare+Choice organization if a previous contract with that organization under this section was terminated at the request of the organization within the preceding 2-year period, except as provided in subparagraph (B) and except in such other circumstances which warrant special consideration, as determined by the Secretary.
Subparagraph (A) shall not apply with respect to the offering by a Medicare+Choice organization of a Medicare+Choice plan in a Medicare+Choice payment area if during the 6-month period beginning on the date the organization notified the Secretary of the intention to terminate the most recent previous contract, there was a legislative change enacted (or a regulatory change adopted) that has the effect of increasing payment amounts under section 1395w-23 of this title for that Medicare+Choice payment area.
The authority vested in the Secretary by this part may be performed without regard to such provisions of law or regulations relating to the making, performance, amendment, or modification of contracts of the United States as the Secretary may determine to be inconsistent with the furtherance of the purpose of this subchapter.
The Secretary shall provide for the annual auditing of the financial records (including data relating to medicare utilization and costs, including allowable costs under section 1395w-27a(c) of this title) of at least one-third of the Medicare+Choice organizations offering Medicare+Choice plans under this part. The Comptroller General shall monitor auditing activities conducted under this subsection.
Each contract under this section shall provide that the Secretary, or any person or organization designated by the Secretary-
Each contract under this section shall require the organization to provide (and pay for) written notice in advance of the contract's termination, as well as a description of alternatives for obtaining benefits under this subchapter, to each individual enrolled with the organization under this part.
Each Medicare+Choice organization shall, in accordance with regulations of the Secretary, report to the Secretary financial information which shall include the following:
The Secretary may require that information reported respecting an organization which controls, is controlled by, or is under common control with, another entity be in the form of a consolidated financial statement for the organization and such entity.
For the purposes of this paragraph, the term "party in interest" means-
Each Medicare+Choice organization shall make the information reported pursuant to subparagraph (A) available to its enrollees upon reasonable request.
The contract shall require the organization to notify the Secretary of loans and other special financial arrangements which are made between the organization and subcontractors, affiliates, and related parties.
In conjunction with the periodic audit of a specialized Medicare Advantage plan for special needs individuals under paragraph (1), the Secretary shall conduct a review to ensure that such organization offering the plan meets the requirements described in section 1395w-28(f)(5) of this title.
The contract shall contain such other terms and conditions not inconsistent with this part (including requiring the organization to provide the Secretary with such information) as the Secretary may find necessary and appropriate.
A Medicare+Choice organization and a PDP sponsor under part D shall pay the fee established by the Secretary under subparagraph (B).
The Secretary is authorized to charge a fee to each Medicare+Choice organization with a contract under this part and each PDP sponsor with a contract under part D that is equal to the organization's or sponsor's pro rata share (as determined by the Secretary) of the aggregate amount of fees which the Secretary is directed to collect in a fiscal year. Any amounts collected shall be available without further appropriation to the Secretary for the purpose of carrying out section 1395w-21 of this title (relating to enrollment and dissemination of information), section 1395w-101(c) of this title, and section 1395b-4 of this title (relating to the health insurance counseling and assistance program).
There are authorized to be appropriated for the purposes described in subparagraph (B) for each fiscal year beginning with fiscal year 2001 and ending with fiscal year 2005 an amount equal to $100,000,000, and for each fiscal year beginning with fiscal year 2006 an amount equal to $200,000,000, reduced by the amount of fees authorized to be collected under this paragraph and section 1395w-112(b)(3)(D) of this title for the fiscal year.
In any fiscal year the fees collected by the Secretary under subparagraph (B) shall not exceed the lesser of-
In this paragraph, the term "Medicare+Choice portion" means, for a fiscal year, the ratio, as estimated by the Secretary, of-
In this paragraph, the term "applicable portion" means, for a fiscal year-
A contract under this section with an MA organization shall require the organization to provide, in any written agreement described in section 1395w-23(a)(4) of this title between the organization and a federally qualified health center, for a level and amount of payment to the federally qualified health center for services provided by such health center that is not less than the level and amount of payment that the plan would make for such services if the services had been furnished by a entity providing similar services that was not a federally qualified health center.
Under the written agreement referred to in subparagraph (A), a federally qualified health center must accept the payment amount referred to in such subparagraph plus the Federal payment provided for in section 1395l(a)(3)(B) of this title as payment in full for services covered by the agreement, except that such a health center may collect any amount of cost-sharing permitted under the contract under this section, so long as the amounts of any deductible, coinsurance, or copayment comply with the requirements under section 1395w-24(e) of this title.
If the Secretary determines for a contract year (beginning with 2014) that an MA plan has failed to have a medical loss ratio of at least .85-
Beginning with plan years beginning on or after January 1, 2021, a contract under this section with an MA organization shall require the organization to submit to the Secretary, through the process established under subparagraph (B), information on the investigations, credible evidence of suspicious activities of a provider of services (including a prescriber) or supplier related to fraud, and other actions taken by such plans related to inappropriate prescribing of opioids.
Not later than January 1, 2021, the Secretary shall, in consultation with stakeholders, establish a process under which MA plans and prescription drug plans shall submit to the Secretary information described in subparagraph (A).
For purposes of this paragraph, including as applied under section 1395w-112(b)(3)(D) of this title, the Secretary shall, pursuant to rulemaking-
A contract under this part shall require a Medicare+Choice organization to provide prompt payment (consistent with the provisions of sections 1395h(c)(2) and 1395u(c)(2) of this title) of claims submitted for services and supplies furnished to enrollees pursuant to the contract, if the services or supplies are not furnished under a contract between the organization and the provider or supplier (or in the case of a Medicare+Choice private fee-for-service plan, if a claim is submitted to such organization by an enrollee).
In the case of a Medicare+Choice eligible organization which the Secretary determines, after notice and opportunity for a hearing, has failed to make payments of amounts in compliance with paragraph (1), the Secretary may provide for direct payment of the amounts owed to providers and suppliers (or, in the case of a Medicare+Choice private fee-for-service plan, amounts owed to the enrollees) for covered services and supplies furnished to individuals enrolled under this part under the contract. If the Secretary provides for the direct payments, the Secretary shall provide for an appropriate reduction in the amount of payments otherwise made to the organization under this part to reflect the amount of the Secretary's payments (and the Secretary's costs in making the payments).
The following provisions shall apply to contracts with a Medicare Advantage organization offering an MA-PD plan in the same manner as they apply to contracts with a PDP sponsor offering a prescription drug plan under part D:
Section 1395w-112(b)(4) of this title.
Section 1395w-112(b)(5) of this title.
Section 1395w-112(b)(6) of this title.
Section 1395w-112(b)(7) of this title.
Section 1395w-112(b)(8) of this title.
If the Secretary determines that a Medicare+Choice organization with a contract under this section-
the Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2). The Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2), if the Secretary determines that any employee or agent of such organization, or any provider or supplier who contracts with such organization, has engaged in any conduct described in subparagraphs (A) through (K) of this paragraph.
The remedies described in this paragraph are-
In the case of a Medicare+Choice organization for which the Secretary makes a determination under subsection (c)(2) the basis of which is not described in paragraph (1), the Secretary may apply the following intermediate sanctions:
The provisions of section 1320a-7a (other than subsections (a) and (b)) of this title shall apply to a civil money penalty under paragraph (2) or (3) in the same manner as they apply to a civil money penalty or proceeding under section 1320a-7a(a) of this title.
The Secretary may terminate a contract with a Medicare+Choice organization under this section in accordance with formal investigation and compliance procedures established by the Secretary under which-
Paragraph (1) shall not apply if the Secretary determines that a delay in termination, resulting from compliance with the procedures specified in such paragraph prior to termination, would pose an imminent and serious risk to the health of individuals enrolled under this part with the organization.
During the period beginning on December 13, 2016, and through the end of plan year 2018, the Secretary may not terminate a contract under this section with respect to the offering of an MA plan by a Medicare Advantage organization solely because the MA plan has failed to achieve a minimum quality rating under the 5-star rating system under section 1395w-23(o)(4) of this title.
To facilitate the offering of Medicare+Choice plans under contracts between Medicare+Choice organizations and employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such Medicare+Choice plans.
To facilitate the offering of MA plans by employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such MA plans. Notwithstanding section 1395w-21(g) of this title, an MA plan described in the previous sentence may restrict the enrollment of individuals under this part to individuals who are beneficiaries and participants in such plan.
1So in original. Probably means subpar. (E) of par.
42 U.S.C. § 1395w-27
EDITORIAL NOTES
AMENDMENTS2022-Subsec. (f)(3)(E). Pub. L. 117-169 added subpar. (E).2018-Subsec. (e)(5). Pub. L. 115-271, §6063(b), added par. (5).Subsec. (f)(3)(D). Pub. L. 115-271, §2008(b), added subpar. (D). 2016-Subsec. (h)(3). Pub. L. 114-255 added par. (3). 2010-Subsec. (d)(2)(A). Pub. L. 111-148, §6408(b)(1)(A), inserted "timely" before "inspect". Subsec. (d)(2)(B). Pub. L. 111-148, §6408(b)(1)(B), inserted "timely" before "audit and inspect".Subsec. (e)(4). Pub. L. 111-152 added par. (4).Subsec. (g)(1). Pub. L. 111-148, §6408(b)(2)(C), inserted at end of concluding provisions "The Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2), if the Secretary determines that any employee or agent of such organization, or any provider or supplier who contracts with such organization, has engaged in any conduct described in subparagraphs (A) through (K) of this paragraph."Subsec. (g)(1)(H) to (K). Pub. L. 111-148, §6408(b)(2), added subpars. (H) to (K).Subsec. (g)(2)(A). Pub. L. 111-148, §6408(b)(3), inserted "except with respect to a determination under subparagraph (E), an assessment of not more than the amount claimed by such plan or plan sponsor based upon the misrepresentation or falsified information involved," after "for each such determination,".2008-Subsec. (d)(6). Pub. L. 110-275, §164(d)(2), added par. (6).Subsec. (f)(3). Pub. L. 110-275, §171(b), added par. (3). Subsec. (f)(3)(B). Pub. L. 110-275, §172(a)(2), added subpar. (B).Subsec. (f)(3)(C). Pub. L. 110-275, §173(b), added subpar. (C). 2003-Subsec. (d)(1). Pub. L. 108-173, §222(l)(3)(C), substituted "and costs, including allowable costs under section 1395w-27a(c) of this title" for ",costs, and computation of the adjusted community rate".Subsec. (d)(4)(A)(ii). Pub. L. 108-173, §900(e)(1)(I), substituted "Secretary" for "Health Care Financing Administration". Subsec. (e)(2)(A). Pub. L. 108-173, §222(k)(1), inserted "and a PDP sponsor under part D" after "organization".Subsec. (e)(2)(B). Pub. L. 108-173, §222(k)(2), inserted "and each PDP sponsor with a contract under part D" after "contract under this part", "or sponsor's" after "organization's", and ",section 1395w-101(c) of this title," after "information)". Subsec. (e)(2)(C). Pub. L. 108-173, §222(k)(3), inserted "and ending with fiscal year 2005" after "beginning with fiscal year 2001", "and for each fiscal year beginning with fiscal year 2006 an amount equal to $200,000,000," after "$100,000,000,", and "and section 1395w-112(b)(3)(D) of this title" after "under this paragraph". Subsec. (e)(2)(D)(i). Pub. L. 108-173, §222(k)(4)(A), inserted "and section 1395w-101(c) of this title" after "section 1395w-21 of this title". Subsec. (e)(2)(D)(ii)(III). Pub. L. 108-173, §222(k)(4)(B), struck out "and" at end.Subsec. (e)(2)(D)(ii)(IV). Pub. L. 108-173, §222(k)(4)(C), substituted "each succeeding fiscal year before fiscal year 2006; and" for "each succeeding fiscal year." Subsec. (e)(2)(D)(ii)(V). Pub. L. 108-173, §222(k)(4)(D), added subcl. (V).Subsec. (e)(2)(F). Pub. L. 108-173, §222(k)(5), added subpar. (F).Subsec. (e)(3). Pub. L. 108-173, §237(c), added par. (3).Subsec. (i). Pub. L. 108-173, §222(j), designated existing provisions as par. (1), inserted heading, and added par. (2).2000-Subsec. (g)(3)(D). Pub. L. 106-554, §1(a)(6) [title VI, §623(a)], added subpar. (D). Subsec. (i). Pub. L. 106-554, §1(a)(6) [title VI, §617(a)], added subsec. (i). 1999-Subsec. (c)(4). Pub. L. 106-113, §1000(a)(6) [title V, §513(b)(1)(B), (C)], designated existing provisions as subpar. (A), inserted heading, realigned margins, and added subpar. (B). Pub. L. 106-113, §1000(a)(6) [title V, §513(a), (b)(1)(A)], substituted "2-year period" for "5-year period" and "except as provided in subparagraph (B) and except in such other circumstances" for "except in circumstances".Subsec. (e)(2)(B). Pub. L. 106-113, §1000(a)(6) [title V, §522(a)(1)], substituted "Any amounts collected shall be available without further appropriation to the Secretary for" for "Any amounts collected are authorized to be appropriated only for". Subsec. (e)(2)(C). Pub. L. 106-113, §1000(a)(6) [title V, §522(a)(2)], amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: "For any fiscal year, the fees authorized under subparagraph (B) are contingent upon enactment in an appropriations act of a provision specifying the aggregate amount of fees the Secretary is directed to collect in a fiscal year. Fees collected during any fiscal year under this paragraph shall be deposited and credited as offsetting collections."Subsec. (e)(2)(D)(ii)(II). Pub. L. 106-113, §1000(a)(6) [title V, §522(a)(3)(A)], struck out "and" after semicolon.Subsec. (e)(2)(D)(ii)(III). Pub. L. 106-113, §1000(a)(6) [title V, §522(a)(3)(B)], substituted ";and" for "and each subsequent fiscal year."Subsec. (e)(2)(D)(ii)(IV). Pub. L. 106-113, §1000(a)(6) [title V, §522(a)(3)(C)], added subcl. (IV).Subsec. (e)(2)(E). Pub. L. 106-113, §1000(a)(6) [title V, §522(a)(4)], added subpar. (E).
STATUTORY NOTES AND RELATED SUBSIDIARIES
CHANGE OF NAME References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of Pub. L. 108-173 set out as a note under section 1395w-21 of this title.
EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115-271, title II, §2008(e), Oct. 24, 2018, 132 Stat. 3931, provided that: "The amendments made by this section [amending this section and sections 1395w-112 and 1395y of this title] shall apply with respect to plan years beginning on or after January 1, 2020."
EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 6408(b)(1) of Pub. L. 111-148 effective Mar. 23, 2010, and amendment by section 6408(b)(2), (3) of Pub. L. 111-148 applicable to acts committed on or after Jan. 1, 2010, see section 6408(d) of Pub. L. 111-148 set out as a note under section 1320a-7 of this title.
EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110-275, title I, §164(g), July 15, 2008, 122 Stat. 2575, provided that: "The amendments made by subsections (c)(1), (d), and (e)(1) [amending this section and section 1395w-28 of this title] shall apply to plan years beginning on or after January 1, 2010, and shall apply to all specialized Medicare Advantage plans for special needs individuals regardless of when the plan first entered the Medicare Advantage program under part C of title XVIII of the Social Security Act [42 U.S.C. 1395w-21 et seq.]." Pub. L. 110-275, title I, §171(c), July 15, 2008, 122 Stat. 2580, provided that: "The amendments made by this section [amending this section and section 1395w-112 of this title] shall apply to plan years beginning on or after January 1, 2010." Pub. L. 110-275, title I, §172(b), July 15, 2008, 122 Stat. 2581, provided that: "The amendments made by this section [amending this section and section 1395w-112 of this title] shall apply to plan years beginning on or after January 1, 2010." Pub. L. 110-275, title I, §173(c), July 15, 2008, 122 Stat. 2581, provided that: "The amendments made by this section [amending this section and section 1395w-112 of this title] shall apply to plan years beginning on or after January 1, 2009."
EFFECTIVE DATE OF 2003 AMENDMENT Amendment by section 222(j), (k), (l)(3)(C) of Pub. L. 108-173 applicable with respect to plan years beginning on or after Jan. 1, 2006, see section 223(a) of Pub. L. 108-173 set out as a note under section 1395w-21 of this title.Amendment by section 237(c) of Pub. L. 108-173 applicable to services provided on or after Jan. 1, 2006, and contract years beginning on or after such date, see section 237(e) of Pub. L. 108-173 set out as a note under section 1320a-7b of this title.
EFFECTIVE DATE OF 2000 AMENDMENT Pub. L. 106-554, §1(a)(6) [title VI, §617(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A-562, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to years beginning with 2001." Pub. L. 106-554, §1(a)(6) [title VI, §623(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A-566, provided that: "The amendment made by subsection (a) [amending this section] shall apply to terminations occurring after the date of the enactment of this Act [Dec. 21, 2000]."
EFFECTIVE DATE OF 1999 AMENDMENT Pub. L. 106-113, div. B, §1000(a)(6) [title V, §513(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A-383, provided that: "The amendments made by this section [amending this section] apply to contract terminations occurring before, on, or after the date of the enactment of this Act [Nov. 29, 1999]." Pub. L. 106-113, div. B, §1000(a)(6) [title V, §522(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A-387, provided that: "The amendments made by subsection (a) [amending this section] apply to fees charged on or after January 1, 2001. The Secretary of Health and Human Services may not increase the fees charged under section 1857(e)(2) of the Social Security Act (42 U.S.C. 1395w-27(e)(2)) for the 3-month period beginning with October 2000 above the level in effect during the previous 9-month period."
CONSTRUCTION RELATING TO ADDITIONAL EXCEPTIONS Pub. L. 106-113, div. B, §1000(a)(6) [title V, §513(b)(2)], Nov. 29, 1999, 113 Stat. 1536, 1501A-383, provided that: "Nothing in the amendment made by paragraph (1)(C) [amending this section] shall be construed to affect the authority of the Secretary of Health and Human Services to provide for exceptions in addition to the exception provided in such amendment, including exceptions provided under Operational Policy Letter #103 (O PL 99.103)."
DELAY IN AUTHORITY TO TERMINATE CONTRACTS FOR MEDICARE ADVANTAGE PLANS FAILING TO ACHIEVE MINIMUM QUALITY RATINGS Pub. L. 114-255, div. C, title XVII, §17001(a), Dec. 13, 2016, 130 Stat. 1330, provided that: "Consistent with the studies provided under the IMPACT Act of 2014 (Public Law 113-185) [see Tables for classification], it is the intent of Congress-"(1) to continue to study and request input on the effects of socioeconomic status and dual-eligible populations on the Medicare Advantage STARS rating system before reforming such system with the input of stakeholders; and "(2) pending the results of such studies and input, to provide for a temporary delay in authority of the Centers for Medicare & Medicaid Services (CMS) to terminate Medicare Advantage plan contracts solely on the basis of performance of plans under the STARS rating system."
TECHNICAL CORRECTION TO MA PRIVATE FEE-FOR-SERVICE PLANS Pub. L. 111-148, title III, §32073207,, 124 Stat. 459, provided that: "For plan year 2011 and subsequent plan years, to the extent that the Secretary of Health and Human Services is applying the 2008 service area extension waiver policy (as modified in the April 11, 2008, Centers for Medicare & Medicaid Services' memorandum with the subject '2009 Employer Group Waiver-Modification of the 2008 Service Area Extension Waiver Granted to Certain MA Local Coordinated Care Plans') to Medicare Advantage coordinated care plans, the Secretary shall extend the application of such waiver policy to employers who contract directly with the Secretary as a Medicare Advantage private fee-for-service plan under section 1857(i)(2) of the Social Security Act (42 U.S.C. 1395w-27(i)(2)) and that had enrollment as of October 1, 2009."
STUDY OF MULTI-YEAR CONTRACTS Pub. L. 108-173, title I, §107(d), Dec. 8, 2003, 117 Stat. 2171, directed the Secretary of Health and Human Services to provide for a study on the feasibility and advisability of providing for contracting with PDP sponsors and MA organizations under this part and part D of this subchapter on a multi-year basis, and to submit to Congress a report on such study not later than Jan. 1, 2007.
IMMEDIATE EFFECTIVE DATE FOR CERTAIN REQUIREMENTS FOR DEMONSTRATIONS Pub. L. 105-33, title IV, §4002(g), Aug. 5, 1997, 111 Stat. 330, provided that: "Section 1857(e)(2) of the Social Security Act [42 U.S.C. 1395w-27(e)(2)] (requiring contribution to certain costs related to the enrollment process comparative materials) applies to demonstrations with respect to which enrollment is effected or coordinated under section 1851 of such Act [42 U.S.C. 1395w-21] ."
- Secretary
- The term "Secretary" means the Secretary of Housing and Urban Development.1See References in Text note below.
- United States
- The term "United States" means (but only for purposes of subparagraphs (A) and (B) of this paragraph) the fifty States and the District of Columbia.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- owner
- The term "owner" means, with respect to federally assisted housing, the entity or private person, including a cooperative or public housing agency, that has the legal right to lease or sublease dwelling units in such housing.
- person
- The term "person" means an individual, a trust or estate, a partnership, or a corporation.