Laws And Regulations

Medicare Modernization Act

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 was signed into law on December 8, 2003. Title I of the MMA establishes a new voluntary outpatient prescription drug benefit under Part D of title XVIII of the Social Security Act (the Act). The prescription drug benefit, referred to as Medicare Part D, as well as an employer subsidy for qualified retiree health plans, became effective on January 1, 2006.

Select the links below to access additional information about the MMA. 

Full text of MMA.

Social Security Act

The Social Security Act (the Act) was enacted into law in 1935, and has had numerous amendments since its inception. One of these amendments was the addition of Title XVIII, Health Insurance for the Aged and Disabled. Part D in Title XVIII is the legislation that sets forth the Medicare prescription drug benefit.

Select this Title XVIII link to navigate to Part D laws specific to the Medicare Prescription Drug Benefit.

Part D Final Rule

The final rule implements the provisions of the Act establishing the Medicare Prescription Drug Benefit by promulgating regulations that further describe the benefit. The final rule was issued on January 28, 2005 and went into effect on March 22, 2005. The final rule is comprised of:

  1. the Preamble, which is a collection of questions/comments/concerns from the industry and other interested parties, and CMS’s responses, and,
  2. the regulations that implement the Part D law. There is a wealth of information in the Preamble that will assist Plans in understanding the law and rules for Part D.

Select this Part D Final Rule link to read this rule

42 CFR Part 423

These are the regulations that implement the laws for the Medicare Prescription Drug Benefit. The regulations are in Title 42 of the Code of Federal Regulations.

Part 423 is organized into the following subparts:

  • Subpart A – General Provisions
  • Subpart B – Eligibility, Election and Enrollment
  • Subpart C – Benefits and Beneficiary Protections
  • Subpart D – Drug Utilization Management, Quality Assurance, and Medication Therapy Management
  • Subpart F – Submission of Bids, Premiums and Related Information and Plan Approval
  • Subpart G – Payments to PDP and MAPD Plans
  • Subpart I – Organization Compliance with State Law and Preemption By Federal Law
  • Subpart J – Coordination with Plans and Programs that Offer Prescription Drug Coverage
  • Subpart K – Application Procedures and Contracts with Part D Sponsors
  • Subpart L – Effects of Change of Ownership or Leasing Facilities
  • Subpart M – Grievances, Coverage Determinations and Appeals
  • Subpart P – Premiums and Cost-Sharing Subsidies for Low-Income Individuals
  • Subpart Q – Fallback Plans
  • Subpart R – Payments to Sponsors of Retiree Prescription Drug Plans
  • Subpart S – Special Rules for States-Eligibility Determinations for Low-Income Subsidies
  • Subpart T – Conforming Changes to Other Regulations
  • Subpart U – Reopening, ALJ Hearings, MAC Review and Judicial Review

Select the following links to access the complete Federal Register for 42 CFR Parts 400403411417422 and  423 of the Medicare Prescription Drug Benefit.

Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance

The CMS Online Manual System is used by CMS program components, partners, contractors, and State Survey Agencies to administer CMS programs.  It offers day-to-day operating instructions, policies, and procedures based on statutes and regulations, guidelines, models, and directives. They are also a good source for Medicare and Medicaid information for the general public. In 2003, CMS transformed the CMS Program Manuals into a web user-friendly presentation and renamed it the CMS Online Manual System.  The following link provides access to the Internet Only Manuals (IOMs). These manuals are an exact replica of the agency’s official record copy. To explore the IOMs, please visit the link below on the CMS website. 


The Prescription Drug Benefit Manual provides in-depth information on the appeals process for Medicare Part D. It provides definitions for commonly used terms, outlines the responsibilities of Part D Plans, and discusses grievances, Coverage Determinations and subsequent appeals handled by Plans, the Part D QIC, ALJs and the MAC.

Select this link to access Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance.

Medicare Prescription Drug Benefit Manual Chapter 6: Part D Drugs and Formulary Requirements

Coverage of Drugs under Medicare Part B vs. Medicare Part D

Chapter 6 of the Medicare Prescription Drug Benefit Manual, entitled “Part D Drugs and Formulary Requirements,” provides guidance regarding the limits on Medicare Part D coverage, the formulary requirements for Part D plans, and requirements for enrollee access to covered Part D drugs. The link below provides the reader with guidance regarding coverage issues associated with Medicare Part B versus Part D coverage for prescription drugs. Chapter 6 Appendix C Attachment I provides a table for quick and easy reference of Part B versus Part D coverage issues in a variety of settings and under a variety of payment methodologies. In addition, Chapter 6 Appendix C Attachment II provides a summary of coverage issues in the form of frequently asked questions regarding coverage availability under Part A or Part B versus exclusion or coverage under Part D.


Medicare Prescription Drug Benefit Manual Chapter 6: Excluded From Part D Categories:. (See Section 20.1 in Chapter 6).

This link provides detailed guidance as to what drugs are either included or excluded from Medicare Part D coverage based on specific products/drugs/drug categories in accordance with statutory and regulatory requirements for Part D drugs. Section 20.1 of Chapter 6 does not contain a complete list of all drugs that are excluded or included from Part D coverage. Instead, a table is available in Appendix B of Chapter 6 that provides Part D coverage clarification based on specific products/drugs/drug categories that have been the subject of frequently asked questions. (See Appendix B). Please note, benzodiazepines and barbiturates are no longer excluded from Medicare Part D coverage. (See Section 20.1 and Drugs Not Excluded from Part D Coverage).


Health Insurance Portability and Accountability Act of 1996 (HIPAA)

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 was passed to provide consumers with increased access to health care insurance, to protect the privacy of health care data, and to promote efficiency in the health care industry. A major component of HIPAA addresses the privacy of individuals’ health information by establishing a federal standard concerning the privacy of health information and how it can be used and disclosed. This federal standard generally preempts all state privacy laws except for those that are more stringent. The HIPAA privacy laws became effective on April 14, 2003.

HIPAA privacy standards apply to health information created or maintained by health care providers who engage in certain electronic transactions, health plans, and health care clearinghouses. Developed by the Department of Health and Human Services (HHS), these standards provide patients with access to their medical records and more control over how their personal health information is used and disclosed. The Office for Civil Rights (OCR) is the departmental component responsible for implementing and enforcing the privacy regulations. (See the Statement of Delegation of Authority to the Office for Civil Rights, as published in the Federal Register on December 28, 2000). HIPAA ensures that those who have access to health information are authorized to have access, and that they will use it appropriately.

Per HIPAA regulations, protected health information (PHI) includes (but is not limited to) name, address, date of birth, social security number, medical records, enrollment data, diagnostic information, payment for healthcare, participation in government health programs and prescription information. This is the kind of information that Maximus Federal Services routinely handles in adjudicating Part D appeals. Protecting PHI is a federal requirement that plans, providers, pharmacies, hospitals and other covered entities, as well as CMS, must comply with, and so must Maximus Federal Services. Accordingly, Maximus Federal Services has very strong PHI protective mechanisms in place to safeguard PHI. Maximus Federal Services cannot: share or sell PHI with other companies for marketing purposes; use PHI for any work that is not part of our contract with CMS; discuss PHI with anyone beyond those with the right to know. Most importantly, Maximus Federal Services must safeguard PHI from unauthorized use or disclosure. Accordingly, Maximus Federal Services has the requisite technology and security to safeguard patient records, electronic PHI, and to limit access to this information to only those with the right to know.

For further information on HIPAA, and for additional resources, click on this link.

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