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42 U.S. Code § 1395w-27. Contracts with Medicare+Choice organizations
(a) In general
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.
(b) Minimum enrollment requirements
(1) In generalSubject to paragraph (2), the Secretary may not enter into a contract under this section with a Medicare+Choice organization unless the organization has—
(A)
at least 5,000 individuals (or 1,500 individuals in the case of an organization that is a provider-sponsored organization) who are receiving health benefits through the organization, or
(B)
at least 1,500 individuals (or 500 individuals in the case of an organization that is a provider-sponsored organization) who are receiving health benefits through the organization if the organization primarily serves individuals residing outside of urbanized areas.
(2) Application to MSA plans
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.
(3) Allowing transition
The Secretary may waive the requirement of paragraph (1) during the first 3 contract years with respect to an organization.
(c) Contract period and effectiveness
(1) Period
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.
(2) Termination authorityIn accordance with procedures established under subsection (h), the Secretary may at any time terminate any such contract if the Secretary determines that the organization—
(A)
has failed substantially to carry out the contract;
(B)
is carrying out the contract in a manner inconsistent with the efficient and effective administration of this part; or
(C)
no longer substantially meets the applicable conditions of this part.
(3) Effective date of contracts
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.
(4) Previous terminations
(A) In general
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.
(B) Earlier re-entry permitted where change in payment policy
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.
(5) Contracting authority
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.