Medicare Laws & Rules

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 (SSA). 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.

Full text of the MMA (PDF)


Social Security Act
The Social Security Act (SSA) 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.

Title XVIII of the SSA


Part D Final Rule
The final rule implements the provisions of the SSA 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 responses, and, 2) the regulations that implement the Part D law. The Preamble has information that will assist Plans in understanding the law and rules for Part D.

Part D Final Rule (PDF)


42 CFR Part 423 - Voluntary Medicare Prescription Drug Benefit
The regulations are in Title 42 of the Code of Federal Regulations and are the regulations that implement the laws for the Medicare Prescription Drug Benefit.

42 CFR Part 423


Internet-Only Manuals
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.



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, OMHA and the MAC.

Medicare Prescription Drug Benefit Manual (PDF)


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. Section 20.1 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.

Chapter 6 Part D Drugs and Formulary Requirements (PDF)


Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance
This guidance covers the appeal provisions set forth at 42 CFR Part 422 Subpart M and 42 CFR Part 423 Subparts M and U. It addresses grievances, coverage/organization determinations and appeals for beneficiaries enrolled in a plan provided by a Medicare Advantage (MA) organization, a Medicare cost plan, health care prepayment plan (HCPP) or a stand-alone Part D plan.

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

Medicare Part D Coverage Determinations/Appeals Flowchart (PDF)


Health Insurance Portability and Accountability Act of 1996
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 healthcare data, and to promote efficiency in the healthcare 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 healthcare providers who engage in certain electronic transactions, health plans and healthcare 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. 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, the 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. QIC Part D routinely handles PHI in adjudicating Part D appeals. Protecting PHI is a federal law that QICs, plans, providers, pharmacies, hospitals and other covered entities, as well as CMS, must comply with.

HHS Health Information Privacy


Additional Links to Medicare websites
The Medicare website provides information about the parts of Medicare, what's new, and how to find Medicare plans, facilities or providers.


The website for Centers for Medicare and Medicaid Services (CMS) provides current healthcare information on Medicare, Medicaid, and the Children's Health Insurance Program.