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| CMS Finalizes Payment Parameters Rule and Letter to Issuers |
Late last Friday, CMS released its final 2018 Notice of Benefit and Payment Parameters and 2018 Letter to Issuers. NAHU submitted comments on both the draft payment parameters rule and draft letter to issuers. The 465-page payment parameters final regulation provides guidance on various agent/broker issues, individual and SHOP marketplaces requirements, changes to the risk-adjustment programs for 2017 and 2018, participation requirements for bronze, silver and gold plans, network requirements, special enrollment periods, direct enrollment and numerous other issues. The 85-page letter to issuers is largely boilerplate from previous years, although it does include language addressing broker-compensation issues. The final payment parameters rule also finalized without changes an interim final rule on special enrollment periods and consumer oriented and operated plans (CO-OPs) released in May.
Given the upcoming change in the presidential administration, the payment parameters rule and letter to issuers were pushed up this year and released significantly earlier than the typical spring-time release. The rules are scheduled to be finalized on January 17, 30 days from their publication and three days before President-Elect Trump is due to take office. This timeline also allows Congress to overturn the regulations through the Congressional Review Act, which allows Congress to pass a joint resolution to overrule a regulation within 60 legislative days from the time the regulation was finalized. This requires both chambers passing a resolution with simple majorities (218 House votes, 51 Senate votes) and the president to sign it into law. The regulation can only be overturned in total.
Agents and Brokers
• Agents/brokers must be paid the same compensation for plans sold inside and outside of the marketplace, but CMS will not take action to enforce compensation agreements.
• Final rule does not finalize the proposal to require agents and brokers to support post-enrollment activities to effectuate enrollment through the marketplace, including data-match and eligibility issues.
• Require web-brokers to display standardized plans when facilitating marketplace enrollment, similarly to Healthcare.gov, or receive approval to display differently.
• Allow web-brokers to utilize enhanced direct enrollment by allowing consumers to remain on web-broker’s websites. Eligibility determination information would be passed through Healthcare.gov then back to the consumer through the web-broker’s website. Web-brokers will be required to demonstrate operational readiness before accessing the direct enrollment pathway, including implementation of required privacy and security measures.
• Require web-brokers to prominently display information relating to tax credits and cost-sharing eligibility directly on their websites.
• Require web-brokers to allow consumers to accept an amount less than their full eligible tax credit to account for potential future income increases.
• Suggests that insurers should withhold agent/broker commissions for those who fail to register or comply with federal requirements.
• Allow web-brokers serving more than one state to aggregate their limited English proficient population across all states that they serve to determine the 15 languages needed to provide taglines. This applies only to healthcare.gov.
• Suspend agent/broker access for direct enrollments if agent/broker poses risks to the marketplace or information systems, such as using technology not approved by CMS. Impose 90-day suspensions for fraudulent or abusive conduct. If a state or federal agency determines that such behavior was conducted, the agent/broker agreements can be terminated.
• Prohibit agents and brokers from maintaining websites with URLs or appearances similar to Healthcare.gov that may mislead consumers to believe they are applying through the marketplace. This includes text sizes, fonts, colors and layouts similar to healthcare.gov. Additionally, agents/brokers should avoid using the terms “exchange” or “marketplace” in websites and direct enrollment websites should not mislead consumers to believe they are applying through healthcare.gov.
Medical Loss Ratio
• Allow insurers the option of calculating MLR liability for a single year if the insurer recalculates liability for two subsequent years instead of the existing three-year rolling average.
• Encourage more plans by allowing deferral of reporting of new business when up to half of their premium is attributable to policies with 12 months or less.
Special Enrollment Periods
• Reviews comments on issues where healthier consumers are discouraged from enrolling in SEPs due to additional verification requirements and notes that the attrition rate for any particular cohort is no different at the end of the year than at points earlier in the year and that gaming of grace periods is not occurring at significant rates to produce measurable effects.
• Reviews the new SEP verification pilot program and allows exchanges to provide consumers with a later effective date if the consumer’s ability to enroll was delayed so that he or she would owe two or more months of premium for retroactive enrolment.
• Codify SEPs provided under previous guidance including: dependents of American Indians; victims of domestic abuse or spousal abandonment and their dependents; consumers incorrectly denied subsidies due to wrongly being deemed eligible for Medicaid or CHIP; consumers disadvantaged by material plan or benefit display errors, including errors related to service areas, covered services or premiums; and consumers who resolve data-matching issues after the expiration of an inconsistency period or have income below 100% of the Federal Poverty Level and did not enroll in coverage while waiting for HHS to verify lawful status.
• Amends the SEP for individuals who move to only make the eligible for the SEP if they were enrolled in marketplace coverage for at least one day during the previous 60 days.
Age-Rating, User Fees, Formulas and Limits
• Expand age-rating bands for children ages 0-20 from the current single-age band with a default age factor of .635 to an age factor for children up to age 14 of .635 to .765. This would gradually increase from ages 15 to 20. States would continue to be able to set their own age-rating curves if they chose.
• Again set the marketplace user fee at 3.5% of premiums, of which at least three percent should be directed to outreach and education.
• Increase the exemption from the individual mandate from 8.0% to 8.05% of household income, down 0.11 percentage points from 2017, when it was 8.16%.
• Increase the maximum annual limit for cost sharing to $7,350 for self-only coverage and $14,700 for other than self-only coverage. Cost-sharing reductions would reduce this to $2,450 for self-only and $4,900 for other-than-self-only for those with incomes below 200% of FPL, and $5,850 for self-only and $11,700 for other-than-self-only for those between 200% and 250% of poverty.
• Increase the annual limit on cost sharing for standalone dental plans to $350 for one child and $700 for two or more children.
Risk Adjustment
• Clarify that insurers should use state law counting methods to determine whether an employer is a small or large employer for purposes or risk adjustment as long as state law accounts for non-full-time employees.
• Modify the risk-adjustment formula to account for partial-year enrollments.
• Incorporate prescription drug utilization to identify high-risk conditions, initially using a dozen prescription drug categories, 10 of which can be used for imputation of a condition and for determining the severity of a condition and two for severity only.
• Calculate the total amount of claims paid for high-cost enrollees (those with costs exceeding $2 million) with those insurers reinsured through the risk-adjustment program for 60% of excess cost.
• Base the risk-adjustment user fee on billable member months instead of enrollee member months, replacing the annual fee from $1.68 per billable member per year ($0.14 per member per month).
• Reduce the amount of risk-adjustment funds collected from insurers by 7.1% for 2017 before payments are made to insurers.
SHOP
• Eliminate existing “tying” provision that requires insurers selling on the individual market to have at least a 20% share of the small-group market in the state, as measured by earned premium, and to offer at least one silver and one gold plan on the SHOP.
• Will not proceed with proposal to eliminate enrollment through the federal SHOP if the SHOP becomes unviable, where enrollments would instead be made through web-brokers and third-party administrators.
• Require that waiting periods in the SHOP to not exceed 60 days, beginning with the date an employee becomes eligible. The measurement period for a variable-hour employee eligible for SHOP coverage cannot exceed 10 months.
• Require state-based exchanges on the federal platform that use federal SHOP to establish standards and policies consistent with the federal SHOP, including for: premium calculation, payment, and collection requirements; rate-change timelines; minimum participation rate requirements and calculation methodologies; employer-contribution methodologies; annual employee open-enrollment periods; initial group enrollment or renewal coverage effective dates; and termination of SHOP coverage or enrollment rules.
Standardized Plans
• Standardized plans for 2018 would have a single provider tier, fixed deductible, fixed annual cost-sharing limit and fixed copayment or coinsurance obligations for a key group of essential health benefits. The 2018 silver, silver cost-sharing variation and gold plans would have separate medical and drug deductibles, and the 87% and 94% silver cost-sharing variations and gold plans have $0 drug deductibles.
• Include a bronze high-deductible health plan compliant option that would allow an enrollee to qualify for a tax-subsidized Health Savings Account.
• Establish three sets of six standardized plans with only one set available in any one state. The first set would be a version of the 2017 plans. The second set would be designed to work in states that: 1) require that cost sharing for physical, occupational or speech therapy be not greater than cost sharing for primary care visits; 2) limit the amount charged for each drug tier or 3) require that drug tiers have copayments rather than coinsurance. The third set is designed for states that have maximum deductible requirements or other cost-sharing standards.
• CMS will continue to review plans to ensure that they are “meaningfully different” to support consumer choice. If a plan is flagged as not meaningfully different, an insurer must modify it or provide a justification to CMS.
• Non-grandfathered health plans in the individual and small-group market may not discriminate in the provision of essential health benefits on the basis of age, expected length of life, present or predicted disability, degree of medical dependency, quality of life or other health condition.
Network Adequacy
• Reaffirm requirement that insurers notify enrollees at least 48 hours before a procedure if the enrollee might receive service from an out-of-network ancillary provider while at an in-network facility. This provision does not apply to balance billing and the insurer is not responsible for balance bills.
• Plans will be evaluated using time and distance standards focusing on hospital systems, dental (if applicable), endocrinology, infectious diseases, oncology medical/surgical, oncology radiation/radiology, mental health, primary care, rheumatology, hospitals and outpatient dialysis. Insurers are also required to give regular patients at least 30 days notice of termination of provider.
• Require insurers cover a percentage of essential community providers in its service area, including multiple providers counting as a single essential community provider.
Rate Review and Market Withdrawal from Insurers
• Insurers must submit QHP applications and rate filings for 2018 certification by May 3, 2017, including Insurers in states with effective rate-review programs. CMS will post proposed rate filings on August 1, 2017, and insurers must finalize QHP rate filings by August 21, 2017, and non-QHPs by October 6, 2017. Final rate information for single risk-pool coverage will be posted on November 1, 2017.
• QHPs must submit justifications for rate increases to CMS. Information supporting all proposed QHP rate increases will be posted on the CMS rate-filing website.
• Allow insurers to avoid the current five-year reentry ban if the insurer transferred all of its products to a related insurer under a corporate reorganization but maintained continuity of coverage within products in compliance with uniform modification of coverage standards. States with different rules governing market withdrawal could continue to use their own rules. |
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