Implementing Health Reform. On February 29, 2016, the Department of Health and Human Services finalized its 2017 Benefit and Payment Parameters (BPP) Rule. The rule finalizes the notice of proposed rulemaking (NPRM) released by HHS on December 2, 2017.
An earlier post provided the highlights of the BPP final rule. This is the first installment of a two-part deep dive into the final rule, which will be followed by an analysis of the final 2017 Letter to Issuers in the Federally Facilitated Marketplaces.
Each spring HHS publishes a BPP rule to govern health plans for the following year. The BPP includes benefit parameters for qualified health plans and payment parameters for the Affordable Care Act's premium stabilization programs—hence its name—but it is also an omnibus rule that HHS uses to amend and update all of its rules governing the ACA marketplaces and health insurance markets generally.
The final rule, of course, builds on the basic rules governing the ACA's market reforms, exchanges, qualified health plans, premium stabilization programs, and rate review that were promulgated in 2012 and 2013, as well as the 2014, 2015, and 2016 BPP rules. The 2017 BPP rule runs to 538 pages.
HHS received 524 comments on the proposed rule from a wide variety of stakeholders and interested parties. The preamble describes and responds to these often contradictory comments in detail. The final rule adopts most of the proposals found in the NPRM, but in many instances modifies NPRM proposals in response to comments. In many other instances it delays or rejects implementation of NPRM proposals. At a number of places in the NPRM, HHS had requested comments on issues it was considering without making a specific proposal. In most instances, HHS describes suggestions it received, but takes no action on these suggestions.
One note to begin: throughout, the rule uses the legally precise term "exchange" more often than the more recent term "marketplace." In discussing the BPP rule, this post will use the term exchange rather than marketplace (and federally facilitated exchange or FFE rather than federally facilitated marketplace, or FFM), but it should be understood that both terms mean the same thing.
Topics covered in this post include definitions; ratings issues; guaranteed availability and renewability; student health coverage; risk adjustment; reinsurance and risk corridors; rate review; exchange establishment; essential health benefits; navigators and assisters; and brokers and agents. Click on a topic to navigate to the portion of the post in which it is covered.
Definitions
The final rule begins with a definitional section. The first definition mentioned in the preface is one that the rule in fact does not change—the definition of "plan year." The preface clarifies that a plan year may be less than twelve months but never more than twelve months.
The final rule redefines large and small employer as required by last year's Protecting Affordable Coverage for Employees (PACE) Act, which provides that a large employer is an employer that employs an average of at least 51 employees during the plan year and at least one employee on the first day of the plan year, and a small employer is an employer that employs an average of at least one but not more than 50 employees during the plan year. States may elect to define large employers as employers employing more than 101 employees and small employers as employing not more than 100. In the case of new employers, the determination of size is based on reasonable expectations as to the average number of employees.
Rating Issues
Under the prior rule, the rating area for determining health insurance rates for a small business is the area that contains the group policyholder's principal place of business. If the group plan, however, is a network plan, as most are, the plan's service area must cover the business' employees. If the principal place of business is merely an address registered with the state for service of process, there may be a disconnect between the rating area on which premiums are based and the service area in which services are delivered.
The final rule, therefore, generally defines the geographic rating area of a small business as the rating area where the greatest number of employees work or reside. The SHOP marketplace will use the place of business address used to qualify the employer for SHOP coverage for rating purposes.
The NPRM had raised several other issues respecting rating areas, but the final rule does not make any further changes in rating area requirements. The NPRM preface had asked whether there should be some limit on how many rating areas states may have, or how small the rating areas may be. Some states have many small rating areas, which raises concerns about inadequate risk spreading. HHS had also asked for comments on whether insurers should be required to make their rating areas generally consistent with their service areas to avoid discrimination. HHS decided to make no changes with respect to either of these issues at this time.
HHS had also requested comments on whether its child age rating factors adequately address different health risks for children of different ages but has put off any changes in these as well to a later time.
Guaranteed Availability And Renewability
The ACA's guaranteed availability requirement requires insurers in all markets to guarantee the availability of their non-grandfathered products to all applicants subject to exceptions. The NPRM had proposed an additional exception to this rule, under which insurers that have given 90 days notice that they are discontinuing a product or 180 days notice that they are leaving a market would not have to accept applicants for coverage under the product. HHS decided not to proceed with this change because of concerns of how the guaranteed availability exception might affect an insurer's risk pool if the insurer did not have to guarantee availability when withdrawing a product. The insurer in this situation will have to give notice to new enrollees that it is discontinuing the product or withdrawing from the market but must sell the policy if requested to do so.
The current rules allow insurers to refuse to cover small groups if a group does not meet minimum participation requirements or the employer does not make minimum premium contributions, except during an annual one-month open enrollment period from November 15 to December 15 when the requirements are waived. The NPRM asked for comments whether insurers should be prohibited from applying minimum participation or contribution requirements to groups with between 51 and 100 employees in states that choose to define these groups as small groups. Employers in this category are subject to the employer mandate and arguably should not be barred from purchasing coverage if they face a penalty for failing to do so. Commenters noted that changing these rules could facilitate adverse selection, and HHS decided not to make a change, although it notes that states may restrict the use of contribution and participation requirements if they chose to do so.
Current guaranteed renewability rules allow insurers to refuse to renew groups that violate group participation or employer contribution requirements or cease to participate in an association. Under both of these circumstances, insurers must guarantee availability. HHS had considered removing these exceptions to guaranteed renewability suggesting that the guaranteed renewability exceptions made no sense if the group could simply reenroll under the guaranteed availability rule, but after reviewing comments on the proposal decided to leave the rule as is. It concluded, for example, that loss of association coverage might subject an employer to a new premium as premiums are based on quarterly rates or to the reset of a deductible, so it still makes sense to distinguish between guaranteed availability and guaranteed renewability.
Student Health Coverage
The final rule requires student health plans to set rates based on actuarially justified factors and actual claims experience. It does not, however, as proposed, require student health plans to comply with the single risk pool rating factors. The final rule allows insurers to create separate risk pools for separate educational institutions or multiple risk pools in a single institution for bona fide reasons, such as separating undergraduate and graduate students. Student health plans may also create separate risk pools for students and their dependents.
The final rule waives actuarial value metal tier requirements for student health plans, and allows insurers to provide coverage at any actuarial value of at least 60 percent. Plans must disclose their actuarial value, however, as well as the metal value or next lowest metal value with which the actuarial value corresponds. Students will thus be better able to choose between a student health plan and, for instance, coverage under their parent's plan. Student health plans may determine their actuarial value using the actuarial value calculator and do not need to have an actuarial certification, as had been proposed in the NPRM. These changes apply for plan years beginning after July 1, 2016.
Risk Adjustment
The final rule makes a number of changes in the "3R" premium stabilization programs: risk adjustment, reinsurance, and risk corridors. The risk adjustment and reinsurance programs remain subject to sequestration for fiscal year 2016, risk adjustment at a level of 7 percent and reinsurance at a 6.8 percent level. HHS believes that the sequestered payments will be available for payment to insurers in FY 2017 unless Congress takes further action to bar this, which would seem likely.
The risk adjustment program has faced heavy criticism from the health insurance cooperatives, which have asserted that it was a significant factor in the CO-OP failures. The CO-OPs claim that the risk adjustment program, which is supposed to transfer funds from health insurers that have low-risk enrollees to those that have high-risk enrollees, in fact transferred funds from small start-up insurers with low premiums to large established insurers with high premiums, sophisticated data-capture capabilities, and historical claims information.
HHS has announced that it will be holding a public conference to discuss improvement to the risk adjustment methodology on March 31, 2016. It will release a white paper on potential changes to the risk adjustment program prior to that conference. Any changes that come out of the conference will be implemented through rulemaking. The final rule, however, does not make major changes in the risk adjustment program.
HHS is updating risk weights using 2012, 2013, and 2014 market scan data. Its risk coefficients for 2017 are based on the use of discrete trend factors for traditional drugs, specialty drugs, and medical and surgical expenditures to more accurately reflect expenditure growth rates. HHS is incorporating data on preventive services into its risk adjustment calculation, thus improving the risk scores of plans with healthier populations. HHS is also adding to the risk adjustment formula an induced demand factor for Massachusetts Connector Care plans and for Medicaid enrollees in individual plans in states that have expanded Medicaid through marketplace plans.
HHS is also considering the use of prescription drug information for risk scoring but is not using it for 2017. HHS is considering how to handle partial year enrollees in the risk adjustment formula, as there have been claims that insurers are experiencing high costs from partial-year enrollees on whom they may not have accumulated diagnostic information. This issue will also be left for discussion at the March 31 conference. For now, however, the risk adjustment formula is largely the same as that used in prior years.
Massachusetts, the only states that has been operating its own risk adjustment program, will cease to do so in 2017. As of 2017, HHS will be operating the risk adjustment program in all states.
The risk adjustment user fee is set in the final rule at $1.56 per enrollee per year for 2017, down from $1.75 for 2016 and from the $1.80 fee projected in the NPRM. Entities acquiring or entering into another arrangement with an insolvent insurer with substantially the same coverage, including state guaranty funds, may be able to accrue previous months of claims experience for the application of risk corridor or reinsurance payments.
An insurer subject to the risk adjustment program that fails to provide HHS access to required data in the EDGE server (the dedicated data environment on which insurers store data for risk adjustment and reinsurance programs) in a timely manner or to meet data requirements is subject to a default charge since HHS cannot determine the insurer's actual charge. A reinsurance-eligible insurer that fails to provide required data or meet data requirements may forfeit reinsurance payments. Insurers that report low enrollment or claims counts compared to baselines, or that fail certain data quality metrics, can be assessed a default risk adjustment charge and forfeit reinsurance payments, although HHS will perform informal analysis throughout the reporting period and work with insurers to correct data problems before the end of the reporting period.
HHS is ending the good faith compliance safe harbor it observed for 2014 and 2015 and may beginning in 2016 assess civil penalties against insurers that fail to comply with risk adjustment and reinsurance program data requirements, even if they do so in good faith.
For 2014, the default charge for insurers that failed to failed to establish a dedicated distributed data environment or submitted inadequate data was set at the product of the statewide average premium for the risk pool, the 75th percentile risk transfer amount, and the plan's enrollment. For plans that fail to meet these requirements for 2015, the default charge will be based on the 90th percentile risk transfer amount. HHS believes that plans are less likely to have technical difficulties that will keep them from fulfilling requirements as of 2015 and that some might decide to simply pay the 75th percentile charge rather than meet requirements. Small insurers, with 500 billable member months or fewer, however, can simply pay a charge of 14 percent of premium rather than set up an EDGE server.
HHS intends to release an interim public summary report of risk adjustment transfer formula elements in March of 2016 to help insurers more accurately estimate their risk adjustment transfers.
Reinsurance And Risk Corridors
The reinsurance and risk corridor programs end in 2016. Under the final rule, HHS will spend all remaining reinsurance program funds in 2016. If sufficient funds are collected, HHS will first increase the coinsurance rate to 100 percent and, if any funds remain, then reduce the attachment point below $90,000 until all funds are spent. The NPRM had proposed that third party administrators, administrative services-only contractors, and other third parties that determine enrollment counts—and thus program liability–for self-insured plans should be subject to audit. The final rule rejects this change, but notes that contributing entities are subject to audit and responsible for the compliance of their third-party agents.
The final rule requires HHS to adjust the 2015 risk corridor payments or charge for 2015 for insurers that overestimated the cost-sharing reductions they offered in 2014—thus increasing their incurred claims, medical loss ratio, and possibly their risk corridor payments—to correct for the difference. Insurers must also report any differences between estimated cost-sharing reduction amounts and actual cost-sharing reductions for 2014. Insurers additionally are required to adjust their claims for 2015 and 2016 to account for inaccurate estimation of unpaid claims for 2014 and 2015. Risk corridor and medical loss ratio reports must reflect any non-de-minimis adjustments made or approved by HHS for risk adjustment payments or charges, reinsurance payments, cost-sharing reduction amounts, or risk corridor payments or charges of which the insurer is notified by August 15 that are not accounted for on prior reports. Finally, HHS is deleting certain interim risk corridor data reporting requirements.
Rate Review
Under the final rule, non-grandfathered coverage in the individual and small group market will for plans beginning in 2017 be subject to rate review if the average increase — including premium rating factors such as age or geography — for all enrollees weighted by premium volume for any plan within a product exceeds the "unreasonableness" threshold, presumably 10 percent. Rating factors are being added to avoid gaming of the premium increase threshold by changing the geographic rating area for a plan.
Also beginning in 2017, insurers must submit rate filings using the Unified Rate Review Template (URRT) to HHS not only when they seek an increase, but also when they are planning to decrease a rate or not modify it. HHS has concluded that it needs all rate filings to reasonably evaluate rate increases. Insurers seeking rate increases must also file an actuarial memorandum, and insurers seeking increases above the threshold must additionally file a written justification.
HHS will make all proposed rate filings, regardless of whether rates are subject to review, available to the public except for information that is a trade secret or confidential commercial or financial information. For states to be considered to have effective rate review programs they must also make information available to the public on proposed rate increases subject to review and final rate increases, and they must do so at a uniform time.
CMS released on February 29, 2016 a bulletin on timing of rate filing submissions. States that have effective rate review programs can require filing of the URRT for single-risk pool coverage as late as July 15, 2016. In states without effective rate review programs, insurers must file their rates with CMS by May 11, 2016. Insurers that participate in the marketplaces served by HealthCare.gov must in any event submit the qualified health plan (QHP) rates table template to CMS by May 11, 2016. States must post rate filings for proposed rate increases no later than August 1, 2016. Final rates will be effective no later than the first day of open enrollment, November 1, 2016. A complete list of key dates for QHP certification and rate filings has been posted by CMS.
Exchange Establishment
The final rule changes the timeframes for submission and approval of exchange blueprints by states wishing to establish their own exchanges. Initially the exchange rules required states seeking to establish their own exchange to give 12 months notice to HHS, which was then shortened to 6.5 months at the time when litigation threatened to end the FFE. Recognizing how long it in fact takes to establish a state exchange, the rule requires a declaration letter from a state seeking to run its own exchange 21 months before open enrollment begins; a state seeking to establish a state-based exchange using the federal platform (SBE-FP) must submit a letter nine months before open enrollment.
A new state-based exchange must submit a blueprint at least fifteen months before open enrollment begins and have its blueprint approved or conditionally approved fourteen months before open enrollment. SBE-FPs must submit a blueprint three months prior to open enrollment and have it approved or conditionally approved two months before open enrollment. If a state exchange ceases operation, HHS will operate the exchange. HHS will oversee and monitor compliance with privacy and security standards in the FFE, SBE-FPs, and state-based exchanges (SBEs).
The final rule preface discusses at some length how SBE-FPs operate. States operating an SBE-FPs are required to enter into a "federal platform agreement" with HHS reflecting their mutual relationship. A state operating an SBE-FP remains responsible for plan management and consumer assistance functions, while the FFE assumes eligibility and enrollment functions and operates the call center and processes consumer casework. SBE-FPs must also maintain a toll free hotline (not call center) and informational website that will direct consumers to the FFE.
Initially the FFE will offer a single package of services; not a menu from which the state can select. States will not be able to add state-specific special enrollment periods, application questions, display elements, or data analysis. Insurers will need to comply with FFE eligibility and enrollment policies and standards. States will otherwise generally be required to enforce standards that apply to insurers in the FFE. The FFE will retain the authority to "suppress" the sale of QHPs where they do not meet federal requirements and the SBE-FP fails to take action.
Essential Health Benefits
The ACA requires states to cover the cost of health care services that they require qualified health plans (QHPs) to cover that are not essential health benefits (EHBs). Benefits required by state mandates adopted prior to December 31, 2011 are considered to be EHBs, but benefits mandated by states after that date are not EHBs unless the mandate was adopted to comply with federal requirements. Under the final regulation, states are responsible for identifying mandated services that are not EHBs. QHP insurers are supposed to quantify the cost of these services and notify the state to defray this cost.
If a state mandates that a large group HMO or state employee plan cover a service, but does not require QHPs to cover it, and the large group or state employee plan becomes the base benchmark plan, the state does not need to defray the cost of the service provided by QHP insurers, even though it would be covered by QHPs as a benchmark plan EHB. If a state imposes a mandate only on individual or small group plans outside the exchange, under the ACA the mandate must apply uniformly to plans inside the exchange as well, and the state must defray the cost for QHP coverage.
If a state imposes a mandate on employers in the 51 to 100 employee range and then expands the definition of small group to cover these employers, the state would have to defray the cost of mandates applied to these products adopted after 2011. If a state requires that its base benchmark plan be supplemented to cover certain essential health benefits, such as habilitative services, or otherwise to meet federal requirements, the state does not need to defray the cost of these benefits.
Navigators And Assisters
The final rule imposes a number of new requirements on navigators, non-navigator assistance personnel, and consumer assisters. Navigators in all exchanges must provide targeted assistance to underserved and vulnerable populations, as defined and identified by their exchange. This is not their exclusive mission, but a necessary part of their mission.
In the FFE, these populations will be identified through the Navigator Funding Opportunity Announcement, with grant applicants permitted to propose additional population groups. HHS will issue further guidance on collaborating or partnering with community groups to achieve this mission. This standard will apply in the FFE beginning in 2018. This requirement will not extend to consumer assisters or to non-navigator assistance personnel, although they are encouraged to reach these populations as well.
The final rule requires navigators in the FFE as of 2018 to help provide consumers with post-enrollment assistance. These obligations, discussed at great length and in excruciating detail in the preface, include assistance with understanding eligibility appeals (though not representing the consumer in the appeal), filing for shared responsibility exemptions, providing basic information regarding the reconciliation of premium tax credits, and understanding basic concepts and rights related to using health coverage. SBEs have the option of requiring or authorizing post-enrollment navigator assistance activities. HHS notes that non-navigator assistance personnel also have some post-eligibility responsibilities. Certified application counselors do not, but nothing prohibits them from assisting consumers post enrollment.
Navigators may not offer tax assistance or interpret tax rules, but must help consumers understand the availability of exemptions through the tax filing process and assist them with the exchange-related components of the tax credit reconciliation process. Navigators, non-navigator assisters, and certified application counselors must provide consumers with a disclaimer stating that they are not tax advisers or attorneys and cannot provide legal advice before providing assistance. Navigators must refer consumers to licensed tax advisers, tax preparers, and other tax resources for tax issues. FFE navigators are authorized to collect, store, and use personally identifiable information relating to consumers to carry out their post-enrollment assistance tasks, subject, of course, to privacy and security requirements.
Exchanges are responsible for ensuring that navigators are trained to carry out their post-enrollment assistance activity responsibilities. Any navigators, non-navigator assisters, or certified application counselors must complete training before carrying out any assister functions, including outreach and education. While post-enrollment navigator obligations do not attach until 2018, navigators are already trained for many of these functions and can take them on voluntarily before then.
The final rule clarifies standards governing the provision of gifts of nominal value, such as pens, magnets, or key chains by navigators. Navigators, non-navigator assisters, and certified enrollment counselors cannot offer gifts as inducements for enrollment. They may offer nominal value gifts (worth $15 or less) at outreach and education events, however, which can include nominal value gifts to potential enrollees. Consumer assisters do not need to keep track of who has received a nominal value gift over multiple encounters as long as no more than nominal value is provided in any one encounter.
Reimbursement for legitimate expenses incurred by a consumer to receive enrollment assistance—for example, transportation costs or postage—is permitted. Provision of gifts or promotional items that promote the products or services of a third party is prohibited.
Certified application counselor organizations must provide an exchange with information on the number of the organization's certified application counselors and on the consumer assistance they are providing. The FFE will begin collecting data quarterly beginning in the third quarter of 2017 including the number of people certified as application counselors; the number of consumers who receive assistance; and the number who received assistance selecting a QHP, enrolling in a QHP, and enrolling in Medicaid or CHIP. Information need only be provided to SBEs, including SBE-FPs upon request and in the manner and form requested by the SBE.
Brokers And Agents
Currently a consumer applying for exchange enrollment through a web-broker or directly through an insurer must be redirected to the exchange website to complete the enrollment and receive an eligibility determination. Under the final rule, web brokers (and insurers) will be able as of 2018 to use an "enhanced direct enrollment process" in the FFE (and in SBE-FPs). The consumer will remain on web-broker's or insurer's website to complete the application and enroll in coverage, with the exchange handling the eligibility determination and enrollment function. The web-broker or insurer will have to use the same questions and sequence of questions found on the FFE single streamlined application with only approved minor modifications to obtain information. All information will need to be submitted through an exchange-approved web service. Exchange notice, privacy, and security standards will have to be followed.
Brokers and agents must receive training and register with an exchange to assist consumers with enrollment. They must also sign a privacy and security agreement. Agents or brokers in SBE-FPs must comply with all applicable FFE standards. The HHS may terminate a broker or agent's agreement with the FFE for cause based on a specific finding of noncompliance or a pattern of noncompliance. The agent or broker (including a web broker) must be given a 30-day opportunity to resolve the matter. A broker or agent may request reconsideration of this decision.
The final rule authorizes HHS to periodically monitor and audit agents and brokers approved to enroll consumers through the exchanges. HHS can suspend an agent's or broker's registration for up to 90 days immediately upon the date of notice in cases of fraud or abusive conduct that may cause imminent or ongoing consumer harm. The agent or broker would not be able to enroll consumers during the suspension period. If the broker or agent submits evidence to rebut the allegations, HHS must review it within 30 days. If the agent or broker fails to submit information to resolve the issue, permanent termination could follow.
The agent or broker can also be terminated if HHS or a state or law enforcement agency finds or determines that the agent or broker has engaged in fraud or abusive conduct that may result in imminent or ongoing consumer harm, using personally identifiable information of Exchange enrollees or applicants or in connection with an exchange enrollment or application. Such a termination does not require the normal 30-day notice. Agents and brokers can also be barred from returning to the FFE in future years for misconduct and can be subjected to civil money penalties for providing false or fraudulent information to the exchange, or disclosing private information.
The final rule includes standards of conduct for agents and brokers in the FFE. These include requirements that they provide consumers with correct information without omission of material fact; refrain from marketing that is misleading, coercive or discriminatory; provide the FFE with correct information regarding applicants and enrollees, obtain consent before enrolling individuals or employers in coverage; protect consumers' personally identifiable information; and otherwise comply with federal and state laws and regulations. The use of the words "exchange" or "marketplace" in a name or URL that would cause confusion with a federal program or website may be considered misleading.
Violation of these standards can be grounds for termination. HHS recognizes that primary responsibility for overseeing agents and brokers resides with the state and will limit itself to compliance with FFE enrollment activities.
HHS approves vendors to offer agent and broker training. Under current requirements, vendors must identity proof agents and brokers and verify state licensure. HHS is removing these verification functions as unnecessary because the FFE verifies identify for registration purposes and QHP insurers must verify state licensure before affiliating with agents and brokers. Vendors must collect and store and share with HHS training completion data on agents they train and provide basic technical assistance to agent and broker users of the vendor's training platform. HHS may monitor and audit training vendors.
from Health Affairs Blog http://ift.tt/1TRLczR
No comments:
Post a Comment