Implementing Health Reform. This is my third post on the 2017 Benefit and Payment Parameters final rule. The first post summarized the highlights of the rule and the final 2017 Letter to Issuers in the Federally Facilitated Marketplace. The second post offered a deep dive into the first half of the BPP rule; this post analyzes the second half of the rule. A final post on the details of the Letter to Issuers will follow in a day or two.
This post will cover notices to employers; financial subsidy eligibility verification; reenrollment and binder payments; open and special enrollments; eligibility appeals; individual responsibility exemptions; the SHOP exchange; selective contracting and standard plans in the FFE; FFE user fee; the drug formulary exceptions process; the premium adjustment percentage; the actuarial value calculator; network adequacy; essential community providers; the premium payment grace period; enforcement and appeals; quality and patient safety; third party payments; and medical loss ratios. Click on a topic to navigate to the portion of the post in which it is covered.
Notices To Employers
The final rule amends the process through which exchanges notify employers when an employee is determined eligible for federal financial assistance. This notice informs an employer that it may be liable for the employer mandate penalty if its employee receives assistance. The notice may also help reduce an employee's responsibility to pay back tax credits if the employer prevails in an appeal and the employee ceases to receive tax credits.
Under the final rule an employer will only be notified if the employee actually enrolls in a QHP through an exchange; not upon a determination of eligibility, as is currently the case. The exchange can either notify the employer on an employee-by-employee basis or for groups of employees who enroll in a QHP with financial assistance. The FFE intends to send notices in groups, but will attempt to do so as soon as is possible after an employee enrolls. The notice will inform the employer that retaliation against an employee who receives assistance under the ACA is prohibited by law.
Financial Subsidy Eligibility Verification
Eligibility for financial assistance through the exchanges is based on projected income for the coming year. Many consumers who are eligible for income assistance have fluctuating income that are difficult to predict. Their actual income often does not match trusted data sources such as earlier tax returns, which could be two years old. Under current procedures, if no income data is available from trusted data sources or income is more than 10 percent less than income documented through such data sources, exchanges must demand income verification.
HHS has concluded that this threshold is not adequate to accommodate normal income variations. Under the final rule, exchanges will apply more reasonable standards. The threshold to be used will be set through guidance. It could be a percentage in excess of 10 percent or a dollar amount. The preface discusses a number of suggestions HHS received for improving income verification. CMS has also recently issued a guidance to help applicants and enrollees with data matching issues.
The final rule also recognizes alternative means of verifying the absence of available employer coverage for financial assistance applicants. If the exchange is unable to verify employer coverage offers from electronic sources, it must contact employers for a statistical sample of applicants or, for 2016 and 2017, use an alternative process approved by HHS.
HHS is working on providing online content to clarify for people who are close to Medicare eligibility age or Medicare-eligible how exchange coverage and Medicare are intended to interact. This content might include, for example, a pop up screen for individuals who are going to turn 65 during a benefit year informing them about Medicare eligibility. In general, HHS is seeking to communicate better with exchange consumers about transitioning to Medicare.
Reenrollment And Binder Payments
HHS is changing its reenrollment hierarchy under the final rule to ensure that enrollees in silver plans that cease to become available from one year to the next are auto-reenrolled with the same insurer in another silver plan in a different product that is most similar to their current plan, rather than being reenrolled in a different metal-tier plan of the same product. They can thus maintain tax credit eligibility, which requires silver plan enrollment.
If an insurer with which an individual is enrolled ceases to offer any plans through the exchange, the individual will be reenrolled in a plan offered by another insurer rather than reenrolled with the same issuer off the exchange. The choice of plan will be directed by state regulators, or, if they failed to act, by the exchange. Where it is responsible, the FFE will reenroll the individual in the lowest premium plan in the same metal level of the same product network type.
As it had last year, HHS had proposed in the NPRM a number of other alternatives for reenrollment that would auto-enroll enrollees to lower-cost plans. It ultimately rejected these alternatives as problematic. Enrollees choose plans for reasons other than cost and HHS concluded it was far better to bring them back to the exchange to actively select a plan than to auto-enroll them in a plan that they would not prefer.
The final rule codifies previous guidance on binder payments. The deadline for paying the first premium for prospective coverage must be set by the insurer and must be no earlier than the effective date of coverage and no later than 30 days after that date or the date when the insurer receives the enrollment transaction, whichever is later. Where a consumer qualifies for retroactive coverage — for example by prevailing on an appeal — the consumer must make a binder payment for all premiums due for the period of retroactive coverage, and will receive only prospective coverage if he or she only pays for one month rather than for all months of retroactive coverage. Exchanges may (and the FFE will) allow insurers to establish a premium payment threshold policy under which the insurer may consider an enrollee to have paid all amounts due for purposes of making a binder payment to effectuate enrollment or to avoid triggering a grace period as long as the threshold is reasonable and uniformly applied.
Open And Special Enrollments
The final rule sets the open enrollment periods for 2017 and 2018 as identical to the 2016 period, running from November 1 to January 31. Beginning in 2019, open enrollment will run each year from November 1 to December 15. HHS received comments supporting other proposals, such as correlating the open enrollment period with tax filing season, but decided to stick with the familiar for two more years and then move to an open enrollment period that will ensure full calendar year enrollment with coverage beginning January 1.
HHS had requested comments on special enrollment periods (SEPs) and received many. It is not adding new SEPs or eliminating or changing existing SEPs under the final rule. In the face of charges that SEPs are being abused, HHS is pursuing through a separate track a review of SEPs and of how eligibility for SEPs should be verified.
Under the final rule, an enrollee who was unable to terminate coverage due to a technical error has up to 60 days after discovering the error to terminate coverage retroactively. An individual who can demonstrate that his or her enrollment was unintentional, inadvertent, or erroneous can also request cancellation of coverage, which the exchange could grant if the enrollee's claim was supported by the totality of the circumstances. Finally, an enrollee who is fraudulently enrolled by another can cancel within 60 days of discovering the fraud. The exchange itself can also cancel enrollment under this circumstance. The exchange can set a deadline by which such cancellations must be initiated.
Eligibility Appeals
The final rule clarifies that individuals can appeal adverse SBE eligibility decisions to HHS. Another provision permits an appeals entity, exchange, or an agency administering an affordability program to request documents that an individual has already provided to another entity when necessary to properly adjudicate an appellant's appeal. Yet another provision allows an appellant to file an untimely appeal if the appeal was delayed by exceptional circumstances, such as a snow storm or power outage.
The final rule permits the dismissal of an appeal upon death of an appellant upon the request of an authorized representative. Another provision allows the holding a hearing with less than 15 days notice when the appellant requests it or the appeal is expedited and the appellate entity contacts the appellant or appellant's representative to set a time, location, and format for the hearing.
The final rule recognizes retroactive eligibility for an individual prevailing in an appeal of an erroneous initial determination to the date that could have applied had the determination been correct. The rule also requires exchanges to redetermine an employee's eligibility or notify the employee of his or her obligation to report changes in eligibility when the employee's employer prevails on an appeal, finding that the employer provided the employee affordable, minimum-value, coverage.
Individual Responsibility Exemptions
The final rule contains several provisions relating to the determination of exemptions from the individual responsibility requirement. Under the individual responsibility requirement, individuals must pay a tax unless they qualify for an exemption. The final rule provides that members of health care sharing ministries and Indian tribes and incarcerated individuals or individuals eligible to receive services from an Indian health provider can claim exemptions through the tax filing process and need not seek a certificate through the exchange.
Individuals who would have been eligible for Medicaid if their state had extended Medicaid to the under-65 adult population may qualify for a hardship exemption without applying for and being denied Medicaid. Individuals who qualify for a hardship exemption because their state did not expand Medicaid may claim the exemption on their tax return beginning with the 2015 tax year.
An individual responsibility exemption is available if an individual cannot afford coverage — that is, if the amount he or she would have to contribute for coverage exceeds the required contribution percentage of his or her income. An individual is also exempt if his or her required contribution exceeds the required contribution percentage for his or her household. Finally, if more than one member of a family is employed and the combined cost of coverage for all of them exceeds the required contribution percentage, the family is exempt.
The required contribution percentage was set for 2014 at 8 percent. It must be updated each year, however, for inflation—or more specifically for the excess in the rate of premium growth over the rate of income growth since 2013. HHS is changing the database it uses for calculating this ratio. Under the new approach to calculating the ratio, the required contribution percentage for 2017 is 8.16, an increase of 0.27 percentage points from 2016.
The rule includes a procedure for discontinuing, with notice and an opportunity to respond, applications for exemptions that are not completed. The applicant must be given 30 days to supply the information needed to complete the application. Finally, HHS will indefinitely allow state-based exchanges to use HHS to determine exemptions. States were supposed to begin processing exemptions themselves by the start of open enrollment for 2016.
The SHOP Exchange
Currently, employers in the SHOP can pick a single plan or allow employee choice within a single tier of coverage. Under the final rule, beginning in 2017, employers in the FF-SHOP can permit their employees "vertical choice," the option of picking all plans across all levels from a single insurer. State regulators may, however, request that this option not be made available in their state. They are asked to do so by March 16, 2016 and HHS must respond by April 1. SBE-FP states may decline to implement vertical choice.
The final rule modifies the requirements for effectuating enrollment in SHOP so that initial premium payments for new enrollees are due by the 20th day of the month prior to the month coverage begins, as opposed to the current requirement of the 15th day of the preceding month. Where an employer plan qualifies for retroactive SHOP coverage, all payments must be received for all months covered retroactively by 30 days after the event that triggers retroactive coverage before coverage is effectuated retroactively, but payments must be received by the 20th day of a month for retroactive coverage to be effectuated on the first day of the next month.
The final rule clarifies that employers may contribute a fixed percentage of the premiums paid by each individual employee or a percentage of the cost of a reference plan, leaving employees to pay the additional premium for a higher-cost plan. The costs of a tobacco surcharge are borne fully by the employee subject to it. The FF-SHOP does not yet have the capacity to support basing employer contributions on a composite premium.
The final rule modifies the definition of "applicant" for SHOP coverage to include employers seeking eligibility to purchase coverage through the SHOP but not enrolling in it themselves. The rule also clarifies that termination of SHOP enrollment is not necessarily termination of group coverage, which may continue in the outside market. FF-SHOP employers must allow their employees an open enrollment period of at least a week annually. Employers can select a coverage effective date up to 2 months in advance and submit plan selections by the 15th of a month for coverage the next month or after the 15th for coverage the second following month.
SHOPs may auto-enroll enrollees in the same coverage for a subsequent year unless the enrollee opts out or, alternatively, require enrollees to re-enroll themselves. The FF-SHOP, however, does not currently have auto-enrollment capability. When an enrollee in the SHOP changes from one plan to another during open enrollment or a special enrollment period, termination of the first plan is effective the day before the effective date of the new plan to avoid a gap in coverage.
Employers must give qualified employees 90-days notice before an adult child reaches age 26 and ages off coverage. Under the final rule, employers or employees can appeal the failure of a SHOP to give timely notice of an eligibility determination. Employers are able to determine whether the effective date of coverage following a successful appeal should be prospective or retroactive. The employee can also make this election if the appeal is of the employee's eligibility.
Selective Contracting And Standard Plans In The FFE
For the first years of the operation of the FFE, HHS used an "open market" approach—all QHPs were welcome. Under the ACA, however, an exchange may refuse to certify a QHP if it is not in the interest of qualified individuals and employers. HHS intends to continue focusing denial of certification on situations involving the integrity of plans, such as material non-compliance with applicable requirements, financial insolvency, or errors in data submissions. HHS is considering, however, becoming more of an active purchaser, possibly denying certification to plans that meet minimum certification requirements but are not in the best interest of consumers.
One specific proposal implemented by the final rule is standardizing plans offered in the exchange, an approach several states have taken. There is considerable evidence that having to choose among too many plans can cause consumer confusion and discouragement. To focus consumer choice, HHS is establishing a set of standardized plan options for 2017. Insurers will not be required to offer standard options and can offer additional options if they chose to do so, but standardized plans will be displayed at HealthCare.gov in a manner that made them easy to identify so that consumers can compare standard plans across insurers (although web-brokers and insurers are not at this time required to differentially display standardized exchange plans on a non-exchange website).
Plan options are standardized under the final rule for the gold, silver, and bronze levels and for each of the enhanced cost-sharing tiers within the silver level. Standardized options have a single provider tier, a four-tier (or possibly five-tier) formulary, a fixed in-network deductible, a fixed annual cost-sharing limit, and standardized copayments and coinsurance levels for key EHB services. Standardized plans must offer some services before the deductible applied, including primary care visits, drugs, and at silver and higher levels specialist visits and mental health and substance abuse disorder outpatient services.
The 2017 standard silver plan, for example, has a $3,500 deductible; an annual out-of-pocket limit of $7,150 (the legal maximum); a $400 copay for emergency room care after the deductible; access to urgent care, primary care visits, specialist visits, mental health and substance abuse disorder outpatient care, and all levels of drugs before the deductible subject only to copayments; and 20 percent coinsurance for inpatient hospitalizations and other services. Standardized plans for families double the deductible and out-of-pocket limit. The same standardized plans will be offered nationally as the FFP cannot accommodate state customization, although laws in some states may preclude the offer of standardized products.
Insurers can offer more than one standardized plan if the plans are meaningfully different, such as an HMO and PPO plan. Non-standardized plans also continue to have to be meaningfully different. Plans are not considered meaningfully different just because one is health savings account eligible and another is not or because they do or do not offer dependent coverage..
FFE User Fee
The FFE user fee charged to market QHP plans through the FFE will continue to be 3.5 percent of premium. This continues to be less than the actual full cost of providing FFE services. SBE-FP insurers will be charged a user fee of 3 percent for the use of the federal platform services. For the 2017 benefit year, however, this fee will be reduced to 1.5 percent to permit a transition. HHS will offer the option of collecting on behalf of the SBE-FPs the entire user fee to fund both SBE and FP operations.
The Drug Formulary Exceptions Process
Current rules require plans providing EHB to have a pharmacy exceptions process, independent of the standard appeal processes, through which an enrollee or enrollee's physician can request and gain access to clinically appropriate drugs, on an expedited basis if necessary. For 2016 this process includes an internal and external review procedure. The costs of non-formulary drugs obtained through an exception apply to annual limitations on cost-sharing.
Some states, however, have different processes for accessing non-formulary drugs. The final rule amends the exceptions process so that plans may be required to comply with state requirements in states that have procedures that are at least as stringent as the federal process and provide for internal and external review, an exceptions process, and timeframes that are the same or shorter than the federal timeframes. States determine which process applies. The NPRM proposed clarifying the availability of medication-assisted treatment for opioid addiction as a mental health and substance abuse disorder EHB. The final rule holds this issue for further guidance in the near future.
The Premium Adjustment Percentage
The ACA requires HHS to determine an annual premium adjustment percentage, which is used to set the rate of increase for three ACA parameters: the maximum annual limitation on cost sharing; the required contribution percentage for individuals for minimum essential coverage, which HHS uses to determine eligibility for hardship exemptions under the individual responsibility requirement; and the assessable payment amounts owed by employers under the employer mandate. Under the ACA, the premium adjustment percentage is the percentage (if any) by which the average per capita premium for health insurance coverage for the preceding calendar year exceeds such average per capita premium for health insurance for 2013.
For 2017, the percentage increases 2013 amounts by 13.25256291 percent. Based on this percentage, the maximum out-of-pocket limit for 2017 will be $7,150 for an individual and $14,300 for a family, compared to $6,350 and $12,700 for 2014. For reduced cost sharing plans, the out-of-pocket maximum will be $2,350 for individuals with incomes below 200 percent of the federal poverty level and $5,700 for individuals with incomes between 200 and 250 percent of the FPL, with family maximums at twice those amounts. Standalone dental plan dollar limits are updated under the final rule based on the dental CPI.
The Actuarial Value Calculator
The final rule allows HHS greater flexibility for designing the AV calculator, used to determine the actuarial value of plans. HHS published with the NPRM the proposed 2017 AV calculator and AV calculator methodology.
Network Adequacy
The adequacy of health plan networks has been a major focus of recent controversy as QHP plans have moved to ever narrower networks to remain price competitive in the exchanges. The National Association of Insurance Commissioners (NAIC) has been engaged in a major effort to amend its state network adequacy model law to address this issue. Existing QHP rules require networks to be adequate to ensure access to services without unreasonable delay and also require the availability of up-to-date provider directories. The proposed rule would have gone further, but the final rule is much more timid.
Under the NPRM, FFE states would be asked to use quantifiable network adequacy metrics to determine adequacy. HHS would provide guidance with metrics that could be used, but they would at least include time and distance standards and minimum provider-covered person ratios for the specialties with the highest utilization rates in the state. In FFE states that do not apply quantifiable network adequacy standards, the FFE would have, under the NPRM, applied time and distance standards, calculated at the county level, similar to those used for evaluating Medicare Advantage plans.
The final rule backs off of this requirement. Instead HHS states that it intends to give states time to act on the NAIC recommendations. HHS intends itself to apply quantitative standards in evaluating QHPs in the FFP, but will not require the states to do so at this time. HHS also states in the preface that it will monitor the practice of tiering, but will not necessarily focus only on access to providers provided by the lowest tier of coverage.
The final rule does contain a couple of transition requirements. First, QHP insurers in the FFE will be required to provide 30 days notice (or notice as soon as practicable) to regular patients of providers who are being dropped from the plan's network, regardless of whether the termination is for-cause or no-cause or is simply a non-renewal. Insurers should work with providers to identify patients who are seen on a regular basis by a provider or who receive primary care from a provider to receive such a notice.
Insurers are also encouraged to inform enrollees of comparable in-network providers. The preface states that this requirement does not apply if a practitioner is leaving a practice but the practice remains in-network. In this situation the practice should notify the patient.
Second, QHP insurers in the FFE are required to allow enrollees under treatment by a provider terminated without cause to continue treatment for up to 90 days if the patient is 1) in an ongoing course of treatment for a life-threatening condition, 2) in an ongoing course of treatment for a serious acute condition, 3) in the second or third trimester of pregnancy, through the postpartum period, or 4) in a course of treatment where the treating physician attests that discontinuing care from the provider would worsen the condition or interfere with anticipated outcomes. Insurers are only be responsible for paying the providers its in-network rate and the provider can balance bill the patient.
An ongoing course of treatment includes mental health and substance abuse disorder treatments. Decisions with respect to requests for continuing care coverage are subject to internal and external appeal.
Finally, the NPRM proposed very limited protection for individuals who receive care from an in-network facility but receive services from out-of-network providers, which became far more limited in the final rule. The final rule provides that, beginning in 2018, if there is a potential of out-of-network ancillary providers (such as anesthesiologists or pathologists) providing services in in-network facilities, a plan may provide notice to an enrollee at least 48 hours in advance or at the time of prior authorization (whichever is earlier) of the possibility of out-of-network billing. Although the preface encourages insurers to provide customized notice, it allows a simple form notice.
If a plan fails to provide this notice, any cost-sharing imposed by out-of-network providers must be charged against the plan's out-of-pocket limit so that the insurer absorbs costs above the limit. This provision applies to all QHP plans, not just those in the FFE. But it does not apply to true balance billing—provider charges that exceed in-network payments. And it does not apply to plans that do not plans that do not cover out of network services. This is obviously not a solution to the problem of surprise bills.
Fortunately, this provision does not preempt more protective state laws, which have already been adopted by a number of states and may be adopted by more, as the NAIC has finalized its model act.
HHS had requested comments on further network adequacy issues it might address, including network resilience policies in disasters and whether wait-time measures should be applied to determine network adequacy. HHS solicited comments on whether insures should be required to survey providers on a regular basis to see if the providers are accepting new patients, and whether insurers should be required to disclose their selection and tiering criteria to regulators. The preface discusses comments HHS received on these issues but HHS does not adopt any rules regarding them.
HHS is, however, committed to establishing a rating or classification system for HealthCare.gov that would classify plans by network breadth to allow consumers to more easily identify narrow and less narrow networks. It is consumer testing ways of displaying these rankings.
Essential Community Providers
HHS continues to tinker with its policies regarding essential community providers, which serve underserved communities. Beginning in 2018, it will allow health plans to count multiple contracted full-time equivalent ECP practitioners practicing at a single location as separate ECPs for meeting ECP participation ratios. The denominator at that time will be updated to include separately all ECP practitioners reported to HHS in the insurer's plan service area. For 2017 HHS will stick with its current policy of counting multiple providers at a single location as a single provider. HHS recently released its current list of ECPs.
The Premium Payment Grace Period
The final rule clarifies that the three-month grace period for nonpayment of premiums for individuals receiving premium tax credit assistance still applies even if an individual loses premium tax credit assistance during the grace period. The rule also clarifies that if an individual reenrolls in coverage for a new year with the same insurer in the same product, the enrollee is not required to pay a binder payment for coverage for the new year and is protected by the three-month grace period for nonpayment. An individual can reinstate coverage during the three-month grace period by making a payment that satisfies the insurer's payment threshold requirements.
Enforcement And Appeals
The final rule makes certain amendments to clarify HHS enforcement policies and insurer appeal rights. For 2014 and 2015, HHS applied a good faith compliance enforcement policy. For 2016 and future years, good faith will not be a defense in compliance actions. HHS states that it is pursuing a progressive compliance model in the future and will consider how new a particular requirement is when deciding on an appropriate enforcement strategy.
Where an insurer informs HHS that it cannot provide coverage to enrollees who purchase a QHP, HHS may suppress the sale of the QHP by the insurer or terminate its QHP certification. HHS may also decertify QHPs that are the subject of state enforcement actions or do not have funds to continue to provide coverage for enrollees for the remainder of the plan year.
The final rule makes number of modifications in the administrative appeals process for insurers, including clarifying grounds for requesting reconsiderations and appeals involving the premium stabilization programs and timing for requesting reconsiderations. These will not be explored in detail here.
The rule also requires insurers to notify enrollees of benefit display errors that might have affected their plan selection and of the availability of a special enrollment period under these circumstances. This does not include display errors in network directories or drug formularies.
Quality And Patient Safety
The final rule strengthens QHP quality and patient safety standards for 2017 to require hospitals with more than 50 beds to use a patient safety evaluation system to continue QHP participation. QHP participating hospitals with more than 50 beds must also work with a patient safety organization and implement a comprehensive person-oriented discharge program or implement an evidence-based initiative to improve health care quality and patient safety.
HHS also strongly supports hospitals tracking patient safety events using the Agency for Healthcare Research and Quality Common Formats but does not require this. QHPs must collect documentation to ensure compliance with these standards.
Third Party Payments
The final rule attempts to tidy up the rules governing third-party payments for QHP coverage. The ACA does not prohibit third parties from paying for QHP coverage, but there would be obvious concerns if, for example, hospitals could purchase coverage for their patients, thus shifting the risk of uncompensated care.
In March of 2014, HHS published an interim final rule requiring QHP and stand-alone dental plan insurers to accept payments from Ryan White HIV/AIDS programs, other federal or state government programs, and Indian tribes and organizations. The final rule clarifies that state government programs include local government programs, and that when government programs provide funding through grantees, insurers will also be required to accept premium payments from those grantees.
The rule applies both to premium and cost-sharing assistance and applies to downstream entities like pharmaceutical benefit managers who might handle cost-sharing payments by third parties. HHS continues to consider whether plans should be required to accept payments from charitable organizations and what guardrails would be needed to protect the risk pool if they were required to do so.
Medical Loss Ratios
Finally, the final rule rejects a couple of proposed changes to the medical loss ratio requirement. The NPRM would have required insurers to use a six- rather than three month run-out period for reporting incurred claims to facilitate more accurate MLR calculations, but this change was not adopted in the final rule.
More importantly, the final rule rejects a suggestion that fraud prevention expenses be counted as claims costs in calculating medical loss ratios. HHS concluded, as had the NAIC earlier, that fraud prevention is a cost-containment activity and thus an administrative expense. The preface notes, however, that the NAIC is currently considering if further quality improvement activities should be considered in the numerator of the medical loss ratio formula and is being urged to consider fraud prevention as a quality improvement activity.
from Health Affairs Blog http://ift.tt/1OQoQYP
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