Tuesday, May 3, 2016

ACA Implementation Round-Up: Insurer Quality Ratings And More

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An update to my April 29 Health Affairs Blog post linked to a CMS blog post describing a limited launch of the qualified health plan (QHP) quality rating system (QRS) for the 2017 open enrollment period. The Center for Medicare and Medicaid Services (CMS) has now released a bulletin, with further details on its plans for the QRS for 2017.

Under earlier technical guidance, QHP insurers are required to submit QRS clinical measures and QHP enrollee survey information during 2016 to support the display of quality ratings on HealthCare.gov for the 2017 open enrollment period. CMS beta tested its QRS for 2015, but has decided to delay a full-scale QRS launch until the 2018 open enrollment period.

HealthCare.gov will continue to consumer test the display of QRS star ratings before implementing them on the federally facilitated marketplace (FFM) nationwide. For 2017, star ratings will only be available in the FFM in five states: Michigan, Ohio, Pennsylvania, Virginia, and Wisconsin. These states were chosen because they had ample participation by QHP insurers and relative variation in star ratings in the beta test. CMS hopes that the further pilot testing will give it additional time to better ascertain how consumers will use quality reporting, to develop technical assistance and educational tools to facilitate the use of quality ratings, and to allow insurers to measure and improve the quality of their QHP offerings.

Insurers are still required to submit 2016 QRS clinical measures and enrollee satisfaction information to CMS and will receive feedback from CMS as to their quality ratings. State-based marketplaces that do not use the FFM platform will be provided with QHP quality rating information and may display quality ratings on their websites if they choose to do so. Insurers in the pilot test states and in state-based marketplaces that display quality ratings may use their QRS ratings in their marketing materials. But state-based marketplaces and insurers that choose to disclose quality ratings must include disclaimers that will be provided by CMS stating that the QRS is still in being tested.

Employer Coverage Verification Study

CMS has announced that it is conducting an employer verification study, requesting information from some employers about coverage that they offered during the 2016 plan year. CMS is examining whether an employee or sample of employees properly attested to not having been offered coverage for 2016 that met affordability or minimum value requirements. An employer-sponsored plan meets the minimum value standard if it has an actuarial value of at least 60 percent and covers substantial physician and inpatient hospital services. It is affordable if the employee's share of the annual premium for the lowest-cost self-only coverage is less than 9.66 percent of household income.

A CMS contractor may telephone employers between April and June 2016. Each call is expected to last 10-15 minutes. Employers will be asked to provide information regarding their lowest-cost self-only 2016 health plan as well as their employees' eligibility for employer-sponsored coverage. Participation is voluntary.

Risk Adjustment Infrastructure

On May 2, 2016, the CMS released at the Federal Register website a notice of its intent to establish a new system of records for the CMS Risk Adjustment Data Validation System (RAD-V). The notice is required by the Privacy Act of 1974. Health insurers in the non-grandfathered individual and small group market that attract low-cost enrollees pay into the risk adjustment program, while insurers that enroll high-cost enrollees receive payments from it.

The Department of Health and Human Services (HHS) does not have direct access to the "Edge Server" data that are used to compute insurer risk scores. Rather patient-specific data remains on the insurers' servers and the risk computations are based on reports provided by the insurers from these data. HHS may audit insurer records, however, to validate risk adjustment reports and compliance with program requirements. When HHS performs audits it will gain access to individually identifiable patient enrollment, demographic, claims, and encounter information as well as information on individual health care providers.

Data in the record system may be disclosable to CMS audit contractors; the Department of Justice and courts or other adjudicatory bodies if an audit results in litigation; federal or state fraud investigation entities; and federal agencies or contactors that deal with breaches of security or confidentiality requirements. The system is subject to HHS data security and confidentiality requirements under the Privacy Act and other federal data protection laws and executive orders. The notice identifies procedures under which individuals may query whether the system contains records about them and gain access to these records and contest their content.

Marketplace Insurer Payment

As I have described earlier, CMS is transitioning payment of marketplace insurers from the manual payment process that it has used for the first two years of the marketplaces—under which insurers have been paid based on monthly self-reports of enrollment and payment requests—to a "policy-based payment" system in which insurers are being paid through an automated payment system based on actual enrollments.

The transition was to have been completed as of the May 2016 payment cycle. For the first four months of 2016, however, insurers were actually paid based on their manual submission through an adjustment of the amounts otherwise due the insurers under the policy-based payment system. Beginning with May 2016, insurers that were overpaid because of this adjustment will have their overpayments withheld from future payments. In a bulletin released on May 2 at its REGTAP.info website (registration required), however, CMS stated that to ease cash-flow problems, insurers that received overpayments for January through April would have half of the overpayment withheld from their May payments and half from their June payments.

Moreover, May payments will be adjusted upward if the reduction in the May payment would bring total year-to-date payments to an insurer to less than 90 percent of the amount claimed under the manual payment system, June and July payments will also be adjusted upward if total year-to-date payments would otherwise be less than 75 percent of payments claimed under the manual payment system, with all remaining adjustments backed out in the August payment cycle.



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