Section 2794 of the Affordable Care Act requires the Department of Health and Human Services (HHS), in conjunction with the states, to review "unreasonable increases in premiums for health insurance coverage." Section 2794 further provides that:
The process established under paragraph (1) shall require health insurance issuers to submit to the Secretary and the relevant State a justification for an unreasonable premium increase prior to the implementation of the increase. Such issuers shall prominently post such information on their Internet websites….
Under implementing regulations, premium increases are reviewed for unreasonableness by states determined by the Centers for Medicare and Medicaid Services (CMS) to have "effective rate review programs," or by CMS itself in states that do not have such programs. Currently CMS reviews the reasonableness of rates in only five states as the rest have been determined to have effective rate review.
Implementing regulations provide that rate increases exceeding 10 percent (or an HHS approved state-specific threshold) are subject to review by CMS or by states. Rate increases have been reviewed at the product level until this year, but for policy years beginning as of January 1, 2017, rate increases are being reviewed by at the plan level. Premium increases in excess of 10 percent are not per se unreasonable, but may be considered to be unreasonable if they are determined by CMS or a state after further review to be excessive, unjustified, or unfairly discriminatory.
If rates are determined to be unreasonable by a state, the state may have the authority to disapprove them. If the state lacks this authority, however, or if CMS determines a premium increase to be unreasonable in states where it does review, the insurer may nonetheless implement the increase. The insurer must, however, submit to CMS or the state a "final justification" of the unreasonable rate increase. It must prominently post on its website publicly available documentation it submitted in support of its rate filing, the final state or CMS determination of unreasonableness with the supporting explanation provided by CMS or the state, and the insurer's final justification for implementing the rate increase. This information must continue to be available for three years.
On September 26, 2016, CMS released a guidance further clarifying the "prominent display" requirement and the required content of the final justification. A justification is "prominently posted" if it can be viewed on the insurer's public website through a clearly identifiable link or tab from the home page without requiring an individual to create or access an account or enter a policy number. An individual must be able to easily determine which rate filing applies to a specific product in a particular market and year.
The final justification cannot simply restate the rationale in the initial rate filing. It must include a thorough explanation and analysis of the insurer's decision to implement the unreasonable rate increase and must respond to the concerns raised by CMS or the reviewing state.
It is not clear why CMS is offering this further guidance a half decade into the rate review program, but given the reportedly high level of premium increases for 2017, further clarification was presumably judged necessary.
from Health Affairs BlogHealth Affairs Blog http://ift.tt/2dugGfy
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