March 5th, 2013
As I have already noted in several previous posts, March 1, 2103 was a banner day for Affordable Care Act implementation. In the midst of all of the other regulatory issuances publicly released by the implementing agencies on March 1, 2013, one seems to have slipped by particularly quietly. It is entitled “Letter to Issuers on Federally-facilitated and State Partnership Exchanges” and contains the most detailed information to date as to how the federal exchanges are going to work and what they will ask of qualified health plan (QHP) issuers. It is only a proposal, with comments due by March 15, but it is a clear indication of where the Department of Health and Human Services is heading.
Much of the information in this guidance can be found in already-released regulations or guidances, but the level of operational detail found in this letter — including in particular implementation timelines—is unprecedented. It is perhaps the clearest sign to date that the FFE is in fact going to happen, and will arrive on time.
As the title states, this guidance takes the form of a letter to insurance issuers. It covers both the federally facilitated exchanges (FFEs) and state partnership exchanges, which are effectively FFEs in which the states agree to perform certain plan management or consumer-assistance functions. The guidance describes how the FFE will work, but also notes areas where partnership states have discretion to follow a different approach. The policies described in the letter apply for 2014. HHS promises similar letters covering operational updates on an annual basis going forward.
QHP certification standards. The first section of the guidance addresses certification standards for QHPs. HHS reiterates that it does not intend to duplicate state regulatory reviews of plan compliance with the 2014 market reforms, including review of coverage of the essential health benefits and of actuarial value. Specific review of health plans for compliance with exchange QHP standards will be conducted by the FFE in states that have neither a state exchange nor a partnership agreement, and by the state in states with a plan management partnership. Partnership states will have flexibility in the application of certification standards as long as their approach is consistent with HHS regulations and guidance. State-based exchanges will conduct their own reviews to ensure compliance with QHP-specific standards.
One of the certification standards that QHPs must meet is network adequacy. QHPs must maintain networks sufficient in numbers and types of providers to assure that all services are accessible without unreasonable delay. For 2014, the Center on Medicare and Medicaid Services (CMS) will rely on state analyses and recommendations where the state has the authority and means to assess adequacy and where state standards are as stringent as the federal QHP standards. In states that lack sufficient network adequacy reviews, CMS will rely on an issuer’s accreditation (commercial or Medicaid) to assure adequacy. Unaccredited insurers must submit their network access plans directly to HHS. CMS will also track complaints about adequacy and gather network data from plans to monitor compliance.
The letter contains a fairly extensive discussion of essential community provider coverage, most of which repeats requirements set out in earlier regulations. Issuers will meet ECP coverage requirements if they include 20 percent of available ECPs in their plan service area, including all Indian providers and at least one of each type of ECP category in each county in their service area in which that category is available. The categories include federally qualified health centers; Ryan White providers; Title X family planning providers; certain types of hospitals; and other ECP providers that serve low-income, medically underserved individuals.
An issuer that includes at least 10 percent of ECPs in its network will meet minimum expectations if it includes a narrative justification describing how it will provide an adequate level of service for low-income and medically underserved enrollees. Issuers that do not meet even this minimum standard can provide a narrative justification, explaining how they will provide an adequate level of service, but CMS will approach such claims skeptically.
CMS will publish a list of ECPs that qualify, but issuers can also write in ECPs that might be on CMS’s lists. An alternate ECP standard is provided for integrated issuers that provide services through employed physicians or through a single contracted medical group. This standard focuses on coverage of health professional shortage areas or 5-digit zip codes in which 30 percent or more of the populations falls below 200 percent of the poverty level.
The letter reiterates the intention of HHS to take a phased approach to accreditation. QHP issuers will be asked to provide information about their accreditation status and to upload current and relevant accreditation certificates from URAC or the NCQA. They will also be asked to provide Consumer Assessment of Healthcare Providers and Systems (CHAPS) date. For 2013 open enrollment, the FFE website will display, where available for plans of the same QHP product types and populations, two CAHPS Global Rankings for health plan or health care data (on a 1 to 10 scale) and results from one access-to-care rating. If commercial plan CHAPS data is not available, the exchange will display Medicaid product-line data. If no CHAPS data is available for a QHP, this will be noted on the website. Information on accreditation status will also be displayed on the exchange website.
Rate review. For 2014, CMS does not intend to duplicate state rate review. It will consider data and actuarial justifications submitted by QHP issuers seeking to increase rates and any recommendations from state regulators. QHP issuers in states that lack an effective rate review program will have to provide and post online justifications for rate increases. CMS will perform outlier tests to identify rates that are either relatively high or low compared to other QHP rates and notify the state regulator of rates that are outliers, but will accept the state’s final judgment as to the justification of rates.
The law prohibits QHPs from employing cost-sharing designs that will discourage enrollment by individuals with significant health needs. CMS will also conduct an outlier analysis of QHP cost-sharing to identify discriminatory benefit designs and submit outliers to more in-depth review. For 2014, CMS will identify cost-sharing outliers with respect to inpatient hospital or mental health stays, specialist visits, pregnancy and newborn care, behavioral health care, and prescription drugs.
CMS will also review information provided by plans on explanations and exclusions to ensure that QMPs do not reduce benefits for subsets of individuals if the action is not based on clinically indicated, reasonable medical management practices. Plans must also attest that they do not otherwise discriminate based on prohibited characteristics.
QHP review. Although the FFE will accept all qualified QHP issuers initially, it will review QHPs to ensure a “meaningful difference” among plans. CMS will first review plan benefit packages and costs to ensure that they are substantially different from plans offered by the same issuer in the same state in terms of plan type (HMO, PPO, etc), metal level, service area coverage, provider networks, premiums, cost sharing, benefits offered, or formulary structure. It will then decide whether consumers would be likely to distinguish a particular plan from other plans offered by the same issuer in the same service area in deciding whether it is in the interest of FFE enrollees to offer the plan. It will not evaluate stand-alone dental products for meaningful different.
Examples of QHPs that might not be meaningfully different would be plans with deductibles that vary only by $50 or out-of-pocket limits that vary by $100. CMS will also review out-of-pocket limits to make sure they comply with ACA requirements.
States participating as plan management partners will evaluate health plans against QHP certification standards as part of their normal regulatory process. They will communicate their recommendations to CMS, which will review the state’s recommendations against federal regulatory standards and notify the state if any concerns arise. CMS will also integrate state regulatory activities in states that do not elect partnership status in its QHP determinations. But CMS is ultimately responsible for QHP certification in FFE and partnership states.
QHP application and certification timeline. The letter sets out a timeline for the QHP application and certification process, which is discussed in some detail in the letter (click the table below to enlarge it):
CMS review of QHP applications will proceed simultaneously with state review during late spring and early summer of 2013. CMS will conclude its review in time for plans to review the data that it will post on its website during the plan preview period. Issuers will be able to request corrections during this period but not to make substantive changes. State partnership exchanges will follow a similar timeline, but plan data will be submitted through the National Association of Insurance Commissioners’ (NAIC’s) SERFF system instead of HHS’s HIOS, and CMS will not begin review until the state certifies its recommendations on July 31. Certification will have to be renewed every year.
Stand-alone dental plans will be certified through more or less the same process. The guidance letter includes a lengthy discussion of ACA provisions that apply and do not apply to stand-alone dental plans. For 2014, stand-alone dental plans that cap annual cost-sharing at $1,000 or below will be considered to have a reasonable annual cost-sharing limit. HHS has determined that a stand-alone dental plan will be available in every FFE or partnership state; thus QHP providers in all FFE states can omit pediatric dental care from their benefits package.
CO-OPs. CMS is responsible for certifying consumer-operated and oriented (CO-OP) plans, which must comply with CO-OP Program rules, federal-exchange standards, and state-specific exchange standards. CMS will “work closely” with the states in evaluating CO-OPs, but will make final certification decisions. CO-OP plans will be certified for two years. The Office of Personnel Management will certify multi-state plans for exchange participation.
Compliance plans. QHPs are encouraged, but not required, to submit a compliance plan as part of their QHP application. CMS will rely on the states to be primarily responsible for ensuring QHP compliance with standards that apply to insurance plans generally but will investigate compliance concerns that are Exchange-specific in nature, focusing primarily on problematic plans. CMS intends to rely primarily on the states for overseeing health plan marketing practices and materials. CMS will not independently approve marketing material.
Consumer enrollment and payment. The letter includes a detailed description of how consumer enrollment and payment will be handled. A qualified individual will apply for coverage, evaluate QHPs and compare options, select a plan, and select the desired amount of advance premium tax credits on the FFE website. The individual will then be directed to the appropriate QHP issuer’s website to pay premiums due above the tax credit amount and to provide any additional information needed by the QHP issuers, such as designating a primary care provider.
The exchange and QHP issuers will exchange electronic files containing enrollments, updates, cancellations, and terminations daily. Each enrollee will have a unique identifier, which will be replaced with a new identifier if the individual changes QHPs. The guidance sets out the standards and format for data exchange. The exchange and issuers must reconcile enrollment data at least monthly.
Issuers will establish cut-off dates for premium payment, which cannot be earlier than the last possible date for plan selection or later than the first date of coverage. Issuers can cancel coverage for individuals who do not pay their initial premium, but once an individual has paid at least one month’s premium, the issuer must allow a three month grace period before termination. The issuer only has to pay claims for the first month of this period, but thereafter can pend claims, which must be paid in full if the enrollee pays all premiums owed before the three month period ends. The issuer must notify both the enrollee and affected providers if payments are delinquent.
Agents and brokers. Agents and brokers who wish to work with the FFE or partnership exchange and are permitted to do so by state law must have state licenses and enter into an agreement with CMS. States will be primarily responsible for broker and agent oversight, but CMS can terminate an agreement with a broker/agent, and if it does so must notify the state. Issuers must ensure that any actions agents or brokers take on their behalf comply with federal and state laws.
Customer service. CMS will operate a call center to support FFE or partnership exchanges. It will be disability-accessible and be available in English and Spanish. The call center will support consumer education, customer self-service, and exchange, Medicaid, and CHIP program information, and will provide information about available consumer support such as assisters, navigators, agents, or others. Mobile support will be a strong focus of the exchange. QHPs are encouraged to engage in consumer education efforts. Issues must make available provider directories and track and resolve consumer complaints.
QHPs must provide meaningful access for individuals with limited English proficiency or disabilities. This includes free oral interpretation, written translations, and taglines for non-English languages indicating the availability of language services. CMS has still, however, not specified the languages to which this requirement will apply. An earlier version of the letter leaked in February contained much more specific and demanding requirements for language and disability access. (Taglines in 30 languages, oral translation in 150 languages, auxiliary aids and services for the disabled). It is hoped that the deletion of these requirements from the final letter does not mean that HHS is not committed to language and disability access.
Finally, CMS has developed a Model QHP addendum to assist QHPs in working with Indian health care providers.Email This Post Print This Post