Implementing Health Reform: Little Rulemaking, But A Steady Stream Of Guidance & A Streamlined Application
April 30th, 2013
So far, late April 2013 has brought little in the way of formal rulemaking under the private insurance reform and Medicaid titles of the Affordable Care Act. The implementing agencies, however, (the Centers for Medicare and Medicaid Services (CMS) of the Department of Health and Human Services (HHS), the Department of Labor, and the Department of Treasury) have been issuing a steady stream of guidance in the form of Frequently Asked Questions (FAQs) illuminating issues that have arisen under both titles.
On April 29, 2013, the agencies issued ACA Implementation FAQs-Set 15 addressing a range of these issue. The first FAQ answers the question of whether a health plan that was granted a waiver from the annual dollar limit prohibition under the “mini-med” waiver program can extend the expiration date of the waiver by changing its plan year (or, in the individual market, policy year) before the expiration of the waiver. Since the 2014 insurance reforms do not take effect until the beginning of the first plan (or policy) year after January 1, 2014, some insurers have been amending their plans or policies to push the expiration date deeper into 2014 and delay the effective date of the 2014 changes. The FAQ clarifies that a plan cannot delay the effective date of the annual dollar limit prohibition through this strategy. When the current waiver expires, an insurer or self-insured plan must eliminate dollar limits (although it can, of course, do so earlier).
Discrimination against providers based on licensure. The second FAQ of Set 15 asks whether regulations can be expected to implement the provision of the ACA prohibiting licensure-status-based discrimination, by non-grandfathered insurers or plans, against health providers acting within their scope of practice under state law. The FAQ states that the provision is self-executing and regulations will not be issued in the near future. Pending further guidance, insurers must implement the provision pursuant to a reasonable, good faith interpretation of the law. The law does not require plans or issuers to accept all types of providers into a network nor does it necessarily require equal provider reimbursement rates, but an insurer cannot refuse, for example, to cover the services of a nurse practitioner or anesthetist simply because he or she is not a medical doctor.
Clinical trial participation. A third FAQ relates to an ACA provision prohibiting non-grandfathered insurers or group health plans from refusing to allow qualified individuals to participate in a clinical trial “with respect to the treatment of cancer or another life-threatening disease or condition,” or to refuse coverage of routine patients costs for items and services furnished in connection with such a trial. The provision further prohibits discrimination against a qualified individual for participating in a clinical trial.
This FAQ states that the clinical trial provision is also self-executing and will not be subject to rulemaking in the near future. Again, good faith, reasonable compliance is expected. While the provision is, of course, self-executing, and one can understand HHS wishing to forego unnecessary rule-making at this moment, the term “life-threatening disease or condition,” is not self-explanatory. Many conditions may not be immediately life-threatening, but may be over the longer term, and research on such conditions is vitally important. Further guidance on this term may, therefore, be needed.
Insurer reporting requirements. The final FAQ in Set 15 addresses provisions of the ACA that require qualified health plans to report certain information (such as data on enrollment, disenrollment, denied claims, and out-of-network cost-sharing practices) to exchanges, HHS, and state insurance commissioners and to make that information publicly available. The ACA also requires non-grandfathered group plans and issuers that are not qualified health plans to provide the same information to HHS, the state commissioner, and the public. The FAQ observes that some of this information may not be available until after the first year of operation, and delays the effectiveness of the requirement until the end of the first benefit year.
Insurance market reforms. A second set of FAQs relating to the health insurance market reforms was released on April 26, 2013. The first of these FAQs clarifies that health insurers whose products include both grandfathered and non-grandfathered business can terminate their non-grandfathered business, leaving their grandfathered business in place, but only if they meet guaranteed renewability requirements by offering substitute coverage for the terminated non-grandfathered coverage.
A second FAQ in this set clarifies that, although state high-risk pools may continue beyond January 1, 2014, enrollees in state high-risk pools have the same rights as any other individuals to move to the exchange or outside-the-exchange individual market. Provisions of the Health Insurance Portability and Accountability Act that required states without high risk pools to require insurers — or certain insurers of last resort — to provide individual market coverage become moot in 2014, when guaranteed availability begins to apply to all non-grandfathered insurers.
A third FAQ clarifies issues that have arisen relative to geographic rating areas. Only one geographic rating factor will apply in any one state to any employer, and will be based on the employer’s primary business location. Only one geographic rating area will also apply per family, based on the location of the primary subscriber. Insures can have only one geographic rating factor per rating area per single risk pool (individual or small group or combined) and cannot vary rating area by product.
This set’s fourth FAQ reiterates one more time that, regardless of state law to the contrary, association coverage provided to individuals is individual coverage, association coverage offered to small groups is small-group coverage, and association coverage offered to large groups is large-group coverage. In “mixed” associations, each association member must receive coverage that complies with the rules that apply to its status as individual, small group, or large group.
Finally, the FAQ states that issuers may not change a plan or premium rates during the course of a plan or policy year because coverage becomes secondary to Medicare, but may offer to replace the plan with a lower cost Medicare supplement product. Because Medicare supplement products are excepted benefits, not subject to ACA protections, the change can be made only with the consent of the enrollee.
Medicaid. On April 25, 2013, the Center for Medicare and Medicaid Services (CMS) issued yet another set of Frequently Asked Questions (FAQs) clarifying further the relationship between CMS and the states in the evolving operation of the Medicaid program. The primary message of the FAQ is that 75 percent federal matching funds will be available to the states as of October 1, 2013 through the advance planning document (APD) process for the maintenance and operation of modified adjusted gross income (MAGI) eligibility systems. This interface is vital to the operation of the 2014 reforms, and the FAQs provide the states with a substantial incentive for having it in place by October 1, 2013.
The 75 percent funding is available for forms, system hardware and supplies, software maintenance and documentation, and personnel costs associated with intake, eligibility determinations, renewals, customer service directly related to eligibility determinations (including call centers), and system maintenance. The enhanced funding is available for initial eligibility verification, but not for post-eligibility audits or verifications. It is also not available for outreach and marketing, policy development, staff development and training (other than training directly related to the operation of the new eligibility system), program integrity, appeals, or on-going case maintenance operations. The 75 percent funding will not expire. It is independent of the 90 percent funding that has been available for the design and development of ACA compliant eligibility systems.
The 75 percent enhanced funding is only available for systems that are in compliance with Medicaid IT standards. The 75 percent matching funding is also available only to states that implement a shared MAGI-based single-streamlined eligibility system that interfaces with the exchange eligibility system. Until a shared MAGI-based system is online that interfaces with the exchange, states may only receive 50 percent federal matching for eligibility determinations. States must in any event implement MAGI-based determinations and the streamlined single application shared eligibility system, but enhanced federal funding will give them an added incentive to do so on time.
The FAQ also addresses a couple of other timely issues. First, it describes again the difference between the “assessment” and “determination” models of eligibility determination in states that have federally facilitated exchanges. States may choose to either have the FFE determine Medicaid and CHIP eligibility or assess eligibility for a subsequent determination. Under both models, the FFE will apply state eligibility requirements. If a state opts for the determination model, it must accept the FFE’s determination of eligibility as final. Under the assessment model, the state will make the final determination but must accept FFE findings respecting eligibility if the FFE applies state eligibility standards. If a state under the assessment model subsequently determines an applicant to be ineligible, it must notify the FFE, which can then determine premium tax credit eligibility. The FFE will not integrate its enrollment files with the state Medicaid and CHIP programs, but will verify current eligibility status on application and check state enrollment files quarterly to ensure that there is not duplication.
In addition, a final Medicaid FAQ explains briefly CMS policy with respect to 1115 Medicaid demonstration projects going forward. Section 1115 of the Social Security Act gives CMS broad discretion to permit the states to pursue Medicaid demonstration projects that deviate from standard Medicaid program requirements. Section 1115 has often been used in the past to permit states to custom design their own Medicaid programs. The FAQs clarify that going forward, CMS will not approve any state 1115 waiver programs with enrollment caps or periods of ineligibility, but also that demonstrations focused on how care is delivered will not generally affect a state’s matching rate, and that integrated care models may even be possible without an 1115 waiver. CMS has established a Medicaid Managed Care resource center to assist states further with managed care initiatives.
Exchange funding. HHS also released on April 23, 2013, two FAQs regarding the use of federal exchange grant funding for state marketing activities in partnership and FFE states. States may use exchange grant funding for marketing, but they must use federal messages and share their marketing materials with HHS in advance of printing or distribution. Materials must also be accessible to persons with disabilities or limited English proficiency. States may place a single state emblem on their marketing materials, but must also include the federal insurance marketplace logo. Only a state with a state exchange or consumer assistance state partnership may separately brand its consumer assistance program materials.
A Streamlined Exchange Application
Finally, HHS released on April 30, 2013, the latest draft of the forms that the exchanges will use for determining eligibility. Proposed forms HHS had released earlier were widely criticized because of their length. The new forms are much shorter: 3 pages for an individual applicant and 7 for a family (not counting a page of instructions and additional pages to be filled out if the applicant receives assistance, has employee coverage, or is a Native American or Alaskan Native). Applicants not seeking premium tax credits will have to provide even less information. The administration notes that this is much shorter than the average 17 page private insurance application form. Since health status will be irrelevant to coverage, and the only information relevant to enrollment is now age, family composition, household composition, household income, address, citizenship or residency status, and potential Medicaid or employer coverage, the form is in fact quite concise.
Curiously, the form does not ask about tobacco use, although it can be a relevant rating factor. The form does instruct financial assistance applicants who have available employee coverage to provide information to calculate the affordability of that coverage taking into account available discounts for tobacco cessation programs, but not discounts for other wellness programs. Employers who do not offer affordable coverage, that is, cannot make unaffordable coverage otherwise affordable by offering wellness discounts, other than smoking cessation programs.Email This Post Print This Post
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