On November 20, 2015, the Center for Medicare and Medicaid Services (CMS) issued a notice of proposed rulemaking (NPRM) for its 2017 Benefit and Payment Parameters (BPP) rule. Every fall CMS publishes a BPP proposed rule, which is finalized every spring for the next year. The BPP includes benefit parameters for qualified health plans and payment parameters for the Affordable Care Act’s premium stabilization programs—hence its name—but it is also an omnibus rule that CMS uses to amend and update all of its rules governing the ACA marketplaces and health insurance markets generally.
Perhaps the most notable changes in the 2017 BBP NPRM are its proposals to create standardized benefit plan options in the federally facilitated marketplace (FFM) and to impose new network adequacy standards, some of which apply in the FFM and some to all insurers. As is usually the case with the BPP, this is a massive NPRM—381 pages. It is also highly technical, making in most instances adjustments to existing rules rather than setting out new rules. This very brief summary will be followed over the next couple of days by a more complete analysis.
Standardized Plan Options
Although one important feature of the marketplaces is the offer of consumer choice among a variety of plan options, there is also evidence that too much choice can result in consumer confusion and discouragement. Several states have experimented with standardized plans to simplify consumer choice.
The proposed rule would create six standard option plans—a bronze, a gold, a standard silver, and three silver plan options — at the 73 percent, 87 percent, and 94 percent actuarial-value levels — available for individuals eligible for cost sharing reduction payments. The plans would have
- standard deductibles (ranging from $6,650 for the bronze plan to $3,500 for the standard silver to $250 for the 94 percent silver cost-sharing variation),
- four-tier drug formularies,
- only one in-network provider tier,
- deductible-free services (for the silver level plan including urgent care, primary care visits, specialist visits, generic drugs, and some preferred brand drugs),
- and a preference for copayments over coinsurance.
Insurers would not be required to offer standardized plans and could offer non-standardized plans (as long as they met meaningful difference standards), but standardized plans would be displayed in a manner that would make them easy for consumers to find.
HHS also seeks comment as to exercise of its authority to deny certification to qualified health plans that are not in the interest of consumers, even if they otherwise meet certification requirements.
Network Adequacy Standards
The NPRM would make several changes as to network adequacy requirements, reflecting in part the work the NAIC has undertaken in drafting a model network adequacy statute for the states. First, states in which the FFM is operating would be asked to select from a set of network adequacy metrics articulated in the letter to issuers. If they chose not to do so, the FFM would impose on insurers applying for qualified health plan (QHP) certification in the FFM default standards regarding consumer travel time and distance to providers. CMS might also create standards for identifying network strength to improve transparency for consumer choice.
Second, the NPRM would impose various continuity-of-care requirements in the FFM. Insurers would have to provide 30 days’ notice or as much notice as practicable before discontinuing a provider. Where an enrollee is in active treatment (for example for a serious acute or life-threatening condition or in the second or third trimester of pregnancy), the insurer would have to cover continuing care for up to 90 days or until treatment was completed.
Third, insurers offering QHPs in any marketplace would have to provide enrollees at least 10 days’ notice prior to a procedure in an in-network facility if the enrollee might receive out-of-network services, for example from an out-of-network anesthesiologist or pathologist. If it failed to do so, the enrollee would be allowed to count the out-of-network cost sharing against the enrollee’s out-of-pocket cost sharing limit and his or her responsibility would thus be capped.
A New Marketplace Category
The proposed rule recognizes a new category of marketplaces: the state based marketplace using the federal platform (SBM-FP). SBM-FPs — currently Hawaii, Oregon, Nevada, and New Mexico — are state-based marketplaces using healthcare.gov for enrollment and eligibility functions. The SBM is responsible for plan management, consumer assistance, and ongoing oversight and program integrity. The NPRM proposes maintaining the current FFM user fee of 3.5 percent of premiums for QHP insurers in the FFM for 2017, but for SBM-FPs CMS would take 3 percent for healthcare.gov functions. Initially CMS might reduce the fee to 1.5 or 2 percent.
The 2017 open enrollment period will run from November 1, 2016 to January 31, 2017, the same period as the 2016 open enrollment period. The NPRM proposes changing the hierarchy for re-enrollment so that auto re-enrollees who had been enrolled in a silver plan that was no longer available would be auto re-enrolled in the most similar silver plan product offered by the same insurer, rather than in a different metal level in the same product, thus retaining tax subsidy eligibility. CMS also asks again, as it did for 2016, whether it should take a different approach to auto reenrollment when the enrollee’s plan becomes substantially more expensive.
Other Proposed Changes
The NPRM proposes that exemptions from the individual responsibility requirement for members of health care sharing ministries or Indian tribes and for incarcerated individuals be done exclusively through the tax filing process. The NPRM would also clarify and simplify the process for determining hardship exemptions through the marketplace.
The only remaining premium stabilization program for 2017 will be the risk adjustment program. The NPRM proposes updates and minor modifications in this program. It also proposes adjustments in the reinsurance and risk corridor programs for 2016.
The NPRM proposes updates for the premium adjustment percentage which is used for determining inflation updates for the maximum annual cost-sharing limit, the contribution percentage for eligibility for the hardship exemption for unaffordable coverage, and the percentage of income used for determining when an employer offers affordable coverage. For 2017, the percentage would increase 5.1 percent over 2016, 13.3 percent over 2014. The annual maximum out-of-pocket limit would increase from $6,350 in 2014 to $7,150 for an individual for 2017.
The NPRM proposes to amend the SHOP regulations to allow two new employee choice options. Employers can currently offer their employees a single plan or the choice of plans within a metal tier. Under the NPRM, they could offer “vertical choice,” the choice of plans in any tier from a single insurer. CMS is also considering a fourth option under which employees could choose plans within a single tier plus the plan above it.
The NPRM modifies requirements that apply to navigators and assisters. Navigators would be required to provide post-enrollment assistance for functions such as marketplace eligibility appeals, application for exemptions through the marketplace, and transitioning from coverage to care. Navigators would be required to serve underserved and vulnerable populations and to complete training before undertaking outreach and enrollment activities. The NPRM also modifies requirements that apply to agents and brokers and requests comments on standards that would allow insurers and web-brokers to directly enroll individuals in the marketplace while remaining on their own website.
The NPRM would allow student health plans to use any actuarial value above 60 percent. It also clarifies risk pool requirements that apply to student health plans. It redefines large and small employer in conformity with recent legislation. It requires all insurers to submit rates using the unified rate review template regardless of whether rates are increased, decreased, or unchanged. The NPRM also changes the marketplace employer notice and appeal provisions.
There is much more in the rule that will be analyzed over the next few days. But these are the headlines.