On December 27, 2016 CMS released its Final Manual for Reconciliation of the Cost-Sharing Reduction (CSR) Component of Advance Payments for Benefit Year 2016.
Each month qualified health plan (QHP) insurers receive advance payments reimbursing them for reducing deductibles, coinsurance, copayments, and out-of-pocket limits for essential health benefits (EHBs) for their low-income and Native American enrollees. Each year, these advance cost-sharing reduction payments must be reconciled with the payments the insurers were actually due. The final manual sets out how this reconciliation process should take place for 2016 and how corrections should be made for 2014 and 2015 cost-sharing reduction (CSR) reconciliations.
Data submission for the reconciliation process for 2016 will begin on April 3, 2017 and must be completed by June 2, 2017. Claims settled after that point can be submitted in 2018 in restatements of 2016 filings. Claims for 2015 not included in 2015 reconciliation filings may be submitted in restatements of the 2015 CSR reconciliation data, but 2014 is closed at this point and 2014 data can be restated only for claims that were subject to appeal or presented other unusual circumstances.
After 2016, all insurers will have to use the “standard methodology” for CSR reconciliation. Under the standard methodology, all claims for EHB for each policy for which CSRs are due must be re-adjudicated as though all EHB claims had been submitted under the insurer’s standard silver plan that is associated with the CSR plan. The difference between the amount of cost-sharing under the CSR variation attributable to a policy and the standard plan cost-sharing must be reconciled with advance CSR payments actually received.
Recognizing that some insurers may not have the technical capacity to re-adjudicate claims, CMS allowed insurers to use simplified methodologies for 2014, 2015, and 2016. These “simplified” methodologies are in fact very complex and the methodology that must be applied varies depending on the number of claims an insurer has in various categories and whether the insurer pays on a fee-for-service or capitated basis. The simplified methodologies were described in my Health Affairs Blog post analyzing last year’s draft manual. Issuers that used the simplified methodology in 2015 can switch to the standard methodology for 2016, but if they do not they will default to the simplified methodology.
The 2016 draft manual is very similar to the 2015 manual, but incorporates guidance that CMS has provided over the first two years of CSR reconciliation, includes updated attestations and guidance on estimating the EHB portion of claims, and additional information on how CMS will handle reporting outliers. The final manual includes revised language on the handling of discrepancies and appeals based on the 2018 payment notice, an additional optional data element for premiums, and an updated process for selecting a methodology.
CMS has also just released its Key Priorities for FFM Compliance Reviews for the 2017 Benefit Year. The document includes two lists, one of qualified health plan certification requirements that CMS intends to be the focus of its compliance reviews for 2017, such as marketing and benefit design, agent and brokers standards, and network adequacy standards; and a second a list of regulatory standards monitored through other oversight mechanisms, such as state marketing or federal risk adjustment requirements.