August 8 Update

In Litigation Report, CMS Notes Coming Proposed Rule Addressing Gender Identity And Pregnancy Termination Discrimination

On August 4, 2017, the Department of Health and Human Services filed a status report in Franciscan Alliance v. Price. In this case, the Franciscan Alliance and several other plaintiffs, including several states, are challenging an HHS regulation promulgated under section 1557 of the Affordable Care Act prohibiting discrimination on the basis of gender identity or termination of pregnancy. Late in 2016, Judge O’Connor, a federal district court judge in Texas, entered a preliminary injunction against the enforcement of the rule. On July 10, 2017, Judge O’Connor remanded the issue to HHS to reconsider its rule.

HHS stated in its status report that it has submitted a draft proposed rule to the Justice Department for review. Following that review, the rule will be submitted to the Office of Management and Budget for interagency clearance, after which it will be published for comment as a proposed rule. Until then, HHS will continue to comply with the injunction against enforcement of these provisions of the rule.

CMS Releases Guidance On Unauthorized Exchange Enrollments

On July 31, the Centers for Medicare and Medicaid Services released at its website a guidance on unauthorized enrollments. The federally facilitated marketplace (FFM) call center has received numerous calls from consumers who complain that they did not enroll in a marketplace plan for 2016 and or 2017 and either already had coverage from another source or did not want marketplace coverage. Many of the complainants learned that they had been enrolled in a qualified health plan (QHP) when they were notified that the IRS was holding their refund until they submitted a form 8962 to reconcile their premium tax credits from the previous year. A large percentage of these consumers had been enrolled by an agent or broker; had 100 percent of their premiums covered by advance premium tax credits (APTC); had incorrect data elements in their records, including contact information; and had income misstated to avoid a Medicaid eligibility determination or maximize APTC.

Insurers will soon receive an Unauthorized Enrollment Finder File with information about consumers who complained to the call center between February 1 and April 30, 2017 about plan year 2016 and 2017 enrollments. Insurers are to follow the instructions they receive and return the files to CMS by August 21, 2017. The insurer may rescind coverage for fraud coverage for consumers who for 2016 or 2017:

  • Informed the call center or the insurer that they did not enroll in coverage and did not want coverage;
  • Were enrolled by an agent or broker;
  • Either received APTC that covered 100 percent of the premium or did not pay any part of their premium, resulting in termination;
  • Had no contact with the insurer other than to inform the insurer they were not enrolled; and
  • Filed no claims.

Presumably once the coverage is rescinded, the consumer will not be responsible for APTC received. It would seem that the insurer would have to refund APTC received as well, although this is not clearly stated.

Original Post

On August 4, 2017, judgment was awarded for another insurer in a risk corridor case in the Court of Federal Claims, this time for Molina for $52.4 million. Molina’s win means that insurers have now prevailed on the merits in two of the 26 risk corridor cases pending in the Court of Claims while the government has prevailed in three.

Judge Thomas Wheeler, who ruled in favor of Molina, was also the author of the Moda decision, the only other risk corridor decision to date in favor of an insurer. Not surprisingly, he followed his earlier decision.

Judge Wheeler held that the Affordable Care Act requires the government to make risk corridor payments to insurers that qualify for those payments under the statute’s payment formula, even though Congress did not specifically appropriate funds for this purpose. He also held that the government had entered into an implied contract when if offered to cover Molina’s losses under the risk corridor program if it sold qualified health plans, and Molina had sold QHPs and suffered losses. He further held that the 2015 and 2016 appropriations riders that sought to bar the use of CMS program management funds failed to repeal the government’s obligation, because a statutory obligation cannot be repealed through an appropriations rider unless the rider is clear and unambiguous in its intention to repeal and the 2015 and 2016 riders did not meet this test.

Judge Wheeler explicitly rejected the holding of another Court of Claims judge to the contrary in the Maine Community Health Options case. Congress has appropriated money for the judgment fund, Judge Wheeler held, and this money is available to fund the government’s obligations under the risk corridor program. He did reject Molina’s express contract and constitutional takings clause claims.

The Federal Circuit Court of Appeals is now considering appeals in at least two of the risk corridor cases — Moda, which was won by the insurers, and Land of Lincoln, won by the government. Its rulings in these cases may definitively settle the risk corridor claim issue.

New Guidance On Navigator And CAC Training

On August 4, 2017, the Centers for Medicare and Medicaid Services released a Guidance Regarding Training, Certification, and Recertification for Navigators and Certified Application Counsellors (CACs) in the Federally Facilitated Marketplaces (FFM). Navigators who were certified for 2016-2017 and who remain with the same organization need merely complete a refresher course, covering operational updates for 2018 and modules on privacy, security, and fraud prevention; coverage to care assistance; and assister standard operating procedures. New navigators, navigators who have been decertified, and navigators who have changed organizations must take the entire training module. Navigators must also meet other certification or licensure requirements.

CACs must complete CAC training and be recertified annually by their CAC Designated Organizations (CDO). There is no abbreviated training program for returning CACs, but the CAC training program is about half the length of the navigator training program. CDOs are not required to enter into new agreements with the FFM or with their CACs each year.

The navigator training program features new elements for 2018, including virtual simulations that illustrate marketplace application and enrollment processes in the FFM and new coverage-to-care and assister-standard-operating-procedure modules. The new CAC program will also include virtual simulations and the coverage to care module, but will no longer include a SHOP marketplace assistance module. CACs will have access to the full navigator training course.