Since the “go live” date for the ACA, the Centers for Medicare and Medicaid Services (CMS) has published an annual guidance letter providing guidance on key areas on how the Marketplace (aka Exchanges) will be regulated, including health plans, standalone dental plans and Brokers for plan year starting in 2017.
The guidance letter, which CMS first issued for the 2014 plan year, communicates key requirements and dates in the certification and recertification process for Qualified Health Plans (QHPs) in the Federally Facilitated Marketplaces (FFMs), network adequacy standards, anti-discriminatory benefit design requirements, and formulary review criteria, along with numerous other technical and operational matters. Elements of this new guidance also applies to the state-based Exchanges that partially rely on the FFM system.
For a nice overview of the guidance letter, click here to read a summary published in Health Affairs.
In response to the 85-page annual letter, NAHU sent a letter to HHS on January 17, 2016 identifying several key issues as describe below.
Plan Design and Broker Rate Disclosure. First, HHS needs to include the release of plan designs and broker rates to be included in the official timetable announced by the federal government each year. Specifically, NAHU recommends publishing this information on or before October 17, 2016. NAHU writes:
Without adequate time to prepare and develop solid coverage recommendations for their clients, agents and brokers are forced to spend valuable open-enrollment time learning about the costs and features of various plans and doing client-specific analysis. That time would be far better used directly reaching consumers and working through options with them. NAHU believes that giving the individuals who help consumers directly as much time as possible to familiarize themselves with plan choices and prices would be very beneficial to the marketplace and consumers.
One-Year Delay Recommended to Implement Additional Federal Network Adequacy. NAHU recommends that HHS give the states time to implement the new Model Network Adequacy Act that was just adopted by the National Association of Insurance Commissioners (NAIC) before implementing federal standards. Among other issues, concerns were expressed regarding “how some of the proposed limits on tiered networks could limit the development of cost-saving and quality-enhancing health insurance products that utilize value-based design principles, including tiered networks.”
NAHU also commented on several other issues impacting network offerings, including consumer notification and education requirements, and cost sharing for out-of-network services.
Consistent Broker Rates Through Out Plan Year. NAHU recommends that HHS stipulate in the final letter for future plan years beginning in 2017 that “if an issuer files a premium rate with the state that includes broker compensation and the filed premium rate and plan design is ultimately approved by the CMS QHP rate review and certification process, then as a condition of approval the issuer may not alter the general compensation rate for brokers proposed and approved for the duration of that plan year.” NAHU added that this policy should not stop an issuer from suspending broker compensation for unethical behavior or misconduct.
Due Process Should Be Afforded During Broker Suspension. NAHU also is asking CMS to consider more due process to a Broker if they are temporarily suspended while being investigated. Ideally, Brokers would have a chance to immediately respond to any complaints that cannot be verified. NAHU writes:
In the proposed 2017 Notice of Benefit and Payment Parameters, CMS proposes immediate temporary suspension of a broker in the case of suspected fraud or abusive conduct for up to 90 days. The proposal notes that, during this suspension, brokers could provide documentation that a charge was made in error and that reinstatement could be made more quickly than 90 days. NAHU would like detailed clarification about the proposed timeframe and requirements by HHS for broker due process and hopes that this clarification will be provided in the final issuer letter should this proposal (or any amended version of this proposal) be codified in the final rule. Ninety days is almost the length of the entire open-enrollment period, and if a broker was in fact innocent of wrongdoing, he or she could be shut out of helping consumers altogether for the season if the case was not resolved quickly.
In addition, NAHU is asking for a better defined appeals process to provide documentation with explicit timeframes and notification requirements.
CMS Taking More Responsibility as Exchange Administrator?
A number of policy experts have provided their thoughts on the new guidance letter. For example, Michael S. Adelberg, Senior Director at FaegreBD Consulting, writes:
In a break with precedent established by previous Annual Letters, the 2017 letter casts CMS as a more assertive exchange administrator, less willing to defer to market forces and state regulators. This move might draw criticism from both insurers and states given current insurer losses, continued funding uncertainties, and the polarized politics of the ACA. Yet, even with the moves made in this Annual Letter, CMS remains less prescriptive than the two largest state-run exchanges (i.e., California, New York) in key areas such as standardizing plan designs and capping consumer costs.
The NAIC also expressed strong reservations with the expansion of oversight responsibilities by the federal government. In a letter dated January 16, 2016, the NAIC stated:
State regulators continue to oppose the establishment of federal deadlines for the submission, review and posting of rates as outlined in this draft letter to issuers and the proposed Notice of Benefit and Payment Parameters for 2017. Establishing a deadline for final approval in states utilizing the federal Exchange is understandable but the additional requirements regarding submission, posting and review of rates for plans both inside and outside the Exchange are excessive in states with effective rate review processes….
Finally, we urge CMS/CCIIO to work closely with state regulators and maintain timely communication. The draft letter to issuers includes language regarding federal review of marketing materials, standards for fraud reporting, and general oversight of QHPs. It must be clear in the letter that any investigation or action taken by the federal government is communicated to state regulators in a timely manner. States have the primary responsibility and authority to review the market conduct of issuers. Coordination and communication are key to ensuring consumers any issues are addressed and consumers are protected.
Clearly, on-going tension between federal and state regulators continue as the ACA continues to be implemented. Stay tuned as we continued to report on emerging issues related to the regulation of the Exchange marketplace and other matters impacting Brokers.
The views expressed in this post do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.