CMS issues proposed notice of benefit and payment parameters for 2018

The Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would make a number of changes to the public health insurance Exchanges created under the Affordable Care Act (ACA). Many of the proposals are intended to take effect in 2018, but some would begin in benefit year 2017.

The proposed rule follows announcements from several national health insurers that they would reduce their participation in Exchanges in 2017, following continued financial losses.  Policy proposals, such as changes to the risk adjustment program, are intended to help boost the stability of the Exchanges and were addressed in a June 2016 white paper following the Department of Health and Human Services (HHS)-Operated Risk Adjustment Methodology Public Meeting, which was held on March 31, 2016.

The proposed rule also outlines changes to plan benefits, including changes to requirements for gold and silver level plans, and eligibility and enrollment standards.

The proposed rule was published in the September 6, 2016 Federal Register, and comments are due by October 6, 2016.  Open enrollment for the 2017 benefit year begins on November 1, 2016, and runs through January 31, 2017.

Some highlights of key provisions of the proposed rule are provided below.

Changes to the Risk Adjustment Program
Risk adjustment is intended to appropriately match payments to the likely cost of enrollees. CMS would make changes to the program to more appropriately account for individuals enrolled for only part of the year. Because these individuals have been shown to incur greater costs, CMS proposes to incorporate a partial year adjustment factor in 2017 and 2018 benefit years.

CMS also proposes adding prescription drug information to their risk adjustment model. By using drug utilization rather than solely diagnosis information, CMS intends to more accurately identify and account for high-risk conditions and to better indicate the level of severity of the condition. The agency is proposing to use 12 prescription drug categories, or RXCs, initially. This proposal has garnered a mix of responses. Some worry that this change could lead to overprescribing, while others believe that the inclusion of this data will lead to more accurate risk adjustments.

Plan benefit changes
The proposed rule also includes new requirements for health plans participating in the Exchanges. CMS would establish two additional sets of six standardized plans, ranging from bronze plans to gold plans with multiple at some metal tiers. Last year, CMS introduced one set of standardized plans in order to simplify the shopping experience for consumers on the Exchanges. One of the new sets of plans is designed for states with certain cost-sharing requirements and the other is designed for states with maximum deductible requirements. The proposed rule would require health plans in the Exchange to offer at least one silver-level plan and at least one gold-level plan.

The proposed rule also builds on previous work to better indicate network breadth for consumers. For 2018, CMS proposes to identify for consumers whether a plan is offered as part of an integrated delivery system.

Eligibility and enrollment standards
Special enrollment periods, opportunities to gain coverage outside of open enrollment, are available to individuals who experience a qualifying life event, including having or adopting a child, getting married, or losing other coverage. CMS has worked to ensure that special enrollment periods are used appropriately in order to maintain a stable pool of customers in the Exchanges. In this rule, CMS builds on this effort to ensure appropriate use of these special enrollment periods by codifying a number of special enrollment periods currently recognized by guidance and seeks comment on how best to prevent individuals from misusing special enrollment periods to sign up for coverage only after they become sick.

CMS proposes changes to the current rules governing the role of agents and brokers assisting individuals in obtaining coverage on the Exchanges. The proposed rule would require web-brokers and Qualified Health Plan (QHP) insurers, after demonstrating operational readiness, to display standardized plans similarly to how they appear on the website. While the plans would not have to appear exactly how they do on, all broker web sites that deviate from the standard display would have to be approved by the HHS. CMS also proposes to require web-brokers to provide post-enrollment activities to properly effectuate enrollment or resolve any issues that may arise after choosing a plan.

Anne Phelps
Principal | Deloitte Advisory
US Health Care Regulatory Leader
Deloitte & Touche LLP
Latest conversations from Anne Phelps on Twitter

Daniel Esquibel
Senior Manager
Deloitte & Touche LLP

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