[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Proposed Rules]
[Pages 78206-78322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27206]
[[Page 78205]]
Vol. 87
Wednesday,
No. 244
December 21, 2022
Part II
Department of Health and Human Services
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45 CFR Parts 153, 155, and 156
Patient Protection and Affordable Care Act, HHS Notice of Benefit and
Payment Parameters for 2024; Proposed Rule
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 /
Proposed Rules
[[Page 78206]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 153, 155, and 156
[CMS-9899-P]
RIN 0938-AU97
Patient Protection and Affordable Care Act, HHS Notice of Benefit
and Payment Parameters for 2024
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule includes proposed payment parameters and
provisions related to the HHS-operated risk adjustment and risk
adjustment data validation programs, as well as proposed 2024 user fee
rates for issuers offering qualified health plans (QHPs) through
Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the
Federal platform (SBE-FPs). This proposed rule also proposes
requirements related to updating standardized plan options and reducing
plan choice overload; re-enrollment hierarchy; plan and plan variation
marketing name requirements for QHPs; essential community providers
(ECPs) and network adequacy; failure to file and reconcile; special
enrollment periods (SEPs); the annual household income verification;
the deadline for QHP issuers to report enrollment and payment
inaccuracies; requirements related to the State Exchange improper
payment measurement program; and requirements for agents, brokers, and
web-brokers assisting FFE and SBE-FP consumers.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by no later than 5 p.m. on January 30,
2023.
ADDRESSES: In commenting, please refer to file code CMS-9899-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-9899-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-9899-P, Mail Stop C4-26-05, 7500
Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Jeff Wu, (301) 492-4305, Rogelyn McLean, (301) 492-4229, Grace
Bristol, (410) 786-8437, for general information.
Jacquelyn Rudich, (301) 492-5211, Bryan Kirk, (443) 745-8999, or
Joshua Paul, (301) 492-4347, for matters related to HHS-operated risk
adjustment.
Leanne Klock, (410) 786-1045, or Joshua Paul, (301) 492-4347, for
matters related to risk adjustment data validation (HHS-RADV).
Aaron Franz, (410) 786-8027, or Leanne Klock, (410) 786-1045, for
matters related to FFE and SBE-FP user fees.
Jacob LaGrand, (301) 492-4400, for matters related to actuarial
value (AV).
Brian Gubin, (401) 786-1659, for matters related to agent, broker,
and web-broker guidelines.
Claire Curtin, (301) 492-4400 or Marisa Beatley, (301) 492-4307,
for matters related to failure to file and reconcile.
Grace Bridges, (301) 492-5228, or Natalie Myren, (667) 290-8511,
for matters related to the verification process related to eligibility
for insurance affordability programs.
Zarah Ghiasuddin, (301) 356-3598, for matters related to re-
enrollment in the Exchanges.
Nicholas Eckart, (301) 492-4452, for matters related to enrollment
of qualified individuals into QHPs and termination of Exchange
enrollment or coverage.
Marisa Beatley, (301) 492-4307, or Dena Nelson, (240) 401-3535, for
matters related to qualified individuals losing MEC and qualifying for
SEPs.
Samantha Nguyen Kella, (816) 426-6339, for matters related to plan
display error SEPs.
Eva LaManna, (301) 492-5565, or Ellen Kuhn, (410) 786-1695, for
matters related to the eligibility appeals requirements.
Linus Bicker, (803) 931-6185, for matters related to State Exchange
improper payment measurement.
Alexandra Gribbin, (667) 290-9977, for matters related to stand-
alone dental plans.
Nikolas Berkobien, (667) 290-9903, for matters related to
standardized plan options.
Carolyn Kraemer, (301) 492-4197, for matters related to plan and
plan variation marketing name requirements for QHPs.
Emily Martin, (301) 492-4423, or Deborah Hunter, (443) 386-3651,
for matters related to network adequacy and ECPs.
Zarin Ahmed, (301) 492-4400, for matters related to termination of
coverage or enrollment for qualified individuals.
Nora Simmons, (410) 786-1981 for matters related to reporting
enrollment and payment inaccuracies.
Jenny Chen, (301) 492-5156, or Shilpa Gogna, (301) 492-4257, for
matters related to State Exchange Blueprint approval timelines.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post comments received
before the close of the comment period on the following website as soon
as possible after they have been received: http://www.regulations.gov.
Follow the search instructions on that website to view public comments.
CMS will not post on Regulations.gov public comments that make threats
to individuals or institutions or suggest that the individual will take
actions to harm the individual. CMS continues to encourage individuals
not to submit duplicative comments. We will post acceptable comments
from multiple unique commenters even if the content is identical or
nearly identical to other comments.
Table of Contents
I. Executive Summary
II. Background
A. Legislative and Regulatory Overview
B. Summary of Major Provisions
III. Provisions of the Proposed Regulations
A. Part 153--Standards Related to Reinsurance, Risk Corridors,
and Risk Adjustment
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
C. Part 156--Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges
IV. Collection of Information Requirements
A. Wage Estimates
B. ICRs Regarding Repeal of Risk Adjustment State Flexibility To
Request a Reduction in Risk Adjustment State Transfers (Sec.
153.320(d))
C. ICRs Regarding Risk Adjustment Issuer Data Submission
Requirements (Sec. Sec. 153.610, 153.700, and 153.710)
[[Page 78207]]
D. ICRs Regarding Risk Adjustment Data Validation Requirements
When HHS Operates Risk Adjustment (HHS-RADV) (Sec. 153.630)
E. ICRs Regarding Navigator, Non-Navigator Assistance Personnel,
and Certified Application Counselor Program Standards (Sec. Sec.
155.210 and 155.225)
F. ICRs Regarding Providing Correct Information to the FFEs
(Sec. 155.220(j))
G. ICRs Regarding Documenting Receipt of Consumer Consent (Sec.
155.220(j))
H. ICRs Regarding Failure To File and Reconcile Process (Sec.
155.305(f))
I. ICRs Regarding Income Inconsistencies (Sec. Sec. 155.315 and
155.320)
J. ICRs Regarding the Improper Payment Pre-Testing and
Assessment (IPPTA) for State Exchanges (Sec. Sec. 155.1500-
155.1515)
K. ICRs Regarding QHP Rate and Benefit Information (Sec.
156.210)
L. ICRs Regarding Establishing a Timeliness Standard for Notices
of Payment Delinquency (Sec. 156.270)
M. Summary of Annual Burden Estimates for Proposed Requirements
N. Submission of PRA-Related Comments
V. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Impact Estimates of the Payment Notice Provisions and
Accounting Table
D. Regulatory Alternatives Considered
E. Regulatory Flexibility Act (RFA)
F. Unfunded Mandates Reform Act (UMRA)
G. Federalism
I. Executive Summary
We are proposing changes to the provisions and parameters
implemented through prior rulemaking to implement the Patient
Protection and Affordable Care Act (ACA).\1\ These proposals are
published under the authority granted to the Secretary by the ACA and
the Public Health Service (PHS) Act.\2\ In this proposed rule, we
propose changes related to some of these ACA provisions and parameters
we previously implemented and propose to implement new provisions. Our
goal with the proposals is providing quality, affordable coverage to
consumers while minimizing administrative burden and ensuring program
integrity. The changes proposed in this rule are also intended to help
advance health equity and mitigate health disparities.
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\1\ The Patient Protection and Affordable Care Act (Pub. L. 111-
148) was enacted on March 23, 2010. The Healthcare and Education
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and
revised several provisions of the Patient Protection and Affordable
Care Act, was enacted on March 30, 2010. In this rulemaking, the two
statutes are referred to collectively as the ``Patient Protection
and Affordable Care Act,'' ``Affordable Care Act,'' or ``ACA.''
\2\ See sections 1311, 1312, 1313, 1321, and 1343 of the ACA and
section 2792 of the PHS Act.
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II. Background
A. Legislative and Regulatory Overview
Title I of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) added a new title XXVII to the PHS Act to establish
various reforms to the group and individual health insurance markets.
These provisions of the PHS Act were later augmented by other laws,
including the ACA. Subtitles A and C of title I of the ACA reorganized,
amended, and added to the provisions of part A of title XXVII of the
PHS Act relating to group health plans and health insurance issuers in
the group and individual markets. The term ``group health plan''
includes both insured and self-insured group health plans.
Section 2702 of the PHS Act, as added by the ACA, establishes
requirements for guaranteed availability of coverage in the group and
individual markets.
Section 1301(a)(1)(B) of the ACA directs all issuers of QHPs to
cover the essential health benefit (EHB) package described in section
1302(a) of the ACA, including coverage of the services described in
section 1302(b) of the ACA, adherence to the cost-sharing limits
described in section 1302(c) of the ACA, and meeting the AV levels
established in section 1302(d) of the ACA. Section 2707(a) of the PHS
Act, which is effective for plan or policy years beginning on or after
January 1, 2014, extends the requirement to cover the EHB package to
non-grandfathered individual and small group health insurance coverage,
irrespective of whether such coverage is offered through an Exchange.
In addition, section 2707(b) of the PHS Act directs non-grandfathered
group health plans to ensure that cost-sharing under the plan does not
exceed the limitations described in section 1302(c)(1) of the ACA.
Section 1302 of the ACA provides for the establishment of an EHB
package that includes coverage of EHBs (as defined by the Secretary of
HHS), cost-sharing limits, and AV requirements. The law directs that
EHBs be equal in scope to the benefits provided under a typical
employer plan, and that they cover at least the following 10 general
categories: ambulatory patient services; emergency services;
hospitalization; maternity and newborn care; mental health and
substance use disorder services, including behavioral health treatment;
prescription drugs; rehabilitative and habilitative services and
devices; laboratory services; preventive and wellness services and
chronic disease management; and pediatric services, including oral and
vision care. Section 1302(d) of the ACA describes the various levels of
coverage based on their AV. Consistent with section 1302(d)(2)(A) of
the ACA, AV is calculated based on the provision of EHB to a standard
population. Section 1302(d)(3) of the ACA directs the Secretary of HHS
to develop guidelines that allow for de minimis variation in AV
calculations. Sections 1302(b)(4)(A) through (D) of the ACA establish
that the Secretary must define EHB in a manner that: (1) Reflects
appropriate balance among the 10 categories; (2) is not designed in
such a way as to discriminate based on age, disability, or expected
length of life; (3) takes into account the health care needs of diverse
segments of the population; and (4) does not allow denials of EHBs
based on age, life expectancy, disability, degree of medical
dependency, or quality of life.
Section 1311(c) of the ACA provides the Secretary the authority to
issue regulations to establish criteria for the certification of QHPs.
Section 1311(c)(1)(B) of the ACA requires, among the criteria for
certification that the Secretary must establish by regulation that QHPs
ensure a sufficient choice of providers. Section 1311(e)(1) of the ACA
grants the Exchange the authority to certify a health plan as a QHP if
the health plan meets the Secretary's requirements for certification
issued under section 1311(c) of the ACA, and the Exchange determines
that making the plan available through the Exchange is in the interests
of qualified individuals and qualified employers in the State. Section
1311(c)(6)(C) of the ACA directs the Secretary of HHS to require an
Exchange to provide for special enrollment periods and section
1311(c)(6)(D) of the ACA directs the Secretary of HHS to require an
Exchange to provide for a monthly enrollment period for Indians, as
defined by section 4 of the Indian Health Care Improvement Act.
Section 1311(d)(3)(B) of the ACA permits a State, at its option, to
require QHPs to cover benefits in addition to EHB. This section also
requires a State to make payments, either to the individual enrollee or
to the issuer on behalf of the enrollee, to defray the cost of these
additional State-required benefits.
Section 1312(c) of the ACA generally requires a health insurance
issuer to consider all enrollees in all health plans (except
grandfathered health plans) offered by such issuer to be members of a
single risk pool for each of its individual and small group markets.
States have the option to merge the individual and small group market
risk
[[Page 78208]]
pools under section 1312(c)(3) of the ACA.
Section 1312(e) of the ACA provides the Secretary with the
authority to establish procedures under which a State may allow agents
or brokers to (1) enroll qualified individuals and qualified employers
in QHPs offered through Exchanges and (2) assist individuals in
applying for premium tax credits (PTC) and cost-sharing reductions
(CSRs) for QHPs sold through an Exchange.
Sections 1313 and 1321 of the ACA provide the Secretary with the
authority to oversee the financial integrity of State Exchanges, their
compliance with HHS standards, and the efficient and non-discriminatory
administration of State Exchange activities. Section 1313(a)(5)(A) of
the ACA provides the Secretary with the authority to implement any
measure or procedure that the Secretary determines is appropriate to
reduce fraud and abuse in the administration of the Exchanges. Section
1321 of the ACA provides for State flexibility in the operation and
enforcement of Exchanges and related requirements.
Section 1321(a) of the ACA provides broad authority for the
Secretary to establish standards and regulations to implement the
statutory requirements related to Exchanges, QHPs and other components
of title I of the ACA, including such other requirements as the
Secretary determines appropriate. When operating an FFE under section
1321(c)(1) of the ACA, HHS has the authority under sections 1321(c)(1)
and 1311(d)(5)(A) of the ACA to collect and spend user fees. Office of
Management and Budget (OMB) Circular A-25 Revised establishes Federal
policy regarding user fees and specifies that a user charge will be
assessed against each identifiable recipient for special benefits
derived from Federal activities beyond those received by the general
public.
Section 1321(d) of the ACA provides that nothing in title I of the
ACA must be construed to preempt any State law that does not prevent
the application of title I of the ACA. Section 1311(k) of the ACA
specifies that Exchanges may not establish rules that conflict with or
prevent the application of regulations issued by the Secretary.
Section 1343 of the ACA establishes a permanent risk adjustment
program to provide payments to health insurance issuers that attract
higher-than-average risk populations, such as those with chronic
conditions, funded by payments from those that attract lower-than-
average risk populations, thereby reducing incentives for issuers to
avoid higher-risk enrollees. Section 1343(b) of the ACA provides that
the Secretary, in consultation with States, shall establish criteria
and methods to be used in carrying out the risk adjustment activities
under this section. Consistent with section 1321(c) of the ACA, the
Secretary is responsible for operating the risk adjustment program in
any State the fails to do so.\3\
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\3\ In the 2014 through 2016 benefit years, HHS operated the
risk adjustment program in every State and the District of Columbia,
except Massachusetts. Beginning with the 2017 benefit year, HHS has
operated the risk adjustment program in all 50 States and the
District of Columbia.
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Section 1401(a) of the ACA added section 36B to the Internal
Revenue Code (the Code), which, among other things, requires that a
taxpayer reconcile APTC for a year of coverage with the amount of the
PTC the taxpayer is allowed for the year.
Section 1402 of the ACA provides for, among other things,
reductions in cost-sharing for EHB for qualified low- and moderate-
income enrollees in silver level QHPs offered through the individual
market Exchanges. This section also provides for reductions in cost-
sharing for Indians enrolled in QHPs at any metal level.
Section 1411(c) of the ACA requires the Secretary to submit certain
information provided by applicants under section 1411(b) of the ACA to
other Federal officials for verification, including income and family
size information to the Secretary of the Treasury. Section 1411(d) of
the ACA provides that the Secretary must verify the accuracy of
information provided by applicants under section 1411(b) of the ACA,
for which section 1411(c) of the ACA does not prescribe a specific
verification procedure, in such manner as the Secretary determines
appropriate.
Section 1411(f) of the ACA requires the Secretary, in consultation
with the Treasury and Homeland Security Department Secretaries and the
Commissioner of Social Security, to establish procedures for hearing
and making decisions governing appeals of Exchange eligibility
determinations. Section 1411(f)(1)(B) of the ACA requires the Secretary
to establish procedures to redetermine eligibility on a periodic basis,
in appropriate circumstances, including eligibility to purchase a QHP
through the Exchange and for advance payments of the premium tax credit
(APTC) and CSRs.
Section 1411(g) of the ACA allows the use of applicant information
only for the limited purposes of, and to the extent necessary to,
ensure the efficient operation of the Exchange, including by verifying
eligibility to enroll through the Exchange and for APTC and CSRs, and
limits the disclosure of such information.
Section 5000A of the Code, as added by section 1501(b) of the ACA,
requires individuals to have minimum essential coverage (MEC) for each
month, qualify for an exemption, or make an individual shared
responsibility payment. Under the Tax Cuts and Jobs Act, which was
enacted on December 22, 2017, the individual shared responsibility
payment is reduced to $0, effective for months beginning after December
31, 2018. Notwithstanding that reduction, certain exemptions are still
relevant to determine whether individuals age 30 and above qualify to
enroll in catastrophic coverage under Sec. Sec. 155.305(h) and
156.155(a)(5).
1. Premium Stabilization Programs
The premium stabilization programs refer to the risk adjustment,
risk corridors, and reinsurance programs established by the ACA.\4\ For
past rulemaking, we refer readers to the following rules:
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\4\ See ACA section 1341 (transitional reinsurance program), ACA
section 1342 (risk corridors program), and ACA section 1343 (risk
adjustment program).
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In the March 23, 2012 Federal Register (77 FR 17219)
(Premium Stabilization Rule), we implemented the premium stabilization
programs.
In the March 11, 2013 Federal Register (78 FR 15409) (2014
Payment Notice), we finalized the benefit and payment parameters for
the 2014 benefit year to expand the provisions related to the premium
stabilization programs and set forth payment parameters in those
programs.
In the October 30, 2013 Federal Register (78 FR 65046), we
finalized the modification to the HHS-operated methodology related to
community rating States.
In the November 6, 2013 Federal Register (78 FR 66653), we
published a correcting amendment to the 2014 Payment Notice final rule
to address how an enrollee's age for the risk score calculation would
be determined under the HHS-operated risk adjustment methodology.
In the March 11, 2014 Federal Register (79 FR 13743) (2015
Payment Notice), we finalized the benefit and payment parameters for
the 2015 benefit year to expand the provisions related to the premium
stabilization programs, set forth certain oversight provisions, and
established payment parameters in those programs.
In the May 27, 2014 Federal Register (79 FR 30240), we
announced
[[Page 78209]]
the 2015 fiscal year sequestration rate for the risk adjustment
program.
In the February 27, 2015 Federal Register (80 FR 10749)
(2016 Payment Notice), we finalized the benefit and payment parameters
for the 2016 benefit year to expand the provisions related to the
premium stabilization programs, set forth certain oversight provisions,
and established the payment parameters in those programs.
In the March 8, 2016 Federal Register (81 FR 12203) (2017
Payment Notice), we finalized the benefit and payment parameters for
the 2017 benefit year to expand the provisions related to the premium
stabilization programs, set forth certain oversight provisions, and
established the payment parameters in those programs.
In the December 22, 2016 Federal Register (81 FR 94058)
(2018 Payment Notice), we finalized the benefit and payment parameters
for the 2018 benefit year, added the high-cost risk pool parameters to
the HHS risk adjustment methodology, incorporated prescription drug
factors in the adult models, established enrollment duration factors
for the adult models, and finalized policies related to the collection
and use of enrollee-level External Data Gathering Environment (EDGE)
data.
In the April 17, 2018 Federal Register (83 FR 16930) (2019
Payment Notice), we finalized the benefit and payment parameters for
2019 benefit year, created the State flexibility framework permitting
States to request a reduction in risk adjustment State transfers
calculated by HHS, and adopted a new methodology for HHS-RADV
adjustments to transfers.
In the May 11, 2018 Federal Register (83 FR 21925), we
published a correction to the 2019 risk adjustment coefficients in the
2019 Payment Notice final rule.
On July 27, 2018, consistent with 45 CFR 153.320(b)(1)(i),
we updated the 2019 benefit year final risk adjustment model
coefficients to reflect an additional recalibration related to an
update to the 2016 enrollee-level EDGE dataset.\5\
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\5\ CMS. (2018, July 27). Updated 2019 Benefit Year Final HHS
Risk Adjustment Model Coefficients. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2019-Updtd-Final-HHS-RA-Model-Coefficients.pdf.
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In the July 30, 2018 Federal Register (83 FR 36456), we
adopted the 2017 benefit year risk adjustment methodology as
established in the final rules published in the March 23, 2012 (77 FR
17220 through 17252) and March 8, 2016 editions of the Federal Register
(81 FR 12204 through 12352). The final rule set forth an additional
explanation of the rationale supporting the use of Statewide average
premium in the HHS-operated risk adjustment State payment transfer
formula for the 2017 benefit year, including the reasons why the
program is operated in a budget-neutral manner. The final rule also
permitted HHS to resume 2017 benefit year risk adjustment payments and
charges. HHS also provided guidance as to the operation of the HHS-
operated risk adjustment program for the 2017 benefit year in light of
the publication of the final rule.
In the December 10, 2018 Federal Register (83 FR 63419),
we adopted the 2018 benefit year HHS-operated risk adjustment
methodology as established in the final rules published in the March
23, 2012 (77 FR 17219) and the December 22, 2016 (81 FR 94058) editions
of the Federal Register. In the rule, we set forth an additional
explanation of the rationale supporting the use of Statewide average
premium in the HHS-operated risk adjustment State payment transfer
formula for the 2018 benefit year, including the reasons why the
program is operated in a budget-neutral manner.
In the April 25, 2019 Federal Register (84 FR 17454) (2020
Payment Notice), we finalized the benefit and payment parameters for
2020 benefit year, as well as the policies related to making the
enrollee-level EDGE data available as a limited data set for research
purposes and expanding the HHS uses of the enrollee-level EDGE data,
approval of the request from Alabama to reduce risk adjustment
transfers by 50 percent in the small group market for the 2020 benefit
year, and updates to HHS-RADV program requirements.
On May 12, 2020, consistent with 153.320(b)(1)(i), we
published the 2021 Benefit Year Final HHS Risk Adjustment Model
Coefficients on the CCIIO website.\6\
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\6\ CMS. (2020, May 12). Final 2021 Benefit Year Final HHS Risk
Adjustment Model Coefficients. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2021-Benefit-Year-Final-HHS-Risk-Adjustment-Model-Coefficients.pdf.
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In the May 14, 2020 Federal Register (85 FR 29164) (2021
Payment Notice), we finalized the benefit and payment parameters for
2021 benefit year, as well as adopted updates to the risk adjustment
models' hierarchical condition categories (HCCs) to transition to ICD-
10 codes, approved the request from Alabama to reduce risk adjustment
transfers by 50 percent in small group market for the 2021 benefit
year, and modified the outlier identification process under the HHS-
RADV program.
In the December 1, 2020 Federal Register (85 FR 76979)
(Amendments to the HHS-Operated Risk Adjustment Data Validation Under
the Patient Protection and Affordable Care Act's HHS-Operated Risk
Adjustment Program (2020 HHS-RADV Amendments Rule)), we adopted the
creation and application of Super HCCs in the sorting step that assigns
HCCs to failure rate groups, finalized a sliding scale adjustment in
HHS-RADV error rate calculation, and added a constraint for negative
error rate outliers with a negative error rate. We also established a
transition from the prospective application of HHS-RADV adjustments to
apply HHS-RADV results to risk scores from the same benefit year as
that being audited.
In the September 2, 2020 Federal Register (85 FR 54820),
we issued an interim final rule containing certain policy and
regulatory revisions in response to the COVID-19 public health
emergency (PHE), wherein we set forth risk adjustment reporting
requirements for issuers offering temporary premium credits in the 2020
benefit year.
In the May 5, 2021 Federal Register (86 FR 24140), we
issued part 2 of the 2022 Payment Notice final rule (2022 Payment
Notice) finalizing a subset of proposals from the 2022 Payment Notice
proposed rule, including policy and regulatory revisions related to the
risk adjustment program, finalization of the benefit and payment
parameters for the 2022 benefit year, and approval of the request from
Alabama to reduce risk adjustment transfers by 50 percent in the
individual and small group markets for the 2022 benefit year. In
addition, this final rule established a revised schedule of collections
for HHS-RADV and updated the provisions regulating second validation
audit (SVA) and initial validation audit (IVA) entities.
On July 19, 2021, consistent with Sec. 153.320(b)(1)(i),
we released Updated 2022 Benefit Year Final HHS Risk Adjustment Model
Coefficients on the CCIIO website, announcing some minor revisions to
the 2022 benefit year final risk adjustment adult model
coefficients.\7\
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\7\ See CMS. (2021, July 19). 2022 Benefit Year Final HHS Risk
Adjustment Model Coefficients. https://www.cms.gov/files/document/updated-2022-benefit-year-final-hhs-risk-adjustment-model-coefficients-clean-version-508.pdf.
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In the May 6, 2022 Federal Register (87 FR 27208) (2023
Payment Notice), we finalized revisions related to the risk adjustment
program, including the benefit and payment parameters for the 2023
benefit year, risk adjustment model recalibration, and collection and
extraction of enrollee-level EDGE data.
[[Page 78210]]
We also finalized the adoption of the interacted HCC count
specification for the adult and child models, along with modified
enrollment duration factors for the adult model models, beginning with
the 2023 benefit year.\8\ We also repealed the ability for States,
other than prior participants, to request a reduction in risk
adjustment State transfers starting with the 2024 benefit year. In
addition, we approved a 25 percent reduction to 2023 benefit year
transfers in Alabama's individual market and a 10 percent reduction to
2023 benefit year transfers in Alabama's small group market. We also
finalized further refinements to the HHS-RADV error rate calculation
methodology beginning with the 2021 benefit year and beyond.
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\8\ On May 6, 2022, we also published the 2023 Benefit Year
Final HHS Risk Adjustment Model Coefficients at https://www.cms.gov/files/document/2023-benefit-year-final-hhs-risk-adjustment-model-coefficients.pdf.
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2. Program Integrity
We have finalized program integrity standards related to the
Exchanges and premium stabilization programs in two rules: the ``first
Program Integrity Rule'' published in the August 30, 2013 Federal
Register (78 FR 54069), and the ``second Program Integrity Rule''
published in the October 30, 2013 Federal Register (78 FR 65045). We
also refer readers to the 2019 Patient Protection and Affordable Care
Act; Exchange Program Integrity rule published in the December 27, 2019
Federal Register (84 FR 71674).
3. Market Rules
For past rulemaking related to the market rules, we refer readers
to the following rules:
In the April 8, 1997 Federal Register (62 FR 16894), HHS,
with the Department of Labor and Department of the Treasury, published
an interim final rule relating to the HIPAA health insurance reforms.
In the February 27, 2013 Federal Register (78 FR 13406) (2014 Market
Rules), we published the health insurance market rules.
In the May 27, 2014 Federal Register (79 FR 30240) (2015
Market Standards Rule), we published the Exchange and Insurance Market
Standards for 2015 and Beyond.
In the December 22, 2016 Federal Register (81 FR 94058),
we provided additional guidance on guaranteed availability and
guaranteed renewability.
In the April 18, 2017 Federal Register (82 FR 18346)
(Market Stabilization final rule), we further interpreted the
guaranteed availability provision.
In the April 17, 2018 Federal Register (83 FR 17058) (2019
Payment Notice final rule), we clarified that certain exceptions to the
special enrollment periods only apply to coverage offered outside of
the Exchange in the individual market.
In the June 19, 2020 Federal Register (85 FR 37160) (2020
section 1557 final rule), in which HHS discussed section 1557 of the
ACA, HHS removed nondiscrimination protections based on gender identity
and sexual orientation from the guaranteed availability regulation.
In part 2 of the 2022 Payment Notice final rule in the May
5, 2021 Federal Register (86 FR 24140), we made additional amendments
to the guaranteed availability regulation regarding special enrollment
periods and finalized new special enrollment periods related to
untimely notice of triggering events, cessation of employer
contributions or government subsidies to COBRA continuation coverage,
and loss of APTC eligibility.
In the September 27, 2021 Federal Register (86 FR 53412)
(part 3 of the 2022 Payment Notice final rule), which was published by
HHS and the Department of the Treasury, we finalized additional
amendments to the guaranteed availability regulations regarding special
enrollment periods.
In the May 6, 2022 Federal Register (87 FR 27208), we
finalized a revision to our interpretation of the guaranteed
availability requirement to prohibit issuers from applying a premium
payment to an individual's or employer's past debt owed for coverage
and refusing to effectuate enrollment in new coverage.
4. Exchanges
We published a request for comment relating to Exchanges in the
August 3, 2010 Federal Register (75 FR 45584). We issued initial
guidance to States on Exchanges on November 18, 2010. In the March 27,
2012 Federal Register (77 FR 18309) (Exchange Establishment Rule), we
implemented the Affordable Insurance Exchanges (``Exchanges''),
consistent with title I of the ACA, to provide competitive marketplaces
for individuals and small employers to directly compare available
private health insurance options on the basis of price, quality, and
other factors. This included implementation of components of the
Exchanges and standards for eligibility for Exchanges, as well as
network adequacy and ECP certification standards.
In the 2014 Payment Notice and the Amendments to the HHS Notice of
Benefit and Payment Parameters for 2014 interim final rule, published
in the March 11, 2013 Federal Register (78 FR 15541), we set forth
standards related to Exchange user fees. We established an adjustment
to the FFE user fee in the Coverage of Certain Preventive Services
under the Affordable Care Act final rule, published in the July 2, 2013
Federal Register (78 FR 39869) (Preventive Services Rule).
In the 2016 Payment Notice, we also set forth the ECP certification
standard at Sec. 156.235, with revisions in the 2017 Payment Notice in
the March 8, 2016 Federal Register (81 FR 12203) and the 2018 Payment
Notice in the December 22, 2016 Federal Register (81 FR 94058).
In an interim final rule, published in the May 11, 2016 Federal
Register (81 FR 29146), we made amendments to the parameters of certain
special enrollment periods (2016 Interim Final Rule). We finalized
these in the 2018 Payment Notice final rule, published in the December
22, 2016 Federal Register (81 FR 94058).
In the April 18, 2017 Market Stabilization final rule Federal
Register (82 FR 18346), we amended standards relating to special
enrollment periods and QHP certification. In the 2019 Payment Notice
final rule, published in the April 17, 2018 Federal Register (83 FR
16930), we modified parameters around certain special enrollment
periods. In the April 25, 2019 Federal Register (84 FR 17454), the
final 2020 Payment Notice established a new special enrollment period.
We published the final rule in the May 14, 2020 Federal Register
(85 FR 29164) (2021 Payment Notice).
In the January 19, 2021 Federal Register (86 FR 6138), we finalized
part 1 of the 2022 Payment Notice final rule that finalized only a
subset of the proposals in the 2022 Payment Notice proposed rule. In
the May 5, 2021 Federal Register (86 FR 24140), we published part 2 of
the 2022 Payment Notice final rule. In the September 27, 2021 Federal
Register (86 FR 53412) part 3 of the 2022 Payment Notice final rule, in
conjunction with the Department of the Treasury, we finalized
amendments to certain policies in part 1 of the 2022 Payment Notice
final rule.
In the May 6, 2022 Federal Register (87 FR 27208), we finalized
changes to maintain the user fee rate for issuers offering plans
through the FFEs and maintain the user fee rate for issuers offering
plans through the SBE-FPs. We also finalized various policies to
address certain agent, broker, and web-broker practices and conduct. We
also finalized updates to the requirement that all
[[Page 78211]]
Exchanges conduct special enrollment period verifications.
5. Essential Health Benefits
On December 16, 2011, HHS released a bulletin that outlined an
intended regulatory approach for defining EHB, including a benchmark-
based framework. We established requirements relating to EHBs in the
Standards Related to Essential Health Benefits, Actuarial Value, and
Accreditation Final Rule, which was published in the February 25, 2013
Federal Register (78 FR 12833) (EHB Rule). In the 2019 Payment Notice,
published in the April 17, 2018 Federal Register (83 FR 16930), we
added Sec. 156.111 to provide States with additional options from
which to select an EHB-benchmark plan for plan years (PYs) 2020 and
beyond.
B. Summary of Major Provisions
The regulations outlined in this proposed rule would be codified in
45 CFR parts 153, 155, and 156.
1. 45 CFR Part 153
In accordance with the OMB Report to Congress on the Joint
Committee Reductions for Fiscal Year 2023, the permanent risk
adjustment program is subject to the fiscal year 2023 sequestration.\9\
Therefore, the risk adjustment program will be sequestered at a rate of
5.7 percent for payments made from fiscal year 2023 resources (that is,
funds collected during the 2023 fiscal year). The funds that are
sequestered in fiscal year 2023 from the risk adjustment program will
become available for payment to issuers in fiscal year 2024 without
further Congressional action. HHS did not receive any requests from
States to operate risk adjustment for the 2024 benefit year; therefore,
HHS will operate risk adjustment in every State and the District of
Columbia for the 2024 benefit year.
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\9\ OMB. (2022, March 28). OMB Report to the Congress on the
BBEDCA 251A Sequestration for Fiscal Year 2023. https://www.whitehouse.gov/wpcontent/uploads/2022/03/BBEDCA_251A_Sequestration_Report_FY2023.pdf.
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We propose to recalibrate the 2024 benefit year risk adjustment
models using the 2018, 2019, and 2020 benefit year enrollee-level EDGE
data, with an exception for the use of the 2020 benefit year to
recalibrate the adult model age-sex coefficients. We propose to use
only 2018 and 2019 benefit year enrollee-level EDGE data in the
recalibration of the adult age-sex coefficients to account for the
observed anomalies in the 2020 benefit year enrollee-level EDGE data
for older adult enrollees, especially older adult female enrollees.
For the 2024 benefit year, we propose to continue applying a market
pricing adjustment to the plan liability associated with Hepatitis C
drugs in the risk adjustment models (see, for example, 84 FR 17463
through 17466). In addition, we are soliciting comment on whether to
consider adding a new payment HCC for gender dysphoria to the risk
adjustment models for future years.
We propose under Sec. 153.320(d) to repeal the flexibility for
States to request reductions of risk adjustment State transfers
calculated by HHS under the State payment transfer formula in all State
market risk pools, including prior participant States that previously
requested a reduction, for the 2025 benefit year and beyond. We also
seek comment on the requests from Alabama to reduce risk adjustment
State transfers in its individual and small group markets by 50 percent
for the 2024 benefit year.
Additionally, we propose, beginning with the 2023 benefit year, to
collect and extract from issuers' EDGE servers through issuers' EDGE
Server Enrollment Submission (ESES) files and risk adjustment
recalibration enrollment files a new data element, a Qualified Small
Employer Health Reimbursement Arrangement (QSEHRA) indicator. In
addition, we propose to extract the plan identifier and rating area
data elements from issuers' EDGE servers for benefit years prior to the
2021 benefit year. We also propose a risk adjustment user fee for the
2024 benefit year of $0.21 per member per month (PMPM).
Beginning with the 2022 benefit year HHS-RADV, we propose to change
the materiality threshold established under Sec. 153.630(g)(2) for
random and targeted sampling from $15 million in total annual premiums
Statewide to 30,000 total billable member months (BMM) Statewide,
calculated by combining an issuer's enrollment in a State's individual
non-catastrophic, catastrophic, small group, and merged markets, as
applicable, in the benefit year being audited.
Beginning with the 2021 benefit year HHS-RADV, we propose to no
longer exempt exiting issuers from adjustments to risk scores and risk
adjustment transfers when they are negative error rate outliers in the
applicable benefit year's HHS-RADV. Thus, HHS would apply HHS-RADV
results to adjust the plan liability risk scores and State transfers of
all issuers. We also solicit comments on discontinuing the use of the
lifelong permanent condition list and the use of Non-EDGE Claims in
HHS-RADV.
We propose to shorten the window to confirm the findings of the
second validation audit (SVA) (if applicable),\10\ or file a
discrepancy report to dispute the SVA findings, to within 15 calendar
days of the notification by HHS, beginning with the 2022 benefit year
HHS-RADV.
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\10\ Only those issuers who have insufficient pairwise agreement
between the Initial Validation Audit (IVA) and SVA receive SVA
findings. See 84 FR 17495; 86 FR 24201.
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We propose to amend the EDGE discrepancy materiality threshold set
forth at Sec. 153.710(e) to align with and mirror the policy finalized
in preamble in part 2 of the 2022 Payment Notice (86 FR 24194 through
24195). That is, the materiality threshold at Sec. 153.710(e) would be
revised to provide that the amount in dispute must equal or exceed
$100,000 or one percent of the total estimated transfer amount in the
applicable State market risk pool, whichever is less.
2. 45 CFR Part 155
In part 155, we propose to revise the Exchange Blueprint approval
timelines for States transitioning from either a FFE to a SBE-FP or to
a State-based Exchange (SBE), or from a SBE-FP to a SBE. We propose to
remove the deadlines for when HHS provides approval, or conditional
approval, on an Exchange Blueprint, and instead propose to require that
such approval is provided at some point prior to the date on which the
Exchange proposes to begin open enrollment either as an SBE or SBE-FP.
We propose a change to address the standards applicable to
Navigators and other assisters and their consumer service functions. At
Sec. 155.210(d)(8), we propose to remove the prohibition on Navigators
from going door-to-door or using other unsolicited means of direct
contact to help provide consumers with enrollment assistance. The
proposal would also apply to non-Navigator assistance personnel in FFEs
and in State Exchanges if funded with section 1311(a) Exchange
Establishment grants, through the reference to Sec. 155.210(d) in
Sec. 155.215(a)(2)(i). In Sec. 155.225(g)(5), we propose to remove
the prohibition on certified application counselors from going door-to-
door or using unsolicited means of direct contact to help consumers
fill out applications or enroll in health coverage. We believe that
these proposals would allow Navigators and other assisters in the FFEs
to help more consumers.
In part 155, we propose changes to address certain agent, broker,
and web-
[[Page 78212]]
broker practices. We propose to allow HHS up to an additional 15
calendar days to review evidence submitted by agents, brokers, or web-
brokers to rebut allegations that led to suspension of their Exchange
agreement(s). We also propose to allow HHS up to an additional 30
calendar days to review evidence submitted by agents, brokers, or web-
brokers that led to termination of their Exchange agreement(s). The
proposal would provide HHS with up to 45 or 60 calendar days to review
and respond to such evidence or requests for reconsideration submitted
by agents, brokers, or web-brokers stemming from the suspension or
termination of their Exchange agreement(s), respectively.
Further, we propose to require agents, brokers, or web-brokers
assisting consumers with completing eligibility applications through
the FFEs and SBE-FPs or assisting an individual with applying for APTC
and CSRs for QHPs to document that eligibility application information
has been reviewed by and confirmed to be accurate by the consumer or
their authorized representative prior to application submission. We
propose that the documentation would be required to include: the date
the information was reviewed; the name of the consumer or their
authorized representative; an explanation of the attestations at the
end of the eligibility application; and the name of the assisting
agent, broker, or web-broker. Furthermore, the documentation would be
required to be maintained by the agent, broker, or web-broker for a
minimum of 10 years and produced upon request in response to
monitoring, audit, and enforcement activities.
We also propose to require agents, brokers, or web-brokers
assisting consumers with applying and enrolling through FFEs and SBE-
FPs, making updates to an existing application, or assisting an
individual with applying for APTC and CSRs for QHPs to document the
receipt of consent from the consumer or their authorized representative
seeking assistance prior to providing assistance, which would include
the consumer taking an action that produces a record of consent and the
maintenance of that record by the agent, broker, or web-broker. We also
propose standards for the content of the documentation of consent,
including that it would be required to include a description of the
scope, purpose, and duration of the consent provided by the consumer or
their authorized representative, the date consent was given, name of
the consumer or their authorized representative, and the name of the
agent, broker, web-broker, or agency being granted consent, as well as
the process by which the consumer or their authorized representative
may rescind consent. Further, we propose that agents, brokers, or web-
brokers would be required to maintain the consent documentation for a
minimum of 10 years and produced upon request in response to
monitoring, audit, and enforcement activities.
We propose to revise the failure to file and reconcile (FTR)
process at Sec. 155.305(f)(4). First, we are proposing codify CMS's
guidance that, for plan year 2023 coverage, the Exchanges on the
Federal platform would not act on data from the IRS for consumers who
have failed to file tax returns and reconcile a previous year's APTC
with the PTC allowed for the year. Second, we propose to provide that,
beginning on January 1, 2024, Exchanges must once again determine
enrollees ineligible for APTC when HHS notifies the Exchange that a
taxpayer (or a taxpayer's spouse, if married) has failed to file a
Federal income tax return and reconcile their past APTC. However, we
propose that an Exchange may only determine enrollees ineligible for
APTC after a taxpayer (or a taxpayer's spouse, if married) has failed
to file a Federal income tax return and reconcile their past APTC for
two consecutive years. We also propose a technical correction to Sec.
155.305(f)(4) to clarify that HHS receives data from the IRS for
consumers who have failed to file tax returns and reconcile a previous
year's APTC.
We propose to amend Sec. 155.320 to require Exchanges to accept an
applicant's attestation of projected annual household income when the
Exchange requests tax return data from the IRS to verify attested
projected annual household income, but the IRS confirms there is no
such tax return data available. Further, we propose to revise Sec.
155.315 to add that an enrollee with income inconsistencies must
receive a 60-day extension in addition to the 90 days currently
provided in Sec. 155.315(f)(2)(ii). These changes would ensure
consumers are treated equitably, ensure continuous coverage, and
strengthen the risk pool.
In the 2023 Payment Notice proposed rule (87 FR 584, 652), we
solicited comments on revising the re-enrollment hierarchy at Sec.
155.335(j) at a later date, and, after considering comments, we now
propose amending and adding several provisions to this regulation to
provide Exchanges (including Exchanges on the Federal platform and
SBEs) with the option to make certain changes to the re-enrollment
hierarchy beginning for PY 2024. Specifically, we propose to allow
Exchanges to direct re-enrollment for CSR-eligible enrollees from a
bronze QHP to a silver QHP with a lower or equivalent net premium under
the same product and QHP issuer, regardless of whether the enrollee's
current plan is available. We believe directing re-enrollment into
lower or same cost, high generosity plans would place enrollees in more
affordable plans with lower out-of-pocket costs, which would lower
health insurance costs for those lower-income (CSR-eligible)
individuals. We also propose to allow the Exchange to incorporate
provider network considerations into the Exchange re-enrollment
hierarchy.
We are proposing changes related to SEPs at Sec. 155.420. First,
we propose two technical corrections to Sec. 155.420(a)(4)(ii)(A) and
(B) to align the text with Sec. 155.420(a)(d)(6)(i) and (ii). The
proposed revisions would clarify that only one person in a tax
household applying for coverage or financial assistance through the
Exchange must qualify for an SEP in order for the entire tax household
to qualify for the SEP. Second, we propose to change the current
coverage effective date requirements at Sec. 155.420(b)(2)(iv) to
permit Exchanges to offer earlier coverage effective start dates for
consumers attesting to a future loss of MEC. These changes would ensure
qualifying individuals are able to seamlessly transition from other
forms of coverage to Exchange coverage as quickly as possible with
minimal coverage gaps.
Third, to mitigate coverage gaps, we are proposing to add Sec.
155.420(c)(6) in which Exchanges would have the option to implement a
new special rule for consumers eligible for a SEP under Sec.
155.420(d)(1) due to loss of Medicaid or CHIP coverage which would give
consumers up to 90 days after their loss of Medicaid or CHIP coverage
to select a plan for Exchange coverage. Fourth, we are proposing to
revise Sec. 155.420(d)(12) to align the policy of the Exchanges on the
Federal platform for granting SEPs to persons who are adversely
affected by a plan display error with current plan display error SEP
operations. The proposal would remove the burden from the consumer to
solely demonstrate to the Exchange that a material plan display error
has influenced the consumer's decision to purchase a QHP through the
Exchange.
We propose to add Sec. 155.430(b)(3) to explicitly prohibit
issuers participating in Exchanges on the Federal platform from
terminating coverage for a dependent child prior to the end of the plan
year because the dependent child has reached the applicable maximum
[[Page 78213]]
age. This change would provide clarity to issuers participating in
Exchanges on the Federal platform regarding their obligation to
maintain coverage for dependent children, as well as to enrollees
regarding their ability to maintain coverage for dependent children.
This proposal would be optional for State Exchanges.
We propose to revise Sec. 155.505(g) to acknowledge the ability of
the CMS Administrator to review Exchange eligibility appeals decisions
prior to judicial review. This change would provide appellants and
other parties with accurate information about the availability of
administrative review by the CMS Administrator if they are dissatisfied
with their eligibility appeal decision.
HHS proposes to implement a new Improper Payment Pre-Testing and
Assessment (IPPTA) program under which State Exchanges will be required
to participate in pre-audit activities that will prepare State
Exchanges for complying with audits required under the Payment
Integrity Information Act of 2019 (PIIA). Activities under the proposed
IPPTA program would provide State Exchanges experience helpful to
preparing for future PIIA audits and will help HHS design and refine
appropriate requirements for future PIIA audits of State Exchanges.
3. 45 CFR Part 156
In part 156, we propose user fee rates for the 2024 benefit year
for all issuers participating on the Exchanges using the Federal
platform. For the 2024 benefit year, we propose an FFE user fee rate of
2.5 percent of total monthly premiums and an SBE-FP user fee rate of
2.0 percent of total monthly premiums. HHS will issue the 2024 benefit
year premium adjustment percentage index and related payment parameters
in guidance, consistent with the policy finalized in part 2 of the 2022
Payment Notice.
For PY 2024 and subsequent PYs, HHS would maintain a large degree
of continuity with the approach to standardized plan options finalized
in the 2023 Payment Notice and proposes only minor updates in this
proposed rule. In particular, in contrast to the policy finalized in
the 2023 Payment Notice, we are proposing to no longer include a
standardized plan option for the non-expanded bronze metal level,
mainly due to AV constraints. Thus, for PY 2024 and subsequent PYs, we
propose standardized plan options for the following metal levels: one
bronze plan that meets the requirement to have an AV up to five
percentage points above the 60 percent standard, as specified in Sec.
156.140(c) (known as an expanded bronze plan); one standard silver
plan; one version of each of the three income-based silver CSR plan
variations; one gold plan; and one platinum plan. We would continue to
differentially display standardized plan options, including those
standardized plan options required under State action that took place
on or before January 1, 2020, on HealthCare.gov, and would continue
enforcement of the standardized plan options display requirements for
approved web-brokers and QHP issuers using a direct enrollment pathway
to facilitate enrollment through an FFE or SBE-FP-- including both the
Classic Direct Enrollment (DE) and Enhanced Direct Enrollment (EDE)
Pathways.
To mitigate the risk of choice overload, HHS proposes to limit the
number of non-standardized plan options that QHP issuers may offer
through the Exchanges using the Federal platform to two non-
standardized plan options per product network type and metal level
(excluding catastrophic plans), in any service area for PY 2024 and
beyond. In addition, HHS proposes, as an alternative to the proposal to
limit the number of non-standardized plan options that an FFE or SBE-FP
issuer may offer on the Exchange, to apply a meaningful difference
standard which would be more stringent than the previous standard. HHS
proposes to strengthen the standard by modifying the criteria and
difference thresholds used to determine whether plans are
``meaningfully different'' from one another.
We propose to require stand-alone dental plan (SADP) issuers to use
age on effective date as the sole method to calculate an enrollee's age
for rating and eligibility purposes beginning with Exchange
certification for PY 2024. Requiring SADPs to use the age on effective
date methodology to calculate an enrollee's age as a condition of QHP
certification, and consequently removing the less commonly used and
more complex age calculation methods, would reduce consumer confusion
and promote operational efficiency. We propose that this policy would
apply to Exchange-certified SADPs as a requirement of certification,
whether they are sold on- or off-Exchange.
In addition, we propose to require Exchange-certified SADP issuers
to submit guaranteed rates as a condition of QHP certification
beginning with Exchange certification for PY 2024. This change would
help reduce the risk of incorrect APTC calculation for the pediatric
dental EHB portion of premiums, thereby reducing the risk of consumer
harm. We propose that this policy would apply to Exchange-certified
SADPs as a requirement of certification, whether they are sold on- or
off-Exchange.
We propose at Sec. 156.225 to require that plan and plan variation
marketing names for QHPs offered through Exchanges on the Federal
platform include correct information, without omission of material
fact, and not include content that is misleading. If finalized as
proposed, CMS would review plan and plan variation marketing names
during the annual QHP certification process in close collaboration with
State regulators.
We propose to revise the network adequacy and ECP standards at
Sec. Sec. 156.230 and 156.235 to provide that all individual market
QHPs and SADPs and all Small Business Health Options Program (SHOP)
QHPs across all Exchanges must use a network of providers that complies
with the network adequacy and ECP standards in those sections, and to
remove the exception that these sections do not apply to plans that do
not use a provider network.
To expand access to care for low-income and medically underserved
consumers, we propose to establish two additional stand-alone ECP
categories at Sec. 156.235(a)(2)(ii)(B) for PY 2024 and subsequent
PYs, Mental Health Facilities and Substance Use Disorder Treatment
Centers. HHS also proposes to require QHP issuers to contract with at
least 35 percent of available FQHCs and at least 35 percent of
available Family Planning Providers that qualify as an ECP in the
plan's service area, in addition to meeting the current overall 35
percent ECP threshold requirement in the plan's service area.
We propose to add a timeliness standard to the requirement at Sec.
156.270(f) for QHP issuers to send enrollees a notice of payment
delinquency. Specifically, we propose to require issuers to send
notices of payment delinquency promptly and without undue delay. This
proposed revision will help ensure that enrollees are aware they are at
risk of losing coverage and can avoid losing coverage by paying any
outstanding premium amounts promptly.
We propose to revise the final deadline in Sec. 156.1210(c) for
issuers to report data inaccuracies identified in payment and
collections reports for discovered underpayments of APTC to the issuer
and user fee overpayments to HHS. Specifically, we propose to remove
the deadline set forth at Sec. 156.1210(c)(2). Under this proposal, we
would retain only the deadline at
[[Page 78214]]
Sec. 156.1210(c)(1), which requires that issuers describe all
inaccuracies identified in a payment and collections report within
three years of the end of the applicable plan year to which the
inaccuracy relates to be eligible to receive an adjustment to correct
an underpayment of APTC to the issuer and user fee overpayments to HHS.
Under this proposal, beginning with the 2020 plan year coverage, HHS
would not pay additional APTC payments or reimburse user fee payments
for FFE, SBE-FP, and SBE issuers for data inaccuracies reported after
the 3-year deadline. Further, we propose that HHS would not accept or
take action that results in an outgoing payment on data inaccuracies or
payment errors (except those identifying an overpayment by HHS) for the
2015 through 2019 plan year coverage that are reported after December
31, 2023. This proposal would better align with the existing IRS
limitation on filing corrected Federal tax returns and reduce
administrative and operational burden on issuers, State Exchanges, and
HHS when handling payment and enrollment dispute.
III. Provisions of the Proposed Regulations
A. Part 153--Standards Related to Reinsurance, Risk Corridors, and Risk
Adjustment
In subparts A, D, G, and H of part 153, we established standards
for the administration of the risk adjustment program. The risk
adjustment program is a permanent program created by section 1343 of
the ACA that transfers funds from lower-than-average risk, risk
adjustment covered plans to higher-than-average risk, risk adjustment
covered plans in the individual, small group markets, or merged
markets, inside and outside the Exchanges. In accordance with Sec.
153.310(a), a State that is approved or conditionally approved by the
Secretary to operate an Exchange may establish a risk adjustment
program, or have HHS do so on its behalf.\11\ HHS did not receive any
requests from States to operate risk adjustment for the 2024 benefit
year. Therefore, HHS will operate risk adjustment in every State and
the District of Columbia for the 2024 benefit year.
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\11\ See also 42 U.S.C. 18041(c)(1).
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1. Sequestration
In accordance with the OMB Report to Congress on the Joint
Committee Reductions for Fiscal Year 2023, the permanent risk
adjustment program is subject to the fiscal year 2023
sequestration.\12\ The Federal Government's 2023 fiscal year began on
October 1, 2022. Therefore, the risk adjustment program will be
sequestered at a rate of 5.7 percent for payments made from fiscal year
2023 resources (that is, funds collected during the 2023 fiscal year).
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\12\ OMB. (2022, March 28). OMB Report to the Congress on the
BBEDCA 251A Sequestration for Fiscal Year 2023. https://www.whitehouse.gov/wp-content/uploads/2022/03/BBEDCA_251A_Sequestration_Report_FY2023.pdf.
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HHS, in coordination with OMB, has determined that, under section
256(k)(6) of the Balanced Budget and Emergency Deficit Control Act of
1985,\13\ as amended, and the underlying authority for the risk
adjustment program, the funds that are sequestered in fiscal year 2023
from the risk adjustment program will become available for payment to
issuers in fiscal year 2024 without further Congressional action. If
Congress does not enact deficit reduction provisions that replace the
Joint Committee reductions, the program would be sequestered in future
fiscal years, and any sequestered funding would become available in the
fiscal year following that in which it was sequestered.
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\13\ Public Law 99-177 (1985).
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Additionally, we note that the Infrastructure Investment and Jobs
Act \14\ amended section 251A(6) of the Balanced Budget and Emergency
Deficit Control Act of 1985 and extended sequestration for the risk
adjustment program through fiscal year 2031 at a rate of 5.7 percent
per fiscal year.15 16
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\14\ Public Law 117-58, 135 Stat. 429 (2021).
\15\ 2 U.S.C. 901a.
\16\ The Coronavirus Aid, Relief, and Economic Security (CARES)
Act previously amended section 251A(6) of the Balanced Budget and
Emergency Deficit Control Act of 1985 and extended sequestration for
the risk adjustment program through fiscal year 2023 at a rate of
5.7 percent per fiscal year. Section 4408 of the CARES Act, Public
Law 116-136, 134 Stat. 281 (2020).
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2. HHS Risk Adjustment (Sec. 153.320)
The HHS risk adjustment models predict plan liability for an
average enrollee based on that person's age, sex, and diagnoses (also
referred to as hierarchical condition categories (HCCs)), producing a
risk score. The HHS risk adjustment methodology utilizes separate
models for adults, children, and infants to account for clinical and
cost differences in each age group. In the adult and child models, the
relative risk assigned to an individual's age, sex, and diagnoses are
added together to produce an individual risk score. Additionally, to
calculate enrollee risk scores in the adult models, we added enrollment
duration factors beginning with the 2017 benefit year,\17\ and
prescription drug categories (RXCs) beginning with the 2018 benefit
year.\18\ Infant risk scores are determined by inclusion in one of 25
mutually exclusive groups, based on the infant's maturity and the
severity of diagnoses. If applicable, the risk score for adults,
children, or infants is multiplied by a cost-sharing reduction (CSR)
factor. The enrollment-weighted average risk score of all enrollees in
a particular risk adjustment covered plan (also referred to as the plan
liability risk score (PLRS)) within a geographic rating area is one of
the inputs into the risk adjustment State payment transfer formula,\19\
which determines the State transfer payment or charge that an issuer
will receive or be required to pay for that plan for the applicable
State market risk pool. Thus, the HHS risk adjustment models predict
average group costs to account for risk across plans, in keeping with
the Actuarial Standards Board's Actuarial Standards of Practice for
risk classification.
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\17\ For the 2017 through 2022 benefit years, there is a set of
11 binary enrollment duration factors in the adult models that
decrease monotonically from one to 11 months, reflecting the
increased annualized costs associated with fewer months of
enrollments. See, for example, 81 FR 94071 through 94074. These
enrollment duration factors were replaced beginning with the 2023
benefit year with HCC-contingent enrollment duration factors for up
to 6 months in the adult models. See, for example, 87 FR 27228
through 27230.
\18\ For the 2018 benefit year, there were 12 RXCs, but starting
with the 2019 benefit year, the two severity-only RXCs were removed
from the adult risk adjustment models. See, for example, 83 FR
16941.
\19\ The State payment transfer formula refers to the part of
the HHS risk adjustment methodology that calculates payments and
charges at the State market risk pool level prior to the calculation
of the high-cost risk pool payment and charge terms that apply
beginning with the 2018 BY. See, for example, 81 FR 94080.
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a. Data for Risk Adjustment Model Recalibration for 2024 Benefit Year
We propose to use 2018, 2019 and 2020 benefit year enrollee-level
EDGE data to recalibrate the 2024 benefit year risk adjustment models
with an exception to exclude the 2020 benefit year data from the
blending of the age-sex coefficients for the adult models.
In accordance with Sec. 153.320, HHS develops and publishes the
risk adjustment methodology applicable in States where HHS operates the
program, including the draft factors to be employed in the models for
the benefit year. This includes information related to the annual
recalibration of the risk adjustment models using data from the most
recent available prior benefit years trended forwarded to reflect the
[[Page 78215]]
applicable benefit year of risk adjustment.
Our proposed approach for 2024 recalibration aligns with the
approach finalized in the 2022 Payment Notice (86 FR 24151 through
24155) and reiterated in the 2023 Payment Notice (87 FR 27220 through
27221), that involves use of the 3 most recent consecutive years of
enrollee-level EDGE data that are available at the time we incorporate
the data in the draft recalibrated coefficients published in the
proposed rule for the applicable benefit year, and not updating the
coefficients between the proposed and final rules if an additional year
of enrollee-level EDGE data becomes available for incorporation. We
continue to believe this approach promotes stability, better meets the
goal of the risk adjustment program, and allows issuers more time to
incorporate this information when pricing their plans for the upcoming
benefit year than the previous approach which allowed for updates to
the data used for recalibration if more data became available between
the proposed and final rules.
As such, we propose to determine coefficients for the 2024 benefit
year based on a blend of separately solved coefficients from the 2018,
2019, and 2020 benefit years of enrollee-level EDGE data, with an
exception to exclude the 2020 benefit year data from the blending of
the age-sex coefficients for the adult models. For all adult model age-
sex coefficients, we propose to use only 2018 and 2019 benefit year
enrollee-level EDGE data in recalibration to account for the observed
anomalous decreases in the unconstrained coefficients \20\ for the 2020
benefit year enrollee-level EDGE data for older adult enrollees,
especially older adult female enrollees.
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\20\ HHS constrains the risk adjustment models in multiple
distinct ways during model recalibration. These include (1)
coefficient estimation groups, also referred to as G-Groups in the
Risk Adjustment Do It Yourself (DIY) Software, (2) a priori
stability constraints, and (3) hierarchy violation constraints. Of
these, coefficient estimation groups and a priori stability
constraints are applied prior to model fitting. The hierarchy
violation constraints are applied after the initial estimates of
coefficients are produced. We refer to the models and coefficients
prior to the application of hierarchy violation constraints as the
``unconstrained models'' and ``unconstrained coefficients,''
respectively. For a description of the various constraints we apply
to the risk adjustment models, see, CMS' ``Potential Updates to HHS-
HCCs for the HHS-operated Risk Adjustment Program'' (the ``2019
White Paper'') (June 17, 2019). https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Potential-Updates-to-HHS-HCCs-HHS-operated-Risk-Adjustment-Program.pdf.
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To further explain, due to the potential impact of the COVID-19 PHE
on costs and utilization of services in 2020, HHS considered whether
the 2020 enrollee-level EDGE data was appropriate for use in the annual
model recalibration for the HHS-operated risk adjustment program
applicable to the individual and small group (including merged)
markets. As part of this analysis, we considered comments received in
response to the 2023 Payment Notice proposed rule (87 FR 598), wherein
we sought comments on the future use of the 2020 enrollee-level EDGE
data due to the potential impact of the COVID-19 PHE. The current
policy that involves using the 3 most recent years of EDGE data
available as of the proposed rule for the annual risk adjustment model
recalibration promotes stability and ensures the models reflect the
year-over-year changes to the markets' patterns of utilization and
spending without over-relying on any factors unique to one particular
year. This approach was put in place based on feedback from issuers and
other interested parties and our experience operating the program since
the 2014 benefit year. Furthermore, we know from our experience that
every year of data can be unique and therefore some level of deviation
from year to year is expected.\21\ These general considerations all
weigh in favor of including the 2020 benefit year data in the
recalibration of the risk adjustment models.
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\21\ Every year we expect some shifting in treatment and cost
patterns, for example as new drugs come to market. Our goal in using
multiple years of data for model calibration is to capture some
degree of year-to-year cost shifting without over-relying on any
factors unique to one particular year.
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However, we recognize that if a benefit year has significant
changes that differentially impact certain conditions or populations
relative to others, or is sufficiently anomalous relative to expected
future patterns of care, we should carefully consider what impact that
benefit year of data could have if it is used in the annual model
recalibration for the HHS-operated risk adjustment program. This
includes consideration of whether to exclude or adjust that benefit
year of data to increase the models' predictive validity or otherwise
limit the impact of anomalous trends. The situation presented by the
COVID-19 PHE and its potential impact on utilization and costs in the
2020 benefit year is an example \22\ of a situation that requires this
additional consideration. Thus, to help further inform HHS' decision on
whether it is appropriate to use 2020 enrollee-level EDGE data to
calibrate the risk adjustment coefficients, HHS analyzed the 2020
benefit year enrollee-level EDGE recalibration data to assess how it
compares to 2019 benefit year enrollee-level EDGE recalibration data.
Our results found:
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\22\ In the 10 years since the start of HHS model calibration
for benefit year 2014, the COVID-19 PHE has been the only such
situation to date. Other events and policy changes have not risen to
the same level of uniqueness or impact.
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The total sample size in the recalibration data set was
similar between the 2019 and 2020 benefit years, with the individual
market at the national level seeing an increase in enrollment in the
2020 benefit year and the small group market at the national level
seeing a slight decrease in enrollment in the 2020 benefit year.
In the 2020 EDGE enrollee-level recalibration data set,
even though PMPM spending dropped substantially between March and April
2020, the total PMPM spending in the 2020 benefit year was similar to
the 2019 benefit year, with the institutional and professional services
PMPM slightly decreasing, preventive services PMPM notably decreasing,
and the drug PMPM increasing. This represents a departure from
historical medical costs trends, which have generally seen increases
year-over-year in all cost categories.
Across all data submitted through issuer's EDGE servers
for the 2020 benefit year, we observed a large increase in telehealth
paid claims amounts when compared to all data submitted through
issuer's EDGE servers for the 2019 benefit year.
The number of enrollees with one or more HCC was
relatively stable between the 2019 and 2020 benefit year enrollee-level
EDGE recalibration data sets in both the recalibration and full data
sets.\23\
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\23\ CMS. (2021, June 30). Summary Report on Permanent Risk
Adjustment Transfers for the 2020 Benefit Year. https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/RA-Report-BY2020.pdf.
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Individual HCC frequencies and costs generally remained
constant between the 2019 and 2020 benefit year enrollee-level EDGE
recalibration data sets, even for the HCCs related to the severe
manifestations of COVID-19. An exception was a notable increase in
frequency for HCC 127 Cardio-Respiratory Failure and Shock, Including
Respiratory Distress Syndromes, which was likely coded for cases in
which acute respiratory distress syndrome (ARDS) was a manifestation of
COVID-19, but relative allowed charges, and therefore, risk adjustment
model coefficients, for HCC 127 remained similar in 2020 compared to
2019.
[[Page 78216]]
RXC frequencies and costs were generally stable between
the 2019 and 2020 benefit year enrollee-level EDGE recalibration data
sets, with the exception of RXC 10 Cystic Fibrosis Agents, for which a
new drug was introduced that increased costs in the 2020 data compared
to the 2019 data.
The unconstrained coefficients for the 2020 benefit year
enrollee-level EDGE recalibration data are similar to the 2019 benefit
year's unconstrainted coefficients with one exception. The exception
exists within the age-sex coefficients in the adult models where we
found decreases among coefficients for older enrollees, especially
female enrollees, which are likely due to decreases in discretionary
spending among this age group in the 2020 benefit year.
In short, on many key dimensions, HHS found that the 2019 benefit
year and 2020 benefit year enrollee-level EDGE data recalibration were
largely comparable.
With this analysis in mind, and based on the comments received in
response to the 2023 Payment Notice proposed rule,\24\ HHS considered
six different options for handling the 2020 benefit year enrollee-level
EDGE recalibration data for purposes of the annual recalibration of the
HHS risk adjustment models for the 2024 benefit year.\25\ Four options
involve the use of 2020 benefit year enrollee-level EDGE recalibration
data in the risk adjustment model recalibration, and two involve the
exclusion of the 2020 benefit year data. These six options are as
follows:
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\24\ These comments offered a variety of perspectives with some
commenters stating that 2020 enrollee-level EDGE data should be used
for model recalibration as normal, a few commenters suggesting that
2020 enrollee-level EDGE data should be excluded entirely, one
commenter recommending that 2020 enrollee-level EDGE data should be
used with a different weight assigned, and several commenters
suggesting HHS release a technical paper on the use of 2020
enrollee-level EDGE data, with several suggesting HHS do a
comparison of coefficients with and without the 2020 enrollee-level
EDGE data to review relative changes in coefficients, and evaluate
changes for clinical reasonability and consistency with 2018 and
2019 enrollee-level EDGE data. See 87 FR 27220 through 27221.
\25\ The proposals related to the use of 2020 benefit year
enrollee-level EDGE data in this rule for model recalibration
purposes are focused on the 2024 benefit year models. Consistent
with the approach finalized in part 2 of the 2022 Payment Notice (86
FR 24151 through 24155), any changes to the use of the 3 most recent
consecutive years of enrollee-level EDGE data, including proposals
related to the use of 2020 benefit year data, for recalibration of
the 2025 and 2026 benefit year HHS risk adjustment models would be
addressed and proposed in a future rulemaking.
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Option 1: Maintain the current policy, recalibrating the
2024 benefit year risk adjustment models using 2018, 2019, and 2020
enrollee-level EDGE data with no exceptions or modifications.
Option 2: Maintain the current policy, recalibrating the
2024 benefit year risk adjustment models using 2018, 2019, and 2020
benefit year enrollee-level EDGE recalibration data, but assign a lower
weight to 2020 data. Assigning a lower weight to the 2020 data would
dampen its impact on the models while continuing to capture in part the
utilization and spending patterns underlying the data.
Option 3: Utilize 4 years of enrollee-level EDGE data,
instead of three, to recalibrate the 2024 benefit year risk adjustment
models using 2017, 2018, 2019, and 2020 benefit year data. This would
serve the purpose of dampening the effect of the 2020 data on the
models by incorporating an extra year of data from a prior benefit year
that was not impacted by the COVID-19 PHE.
Option 4: Maintain the current policy, recalibrating the
2024 benefit year risk adjustment models using 2018, 2019, and 2020
enrollee-level EDGE recalibration data with an exception to exclude the
2020 benefit year data from the blending of the age-sex coefficients
for the adult models. Under this option, we would determine
coefficients for the 2024 benefit year based on a blend of separately
solved coefficients from the 2018, 2019, and 2020 benefit years of
enrollee-level EDGE recalibration data and would exclude the 2020
benefit year from the recalibration of the adult models' age-sex
coefficients. Instead, only 2018 and 2019 benefit year enrollee-level
EDGE recalibration data would be used to recalibrate the adult risk
adjustment models age-sex coefficients.\26\
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\26\ This is a similar approach to that taken in part 2 of the
2022 Payment Notice, where we only used 2016 and 2017 enrollee-level
EDGE data for the limited purpose of developing the RXC 09
coefficients, RXC 09 HCC related coefficients, and RXC 09
interaction term coefficients for the 2022 benefit year adult
models, given concerns regarding unrepresentative expenditures and
off-label prescribing of hydroxychloroquine during the COVID-19 PHE
relative to drugs that enrollees with HCC 048, 056, or 057 may take.
See 86 FR 24180.
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Option 5: Exclude the 2020 benefit year enrollee-level
EDGE recalibration data and instead use the 2017, 2018, and 2019
benefit year enrollee-level EDGE recalibration data, trended forward to
the 2024 benefit year, in recalibration of the risk adjustment models
for the 2024 benefit year, or use the final 2023 risk adjustment model
coefficients for the 2024 benefit year without trending the data to
account for inflation and changes in costs and utilization between the
2023 and 2024 benefit years.
Option 6: Exclude the 2020 benefit year enrollee-level
EDGE recalibration data and instead use only 2 years of enrollee-level
EDGE data for recalibration--that is, use only 2018 and 2019 benefit
year data to recalibrate the 2024 risk adjustment models.
Although it is true our analyses found that the 2019 and 2020
benefit year enrollee-level EDGE recalibration data were largely
comparable, there were observed anomalous decreases in the
unconstrained age-sex coefficients for the 2020 benefit year enrollee-
level EDGE recalibration data for older adult enrollees, especially
older female enrollees. We are therefore concerned that not making any
adjustments with respect to the use of 2020 enrollee-level EDGE
recalibration data could have an undue impact on the risk captured by
the age-sex factors in the adult models such that these factors would
less accurately reflect the expected spending patterns for the 2024
benefit year. Option 1 would not address the identified anomalous trend
that is not expected to continue in future benefit years. Option 2
represents a middle ground between those commenters who expressed
support for including 2020 benefit year data in model recalibration and
those who expressed support for excluding the data, by capturing the
utilization and spending patterns underlying the 2020 data while
dampening its effects in the models. However, we are concerned this
approach would require identifying an appropriate weighting methodology
other than the equal weighting that we generally use to blend the
factors from the 3 data years, and we do not believe there is a self-
evident method of weighting 2020 data differently for this purpose.
Furthermore, we are concerned that dampening the effect of the 2020
benefit year data in all of the models for all factors (as opposed to
just the age-sex factors in the adult models) defeats the purpose of
using the next available benefit year of data to recalibrate the
models, because doing so would prevent the models from reflecting
changes in utilization and cost of care that are unrelated to the
impact of the COVID-19 PHE. There are similar concerns with option 3
and the inclusion of an additional prior benefit year (that is, 2017)
to recalibrate the 2024 benefit year models to dampen the impact of the
2020 benefit year data. We do not believe that such a broad dampening
is necessary since the anomalous coefficient changes identified from
the 2020 benefit year data were largely limited to the adult model age-
sex coefficients and incorporating an
[[Page 78217]]
additional prior benefit year of data would dampen the impact of the
2020 benefit year data on other factors (for example, HCCs, RXCs, and
interaction factors) and would prevent the models from reflecting
changes in utilization and cost of care that are unrelated to the
impact of the COVID-19 PHE. Furthermore, option 3 would use older data
to fit the 2024 benefit year risk adjustment models than options 1 and
2 (that is, 2017 benefit year data), which may impact the risk
adjustment models such that they reflect older cost and utilization
trends than would be desirable.
We are similarly concerned about options 5 and 6, which would
involve the complete exclusion of 2020 benefit year data. With respect
to option 5, although using the same data years for 2024 benefit year
model recalibration as 2023 benefit year model recalibration or using
the 2023 benefit year models for the 2024 benefit year would likely
yield the same or similar coefficients \27\ to those published for the
2023 benefit year, thereby providing stability that issuers may find
desirable, we are concerned this approach would also involve the use of
older data as with option 3, which may not be the data set that would
best reflect current utilization and spending trends including changes
in drug prescribing patterns. In addition, our analyses of the 2020
benefit year enrollee-level EDGE recalibration data found that it was
largely comparable with the 2019 benefit year data set and we did not
identify other major anomalous trends in our comparison of the
unconstrained HCC coefficients in the 2019 and 2020 enrollee-level EDGE
recalibration data sets, which raises the question about whether there
is a sufficient justification to completely exclude 2020 benefit year
enrollee-level EDGE recalibration data in the recalibration of the risk
adjustment models.
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\27\ We expect that the trending of the prior benefit year data
to reflect the anticipated costs and spending trends in the
applicable future benefit year of risk adjustment that occurs as
part of the annual model recalibration effort would impact the 2024
risk adjustment model coefficients.
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Option 6 has the same drawbacks as option 5--that is, it would not
use the most recently available data for the applicable benefit year
model recalibration, which may be the data set that would best reflect
current utilization and spending trends, and raises the same question
about whether there is a sufficient justification to completely exclude
the 2020 benefit year data for model recalibration purposes. This
option has the additional drawback of decreasing the stabilizing effect
of using multiple years of data, as our goal in using multiple years of
data for model calibration is to capture some degree of year-to-year
cost shifting without over-relying on any factors unique to one
particular year. When using 2 years of data, each year is weighted at
50 percent, but with 3 years of data, each year is weighted at 33.3
percent. As such, a change in a coefficient occurring in 1 year of the
data that is actually included in recalibration would have a greater
impact on the risk adjustment model coefficients if only using 2 years
of data rather than 3 years, due to the increase in the reliance of the
blended coefficients on the remaining 2 years of data.\28\
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\28\ We do not have the same concerns with respect to using only
2 years of data for recalibration of the adult model age-sex
coefficients because age-sex coefficients tend to contribute less to
enrollees' risk scores than HCC, RXC, and interaction coefficients,
so changes in a single age-sex coefficient in one of the remaining
years of data is less likely to have an undue impact. Additionally,
the age-sex coefficients are derived from substantially larger
samples of enrollees and are therefore theoretically more stable
than HCC, RXC, enrollment duration and interaction coefficients.
Furthermore, the anomalies seen in the age-sex coefficients fit with
the 2020 EDGE data systematically impact a wide range of enrollees.
As such, we believe the risks of including 2020 EDGE data in
blending of the age-sex coefficients outweighs the risks of only
using the 2018 and 2019 benefit years of EDGE data to blend the age-
sex coefficients for the 2024 benefit year adult models.
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After consideration of these different options, we propose option
4--that is, maintain the current policy of using the 3 most recent
consecutive benefit year data sets that are available at the time of
publication of this proposed rule, with a narrowly tailored exception
to exclude the 2020 benefit year data from the blending of the age-sex
coefficients for the adult models. Under this proposal, we would
determine coefficients for the 2024 benefit year based on a blend of
separately solved coefficients from the 2018, 2019, and 2020 benefit
years of enrollee-level EDGE recalibration data except for the
coefficients for the adult age-sex factors, which would instead be
based on a blend of separately solved coefficients from only the 2018
and 2019 benefit year enrollee-level EDGE recalibration. This approach
preserves the current policy and use of the 3 most recent consecutive
years of data available for the majority of the risk adjustment model
coefficients, allowing for the use of the next available benefit year
of data to recalibrate models that appears to be largely comparable
with 2019 benefit year data to reflect changes in cost and utilization
patterns for payment HCCs, RXCs, enrollment duration factors and
interaction factors. At the same time, it includes an exception
narrowly tailored to account for the observed anomalous decreases in
the unconstrainted coefficients for the 2020 benefit year enrollee-
level EDGE recalibration data for older adult enrollees, especially
female enrollees. Thus, we believe that this offers a balanced approach
to the use of 2020 benefit year enrollee-level EDGE recalibration data
for model recalibration purposes while also addressing the limited
observed anomalous trends in the 2020 benefit year enrollee-level EDGE
recalibration data.
Our proposal to adopt option 4 is narrowly tailored to only address
the observed trend in the unconstrained age-sex coefficients for the
2020 benefit year enrollee-level EDGE recalibration data for older
adult enrollees, especially older adult female enrollees, which are
likely due to decreases in discretionary spending among this age group
in the 2020 benefit year. We are not proposing adjustments in response
to the other trends observed in the 2020 benefit year enrollee-level
EDGE recalibration data, such as the decrease in PMPM spending that
occurred in March and April 2020,\29\ because we generally found that
the 2020 benefit year data and trends were otherwise largely comparable
with the 2019 benefit year data and we did not identify other anomalous
trends in our comparison of the unconstrained HCC coefficients in the
2019 and 2020 benefit year enrollee-level EDGE recalibration data sets.
We further note that the coefficients fit by the risk adjustment models
reflect the cost of treatment rather than the number of enrollees
accessing treatment or when during the year the treatment is accessed.
Therefore, even though there was some observed decreased utilization in
the 2020 benefit year enrollee-level EDGE recalibration data, the lack
of change in diagnosis-related coefficients between the models fit with
prior years of enrollee-level EDGE recalibration data and the models
fit with 2020 enrollee-level EDGE recalibration data indicates that
when an enrollee was able to access care and a diagnosis was recorded
on EDGE for the benefit year, the cost of treatment of their diagnosed
conditions was similar to that experienced in previous benefit years.
As such, we believe the 2020 enrollee-level EDGE recalibration data is
sufficiently similar to prior years of enrollee level EDGE
recalibration data to
[[Page 78218]]
use in the fitting of coefficients for HCCs, RXCs, their interactions,
and enrollment duration factors. We also do not believe that any 2020
enrollee-level EDGE recalibration data exceptions are needed for the
child or infant risk adjustment models because among those models we
did not observe anomalous trends between age-sex groups analogous to
those trends observed that differentially impacted age-sex factors in
the adult models. The draft coefficients listed in Tables 2 through 7
of this proposed rule reflect the use of 2018, 2019, and 2020 benefit
year enrollee-level EDGE recalibration data, with an exception to
exclude the 2020 benefit year data from the blending of the age-sex
coefficients for the adult models, as well as the other risk adjustment
model updates proposed in this proposed rule.\30\
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\29\ As noted above, even though PMPM spending dropped
substantially between March and April 2020, our analysis found that
total PMPM spending in the 2020 benefit year was generally similar
to the 2019 benefit year.
\30\ Similar to recalibration of the 2023 risk adjustment adult
models and consistent with the policies adopted in the 2023 Payment
Notice, the draft factors in this rule also reflect the removal of
the mapping of hydroxychloroquine sulfate to RXC 09 (Immune
Suppressants and Immunomodulators) and the related RXC 09
interactions (RXC 09 x HCC056 or 057 and 048 or 041; RXC 09 x
HCC056; RXC 09 x HCC 057; RXC 09 x HCC048, 041) from the 2018 and
2019 benefit year enrollee-level EDGE data sets for purposes of
recalibrating the 2024 benefit year adult models. See 87 FR 27232
through 27235. Additionally, the draft factors for the adult models
reflect the use of the final, fourth quarter (Q4) RXC mapping
document that was applicable for each benefit year of data included
in the current year's model recalibration (except under extenuating
circumstances that can result in targeted changes to RXC mappings).
See 87 FR at 27231 through 27232.
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To aid interested parties in their consideration of the proposed
option, we are providing in Table 1 the values for the adult age-sex
coefficients under option 1, which blends the age-sex coefficients
using all three benefit years (2018, 2019 and 2020). Interested parties
may compare the coefficients in Table 1 (reflecting option 1) to those
in Table 2 (reflecting proposed option 4) to understand the impact of
the 2020 enrollee-level EDGE data on the blended age-sex coefficients
for the 2024 benefit year.
[GRAPHIC] [TIFF OMITTED] TP21DE22.000
In addition to considering alternative options to recalibration in
this section, we note that the coefficients could change if we identify
an error after publication of this rule or if some or all of the
proposed model changes are not finalized or are modified in response to
comments. In addition, consistent with Sec. 153.320(b)(1)(i), if we
are unable to finalize the final coefficients in time for publication
in the final rule, we would publish the final coefficients for the 2024
benefit year in guidance soon after the publication of the final rule.
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\31\ All coefficients in Table 2 except for the adult age-sex
factors are blended using all three benefit years of enrollee-level
EDGE data (2018, 2019, and 2020). Option 1 and proposed option 4
only differ in the values of the adult age-sex coefficients. As
such, in Table 1, we only provide the adult age-sex coefficients for
option 1.
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We seek comment on the proposal to determine 2024 benefit year
coefficients based on a blend of separately solved coefficients from
the 2018, 2019, and 2020 enrollee-level EDGE recalibration data, with
an exception to exclude the 2020 benefit year data from the blending of
the age-sex coefficients for the adult models. We also seek comment on
all of the alternative approaches outlined above.
b. Pricing Adjustment for the Hepatitis C Drugs
For the 2024 benefit year, we propose to continue applying a market
pricing adjustment to the plan liability associated with Hepatitis C
drugs in the risk adjustment models.\32\ Since the 2020 benefit year
risk adjustment models, we have been making a market pricing adjustment
to the plan liability associated with Hepatitis C drugs to reflect
future market pricing prior to solving for coefficients for the
models.\33\ The purpose of this market pricing adjustment is to account
for significant pricing changes associated with the introduction of new
and generic Hepatitis C drugs between the data years used for
recalibrating the models and the applicable recalibration benefit
year.\34\
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\32\ See for example, 84 FR 17463 through 17466.
\33\ The Hepatitis C drugs market pricing adjustment to plan
liability is applied for all enrollees taking Hepatitis C drugs in
the data used for recalibration.
\34\ Silseth, S., & Shaw, H. (2021). Analysis of prescription
drugs for the treatment of hepatitis C in the United States.
Milliman White Paper. https://www.milliman.com/-/media/milliman/pdfs/2021-articles/6-11-21-analysis-prescription-drugs-treatment-hepatitis-c-us.ashx.
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We have committed to reassessing this pricing adjustment with
additional years of enrollee-level EDGE data, as data become available.
As part of the 2024 benefit year model recalibration, we reassessed the
cost trend for Hepatitis C drugs using available
[[Page 78219]]
enrollee-level EDGE data (including 2020 benefit year data) to consider
whether the adjustment was still needed and if it is still needed,
whether it should be modified. We found that the data for the Hepatitis
C RXC that would be used for the 2024 benefit year recalibration \35\
still do not account for the significant pricing changes due to the
introduction of new Hepatitis C drugs, and therefore, do not precisely
reflect the average cost of Hepatitis C treatments applicable to the
benefit year in question.
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\35\ As detailed above, we propose to use 2018, 2019 and 2020
enrollee-level EDGE data for recalibration of the 2024 benefit year
HHS risk adjustment models, with an exception to exclude 2020 data
from recalibration of the age-sex factors for the adult models.
However, for purposes of assessing whether this pricing adjustment
was still needed and, if so, if it should be modified, we also
assessed 2017 enrollee-level EDGE data in the event one of the
alternative proposals regarding use of 2020 enrollee-level EDGE data
is adopted.
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Specifically, generic Hepatitis C drugs did not become available on
the market until 2019, and we propose to use 2018 benefit year EDGE
data in the 2024 benefit year model recalibration.\36\ Due to the lag
between the data years used to recalibrate the risk adjustment models
and the applicable benefit year of risk adjustment, as well as the
expectation that the costs for Hepatitis C drugs will not increase at
the same rate as other drug costs between the data year and the
applicable benefit year of risk adjustment, we do not believe that the
trends used to reflect growth in the cost of prescription drugs due to
inflation and related factors for recalibrating the models will
appropriately reflect the average cost of Hepatitis C treatments
expected in the 2024 benefit year. Therefore, we continue to believe a
market pricing adjustment specific to Hepatitis C drugs in our models
for the 2024 benefit year is necessary to account for the significant
pricing changes associated with the introduction of new and generic
Hepatitis C drugs between the data years used for recalibrating the
models and the applicable recalibration benefit year. We intend to
continue to assess this pricing adjustment in future benefit year
recalibrations using additional years of enrollee-level EDGE data.
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\36\ See Miligan, J, (2018). A perspective from our CEO: Gilead
Subsidiary to Launch Authorized Generics to Treat HCV. Gilead.
https://www.gilead.com/news-and-press/company-statements/authorized-generics-for-hcv. See also AbbVie. (2017). AbbVie Receives U.S. FDA
Approval of MAVYRETTM (glecaprevir/pibrentasvir) for the
Treatment of Chronic Hepatitis C in All Major Genotypes (GT 1-6) in
as Short as 8 Weeks. Abbvie. https://news.abbvie.com/news/abbvie-receives-us-fda-approval-mavyret-glecaprevirpibrentasvir-for-treatment-chronic-hepatitis-c-in-all-major-genotypes-gt-1-6-in-as-short-as-8-weeks.htm.
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We seek comment on our proposal to continue applying a market
pricing adjustment to the plan liability associated with Hepatitis C
drugs for the 2024 benefit year.
c. Request for Information: Payment HCC for Gender Dysphoria
HHS requests information on adding a payment HCC for gender
dysphoria to the HHS-operated risk adjustment models for future benefit
years. As part of the ongoing assessment of improvements to the HHS-
operated risk adjustment program, HHS considers whether adjustments are
needed to the payment HCCs in the risk adjustment models.\37\ In light
of Executive Order (E.O.) 13985 ``Advancing Racial Equity and Support
for Underserved Communities Through the Federal Government,'' \38\ E.O.
13988 ``Preventing and Combating Discrimination on the Basis of Gender
Identity or Sexual Orientation,'' \39\ and a comment received in
response to the 2023 Payment Notice proposed rule, HHS is soliciting
comment on whether to consider adding a new payment HCC for gender
dysphoria to the risk adjustment models for future benefit years.
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\37\ See, for example, the 2019 White Paper. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Potential-Updates-to-HHS-HCCs-HHS-operated-Risk-Adjustment-Program.pdf.
\38\ 86 FR 7009.
\39\ 86 FR 7023.
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In considering the inclusion of a new payment HCC for gender
dysphoria, we evaluated this potential payment HCC against the 10
Principles of HHS-Operated Risk Adjustment and determined that a new
payment HCC for gender dysphoria would satisfy some but not all of
these principles (77 FR 73128).
To further consider whether we should add a payment HCC for gender
dysphoria to the HHS-operated risk adjustment models, we request
feedback on the following questions:
The implications of using the changing clinical concepts
and labels from the ICD-10-CM diagnosis of ``gender identity disorder''
compared to the draft ICD-11-CM diagnosis of ``gender incongruence''
\40\ for the naming and inclusion of this diagnosis or payment HCC in
the HHS risk adjustment models.
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\40\ World Health Organization. (n.d.). Gender incongruence and
transgender health in the ICD. https://www.who.int/standards/classifications/frequently-asked-questions/gender-incongruence-and-transgender-health-in-the-icd.
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Whether a gender dysphoria HCC should be a separate and
standalone payment HCC, or if gender dysphoria could be combined with
any other diagnoses to form a broader payment HCC.\41\
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\41\ Gender dysphoria codes are currently mapped to HCC 93 Other
Psychiatric Disorders, a non-payment HCC that is not currently
included in the HHS-operated risk adjustment models.
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Any other factors HHS should consider when determining
whether to add a gender dysphoria HCC to the HHS risk adjustment models
as a payment HCC.
While we are not proposing to add a payment HCC for gender
dysphoria to the HHS risk adjustment models at this time, we solicit
comments to inform our continued consideration of potential risk
adjustment model updates for future benefit years.
d. List of Factors To Be Employed in the Risk Adjustment Models (Sec.
153.320)
The proposed 2024 benefit year risk adjustment model factors
resulting from the equally weighted (averaged) blended factors from
separately solved models using the 2018, 2019, and 2020 enrollee-level
EDGE data, with an exception to exclude the 2020 data from
recalibration of the age-sex factors for the adult models, are shown in
Tables 1 through 6. The adult, child, and infant models have been
truncated to account for the high-cost risk pool payment parameters by
removing 60 percent of costs above the $1 million threshold.\42\ Table
2 contains factors for each adult model, including the age-sex, HCCs,
RXCs, RXC-HCC interactions, interacted HCC counts, and enrollment
duration coefficients. Table 3 contains the factors for each child
model, including the age-sex, HCCs, and interacted HCC counts
coefficients. Table 4 lists the HHS-HCCs selected for the interacted
HCC counts factors that apply to the adult and child models. Table 5
contains the factors for each infant model. Tables 6 and 7 contain the
HCCs included in the infant models' maturity and severity categories,
respectively.
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\42\ We are not proposing changes to the high-cost risk pool
parameters for the 2024 benefit year. Therefore, we would maintain
the $1 million threshold and 60 percent coinsurance rate.
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e. CSR Adjustments43 44 45
46 4748
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\43\ Starting with the 2024 risk adjustment adult models, HHS
will group HCC 18 Pancreas Transplant Status and HCC 183 Kidney
Transplant Status/Complications to reflect that these transplants
frequently co-occur for clinical reasons and to reduce volatility of
coefficients across benefit years due to the small sample size of
HCC 18. This change will also be reflected in the DIY Software for
the 2024 benefit year.
\44\ HCC numbers that appear with an underscore in this document
will appear without the underscore in the DIY software. For example,
HCC 35_1 in this table will appear as HCC 351 in the DIY software.
\45\ Starting with the 2024 risk adjustment adult models, HHS
will group HCC 18 Pancreas Transplant Status and HCC 183 Kidney
Transplant Status/Complications to reflect that these transplants
frequently co-occur for clinical reasons and to reduce volatility of
coefficients across benefit years due to the small sample size of
HCC 18. This change will also be reflected in the DIY Software for
the 2024 benefit year.
\46\ As a note, we constrain RXC 03 to be equal to average plan
liability for RXC 03 drugs, RXC 04 to be equal to the average plan
liability for RXC 04 drugs, and we constrain RXC 03 x HCC142 and RXC
04 x HCC184, 183, 187, 188 to be equal to 0. See CMS. (2016, March
24). March 2016 Risk Adjustment Methodology Discussion Paper.
https://www.cms.gov/cciio/resources/forms-reports-and-other-resources/downloads/ra-march-31-white-paper-032416.pdf (where we
previously discussed the use of constraints in the risk adjustment
models).
\47\ Similar to recalibration of the 2023 risk adjustment adult
models and consistent with the final policies adopted in the 2023
Payment Notice, the draft factors in this rule reflect the removal
of the mapping of hydroxychloroquine sulfate to RXC 09 (Immune
Suppressants and Immunomodulators) and the related RXC 09
interactions (RXC 09 x HCC056 or 057 and 048 or 041; RXC 09 x
HCC056; RXC 09 x HCC 057; RXC 09x HCC048, 041) from the 2018 and
2019 benefit year enrollee-level EDGE data sets for purposes of
recalibrating the 2024 benefit year adult models. See 87 FR 27232
through 27235. Additionally, the draft factors for the adult models
reflect the use of the final, fourth quarter (Q4) RXC mapping
document that was applicable for each benefit year of data included
in the current year's model recalibration (except under extenuating
circumstances that can result in targeted changes to RXC mappings),
while continuing to engage in annual and quarterly review processes.
See 87 FR 27231 through 27232.
\48\ Starting with the 2024 risk adjustment adult models, HHS
will group HCC 18 Pancreas Transplant Status and HCC 183 Kidney
Transplant Status/Complications to reflect that these transplants
frequently co-occur for clinical reasons and to reduce volatility of
coefficients across benefit years due to the small sample size of
HCC 18. This change will also be reflected in the DIY Software for
the 2024 benefit year and will be applied to the adult models only.
In the child models, HCC 18 and HCC 183 are subject to an a priori
constraint (S1) with HCC 34, also for sample size reasons. See
Section 4.2.2 of the 2019 White Paper. (June 17, 2019.) https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Potential-Updates-to-HHS-HCCs-HHS-operated-Risk-Adjustment-Program.pdf. Nevertheless, in both the adult and child models, the
presence of one of these HCCs either alone or in a group will
trigger a severity illness indicator and/or a transplant indicator
for the interacted counts model specification depending on the total
number of HCCs the enrollee has.
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We propose to continue including an adjustment for the receipt of
CSRs in the risk adjustment models in all 50 States and the District of
Columbia. While we continue to study and explore a range of options to
update the CSR adjustments to improve prediction for CSR enrollees and
whether changes are needed to the risk adjustment transfer formula to
account for CSR plans,\49\ to maintain stability and certainty for
issuers for the 2024 benefit year, we are proposing to maintain the CSR
adjustment factors finalized in the 2019, 2020, 2021, 2022, and 2023
Payment Notices.\50\ See Table 8. We also propose to continue to use a
CSR adjustment factor of 1.12 for all Massachusetts wrap-around plans
in the risk adjustment plan liability risk score calculation, as all of
Massachusetts' cost-sharing plan variations have AVs above 94 percent
(81 FR 12228).
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\49\ See CMS. (2021, October 26). HHS-Operated Risk Adjustment
Technical Paper on Possible Model Changes. Appendix A. https://www.cms.gov/files/document/2021-ra-technical-paper.pdf. We are also
considering a letter recently published by the American Academy of
Actuaries regarding accounting for the receipt of CSRs in risk
adjustment and plan rating and are continuing to monitor changes
related to these issues. Bohl, J., Novak, D., & Karcher, J. (2022,
September 8). Comment Letter on Cost-Sharing Reduction Premium Load
Factors. American Academy of Actuaries. https://www.actuary.org/sites/default/files/202209/Academy_CSR_Load_Letter_09.08.22.pdf.
\50\ See 83 FR 16930 at 16953; 84 FR 17478 through 17479; 85 FR
29190; 86 FR 24181; and 87 FR 27235 through 27236.
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We seek comment on these proposals.
[[Page 78236]]
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f. Model Performance Statistics
Each benefit year, to evaluate risk adjustment model performance,
we examine each model's R-squared statistic and predictive ratios
(PRs). The R-squared statistic, which calculates the percentage of
individual variation explained by a model, measures the predictive
accuracy of the model overall. The PR for each of the HHS risk
adjustment model is the ratio of the weighted mean predicted plan
liability for the model sample population to the weighted mean actual
plan liability for the model sample population. The PR represents how
well the model does on average at predicting plan liability for that
subpopulation.
A subpopulation that is predicted perfectly would have a PR of 1.0.
For each of the current and proposed HHS risk adjustment models, the R-
squared statistic and the PRs are in the range of published estimates
for concurrent risk adjustment models.\51\ Because we propose to blend
the coefficients from separately solved models based on the 2018, 2019,
and 2020 benefit years' enrollee-level EDGE data, with an exception to
exclude 2020 benefit year data from the recalibration of the age-sex
factors for the adult models, we are publishing the R-squared statistic
for each model separately to verify their statistical validity. The R-
squared statistics for the proposed 2024 benefit models are shown in
Table 9.
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\51\ Hileman, G., & Steele, S. (2016). Accuracy of Claims-Based
Risk Scoring Models. Society of Actuaries. https://www.soa.org/4937b5/globalassets/assets/files/research/research-2016-accuracy-claims-based-risk-scoring-models.pdf.
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3. Overview of the HHS Risk Adjustment Methodology (Sec. 153.320)
In part 2 of the 2022 Payment Notice (86 FR 24183 through 24186),
we finalized the proposal to continue to use the State payment transfer
formula finalized in the 2021 Payment Notice for the 2022 benefit year
and beyond, unless changed through notice-and-comment rulemaking. We
explained that under this approach, we will no longer republish these
formulas in future annual HHS notice of benefit and payment parameter
rules unless changes are being proposed. We are not proposing any
changes to the formula in this rule, and therefore, are not
republishing the formulas in this rule. We would continue to apply the
formula as finalized in the 2021 Payment Notice (86 FR 24183 through
24186) \52\ in the States where HHS operates the risk adjustment
program in the 2024 benefit year. Additionally, as finalized in the
2020 Payment Notice (84 FR 17466 through 17468), we will maintain the
high-cost risk pool parameters for the 2020 benefit year and beyond,
unless amended through notice-and-comment rulemaking. We are not
proposing any changes to the high-cost risk pool parameters for the
2024 benefit year; therefore, we would maintain the $1 million
threshold and 60 percent coinsurance rate.
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\52\ Discussion provided an illustration and further details on
the State payment transfer formula.
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4. Repeal of Risk Adjustment State Flexibility To Request a Reduction
in Risk Adjustment State Transfers (Sec. 153.320(d))
We propose to repeal the flexibility under Sec. 153.320(d) for
States to request reductions of risk adjustment State transfers under
the State payment transfer formula in all State market risk pools,
including those prior participant States that previously requested a
reduction,\53\ for the 2025 benefit year and beyond. We also solicit
comment on Alabama's requests to reduce risk adjustment State transfers
in the individual (including the catastrophic and non-catastrophic risk
pools) and small group markets for the 2024 benefit year.
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\53\ Alabama is the only State that has previously requested a
reduction in risk adjustment transfers through this flexibility and
therefore is the only State considered a ``prior participant
State''.
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a. Repeal of State Flexibility To Request Transfer Reductions
We propose to amend Sec. 153.320(d) to repeal the ability for any
State to request a reduction in risk adjustment State transfers
beginning with the 2025 benefit year. As part of this repeal, we
propose conforming amendments to the introductory text of Sec.
153.320(d), which currently provides that prior participant States may
request to reduce risk adjustment transfers in all State market risk
pools by up to 50 percent beginning with the 2024 benefit year, to
remove this flexibility for the 2025 benefit year and beyond and limit
the timeframe available for prior participants to request reductions to
the 2024 benefit year only. Similarly, we propose conforming amendments
to paragraphs (d)(1)(iv) and (d)(4)(i)(B), which describe the
conditions for a prior participant State to request a reduction
beginning with the 2024 benefit year, to also limit these requests to
the 2024 benefit year only and to eliminate the ability for prior
participant States to request a reduction for the 2025 benefit year and
beyond.
In the 2019 Payment Notice (83 FR 16955 through 16960), we amended
Sec. 153.320 to add paragraph (d) to provide States the flexibility to
request a reduction to the applicable risk adjustment State transfers
calculated by HHS using the State payment transfer formula for the
State's individual (catastrophic or non-catastrophic risk pools), small
group, or merged market risk pool by up to 50 percent in States where
HHS operates the risk adjustment program to more precisely account for
differences in actuarial risk in the applicable State's markets
beginning with the 2020 benefit year. We finalized that any requests we
received would be published in the applicable benefit year's proposed
HHS notice of benefit and payment parameters, and the supporting
evidence provided by the State in support of its request would be made
available for public comment.\54\
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\54\ If the State requests that HHS not make publicly available
certain supporting evidence and analysis because it contains trade
secrets or confidential commercial or financial information within
the meaning of HHS' Freedom of Information Act regulations at 45 CFR
5.31(d), HHS will only make available on the CMS website the
supporting evidence submitted by the State that is not a trade
secret or confidential commercial or financial information by
posting a redacted version of the State's supporting evidence. See
Sec. 153.320(d)(3).
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In the 2023 Payment Notice (87 FR 27236), HHS limited this
flexibility by finalizing amendments to Sec. 153.320(d) that repealed
the State flexibility framework for States to request reductions in
risk adjustment State transfer payments for the 2024 benefit year and
beyond, with an exception for prior participants.\55\ We also limited
the options for prior participants to request reductions by finalizing
that beginning with the 2024 benefit year, States submitting reduction
requests must demonstrate that the requested reduction satisfies the de
minimis standard--that is, the premium increase necessary to cover the
affected issuer's or issuers' reduced risk adjustment payments does not
exceed 1 percent in the relevant State market risk pool.\56\ In the
2023 Payment Notice (87 FR 27239 through 27241), we also finalized the
conforming amendments to the HHS approval framework in Sec.
153.320(d)(4) to reflect the changes to the applicable criteria (that
is, only retaining the de minimis criterion) beginning with the 2024
benefit year, and we finalized the proposed definition of ``prior
participant'' in Sec. 153.320(d)(5). In addition, HHS indicated our
intention to propose in future rulemaking to repeal the exception for
prior participants beginning with the 2025 benefit year.\57\
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\55\ Section 153.320(d)(5) defines prior participants as States
that submitted a State reduction request in the State's individual
catastrophic, individual non-catastrophic, small group, or merged
market risk pool in the 2020, 2021, 2022, or 2023 benefit year.
\56\ 87 FR 27239 through 27241. See also 83 FR 16957.
\57\ 87 FR 27239 through 27241. See also 83 FR 16957.
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Since finalizing the ability for States to request a reduction of
risk adjustment transfers in the 2019 Payment Notice (83 FR 16955
through 16960), we received public comments on subsequent proposed
rulemakings requesting that HHS repeal this policy, with several
commenters noting that reducing risk adjustment transfers to plans with
higher-risk enrollees could create incentives for issuers to avoid
enrolling high-risk enrollees in the future by distorting plan
offerings and designs, including by avoiding broad network plans, not
offering platinum plans at all, and only offering limited gold plans.
Commenters further stated that issuers could also distort plan designs
by excluding coverage or imposing high cost-sharing for certain drugs
or services. For example, one commenter stated that the risk adjustment
State payment transfer formula already adjusts for differences in types
of individuals enrolled in different States and aggregate differences
in prices and utilization by using the Statewide average premium as a
scaling factor, so State flexibility to account for State-specific
factors is unnecessary.\58\ In addition, since establishing this
framework, we have observed a lack of
[[Page 78238]]
interest from States in using this policy. Only one State (Alabama) has
exercised this flexibility and requested reductions to transfers in its
individual and/or small group markets.\59\
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\58\ See Fielder, M, & Layton, T. (2020, December 30). Comment
Letter on 2022 Payment Notice Proposed Rule. Brookings. https://www.brookings.edu/wp-content/uploads/2020/12/FiedlerLaytonCommentLetterNBPP2022.pdf.
\59\ For the 2020 and 2021 benefit years, Alabama submitted a 50
percent risk adjustment transfer reduction request for its small
group market, which HHS approved in the 2020 Payment Notice (84 FR
17454) and in the 2021 Payment Notice (85 FR 29164). For the 2022
and 2023 benefit years, Alabama submitted 50 percent risk adjustment
transfer reduction requests for its individual and small group
markets. HHS approved the State's requests for the 2022 benefit year
in part 2 of the 2022 Payment Notice final rule (86 FR 24140) and
approved a 25 percent reduction for Alabama's individual market
State transfers (including the catastrophic and non-catastrophic
risk pools) and a 10 percent reduction for the State's small group
market transfers for the 2023 benefit year in the 2023 Payment
Notice (87 FR 27208).
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HHS believes this proposal to completely repeal the option for
States to request reductions in risk adjustment State transfers would
align HHS policy with Section 1 of E.O. 14009 (86 FR 7793), which
prioritizes protecting and strengthening the ACA and making high-
quality health care accessible and affordable for all individuals.
Section 3 of E.O. 14009 directs HHS, and the heads of all other
executive departments and agencies with authorities and
responsibilities related to Medicaid and the ACA, to review all
existing regulations, orders, guidance documents, policies, and any
other similar agency actions to determine whether they are inconsistent
with policy priorities described in Section 1 of E.O. 14009. Consistent
with this directive, HHS reviewed the risk adjustment State flexibility
under Sec. 153.320(d) and determined it is inconsistent with policies
described in sections 1 and 3 of E.O. 14009. We believe that a complete
repeal of Sec. 153.320(d) would prevent the potential negative
outcomes of risk adjustment State flexibility identified through public
comment, including the possibility of risk selection, market
destabilization, increased premiums, smaller networks, and less-
comprehensive plan options, the prevention of which would protect and
strengthen the ACA and make health care more accessible and affordable.
For all of these reasons, we propose to amend Sec. 153.320(d) to fully
repeal the flexibility for States, including prior participants, to
request reductions of risk adjustment State transfers calculated by HHS
under the State payment transfer formula in all State market risk pools
beginning with the 2025 benefit year. If these amendments are
finalized, no State would be able to request a reduction in risk
adjustment transfers calculated by HHS under the State payment transfer
formula starting with the 2025 benefit year.
We seek comment on this proposal.
b. Requests To Reduce Risk Adjustment Transfers for the 2024 Benefit
Year
In accordance with Sec. 153.320(d)(2), beginning with the 2020
benefit year, States requesting a reduction in the transfers calculated
by HHS under the State payment transfer formula must submit their
requests with the supporting evidence and analysis outlined under Sec.
153.320(d)(1) by August 1 of the calendar year that is 2 calendar years
prior to the beginning of the applicable benefit year. As finalized in
the 2023 Payment Notice (87 FR 27239 through 27241), under Sec.
153.320(d)(1)(iv), State requests for a reduction to transfers must
include a justification for the reduction requested demonstrating the
requested reduction would have de minimis impact on the necessary
premium increase to cover the transfers for issuers that would receive
reduced transfer payments beginning with the 2024 benefit year. In
accordance with Sec. 153.320(d)(4)(i)(B), HHS will approve State
reduction requests if HHS determines, based on the review of the
information submitted as part of the State's request, along with other
relevant factors, including the premium impact of the transfer
reduction for the State market risk pool, and relevant public comments,
that the requested reduction would have de minimis impact on the
necessary premium increase to cover the transfers for issuers that
would receive reduced transfer payments beginning with the 2024 benefit
year. In addition, pursuant to Sec. 153.320(d)(4)(ii), HHS may approve
a reduction amount that is lower than the amount requested by the State
if the supporting evidence and analysis do not fully support the
requested reduction amount. If approved by HHS, State reduction
requests are applied to the plan PMPM payment or charge State payment
transfer amount (Ti in the State payment transfer formula).
For the 2024 benefit year, HHS received requests from Alabama to
reduce risk adjustment State transfers for its individual \60\ and
small group markets by 50 percent. As Alabama has stated in previous
years, Alabama asserts that the HHS-operated risk adjustment program
does not work precisely in the Alabama market, clarifying that they do
not assert that the risk adjustment formula is flawed, only that it
produces imprecise results in Alabama which has an ``extremely
unbalanced market share.'' The State reports that its review of the
issuers' 2021 financial data suggested that any premium increase
resulting from a reduction of 50 percent to the 2024 benefit year risk
adjustment payments for the individual market would not exceed one
percent, the de minimis premium increase threshold set forth in Sec.
153.320(d)(1)(iv) and (d)(4)(i)(B). Additionally, the State reports
that its review of the issuers' 2021 financial data also suggested that
any premium increase resulting from a 50 percent reduction to risk
adjustment payments in the small group market for the 2024 benefit year
would not exceed the de minimis threshold of one percent.
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\60\ Alabama's individual market request is for a 50 percent
reduction to risk adjustment transfers for its individual market
non-catastrophic and catastrophic risk pools.
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At this time, to make HHS's approval determination under Sec.
153.320(d)(4), we seek comment on Alabama's requests to reduce risk
adjustment State transfers in their individual and small group markets
by 50 percent for the 2024 benefit year. The request and additional
documentation submitted by Alabama are posted under the ``State
Flexibility Requests'' heading at https://www.cms.gov/cciio/programs-and-initiatives/premium-stabilization-programs.
5. Risk Adjustment Issuer Data Requirements (Sec. Sec. 153.610,
153.700, and 153.710)
We propose, beginning with the 2023 benefit year, to collect and
extract from issuers' EDGE servers through issuers' EDGE Server
Enrollment Submission (ESES) files and risk adjustment recalibration
enrollment files a new data element, a QSEHRA indicator. We also
propose to extract plan ID and rating area data elements issuers have
submitted to their EDGE servers from certain benefit years prior to
2021.
45 CFR 153.610(a) requires that health insurance issuers of risk
adjustment covered plans submit or make accessible all required risk
adjustment data in accordance with the data collection approach
established by HHS \61\ in States where HHS operates the program on
behalf of a State.\62\ In the 2014 Payment Notice (78 FR 15497 through
15500; Sec. 153.720), HHS established an approach for obtaining the
necessary data for risk adjustment calculations in States where HHS
operates the program
[[Page 78239]]
through a distributed data collection model that prevented the transfer
of individuals' personally identifiable information (PII). Then, in
several subsequent rulemakings,\63\ we finalized policies for the
extraction and use of enrollee-level EDGE data. The purpose of
collecting and extracting enrollee-level data is to provide HHS with
more granular data to use for recalibrating the HHS risk adjustment
models, informing updates to the AV Calculator, conducting policy
analysis, and calibrating HHS programs in the individual and small
group (including merged) markets and the PHS Act requirements enforced
by HHS that are applicable market-wide,\64\ as well as informing policy
and improving the integrity of other HHS Federal health-related
programs.\65\ The use of enrollee-level data extracted from issuers'
EDGE servers and summary level reports produced from remote command and
ad hoc queries enhances HHS' ability to develop and set policy and
limits the need to pursue alternative burdensome data collections from
issuers. We also previously finalized policies related to creating on
an annual basis an enrollee-level EDGE Limited Data Set (LDS) using
masked enrollee-level data submitted to EDGE servers by issuers of risk
adjustment covered plans in the individual and small group (including
merged) markets and making this LDS available to requestors who seek
the data for research purposes.66 67
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\61\ Also see 45 CFR 153.700-153.740.
\62\ The full list of required data elements can be found in
Appendix A of OMB Control Number 0938-1155/CMS-10401. (2022, May
26). Standards Related to Reinsurance, Risk Corridors, and Risk
Adjustment. https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10401.
\63\ See the 2018 Payment Notice, 81 FR 94101; the 2020 Payment
Notice, 84 FR 17488; and the 2023 Payment Notice, 87 FR 27241.
\64\ See, for example, 42 U.S.C. 300gg-300gg-28.
\65\ As detailed in the 2023 Payment Notice, the finalized
policies related to the permitted uses of EDGE data and reports make
clear that HHS can use this information to inform policy analyses
and improve the integrity of other HHS Federal health-related
programs outside the commercial individual and small group
(including merged) markets, such as the programs in certain States
to provide wrap-around QHP coverage through Exchanges to Medicaid
expansion populations and coverage offered by non-Federal
Governmental plans. See 87 FR 27243; 87 FR 630 through 631.
\66\ See the 2020 Payment Notice, 84 FR 17486 through 17490 and
the 2023 Payment Notice, 87 FR 27243. Also see CMS. (2022, August
15). Enrollee-Level External Data Gathering Environment (EDGE)
Limited Data Set (LDS). https://www.cms.gov/research-statistics-data-systems/limited-data-set-lds-files/enrollee-level-external-data-gathering-environment-edge-limited-data-set-lds.
\67\ As explained in the 2020 Payment Notice, we do not
currently make the EDGE LDS available to requestors for public
health or health care operation activities. See 84 FR 17488.
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a. Collection and Extraction of the QSEHRA Indicator
In the 2023 Payment Notice (87 FR 27241 through 27252), we
finalized that we will collect and extract an individual coverage
Health Reimbursement Arrangement (ICHRA) indicator and that we will
make this indicator available in the enrollee-level EDGE LDS beginning
with the 2023 benefit year. The primary purpose of collecting and
extracting ICHRA indicator data is to allow HHS to conduct analyses to
examine whether there are any unique actuarial characteristics of the
ICHRA population (such as the health status of enrollees with ICHRAs),
and to investigate what impact (if any) ICHRA enrollment is having on
State individual and small group (or merged) market risk pools. The
additional information collected through the ICHRA indicator will be
used to further analyze if any refinements to the HHS risk adjustment
methodology should be examined or proposed through notice and comment
rulemaking, and similarly may also be used to inform policy analysis
and potential updates to the AV Calculator, other HHS individual or
small group (including merged) market programs, or other HHS Federal
health-related programs.
Since finalizing the collection of the ICHRA indicator as part of
the enrollee-level EDGE data extracted from issuers' EDGE servers, we
determined that also collecting and extracting a QSEHRA indicator would
provide a more thorough picture of the actuarial characteristics of the
Health Reimbursement Arrangement (HRA) population and how or whether
HRA enrollment is impacting State individual and small group (including
merged) market risk pools. HHS needs QSEHRA data in order to conduct a
comprehensive assessment of the HRA markets. A QSEHRA indicator would
also allow HHS to investigate whether the risk profile of enrollees in
QSEHRAs, which differ from ICHRAs with respect to standards related to
employer eligibility, employee eligibility, restrictions on allowance
amounts, and eligibility for PTCs, differ from enrollees in ICHRAs.\68\
While we acknowledge that FFEs, SBE-FPs, and SBEs collect information
about the provision of QSEHRAs, we note that adding a QSEHRA indicator
to the required risk adjustment EDGE data submissions would provide
more uniform and comprehensive information than what is submitted by
Exchange enrollees, as it would capture information on both Exchange
and non-Exchange enrollment. It also would provide HHS the ability to
extract and aggregate the QSEHRA indicator alongside other claims and
enrollment data accessible through issuers' EDGE servers, which would
not be possible with the data collection from consumers through other
processes since the EDGE data is masked \69\ and therefore cannot be
linked with other enrollment data sources.\70\
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\68\ Rosso, R. (2022, May 7). Health Reimbursement Arrangements
(HRAs): Overview and Related History. Congressional Research
Service. https://crsreports.congress.gov/product/pdf/R/R47041.
\69\ 45 CFR 153.720.
\70\ For information on the challenges associated with linking
the extracted enrollee-level EDGE data to other sources, see 87 FR
631 through 632.
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We therefore propose that, beginning with the 2023 benefit year,
issuers would be required to collect and submit a QSEHRA indicator as
part of the required risk adjustment data that issuers make accessible
to HHS from their respective EDGE servers in States where HHS operates
the risk adjustment program. This new data element would be included as
part of the enrollee-level EDGE data extracted from issuers' EDGE
servers and summary level reports produced from remote command and ad
hoc queries beginning with the 2023 benefit year.\71\ We also propose
to include this indicator in the enrollee-level EDGE LDS made available
to qualified researchers upon request once available (that is,
beginning with 2023 benefit year data).
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\71\ The deadline for submission of 2023 benefit year risk
adjustment data is April 30, 2024. See 45 CFR 153.730.
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In the 2023 Payment Notice (87 FR at 27248), we acknowledged that
ICHRA information is collected by HHS from FFE or SBE-FP enrollees
through the eligibility application process and from SBE enrollees
through the State Exchange enrollment and payment files, as well as
collected directly by issuers and their affiliated agents and brokers.
We also noted the ICHRA indicator was intended to capture whether a
particular enrollee's health care coverage involves (or does not
involve) an ICHRA and that we would structure this data element for
EDGE data submissions similar to current collections, where possible.
Additionally, we explained that the collection and extraction of an
ICHRA indicator as part of the required risk adjustment data
submissions issuers make accessible to HHS through their respective
EDGE servers provides more uniform and comprehensive information than
what is submitted by FFE and SBE-FP enrollees on a QHP application and
by SBE enrollees through enrollment and payment files, as it would
capture both on and off Exchange enrollees.
The same is also true for QSEHRA information and we therefore
propose to apply the same approach for the QSEHRA indicator. Currently,
the FFEs and SBE-FPs collect information about
[[Page 78240]]
QSEHRA provision from all applicants to determine whether they are
eligible for a special enrollment period (SEP), as individuals and
their dependents who become newly eligible for a QSEHRA may be eligible
for a SEP. SBEs also collect similar information from their applicants
to determine SEP eligibility. This data may also be provided directly
to issuers by consumers who seek to enroll in coverage directly with
the issuer. In addition, an issuer may currently have or collect
information that could be used to populate the QSEHRA indicator in
situations where the issuer is being paid directly by the employer
through the QSEHRA for the individual market coverage. We therefore
propose to generally permit issuers to populate the required QSEHRA
indicator with information from the FFE or SBE-FP enrollees or
enrollees through SBEs, or from other sources for collecting this
information. The QSEHRA indicator would be used to capture whether a
particular enrollee's health care coverage involves (or does not
involve) a QSEHRA, and we propose to structure this data element for
EDGE data submissions similar to current collections, where possible.
Beginning with the 2023 benefit year, HHS would provide additional
operational and technical guidance on how issuers should submit this
new data element to HHS through issuer EDGE servers via the applicable
benefit year's EDGE Server Business Rules and the EDGE Server Interface
Control Document, as may be necessary.
We are also proposing, similar to the transitional approach for the
ICHRA indicator finalized in the 2023 Payment Notice (87 FR 27241
through 27252), a transitional approach for the collection and
extraction of the QSEHRA indicator. For the 2023 and 2024 benefit
years, issuers would be required to populate the QSEHRA indicator using
only data they already collect or have accessible regarding their
enrollees. For example, when an FFE enrollee is using an SEP,
information about QSEHRA provision is collected by the FFE, and the FFE
may make these data available to issuers. In addition, as noted above,
there may be situations where an issuer has or collects information
that could be used to populate the QSEHRA indicator. Then, beginning
with the 2025 benefit year, we propose that the transitional approach
would end, and issuers would be required to populate the QSEHRA field
using available sources (for example, information from Exchanges, and
requesting information directly from enrollees) and, in the absence of
an existing source for particular enrollees, to make a good faith
effort to ensure collection and submission of the QSEHRA indictor for
these enrollees. HHS would provide additional details on what
constitutes a good faith effort to ensure collection and submission of
the QSEHRA indicator in the future. HHS intends to seek input from
issuers and other interested parties to inform development of the good
faith standard and determine the most feasible methods for issuers to
collect the information used to populate this data field.\72\
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\72\ If the burden estimate for collection of QSEHRA indicator
changes beginning with the 2025 benefit year (after the transitional
approach ends), the information collection under OMB control number
0938-1155 would be revised accordingly and interested parties would
be provided the opportunity to comment through that process.
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We believe this transitional approach is necessary as the burden
associated with the collection of this data would be similar to that of
the collection of the ICHRA indicator, as finalized in the 2023 Payment
Notice (87 FR 27241 through 27252). Much like the ICHRA indicator data,
we believe that some issuers already collect the relevant QSEHRA data.
However, we do not believe the information to populate the QSEHRA
indicator is routinely collected by all issuers at this time;
therefore, we anticipate that there may be administrative burden for
some issuers in developing processes for collection, validation, and
submission of this new data element. In recognition of the burden that
collection of this new data element potentially would pose for some
issuers, we propose to adopt a transitional approach for the 2023 and
2024 benefit years. This transitional approach for the QSEHRA indicator
would be the same as the approach finalized for the ICHRA indicator in
the 2023 Payment Notice and is also similar to how we have handled
other new data collection requirements.\73\ Further details regarding
the estimated burden may be found below in the ICRs Regarding Risk
Adjustment Issuer Data Submission Requirements (Sec. Sec. 153.610,
153.700, and 153.710).
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\73\ For example, HHS did not penalize issuers for temporarily
submitting a default value for the in/out-of-network indictor for
the 2018 benefit year in order to give issuers time to make the
necessary changes to their operations and systems to comply with the
new data collection requirement, but required issuers to provide
full and accurate information for the in/out-of-network indicator
beginning with the 2019 benefit year.
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Consistent with the policy adopted in the 2020 Payment Notice (84
FR 17488 through 17490) regarding HHS' use of data and reports
extracted from issuers EDGE servers (including data reports and ad hoc
query reports), and the policy adopted in the 2023 Payment Notice (87
FR 27243) to expand the permissible uses of such data and reports,
beyond the risk adjustment program, we would also use the QSEHRA
indicator once it is available to conduct policy analysis;
operationalize and calibrate other HHS programs in the individual and
small group (including merged) markets; and to inform policy analysis
and improve the integrity of other HHS Federal health-related programs
to the extent such use is otherwise authorized by, required under, or
not inconsistent with applicable Federal law. We would not use the
QSEHRA indicator or any analysis that relied upon the indictor to
pursue changes to our policies until we conduct data quality checks and
ensure the response rate is adequate to support any analytical
conclusions. These data quality and reliability checks would generally
be consistent with other data standard checks that HHS performs related
to data collected through issuers' EDGE servers.
In conjunction with the proposal to collect and extract this new
data element, we also propose to include the QSEHRA indicator in the
LDS containing enrollee-level EDGE data that HHS makes available to
qualified researchers upon request once the QSEHRA indicator is
available, beginning with the 2023 benefit year. We propose to include
the new indicator as part of the LDS because it would enhance the
usefulness of the data set for qualified researchers by making
available additional data to increase understanding of these markets,
particularly the impact QSEHRA provision may have on the individual and
small group (including merged) markets, and contribute to greater
transparency. We further note that similar to the ICHRA indicator, the
proposed QSEHRA indicator would not be a direct identifier that must be
excluded from an LDS under the HIPAA Privacy Rule and thus would not
add to the risk of enrollees being identified. As noted in the 2023
Payment Notice (87 FR at 27245), only an LDS of certain masked
enrollee-level EDGE data elements is made available and this LDS is
available only to qualified researchers if they meet the requirements
for access to such file(s), including entering into a data use
agreement that establishes the permitted uses or disclosures of the
information and prohibits the recipient from identifying the
information.74 75 In
[[Page 78241]]
addition, consistent with how we created the LDS in prior years, HHS
will continue to exclude data from the LDS that could lead to
identification of certain enrollees.\76\
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\74\ See CMS. (2020, June). Data Use Agreement. (Form CMS-R-
0235L).https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS-R-0235L.pdf. See also 84 FR 17486 through 17490.
\75\ CMS. (2020, June). Data Use Agreement. (Form CMS-R-0235L).
https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS-R-0235L.pdf.
\76\ See, for example, CMS. (2021, August 25). Creation of the
2019 Benefit Year Enrollee-Level EDGE Limited Data Sets: Methods,
Decisions and Notes on Data Use. https://www.cms.gov/files/document/2019-data-use-guide.pdf.
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b. Extracting Plan ID and Rating Area
Finally, in addition to collecting and extracting a QSEHRA
indicator, we propose to extract the plan ID \77\ and rating area data
elements from the 2017, 2018, 2019 and 2020 benefit year data
submissions that issuers already made accessible to HHS. In the 2023
Payment Notice (87 FR 27249), we finalized the proposal to extract
these data elements beginning with the 2021 benefit year. However, HHS
has determined that to aid in annual model recalibration, as well as
HHS' analyses of risk adjustment data, it would be beneficial to also
include these two data elements as part of the enrollee-level EDGE data
and reports extracted from issuers' EDGE servers for the 2017, 2018,
2019 and 2020 benefit years. Inclusion of plan ID and rating area in
extractions of these additional benefit year data sets would also
support analysis of other HHS individual and small group (including
merged) market programs, as well as other HHS Federal health-related
programs.
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\77\ For details on the plan ID and its components, see p. 42 of
the following: CMS. (2013, March 22). CMS Standard Companion Guide
Transaction Information: Instructions related to the ASC X12 Benefit
Enrollment and Maintenance (834) transaction, based on the
005010X220 Implementation Guide and its associated 005010X220A1
addenda for the FFE. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/companion-guide-for-ffe-enrollment-transaction-v15.pdf.
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Moreover, since finalizing the 2023 Payment Notice, we have found
that the analysis of risk adjustment data would be more valuable if we
could compare historical trends, and access to these data elements for
past years would further our ability to analyze and improve the risk
adjustment program. For example, in assessing the 2020 enrollee-level
EDGE data set for inclusion in the 2024 benefit year model
recalibration, having access to plan ID and rating area would have
allowed us to consider the different patterns of utilization and costs
at a more granular level (for example, the State market risk pool
level). Since issuers already collected and made available these data
elements to HHS for the 2017, 2018, 2019 and 2020 benefit years,\78\ we
do not believe that this proposal would increase burden on issuers. We
are also not proposing any changes to the accompanying policies
finalized in the 2023 Payment Notice with respect to these data
elements and the enrollee-level EDGE LDS. Although we recognize that
including plan ID and rating area would enhance the usefulness of the
LDS, we continue to believe it is appropriate to exclude these data
elements from the LDS to mitigate the risk that entities that receive
the LDS file could identify issuers based on these identifiers,
particularly in areas with a small number of issuers. As such, HHS
would not include these data elements (plan ID and rating area) in the
LDS files made available to qualified researchers upon request.
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\78\ As detailed in the 2023 Payment Notice, issuers have been
required to submit these two data elements as part of the required
risk adjustment data submissions to their respective EDGE servers to
support HHS' calculation of risk adjustment transfers since the 2014
benefit year. See 87 FR 27243.
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We seek comment on these proposals.
6. Risk Adjustment User Fee for 2024 Benefit Year (Sec. 153.610(f))
We propose a risk adjustment user fee for the 2024 benefit year of
$0.21 PMPM. Under Sec. 153.310, if a State is not approved to operate,
or chooses to forgo operating, its own risk adjustment program, HHS
will operate risk adjustment on its behalf. As noted previously in this
proposed rule, for the 2024 benefit year, HHS will operate the risk
adjustment program in every State and the District of Columbia. As
described in the 2014 Payment Notice (78 FR 15416 through 15417), HHS'
operation of risk adjustment on behalf of States is funded through a
risk adjustment user fee. Section 153.610(f)(2) provides that, where
HHS operates a risk adjustment program on behalf of a State, an issuer
of a risk adjustment covered plan must remit a user fee to HHS equal to
the product of its monthly billable member enrollment in the plan and
the PMPM risk adjustment user fee specified in the annual HHS notice of
benefit and payment parameters for the applicable benefit year.
OMB Circular No. A-25 established Federal policy regarding user
fees, and specifies that a user charge will be assessed against each
identifiable recipient for special benefits derived from Federal
activities beyond those received by the general public.\79\ The HHS-
operated risk adjustment program provides special benefits as defined
in section 6(a)(1)(B) of OMB Circular No. A-25 to issuers of risk
adjustment covered plans because it mitigates the financial instability
associated with potential adverse risk selection.\80\ The risk
adjustment program also contributes to consumer confidence in the
health insurance industry by helping to stabilize premiums across the
individual, merged, and small group markets.
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\79\ OMB. (1993). OMB Circular No. A-25 Revised, Transmittal
Memorandum No. https://www.whitehouse.gov/wp-content/uploads/2017/11/Circular-025.pdf.
\80\ Ibid.
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In the 2023 Payment Notice (87 FR 27252), we calculated the Federal
administrative expenses of operating the risk adjustment program for
the 2023 benefit year to result in a risk adjustment user fee rate of
$0.22 PMPM based on our estimated costs for risk adjustment operations
and estimated BMM for individuals enrolled in risk adjustment covered
plans. For the 2024 benefit year, HHS proposes to use the same
methodology to estimate our administrative expenses to operate the risk
adjustment program. These costs cover development of the models and
methodology, collections, payments, account management, data
collection, data validation, program integrity and audit functions,
operational and fraud analytics, interested parties training,
operational support, and administrative and personnel costs dedicated
to risk adjustment program activities. To calculate the risk adjustment
user fee, we divided HHS' projected total costs for administering the
risk adjustment program on behalf of States by the expected number of
BMM in risk adjustment covered plans in States where the HHS-operated
risk adjustment program will apply in the 2024 benefit year.
We estimate that the total cost for HHS to operate the risk
adjustment program on behalf of States for the 2024 benefit year will
be approximately $60 million, which remains stable with the
approximately $60 million estimated for the 2023 benefit year. We also
project higher enrollment than our prior estimates in the individual
and small group (including merged) markets in the 2023 and 2024 benefit
years based on the increased enrollment between the 2020 and 2021
benefit years, likely due to the increased PTC subsidies provided for
in the American Rescue Plan Act of 2021 (ARP).81 82 In light
of the passage
[[Page 78242]]
of the Inflation Reduction Act of 2022 (IRA), in which Section 12001
extended the enhanced PTC subsidies in section 9661 of the ARP through
the 2025 benefit year, we project increased 2021 enrollment levels to
remain steady through the 2025 benefit year.\83\ Because this provision
of the IRA is expected to continue higher enrollment, we propose a
slightly lower risk adjustment user fee of $0.21 PMPM.
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\81\ ARP. Public Law 117-2 (2021).
\82\ CMS. (2022, July 19). Summary Report on Permanent Risk
Adjustment Transfers for the 2021 Benefit Year. (p. 9). https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/RA-Report-BY2021.pdf.
\83\ Inflation Reduction Act. Public Law 1217-169 (2022).
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We seek comment on the proposed risk adjustment user fee for the
2024 benefit year.
7. Risk Adjustment Data Validation Requirements When HHS Operates Risk
Adjustment (HHS-RADV) (Sec. Sec. 153.350 and 153.630)
HHS will conduct risk adjustment data validation under Sec. Sec.
153.350 and 153.630 in any State where HHS is operating risk adjustment
on a State's behalf.\84\ The purpose of risk adjustment data validation
is to ensure issuers are providing accurate high-quality information to
HHS, which is crucial for the proper functioning of the HHS-operated
risk adjustment program. HHS-RADV also ensures that risk adjustment
transfers reflect verifiable actuarial risk differences among issuers,
rather than risk score calculations that are based on poor quality
data, thereby helping to ensure that the HHS-operated risk adjustment
program assesses charges to issuers with plans with lower-than-average
actuarial risk while making payments to issuers with plans with higher-
than-average actuarial risk. HHS-RADV consists of an initial validation
audit (IVA) and a second validation audit (SVA). Under Sec. 153.630,
each issuer of a risk adjustment covered plan must engage an
independent initial validation audit entity. The issuer provides
demographic, enrollment, and medical record documentation for a sample
of enrollees selected by HHS to its initial validation auditor for data
validation. Each issuer's IVA is followed by an SVA, which is conducted
by an entity HHS retains to verify the accuracy of the findings of the
IVA. Based on the findings from the IVA, or SVA (as applicable), HHS
conducts error estimation to calculate an HHS-RADV error rate. The HHS-
RADV error rate is then applied to adjust the plan liability risk
scores of outlier issuers, as well as the risk adjustment transfers
calculated under the State payment transfer formula for the applicable
State market risk pools, for the benefit year being audited.
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\84\ HHS has operated the risk adjustment program in all 50
States the District of Columbia since the 2017 benefit year.
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a. Materiality Threshold for Risk Adjustment Data Validation
Beginning with 2022 benefit year HHS-RADV, we propose to change the
HHS-RADV materiality threshold definition, first implemented in the
2018 Payment Notice (81 FR 94104 through 94105), from $15 million in
total annual premiums Statewide to 30,000 total BMM Statewide,
calculated by combining an issuer's enrollment in a State's individual
non-catastrophic, catastrophic, small group, and merged markets, as
applicable, in the benefit year being audited.\85\ Consistent with the
application of the current materiality threshold definition and
accompanying exemption under Sec. 153.630(g)(2), issuers that fall
below the new proposed materiality threshold would not be subject to
the annual IVA (and SVA) audit requirements, but may be selected to
participate in a given benefit year of HHS-RADV based on random
sampling or targeted sampling due to the identification of any risk-
based triggers that warrant more frequent audits.
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\85\ Activities related to the 2022 benefit year of HHS-RADV
will generally begin in March 2023, when issuers can start selecting
their IVA entity, and IVA entities can start electing to participate
in HHS-RADV for the 2022 benefit year. See, for example, the 2021
Benefit Year HHS-RADV Activities Timeline (May 3, 2022), available
at: https://regtap.cms.gov/uploads/library/HRADV_2021Timeline_5CR_050322.pdf.
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In the 2020 Payment Notice (84 FR 17508 through 17511), HHS
established Sec. 153.630(g) to codify exemptions to HHS-RADV
requirements, including an exemption for issuers that fell below a
materiality threshold, as defined by HHS, to ease the burden of annual
audit requirements for smaller issuers of risk adjustment covered plans
that do not materially impact risk adjustment transfers.\86\ This
materiality threshold was first implemented and defined in the 2018
Payment Notice (81 FR 94104 through 94105), where HHS finalized a
policy that issuers with total annual premiums at or below $15 million
(calculated based on the Statewide premiums of the benefit year being
validated) would not be subject to annual IVA requirements, but would
still be subject to random and targeted sampling.\87\ Under this
approach, issuers below the materiality threshold are subject to an IVA
approximately every 3 years, barring any risk-based triggers that would
warrant more frequent audits.
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\86\ Additionally, in the 2019 Payment Notice (83 FR 16966), we
finalized an exemption from HHS-RADV for issuers with 500 or fewer
BMM Statewide in the benefit year being audited. This very small
issuer exemption is codified at 45 CFR 153.630(g)(1). Issuers with
500 or fewer BMM Statewide are not subject to random or targeted
sampling.
\87\ While the 2018 Payment Notice (81 FR 94104 through 94105)
provided an applicability date for the materiality threshold that
began with the 2017 benefit year of HHS-RADV, we postponed the
application of the materiality threshold to the 2018 benefit year in
the 2019 Payment Notice (83 FR 16966 through 16967).
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We implemented the materiality threshold based on an evaluation of
the burden associated with HHS-RADV, particularly the fixed costs
associated with hiring an initial validation auditor and submitting IVA
results to HHS on an annual basis, which may be a large portion of some
issuers' administrative costs.\88\ To ease the burden of annual audit
requirements for smaller issuers of risk adjustment covered plans that
do not materially impact risk adjustment transfers, we finalized a
threshold of $15 million in total annual premiums Statewide--a
threshold at which 1 percent of an issuer's premiums would cover the
estimated $150,000 cost of the IVA.\89\ When defining this threshold,
we also considered the impact of the exemption on risk adjustment
transfers and data validation activities, and estimated issuers above
this threshold represented approximately 98.5 percent of enrollment in
risk adjustment covered plans nationally. As such, we determined the
annual audit of issuers at or below the threshold of total annual
premiums Statewide of $15 million was not material.\90\ We committed to
continue to monitor this threshold and further noted we may propose
adjustments in the future to maintain this balance.\91\
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\88\ See 81 FR 94104 through 94105. Also see 81 FR 61490.
\89\ See 81 FR 94104 through 94105.
\90\ See 81 FR 94104 through 94105. Also see 81 FR 61490.
\91\ See 81 FR 94105.
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Since we established the materiality threshold definition, the
estimated costs to complete the IVA have increased, especially with the
addition of prescription drug categories to the adult models starting
with the 2018 benefit year, and our current estimate of the cost of the
IVA is approximately $170,000 per an issuer. To maintain the same
general framework and effectively limit the proportion of an issuer's
premiums that would be used to cover IVA costs to 1 percent, we would
need to adjust the current materiality threshold definition and
increase it to
[[Page 78243]]
$17 million in total annual premiums Statewide. We estimate that 30,000
BMM Statewide translates to approximately $17 million in total annual
premiums Statewide on average across markets, and this proposed
threshold would maintain that issuers of risk adjustment covered plans
below this threshold would represent no more than 1.5 percent of
enrollment in risk adjustment covered plans nationally. We therefore
propose to change the HHS definition of the materiality threshold under
Sec. 153.630(g)(2) to 30,000 BMM Statewide in the benefit year being
audited beginning with the 2022 benefit year of HHS-RADV.
We propose shifting the exemption from a dollar threshold to BMM
threshold because a BMM threshold would continue to exempt small
issuers that face a disproportionally higher burden even in situations
where PMPM premiums grow overtime. Shifting the materiality threshold
under Sec. 153.630(g)(2) to a BMM basis would also align with the
threshold established in Sec. 153.630(g)(1), which exempts issuers
with 500 or fewer BMM Statewide in the benefit year being audited from
HHS-RADV requirements, including random and targeted sampling. We do
not anticipate that this proposal would change the current estimated
burdens of the annual HHS-RADV requirements on issuers as the pool of
issuers falling below a 30,000 BMM Statewide threshold does not
significantly differ from the pool of issuers falling below a $15
million total annual premiums Statewide threshold. On average, between
the 2017 and 2021 benefit years, there were 197 issuers of risk
adjustment covered plans with total annual premiums Statewide below $15
million and 201 issuers of risk adjustment covered plans with total BMM
Statewide below 30,000. The proposed changes should also have a minimal
impact on data validation activities as issuers of risk adjustment
covered plans below this proposed threshold are estimated to represent
no more than 1.5 percent of enrollment in risk adjustment covered plans
nationally. We continue to believe that setting this 1.5 percent of
enrollment threshold promotes the goals of the HHS-RADV process, while
also considering the burden of the process on smaller plans, and
therefore represents the appropriate balance.
We are not proposing any changes to the regulatory text at Sec.
153.630(g)(2) or to the other accompanying policies. As such, beginning
with the 2022 benefit year of HHS-RADV, issuers below the proposed
30,000 BMM Statewide threshold would be exempt from participating in
the annual HHS-RADV IVA and SVA requirements if not otherwise selected
by HHS to participate under random and targeted sampling conducted
approximately every 3 years (barring any risk-based triggers based on
experience that would warrant more frequent audits). To determine
whether an issuer falls under the materiality threshold, its BMM would
be calculated Statewide, that is, by combining an issuer's enrollment
in a State's individual non-catastrophic, catastrophic, small group,
and merged markets, as applicable, in the benefit year being audited.
Issuers that qualify for the exemption under Sec. 153.630(g)(2) from
HHS-RADV requirements for a particular benefit year must continue to
maintain their risk adjustment documents and records consistent with
Sec. 153.620(b) and may be required to make those documents and
records available for review or to comply with an audit by the Federal
Government.\92\ We further note that if an issuer of a risk adjustment
covered plan that falls within the materiality threshold is not exempt
from HHS-RADV for a given benefit year (that is, the issuer is selected
as part of random or targeted sampling), and fails to engage an IVA or
submit IVA results to HHS, the issuer would be subject to the default
data validation charge in accordance with Sec. 153.630(b)(10) and may
be subject to other enforcement action. Lastly, we affirm that an
issuer that qualifies for an exemption under Sec. 153.630(g)(2) from
HHS-RADV requirements for a particular benefit year would not have its
risk scores and State transfers adjusted due to its own risk score
error rate(s), but its risk scores and State transfers could be
adjusted if other issuers in the applicable State market risk pools
were outliers in that benefit year of HHS-RADV.
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\92\ See 45 CFR 153.620(b) and (c).
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We solicit comments on this proposal as well as comments on whether
we should increase the materiality threshold to $17 million in total
annual premiums Statewide instead of switching to 30,000 BMM Statewide
and on the applicability date for when a new HHS-RADV materiality
threshold should begin to apply.
b. HHS-RADV Adjustments for Issuers That Have Exited the Market
Beginning with 2021 benefit year HHS-RADV, we propose to remove the
policy to only apply an exiting issuer's HHS-RADV results if that
issuer is a positive error rate outlier.\93\ We are proposing to change
this policy because it is no longer necessary to treat exiting issuers
differently from non-exiting issuers when they are negative error rate
outliers in the applicable benefit year's HHS-RADV given the transition
to the concurrent application of HHS-RADV results for all issuers.
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\93\ To qualify as an exiting issuer, an issuer must exit all of
the market risk pools in the State (that is, not selling or offering
any new plans in the State). If an issuer only exits some markets or
risk pools in the State, but continues to sell or offer new plans in
others, it is not considered an exiting issuer. A small group market
issuer with off-calendar year coverage who exits the market but has
only carry-over coverage that ends in the next benefit year (that
is, carry-over of run out claims for individuals or groups enrolled
in the previous benefit year, with no new coverage being offered or
sold) is considered an exiting issuer. See the 2020 Payment Notice,
84 FR 17503 through 17504.
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Consistent with 45 CFR 153.350(b) and (c), adjustments are made to
risk scores and risk adjustment State transfers based on the errors
discovered in HHS-RADV. In the 2015 Payment Notice (79 FR 13768 through
13769), HHS established a prospective approach to adjust risk scores
and risk adjustment State transfers based on the results of HHS-RADV.
Under the prospective approach, an issuer's HHS-RADV error rate for a
given benefit year is applied to the following benefit year's risk
scores and risk adjustment State transfers. However, an issuer that
exits all market risk pools in the State during or at the end of the
benefit year being audited would not have risk scores and State
transfers to adjust in the next applicable benefit year. As such, the
2019 Payment Notice (83 FR 16965 through 16966) created an exception to
the prospective approach for exiting issuers that provides for the
concurrent application of HHS-RADV results for exiting issuers
identified as outliers. Under this exception, the HHS-RADV error rate
of an outlier exiting issuer is used to adjust the exiting issuer's
prior year risk scores and State transfers for the applicable State
market risk pool(s). Due to the budget neutral nature of the HHS-
operated risk adjustment program, including HHS-RADV, the application
of an outlier exiting issuer's HHS-RADV error rate would also impact
other issuers in the applicable State market risk pool(s). Recognizing
the impact on non-exiting issuers, we further refined the exiting
issuer HHS-RADV policies in the 2020 Payment Notice (84 FR 17503
through 17504) to limit the re-opening of risk pools to make HHS-RADV
adjustments to non-exiting issuers' risk adjustment State transfers in
certain situations. More specifically, HHS finalized a policy to only
make risk score and risk adjustment State transfer adjustments to
reflect an exiting issuer's HHS-RADV results if that issuer is a
[[Page 78244]]
positive error rate outlier in the benefit year being audited,
beginning with the 2018 benefit year.\94\ This policy makes adjustments
for positive error rate outliers because those HHS-RADV results
indicate there was an undercharge or overpayment in the initial
calculation of the exiting issuer's State transfer amount(s).\95\
Adjustments were not made if an exiting issuer was found to be a
negative error rate outlier.\96\ This policy was designed to ensure
that other issuers in a State market risk pool are made whole when an
issuer with a positive error rate exits the State and to remove the
additional burden of having transfers adjusted (including the potential
for additional charges to be assessed to other issuers) for a prior
benefit year when a negative error rate outlier exits the State.
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\94\ In adjusting exiting issuers with positive error rates, HHS
collects funds (either increasing the charge amount or reducing the
payment amount) from the exiting issuer and redistributes these
funds to the other issuers who participated in that State market
risk pool in the prior benefit year. See 84 FR 17503 through 17504.
\95\ A positive error rate generally has the effect of
decreasing an issuer's risk score and thereby decreasing its risk
adjustment State transfer payment amount or increasing its risk
adjustment State transfer charge amount.
\96\ A negative error rate generally has the effect of
increasing an issuer's risk score and thereby increasing its risk
adjustment State transfer payment amount or decreasing its risk
adjustment State transfer charge amount.
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Subsequently, in the 2020 HHS-RADV Amendments Rule (85 FR 76979),
HHS finalized a transition to the concurrent application of HHS-RADV
results for all issuers, including non-exiting issuers, beginning with
the 2020 benefit year HHS-RADV, and has continued the policy to only
make risk scores and risk adjustment State transfers adjustments for
exiting issuers if they are positive error rate outliers. However, in
light of this shift to the concurrent application of HHS-RADV
adjustments for all issuers, there is no longer a reason to treat
exiting issuers differently than non-exiting issuers. We therefore
propose, beginning with 2021 HHS-RADV, to modify this policy and apply
HHS-RADV results to adjust the plan liability risk scores of the
benefit year being audited for all positive and negative error rate
outlier issuers.\97\
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\97\ Due to the budget neutral nature of the HHS-operated risk
adjustment program, including HHS-RADV, the application of an
outlier issuer's HHS-RADV error rate would also impact other issuers
in the applicable State market risk pool(s). As such, non-outlier
and exempt issuers may also see their State transfers adjusted as a
result of the application of HHS-RADV results if there are one or
more outliers in the State market risk pool(s).
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We are not proposing any other changes to the policies regarding
HHS-RADV adjustments for issuers that exit the market and therefore
would maintain the existing framework for determining whether an issuer
is an exiting issuer. As such, the issuer would have to exit all of the
market risk pools in the State (that is, not selling or offering any
new plan in the State) to be considered an exiting issuer. If an issuer
only exits some of the markets or risk pools in the State, but
continues to sell or offer new plans in others, it would not be
considered an exiting issuer. We also affirm that small group market
issuers with off-calendar year coverage who exit the market and only
have carry-over coverage that ends in the next benefit year (that is,
carry-over of run out claims for individuals enrolled in the previous
benefit year, with no new coverage being offered or sold) would be
considered an exiting issuer and would be exempt from HHS-RADV under
Sec. 153.630(g)(4). Individual market issuers offering or selling any
new individual market coverage in the subsequent benefit year would be
required to participate in HHS-RADV, unless another exemption applies.
We solicit comments on this proposal.
c. Discontinue Lifelong Permanent Conditions List and Use of Non-EDGE
Claims in HHS-RADV
We seek comment on discontinuing the use of the Lifelong Permanent
Conditions (LLPC) list \98\ and the use of non-EDGE claims starting
with the 2022 benefit year of HHS-RADV.
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\98\ See, for example, Appendix C: Lifelong Permanent Conditions
in the 2021 Benefit Year PPACA HHS Risk Adjustment Data Validation
(HHS-RADV) Protocols (November 9, 2022) available at https://regtap.cms.gov/uploads/library/HRADV_2021_Benefit_Year_Protocols_5CR_110922.pdf. Also see, for
example, Appendix E: Lifelong Permanent Conditions in the 2018
Benefit Year PPACA HHS Risk Adjustment Data Validation (HHS-RADV)
Protocols (June 24, 2019) available at https://regtap.cms.gov/uploads/library/HRADV_2018Protocols_070319_RETIRED_5CR_070519.pdf.
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The LLPC list was developed for HHS-RADV medical record abstraction
purposes beginning with the 2016 benefit year, when issuers were first
learning the HHS-RADV protocols and still gaining experience with EDGE
data submissions.\99\ The intention of the LLPC list was to balance the
burdens and costs of HHS-RADV with the program integrity goals of
validating the actuarial risk of enrollees in risk adjustment covered
plans to ensure that the HHS-operated risk adjustment program
accurately assesses charges to issuers with plans with lower-than-
average actuarial risk while making payments to issuers with plans with
higher-than-average actuarial risk. The LLPC list was designed to ease
the burden of medical record retrieval for lifelong conditions by
simplifying and standardizing coding abstraction for IVA and SVA
entities that may have different interpretations of standard coding
guidelines. Conditions on the LLPC list can be abstracted by IVA and
SVA entities and validated in HHS-RADV if present anywhere on an
enrollee's valid and authenticated medical record, even if the
associated diagnosis is not present on a claim that meets EDGE server
data submission requirements for the applicable benefit year.\100\ The
associated diagnoses for the health conditions selected by HHS are
considered to be lifelong, permanent conditions which last for multiple
years, require ongoing medical attention, and are typically unresolved
once diagnosed.\101\
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\99\ CMS first published the ``Chronic Condition HCCs'' list in
the 2016 Benefit Year PPACA HHS Risk Adjustment Data Validation
(HHS-RADV) Protocols (October 20, 2017) available at https://regtap.cms.gov/uploads/library/HRADV_2016Protocols_v1_5CR_052218.pdf. Beginning with 2018 benefit
year, CMS has provided the ``Lifelong Permanent Conditions'' list, a
simplified list of health conditions which share similar
characteristics as those on the ``Chronic Condition HCCs'' list. See
supra note 93.
\100\ Ibid.
\101\ See, for example, Appendix C: Lifelong Permanent
Conditions in the 2021 Benefit Year PPACA HHS Risk Adjustment Data
Validation (HHS-RADV) Protocols (August 17, 2022) available at
https://regtap.cms.gov/uploads/library/HRADV_2021_Benefit_Year_Protocols_v1_5CR_081722.pdf.
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While the LLPC list was developed for HHS-RADV medical record
abstraction purposes, the EDGE Server Business Rules for risk
adjustment EDGE data submissions direct that EDGE server data
submissions are claim-based and follow standard coding principles and
guidelines. EDGE Server Business Rules require that diagnoses codes
submitted to the EDGE server be related to medical services performed
during the patient's visit, be performed by a State licensed medical
provider, be associated with a paid claim submitted to the issuer's
EDGE server, and be associated with an active enrollment period with
the issuer for the applicable risk adjustment benefit year.\102\ Some
issuers have raised concerns that the LLPC list may incentivize issuers
to submit EDGE supplemental diagnosis files containing LLPC diagnoses
even though those diagnoses may not have been addressed in the claim
submitted to the EDGE server for that encounter. While we allowed the
use of the LLPC list for the last several years of HHS-RADV, we
continued to consider these issues and
[[Page 78245]]
are now soliciting comments on the discontinuance of the use of the
LLPC list beginning with the 2022 benefit year of HHS-RADV.
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\102\ See, for example, Section 8.1 Guidance on Diagnosis
Code(s) Derived from Health Assessments of the EDGE Server Business
Rules (ESBR) (November 1, 2022) available at https://regtap.cms.gov/uploads/library/DDC-ESBR-110122-5CR-110122.pdf.
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We believe that discontinuing the use of the LLPC list in HHS-RADV,
beginning with the 2022 benefit year, would better align HHS-RADV
guidance with the EDGE Server Business Rules and would eliminate some
situations where an issuer may receive risk score credit for conditions
that did not require treatment during an active enrollment period with
the issuer for the applicable risk adjustment benefit year. In
addition, we also believe that issuers have now gained sufficient
experience with the EDGE data submission process and HHS-RADV protocols
that it may not be necessary to continue use of the LLPC list. For
example, while nearly half the States subject to the HHS-operated risk
adjustment program for the 2015 benefit year \103\ were not eligible to
receive an interim risk adjustment summary report,\104\ this trend has
not continued. In fact, all States have received an interim risk
adjustment summary report since the 2017 benefit year of the HHS-
operated risk adjustment program \105\ and only one State where HHS was
responsible for operating the risk adjustment program failed to receive
an interim risk adjustment summary report for the 2016 benefit
year.\106\ Further, after several pilot years of HHS-RADV, issuers also
have now gained several years of experience with HHS-RADV and HHS-RADV
protocols.\107\ Therefore, we solicit comment on all aspects of this
potential change, including the applicability date for the
discontinuance of the LLPC list. We also request comment on the extent
that issuers and their IVA entities have relied on the LLPC list to
document diagnoses when official coding guidance was unclear or the
medical record lacked documentation to support diagnosis of a lifelong,
permanent condition.
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\103\ See the Interim Summary Report on Risk Adjustment for the
2015 Benefit Year (March 18, 2016), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/InterimRAReport_BY2015_5CR_032816.pdf.
\104\ Since the 2015 benefit year of the HHS-operated risk
adjustment program, in order for a State to receive the interim risk
adjustment summary report, all issuers with 0.5 percent of market
share must successfully submit at least 90 percent of full year
enrollment and 90 percent of three quarters of medical claims to
their EDGE servers by the applicable deadline, as well as pass EDGE
quality checks. Details of EDGE quantity and quality assessment can
be found in the ``Evaluation of EDGE Data Submissions'' guidance
published every year. See, for example, the Evaluation of EDGE Data
Submissions for 2015 Benefit Year EDGE Server Data Bulletin (March
18, 2016), available at: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Part-2-EDGE-Q_Q-Guidance_03182016.pdf. Also see, for example, the Evaluation of EDGE
Data Submissions for 2022 Benefit Year EDGE Server Data Bulletin
(October 25, 2022), available at: https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/edge_2022_qq_guidance.pdf.
\105\ See the Interim Summary Report on Risk Adjustment for the
2017 Benefit Year (April 27, 2018), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Interim-RA-Report-BY2017.pdf. Also see, for
example, the Interim Summary Report on Risk Adjustment for the 2018
Benefit Year (March 22, 2019), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Interim-RA-Report-BY2018.pdf. Also see, for example, the
Interim Summary Report on Risk Adjustment for the 2019 Benefit Year
(March 25, 2020), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Interim-RA-Report-BY2019.pdf. Also see, for example, the Interim Summary Report
on Risk Adjustment for the 2020 Benefit Year (March 31, 2021),
available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Interim-RA-Report-BY2020.pdf. Also see, for example, the Interim Summary Report on
Risk Adjustment for the 2021 Benefit Year (March 22, 2022),
available at: https://www.cms.gov/files/document/interim-ra-report-by2021.pdf.
\106\ See the Interim Summary Report on Risk Adjustment for the
2016 Benefit Year (April 11, 2017), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/InterimRAReport_BY2016_5CR_033117.pdf.
\107\ CMS conducted two (2) pilot years for HHS-RADV for the
2015 and 2016 benefit years. The results of 2015 and 2016 benefit
year HHS-RADV were not applied to adjust plan liability risk scores
or risk adjustment transfers. In addition, 2017 benefit year HHS-
RADV was a pilot year for Massachusetts issuers; therefore, these
issuers' 2017 benefit year HHS-RADV results were not applied to risk
scores or transfers. Except for Massachusetts issuers, the 2017
benefit year was the first non-pilot year where HHS-RADV results
were used to adjust risk scores and risk adjustment transfers. See
84 FR at 17508 (April 25, 2019). Also see the Summary Report of 2017
Benefit Year HHS-RADV Adjustments to Risk Adjustment Transfers
(August 1, 2019), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/BY2017-HHSRADV-Adjustments-to-RA-Transfers-Summary-Report.pdf.
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Similarly, we seek comments on discontinuing the current policy
that permits the use of non-EDGE claims in HHS-RADV beginning with the
2022 HHS-RADV benefit year. Under Sec. 153.630(b)(6), issuers are
required to provide their IVA entity with all relevant claims data and
medical record documentation for the enrollees selected for audit. HHS
currently allows issuers to submit medical records to their IVA entity
for which no claim was accepted into the EDGE server in certain
situations.\108\ Under the non-EDGE claims protocol, if issuers
identify medical records with no associated EDGE server claim in HHS-
RADV, they must demonstrate that a non-EDGE claim meets risk adjustment
eligibility criteria. Issuers must also allow the IVA entity to view
the associated non-EDGE claim, and IVA entities must record their
validation results in their IVA Entity Audit Results Submission.\109\
This protocol was also adopted during the early years of HHS-RADV when
issuers were gaining experience with HHS-RADV protocols and some may
have experienced challenges submitting claims to the EDGE server.
However, as explained above, issuers have consistently met data
integrity criteria for their EDGE data submissions for multiple
consecutive benefit years such that we are now examining the non-EDGE
claims protocol and considering whether it should be discontinued.
Thus, as part of our ongoing effort to examine ways to better align
HHS-RADV guidance and the EDGE Server Business Rules, and in
recognition of the experience issuers have gained with HHS-RADV and
EDGE data submissions, we solicit comments on discontinuing this
protocol. If this change is adopted, beginning with the 2022 benefit
year of HHS-RADV, issuers would no longer be able to submit non-EDGE
claims to their IVA entities to supplement EDGE claims reviewed during
HHS-RADV. We solicit comment on all aspects of this potential protocol
change, including the applicability date. We also request comment on
the extent that issuers and their IVA entities have relied on the
current non-EDGE claims protocol and on how this potential change would
impact issuers.
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\108\ See, for example, Section 9.2.6.5: Documentation of Claims
Not Accepted in EDGE of the 2021 Benefit Year PPACA HHS Risk
Adjustment Data Validation (HHS-RADV) Protocols (August 17, 2022)
available at https://regtap.cms.gov/uploads/library/HRADV_2021_Benefit_Year_Protocols_v1_5CR_081722.pdf.
\109\ The non-EDGE claim must be risk adjustment eligible paid/
positively adjudicated within the benefit year for the specified
sampled enrollee. Although the non-EDGE claim would have been
accepted to EDGE had it met the EDGE submission deadline, diagnoses
associated with non-EDGE claim s are not included in the risk
adjustment risk score calculations in the June 30th Summary Report
on Permanent Risk Adjustment Transfers. Diagnoses associated with
non-EDGE claims are only used as an option for HCC validation
purposes in HHS-RADV when the applicable criteria are met.
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d. HHS-RADV Discrepancy and Administrative Appeals Process
We propose to shorten the window to confirm the findings of the SVA
(if applicable),\110\ or file a discrepancy report, to within 15
calendar days of the notification by HHS, beginning with the 2022
benefit year of HHS-RADV. Under Sec. 153.630(d)(2), issuers currently
have 30 calendar days to confirm the findings
[[Page 78246]]
of the SVA, or file a discrepancy report, in the manner set forth by
HHS, to dispute those SVA findings. We propose the shorter attestation
and discrepancy reporting window for SVA findings to improve HHS'
ability to finalize SVA findings results prior to release of the
applicable benefit year HHS Risk Adjustment Data Validation (RADV)
Results Memo and the Summary Report of Risk Adjustment Data Validation
Adjustments to Risk Adjustment Transfers for the applicable benefit
year, which are time-sensitive publications because information on HHS-
RADV adjustments is used by issuers for medical loss ratio (MLR)
reporting.\111\
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\110\ Only those issuers who have insufficient pairwise
agreement between the IVA and SVA receive SVA findings. See 84 FR
17495. Also see 86 FR 24201.
\111\ Section 2718 of the PHS Act, as added by the ACA generally
requires health insurance issuers to submit an annual MLR report to
HHS and provide rebates to enrollees if the issuers do not achieve
specified MLR thresholds. See 42 U.S.C. 300gg-18 and 45 CFR part
158. Also see 45 CFR 153.710(h).
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We do not propose to shorten the 30-calendar-day window set forth
in Sec. 153.630(d)(2) to confirm the risk score error rate, or file a
discrepancy, as the same timing considerations do not extend to the
risk score error rate attestation and discrepancy reporting window. In
addition, all issuers who participate in HHS-RADV for the applicable
benefit year must complete the risk score error rate attestation and
discrepancy reporting process, whereas the SVA findings attestation and
discrepancy reporting process is limited to the small number of issuers
that have insufficient pairwise agreement between the IVA and SVA.
In prior rulemakings, we proposed shortening the attestation and
discrepancy reporting window for the SVA findings, but did not finalize
these proposals in response to comments suggesting that we revisit this
proposal once issuers had more experience with HHS-RADV after the first
non-pilot year.\112\ Since issuers now have more than 4 years of
experience with HHS-RADV, including several non-pilot years, HHS
believes it is appropriate to revisit the proposal to shorten the
reporting window to confirm the findings of the SVA, or file a
discrepancy report, and that any disadvantages of this shortened
reporting window would be outweighed by the benefits of timely
resolution of any discrepancies before the release of the applicable
benefit year HHS Risk Adjustment Data Validation (RADV) Results Memo
and the Summary Report of Risk Adjustment Data Validation Adjustments
to Risk Adjustment Transfers for the applicable benefit year.
Specifically, based on our experience, we found that few issuers have
insufficient pairwise agreement between the IVA and SVA that results in
receiving SVA findings, and therefore, few issuers would even have the
option to file an SVA discrepancy.\113\ Of these issuers, even fewer of
them will actually file a discrepancy, and therefore, based on this
experience, HHS believes only a very small number of issuers will
receive SVA findings and file discrepancies in future years of HHS-
RADV.
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\112\ See 84 FR 17495 and 86 FR 24201.
\113\ Only those issuers who have insufficient pairwise
agreement between the IVA and SVA receive SVA findings. See, for
example, 84 FR 17495 and 86 FR 24201.
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More importantly, without this timing change, we are concerned
about HHS' continued ability to release the applicable benefit year HHS
Risk Adjustment Data Validation (RADV) Results Memo and Summary Report
of Risk Adjustment Data Validation Adjustments to Risk Adjustment
Transfers on a timely basis. Specifically, this proposal would improve
our ability to follow the HHS-RADV timeline as described in part 2 of
the 2022 Payment Notice,\114\ which provides for release of the Summary
Report of Risk Adjustment Data Validation Adjustments to Risk
Adjustment Transfers in early summer of 2 calendar years after the
applicable benefit year. This schedule was developed to support timely
reporting of HHS-RADV adjustment amounts in the MLR reports \115\ due
by July 31st of the same calendar year in which the results are
released.\116\ The SVA findings need to be finalized to begin the HHS-
RADV error estimation process, publish the HHS-RADV Results Memo (which
is released alongside issuer's HHS-RADV results reports), and prepare
the Summary Report of Risk Adjustment Data Validation Adjustments to
Risk Adjustment Transfers for publication. Shortening the current 30-
calendar-day attestation and discrepancy reporting window for SVA
findings (if applicable) to 15 calendar days would better allow HHS to
finalize SVA findings results and timely release the Summary Report of
Risk Adjustment Data Validation Adjustments to Risk Adjustment
Transfers in summer, which would support timely reporting of the HHS-
RADV adjustments to risk adjustment State transfers in issuers' MLR
reports.
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\114\ 86 FR 24198 through 24201.
\115\ Issuer MLRs are calculated using a 3-year average. See 45
CFR 158.220(b).
\116\ See 45 CFR 158.110(b). Also see 45 CFR 153.710(h)(1)(v).
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We further note that a 15-calendar-day attestation and discrepancy
reporting window is consistent with the IVA sample and EDGE attestation
and discrepancy reporting windows at Sec. Sec. 153.630(d)(1) and
153.710(d), respectively. At the conclusion of the SVA for a given
benefit year, we distribute SVA findings to issuers that have
insufficient agreement between their IVA and SVA results during the
pairwise means analysis, and use the SVA findings for the risk score
error rate calculation.\117\ Under this proposal, a 15-calendar-day
window to confirm the findings or file a discrepancy, in the manner set
forth by HHS, would begin when the SVA finding reports are issued.
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\117\ If sufficient pairwise means agreement is achieved, the
IVA findings will be used for purposes of the risk score error rate
calculation. Issuers with sufficient pairwise means agreement are
only permitted to file a discrepancy or appeal the risk score error
rate calculation. See 78 FR 72334 through 72337 and 79 FR 13761
through 13768.
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To effectuate this proposed amendment, we propose the following
four revisions to Sec. 153.630(d). First, we propose to revise Sec.
153.630(d)(2) to remove the reference to the calculation of the risk
score error rate as a result of HHS-RADV. Second, we propose to revise
Sec. 153.630(d)(2) to establish that the attestation and discrepancy
reporting window for the SVA findings (if applicable) would be within
15 calendar days of the notification by HHS of the SVA findings (if
applicable), rather than the current 30-calendar-day reporting window.
Third, we propose to redesignate current paragraph (d)(3) as paragraph
(d)(4), to maintain the existing provision which explains that an
issuer may appeal findings of an SVA (if applicable) or the calculation
of a risk score error rate as a result HHS-RADV, under the process set
forth in Sec. 156.1220. Fourth, we propose to add a new Sec.
153.630(d)(3) to maintain the current attestation and discrepancy
reporting window for the calculation of the risk score error rate. This
new regulatory subsection would provide that within 30 calendar days of
the notification by HHS of the calculation of the risk score error
rate, in the manner set forth by HHS, an issuer must either confirm or
file a discrepancy report to dispute the calculation of the risk score
error rate as a result of HHS-RADV.
In addition, we propose to make corresponding amendments to the
cross-references to Sec. 153.630(d)(2) that appear in Sec. Sec.
153.710(h)(1) and 156.1220(a)(4)(ii). Section 153.630(d)(2) currently
sets forth the attestation and discrepancy reporting window for both
SVA findings (if applicable) and the calculation of the risk score
error rate as a result of HHS-RADV. Under this proposal, the
attestation and discrepancy reporting window for SVA
[[Page 78247]]
findings (if applicable) and the calculation of the risk score error
rate as a result of HHS-RADV would be set forth in separate paragraphs,
Sec. 153.630(d)(2) and (d)(3), respectively. As such, we propose to
amend the existing cross-reference to Sec. 153.630(d)(2) in Sec. Sec.
153.710(h)(1) and 156.1220(a)(4)(ii) to add a reference to paragraph
(d)(3).
We seek comment on this proposal and the accompanying conforming
amendments.
8. EDGE Discrepancy Materiality Threshold (Sec. 153.710)
We propose to amend the EDGE discrepancy materiality threshold set
forth at Sec. 153.710(e) to align it with the final policy adopted in
preamble in part 2 of the 2022 Payment Notice.\118\ We also propose a
conforming amendment to Sec. 153.710(h)(1) to add a reference to new
proposed Sec. 153.630(d)(3).
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\118\ See 86 FR 24194 through 24195.
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An issuer of a risk adjustment covered plan must provide to HHS,
through their EDGE server,\119\ access to enrollee-level plan
enrollment data, enrollee claims data, and enrollee encounter data as
specified by HHS for a benefit year.\120\ Consistent with Sec.
153.730, to be considered for risk adjustment payments and charges,
issuers of risk adjustment covered plans must submit their respective
EDGE data by April 30th of the year following the applicable benefit
year or, if such date is not a business day, the next applicable
business day. At the end of the EDGE data submission process, HHS
issues final EDGE server reports \121\ which reflect an issuer's data
that was successfully submitted by the data submission deadline. Within
15 calendar days of the date of these final EDGE server reports, the
issuer must confirm to HHS that the information in the final EDGE
server reports accurately reflect the data to which the issuer has
provided access to HHS through its EDGE server for the applicable
benefit year by submitting an attestation; or the issuer must describe
to HHS any discrepancies it identifies in the final EDGE server
reports.\122\
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\119\ This is also known as the dedicated distributed data
collection environment.
\120\ 45 CFR 153.710(a) through (c).
\121\ These reports are: Enrollee (Without) Claims Summary
(ECS), Enrollee (Without) Claims Detail (ECD), Frequency Report by
Data Element for Medical Accepted Files (FDEMAF), Frequency Report
by Data Element for Pharmacy Accepted Files (FDEPAF), Frequency
Report by Data Element for Supplemental Accepted Files (FDESAF),
Frequency Report by Data Element for Enrollment Accepted Files
(FDEEAF), Claim and Enrollee Frequency Report (CEFR), High Cost Risk
Pool Summary (HCRPS), High Cost Risk Pool Detail Enrollee (HCRPDE),
Risk Adjustment Claims Selection Summary (RACSS), Risk Adjustment
Claims Selection Detail (RACSD), Risk Adjustment Transfer Elements
Extract (RATEE), Risk Adjustment Risk Score Summary (RARSS), Risk
Adjustment Risk Score Detail (RARSD), Risk Adjustment Data
Validation Population Summary Statistics (RADVPS), Risk Adjustment
Payment Hierarchical Condition Category Enrollee (RAPHCCER), Risk
Adjustment User Fee (RAUF).
\122\ 45 CFR 153.710(d).
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In part 2 of the 2022 Payment Notice (86 FR 24194 through 24195),
we codified at Sec. 153.710(e) a materiality threshold for EDGE
discrepancies reported under Sec. 153.710(d)(2) that the amount in
dispute must equal or exceed $100,000 or one percent of the applicable
payment or charge payable to or due from the issuer for the benefit
year, whichever is less. However, in preamble, we explained the final
policy was intended to establish that the amount in dispute must equal
or exceed $100,000 or one percent of the total estimated transfer
amount in the applicable State market risk pool, whichever is
less.\123\ That is, the preamble uses one percent of the total
estimated transfer amount in the applicable State market risk pool
while the regulation uses one percent of the applicable payment or
charge payable to or due from the issuer. As explained in the preamble
in part 2 of the 2022 Payment Notice, the intended threshold is
$100,000 or one percent of the total estimated transfer amount in the
applicable State market risk pool because HHS generally only takes
action on reported material EDGE discrepancies that harm other issuers
in the same State market risk pool and, based on HHS' experience with
prior benefit years, EDGE discrepancies that are less than a fraction
of total State market risk pool transfers are unlikely to materially
impact other issuers. We therefore propose to amend Sec. 153.710(e) to
revise the materiality threshold for EDGE discrepancies to reflect that
the amount in dispute must equal or exceed $100,000 or one percent of
the total estimated transfer amount in the applicable State market risk
pool, whichever is less.
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\123\ See 86 FR 24194 through 24195. Also see 85 FR 78604
through 78605.
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Finally, as discussed in section III.A.7.d of this preamble (HHS-
RADV Discrepancy and Administrative Appeals Process), we also propose
amendments to Sec. 153.710(h)(1) to add a reference to new proposed
Sec. 153.630(d)(3). As discussed in the HHS-RADV Discrepancy and
Administrative Appeals Process section of this proposed rule, under new
proposed Sec. 153.630(d)(3), we would retain the 30-calendar-day
window to confirm, or file a discrepancy, regarding the calculation of
the risk score error rate as a result of HHS-RADV. Under this proposal,
the cross-reference to Sec. 153.630(d)(2) in Sec. 153.710(h)(1) would
be maintained and would capture the new proposed 15-calendar-day window
to confirm, or file a discrepancy, for SVA findings (if applicable).
We seek comment on the proposed amendment to Sec. 153.710 and the
accompanying policies.
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
1. Exchange Blueprint Approval Timelines (Sec. 155.106)
We propose a change to address the Exchange Blueprint approval
timelines for States transitioning from either a Federally-facilitated
Exchange (FFE) to a State-based Exchange on the Federal Platform (SBE-
FP) or to a State-based Exchange (SBE), or from an SBE-FP to an SBE. At
Sec. 155.106(a)(3) (for FFE or SBE-FP to SBE transitions) and Sec.
155.106(c)(3) (for FFE to SBE-FP transitions), we propose to revise the
current timelines by which a State must have an approved or
conditionally approved Exchange Blueprint to require that States gain
approval prior to the date on which the Exchange proposes to begin open
enrollment either as an SBE or SBE-FP. The current regulatory timeline
by which a State must have an approved or conditionally approved
Exchange Blueprint was finalized in the 2017 Payment Notice (81 FR
12203, 12241 through 12242). Based on our experience with Exchange
transitions since then, we believe the current timeline by which a
State must gain Exchange Blueprint approval does not sufficiently
support States' need to work with HHS to finalize and submit an
approvable Exchange Blueprint.
Section 155.106 requires States to have an approved or
conditionally approved Exchange Blueprint 14 months prior to an SBE-FP
to SBE transition in accordance with paragraph (a)(3) and three months
prior to a FFE to SBE-FP transition in accordance with paragraph
(c)(3). The submission and approval of Exchange Blueprints is an
iterative process that generally takes place over the course of 15
months prior to a State's first open enrollment with an SBE, or three
to six months prior to a State's first open enrollment with an SBE-FP.
The Exchange Blueprint serves as a vehicle for a State to document its
progress toward implementing its intended Exchange operational model.
HHS' review and approval of the Exchange Blueprint involves providing
[[Page 78248]]
substantial technical assistance to States as they design, finalize,
and implement their Exchange operations. The transition from a FFE or
SBE-FP to SBE, or SBE-FP to SBE, involves significant collaboration
between HHS and States to develop plans and document readiness for the
State to transition from one Exchange operational model and information
technology infrastructure to another. These activities include the
State completing key milestones, meeting established deadlines, and
implementing contingency measures.
Our proposal to require Exchange Blueprint approval or conditional
approval prior to an Exchange's first open enrollment period would
allow States the additional time and flexibility if needed, that, in
HHS' experience, is necessary to support the development and
finalization of an approvable Exchange Blueprint, as well as for
completion of the myriad activities necessary to transition QHP
enrollees in the State to a new Exchange model and operator. HHS is of
the view that the more generous proposed timeline is appropriate and
necessary to support a State's submission of an approvable Exchange
Blueprint. The proposed timeline is more protective of the significant
investments of personnel time and State tax dollars a State must make
to stand up a new Exchange, by providing the State a more generous
timeline to develop an approvable Exchange Blueprint that shows the
Exchange will be ready to support the State's current and future QHP
enrollees and applicants for QHP enrollment.
We seek comment on this proposal, including comments related to how
transitioning SBEs could provide greater transparency to consumers
regarding the Exchange Blueprint approval process.
2. Navigator, Non-Navigator Assistance Personnel, and Certified
Application Counselor Program Standards (Sec. Sec. 155.210, 155.215,
and 155.225)
a. Repeal of Prohibitions on Door-to-Door and Other Direct Contacts
HHS proposes to repeal the provisions that currently prohibit
Navigators, certified application counselors, non-Navigator assistance
personnel in FFEs, and non-Navigator assistance personnel in certain
State Exchanges funded with section 1311(a) Exchange Establishment
grants (collectively, Assisters) from going door-to-door or using other
unsolicited means of direct contact to provide enrollment assistance to
consumers. This proposal would eliminate barriers to coverage access by
maximizing pathways to enrollment.
Sections 1311(d)(4)(K) and 1311(i) of the ACA direct all Exchanges
to establish a Navigator program. Navigator duties and requirements for
all Exchanges are set forth in section 1311(i) of the ACA and Sec.
155.210. Section 1321(a)(1) of the ACA directs the Secretary to issue
regulations that set standards for meeting the requirements of title I
of the ACA, with respect to, among other things, the establishment and
operation of Exchanges. Pursuant to section 1321(a)(1) of the ACA, the
Secretary issued Sec. 155.205(d) and (e), which authorizes Exchanges
to perform certain consumer service functions in addition to the
Navigator program, such as the establishment of a non-Navigator
assistance personnel program. Section 155.215 establishes standards for
non-Navigator assistance personnel in FFEs and in State Exchanges if
they are funded with section 1311(a) Exchange Establishment grant
funds.\124\ Section 155.225 establishes the certified application
counselor program as a consumer assistance function of the Exchange,
separate from and in addition to the functions described in Sec. Sec.
155.205(d) and (e), 155.210, and 155.215.
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\124\ At this time, no State Exchanges are funded with section
1311(a) Exchange Establishment grant funds.
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Assisters are certified and trusted community partners who provide
free and impartial enrollment assistance to consumers. They conduct
outreach and education to raise awareness about the Exchanges and other
coverage options. Their mission focuses on assisting the uninsured and
other underserved communities to prepare applications, establish
eligibility and enroll in coverage through the Exchanges, among many
other things. The regulations governing these Assisters prohibit
Assisters from soliciting any consumer for application or enrollment
assistance by going door-to-door or through other unsolicited means of
direct contact, including calling a consumer to provide application or
enrollment assistance without the consumer initiating the contact,
unless the individual has a pre-existing relationship with the
individual Assister or designated organization and other applicable
State and Federal laws are otherwise complied with. HHS has interpreted
this prohibition in the 2015 Market Standards final rule (79 FR 30240,
30284 through 30285) as still permitting door-to-door and other
unsolicited contacts to conduct for general consumer education or
outreach, including to let the community know that the Assister's
organization is available to provide application and enrollment
assistance services to the public.
The existing regulations prohibiting Navigators (at Sec.
155.210(d)(8)), non-Navigator assistance personnel (through the cross-
reference to Sec. 155.210(d) in Sec. 155.215(a)(2)(i)), and certified
application counselors (at Sec. 155.225(g)(5)) were initially
finalized in the 2015 Market Standards final rule (79 FR 30240). At the
time that HHS proposed and finalized the 2015 Market Standards rule in
2014, the Exchanges were still in their infancy. At the time, we
believed that prohibiting door-to-door solicitation and other
unsolicited means of direct consumer contact by an Assister for
application or enrollment assistance would ensure that Assisters'
practices were sufficiently protective of the privacy and security
interests of the consumers they served. We also believed that
prohibiting unsolicited means of direct contacts initiated by Assisters
was necessary to provide important guidance and peace of mind to
consumers, especially when they were faced with questions or concerns
about what to expect in their interactions with individuals offering
Exchange assistance.\125\
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\125\ 79 FR 30240.
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However, under existing regulations, Navigators and other non-
Navigator assistance personnel in FFE States are permitted to conduct
outreach to consumers using consumer information provided to them by an
FFE. The Health Insurance Exchanges (HIX) System of Records
Notice,\126\ Routine Use No. 1 provides that the FFEs may share
consumer information with CMS grantees, including Navigators and other
non-Navigator assistance personnel in FFE States, who have been engaged
by CMS to assist in an FFE authorized function, which includes
conducting outreach to persons who have been redetermined ineligible
for Medicaid/CHIP. In this limited circumstance, an FFE may share with
Navigators and other non-Navigator assistance personnel in FFE States
consumer information that the FFE receives from Medicaid/CHIP agencies
once a consumer has been redetermined ineligible for Medicaid/CHIP in
order for the Navigators and other non-Navigator assistance personnel
to conduct outreach to such consumers regarding opportunities for
coverage through the FFEs.
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\126\ 78 FR 63211, 63215.
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Since finalizing the 2015 Market Standards final rule, HHS has
enacted a number of measures designed to ensure that Assisters are
properly safeguarding
[[Page 78249]]
the personally identifiable information of all consumers they assist.
As part of their annual certification training, HHS requires Assisters
to complete a course on privacy, security, and fraud prevention
standards. Further, we require Assisters to obtain a consumer's consent
before discussing or accessing their personal information (except in
the limited circumstance described above) and to only create, collect,
disclose, access, maintain, store and/or use consumer personally
identifiable information to perform the functions that they are
authorized to perform as Assisters in accordance with Sec. Sec.
155.210(b)(2)(iv) and (c)(1)(v), 155.225(d)(3), and 155.215(b)(2), as
applicable. In addition, now that the Exchanges and their Assister
programs have been in operation for almost 10 years, Assisters have
more name recognition and consumer trust within the communities the
Assisters serve. Accordingly, HHS believes that its previous concerns
related to consumers' privacy and security interests and consumers not
knowing what to expect when interacting with Assisters have been
sufficiently mitigated with the measures HHS has enacted such that a
blanket prohibition on unsolicited direct contact of consumers by
Assisters for application or enrollment assistance is no longer
necessary.
The prohibition on door-to-door enrollment places additional burden
on consumers and Assisters to make subsequent appointments to
facilitate enrollment, which creates access barriers for consumers to
receive timely and relevant enrollment assistance. Additionally, this
prohibition could impede the Exchanges' potential to reach a broader
consumer base in a timely manner, reduce uninsured rates, and increase
access to health care. We believe it is important to be able to
increase access to coverage for those whose ability to travel is
impeded due to mobility, sensory or other disabilities, who are
immunocompromised, and who are limited by a lack of transportation.
Consistent with the proposal to remove the general prohibition on
door-to-door and other direct outreach by Navigators, we propose to
delete Sec. 155.210(d)(8). If finalized, the repeal of Sec.
155.210(d)(8) would remove the general prohibition on door-to-door and
other direct outreach by non-Navigator assistance personnel in FFEs and
in State Exchanges if funded with section 1311(a) Exchange
Establishment grants, as Sec. 155.215(a)(2)(i) requires such entities
to comply with the prohibitions on Navigator conduct set forth at Sec.
155.210(d). Likewise, we propose to repeal Sec. 155.225(g)(5), which
currently imposes the general prohibition against door-to-door and
other direct contacts on certified application counselors.
As we explained earlier in this preamble, HHS is now of the view
that repealing restrictions on an Exchange's ability to allow
Navigators, non-Navigator assistance personnel, and certified
application counselors to offer application or enrollment assistance by
going door-to-door or through other unsolicited means of direct contact
is a positive step that would enable Assisters to reach a broader
consumer base in a timely manner--helping to reduce uninsured rates and
health disparities by removing underlying barriers to accessing health
coverage.
We seek comment on this proposal.
3. Ability of States To Permit Agents and Brokers and Web-Brokers To
Assist Qualified Individuals, Qualified Employers, or Qualified
Employees Enrolling in QHPs (Sec. 155.220)
Section 1312(e) of the ACA directs the Secretary to establish
procedures under which a State may permit agents and brokers to enroll
individuals and employers in QHPs through an Exchange and to assist
individuals in applying for financial assistance for QHPs sold through
an Exchange. In addition, section 1313(a)(5)(A) of the ACA directs the
Secretary to provide for the efficient and non-discriminatory
administration of Exchange activities and to implement any measure or
procedure the Secretary determines is appropriate to reduce fraud and
abuse. Under Sec. 155.220, we established procedures to support the
State's ability to permit agents, brokers, and web-brokers to assist
individuals, employers, or employees with enrollment in QHPs offered
through an Exchange, subject to applicable Federal and State
requirements. This includes processes under Sec. 155.220(g) and (h)
for HHS to suspend or terminate an agent's, broker's, or web-broker's
Exchange agreement(s) in circumstances that involve fraud of abusive
conduct or where there are sufficiently severe findings of non-
compliance. We also established FFE standards of conduct under Sec.
155.220(j) for agents and brokers that assist consumers in enrolling in
coverage through the FFEs to protect consumers and ensure the proper
administration of the FFEs. Consistent with Sec. 155.220(l), agents,
brokers and web-brokers that assist with or facilitate enrollment in
States with SBE-FPs must comply with all applicable FFE standards,
including the requirements in Sec. 155.220. In this rule, we propose
to build on this foundation with new proposed procedures and additional
consumer protection standards for agents, brokers, and web-brokers that
assist consumers with enrollments through FFEs and SBE-FPs.
a. Extension of Time To Review Suspension Rebuttal Evidence and
Termination Reconsideration Requests (Sec. 155.220(g) and (h))
We propose to allow HHS up to an additional 15 or 30 calendar days
to review evidence submitted by agents, brokers, or web-brokers to
rebut allegations that led to suspension of their Exchange agreement(s)
or to request reconsideration of termination of their Exchange
agreement(s), respectively. This proposal would provide HHS a total of
up to 45 or 60 calendar days to review such rebuttal evidence or
reconsideration request and notify the submitting agents, brokers, or
web-brokers of HHS' determination regarding the suspension of their
Exchange agreement(s) or reconsideration decision related to the
termination of their Exchange agreement(s), respectively. In the 2017
Payment Notice, we added paragraph (5) to Sec. 155.220(g) to address
the temporary suspension or immediate termination of an agent's or
broker's agreements with the FFEs in cases involving fraud or abusive
conduct.\127\ Consistent with section 1313(a)(5)(A) of the ACA, we
added these procedures to give HHS authority to act quickly in these
situations to prevent further harm to consumers and to support the
efficient and effective administration of Exchanges on the Federal
platform. Under Sec. 155.220(g)(5)(i)(A), if HHS reasonably suspects
that an agent, broker, or web-broker may have engaged in fraud or
abusive conduct using personally identifiable information of Exchange
applicants or enrollees or in connection with an Exchange enrollment or
application, HHS may temporarily suspend the agent's, broker's or web-
broker's Exchange agreement(s) for up to 90 calendar days, with the
suspension effective as of the date of the notice to the agent, broker,
or web-broker. This temporary suspension is effective immediately and
prohibits the agent, broker, or web-broker from assisting with or
facilitating enrollment in coverage in a manner that constitutes
enrollment through the Exchange, including participating in the Classic
DE and EDE Pathways, during this 90-day period.128 129 As
previously
[[Page 78250]]
explained, immediate suspension is critical in these circumstances to
stop additional potentially fraudulent enrollments through the FFEs and
SBE-FPs.\130\ Consistent with Sec. 155.220(g)(5)(i)(B), the agent,
broker, or web-broker can submit evidence to HHS to rebut the
allegations that they have engaged in fraud or abusive conduct that led
to a temporary suspension by HHS of their Exchange agreement(s) at any
time during 90-day period. If such rebuttal evidence is submitted, HHS
will review it and make a determination as to whether a suspension
should be lifted within 30 days of receipt of such evidence.\131\ If
HHS determines that the agent, broker, or web-broker satisfactorily
addresses the concerns at issue, HHS will lift the temporary suspension
and notify the agent, broker, or web-broker. If the rebuttal evidence
does not persuade HHS to lift the suspension, HHS may terminate the
agent's, broker's, or web-broker's Exchange agreement(s) for
cause.132 133
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\127\ See 81 FR at 12258-12264. Also see 80 FR at 75525-75526.
\128\ 45 CFR 155.220(g)(5)(iii).
\129\ The agent, broker, or web-broker must continue to protect
any personally identifiable information accessed during the term of
their Exchange agreements. See, e.g., 45 CFR 155.220(g)(5)(iii) and
155.260.
\130\ See, e.g., 81 FR at 12258-12264.
\131\ See 45 CFR 155.220(g)(5)(i)(B).
\132\ See 45 CFR 155.220(g)(5)(i)(B).
\133\ If the agent, broker, or web-broker fails to submit
rebuttal information during this 90-day period, HHS may terminate
their Exchange agreement(s) for cause. 45 CFR 155.220(g)(5)(i)(B).
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HHS also previously established a framework for termination of an
agent's, broker's, or web-broker's Exchange agreement(s) for cause in
situations where, in HHS' determination, a specific finding of
noncompliance or pattern of noncompliance is sufficiently severe.\134\
This framework provides HHS the ability to terminate an agent's,
broker's, or web-broker's Exchange agreement(s) for cause to protect
consumers and the efficient and effective operation of Exchanges in
cases of sufficiently severe violations or patterns of violations. In
these situations, HHS provides the agent, broker, or web-broker, an
advance 30-day notice and an opportunity to cure and address the non-
compliance finding(s).135 136 More specifically, upon
identification of a sufficiently severe violation, HHS notifies the
agent, broker, or web-broker of the specific finding(s) of
noncompliance or pattern of noncompliance. The agent, broker, or web-
broker then has a period of 30 days from the date of the notice to
correct the noncompliance to HHS' satisfaction. If after 30 days the
noncompliance is not addressed to HHS' satisfaction, HHS may terminate
the Exchange agreement(s) for cause. Once their Exchange agreement(s)
are terminated for cause under Sec. 155.220(g)(3), the agent, broker,
or web-broker is no longer registered with the FFE, is not permitted to
assist with or facilitate enrollment of a qualified individual,
qualified employer, or qualified employee in coverage in a manner that
constitutes enrollment through the Exchange, and is not permitted to
assist individuals in applying for APTC and CSRs for
QHPs.137 138 Consistent with Sec. 155.220(h)(1), an agent,
broker, or web-broker whose Exchange agreement(s) are terminated can
request reconsideration of such action. Section 155.220(h)(2) provides
the agent, broker, or web-broker with 30 calendar days to submit their
request (including any rebuttal evidence or information) and Sec.
155.220(h)(3) requires HHS to provide agents, brokers, or web-brokers
with written notice of HHS' reconsideration decision within 30 calendar
days of receipt of the request for reconsideration.
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\134\ See 45 CFR 155.220(g)(1)-(4). Also see, e.g., 78 FR at
37047 through 37048 and 78 FR at 54076 through 54081.
\135\ See 45 CFR 155.220(g)(3)(i).
\136\ The one exception is for situations where the agent,
broker, or web-broker fails to maintain the appropriate license
under applicable State law(s). See 45 CFR 155.220(g)(3)(ii). In
these limited situations, HHS may immediately terminate the agent,
broker, or web-broker's Exchange agreement(s) for cause without any
further opportunity to resolve the matter upon providing notice to
the agent, broker, or web-broker. Ibid.
\137\ 45 CFR 155.220(g)(4).
\138\ The agent, broker, or web-broker must continue to protect
any PII accessed during the term of their Exchange agreements. See,
e.g., 45 CFR 155.220(g)(4) and 155.260.
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Our experience reviewing evidence and other information submitted
by agents, brokers, or web-brokers to rebut allegations that led to the
suspension of their Exchange agreement(s) or to request reconsideration
of the termination of their Exchange agreement(s), found that the
process, especially in more complex situations, often requires
significant resources and time. The review process can involve parsing
complex technical information and data, as well as revisiting consumer
complaints or conducting outreach to consumers. The amount of time it
takes for the review process is largely dependent on the particular
situation at hand (for example, the number of alleged violations and
impacted consumers, how much and what type of information an agent,
broker, or web-broker submits, the amount of time it takes for
consumers to locate and provide documentation related to their
complaints, and the number of concurrent submissions in need of
review). Given the large number of factors involved, we believe that
allowing HHS additional time to complete the review would be
beneficial.
We are cognizant that this additional time could delay the ability
of agents, brokers, and web-brokers to conduct business, which may be
particularly burdensome to those who have compelling evidence to rebut
allegations of noncompliance. Given the critical role that agents,
brokers, and web-brokers serve in enrolling consumers in plans on the
Exchanges, it is our intention to minimize the burden imposed on
agents, brokers, and web-brokers to the greatest extent possible while
also ensuring that HHS has additional time (if necessary) to review any
submitted rebuttal evidence. As stated above, this additional time is
warranted to accommodate particularly complex situations that require
significant resources and time. We expect that not all reviews are so
complex that they would require the use of this additional time; in
cases where agents, brokers, and web-brokers present compelling
evidence to rebut allegations of noncompliance, we expect to be able to
resolve the vast majority of those reviews without the use of this
additional time.
We believe that the proposal to allow HHS a total of up to 45
calendar days to review rebuttal evidence is warranted given that
agents, brokers, and web-brokers have up to 90 days to submit rebuttal
evidence to HHS during their suspension period, while HHS currently
only has 30 days to review, consider, and make determinations based on
that evidence. It does not seem unreasonable to increase this combined
maximum 120-day time period \139\ to 135 days.\140\
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\139\ As noted above, an agent, broker, or web-broker whose
Exchange agreement(s) are temporarily suspended can submit rebuttal
evidence at any time during the 90-day suspension period, thus
triggering the start of the HHS review period and limiting the
length of the suspension period. For example, under this proposal,
if an agent were to submit rebuttal evidence within seven days of
receiving the suspension notice and HHS were to respond on the last
day of the proposed new review period (day 45) and lift the
suspension, that would mean the agent's Exchange agreement(s) would
have been suspended for only 52 days.
\140\ For example, under this proposal, if an agent whose
Exchange agreement(s) were temporarily suspended were to submit
rebuttal evidence to rebut allegations that led to the suspension of
their Exchange agreement(s) on the final day of the suspension
period (day 90), pursuant to Sec. 155.220(g)(5)(i)(B), and HHS were
to respond on the final day of the proposed new review period (day
45) and lift the suspension, that agent's Exchange agreement(s)
would be suspended for a maximum of 135 days.
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We believe that this is not an unreasonable maximum timeframe,
[[Page 78251]]
particularly where HHS has a reasonable suspicion the agent, broker, or
web-broker engaged in fraud or abusive conduct that may cause imminent
or ongoing consumer harm using personally identifiable information of
an Exchange enrollee or applicant or in connection with an Exchange
enrollment or application. As noted in the 2017 Payment Notice, there
is a similar requirement for Medicare providers, as 42 CFR 405.371
provides HHS with the authority to suspend payment for at least 180
days if there is reliable information that an overpayment exists, or
there is a credible allegation of fraud (81 FR 12262 through 12263).
Under Sec. 155.220(g)(5)(i)(A), HHS temporarily suspends an agent,
broker or web-broker's Exchange agreement(s) only in situations in
which there is sufficient evidence or other information such that HHS
reasonably suspects the agent, broker or web-broker engaged in fraud,
or in abusive conduct that may cause imminent or ongoing consumer harm
using personally identifiable information of an Exchange enrollee or
applicant or in connection with an Exchange enrollment or application.
As such, HHS exercises this authority and sends suspension notices only
in the limited situations where there may have been fraud or abusive
conduct to stop further Exchange enrollment activity when the
misconduct may cause imminent or ongoing harm to consumers or the
effective and efficient administration of Exchanges. We also further
emphasize that the proposed extension to allow for up to 45 days for
HHS to review rebuttal evidence in these situations represents the
maximum timeframe.\141\ To the extent the situation at hand does not,
for example, involve a large number of alleged violations or impacted
consumers, HHS may not need the maximum timeframe to complete the
review and notify the agent, broker, or web-broker whether the
suspension is lifted.
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\141\ Further, as detailed above, the agent, broker, or web-
broker whose Exchange agreement(s) are suspended has an opportunity
to limit the overall length of the suspension period with the timely
submission of rebuttal evidence.
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Terminations of Exchange agreement(s) by HHS are also limited, but
in a different way. As outlined above, Sec. 155.220(g)(1) allows HHS
to terminate an agent, broker, or web-brokers Exchange agreement for
cause only when, in HHS' determination, a specific finding of
noncompliance or pattern of noncompliance is sufficiently severe.
Examples of specific findings of noncompliance that HHS might determine
to be sufficiently severe to warrant termination of an agent's,
broker's, or web-broker's Exchange agreement for cause under section
Sec. 155.220(g)(1) include, but are not limited to, violations of the
Exchange privacy and security standards.\142\ Patterns of noncompliance
that HHS might determine to be sufficiently severe to warrant
termination for cause include, for example, repeated violations of any
of the applicable standards in Sec. 155.220 or Sec. 155.260(b) for
which the agent or broker was previously found to be noncompliant.\143\
As proposed, if HHS takes the total up to 60 calendar days to review
rebuttal evidence submitted by the agent, broker, or web-broker whose
Exchange agreement was terminated for cause, the maximum timeframe for
the reconsideration process under Sec. 155.220(h) would be 90 days. We
believe this approach strikes the appropriate balance with respect to
reviewing information submitted with a request to reconsider
termination of their Exchange agreement(s) because it provides the
agent, broker, or web-broker due process while also protecting
consumers from potential harm. We are proposing a longer time period of
60 days for HHS review of information and evidence submitted by an
agent, broker, or web-broker as part of their reconsideration request
(versus 45 days for HHS review of rebuttal evidence and information
submitted in response to a suspension determination) because the HHS
reviews under Sec. 155.220(h)(2) are part of the appeal process. As
such, the agent, broker, or web-broker had an opportunity at an earlier
stage of the suspension or termination process to rebut the allegations
and/or findings, or otherwise take remedial steps to address the
concerns identified by HHS, that led to suspension or termination of
their Exchange agreement(s).144 145
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\142\ As outlined in Sec. 155.220(g)(2), an agent, broker, or
web-broker may be determined noncompliant if HHS finds that the
agent, broker, or web-broker violated any standard specified in
Sec. 155.220; any term or condition of their Exchange agreement(s);
any State law applicable to agents, brokers, or web-brokers; or any
Federal law applicable to agents, brokers, or web-brokers.
\143\ Ibid.
\144\ See 45 CFR 155.220(g)(5)(i)(B) (providing an opportunity
to rebut allegations of fraud or abusive conduct) and 45 CFR
155.220(g)(3)(i) (providing advance notice and an opportunity to
correct the noncompliance).
\145\ The one exception is for immediate terminations for cause
due to the lack of appropriate State licensure under 45 CFR
155.220(g)(3)(ii). In these situations, however, the maximum
timeframe between the agent, broker, or web-broker receiving the
termination notice and the issuance of the HHS reconsideration
decision would be 90 days.
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For these reasons, we propose to amend Sec. 155.220(g)(5)(i)(B) to
provide HHS with up to 45 calendar days to review evidence and other
information submitted by agents, brokers, or web-brokers to rebut
allegations that led to suspension of their Exchange agreement(s) and
make a determination of whether to lift the suspension. We also propose
to amend Sec. 155.220(h)(3) to provide HHS with up to 60 days to
review evidence and other information submitted by agents, brokers, or
web-brokers to rebut allegations that led to termination of their
Exchange agreement(s) and provide written notice of HHS'
reconsideration decision.
We seek comment on this proposal.
b. Providing Correct Information to the FFEs (Sec. 155.220(j))
We propose to amend Sec. 155.220(j)(2)(ii) to require agents,
brokers, or web-brokers assisting with and facilitating enrollment
through FFEs and SBE-FPs or assisting an individual with applying for
APTC and CSRs for QHPs to document that eligibility application
information has been reviewed by and confirmed to be accurate by the
consumer or their authorized representative designated in compliance
with Sec. 155.227, prior to application submission. We propose that
such documentation would be created by the assisting agent, broker, or
web-broker and would require the consumer or their authorized
representative to take an action, such as providing a signature or a
recorded verbal confirmation, that produces a record that can be
maintained by the agent, broker, or web-broker and produced to confirm
the submitted eligibility application information was reviewed and
confirmed to be accurate by the consumer or their authorized
representative. In addition, we propose that the documentation must
include the date the information was reviewed, the name of the consumer
or their authorized representative, an explanation of the attestations
at the end of the eligibility application, and the name of the agent,
broker, or web-broker providing assistance. Lastly, we propose that the
documentation must be maintained by the agent, broker, or web-broker
for a minimum of 10 years and produced upon request in response to
monitoring, audit, and enforcement activities conducted consistent with
Sec. 155.220(c)(5), (g), (h) and (k). These proposed changes would
require amending Sec. 155.220(j)(2)(ii), creating new paragraph Sec.
155.220(j)(2)(ii)(A), and redesignating current Sec.
155.220(j)(2)(ii)(A), Sec. 155.220(j)(2)(ii)(B),
[[Page 78252]]
Sec. 155.220(j)(2)(ii)(C) and Sec. 155.220(j)(2)(ii)(D) without
change as Sec. 155.220(j)(2)(ii)(B), Sec. 155.220(j)(2)(ii)(C), Sec.
155.220(j)(2)(ii)(D), and Sec. 155.220(j)(2)(ii)(E), respectively.
Agents, brokers and web-brokers are among those who play a critical
role in educating consumers about Exchanges and insurance affordability
programs, and in helping consumers complete and submit applications for
eligibility determinations, compare plans, and enroll in coverage.
Consistent with section 1312(e) of the ACA, Sec. 155.220 establishes
the minimum standards for the process by which an agent, broker, or
web-broker may help enroll an individual in a QHP in a manner that
constitutes enrollment through the Exchange and to assist individuals
in applying for PTC and CSRs. This process and minimum standards
require the applicant's completion of an eligibility verification and
enrollment application and the agent's, broker's, or web-broker's
submission of the eligibility application information through the
Exchange website or an Exchange-approved web service.\146\ While
agents, brokers, and web-brokers can assist a consumer with completing
the Exchange application, the consumer is the individual with the
knowledge to confirm the accuracy of the information provided on the
application.\147\
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\146\ 45 CFR 155.220(c)(1). Also see, e.g., 77 FR at 18334-
18336.
\147\ This is evidenced by the language in Sec. 155.220(j)(1)
that refers to agents, brokers, or web-brokers that assist or
facilitate enrollment (emphasis added).
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Section 155.220(j)(2) sets forth the standards of conduct for
agents, brokers, or web-brokers that assist with or facilitate
enrollment of qualified individuals, qualified employers, or qualified
employees in coverage in a manner that constitutes enrollment through
an FFE or SBE-FP or that assist individuals in applying for APTC and
CSRs for QHPs sold through an FFE or SBE-FP. As explained in the 2017
Payment Notice proposed rule (81 FR 12258 through 12264), these
standards are designed to protect against agent, broker, and web-broker
conduct that is harmful towards consumers or prevents the efficient
operation of the FFEs and SBE-FPs. Under Sec. 155.220(j)(2)(ii),
agents, brokers, or web-brokers must provide the FFEs and SBE-FPs with
``correct information under section 1411(b) of the Affordable Care
Act.''
Section 1411(h) of the ACA provides for the imposition of civil
penalties if any person fails to provide correct information under
section 1411(b) to the Exchange. Consistent with Sec. 155.220(l),
agents, brokers and web-brokers that assist with or facilitate
enrollment of qualified individuals, qualified employers, or qualified
employees in States with SBE-FPs must comply with all applicable FFE
standards. This includes, but is not limited to, compliance with the
FFE standards of conduct in Sec. 155.220(j).
Currently, Sec. 155.220(j)(2)(ii) requires that agents, brokers,
and web-brokers provide the FFEs and SBE-FPs with correct information
under section 1411(b) of the ACA, but it does not explicitly require
agents, brokers, or web-brokers assisting consumers with completing
eligibility applications through the FFEs and SBE-FPs to confirm with
those consumers the accuracy of the information entered on their
applications prior to application submission or document the consumer
has reviewed and confirmed the information to be accurate. HHS has
continued to observe applications submitted to the FFEs and SBE-FPs
that contain incorrect consumer information. We have also received
consumer complaints stating the information provided on their
eligibility applications submitted by agents, brokers, or web-brokers
on their behalf was incorrect. These complaints can be difficult to
investigate and adjudicate, because the only evidence available is
often the word of one person against another and the FFEs and SBE-FPs
generally do not have access to other contextual information to help
resolve the matter. By requiring the creation and maintenance of
documentation that the assisting agent, broker, or web-broker confirmed
with the consumer or their authorized representative that the entered
information was reviewed and accurate, the adjudication of such
complaints could be expedited and more easily resolved. In addition,
the inclusion of incorrect consumer information on eligibility
applications may result in consumers receiving inaccurate eligibility
determinations, and may affect consumers' tax liability, or produce
other potentially negative results. If a consumer receives an incorrect
APTC determination or is unaware they are enrolled in a QHP, that
consumer may owe money to the IRS when they file their Federal income
tax return. Ensuring a consumer's income determination has been
reviewed and is accurate would help avoid these situations. Incorrect
consumer information on eligibility applications may also affect
Exchange operations or HHS's analysis of Exchange trends. For example,
a high volume of applications all containing the erroneous information,
such as U.S. citizens attesting to not having an SSN, could hinder the
efficient and effective operation of the Exchanges on the Federal
platform by requiring HHS to focus its time and efforts on addressing
these erroneous applications. This proposal is consistent with the fact
that the consumer or their authorized representative is the individual
with the knowledge to confirm the accuracy of the information provided
on the application and would serve as an additional safeguard and
procedural step to ensure the accuracy of the application information
submitted to Exchanges. Thus, we propose to revise Sec.
155.220(j)(2)(ii) to require agents, brokers, and web-brokers to
document that the eligibility application information was reviewed and
confirmed to be accurate by the consumer or their authorized
representative before application submission.
We also propose to establish in new proposed Sec.
155.220(j)(2)(ii)(A) standards for what constitutes adequate
documentation that eligibility application information has been
reviewed and confirmed to be accurate by the consumer or their
authorized representative. First, we propose to revise Sec.
155.220(j)(2)(ii)(A) to establish that documenting that eligibility
application information has been reviewed and confirmed to be accurate
by the consumer or their authorized representative would require the
consumer or their authorized representative to take an action that
produces a record that can be maintained and produced by the agent,
broker, or web-broker and produced to confirm the consumer or their
authorized representative has reviewed and confirmed the accuracy of
the eligibility application information.
We do not propose any specific method for documenting that
eligibility application information has been reviewed and confirmed to
be accurate by the consumer or their authorized representative. To
provide guidance to agents, brokers, and web-brokers, we propose to
include in Sec. 155.220(j)(2)(ii)(A) a non-exhaustive list of
acceptable methods to document that eligibility application information
has been reviewed and confirmed to be accurate, including obtaining the
signature of the consumer or their authorized representative
(electronically or otherwise), verbal confirmation by the consumer or
their authorized representative that is captured in an audio recording,
or a written response (electronic or otherwise) from the consumer or
their authorized
[[Page 78253]]
representative to a communication sent by the agent, broker, or web-
broker. We also invite comment on whether there may be other acceptable
methods of documentation that HHS should consider specifying to be
permissible for purposes of documenting that eligibility application
information has been reviewed and confirmed to be accurate by the
consumer or their authorized representative. For example, we are
specifically interested in any current best practices or approaches
that agents, brokers or web-brokers may use to create records or
otherwise document that eligibility application information was
reviewed by the consumer or their authorized representative prior to
submission to the Exchange.
We also propose that the consumer would be able to review and
confirm the accuracy of application information on behalf of other
applicants (for example, dependents or other household members), and
authorized representatives would be able to provide review and confirm
the accuracy of application information on behalf of the people they
are designated to represent, as it may be difficult or impossible to
obtain confirmation from each consumer whose information is included on
an application. This would allow agents, brokers, and web-brokers to
continue assisting consumers as they currently do (for example, often
by working with an individual representing a household when submitting
an application for a family).
Next, we propose to require at new proposed Sec.
155.220(j)(2)(ii)(A)(1) that the eligibility application information
documentation, which would be created by the assisting agent, broker,
or web-broker, must include an explanation of the attestations at the
end of the eligibility application that the eligibility application
information has been reviewed by and confirmed to be accurate by the
consumer or their authorized representative. At the end of the Exchange
eligibility application, one of the attestations the consumer must
currently agree to before submitting the application is as follows:
``I'm signing this application under penalty of perjury, which means
I've provided true answers to all of the questions to the best of my
knowledge. I know I may be subject to penalties under Federal law if I
intentionally provide false information.'' The documentation the agent,
broker, or web-broker creates to satisfy this proposed requirement
would be required to include this language for awareness and to remind
the consumer that they are responsible for the accuracy of the
application information, even if the information was entered into the
application on their behalf by an agent or broker assisting them. We
believe that this proposal would help ensure that the consumer or their
authorized representative understands the importance of confirming the
accuracy of the information contained in the eligibility application
and further safeguard against the provision and submission of incorrect
eligibility application information. We also believe that that proposal
would help safeguard consumers from the negative consequences of
failing to understand the attestations and potentially attesting to
conflicting information. For example, one common error we see on
applications completed by agents, brokers, or web-brokers is an
attestation that a consumer does not have an SSN while also including
an attestation that the consumer is a U.S. citizen. These conflicting
attestations can generate DMIs, which, if not resolved during the
allotted resolution window, could result in the consumer's coverage
being terminated. For these reasons, we propose to add a requirement at
new Sec. 155.220(j)(2)(ii)(A)(1) that the documentation include the
date the information was reviewed, the name of the consumer or their
authorized representative, an explanation of the attestations at the
end of the eligibility application, and the name of the assisting
agent, broker, or web-broker.
Lastly, at new proposed Sec. 155.220(j)(2)(ii)(A)(2) we propose to
require agents, brokers, and web-brokers to maintain the documentation
demonstrating that the eligibility application information was reviewed
and confirmed as accurate by the consumer or their authorized
representative for a minimum of 10 years. Section 155.220(c)(5) states
HHS or our designee may periodically monitor and audit an agent,
broker, or web-broker to assess their compliance with applicable
requirements. However, there is not currently a maintenance of records
requirement directly applicable to all agents, brokers, and web-brokers
assisting consumers through the FFEs and SBE-FPs.\148\ Capturing a
broad-based requirement mandating that all agents, brokers, and web-
brokers assisting consumers in the FFEs and SBE-FPs maintain the
records and documentation demonstrating that information captured in
their application has been reviewed and confirmed to be accurate by the
consumer or their authorized representative they are assisting would
provide a clear, uniform standard. It also would ensure this
documentation is maintained for sufficient time to allow for
monitoring, audit, and enforcement activities to take place.\149\
Therefore, consistent with other Exchange maintenance of records
requirements,\150\ we propose to capture in new proposed Sec.
155.220(j)(2)(iii)(A)(2) that agents, brokers, and web-brokers must
maintain the documentation described in proposed Sec.
155.220(j)(2)(ii)(A) for a minimum of 10 years, and produce the
documentation upon request in response to monitoring, audit, and
enforcement activities conducted consistent with Sec. 155.220(c)(5),
(g), (h), and (k).
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\148\ Section 155.220(c)(3)(i)(E) requires web-brokers to
maintain audit trails and records in an electronic format for a
minimum of 10 years and cooperate with any audit under this section.
Section 156.340(a)(2) places responsibility on QHP issuers
participating in Exchanges using the Federal platform to ensure
their downstream and delegated entities (including agents and
brokers) are complying with certain requirements, including the
maintenance of records requirements in Sec. 156.705. In addition,
under Sec. 156.340(b), agents and brokers that are downstream
entities of QHP issuers in the FFEs must be bound by their
agreements with the QHP issuer to comply with certain requirements,
including the records maintenance standards in Sec. 156.705.
Section 156.705(c) and (d) requires QHP issuers in the FFEs to
maintain certain records for 10 years and to make all such records
available to HHS, the OIG, the Comptroller General, or their
designees, upon request.
\149\ While investigations consumer complaints are an example of
a more immediate, real-time monitoring and oversight activity,
market conduct examinations, audits, and other types of
investigations (e.g., compliance reviews) may occur several years
after the applicable coverage year.
\150\ See, for example, 45 CFR 155.220(c)(3)(i)(E) and
156.705(c).
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We seek comment on these proposals.
c. Documenting Receipt of Consumer Consent (Sec. 155.220(j))
We propose to amend Sec. 155.220(j)(2)(iii) to require agents,
brokers, or web-brokers assisting with and facilitating enrollment
through FFEs and SBE-FPs or assisting an individual with applying for
APTC and CSRs for QHPs to document the receipt of consent from the
consumer, or the consumer's authorized representative designated in
compliance with Sec. 155.227, qualified employers, or qualified
employees they are assisting. We propose that documentation of receipt
of consent would be created by the assisting agent, broker, or web-
broker and would require the consumer seeking to receive assistance, or
the consumer's authorized representative, to take an action, such as
providing a signature or a recorded verbal authorization, that produces
a record that can be maintained by the agent, broker, or web-broker and
produced to confirm the consumer's or their authorized representative's
consent was provided. With regard to the content of
[[Page 78254]]
the documentation of consent, in addition to the date consent was
given, name of the consumer or their authorized representative, and the
name of the agent, broker, web-broker, or agency being granted consent,
we propose the documentation would be required to include a description
of the scope, purpose, and duration of the consent provided by the
consumer, or their authorized representative, as well as the process by
which the consumer or their authorized representative may rescind such
consent. Lastly, we propose that documentation of the consumer's or
their authorized representative's, consent be maintained by the agent,
broker, or web-broker for a minimum of 10 years and produced upon
request in response to monitoring, audit, and enforcement activities
conducted consistent with Sec. 155.220(c)(5), (g), (h) and (k).
Currently, Sec. 155.220(j)(2)(iii) requires agents, brokers, or
web-brokers assisting with or facilitating enrollment through the FFEs
or SBE-FPs or assisting an individual in applying for APTC and CSRs for
QHPs to obtain the consent of the individual, employer, or employee
prior to providing such assistance. However, Sec. 155.220(j)(2)(iii)
does not currently require agents, brokers, or web-brokers to document
the receipt of consent. We have observed several cases in which there
have been disputes between agents, brokers, or web-brokers and the
individuals they are assisting, or between two or more agents, brokers,
or web-brokers, about who has been authorized to act on behalf of a
consumer or whether anyone has been authorized to do so. We have also
received complaints alleging enrollments by agents, brokers, and web-
brokers that occurred without the consumer's consent, and have
encountered agents, brokers, and web-brokers who attest they have
obtained consent and have acted in good faith, but who do not have
reliable records of such consent to defend themselves from allegations
of misconduct. Thus, we are proposing this standard because we believe
that it would be beneficial to have reliable records of consent to help
with the resolution of such disputes or complaints and to minimize the
risk of fraudulent activities such as unauthorized enrollments. For
these reasons, we propose to revise Sec. 155.220(j)(2)(iii) to require
agents, brokers, and web-brokers to document the receipt of consent
from the consumer seeking to receive assistance or the consumer's
authorized representative, employer, or employee prior to assisting
with or facilitating enrollment through the FFEs and SBE-FPs, making
updates to an existing application or enrollment, or assisting the
consumer in applying for APTC and CSRs for QHPs.
We also propose to establish in proposed new Sec.
155.220(j)(2)(iii)(A)-(C) standards for what constitutes obtaining and
documenting consent to provide agents, brokers, and web-brokers with
further clarity regarding this proposed requirement. First, we propose
to add new proposed Sec. 155.220(j)(2)(iii)(A) to establish that
obtaining and documenting the receipt of consent would require the
consumer seeking to receive assistance, or the consumer's authorized
representative designated in compliance with Sec. 155.227, to take an
action that produces a record that can be maintained by the agent,
broker, or web-broker and produced to confirm the consumer's or their
authorized representative's consent has been provided.
We do not intend to prescribe the method to document receipt of
individual consent, so long as whatever method is chosen requires the
consumer or their authorized representative to take an action and
results in a record that can be maintained and produced by the agent,
broker, or web-broker. Therefore, we propose to include in new proposed
Sec. 155.220(j)(2)(iii)(A) a non-exhaustive list of acceptable means
to document receipt of consent, including obtaining the signature of
the consumer or their authorized representative (electronically or
otherwise), verbal confirmation by the consumer or their authorized
representative that is captured in an audio recording, a response from
the consumer or their authorized representative to an electronic or
other communication sent by the agent, broker, or web-broker, or other
similar means or methods that HHS specifies in guidance. Other methods
of documenting individual consent may be acceptable, such as requiring
individuals to create user accounts on an agent's or agency's website
where they designate or indicate the agents, brokers, or web-brokers to
whom they have provided consent. Under this proposal, agents, brokers,
and web-brokers would also be permitted to continue to utilize State
Department of Insurance forms, such as agent or broker of record forms,
provided these forms cover the minimum requirements set forth in this
proposed rule. If agents, brokers, and web-brokers have already adopted
consent documentation processes consistent with this proposed
framework, no changes would be required if this proposed standard is
finalized. We intend to allow for documentation methods well-suited to
the full range of ways agents, brokers, and web-brokers interact with
consumers they are assisting (for example: in-person, via phone,
electronic communications, use of an agent's or agency's website,
etc.). We also intend for the primary applicant to be able to provide
consent on behalf of other applicants (for example, dependents or other
household members), and authorized representatives to be able to
provide consent on behalf of the people they are designated represent
(for example, incapacitated persons), as it may be difficult or
impossible to obtain consent from each individual whose information is
included on an application. This would allow agents, brokers, and web-
brokers to continue assisting individuals as they currently do (for
example, often by working with an individual representing a household
when submitting an application for a family).
Second, we propose to require at new proposed Sec.
155.220(j)(2)(iii)(B) that the consent documentation must include the
date consent was given, name of the consumer or their authorized
representative, name of the agent, broker, web-broker, or agency being
granted consent, a description of the scope, purpose, and duration of
the consent obtained by the individual, as well as a process through
which the consumer or their authorized representative may rescind
consent. Agents, brokers, and web-brokers may work with individuals in
numerous capacities. For example, they may assist individuals with
applying for financial assistance and enrolling in QHPs through the
FFEs and SBE-FPs, as well as shopping for other non-Exchange products.
Similarly, agents, brokers, and web-brokers may have different business
models such that individuals may interact with specific individuals
consistently or numerous individuals representing a business entity
that may vary upon each contact (for example, call center
representatives), and the methods of interaction may vary as well (for
example: in-person, phone calls, use of an agent's or agency's website
etc.). In addition, individuals may wish to change the agents, brokers,
or web-brokers they work with and provide consent to over time. For
these reasons, the scope, purpose, and duration of the consent agents,
brokers, and web-brokers seek to obtain from individuals can vary
widely. Therefore, this proposal is intended to ensure individuals are
making an informed decision when providing their consent
[[Page 78255]]
to the agents, brokers, or web-brokers assisting them, that individuals
can make changes to their provision of consent over time, and that the
documentation of consent at a minimum captures who is providing and
receiving consent, for what purpose(s) the consent is being provided,
when consent was provided, the intended duration of the consent, and
how specifically consent may be rescinded. We expect that the
information in the consent documentation would align with the
information in the corresponding individuals' applications (for
example: names, phone numbers, or email addresses should align as
applicable depending on whether the consent is obtained via email, text
message, call recording, or otherwise), except for in instances in
which consent is being provided by an authorized representative.
Lastly, at new proposed Sec. 155.220(j)(2)(iii)(C), we propose to
require agents, brokers, and web-brokers to maintain the documentation
described in proposed Sec. 155.220(j)(2)(iii)(A) for a minimum of 10
years. Section 155.220(c)(5) states HHS or our designee may
periodically monitor and audit an agent, broker, or web-broker to
assess their compliance with applicable requirements. However, there is
not currently a maintenance of records requirement directly applicable
to all agents, brokers, and web-brokers assisting consumers through the
FFEs and SBE-FPs.\151\ Capturing a broad-based requirement mandating
that all agents, brokers, and web-brokers assisting consumers in the
FFEs and SBE-FPs to maintain the records and documentation
demonstrating receipt of consent from consumers or their authorized
representative would provide a clear, uniform standard. It would also
ensure these records and documentation are maintained for sufficient
time to allow for monitoring, audit, and enforcement activities to take
place.\152\ Therefore, consistent with other Exchange maintenance of
records requirements,\153\ we propose to capture in new proposed Sec.
155.220(j)(2)(iii)(C) that agents, brokers, and web-brokers must
maintain the documentation described in proposed Sec.
155.220(j)(2)(iii)(A) for a minimum of 10 years, and produce the
documentation upon request in response to monitoring, audit and
enforcement activities conducted consistent with Sec. 155.220(c)(5),
(g), (h) and (k).
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\151\ Section 155.220(c)(3)(i)(E) requires web-brokers to
maintain audit trails and records in an electronic format for a
minimum of 10 years and cooperate with any audit under this section.
Section 156.340(a)(2) places responsibility on QHP issuers
participating in Exchanges using the Federal platform to ensure
their downstream and delegated entities (including agents and
brokers) are complying with certain requirements, including the
maintenance of records requirements in Sec. 156.705. Section
156.705(c) requires QHP issuers in the FFEs to maintain certain
records for 10 years.
\152\ While investigations consumer complaints are an example of
a more immediate, real-time monitoring and oversight activity,
market conduct examinations, audits, and other types of
investigations (e.g., compliance reviews) may occur several years
after the applicable coverage year.
\153\ See, for example, 45 CFR 155.220(c)(3)(i)(E) and
156.705(c).
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We seek comment on these proposals, including whether there are
other means or methods of documentation that HHS should consider
specifying are permissible for purposes of documenting the receipt of
consent from consumer or their, qualified employers, or qualified
employees.
4. Eligibility Standards (Sec. 155.305)
a. Failure to File and Reconcile Process (Sec. 155.305(f)(4))
We are proposing to amend Sec. 155.305(f)(4) which currently
prohibits an Exchange from determining a taxpayer eligible for APTC if
HHS notifies the Exchange that a taxpayer (or a taxpayer's spouse, if
married) has failed to file a Federal income tax return and reconcile
their past APTC for a year for which tax data would be utilized for
verification of household income and family size in accordance with
Sec. 155.320(c)(1)(i).
As background, Exchange enrollees whose taxpayer fails to comply
with current paragraph Sec. 155.305(f)(4) are referred to as having
failed to ``file and reconcile''. Since 2015, HHS has taken regulatory
and operational steps to help increase taxpayer compliance with filing
and reconciliation requirements under the Code as described at 26 CFR
1.36B-4(a)(1)(i) and (a)(1)(ii)(A) by tying eligibility for future APTC
to the taxpayer's reconciliation of past APTC paid. However, since the
finalization of the requirement at Sec. 155.305(f)(4), HHS has
determined that the costs of the current policy outweigh the benefits
for a number of reasons. For one, Exchanges have faced a longstanding
operational challenge, specifically that Exchanges sometimes have to
determine an enrollee ineligible for APTC without having up-to-date
information on the tax filing status of households while Federal income
tax returns are still being processed by the IRS. Currently, Exchanges
determine an enrollee ineligible for APTC if the IRS, through data
passed from the IRS to HHS, via the Federal Data Services Hub (the
Hub), tells an Exchange that the taxpayer did not comply with the
requirement to file a Federal income tax return and reconcile APTC for
one specific tax year. To address the challenge of receiving up-to-date
information, and to promote continuity of coverage in an Exchange QHP,
we are proposing a new process for Exchanges to conduct FTR while also
ensuring that Exchanges preserve program integrity by paying APTC only
to consumers who are eligible to receive it. HHS believes that any FTR
process should encourage compliance with the filing and reconciling
requirement under the Code, minimize the potential for APTC recipients
to incur large tax liabilities over time, and support eligible
enrollees' continuous enrollment in Exchange coverage with APTC by
avoiding situations where enrollees become uninsured when their APTC is
terminated.
For Exchanges using the Federal eligibility and enrollment
platform, which includes the FFEs and SBE-FPs, taxpayers who have not
met the requirement of Sec. 155.305(f)(4) are put into the FTR process
with the Exchange. As part of the normal process used by Exchanges
using the Federal eligibility and enrollment platform during Open
Enrollment, enrollees for whom IRS data indicates an FTR status for
their taxpayer receive notices from the Exchange alerting them that IRS
data shows that their taxpayer has not filed a Federal income tax
return for the applicable tax year and reconciled APTC for that year
using IRS Form 8962. FTR Open Enrollment notices sent directly to the
taxpayer clearly state that IRS data indicates the taxpayer failed to
file and reconcile, whereas FTR Open Enrollment notices sent to the
applicant's household contact, who may or may not be the taxpayer, list
a few different reasons consumers may be at risk of losing APTC,
including the possibility that IRS data indicates the taxpayer failed
to file and reconcile. Notices to the applicant's household contact can
be confusing because of the multiple reasons listed. Both of these Open
Enrollment notices encourage taxpayers identified as having an FTR
status to file their Federal income tax return and reconcile their APTC
for that year using IRS Form 8962, or risk losing APTC eligibility for
the next coverage year.
In late 2015, to allow consumers with an FTR status to be
determined eligible for APTC temporarily (if otherwise eligible), HHS
added a question to the single, streamlined application used by the
Exchanges using the Federal eligibility and enrollment platform that
allows enrollees to attest on their
[[Page 78256]]
application, under the penalty of perjury, that they have filed and
reconciled their APTC by checking a box that says, ``Yes, I reconciled
premium tax credits for past years.'' \154\ Enrollees who check this
attestation and enroll in coverage during Open Enrollment retain their
APTC, even if IRS data has not been updated to reflect their most
current Federal income tax filing status or if the individual has not
actually reconciled their APTC. Allowing enrollees to attest to filing
and reconciling even though IRS data indicates that they did not, is a
critical step to safeguard enrollees from losing APTC erroneously as
the IRS typically takes several weeks to process Federal income tax
returns, with additional time required for returns or amendments that
are filed using a paper process.
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\154\ We note that this question was removed from the single
streamlined application once the FTR process was paused in 2020 for
the 2021 PY.
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After Open Enrollment, Exchanges using the Federal platform then
conduct a second look at FTR data to follow up and verify an
enrollee(s)' reconciliation attestation by conducting a verification of
their taxpayer's FTR status early in the next coverage year, which
includes additional notices to enrollees and taxpayers. This
verification process early in the next coverage year is referred to as
FTR Recheck. State Exchanges that operate their own eligibility and
enrollment platform have each implemented similar processes to check
the FTR status of their enrollees annually based on data provided by
the IRS, to identify and notify enrollees who are at risk of losing
APTC eligibility, and to allow enrollees to attest under the penalty of
perjury that they have filed and reconciled their APTC.
There are many reasons we are proposing the changes to Sec.
155.305(f)(4) described herein. First, HHS' and State Exchanges'
experiences with running FTR operations have shown that Exchange
enrollees often do not understand the requirement that their taxpayer
must file a Federal income tax return and reconcile their APTC or that
they must also submit IRS Form 8962 to properly reconcile their APTC,
even though the single, streamlined application used by Exchanges on
the Federal platform and QHP enrollment process require a consumer to
attest to understanding the requirement to file and reconcile in two
places. For example, HHS is aware anecdotally that many third-party tax
preparers, such as accountants, are not aware of the requirement to
file and reconcile, nor prompt consumers to also include IRS Form 8962
along with their Federal income tax return. Although enrollees who rely
on third party tax preparers such as accountants or third-party tax
preparation software to prepare their Federal income tax returns are
still required to file and reconcile even if their tax preparer was
unaware of the requirement, consumers should have the opportunity to
receive additional guidance from Exchanges on the requirement to file
and reconcile to promote compliance and prevent termination of APTC.
While annual FTR notices help with this issue as the notices alert
consumers that they did not provide adequate documentation to fulfill
the requirement to file and reconcile, the current process that
requires Exchanges to determine an enrollee ineligible for APTC after 1
year of having an FTR status is overly punitive. Some consumers may
have their APTC ended due to delayed data, in which case their only
remedy is to appeal to get their APTC reinstated. Consumers also may be
confused or may have received inadequate education on the requirement
to file and reconcile, in which case they must actually file,
reconcile, and appeal to get their APTC reinstated. By requiring
Exchanges to determine an enrollee ineligible for APTC only after
having an FTR status for two consecutive tax years (specifically, years
for which tax data would be utilized for verification of household
income and family size), Exchanges would have more opportunity to
conduct outreach to consumers whom data indicate have failed to file
and reconcile to prevent erroneous terminations of APTC and to provide
access to APTC for an additional year even when APTC would have been
correctly terminated under the original FTR process. Under the proposed
change, Exchanges on the Federal platform would continue to send
notices to consumers for the year in which they have failed to
reconcile APTC as an initial warning to inform and educate consumers
that they need to file and reconcile or risk being determined
ineligible for APTC if they fail to file and reconcile for a second
consecutive tax year. This change would also alleviate burden on HHS
hearing officers by reducing the number of appeals related to denial of
APTC due to FTR, and prevent consumers who did reconcile, but for whom
IRS data was not updated quickly enough, from having to go through an
appeal process to have their APTC rightfully reinstated.
HHS believes in ensuring consumers have access to affordable
coverage and places high value on consumers maintaining continuity of
coverage in the Exchange as HHS has found that FFE and SBE-FP enrollees
who lose APTC tend to end their Exchange coverage and will experience
coverage gaps, as they cannot afford unsubsidized coverage. In light of
this, HHS believes it is imperative that any change to the current FTR
operations be done carefully and that HHS thoughtfully balance how it
enforces the requirement to file and reconcile, since a consequence of
losing APTC effectively means many consumers may lose access to needed
medical care.
Therefore, given these challenges that both Exchanges and consumers
have faced with the requirement to file and reconcile, we are proposing
to revise Sec. 155.305(f)(4) under which Exchanges would not be
required, or permitted, to determine consumers ineligible for APTC due
to having an FTR status for only 1 year. Given that HHS's experience
running FTR shows continued issues with compliance with the requirement
to file and reconcile, we propose that beginning on January 1, 2024,
Exchanges must find an applicant ineligible for APTC only if the
applicant has an FTR delinquent status for two consecutive years
(specifically, two consecutive years for which tax data would be
utilized for verification of household income and family size).
Previously, CMS announced that Exchanges on the Federal platform
would not act on data from the IRS for enrollees who have failed to
file Federal income tax returns and reconcile a previous year's APTC
with the PTC allowed for the year. The guidance also announced
flexibility for State Exchanges that operate their own eligibility and
enrollment platforms to take similar action.\155\ Due to the ongoing
COVID-19 PHE in 2020, for plan year 2021, CMS temporarily paused ending
APTC for enrollees with an FTR status due to IRS processing delays of
2019 Federal income tax returns.\156\ CMS then extended this pause for
the 2023 plan year in July 2022.\157\ As a result of these changes, 55
percent of enrollees who were automatically re-enrolled during 2021
open enrollment with an FTR status
[[Page 78257]]
remained enrolled in Exchange coverage as of March 2021. In contrast,
only 12 percent of those enrollees with an FTR status who were
automatically re-enrolled without APTC during the 2020 open enrollment
were still enrolled in coverage as of March 2020. These results show
the significant impact that loss of APTC due to FTR status has on
whether enrollees continue to remain in coverage offered through the
Exchange as these impacted enrollees must pay the full cost of their
Exchange plan, which is often unaffordable without APTC.
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\155\ See CMS. (2022, July 18). Failure to File and Reconcile
(FTR) Operations Flexibilities for Plan Year 2023. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/FTR-flexibilities-2023.pdf.
\156\ See CMS. (2021, July 23). Failure to File and Reconcile
(FTR) Operations Flexibilities for Plan Years 2021 and 2022--
Frequently Asked Questions (FAQ). https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/FTR-flexibilities-2021-and-2022.pdf.
\157\ See CMS. (2022, July 18). Failure to File and Reconcile
(FTR) Operations Flexibilities for Plan Year 2023. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/FTR-flexibilities-2023.pdf.
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CMS proposes to continue to pause FTR until the point in time that
HHS and the IRS will be able to implement the new FTR policy, if
finalized. That is to say, until the IRS can update its systems to
implement the new FTR policy, and HHS can notify the Exchange of an
enrollee's consecutive 2-year FTR status, the Exchange will not
determine enrollees ineligible for APTC based on either the one-year or
2-year FTR status. We believe that removing APTC after 2 consecutive
years of an FTR status instead of one will help consumers avoid gaps in
coverage by increasing retention in the Exchange even if they have
failed to reconcile for 1 year, and will reduce the punitive nature of
the current process which may erroneously terminate APTC for consumers
who have filed and reconciled. We also believe that these proposed
changes would help protect consumers from accruing large tax
liabilities over multiple years by notifying and ending APTC for
consumers with an FTR status for two consecutive years. Finally, we
believe these proposed changes would allow Exchanges to maintain
program integrity by denying APTC to consumers who have, over the
course of two years, been given ample notification of their obligation
to file and reconcile and have nevertheless failed to do so.
We seek comment on this proposal, especially from States or other
interested parties regarding tax burdens on consumers which would
inform our decision on this proposal.
5. Verification Process Related to Eligibility for Insurance
Affordability Programs (Sec. Sec. 155.315 and 155.320)
a. Income Inconsistencies
We propose to amend Sec. 155.320 to require Exchanges to accept an
applicant's or enrollee's attestation of projected annual household
income when the Exchange requests tax return data from the IRS to
verify attested projected annual household income, but the IRS confirms
there is no such tax return data available. We further propose to amend
Sec. 155.315(f) to add that income inconsistencies must receive an
automatic 60-day extension in addition to the 90 days provided by Sec.
155.315(f)(2)(ii).
Section 155.320 sets forth the verification process for household
income. The Exchange requires that an applicant or enrollee applying
for financial assistance must attest to their projected annual
household income. See Sec. 155.320(a)(1) and (c)(3)(ii)(b). The
regulation also requires that for any individual in the applicant's or
enrollee's tax household (and for whom the Exchange has a SSN), the
Exchange must request tax return data regarding income and family size
from the IRS.\158\ See Sec. 155.320(c)(i)(A). When the Exchange
requests tax return data from the IRS and the data indicates that
attested projected annual household income represents an accurate
projection of the tax filer's household income for the benefit year for
which coverage is requested, the Exchange must determine eligibility
for APTC and CSR based on the IRS tax data. See Sec.
155.320(c)(3)(ii)(C).
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\158\ The Exchange must also request data regarding Social
Security Benefits from the Social Security Administration.
---------------------------------------------------------------------------
When the Exchange requests tax return data from the IRS and the IRS
returns data that reflects that the attested projected annual household
income is not an accurate projection of the tax filer's household
income for the benefit year for which coverage is requested, the
applicant or enrollee is considered to have experienced a change in
circumstances, which allows HHS to establish procedures for determining
eligibility for APTC on information other than IRS tax return data, as
described in Sec. 155.320(c)(3)(iii)-(vi). See ACA Sec. 1412(b)(2).
The Exchange also considers an applicant or enrollee to have
experienced a change in circumstances when the Exchange requests tax
return data from the IRS to verify attested projected household income,
but the IRS confirms such data is unavailable. This is because tax data
is usually unavailable when an applicant or enrollee has experienced a
change in family size, other household circumstances (such as a birth
or death), filing status changes (such as a marriage or divorce), or
the applicant or enrollee was not required to file a tax return for the
year involved. See Sec. ACA 1412(b)(2). When an applicant or enrollee
has experienced a change in circumstances as described in ACA Sec.
1412(b)(2), the Exchange determines eligibility for APTC and CSR using
alternate procedures designed to minimize burden and protect program
integrity, described in Sec. 155.320(c)(3)(iii)-(vi).
If an applicant or enrollee qualifies for an alternate verification
process as described above, and the attested projected annual household
income is greater than the income amount returned by the IRS, the
Exchange accepts the applicant's attestation without further
verification under Sec. 155.320(c)(iii)(A). If an applicant qualifies
for an alternate verification process, and the attested projected
annual household income is more than a reasonable threshold less than
the income amount returned by the IRS, or there is no IRS data
available, the Exchange generates an income inconsistency (also
referred to as a data matching issue or DMI) and proceeds with the
process described in Sec. 155.315(f)(1) through (4), unless a
different electronic data source returns an amount within a reasonable
threshold of the projected annual household income. See Sec.
155.320(c)(3)(iv) and (c)(3)(vi)(D). This process usually requires the
applicant or enrollee to present satisfactory documentary evidence of
projected annual household income. If the applicant fails to provide
documentation verifying their projected annual household income
attestation, the Exchange determines the consumer's eligibility for
APTC and CSRs based on available IRS data, as required in Sec.
155.320(c)(3)(vi)(F). However, if there is no IRS data available, the
Exchange must determine the applicant ineligible for APTC and CSRs as
required in Sec. 155.320(c)(3)(vi)(G). We propose to make clarifying
revisions to the current regulations to ensure consistency between the
regulations and the current operations of the Exchanges on the Federal
platform, as described here.
We propose to add Sec. 155.320(c)(5) which would require Exchanges
to accept an applicant's or enrollee's attestation of projected annual
household income when the Exchange requests IRS tax return data but IRS
confirms such data is not available. The current process is overly
punitive to consumers and burdensome to Exchanges; reasons for IRS not
returning consumer data can extend beyond the consumer not filing tax
returns, and can be attributed to tax household composition changes
(such as birth, marriage, and divorce), name changes, or other
demographic updates or mismatches--all of which are legitimate changes
that currently prevent a consumer from avoiding an income
[[Page 78258]]
DMI. Additionally, the consequence of receiving an income DMI and being
unable to provide sufficient documentation to verify projected
household income outweighs the intended programmatic benefits: under
Sec. 155.320(c)(3)(vi)(G) consumers are determined completely
ineligible for APTC and CSRs. With respect to burden on Exchanges, DMI
verification by the Exchange requires an outlay of administrative hours
to monitor and facilitate the resolution of income inconsistencies.
Within the Federal Platform, this administrative task accounts for
approximately 300,000 hours of labor annually, which we believe is
proportionally mirrored by State Exchanges.
Accordingly, we propose to accept an applicant's or enrollee's
attestation of projected annual household income when IRS tax return
data is requested but is not available, and to determine the applicant
or enrollee eligible for APTC or CSRs in accordance with the
applicant's or enrollee's attested projected household income, to more
fairly determine eligibility for consumers and to reduce unnecessary
burden on Exchanges. This proposal is consistent with Sec. 1412(b)(2)
of the ACA, which allows the Exchange to utilize alternate verification
procedures when a consumer has experienced substantial changes in
income, family size or other household circumstances, or filing status,
or when an applicant or enrollee was not required to file a tax return
for the applicable year.\159\ It is also consistent with the
flexibility under ACA Sec. 1411(c)(4)(B) to modify methods for
verification of the information where we determine such modifications
would reduce the administrative costs and burdens on the applicant.
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\159\ 42 U.S.C. 18081
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We clarify that the Exchange would continue to generate income DMIs
when IRS tax data is available and the attested projected household
income amount is more than a reasonable threshold below the income
amount returned by the IRS, and other sources cannot provide income
data within the reasonable threshold. Additionally, the Exchange would
continue to generate income DMIs when IRS tax data cannot be requested,
because an applicant or enrollee did not provide sufficient information
(namely, a social security number), and other sources cannot provide
income data within the reasonable threshold of the attested projected
household income. Under Sec. 1411(c)(3) of the ACA, only data from the
IRS is required to be used to determine if income is inconsistent.
Currently, there are no reliable and accurate income data sources
legally available to the Exchange that would provide quality data for
the purpose of generating income DMIs. Income data from other
electronic data sources may continue to be used by Exchanges to verify
income when the attested projected household income amount is more than
a reasonable threshold below the income amount returned by the IRS or
IRS data cannot be requested.
Lastly, we propose to revise Sec. 155.315(f) to add new paragraph
(f)(7) to require that applicants must receive an automatic 60-day
extension in addition to the 90 days currently provided by Sec.
155.315(f)(2)(ii) to allow applicants sufficient time to provide
documentation to verify household income. The extension would be
automatically granted when consumers exceed the allotted 90 days
without resolving any active household income DMIs. This proposal
aligns with current Sec. 155.315(f)(3), which provides extensions to
applicants beyond the existing 90 days if the applicant demonstrates
that a good faith effort has been made to obtain the required
documentation during the period. It is also consistent with the
flexibility under ACA Sec. 1411(c)(4)(B) to modify methods for
verification of the information where we determine such modifications
would reduce the administrative costs and burdens on the applicant.
We have found that 90 days is often an insufficient amount of time
for many applicants to provide this income documentation, since it can
require multiple documents from various household members along with an
explanation of seasonal employment or self-employment, including
multiple jobs. As applicants are asked to provide a projection for
their next year's income, they often submit documents that do not fully
explain their attestation due to the complexities noted above, which
requires contact from the Exchange and additional document submission,
which often pushes the verification timeline past 90 days. An
additional 60 days would allow consumers more time to gather multiple
documents from multiple sources, and also allows time for back and
forth review with the Exchange. The majority of households with income
DMIs are low income and consumers often have multiple sources of
employment that can change frequently. Therefore, collecting and
submitting documentation to verify projected household income is
extremely complicated and difficult. The proposed extension would
provide consumers with necessary time to gather and submit sufficient
documentation to verify projected household income. The current
authority allowing for the granting of extensions is applied on a case
by case basis and requires the consumers to demonstrate difficulty
before the 90- day deadline, which does not address the need for
additional time more broadly for households with income DMIs.
A review of income DMI data indicates that when consumers receive
additional time, they are more likely to successfully provide
documentation to verify their projected household income. Between 2018
and 2021, over one third of consumers who resolved their income DMIs on
the Exchange did so in more than 90 days. These consumers were provided
additional time under Sec. 155.315(f)(3), but the extension under this
existing provision places the burden on the consumer to obtain more
time to submit documentation. The proposed extension would treat
consumers more equitably and would take into consideration the
complicated process of obtaining and submitting income documents for
these households. We believe the proposed extension would provide more
opportunity to work with consumers to submit the correct documentation
to verify their projected annual household income. Extensions enabled
HHS to determine eligibility for more consumers truly eligible for
coverage. HHS continues to study consumer behavior in resolving
consistencies to continue to support accurate eligibility
determination.
HHS has found that income DMIs have a negative impact on access,
health equity, and the risk pool. Per a review of PY 2022 data, the
majority of income DMIs disproportionately impacted households with
lower attested household income. Among households with an income DMI in
PY 2022, more than 60 percent attested to a household income of less
than $25,000; compared to households without an income DMI, where only
about 40 percent attested to household income less than $25,000.
Additionally, households with an attested household income below
$25,000 successfully submitted documentation to verify their income 25
percent less often than households with higher household incomes.
Income DMIs also may pose a strain on populations of color. A
review of available data indicates that income DMI expirations are
higher than expected among Black or African American consumers.
Further, the proposed changes would ensure that all consumers are able
to continue to have access to more affordable coverage by continuing to
receive their APTC, which
[[Page 78259]]
also supports HHS' goal of consumers maintaining continuous coverage.
Income DMIs also negatively impact the risk pool. When households
are unable to submit documentation to verify their household income and
lose eligibility for APTC, they are much more likely to drop coverage
since they must pay the entire monthly premium, which in many cases may
be significantly more than the premium minus the APTC. We found that
consumers who were unable to submit sufficient documentation to verify
their income and lost their eligibility for APTC were half as likely as
other consumers to remain covered through the end of the plan year.
Consumers aged 25-35 were the age group most likely to lose their APTC
eligibility due to an income DMI, resulting in a loss of a population
that, on average, has a lower health risk, thereby negatively impacting
the risk pool. This finding underscores the importance of consumers
being provided ample time to resolve their Income DMIs in order to
support HHS' commitment to advancing health equity for consumers
participating in the Exchange.
Given the information we have on the negative and disproportionate
impacts of income DMIs, we are proposing to adjust the household income
verification requirements in order to treat consumers more equitably,
help ensure continuous coverage, and strengthen the risk pool. If the
proposed changes are finalized, Exchanges would utilize only data from
the IRS to determine if income is inconsistent and would accept
attestation when tax return data is requested from IRS but not
returned. In cases where the IRS returns tax data that reflects that
the attested projected annual household income is not an accurate
projection of the tax filer's household income, Exchanges would
continue existing operations. Additionally, Exchanges would utilize the
additional time provided to work with consumers to submit documentation
to verify their projected annual household income. While the increased
protection for consumers from loss of eligibility for APTC could
present a program integrity risk, households are required to provide
true answers to application questions under penalty of perjury.
Additionally, HHS does not believe that individuals with a mismatch due
to situations such as family size change have a greater incentive to
misreport income than their counterparts, given that changes in family
size and other changes in circumstances are unlikely to be correlated
with income misreporting incentives. HHS will continue to engage with
partners to evaluate the impact of this proposal on APTC accuracy.
We seek comment on these proposals.
6. Annual Eligibility Redetermination (Sec. 155.335)
We propose amending Sec. 155.335(j)(1) and (2) to allow Exchanges,
beginning for PY 2024, to modify their re-enrollment hierarchies such
that enrollees who are eligible for CSRs in accordance with Sec.
155.305(g) and who would otherwise be automatically re-enrolled in a
bronze-level QHP without CSRs, to instead be automatically re-enrolled
in a silver-level QHP (with income-based CSRs) in the same product with
a lower or equivalent premium (after APTC), provided that certain
conditions are met.\160\ Furthermore, we propose to amend the Exchange
re-enrollment hierarchy to allow all Exchanges (Exchanges on the
Federal platform and SBEs) to ensure enrollees whose QHPs are no longer
available to them and enrollees who would be re-enrolled into a silver-
level QHP in order to receive income-based CSRs are re-enrolled into
plans with the most similar network to the plan they had in the
previous year, provided that certain conditions are met. To honor other
criteria the enrollee may have used to make the original selection, we
propose to limit re-enrollment of such enrollees into plans offered by
the same issuer and of the same product if the enrollee's plan and
product remains available through the Exchange for renewal consistent
with Sec. 147.106. We propose that Exchanges (including Exchanges on
the Federal platform and SBEs) would implement this option beginning
with the open enrollment period for plan year 2024 coverage, if
operationally feasible, and if not then beginning with the open
enrollment period for plan year 2025 coverage.
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\160\ Under Sec. 144.103, a product is defined as a discrete
package of health insurance coverage benefits that are offered using
a particular product network type (such as health maintenance
organization, preferred provider organization, exclusive provider
organization, point of service, or indemnity) within a service area.
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The re-enrollment hierarchy previously prioritized placing an
enrollee in a similar metal level; however, HHS now believes other
factors, such as access to income-based CSRs and net premium (that is,
premium minus the APTC), should also be taken into account. As
discussed later, HHS is considering whether for future years it would
be appropriate to modify the re-enrollment process to incorporate both
net premium and out-of-pocket costs attributable to cost sharing
(referred to in this preamble as total out-of-pocket cost) when both
directing re-enrollment to a plan at the same metal level as the
enrollee's current QHP and directing re-enrollment to a plan at a
higher metal level than the enrollee's current QHP in all
Exchanges.\161\ \162\
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\161\ As defined at Sec. 155.20, cost sharing means any
expenditure required by or on behalf of an enrollee with respect to
essential health benefits; such term includes deductibles,
coinsurance, copayments, or similar charges, but excludes premiums,
balance billing amounts for non-network providers, and spending for
non-covered services.
\162\ Total out-of-pocket costs could also include balance
billing amounts, but for purposes of this preamble, we use the term
total out-of-pocket costs to refer to net premium and out-of-pocket
costs attributable to amounts such as coinsurance, copayments, and
deductibles.
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In the 2014 Patient Protection and Affordable Care Act; Annual
Eligibility Redeterminations for Exchange Participation and Insurance
Affordability Programs; Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges (79 FR
52994, 52998 through 53001), we established the Exchange re-enrollment
hierarchy at Sec. 155.335(j) with the goal of ensuring continuous
coverage for consumers who opt not to make an active plan selection for
the upcoming year. In paragraph (j)(1), we finalized that if an
enrollee remains eligible for enrollment in a QHP through the Exchange
upon annual redetermination, and the product under which the QHP in
which the enrollee was enrolled remains available for renewal,
consistent with Sec. 147.106, such enrollee will have his or her
enrollment in a QHP through the Exchange under the product renewed
unless he or she terminates coverage, including termination of coverage
in connection with voluntarily selecting a different QHP, in accordance
with Sec. 155.430. We further finalized that the QHP in which the
enrollee's coverage will be renewed will be selected according to the
following order of priority: (1) in the same plan as the enrollee's
current QHP, unless the current QHP is not available through the
Exchange; (2) if the enrollee's current QHP is not available, the
enrollee's coverage will be renewed in a QHP at the same metal level as
the enrollee's current QHP within the same product; (3) if the
enrollee's current QHP is not available through the Exchange and the
enrollee's product no longer includes a QHP at the same metal level as
the enrollee's current QHP, the enrollee's coverage will be renewed in
a plan that is one metal level higher or lower than the enrollee's
current QHP (with the exception of when the enrollee's current QHP is a
silver level
[[Page 78260]]
plan); or (4) if the enrollee's current QHP is not available through
the Exchange and the enrollee's product no longer includes a QHP that
is at the same metal level as, or one metal level higher or lower, than
the enrollee's current QHP, the enrollee's coverage will be renewed in
any other QHP offered under the product in which the enrollee's current
QHP is offered in which the enrollee is eligible to enroll.\163\
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\163\ Under Sec. 155.335(j)(1)(iii)(A), if the enrollee's
current QHP is not available through the Exchange and the enrollee's
product no longer includes a QHP at the same metal level as the
enrollee's current QHP and the enrollee's current QHP is a silver
level plan, the enrollee will be re-enrolled in a silver level QHP
under a different product offered by the same QHP issuer that is
most similar to the enrollee's current product. If no such silver
level QHP is available for enrollment through the Exchange, the
enrollee's coverage will be renewed in a QHP that is one metal level
higher or lower than the enrollee's current QHP under the same
product.
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Under paragraph (j)(2), we finalized standards to address re-
enrollment in situations in which no plans under the product under
which an enrollee's QHP is offered are available through the Exchange
for renewal. In this situation, the enrollee may be enrolled in a QHP
under a different product offered by the same issuer, to the extent
permitted by applicable State law, unless the enrollee terminates
coverage including termination of coverage in connection with
voluntarily selecting a different QHP. In such cases, the re-enrollment
will occur according to the following order of priority: (1) in a QHP
through the Exchange at the same metal level as the enrollee's current
QHP in the product offered by the same issuer that is the most similar
to the enrollee's current product; (2) if the issuer does not offer
another QHP through the Exchange at the same metal level as the
enrollee's current QHP, the enrollee will be re-enrolled in a QHP
through the Exchange that is one metal level higher or lower than the
enrollee's current QHP in the product offered by the same issuer
through the Exchange that is the most similar to the enrollee's current
product; or (3) if the issuer does not offer another QHP through the
Exchange at the same metal level as, or one metal level higher or lower
than the enrollee's current QHP, the enrollee will be re-enrolled in
any other QHP offered through the Exchange by the same issuer in which
the enrollee is eligible to enroll.
In the 2017 Payment Notice (81 FR 12203), we finalized the rule to
provide for automatic re-enrollment in a QHP offered by another issuer
through the Exchange in order to maintain coverage with APTC and
income-based CSRs for the majority of Exchange enrollees who are
receiving these subsidies, as opposed to permitting a QHP issuer that
no longer has a QHP available to an enrollee through an Exchange to re-
enroll the enrollee outside the Exchange. Specifically, we established
that, beginning in PY 2017, if no QHP from the same issuer is available
to enrollees through the Exchange, the Exchange could direct alternate
enrollments for such enrollees to the extent permitted by applicable
State law into a QHP from a different issuer. In such cases, the re-
enrollment will occur as directed by the applicable State regulatory
authority, or, if the applicable State regulatory authority declines to
direct this activity, such alternate enrollments would be directed by
the Exchange. This rule provides considerable flexibility to Exchanges
to specify the logic that will be used to assign enrollees in this
situation to specific plans.
In the 2023 Payment Notice (87 FR 27208, 27273), HHS announced it
would consider proposing amendments to the Exchange re-enrollment
hierarchy in future rulemaking and would take into account comments
received. In the preamble to the 2023 Payment Notice proposed rule (87
FR 584, 652), we solicited comments on incorporating the net premium,
maximum out-of-pocket amount (MOOP), deductible, and total out-of-
pocket cost of a plan into the Exchange re-enrollment hierarchy.\164\
We also solicited comments on additional criteria or mechanisms HHS
could consider to ensure that the Exchange hierarchy for re-enrollment
aligns with plan generosity and consumer needs (87 FR at 652).
Additionally, we sought comment on the following examples: (1) re-
enrolling a current bronze QHP enrollee into an available silver QHP
with a lower net premium and higher plan generosity (that is, a higher
metal level) offered by the same QHP issuer; and (2) re-enrolling a
current silver QHP enrollee into another available silver QHP, under
the enrollee's current product and with a service area that is serving
the enrollee that is issued by the same QHP issuer, which has lower
total out-of-pocket cost (87 FR at 652). As described in further detail
later, we propose to codify example (1) described above by amending
Sec. 155.335(j)(1) and (2) to allow Exchanges, beginning for PY 2024,
to modify their re-enrollment hierarchies such that enrollees who are
eligible for CSRs in accordance with Sec. 155.305(g) and who would
otherwise be automatically re-enrolled in a bronze-level QHP without
CSRs, would instead be automatically re-enrolled in a silver-level QHP
(with income-based CSRs) in the same product with a lower or equivalent
premium after APTC. We believe initially limiting the scope to only
income-based CSR-eligible enrollees who are currently in a bronze QHP
and have a lower cost silver CSR QHP available would allow issuers and
Exchanges to incrementally update their processes, as opposed to
incorporating net premium and out-of-pocket cost (OOPC) throughout the
hierarchy for PY 2024.
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\164\ MOOP refers to the limit on cost sharing an enrollee has
to pay for covered services in a plan year. After the enrollee
spends this amount on cost sharing for in-network essential health
benefits, the health plan pays 100 percent of the costs of covered
essential health benefits. For purposes of this section of preamble,
the term total out-of-pocket costs refers to net premium and out-of-
pocket costs attributable to cost sharing and excludes any costs
attributable to balance billing.
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We received substantial comments from diverse interested parties
and have carefully considered these comments. Several commenters
encouraged HHS to take net premium or total out-of-pocket cost into
account for the re-enrollment hierarchy. Many commenters supported
amending Sec. 155.335(j)(1)(i) to allow the enrollee to be re-enrolled
into a different plan with a lower net premium and higher generosity if
there is no change in the issuer, product, service area, and provider
network. Some commenters raised concerns with Sec. 155.335(j)(1)(ii)
through (iv) and (j)(2)(iii), which outline the re-enrollment rules
when an enrollee's current QHP is no longer available, since they allow
consumers to be re-enrolled in a plan with far higher costs if the
issuer and provider networks types are prioritized. Commenters
explained that the current policy does not provide flexibility for
enrollees to be re-enrolled into a different plan even if a change in
market conditions has significantly raised the old plan's cost to the
enrollees. Further, commenters stated that the majority of enrollees
who do not shop at all during the Open Enrollment Period (OEP) care
more about cost than the issuer or provider network. More specifically,
commenters cited research on plans sold through Covered California that
showed, on average, families in California were charged an extra $466 a
year in annual premiums as a result of remaining with a plan that no
longer served their interests. Commenters stated that including total
out-of-pocket cost and plan generosity into re-enrollment rules would
be particularly beneficial for situations when enrollees are eligible
for
[[Page 78261]]
cost-sharing reductions and are not enrolled in a silver plan.
Commenters also recommended that provider network considerations be
incorporated into any revised re-enrollment hierarchy. Specifically,
commenters explained that a revised hierarchy that does not incorporate
provider networks could result in enrollees losing access to their
providers, increased out-of-network costs, and/or being placed in
narrower network plan. Some commenters urged the Exchange to provide
accessible notices and reasonable opportunities for the consumer to
return to their former plan or drop coverage. Commenters also mentioned
the importance of enhancing the consumer shopping experience and
decision support tools to improve consumer understanding, particularly
around cost sharing. In the 2023 Payment Notice, HHS did not finalize
any changes to Sec. 155.335(j).
HHS is aware of interested parties' concerns that enrollees in the
Exchanges on the Federal platform may fail to return to the Exchange to
make an active plan selection in situations in which changing plans
could be beneficial to the enrollee, and that re-enrollment rules may
default enrollees into less beneficial plans than other available
plans. Currently, the Federal hierarchy for re-enrollment ensures an
enrollee's coverage will be renewed in the same plan as the enrollee's
current QHP, unless the current QHP is not available through the
Exchange. If the enrollee's current QHP is no longer available through
the Exchange, the Federal hierarchy prioritizes the same metal level
and product network type in order to determine the most similar plans
within the same service area. However, if that is not an option, an
enrollee will be re-enrolled in a QHP that is one metal level lower or
higher within the same service area (with the exception of silver
plans). In the 2022 OEP, 28 percent of returning Exchange enrollees
using the HealthCare.gov platform were auto re-enrolled.\165\
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\165\ CMS (2021, April 21). 2022 Marketplace Open Enrollment
Public Use Files. https://www.cms.gov/research-statistics-data-systems/marketplace-products/2021-marketplace-open-enrollment-period-public-use-files.
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The current hierarchy assumes that the same metal level would be
least disruptive to enrollees in terms of premium and coverage.
However, in some instances it may be to the enrollee's advantage to
move to a different metal level. For example, for PY 2022,
approximately 110,000 consumers who were automatically re-enrolled also
had available to them a plan at one metal level higher than their
current plan in the same product from the same issuer with the same
network that had a lower net premium \166\ More specifically,
approximately 38,000 consumers who were automatically re-enrolled into
bronze plans also had available a silver-level plan in the same product
from the same issuer with the same network that had lower total costs.
Furthermore, the Federal hierarchy does not consider the availability
of lower premium plans at the same metal level under the same product
as the enrollee's current QHP. Directing re-enrollment into lower or
same cost, higher metal level plans would place enrollees in more
affordable plans with lower out-of-pocket costs, which would lower
health insurance costs for those lower-income (CSR-eligible)
individuals. Currently, a large majority of Hispanic, Black, and Asian
enrollees using the HealthCare.gov platform are in the 94 or 87 percent
CSR-eligible populations (68, 66, and 62 percent, respectively).\167\
As such, re-enrolling enrollees who would otherwise be automatically
re-enrolled in a bronze-level QHP without CSRs, into a silver-level QHP
(with income-based CSRs) may also improve coverage and affordability
for racial and ethnic minorities. Interested parties have emphasized
the critical importance of automatic re-enrollment policies for
immigrants and racial and ethnic minorities who may face greater
challenges in understanding and accessing the active re-enrollment
process, and who are disproportionately impacted by cost increases due
often to lower wealth and discretionary income. While the vast majority
of re-enrollees through HealthCare.gov actively select a plan for the
upcoming year during the open enrollment period, some remain in their
auto re-enrollment plan.
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\166\ CMS. (2022). Internal Eligibility and Enrollment Data.
\167\ CMS. (2021, October). Internal Eligibility and Enrollment
Data.
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We are aware that some number of enrollees who are automatically
re-enrolled are eligible for income-based CSRs (or become eligible for
these CSRs through the annual redetermination process under this
section), but remain enrolled in a bronze-level QHP, under which they
cannot receive income-based CSRs. Further, we know that in some cases,
a silver-level QHP in the same product, with the same issuer and
network and lower or equivalent premiums, is available. In order to
assist these enrollees in obtaining access to income-based CSRs given
their eligibility, and without additional net premium, we propose
revisions at Sec. 155.335(j). All of these considerations informed our
decision to propose the following revisions to the re-enrollment
hierarchy at Sec. 155.335(j), as well as our specific approach for
implementing these requirements.
We propose revising Sec. 155.335(j)(1)(i) and adding paragraphs
(j)(1)(i)(A), (B), and (C) to amend the Exchange re-enrollment
hierarchy for enrollment in coverage beginning in PY 2024.
Specifically, we propose that, if the enrollee's current QHP is
available and: (1) the enrollee is not CSR-eligible, in accordance with
Sec. 155.305(g), the Exchange will re-enroll the enrollee in the same
plan as the enrollee's current QHP (paragraph (j)(1)(i)(A)); (2) the
enrollee is CSR-eligible, in accordance with Sec. 155.305(g), and the
enrollee's current QHP is a bronze level plan, the Exchange will re-
enroll the enrollee either in the same plan as the enrollee's current
QHP, or, at the option of the Exchange, in a silver level QHP within
the same product that has a lower or equivalent premium after APTC and
that has the most similar network compared to the enrollee's current
QHP (paragraph (j)(1)(i)(B)); and (3) the enrollee is CSR-eligible, in
accordance with Sec. 155.305(g), and the enrollee's current QHP is not
a bronze level plan, the Exchange will re-enroll the enrollee in the
same plan as the enrollee's current QHP (paragraph (j)(1)(i)(C)). With
respect to current operations, the only effective change to the re-
enrollment hierarchy would be the change proposed in paragraph
(j)(1)(i)(B). HHS does not propose to shift enrollment out of the
enrollee's current product or issuer if the enrollee's current product
and/or issuer are available through the Exchange. We believe retaining
coverage in the enrollee's current product when available is important
in order to honor the various criteria the enrollee may have used to
make the original selection and ensure there is no disruption to the
enrollee's benefit coverage, such as the product network type (for
example, HMO, PPO, etc.) and covered items and services. Furthermore,
we believe it is of particular importance to ensure the enrollee's
specific provider coverage is maintained beyond a product's provider
network type when the enrollee is being auto re-enrolled into a
different QHP than their current QHP.
We also propose amending paragraphs (j)(1)(ii) through (iv), which
outline the steps for re-enrollment determinations when the enrollee's
current QHP is no longer available and the enrollee's current product
is still available through the Exchange for renewal. Specifically, we
propose revising paragraph (j)(1)(ii) by adding
[[Page 78262]]
paragraphs (j)(1)(ii)(A), (B), and (C) to specify for enrollment in
coverage beginning in PY 2024, that if the enrollee's current QHP is
not available through the Exchange and: (1) the enrollee is not CSR-
eligible, in accordance with Sec. 155.305(g), the Exchange will re-
enroll the enrollee in a QHP within the same product, at the same metal
level and that has the most similar network compared to the enrollee's
current QHP (paragraph (j)(1)(ii)(A)); (2) the enrollee is CSR-
eligible, in accordance with Sec. 155.305(g), and the enrollee's
current QHP is a bronze level plan, the Exchange will re-enroll the
enrollee in a bronze level QHP within the same product, or, at the
option of Exchange, in a silver level QHP within the same product that
has a lower or equivalent premium after APTC and that has the most
similar network compared to the enrollee's current QHP (paragraph
(j)(1)(ii)(B)); and (3) the enrollee is CSR-eligible, in accordance
with Sec. 155.305(g), and the enrollee's current QHP is not a bronze
level plan, the Exchange will re-enroll the enrollee in a QHP within
the same product at the same metal level and that has the most similar
network compared to the enrollee's current QHP (paragraph
(j)(1)(ii)(C)).
We also propose amending paragraphs (j)(1)(iii)(A) through (B),
which outline the re-enrollment rules when the enrollee's current QHP
is not available through the Exchange and the enrollee's product no
longer includes a QHP at the same metal level as the enrollee's current
QHP. Specifically, we propose, beginning for PY 2024, amending
paragraphs (j)(1)(iii)(A) and (B) to require if: (1) the enrollee's
current QHP is a silver level plan, the Exchange will re-enroll the
enrollee in a silver level QHP under a different product offered by the
same QHP issuer that is most similar to and that has the most similar
network compared to the enrollee's current product; if no such silver
level QHP is available for enrollment through the Exchange, the
Exchange will re-enroll the enrollee in a QHP under the same product
that is one metal level higher or lower than the enrollee's current QHP
and that has the most similar network compared to the enrollee's
current QHP (paragraph (j)(1)(iii)(A)); and (2) the enrollee's current
QHP is not a silver level plan, the Exchange will re-enroll the
enrollee in a QHP under the same product that is one metal level higher
or lower than the enrollee's current QHP and that has the most similar
network compared to the enrollee's current QHP (paragraph
(j)(1)(iii)(A)).
We propose amending paragraph (j)(1)(iv), which outlines the re-
enrollment rules when the enrollee's current QHP is not available
through the Exchange and the enrollee's product no longer includes a
QHP at the same metal level as, or one metal level higher or lower
than, the enrollee's current QHP. We propose, adding to paragraph
(j)(1)(iv) which would provide, beginning for PY 2024, if the
enrollee's current QHP is not available through the Exchange and the
enrollee's product no longer includes a QHP that is at the same metal
level as, or one metal level higher or lower than the enrollee's
current QHP, the Exchange will re-enroll the enrollee in any other QHP
offered under the product in which the enrollee's current QHP is
offered in which the enrollee is eligible to enroll that has the most
similar network compared to the enrollee's current QHP.
We propose amending paragraphs (j)(2)(i) through (iii), which
outlines the re-enrollment rules when the enrollee's current product is
no longer available through the Exchange for renewal. Specifically, we
propose to amend paragraph (j)(2)(i) to provide, beginning for the PY
2024, that if the enrollee is not CSR eligible, the Exchange will re-
enroll the enrollee in a QHP in the product offered by the same issuer
that is the most similar to the enrollee's current product at the same
metal level as and with the most similar network compared to the
enrollee's current QHP. We propose revising and redesignating paragraph
(j)(2)(ii) as paragraph (j)(2)(iv), which would require, if the issuer
does not offer another QHP at the same metal level as the enrollee's
current QHP, the Exchange will re-enroll the enrollee in a QHP that is
one metal level higher or lower than the enrollee's current QHP and
that has the most similar network compared to the enrollee's current
QHP in the product offered by the same issuer through the Exchange that
is the most similar to the enrollee's current product. We propose to
add a new paragraph (j)(2)(ii) to establish that if the enrollee is
CSR-eligible, in accordance with Sec. 155.305(g), and the enrollee's
current QHP is a bronze level plan, the Exchange will re-enroll the
enrollee in a bronze level QHP, or, at the option of the Exchange, in a
silver level QHP that has a lower or equivalent premium after APTC and
that has the most similar network compared to the enrollee's current
QHP in the product offered by the same issuer through the Exchange that
is most similar to the enrollee's current product.
We also propose, beginning for PY 2024, revising and redesignating
paragraph (j)(2)(iii) as paragraph (j)(2)(v), which would state that if
the issuer does not offer another QHP through the Exchange at the same
metal level as, or one metal level higher or lower than the enrollee's
current QHP, the Exchange will re-enroll the enrollee in any other QHP
offered by the same issuer in which the enrollee is eligible to enroll
in the product that is most similar to the enrollee's current product
and in a QHP within that product that has the most similar network to
the enrollee's current QHP. Lastly, we propose to add a new paragraph
(j)(2)(iii) to establish that if the enrollee is CSR-eligible, in
accordance with Sec. 155.305(g), and the enrollee's current QHP is not
a bronze level plan, the Exchange will re-enroll the enrollee in a QHP
at the same metal level that has the most similar network compared to
the enrollee's current QHP in the product offered by the same issuer
that is the most similar to the enrollee's current product.
We believe that enrollees are best able to make plan selections
themselves, and outreach from the Exchanges on the Federal platform
always encourages enrollees to actively return, provide their latest
eligibility information, and shop and compare Exchange plans to make
the selection that best meets their needs. Income-based CSR-eligible
enrollees in Exchanges on the Federal platform who are subject to the
proposed policy would receive a notice from the Exchange advising them
that they will be re-enrolled into a silver plan if they do not make an
active selection on or before December 15th, and would also see the
silver plan highlighted in the online shopping experience if they
return on or before December 15th to review their options. The notice
would also inform the enrollee that if they prefer to keep their bronze
plan, they can actively select it through December 15th, for an
effective date of January 1st. Enrollees in Exchanges on the Federal
platform who do not make an active selection on or before December 15th
would receive an additional communication from the Exchange after
December 15th reminding them of their new plan enrollment for January
1st, as well as their ability to make a different plan selection by
January 15th that would be effective starting February 1st.
This proposal is consistent with the 2014 Patient Protection and
Affordable Care Act; Annual Eligibility Redeterminations for Exchange
Participation and Insurance Affordability Programs; Health
[[Page 78263]]
Insurance Issuer Standards Under the Affordable Care Act, Including
Standards Related to Exchanges (79 FR 52994, 53001) explanation of the
guaranteed renewability provisions at Sec. 147.106. If a product
remains available for renewal, including outside the Exchange, the
issuer must renew the coverage within the product in which the enrollee
is currently enrolled at the option of the enrollee, unless an
exception to the guaranteed renewability requirements applies. However,
to the extent that the issuer is subject to Sec. 155.335(j) with
regard to an enrollee's coverage through the Exchange, the issuer must,
subject to applicable State law regarding automatic re-enrollments,
automatically enroll the enrollee in accordance with the re-enrollment
hierarchy, even where that results in re-enrollment in a plan under a
different product offered by the same QHP issuer through the Exchange.
Enrollments completed pursuant to Sec. 155.335(j) will be considered
to be a renewal of the enrollee's coverage, provided the enrollee also
is given the option to renew coverage within his or her current product
outside the Exchange. This proposal is intended to provide greater
financial security to bronze plan enrollees who do not actively re-
enroll and may not be aware that a more generous silver plan at the
same or lesser cost may be available with dramatically more costs
covered by the plan. Additionally, some of these consumers may have
been initially enrolled before more generous APTC became available with
the passage of the ARP,\168\ and may not have been initially income-
based CSR-eligible when they first enrolled, or may have been helped by
an agent, broker or assister who did not adequately explain the
benefits of silver enrollment for CSR-eligible enrollees. This proposal
would assist bronze enrollees who may be less engaged and are not aware
that a more generous version of their plan was available at the same or
lesser cost.
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\168\ With the passage of the IRA, these enhanced subsidies have
been extended for an additional three years (through 2025).
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Additionally, we note that HHS is not proposing any changes to SEP
eligibility or duration in connection with the proposed changes at
Sec. 155.335(j). Currently, under Sec. 155.420(d)(1)(i), a qualified
individual is eligible for a SEP to enroll in or change from one QHP to
another if the qualified individual loses MEC, which includes when an
enrollee's current product is no longer available for renewal. As such,
it is not considered a loss of MEC when an enrollee is re-enrolled from
a bronze QHP to a silver QHP within the same product and their current
plan is still available. We also note that consistent with longtime
binder payment policy for Exchange enrollees, auto re-enrollment into a
different plan or product with the same issuer that offers their
current plan would not require enrollees with already effectuated
coverage to make a new binder payment. This means, for example, that a
CSR-eligible bronze plan enrollee receiving APTC who is auto re-
enrolled in a silver plan offered by the same issuer as their current
bronze plan would enter the 3-month APTC grace period if they were late
on paying for January coverage in the future year.\169\
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\169\ Please refer to the following for further explanation on
binder payments and re-enrollment: CMS. (2022, July 28). 2022
Federally-facilitated Exchange (FFE) and Federally-facilitated Small
Business Health Options Program (FF-SHOP) Enrollment Manual.
(Exhibit 12, pp. 33-37, and p. 87). https://www.hhs.gov/guidance/document/2022-enrollment-manual.
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We acknowledge the operational complexities issuers and States may
face as a result of these proposed changes. Issuers would continue to
identify the re-enrollment plan for all enrollees still served by the
issuer in the new plan year, except that the Exchange would identify
the silver re-enrollment plan for bronze enrollees if those enrollees
were redetermined CSR eligible in accordance with Sec. 155.305(g). In
order to ensure enrollees are auto re-enrolled in a plan with the most
similar network to their current QHP, in the situations where the
enrollee would not be auto re-enrolled into their current QHP, HHS
would place enrollees into a plan with the same network ID as their
current QHP, if possible. Similar to the current Plan ID Crosswalk
process, issuers would be able to submit justifications for HHS review
if they believed a different network ID in the following plan year had
the most similar network to the enrollee's current QHP.\170\ Exchanges
and State regulators would have a more complicated analysis in assuring
that the issuer-identified re-enrollment plan was consistent with the
proposed premium and network requirements at Sec. 155.335(j). However,
we believe incorporating net premium and provider networks into re-
enrollment determinations would help ensure the hierarchy for re-
enrollment in all Exchanges takes into account plan generosity and
consumer needs beyond merely the retention of the most similar plan
available. The Exchanges would need to develop new Exchange notices to
provide the enrollees advance and sufficient notice that their plan
will change unless they return during open enrollment, and would seek
to improve other existing notices, as applicable, to improve
transparency and enrollees' understanding of their re-enrollment
options. We believe it is important to ensure re-enrollment rules
default consumers into lower-cost or more generous plans; promote
consumer access to affordable, high-quality coverage; and increase
consumer understanding of their re-enrollment options by developing
additional consumer notices and guidance.
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\170\ CMS (2022). Qualified Health Plan Certification Website.
https://www.qhpcertification.cms.gov/s/Plan%20Crosswalk.
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We seek comment on this proposal. We also seek comments on using
network IDs to determine the most similar network. Consistent with the
definition of a product at Sec. 144.103, the product ID accounts for
different product network types (for example, HMO, PPO, etc.) whereas
network IDs account for specific provider differences. As discussed
earlier, in situations where the enrollee would not be auto re-enrolled
into their current QHP, HHS intends to place enrollees into a plan with
the same network ID as their current QHP to ensure enrollee are being
auto re-enrolled into plans with the most similar network. We
particularly solicit comments on how States review network IDs and the
criteria or thresholds States use to determine whether a new network ID
is warranted, for example, whether States require that an issuer create
a new network ID if there is a five percent difference in the providers
covered under a network.
Additionally, HHS is considering whether for future years it would
be appropriate to incorporate net premium and total out-of-pocket cost
throughout the Exchange re-enrollment hierarchy. We solicit comments on
amending the hierarchy at Sec. 155.335(j), for future plan years, to
also allow the Exchange take the following actions in the following
circumstances: (1) if the enrollee's current plan is not available,
regardless of income-based CSR eligibility, direct re-enrollment to a
plan at a higher metal level than their current QHP, with a lower or
equivalent net premium and total out-of-pocket cost, within the same
product, network, and QHP issuer; (2) if the enrollee's current plan is
not available and the enrollee does not have a plan at a higher metal
level than their current QHP with a lower or equivalent net premium and
total out-of-pocket cost, regardless of income-based CSR eligibility,
direct re-enrollment to a plan at the same metal level as their current
QHP, with a lower or equivalent net premium and total out-of-pocket
cost, within the same product, network, and
[[Page 78264]]
QHP issuer; and (3) if a plan at the same metal level as their current
QHP is not available and the enrollee is not income-based CSR eligible,
direct re-enrollment to a QHP that is one metal level higher or lower
than the enrollee's current QHP, with a lower or equivalent net premium
and total out-of-pocket cost, under the same product, network, and
issuer. For example, an Exchange could consider re-enrolling a current
gold QHP enrollee into another available gold QHP, within the
enrollee's service area and current product that is issued by the same
QHP issuer that has a lower or equivalent net premium and out-of-pocket
cost. We also solicit comments on re-enrolling consumers into the
lowest cost silver plan in the following year if the consumer chose the
lowest cost silver plan in the current plan year. Due to operational
complexities, we seek comment on whether the actuarial value (AV) of a
plan should be used as a proxy for estimating the total costs that an
enrollee may be subject to under a given plan.\171\ Specifically, we
solicit comments on whether the Exchange should ensure that the net
premium of the higher AV plan is less than or equal to the net premium
of the default plan or use net premium and total out-of-pocket cost
calculations to determine if enrollees should be upgraded to a higher
metal level in future plan years.
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\171\ Actuarial value refers to the percentage of total average
costs for covered benefits that a plan will cover. However, the
enrollee could be responsible for a higher or lower percentage of
the total costs of covered services for the year, depending on their
actual health care needs and the terms of the insurance policy.
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We also seek comments on whether 73 percent CSR plan variation-
eligible enrollees should be re-enrolled into silver plan variations or
gold level plans since in some cases gold plans may be more affordable
than silver plan variations for 73 percent CSR-eligible enrollees.
Additionally, we solicit comments on the States' process for
calculating total out-of-pocket cost to understand if, and to what
extent, the States' methodology for calculating total out-of-pocket
costs vary. Furthermore, we solicit comment on whether the re-
enrollment hierarchy should also factor in potential out-of-pocket
costs, not attributable to cost sharing, such as balance billing, and
if so, how.
HHS also seeks broad comment on alternative auto-enrollment
policies that we should consider in future years.\172\ For example, we
are curious about interested parties' thoughts on an auto-enrollment
policy under which consumers who have entered delinquency on their QHP
premiums would be auto-enrolled into QHPs with no net premium after
application of APTC (referred to as zero-dollar plans). In accordance
with Sec. Sec. 155.430(b)(2)(ii) and 156.270, a QHP/SADP may terminate
an enrollee's coverage for non-payment of premiums, subject to certain
conditions. Specifically, Sec. 156.270(d) requires issuers to observe
a three-consecutive-month grace period before terminating coverage for
those enrollees who are eligible for, and have elected to receive, APTC
and who, upon failing to timely pay their premiums, are receiving APTC.
Research suggests that even small net premiums can significantly
decrease enrollment and that this could be because paying even a small
premium requires enrollees to take additional action.\173\ \174\
Enrollees may experience life changes that make it challenging to pay
their monthly premiums on an ongoing basis. Currently, the Exchanges on
the Federal platform only track nonpayment once the three-month APTC
grace period has expired, and do not know when the enrollee first
becomes delinquent on payment of premiums. Since providers are notified
when an individual is in the second and third month of the grace
period, they know that claims may not be paid and may require that the
enrollee pay in full at the point of service. A potential challenge
with auto enrolling enrollees into zero-dollar premium plans, with
retroactive coverage, if they go into delinquency is that re-processing
any claims for those enrollees able to self-pay during the pended
months would be difficult if the zero-dollar premium auto-assignment
was to the original issuer and would be especially burdensome if the
new plan was issued by another issuer. We solicit comments on if auto
enrolling enrollees into zero-dollar premium plans if they go into
delinquency should be prospective or retroactive. In order to mitigate
the barriers enrollees face to enroll, effectuate, and maintain
coverage, HHS is considering enrolling consumers who enter delinquency
into zero-dollar plans.
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\172\ HHS seeks comment on all auto-enrollment policies that
could better ensure consumer's continuous access to health coverage,
including policies that may require additional grants of authority
from Congress to HHS.
\173\ Fiedler, M., & McIntyre, A. (2022, September 13). Tweaking
the marketplace enrollment process could magnify effects of larger
premium tax credits. Brookings. https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2022/09/13/tweaking-the-marketplace-enrollment-process-could-magnify-effects-of-larger-premium-tax-credits/.
\174\ Drake, C., Cai, S., Anderson, D., and Sacks, D. (2021,
October 22). Financial Transaction Costs Reduce Benefit Take-Up:
Evidence from Zero-Premium Health Plans in Colorado. SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3743009.
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We also solicit comments on enrolling consumers into zero dollar
plans if they fail to make a binder payment. Sometimes QHP applicants
select plans, but fail to make a binder payment to effectuate coverage,
and thus have their coverage canceled by the issuer. As mentioned
previously in this proposed rule, enrollees face non-financial burdens
that cause them to miss these payments or in some cases fail to
complete the enrollment process. As such, it is likely that by
alleviating or eliminating these non-financial burdens, some enrollees
would choose to enroll in coverage. We request comments on these
proposals.
7. Special Enrollment Periods (Sec. 155.420)
a. Use of Special Enrollment Periods by Enrollees
We propose two technical corrections to Sec. 155.420(a)(4)(ii)(A)
and (B) to align the text with Sec. 155.420(d)(6)(i) and (ii). The
proposed revisions would clarify that only one person in a tax
household applying for coverage or financial assistance through the
Exchange must qualify for a special enrollment period under paragraphs
(d)(6)(i) and (ii) in order for the entire household to qualify for the
special enrollment period.
As discussed in previous rulemaking, certain SEPs under Sec.
155.420(d) are available to an entire tax household applying for
coverage or financial assistance through the Exchange when a qualified
individual or the qualified individual's dependent satisfies specified
requirements (rather than when the qualified individual and the
qualified individual's dependent satisfy such requirements).\175\ In
the 2022 Payment Notice (86 FR 24140), we finalized revisions to Sec.
155.420(a)(4)(ii)(C) to update the language from ``if an enrollee and
his or her dependents'' to ``if an enrollee or his or her dependents''
to align with the regulatory text for triggering events under Sec.
155.420(d)(6)(i) and (ii), but we neglected to propose and finalize
similar but necessary changes to the text of Sec. 155.420(a)(4)(ii)(A)
and (B) and noted that we intended to propose these changes in future
rulemaking. Therefore, to align the text of Sec. 155.420(a)(4)(ii)(A)
and (B) with the triggering event provisions under Sec.
155.420(d)(6)(i) and (ii), we are
[[Page 78265]]
proposing two technical corrections to Sec. 155.420(a)(4)(ii)(A) and
(B) by updating the sentence at paragraph (a)(4)(ii)(A) from ``if an
enrollee and his or her dependents'' to ``if an enrollee or his or her
dependents'' and by updating the sentence at paragraph (a)(4)(ii)(B)
from ``if an enrollee and his or her dependents'' to ``if an enrollee
or his or her dependents.'' Because these are two technical changes, we
do not anticipate that it will impact Exchanges' operations or
messaging.
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\175\ See 78 FR 42262. Also, the 2017 Market Stabilization Rule
used the phrase ``if an enrollee or his or her dependent'' when
describing the rule that would be finalized at what is now paragraph
Sec. 155.420(a)(4)(ii)(A), See 82 FR 18359.
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We seek comment on this proposal.
b. Effective Dates for Qualified Individuals Losing Other Minimum
Essential Coverage (Sec. 155.420(b))
We are proposing amendments to the coverage effective date rules at
Sec. 155.420(b)(2)(iv) to permit Exchanges the option to offer earlier
coverage effective start dates for consumers attesting to a future loss
of MEC. Doing so could mitigate coverage gaps when consumers lose forms
of MEC (other than Exchange coverage) mid-month and allow for more
seamless transitions from other coverage to Exchange coverage. We are
aware that consumers may face gaps in coverage because current coverage
effective date rules do not allow for retroactive or mid-month coverage
effective dates for consumers whose other coverage ends mid-month.
Under current rules, the earliest start date for Exchange coverage is
the first day of the month following the date of loss of MEC. We are
aware that in some States, Medicaid or CHIP is regularly terminated
mid-month, so we are soliciting input on whether the proposed change
would help consumers, especially those impacted by Medicaid/CHIP
unwinding, to seamlessly transition from another form of MEC to
Exchange coverage.
Consumers losing MEC, such as coverage through an employer,
Medicaid, or CHIP, already qualify for a special enrollment period
under Sec. 155.420(d)(1) and may report a loss of MEC to Exchanges and
select a QHP up to 60 days before or 60 days after their loss of MEC.
Exchanges must generally provide a regular coverage effective date as
described in Sec. 155.420(b)(1): for a QHP selection received by the
Exchange between the 1st and the 15th day of any month, the Exchange
must ensure a coverage effective date of the 1st day of the following
month; and for a QHP selection received by the Exchange between the
16th and the last day of any month, the Exchange must ensure a coverage
effective date of the 1st day of the second following month. However,
Exchanges must provide special coverage effective dates for certain
special enrollment period types including loss of MEC, as described in
Sec. 155.420(b)(2), and may elect to provide coverage effective dates
earlier than those specified in Sec. 155.420(b)(1) and (2)(i), as
described in Sec. 155.420(b)(3). The loss of MEC coverage effective
dates are generally governed by Sec. 155.420(b)(2)(iv). Currently, for
all Exchanges, consumers who report a future loss of MEC and select a
plan on or before the loss of MEC are provided an Exchange coverage
effective date of the 1st of the month after the date of loss of MEC,
pursuant to Sec. 155.420(b)(2)(iv). For example, if a consumer reports
on June 1st that they will lose MEC on July 15th and they make a plan
selection on or before July 15th, Exchange coverage will be effective
August 1st. The consumer in this case cannot avoid a gap in coverage of
more than two weeks.
For consumers reporting a loss of MEC that occurred up to 60 days
in the past, Exchanges must ensure that coverage is effective in
accordance with Sec. 155.420(b)(1) (the regular coverage effective
dates described above) \176\ through a cross reference from Sec.
155.420(b)(2)(iv). Alternatively, Exchanges can offer prospective
coverage effective dates so that coverage is effective the first of the
month following plan selection, at the option of the Exchange. See
Sec. 155.420(b)(2)(i). For example, if a consumer reports on July 1st
a past loss of MEC that occurred on June 30th and selects a plan on
July 15th, Exchange coverage is effective August 1st.
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\176\ For example, if a consumer selects a plan on May 2nd,
coverage will be effective June 1st, if a consumer selects a plan on
May 16th, coverage will be effective July 1st.
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Because current regulation at Sec. 155.420(b)(2)(iv) does not
allow for retroactive or mid-month coverage effective dates, consumers
may experience gaps in coverage, especially those consumers who live in
States that allow mid-month terminations of Medicaid or CHIP coverage.
Further, after the COVID-19 PHE comes to an end, HHS expects to see a
higher than usual volume of individuals transitioning from Medicaid and
CHIP coverage to the Exchange. This is because States will be required
to return to normal eligibility and enrollment operations after the
expiration of the continuous enrollment condition that provided a
temporary increase in Federal Medicaid matching funds authorized by the
Families First Coronavirus Response Act (FFCRA),\177\ and we expect
that many individuals experienced changes in income or household size
since the continuous enrollment condition took effect. Consumers who
become ineligible for Medicaid are at risk of being uninsured for a
period of time and postponing use of health care services, which can
lead to poorer health outcomes, if they are not able to successfully
transition between coverage programs without coverage gaps.
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\177\ FFCRA. Public Law 116-127 (2020). These provisions enabled
States to receive the temporary Federal Medical Assistance
Percentage increase under that section.
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Therefore, to ensure that qualifying individuals whose prior MEC
ends mid-month are able to seamlessly transition from non-Exchange MEC
to Exchange coverage as quickly as possible with no coverage gaps, we
are proposing to revisions to paragraph (b)(2)(iv). Specifically, we
propose to add additional language to paragraph (b)(2)(iv) that if a
qualified individual, enrollee, or dependent, as applicable, loses
coverage as described in paragraph (d)(1), experiences a change in
eligibility for APTC per paragraph (d)(6)(iii), or experiences a loss
of government contribution or subsidy per paragraph (d)(15), and if the
plan selection is made on or before the day of the triggering event,
the Exchange must ensure that the coverage effective date is the 1st
day of the month following the date of the triggering event (as
currently required under paragraph (b)(2)(iv)) and, at the option of
the Exchange, if the plan selection is made on or before the last day
of the month preceding the triggering event, the Exchange must ensure
that coverage is effective on the first of the month in which the
triggering event occurs. For example, if a consumer attests between May
16th and June 30th that they will lose MEC on July 15th and selects a
plan on or before June 30th, coverage would be effective on August 1st
(first of the month after the last day of prior MEC), or at the option
of the Exchange, on July 1st (the first of the month in which the
triggering event occurs).
We acknowledge that this proposed change may have a limited impact
because many types of coverage do not typically have end dates in the
middle of the month. However, for those that it does impact, the
proposed change would provide earlier access to coverage and APTC and
CSR. Under the current rule at paragraph (b)(2)(iv), consumers
reporting a future loss of MEC may have to wait weeks for their
coverage to start, even if they were proactive and attested to a
coverage loss as soon as they became aware. We do not believe that this
proposed change introduces
[[Page 78266]]
program integrity concerns because it only applies to those consumers
who report a future loss of MEC and have been determined eligible for
an SEP and found eligible for an Exchange QHP, fall within their 60-day
reporting window for reporting a future loss of MEC, and select a plan
on or before the last day of the month preceding the loss of MEC.
We believe this proposed change would provide additional
flexibilities for Exchanges as the proposed changes to paragraph
(b)(2)(iv) would provide Exchanges with the option to use the current
coverage effective dates available under current paragraph (b)(2)(iv)
as well as the option to provide earlier coverage effective dates for
some consumers who attest to a future loss of MEC. We also acknowledge
that if Exchanges do elect an earlier coverage effective date as we
propose, this would result in some consumers paying for both an
Exchange QHP and their other MEC for a short period of dual enrollment.
However, we do not believe the partial-month period of dual enrollment
should bar an enrollee from APTC or CSR benefits for the Exchange
coverage if otherwise eligible. Given that consumers impacted by the
proposed change to Sec. 155.420(b)(2) will have other MEC for only
part of the first month of their QHP coverage, Exchanges could look to
the definition of coverage month in 26 CFR 1.36B-3, which states that a
consumer may qualify when not eligible for the full calendar month for
minimum essential coverage, to find a consumer who receives an earlier
effective date under this rule as eligible for APTC and CSRs for the
first month of their QHP coverage, despite the brief period of
overlapping coverage. In order to clarify our interpretation that
consumers may be eligible for APTC and CSRs as of the earlier SEP
effective date proposed in this rulemaking, we are considering whether
any corresponding amendments to APTC eligibility rules may be necessary
and plan to codify such changes in the final rule as needed. For
example, since Exchange regulations regarding APTC eligibility do not
reference the statutory definition of a coverage month, we seek comment
on whether Exchange regulations at Sec. 155.305(f) should be revised
to correspond with the statutory definition of a coverage month.
We believe the largest beneficiaries of these proposed changes
would be consumers whose States permit mid-month terminations of
Medicaid or CHIP coverage. We seek comment from interested parties on
the frequency of mid-month coverage end dates, potential program
integrity issues associated with earlier effective dates, and on
instances when the expedited effective date would or would not mitigate
coverage gaps or introduce coordination of benefits issues.
Under Sec. 147.104(b)(5), applicable to health insurance issuers
that offer health insurance coverage in the individual, small group, or
large group market in a State, coverage elected during limited open and
special enrollment periods described in Sec. 147.104(b)(2) and (3)
must become effective consistent with the dates described in Sec.
155.420(b) (this excludes the special enrollment period under Sec.
155.420(d)(6) which is explicitly excepted from Sec. 147.104(b)(2)).
Therefore, with the exception of the triggering event in Sec.
155.420(d)(6), which is limited to coverage purchased through an
Exchange, these proposed changes to the effective date for future loss
of MEC would be effective for individual market coverage purchased off
an Exchange, as well as for coverage purchased through an Exchange, and
the proposed option of the Exchange to specify the effective date would
refer to an option of the applicable State authority with respect to
individual market coverage purchased off an Exchange.
While we also considered proposing retroactive coverage effective
dates for consumers reporting past loss of MEC, we decided to limit
these proposed changes to future loss of MEC to avoid adverse selection
and reduce burden on Exchanges, States, and issuers, as allowing for
retroactive coverage start dates can be operationally complex for
Exchanges to implement and for issuers to process. Also, we believe the
proposed changes would limit the financial burden on consumers, as
consumers who report a loss of MEC in the past 60 days may not want or
be able to afford to pay past premiums to effectuate coverage
retroactively. While we also considered providing mid-month coverage
effective dates for consumers who lose MEC mid-month, this would have
been disadvantageous to affording coverage given that IRS regulations
at 26 CFR 1.36B-3 generally provide that PTC is only available for a
month when, as of the first day of the month, the individual is
enrolled in a plan through the Exchange. We seek comment on additional
regulatory changes that would improve transitions to Exchange coverage
and minimize periods of uninsurance for consumers who report a loss of
MEC to the Exchange.
We seek comment on these proposals.
c. Special Rule for Loss of Medicaid or CHIP Coverage (Sec.
155.420(c))
In order to mitigate coverage gaps when consumers lose Medicaid or
CHIP coverage and to allow for a more seamless transition into Exchange
coverage, we are proposing a new special rule under Sec. 155.420(c)(6)
to provide more time for consumers who lose Medicaid or CHIP coverage
that is considered MEC as described in Sec. 155.420(d)(1)(i) to report
their loss of coverage and enroll in Exchange coverage. The proposed
regulation would align the special enrollment period window following
loss of Medicaid or CHIP with the reconsideration period available
under 42 CFR 435.916(a).
Currently, qualified individuals or their dependents who lose MEC,
such as coverage through an employer or most kinds of Medicaid or CHIP,
qualify for a special enrollment period under Sec. 155.420(d)(1)(i)
and may report a loss of MEC to Exchanges up to 60 days before and up
to 60 days after their loss of MEC. 45 CFR 155.420(c)(2). When these
qualified individuals or their dependents are disenrolled from Medicaid
or CHIP based on modified adjusted gross income (MAGI) following an
eligibility redetermination, 42 CFR 435.916 requires that the State
Medicaid agency provide a 90-day reconsideration window, which allows
former beneficiaries to provide the necessary information to their
State Medicaid agency to re-establish their eligibility for Medicaid or
CHIP without having to complete a new application. During the 90 days
following a Medicaid or CHIP denial or disenrollment, it would be
reasonable for a consumer who becomes uninsured to proceed first by
attempting to regain coverage through Medicaid or CHIP. However,
because the special enrollment period for loss of MEC at Sec.
155.420(d)(1)(i) currently lasts only 60 days after the loss of
Medicaid or CHIP coverage, by the time that a consumer exhausts their
attempt to regain coverage through Medicaid or CHIP (which they must do
within 90 days of loss of Medicaid or CHIP), they may have missed their
window to enroll in Exchange coverage through a special enrollment
period based on loss of MEC (60 days after loss of Medicaid or CHIP).
In further support of this proposal, we are aware that most
consumers losing Medicaid or CHIP may not transition to Exchange
coverage in a timely manner. A recent report published by the Medicaid
and CHIP Payment and Access Commission (MACPAC) \178\
[[Page 78267]]
found that only about three percent of beneficiaries who were
disenrolled from Medicaid or CHIP in 2018 enrolled in Exchange coverage
within 12 months. The 2018 data also showed that more than 70 percent
of adults and children moving from Medicaid to Exchange coverage had
gaps in coverage for an average of about three months.\179\ While there
are likely several reasons that consumers did not transition directly
from Medicaid or CHIP coverage to Exchange coverage in 2018, the
proposed special rule at Sec. 155.420(c)(6) has the potential to
mitigate an administrative hurdle that may pose a barrier to enrolling
in Exchange coverage in a timely manner and with little to no coverage
gaps.
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\178\ Medicaid and CHIP Payment Access Commission. (2022, July).
Transitions Between Medicaid, CHIP, and Exchange Coverage. https://www.macpac.gov/wp-content/uploads/2022/07/Coverage-transitions-issue-brief.pdf.
\179\ Ibid.
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Therefore, to ensure that qualifying individuals are able to
seamlessly transition from Medicaid or CHIP coverage to Exchange
coverage as quickly as possible to and mitigate the risk of coverage
gaps, we propose to create new paragraph (c)(6) which would add
language stating that effective January 1, 2024, Exchanges will have
the option to implement a new special rule that consumers eligible for
an SEP under Sec. 155.420(d)(1)(i) due to loss of Medicaid or CHIP
coverage that is considered MEC will have up to 90 days after their
loss of Medicaid or CHIP coverage to enroll in an Exchange QHP. This
proposal would align the special enrollment period window following
loss of Medicaid or CHIP with the reconsideration period available
under 42 CFR 435.916(a). We also propose adding language to paragraph
(c)(2) to clarify that a qualified individual or his or her dependent
who is described in paragraph (d)(1)(i) continues to have 60 days after
the triggering event to select a QHP unless an Exchange exercises the
option proposed in new paragraph (c)(6). We believe these proposed
changes would have a positive impact on consumers while providing
additional flexibilities for Exchanges as they can choose whether to
offer this special rule or not, depending on enrollment trends for
their respective populations.
We seek comment on this proposal.
d. Plan Display Error Special Enrollment Periods (Sec. 155.420(d))
We propose amending Sec. 155.420(d)(12) to align the policy of the
Exchanges for granting SEPs to persons who are adversely affected by a
plan display error with current plan display error SEP operations. We
propose amending paragraph (d)(12) by changing the subject of the
regulation to focus on the affected enrollment, not the affected
qualified individual or enrollees.\180\
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\180\ In this section, ``consumer'' may be used as shorthand for
``qualified individual, enrollee, or their dependents.''
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In accordance with Sec. 155.420, SEPs allow a qualified individual
or enrollee who experiences certain qualifying events to enroll in, or
change enrollment in, a QHP through the Exchange outside of the annual
OEP. In 2016, CMS added warnings on HealthCare.gov about inappropriate
use of SEPs, and tightened certain eligibility rules.\181\ We sought
comment on these issues in the Patient Protection and Affordable Care
Act; HHS Notice of Benefit and Payment Parameters for 2018 proposed
rule (81 FR 61456), especially on data that could help distinguish
misuse of SEPs from low take-up of SEPs among healthier eligible
individuals; evidence on the impact of eligibility verification
approaches, including pre-enrollment verification, on health insurance
enrollment, continuity of coverage, and risk pools (whether in the
Exchange or other contexts); and input on what SEP-related policy or
outreach changes could help strengthen risk pools. We examined
attrition rates in our enrollment data and have found that the
attrition rate for any particular cohort is no different at the end of
the year than at points earlier in the year, suggesting that any such
gaming, if it is occurring, does not appear to be occurring at
sufficient scale to produce statistically measurable effects.
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\181\ February 25, 2016. Fact Sheet: Special Enrollment
Confirmation Process. Available online at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-02-24.html.
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In the Patient Protection and Affordable Care Act; HHS Notice of
Benefit and Payment Parameters for 2018; Amendments to Special
Enrollment Periods and the Consumer Operated and Oriented Plan Program
(81 FR 94058, 94127 through 94129), CMS codified the plan display error
SEP in Sec. 155.420(d)(12) to reflect that plan display error SEP may
be triggered when a qualified individual or enrollee, or their
dependent, adequately demonstrates to the Exchange that a material
error related to plan benefits, service area, or premium (hereinafter
``plan display error'') influenced the qualified individual's,
enrollee's, or their dependents' decision to purchase a QHP through the
Exchange. This generally allowed consumers who enrolled in a plan for
which HealthCare.gov displayed incorrect plan benefits, service area,
cost-sharing, or premium, and who could demonstrate that such incorrect
information influenced their decision to purchase a QHP through the
Exchange, to select a new plan that better suited their needs.
In the same final rule, CMS also finalized the policies at Sec.
147.104(b)(2) to make clear that the plan display error SEP only
creates an opportunity to enroll in coverage through the Exchange, and
clarified that the special enrollment period is limited to plan display
errors presented to the consumer by the Exchange at the point at which
the consumer enrolls in a QHP (81 FR at 94128 through 94129). By this
we meant that the consumer must have already completed their Exchange
application, the Exchange must have determined that the consumer is
eligible for QHP coverage and any applicable APTC or CSRs, and the
consumer must have viewed the material error while making a final
selection to enroll in the QHP.
Currently, Sec. 155.420(d)(12) requires the qualified individual,
enrollee, or their dependent, to adequately demonstrate to the Exchange
that a material error related to plan benefits, service area, or
premium influenced the qualified individual's or enrollee's decision to
purchase a QHP through the Exchange. However, we have found that
consumers may benefit when other interested parties, besides a
qualified individual, enrollee, or their dependents, can demonstrate to
the Exchange that a material plan error influenced the qualified
individual's, enrollee's, or their dependents' enrollment decision to
purchase a QHP through the Exchange. In our experience, plan display
errors may not be obvious or detectable to the consumer and the
Exchange until after the enrollment has been impacted by the error
related to plan benefits, service area, premiums, or even cost-sharing.
In majority of the plan display errors, the issuer or State regulator
has identified the display error. For example, a plan display error can
influence a consumer's enrollment without the consumer's knowledge when
a consumer enrolls in a QHP, pays an incorrect premium amount that was
submitted to and displayed on HealthCare.gov, and the plan display
error regarding the premium amount is not known until the enrollment is
cancelled by the issuer for non-payment of premiums. In this case, the
plan display error would not be discovered until the issuer
investigates the reason for cancellation. The issuer is the only party
that can identify that the plan display error was caused by
[[Page 78268]]
incorrect premium amounts between the issuer's records and data
submitted to HealthCare.gov, and that can notify CMS of the plan
display error. CMS can then work with the issuer to implement its
established data correction processes to make the necessary corrections
to the Healthcare.gov. This process includes CMS investigating the plan
display error to determine if it is reasonable to expect that the
material error has influenced the enrollment or the consumer's
purchasing decision. In this example, CMS is likely to determine that
the plan display error impacted the consumer's purchasing decision
because the consumer was presented erroneous information when
purchasing the plan and likely made an enrollment decision based on the
premium and cost-sharing amount. Issuers that submit a data change
request that adversely impacts the consumers' enrollment on
HealthCare.gov are required to notify consumers of the plan display
error and the remediation.
Since qualified individuals, enrollees, and their dependents are
not always the parties best suited to demonstrate to the Exchange that
a material plan display has influenced their enrollment, we propose
revising paragraph (d)(12) to remove the burden solely from the
qualified individual, enrollee, and their dependents. We propose adding
cost-sharing to the list of plan display errors which is displayed on
HealthCare.gov alongside plan benefits, service area, and premiums, and
equally influence the consumer's purchasing decision or enrollment.
Specifically, we propose revising Sec. 155.420(d)(12) to reflect that
an SEP is available when the enrollment in a QHP through the Exchange
was influenced by a material error related to plan benefits, cost-
sharing, service area, or premium. We propose to consider a material
error to be one that is likely to have influenced a qualified
individual's, enrollee's, or their dependent's enrollment in a QHP.
It should be noted that an error related to plan benefits, service
area, cost-sharing or premium does not trigger an SEP when the error is
not material, such as when the error is honored as it was displayed.
Errors related to plan benefits, service area, cost-sharing or premium
include situations where coding on HealthCare.gov causes benefits to
display incorrectly, or where CMS identifies incorrect QHP data
submission or discrepancy between an issuer's QHP data and its State-
approved form filings.\182\ If the error involves information that
displays on HealthCare.gov, CMS works with the issuer and applicable
State's regulatory authority to arrive at a solution that has minimal
impact on consumers and affirms, to the extent possible, that they are
not negatively affected by the error. Generally, the most
straightforward and consumer-friendly resolution is for issuers to
honor the benefit as it was displayed incorrectly for affected
enrollees, if permitted by the applicable State regulatory authority.
If the issuer chooses to honor the error and administers the plan as it
was incorrectly displayed for the affected consumers, CMS will not
provide the consumers with an SEP. The proposed revision to the
regulation would be consistent with this approach, as the issuer's
honoring of the error would effectively eliminate the materiality of
the error.
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\182\ See the following: CMS. (2022, July 28). 2022 Federally-
facilitated Exchange (FFE) and Federally-facilitated Small Business
Health Options Program (FF-SHOP) Enrollment Manual. (Section 6.8.1,
p. 82). https://www.cms.gov/files/document/ffeffshop-enrollment-manual-2022.pdf.
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Our proposal would have minimal operational impact, as interested
parties currently have the infrastructure to demonstrate to the
Exchange that a plan display error influenced a qualified individual's,
enrollee's, or their dependents' decision to purchase a QHP through the
Exchange. CMS currently engages with partners and interested parties
throughout the plan display error SEP process, ensuring that issuers
and States are notified of CMS decisions as appropriate. States have
access to the status of all applicable plan display error SEPs and can
track the progress of the plan display error SEPs until remediation. In
addition, under Sec. 156.1256, issuers ``must notify their enrollees
of material plan or benefit display errors and the enrollees'
eligibility for an [SEP] . . . within 30 calendar days after being
notified by the [FFE] that the error has been fixed, if directed to do
so by the [FFE].'' Thus, impacted consumers are also currently being
notified and made aware of plan display error SEPs policies if their
plan data had a significant, material error. We expect that this
experience is similar on all Exchanges, and therefore are proposing
that this amendment to the description of the SEP trigger would apply
for all Exchanges.
We request comment on this proposal.
Additionally, HHS is considering for future years, whether
consumers whose providers leave their network mid-year should be
eligible for an SEP. Significant network changes, whether it is
initiated by the QHP issuer or the provider, can occur at any point
during the year. Under Medicare Advantage regulation 42 CFR
422.62(b)(23), individuals affected by a significant change in their
plan's provider network are eligible for an SEP that permits re-
enrollment into another Medicare Advantage plan or to original
Medicare. CMS is seeking comments on whether QHP consumers similarly
affected by a significant change in their plan's provider network
should be eligible for an SEP. We also solicit comment on whether we
should consider an enrollee who is impacted by a provider contract
termination to be someone who is experiencing an exceptional
circumstance, as specified in Sec. 155.420(d)(9), or should be
eligible for a new SEP for provider contract terminations, and what
standards for when termination of a provider from the network should
serve as a basis for SEP eligibility.
8. Termination of Exchange Enrollment or Coverage (Sec. 155.430)
a. Prohibition of Mid-Plan Year Coverage Termination for Dependent
Children Who Reach the Maximum Age
We propose to add Sec. 155.430(b)(3) to explicitly prohibit QHP
issuers participating in Exchanges on the Federal platform from
terminating coverage of dependent children before the end of the
coverage year because the child has reached the maximum age at which
issuers are required to make coverage available under Federal or State
law. The ACA amended the PHS Act to require at section 2714
(implemented at Sec. 147.120) that group health plans and health
insurance issuers offering group or individual health insurance
coverage that offer dependent child coverage must make such coverage
available for an adult child until age 26. The ACA also adds section
9815(a)(1) to the Code and section 715(a)(1) to the Employee Retirement
Income Security Act to incorporate the provisions of part A of title
XXVII of the PHS Act (including section 2714) and make them applicable
to group health plans, and health insurance issuers providing health
insurance coverage in connection with group health plans. This proposal
to amend Sec. 155.430 would not change the requirements under Sec.
147.120 nor would it affect parallel provisions in 26 CFR 54.9815-2714
and 29 CFR 2590.715-2714. Some States have established higher age
limits, and some issuers adopt higher than legally required age limits
as a business decision.
In operationalizing this regulation on the Federal eligibility and
enrollment platform, HHS has required issuers that
[[Page 78269]]
cover dependent children to provide coverage to dependent children
until the end of the plan year in which they turn 26 (or the maximum
age under State law), although this is not specifically required under
Sec. 147.120. Nevertheless, interested parties have requested that
HHS' policy be codified in regulation for clarity. Doing so would
reduce uncertainty for Federally-facilitated Exchange issuers regarding
their obligation under Sec. 155.430 to maintain coverage for a
dependent child who has turned 26 (or the maximum age under State law)
until the end of the plan year (unless coverage is otherwise permitted
to be terminated). Likewise, it would provide clarity for enrollees
themselves who may be uncertain about the rules governing their ability
to remain enrolled as a dependent child until the end of the plan year
in which they reach the maximum age (that is, age 26 or the maximum age
under State law). This proposal would codify the current implementation
of the Federal platform.
Payment of APTC on the Exchange, in addition to the way the Federal
eligibility and enrollment platform has operationalized Exchange
eligibility determinations, warrants a different policy for issuers of
individual market QHPs on the Exchanges with regard to child dependents
turning age 26 (or the maximum age under State law). This is especially
true when comparing individual market Exchange coverage to the employer
market, where the employer is typically contributing toward the cost of
child dependent coverage, but only until the child dependent attains
the maximum dependent age under the group health plan; in the Exchange,
the dependent child can receive a portion of the family's APTC for the
entire plan year. Exchange eligibility determinations for enrollment
through the Exchange and for APTC are based on the tax household, and
the determination is made for the entire plan year unless it is
replaced by a new determination of eligibility, such as when a change
is reported by the enrollee or identified by the Exchange in accordance
with Sec. 155.330. The annual basis of Exchange eligibility
determinations, absent a new determination, is made clear by the annual
eligibility redetermination requirements in Sec. 155.335. Eligibility
standards for enrollment through the Exchange and for APTC make no
mention of an issuer's business rules regarding dependent
relationships, or otherwise regarding the specific relationships
between applicants. Additionally, Exchange eligibility criteria do not
prohibit allocation of APTC to dependent children enrollees over the
age of 26. Every family member who is part of the tax household must be
listed on the Exchange application for coverage, and the IRS has no
maximum age cap for tax dependents. Because eligibility determinations
are made for the entire plan year, the Exchange will generally continue
to pay the issuer APTC, including the portion attributable to the
dependent child, through the end of the plan year in which the
dependent child turns 26, or through the end of the plan year in which
the dependent reaches the maximum age required under State law.
In developing the Federal eligibility and enrollment platform, HHS
directed QHP issuers on Exchanges that use the Federal platform to
honor the eligibility determination made by the Exchange. This
requirement applies whether or not the enrollees are determined
eligible for APTC. The situation for issuers on these Exchanges thus
differs from those in the off-Exchange insurance market, where
enrollees do not receive APTC, and in the group insurance market, where
contributions by employers may end on the day in which the dependent
child turns 26 (or the maximum age under State law).
To clarify, in Exchanges on the Federal platform, during the annual
re-enrollment process, enrollees who, during the plan year, have
reached age 26 (or the maximum age under State law) are, if otherwise
eligible, re-enrolled into a separate policy (following the re-
enrollment hierarchy at Sec. 155.335(j)) beginning January 1st of the
following plan year, with APTC, if applicable.
Additionally, consistent with existing policy, in circumstances in
which a household with an dependent child who has reached age 26 (or
the maximum age under State law) reports a change in circumstance to
the Exchanges on the Federal platform during the plan year after having
reached that age and becomes eligible for an SEP, the dependent child
who has exceeded age 26 (or the maximum age under State law) will have
their eligibility redetermined in accordance with Sec. 155.330, the
dependent child's coverage under that policy will be terminated, and
they will be enrolled into their own policy, subject to payment of a
binder payment. If, however, the household is not eligible for an SEP
as a result of the change, the original eligibility determination from
the initial enrollment will remain in place and the dependent child
will remain as a covered dependent on the original policy.
Therefore, we propose to add new paragraph (b)(3) to Sec. 155.430
to expressly prohibit QHP issuers participating in Exchanges on the
Federal platform from terminating coverage until the end of the plan
year for dependent children because the dependent child has reached age
26 (or the maximum age under State law). This change would provide
clarity to issuers participating in Exchanges on the Federal platform
regarding their obligation to maintain coverage for dependent children,
as well as to enrollees themselves regarding their ability to maintain
coverage. In addition, we propose to make implementation optional for
State Exchanges that wish to establish a similar prohibition.
We request comments on this proposal.
9. General Eligibility Appeals Requirements (Sec. 155.505)
We propose revising Sec. 155.505(g) to acknowledge the ability of
the CMS Administrator to review Exchange eligibility appeals decisions
prior to judicial review. Section 155.505 describes the general
Exchange eligibility appeals process, including applicants' and
enrollees' right to appeal certain Exchange eligibility determinations
specified in Sec. 155.505(b), and the obligation of the HHS appeals
entity and State Exchange appeals entities to conduct certain Exchange
eligibility appeals as described in Sec. 155.505(c). In accordance
with Sec. 155.505(g), appellants may seek judicial review of an
Exchange eligibility appeal decision made by the HHS appeals entity and
State Exchange appeals entities to the extent it is available by law.
Currently, the regulation specifies no other administrative
opportunities for appellants to appeal Exchange eligibility appeal
decisions made by the HHS appeals entity. We propose revising this
regulation to acknowledge the ability of the CMS Administrator to
review Exchange eligibility appeals decisions prior to judicial review.
This proposed change would ensure that accountability for the
decisions of the HHS appeals entity is vested in a principal officer,
as well as to bring Sec. 155.505(g) of the appeals process to a more
similar posture as other CMS appeals entities that provide
Administrator review.\183\ Revising the
[[Page 78270]]
regulation would also provide appellants and other parties with
accurate information about the availability of administrative review by
the CMS Administrator if they are dissatisfied with their Exchange
eligibility appeal decision.
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\183\ Examples include: 42 CFR 405 subpart R (Provider
Reimbursement Review Board); 42 CFR 412 subpart L (Medicare
Geographic Classification Review Board); 42 CFR 430.60-430.104
(Medicaid State Plan Materials/Compliance Determinations); 42 CFR
423.890 (Retiree Drug Subsidy (RDS) Appeals); 42 CFR 411.120-124
(Group Health Plan Non-conformance Appeals); 42 CFR 417.640,
417.492. 417.500, 417.494 (Health Maintenance Organization
Competitive Medical Plan (HMO/CMP) Contract Related Appeals); 42 CFR
423.2345 (Termination of Discount Program Agreement Appeals).
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We seek comment on this proposal.
10. Improper Payment Pre-Testing and Assessment (IPPTA) for State
Exchanges (Sec. Sec. 155.1500 Through 155.1515)
We propose the establishment of the IPPTA, an improper payment
measurement program of APTC, that will include State Exchanges. The
proposed IPPTA would prepare State Exchanges for the planned
measurement of improper payments of APTC, would test processes and
procedures that support HHS' review of determinations of APTC made by
State Exchanges, and would provide a mechanism for HHS and State
Exchanges to share information that would aid in developing an
efficient measurement process. To codify the IPPTA requirements, we
propose to establish new subpart P under 45 CFR part 155.
The Payment Integrity Information Act of 2019 (PIIA) \184\ requires
Federal agencies to annually identify, review, measure, and report on
the programs they administer that are considered susceptible to
significant improper payments. HHS determined that APTC are susceptible
to significant improper payments and are subject to additional
oversight. In accordance with 45 CFR part 155, FFEs, SBE-FPs, and State
Exchanges that operate their own eligibility and enrollment systems
determine the amount of APTC to be paid to qualified applicants. Only
improper payments of APTC made by FFEs and SBE-FPs will be measured and
reported in the Annual Financial Report beginning in 2022 as part of
the Exchange Improper Payment Measurement (EIPM) program. We stated in
the 2023 Payment Notice proposed rule (87 FR 654 through 655) that HHS
was in the planning phase of establishing an improper payment
measurement program that would include State Exchanges--the SEIPM
program. We also stated in the 2023 Payment Notice proposed rule that
HHS had intended to implement the proposed SEIPM program beginning with
the 2023 benefit year. In response to that proposed rule, HHS received
several comments from State Exchanges that indicated concerns with the
proposed requirements, particularly with respect to the SEIPM program's
implementation timeline and proposed data collection processes. For
example, some State Exchanges commented that they would need more time
and information from HHS to prepare for the implementation of the SEIPM
program. We decided not to finalize the proposed rule due to
commenters' concerns surrounding the proposed implementation timeline
and other burdens that would be imposed by the proposed SEIPM program
(87 FR 27281). HHS is now proposing the IPPTA to provide State
Exchanges with more time to prepare for the planned measurement of
improper payments of APTC, to test processes and procedures that
support HHS' review of determinations of APTC made by State Exchanges,
and to provide a mechanism for HHS and State Exchanges to share
information that would aid in developing an efficient measurement
process.
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\184\ PIIA, 31 U.S.C. 3352 (2020).
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In 2019, HHS developed an initiative to provide the State Exchanges
with an opportunity to voluntarily engage with HHS to prepare for
future measurement of improper payments of APTC. HHS provided three
options to State Exchanges--program analysis, program design, and
piloting--designed to accommodate the State Exchanges' schedules and
availability to participate in the initiative. Currently, of the 18
State Exchanges, 10 have participated in various levels of engagement.
HHS proposes that the proposed IPPTA would replace the current,
voluntary State engagement initiative. HHS additionally proposes that
activities already completed by State Exchanges as part of the current
voluntary engagement may be used to satisfy elements of the proposed
IPPTA. HHS has determined that participation from all State Exchanges
is required in order to test processes and procedures that would
prepare the State Exchanges for the planned measurement of improper
payments of APTC.
Therefore, we propose to establish a new subpart P under 45 CFR
part 155 (containing Sec. Sec. 155.1500 through 155.1515) to codify
the proposed IPPTA requirements. The proposed regulations at subpart P
would be applicable beginning in 2024 with each State Exchange being
selected to participate for a period of one calendar year which would
occur either in 2024 or 2025.
a. Purpose and Scope (Sec. 155.1500)
We are proposing to add new subpart P to part 155, which would
address various State Exchange and HHS responsibilities. HHS may use
Federal contractors as needed to support the performance of IPPTA.
We are proposing to add new Sec. 155.1500 to convey the purpose
and scope of the IPPTA.
At paragraph (a), we are proposing the purpose and scope of subpart
P as setting forth the requirements of the IPPTA for State Exchanges.
The proposed IPPTA is an initiative between HHS and State Exchanges.
The proposed requirements are intended to prepare State Exchanges for
the planned measurement of improper payments, test processes and
procedures that support HHS' review of determinations of APTC made by
State Exchanges, and provide a mechanism for HHS and State Exchanges to
share information that would aid in developing an efficient measurement
process.
b. Definitions (Sec. 155.1505)
We are proposing to codify the definitions that are specific to
IPPTA and key to understanding the processes and procedures of IPPTA.
We are proposing the definition of ``business rules'' to
mean the State Exchange's internal directives defining, guiding, or
constraining the State Exchange's actions when making eligibility
determinations and related APTC calculations. For example, the internal
directives, methodologies, algorithms, or policies that a State
Exchange applies or executes on its own data to determine whether an
applicant meets the eligibility requirements for a QHP and any
associated APTC would be considered to be a business rule.
We are proposing the definition of ``entity relationship
diagram'' to mean a graphical representation illustrating the
organization and relationship of the data elements that are pertinent
to applications for QHP and associated APTC payments.
We are proposing the definition of ``Pre-testing and
assessment'' to mean the process that uses the procedures specified in
Sec. 155.1515 to prepare State Exchanges for the planned measurement
of improper payments of APTC.
We are proposing the definition of ``Pre-testing and
assessment checklist'' to mean the document that contains criteria that
HHS will use to review a State Exchange's completion of the
requirements of the IPPTA.
We are proposing the definition of ``Pre-testing and
assessment data request form'' to mean the document that
[[Page 78271]]
specifies the structure for the data elements that HHS would require
each State Exchange to submit.
We are proposing the definition of ``Pre-testing and
assessment period'' to mean the timespan during which HHS will engage
in the pre-testing and assessment procedures with a State Exchange. The
pre-testing and assessment period will cover one calendar year.
We are proposing the definition of ``Pre-testing and
assessment plan'' to mean the template developed by HHS in
collaboration with each State Exchange enumerating the procedures,
sequence, and schedule to accomplish the pre-testing and assessment.
We are proposing the definition of ``Pre-testing and
assessment report'' to mean the summary report provided by HHS to each
State Exchange at the end of the State Exchange's pre-testing and
assessment period that will include, but not be limited to, the State
Exchange's status regarding completion of each of the pre-testing and
assessment procedures specified in proposed Sec. 155.1515, as well as
observations and recommendations that result from processing and
testing the data submitted by the State Exchange to HHS. At Sec.
155.1515(g), we are proposing that the pre-testing and assessment
report is intended to be used internally by HHS and each State Exchange
as a reference document for performance improvement. The pre-testing
and assessment report will not be released to the public by HHS unless
otherwise required by law.
c. Data Submission (Sec. 155.1510)
We are proposing to add new Sec. 155.1510 which would address the
data submission requirements to support the IPPTA. Consistent with
this, we are proposing to establish a pre-testing and assessment data
request form to collect and compile information from each State
Exchange. As explained below in section IV., Collection of Information
Requirements, the pre-testing and assessment data request form has been
submitted to OMB for review and approval. As described below, HHS
proposes that each State Exchange submit to HHS a sample of no fewer
than 10 tax household identification numbers (that is, the record of a
tax household that applied for and was determined eligible to enroll in
a QHP and was determined eligible to receive APTC in an amount greater
than $0).
At paragraph (a)(1), we are proposing that a State
Exchange would be required to submit to HHS by the deadline in the pre-
testing and assessment plan the following documentation for their data:
(i) the State Exchange's data dictionary including attribute name, data
type, allowable values, and description; (ii) an entity relationship
diagram, which shall include the structure of the data tables and the
residing data elements that identify the relationships between the data
tables; and (iii) business rules and related calculations.
At paragraph (a)(2), we are proposing that the State
Exchange must use the pre-testing and assessment data request form, or
other method as specified by HHS, to submit to HHS the application data
associated with no fewer than 10 tax household identification numbers
and the associated policy identification numbers that address scenarios
specified by HHS to allow HHS to test all of the pre-testing and
assessment processes and procedures. The proposed scenarios would
include various application characteristics such as household
composition, data matching inconsistencies (for example, SSN,
citizenship, lawful presence, annual income) identified for the
applications, special enrollment period application types (for example,
relocation, marriage), periodic data matching (for example, Medicaid/
CHIP, Medicare, death), application status (for example, policy
terminated, policy canceled), and application types (for example,
initial application). HHS understands that it is unlikely that the
application data associated with a singular tax household could address
all of the characteristics contained in all of the scenarios specified.
Therefore, HHS proposes that while the application data for each tax
household does not need to address all of the scenarios specified, the
application data submitted for no fewer than 10 tax households should,
when taken together as a whole, address all of the characteristics in
all of the scenarios specified. For example, the application data for
one tax household may address lawful presence inconsistency
adjudication but not special enrollment eligibility verification.
Accordingly, the application data for another tax household should
address special enrollment eligibility verification. After receiving
the application data associated with no fewer than 10 tax households
from the State Exchange, HHS would test the data from each of the tax
households against its review procedures to determine if the respective
policy applications fulfill the scenarios. If the submitted application
data does not collectively fulfill the scenarios, HHS would coordinate
with the State Exchange to select additional tax households. For the
data submitted, HHS would also require the State Exchange to provide
digital copies such as PDFs of supporting consumer-submitted
documentation (for example, proof of residency, proof of citizenship).
In proposed Sec. 155.1515(e)(2), HHS proposes that for
each of the tax households, the State Exchange would align and populate
the data in the pre-testing and assessment data request form with the
assistance of HHS. HHS would require that the State Exchange
electronically transmit the completed pre-testing and assessment data
request form to HHS within the deadline specified in the pre-testing
and assessment plan. Once HHS receives the transmission from the State
Exchange, HHS then would execute the pre-testing and assessment
processes and procedures on the application data.
At paragraph (b), we are proposing the requirement that a
State Exchange must submit the data documentation as specified in Sec.
155.1510(a)(1) and the application data associated with no fewer than
10 tax households as specified in Sec. 155.1510(a)(2) within the
timelines in the pre-testing and assessment plan specified in Sec.
155.1515.
d. Pre-Testing and Assessment Procedures (Sec. 155.1515)
We are proposing to add new Sec. 155.1515 which would address the
requirements associated with the pre-testing and assessment procedures
that underlie and support the IPPTA. The pre-testing and assessment
procedures are the activities of the IPPTA that are, in part, designed
to test HHS' review processes and procedures that support HHS' review
of determinations of the APTC made by State Exchanges, to improve the
State Exchange's understanding of the IPPTA, to prepare State Exchanges
for the planned measurement of improper payments, and to provide HHS
and the State Exchanges with a mechanism to share information that
would aid in developing an efficient measurement process.
At paragraph (a), we are proposing the general requirement
that the State Exchange must participate in the IPPTA for a period of
one calendar year that would occur in either 2024 or 2025, and that the
State Exchange and HHS would work together to execute the IPPTA
procedures in accordance with timelines in the pre-testing and
assessment plan.
At paragraph (b), we are proposing the requirements for
the orientation and planning processes.
[[Page 78272]]
At paragraph (b)(1), we are proposing HHS would provide
State Exchanges with an overview of the pre-testing and assessment
procedures as part of the orientation process. We are also proposing
that, during the orientation process, HHS would identify the
documentation that a State Exchange must provide to HHS for pre-testing
and assessment. For example, if data use agreements or information
exchange agreements need to be executed, HHS would inform State
Exchanges about that documentation requirement.
At paragraph (b)(2), we are proposing that HHS, in
collaboration with each State Exchange, would develop a pre-testing and
assessment plan as part of the orientation process. The pre-testing and
assessment plan would be based on a template that enumerates the
procedures, sequence, and schedule to accomplish pre-testing and
assessment. While HHS would need to meet milestones specified in the
schedule and applicable deadlines due to the time span allotted for
this proposed program, HHS would take into account feedback from the
State Exchanges in an effort to minimize burden. The pre-testing and
assessment plan would take into consideration relevant activities, if
any, that were completed during a prior, voluntary, State engagement.
The pre-testing and assessment plan would include the pre-testing and
assessment checklist.
At paragraph (b)(3), we are proposing that HHS will issue
a pre-testing and assessment plan specific to a State Exchange at the
conclusion of the pre-testing and assessment planning process. The pre-
testing and assessment plan would be for HHS and State Exchange
internal use only and would not be made available to the public by HHS
unless otherwise required by law.
At paragraph (c), we are proposing the requirements
associated with notifications and updates.
At paragraph (c)(1), we are proposing the requirements
associated with HHS' responsibility to notify State Exchanges, as
needed throughout the pre-testing and assessment period, concerning
information related to the pre-testing and assessment processes and
procedures.
At paragraph (c)(2), we are proposing the requirements
associated with information State Exchanges must provide to HHS
throughout the pre-testing and assessment period regarding any
operational, policy, business rules (for example, data elements and
table relationships), information technology, or other changes that may
impact the ability of the State Exchange to satisfy the requirements of
the IPPTA during the pre-testing and assessment period. For example,
HHS would need to be made aware of changes to the State Exchange's
technical platform or modifications to its policies or procedures as
these changes may impact specific pre-testing and assessment processes
or procedures, the data to be reviewed, and ultimately a State
Exchange's determinations of an applicant's eligibility for APTC. We
are proposing that other decisions or changes made by a State Exchange,
which could affect the pre-testing and assessment including any changes
regarding items such as naming conventions or definitions of specific
data elements used in the pre-testing and assessment, must be submitted
to HHS. We propose this requirement because any lack of clarity in how
State Exchanges make eligibility determinations and payment
calculations could impact HHS' ability to assist the State Exchange in
understanding the pre-testing and assessment processes and procedures
and could affect HHS' recommendations in the pre-testing and assessment
report.
At paragraph (d), we are proposing the requirements
regarding the submission of required data and data documentation by
State Exchanges, and we state that, as specified in Sec. 155.1510(a)
of this subpart, HHS will inform State Exchanges about the form and
manner for State Exchanges to submit required data and data
documentation to HHS in accordance with the pre-testing and assessment
plan.
At paragraph (e), we are proposing the general
requirements regarding coordination between HHS and the State Exchanges
to facilitate HHS' processing of data and data documentation submitted
by State Exchanges.
At paragraph (e)(1), we are proposing the requirements
associated with HHS' responsibility to coordinate with each State
Exchange to track and manage the data and data documentation submitted
by a State Exchange as specified in Sec. 155.1510(a)(1) and (a)(2).
At paragraph (e)(2), we are proposing the requirements
associated with HHS' responsibility to coordinate with each State
Exchange to provide assistance in aligning the data specified in Sec.
155.1510(a)(2) from the State Exchange's existing data structure to
HHS' standardized set of data elements.
At paragraph (e)(3), we are proposing the requirement that
HHS will coordinate with each State Exchange to interpret and validate
the data specified in Sec. 155.1510(a)(2).
At paragraph (e)(4), we are proposing the requirement that
HHS would use the data and data documentation submitted by the State
Exchange to execute the pre-testing and assessment procedures.
At paragraph (f), we are proposing the requirements that
HHS would issue the pre-testing and assessment checklist in conjunction
with and as part of the pre-testing and assessment plan. The pre-
testing and assessment checklist criteria we are proposing would
include but would not be limited to:
++ At paragraph (f)(1), the State Exchange's submission of the data
documentation as specified in Sec. 155.1510(a)(1);
++ At paragraph (f)(2), the State Exchange's submission of the data
for processing and testing as specified in Sec. 155.1510(a)(2); and
++ At paragraph (f)(3), the State Exchange's completion of the pre-
testing and assessment processes and procedures related to the IPPTA
program.
At paragraph (g), we are proposing that, subsequent to the
completion of a State Exchange's pre-testing and assessment period, HHS
will prepare and issue a pre-testing and assessment report specific to
that State Exchange. The report would be for HHS and State Exchange
internal use only and would not be made available to the public by HHS
unless otherwise required by law.
We seek comments on these proposals.
C. Part 156--Health Insurance Issuer Standards Under the Affordable
Care Act, Including Standards Related to Exchanges
1. FFE and SBE-FP User Fee Rates for the 2024 Benefit Year (Sec.
156.50)
For the 2024 benefit year, we propose an FFE user fee rate of 2.5
percent of total monthly premiums and an SBE-FP user fee rate of 2.0
percent of the total monthly premiums. Section 1311(d)(5)(A) of the ACA
permits an Exchange to charge assessments or user fees on participating
health insurance issuers as a means of generating funding to support
its operations. If a State does not elect to operate an Exchange or
does not have an approved Exchange, section 1321(c)(1) of the ACA
directs HHS to operate an Exchange within the State. Accordingly, in
Sec. 156.50(c), we state that a participating issuer offering a plan
through an FFE or SBE-FP must remit a user fee to HHS each month that
is equal to the product of the annual user fee rate specified in the
annual HHS
[[Page 78273]]
notice of benefit and payment parameters for FFEs and SBE-FPs for the
applicable benefit year and the monthly premium charged by the issuer
for each policy where enrollment is through an FFE or SBE-FP. OMB
Circular A-25 established Federal policy regarding user fees and what
the fees can be used for. In particular, it specifies that a user fee
charge will be assessed against each identifiable recipient of special
benefits derived from Federal activities beyond those received by the
general public.
a. FFE User Fee Rates for the 2024 Benefit Year
Based on estimated costs, enrollment (including anticipated
establishment of State Exchanges in certain States in which FFEs
currently are operating), and premiums for the 2023 plan year, we
propose a 2024 user fee rate for all participating FFE issuers of 2.5
percent of total monthly premiums.
In Sec. 156.50(c)(1), to support the functions of FFEs, an issuer
offering a plan through an FFE must remit a user fee to HHS, in the
timeframe and manner established by HHS, equal to the product of the
monthly user fee rate specified in the annual HHS notice of benefit and
payment parameters for the applicable benefit year and the monthly
premium charged by the issuer for each policy where enrollment is
through an FFE. As in benefit years 2014 through 2023, issuers seeking
to participate in an FFE in the 2024 benefit year will receive two
special benefits not available to the general public: (1) the
certification of their plans as QHPs; and (2) the ability to sell
health insurance coverage through an FFE to individuals determined
eligible for enrollment in a QHP. For the 2024 benefit year, issuers
participating in an FFE will receive special benefits from the
following Federal activities:
Provision of consumer assistance tools;
Consumer outreach and education;
Management of a Navigator program;
Regulation of agents and brokers;
Eligibility determinations;
Enrollment processes; and
Certification processes for QHPs (including ongoing
compliance verification, recertification, and decertification).
Activities performed by the Federal Government that do not provide
issuers participating in an FFE with a special benefit are not covered
by the FFE user fee.
The proposed user fee rate reflects our estimates for the 2024
benefit year of costs for operating the Federal Exchanges, premiums,
enrollment, and transitions in Exchange models (from the FFE and SBE-FP
models to either the SBE-FP or State Exchange models). To develop the
proposed 2024 benefit year FFE user fee rates, we considered a range of
costs, premium and enrollment projections.\185\ We estimated stable
contract costs on FFE user fee eligible costs from the 2023 benefit
year. We took a number of factors into consideration in choosing which
premium and enrollment projections should inform the proposed 2024 FFE
user fee rates. The enhanced PTC subsidies in section 9661 of the ARP
were extended in section 12001 of the IRA through the 2025 benefit
year. The extension of enhanced PTC subsidies significantly influenced
our development of the 2024 enrollment and premium projections. We
expect this provision of the IRA to sustain the higher enrollment
levels observed in the 2021 benefit year after the ARP was established
and as a result, we expect the projected total premiums where the user
fee applies to increase, thereby increasing the amount of user fee that
will be collected. Our 2024 enrollment estimates also account for the
2022 benefit year transition (and projected transitions through the
2024 benefit year) of States from FFEs or SBE-FPs to State Exchanges,
as well as the enrollment impacts of section 1332 State innovation
waivers. We project that 2024 benefit year premiums will generally
increase at the rate of medical inflation. After considering the range
of costs, premium and enrollment projections, we propose a 2024 user
fee rate that will exert downward pressure on consumer premiums when
compared to the user fee rate from prior years, and that also ensures
adequate funding for Federal Exchange operations. The proposed FFE user
fee rates for 2024 are slightly lower than the 2.75 percent FFE user
fee rate that we established for the 2023 benefit year. After
accounting for the impact of the lower user fee rate, we estimate that
we would have sufficient funding available to fully fund user-fee
eligible Exchange activities.
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\185\ We used the most recent projections from the Congressional
Budget Office (https://www.cbo.gov/publication/57962) and our own
internal data.
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We seek comment on the proposed 2024 FFE user fee rate.
b. SBE-FP User Fee Rates for the 2024 Benefit Year
We propose to charge issuers offering QHPs through an SBE-FP a user
fee rate of 2.0 percent of the monthly premium charged by the issuer
for each policy under plans offered through an SBE-FP for the 2024
benefit year.
In Sec. 156.50(c)(2), we specify that an issuer offering a plan
through an SBE-FP must remit a user fee to HHS, in the timeframe and
manner established by HHS, equal to the product of the monthly user fee
rate specified in the annual HHS notice of benefit and payment
parameters for the applicable benefit year and the monthly premium
charged by the issuer for each policy where enrollment is through an
SBE-FP, unless the SBE-FP and HHS agree on an alternative mechanism to
collect the funds from the SBE-FP or State instead of direct collection
from SBE-FP issuers. SBE-FPs enter into a Federal platform agreement
with HHS to leverage the systems established for the FFEs to perform
certain Exchange functions, and to enhance efficiency and coordination
between State and Federal programs. The benefits provided to issuers in
SBE-FPs by the Federal Government include use of the Federal Exchange
information technology and call center infrastructure used in
connection with eligibility determinations for enrollment in QHPs and
other applicable State health subsidy programs, as defined at section
1413(e) of the ACA, and QHP enrollment functions under 45 CFR part 155,
subpart E. The user fee rate for SBE-FPs is calculated based on the
proportion of user fee eligible FFE costs that are associated with the
FFE information technology infrastructure, the consumer call center
infrastructure, and eligibility and enrollment services, and allocating
a share of those costs to issuers in the relevant SBE-FPs.
To calculate the proposed SBE-FP rates for the 2024 benefit year,
we used the same assumptions on contract costs, enrollment, and
premiums as the proposed FFE user fee rates. The user fee rate for SBE-
FPs is calculated based on the proportion of the total FFE costs
utilized by SBE-FPs, such as the costs associated with the FFE
information technology infrastructure, the consumer call center
infrastructure, and eligibility and enrollment services and other
applicable State health subsidy programs, which we estimate to be
approximately 80 percent. Based on this methodology, the proposed 2024
SBE-FP user fee rate is lower than the user fee rate of 2.25 percent of
premiums that we established for the 2023 benefit year. The lower
proposed user fee rate for SBE-FP issuers for the 2024 benefit year
reflects our estimates of costs for operating the Federal Exchanges,
premiums, enrollment, as well as State Exchange transitions for the
2024 benefit year, and the costs associated
[[Page 78274]]
with performing these services that benefit SBE-FP issuers.
We seek comment on the proposed 2024 SBE-FP user fee rate.
2. Publication of the 2024 Premium Adjustment Percentage, Maximum
Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on
Cost Sharing, and Required Contribution Percentage in Guidance (Sec.
156.130)
As established in part 2 of the 2022 Payment Notice, HHS will
publish the premium adjustment percentage, the required contribution
percentage, maximum annual limitations on cost-sharing, and reduced
maximum annual limitation on cost-sharing, in guidance annually
starting with the 2023 benefit year. We note that these parameters are
not included in this rulemaking, as HHS does not propose to change the
methodology for these parameters for the 2024 benefit year, and
therefore, HHS is required to publish these parameters in guidance no
later than January 2023.
3. Standardized Plan Options (Sec. 156.201)
HHS proposes to exercise its authority under sections 1311(c)(1)
and 1321(a)(1)(B) of the ACA to make minor updates to its approach with
respect to standardized plan options for PY 2024 and subsequent PYs.
Section 1311(c)(1) of the ACA directs the Secretary to establish
criteria for the certification of health plans as QHPs. Section
1321(a)(1)(B) of the ACA directs the Secretary to issue regulations
that set standards for meeting the requirements of title I of the ACA
with respect to, among other things, the offering of QHPs through such
Exchanges.
Standardized plan options were first introduced in the 2017 Payment
Notice, and defined at Sec. 155.20. In the first iteration of
standardized plan options, HHS finalized one set of standardized plan
options designed to be similar to the most popular QHPs in the 2015
individual market FFEs at the bronze, silver, and gold metal levels.
Issuers were not required to offer these standardized plan options. To
facilitate plan shopping and to educate consumers about the distinctive
cost-sharing features of standardized plan options, these plans were
differentially displayed on HealthCare.gov under the authority at Sec.
155.205(b)(1). Specifically, consumers had the ability to filter plan
options to view only standardized plan options and received an
accompanying message explaining how standardized plan options differed
from non-standardized plan options.
In the 2018 Payment Notice, HHS finalized three new sets of
standardized plan options. The original standardized plan options from
the 2017 Payment Notice were updated to reflect changes in QHP
enrollment data in 2016, to include SBE-FP data, and to account for
State cost-sharing laws. Standardized plan options were once more
differentially displayed, but this time, they were also labeled
``Simple Choice'' plans to make them more easily distinguishable from
non-standardized plan options. HHS also established display
requirements for approved web-brokers and QHP issuers using a direct
enrollment pathway to facilitate enrollment through an FFE or SBE-FP--
including both the Classic DE and EDE Pathways--at Sec. Sec.
155.220(c)(3)(i)(H) and 156.265(b)(3)(iv), respectively (81 FR 94117
through 94118, 94148; 45 CFR 155.220(l) and 155.221(i)). Under these
requirements, these entities must differentially display standardized
plan options in accordance with the requirements under Sec.
155.205(b)(1) in a manner consistent with how standardized plan options
are displayed on HealthCare.gov, unless HHS approved a deviation.
Standardized plan options were then discontinued in the 2019
Payment Notice, but the discontinuance was challenged in the United
States District Court for the District of Maryland. On March 4, 2021,
the court decided City of Columbus, et al. v. Cochran.\186\ The court
reviewed nine separate policies HHS had promulgated in the 2019 Payment
Notice, vacating four of them. The court specifically vacated the
portion of the 2019 Payment Notice that ceased HHS' practice of
designating some plans in the FFEs as ``standardized options,'' a
policy that the 2019 Payment Notice stated was seeking to maximize
innovation by issuers in designing and offering a wide range of plans
to consumers (83 FR 16974 and 16975). Subsequently, HHS announced its
intent to engage in rulemaking under which it would propose to resume
standardized plan options in time for PY 2023.\187\ Relatedly,
President Biden's Executive Order on Promoting Competition in the
American Economy directed HHS to implement standardized plan options in
order to facilitate the plan selection process for consumers on the
Exchanges.\188\
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\186\ 523 F. Supp. 3d 731 (D. Md. 2021).
\187\ In part 3 of the 2022 Payment Notice, we explained that we
would not be able to fully implement those aspects of the court's
decision regarding standardized plan options in time for issuers to
design plans and for Exchanges to be prepared to certify such plans
as QHPs for PY 2022, and therefore, intended to address these issues
in time for plan design and certification for PY 2023. See 86 FR
24140, 24264.
\188\ Executive Order 14036 on Promoting Competition in the
American Economy, July 9, 2021. See 86 FR 36987.
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More recently, in the 2023 Payment Notice, HHS finalized the
requirement for PY 2023 and beyond that issuers offering QHPs through
FFEs and SBE-FPs must offer through the Exchange standardized QHP
options designed by HHS at every product network type (as described in
the definition of ``product'' at Sec. 144.103), at every metal level,
and throughout every service area that they offer non-standardized QHP
options in the individual market. HHS did not require issuers in the
small group market to offer these standardized plan options.
Furthermore, HHS did not subject issuers in State Exchanges to these
requirements. HHS also exempted issuers in FFEs and SBE-FPs that are
already required to offer standardized plan options under State action
taking place on or before January 1, 2020, such as issuers in the State
of Oregon,\189\ from the requirement to offer the standardized plan
options finalized in the 2023 Payment Notice.
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\189\ See Or. Admin. R. 836-053-0009.
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In the 2023 Payment Notice, HHS finalized two sets of standardized
plan options for two different sets of States at the following metal
levels: one bronze plan, one bronze plan that meets the requirement to
have an AV up to 5 points above the 60 percent standard, as specified
in Sec. 156.140(c) (known as an expanded bronze plan), one standard
silver plan, one version of each of the three income-based silver CSR
plan variations, one gold plan, and one platinum plan. HHS did not
finalize standardized plan option designs for the Indian CSR plan
variations as provided for at Sec. 156.420(b) given that the cost-
sharing parameters for these plan variations are already largely
specified, but HHS still required issuers to offer these plan
variations for standardized plan options.\190\
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\190\ See QHP Certification Standardized Plan Options FAQs,
https://www.qhpcertification.cms.gov/s/Standardized%20Plan%20Options%20FAQs.
---------------------------------------------------------------------------
In the 2023 Payment Notice, HHS also elaborated upon the
methodology it utilized in creating the standardized plan options
designs. Specifically, HHS explained that it designed these plans to be
similar to the most popular QHPs in FFEs and SBE-FPs in PY 2021. This
was done based on an examination of the proportion of consumers
enrolled in plans with different cost sharing types (including
copayment exempt from the deductible, copayment subject to the
deductible, coinsurance exempt from
[[Page 78275]]
the deductible, and coinsurance subject to the deductible) for every
benefit category in the actuarial value (AV) calculator at each metal
level.
HHS chose the cost-sharing type with the majority or plurality of
enrollees. HHS then chose the enrollee-weighted median values for this
cost-sharing type as the copayment amount or coinsurance rate for each
benefit category before modifying these plans to have an AV near the
lower end of the de minimis range for each metal level to ensure the
competitiveness of these plans. HHS applied this methodology in
selecting the deductibles and MOOPs for these plans, as well.
HHS also explained that it designed two separate sets of
standardized plan options in order to accommodate applicable cost-
sharing laws in different sets of FFE and SBE-FP States, similar to the
approach previously taken for standardized plan options. Specifically,
in the 2018 Payment Notice, HHS designed three sets of standardized
plan options tailored to unique cost-sharing laws in different States.
The second and third sets of these standardized plan options differed
from the first set only to the extent necessary to comply with State
cost sharing laws.
The second set of standardized plan options in the 2018 Payment
Notice was designed to work in States that: (1) require that cost
sharing for physical therapy, occupational therapy, and speech therapy
be no greater than the cost sharing for primary care visits; (2) limit
the cost-sharing amount that can be charged for a 30-day supply of
prescription drugs by tier; or (3) require that all drug tiers carry a
copayment rather than coinsurance. The second set of standardized plan
options applied to Arkansas, Delaware, Iowa, Kentucky, Louisiana,
Missouri, Montana, and New Hampshire. The third set was designed to
work in a State with maximum deductible requirements and other cost
sharing standards. The third set of standardized plan options was
designed to work in the Exchange in New Jersey, which has since
transitioned to become a State Exchange and was thus outside the scope
of this particular rulemaking.
HHS explained that it included several of the defining features of
the second set of standardized plan options from the 2018 Payment
Notice in the first set of standardized plan options in the 2023
Payment Notice. As a result, in the first set of standardized plan
options, there was cost sharing parity between the primary care visit,
the speech therapy, and the occupational and physical therapy benefit
categories. There were also copayments for all prescription drug tiers,
including the non-preferred brand and specialty tiers, instead of
coinsurance rates. Finally, the copayment for the mental health/
substance use disorder in-network outpatient office visit sub-
classification was equal to the least restrictive level for copayments
for medical/surgical benefits in the in-network, outpatient office
visit sub-classification (and copayments applied to substantially all
medical/surgical benefits in this sub-classification), to ensure
issuers were able to design plans that comply with the Paul Wellstone
and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
(MHPAEA) and its implementing regulations.\191\ This first set of
standardized plan options applied to all FFE and SBE-FP issuers,
excluding those in Delaware and Louisiana.
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\191\ In general, MHPAEA requires that the financial
requirements (such as coinsurance and copays) and treatment
limitations (such as visit limits) imposed on mental health or
substance use disorder benefits cannot be more restrictive than the
predominant financial requirements and treatment limitations that
apply to substantially all medical/surgical benefits in a
classification.
---------------------------------------------------------------------------
HHS further explained that it included all of the defining features
of the second set of standardized plan options from the 2018 Payment
Notice in the second set of standardized plan options in the 2023
Payment Notice. As a result, in this set of standardized plan options,
similar to the first set of standardized plan options, there was cost-
sharing parity between the primary care visit, the speech therapy, and
the occupational and physical therapy benefit categories, and there
were copayments for all prescription drug tiers, including the non-
preferred brand and specialty tiers, instead of coinsurance rates.
Additionally, the copayment for the mental health/substance use
disorder in-network outpatient office visit sub-classification was
equal to the least restrictive level for copayments for medical/
surgical benefits in the in-network, outpatient office visit sub-
classification (and copayments applied to substantially all medical/
surgical benefits in this sub-classification), to ensure issuers were
able to design plans that comply with MHPAEA and its implementing
regulations.
The feature that distinguished the first set of standardized plan
options from the second is that the second set of standardized plan
options had copayments of $150 or less for the specialty drug tiers of
standardized plan options at all metal levels. This feature was
included in the second set of standardized plan options in order to
accommodate relevant specialty tier prescription drug cost sharing laws
in Delaware and Louisiana (87 FR 674 through 676; 87 FR 27311 through
27313).\192\
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\192\ See 87 FR 674 through 676 and 87 FR 27311 through 27313
for a more detailed discussion on the methodology HHS used to create
the standardized plan options in the 2023 Payment Notice.
---------------------------------------------------------------------------
In the 2023 Payment Notice, HHS also exercised the authority under
Sec. 155.205(b)(1) to resume the differential display of standardized
plan options, including those standardized plan options required under
State action taking place on or before January 1, 2020, on
HealthCare.gov beginning with the PY 2023 open enrollment period.
Similarly, also beginning with the PY 2023 open enrollment period, HHS
resumed enforcement of the existing standardized plan options display
requirements under Sec. Sec. 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv)
for approved web-brokers and QHP issuers using a direct enrollment
pathway to facilitate enrollment through an FFE or SBE-FP--including
those using the Classic DE and EDE Pathways--meaning these entities
were required to differentially display standardized plan options in a
manner consistent with how standardized plan options were displayed on
HealthCare.gov, unless HHS approved a deviation, beginning with the PY
2023 open enrollment period.
Most recently, after publishing the 2023 Payment Notice, HHS
conducted extensive interested party engagement with a range of
participants, including issuers, agents, brokers, web-brokers, States,
State Exchanges, researchers, disease advocacy groups, and consumer
support groups (87 FR 27318). HHS discussed a range of topics related
to standardized plan options in these engagement sessions, including
plan designs, cost sharing, pre-deductible coverage of particular
benefits, formulary tiering, enhancing choice architecture, plan
display on HealthCare.gov, reducing the risk of plan choice overload
(either through direct limits on the number of non-standardized plan
options or a revised version of the meaningful difference standard),
and advancing health equity.
For PY 2024 and subsequent PYs, we would maintain a large degree of
continuity with our approach to standardized plan options in the 2023
Payment Notice, except for minor updates as proposed in this section.
First, in contrast to the policy finalized in the 2023 Payment Notice,
we propose, for PY 2024 and subsequent PYs, to no longer include a
standardized
[[Page 78276]]
plan option for the non-expanded bronze metal level. Accordingly, we
propose at new Sec. 156.201(b) that for PY 2024 and subsequent PYs,
FFE and SBE-FP issuers offering QHPs through the Exchanges must offer
standardized QHP options designed by HHS at every product network type
(as described in the definition of ``product'' at Sec. 144.103), at
every metal level except the non-expanded bronze level, and throughout
every service area that they offer non-standardized QHP options. We
propose to re-designate the current regulation text at Sec. 156.201 as
paragraph (a) and revise it to apply only to PY 2023.
Thus, for PY 2024 and subsequent PYs, we propose standardized plan
options for the following metal levels: one bronze plan that meets the
requirement to have an AV up to 5 points above the 60 percent standard,
as specified in Sec. 156.140(c) (known as an expanded bronze plan),
one standard silver plan, one version of each of the three income-based
silver CSR plan variations, one gold plan, and one platinum plan.
Consistent with our approach in the 2023 Payment Notice, we are not
proposing standardized plan options for the Indian CSR plan variations
as provided for at Sec. 156.420(b) given that the cost-sharing
parameters for these plan variations are already largely specified. We
would continue to require issuers to offer these plan variations for
all standardized plan options offered, and we propose to remove the
regulation text language stating that standardized plan options for
these plan variations are not required to clarify that while issuers
must, under Sec. 156.420(b), continue to offer such plan variations
based on standardized plan options, those plan variations will
themselves not be standardized plan options based on designs we will
specify in this rulemaking.\193\
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\193\ See QHP Certification Standardized Plan Options FAQs,
https://www.qhpcertification.cms.gov/s/Standardized%20Plan%20Options%20FAQs.
---------------------------------------------------------------------------
We propose to discontinue standardized plan options for the non-
expanded bronze metal level mainly due to AV constraints. Specifically,
it is not feasible to design a non-expanded bronze plan that includes
any pre-deductible coverage while maintaining an AV within the
permissible AV de minimis range for the non-expanded bronze metal
level. Furthermore, few issuers chose to offer non-expanded bronze
standardized plan options in PY 2023, with the majority of issuers
offering bronze plans instead choosing to offer only expanded bronze
standardized plan options. Thus, we believe discontinuing non-expanded
bronze standardized plan options would minimize burden without any
deleterious consequences. We also clarify that issuers would still be
permitted to offer non-standardized plan options at the non-expanded
bronze metal level, meaning consumers would still have the ability to
choose these plan options if they so choose. We also clarify that if an
issuer offers a non-standardized plan option at the bronze metal level,
whether expanded or non-expanded, it would need to also offer an
expanded bronze standardized plan option.
Similar to the approach taken in the 2023 Payment Notice, we
propose to create standardized plan options that resemble the most
popular QHP offerings that millions are already enrolled in by
selecting the most popular cost-sharing type for each benefit category;
selecting enrollee-weighted median values for each of these benefit
categories based on refreshed PY 2022 cost-sharing and enrollment data;
modifying these plans to be able accommodate State cost-sharing laws;
and decreasing the AVs for these plan designs to be at the floor of
each AV de minimis range primarily by increasing deductibles.
Furthermore, consistent with the approach taken in the 2023 Payment
Notice, we propose to create two sets of standardized plan options at
the previously proposed metal levels, with the same sets of designs
applying to the same sets of States as in the 2023 Payment Notice.
Specifically, the first set of standardized plan options would continue
to apply to FFE and SBE-FP issuers in all FFE and SBE-FP States,
excluding those in Delaware, Louisiana, and Oregon, and the second set
of standardized plan options would continue to apply to Exchange
issuers specifically in Delaware and Louisiana. See Table 10 and Table
11 for the two sets of standardized plan options we propose for PY
2024.
In addition, since SBE-FPs use the same platform as the FFEs, we
would continue to apply the standardized plan option requirements
equally on FFEs and SBE-FPs. We continue to believe that proposing a
distinction between FFEs and SBE-FPs for purposes of these requirements
would create a substantial financial and operational burden that we
believe outweighs the benefit of permitting such a distinction.
Also, consistent with our policy in PY 2023, we would continue to
apply these requirements to applicable issuers in the individual market
but not in the small group market. We also would continue to exempt
issuers offering QHPs through FFEs and SBE-FPs that are already
required to offer standardized plan options under State action taking
place on or before January 1, 2020, such as issuers in the State of
Oregon,\194\ from the requirement to offer the standardized plan
options included in this rule. In addition, we would continue to exempt
issuers in State Exchanges from these requirements for several reasons.
First, we do not wish to impose duplicative standardized plan option
requirements on issuers in the eight State Exchanges that already have
standardized plan option requirements. Additionally, we continue to
believe that State Exchanges are best positioned to understand both the
nuances of their respective markets and consumer needs within those
markets. Finally, we continue to believe that States that have invested
the necessary time and resources to become State Exchanges have done so
in order to implement innovative policies that differ from those on the
FFEs, and we do not wish to impede these innovative policies so long as
they comply with existing legal requirements.
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\194\ See Or. Admin. R. 836-053-0009.
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Furthermore, consistent with the policy finalized in the 2023
Payment Notice, we would continue to differentially display
standardized plan options, including those standardized plan options
required under State action taking place on or before January 1, 2020,
on HealthCare.gov under the authority at Sec. 155.205(b)(1). We would
also continue enforcement of the standardized plan options display
requirements for approved web-brokers and QHP issuers using a direct
enrollment pathway to facilitate enrollment through an FFE or SBE-FP--
including both the Classic DE and EDE Pathways--at Sec. Sec.
155.220(c)(3)(i)(H) and 156.265(b)(3)(iv), respectively. This means
that these entities would be required to differentially display the
2024 benefit year standardized plan options in accordance with the
requirements under Sec. 155.205(b)(1) in a manner consistent with how
standardized plan options are displayed on HealthCare.gov, unless HHS
approves a deviation, beginning with the 2024 benefit year open
enrollment period. Consistent with our PY 2023 policy, any requests
from web-brokers and QHP issuers seeking approval for an alternate
differentiation format would continue to be reviewed based on whether
the same or similar level of differentiation and clarity is being
[[Page 78277]]
provided under the requested deviation as is provided on
HealthCare.gov.
Consistent with the approach to plan designs in the 2023 Payment
Notice, we would also continue to use the following four tiers of
prescription drug cost sharing in the proposed standardized plan
options: generic drugs, preferred brand drugs, non-preferred brand
drugs, and specialty drugs. We believe the use of four tiers of
prescription drug cost-sharing in the standardized plan options will
continue to allow for predictable and understandable drug coverage. We
believe the use of four tiers of prescription drug cost-sharing will
also play an important role in facilitating the consumer decision-
making process by allowing consumers to more easily compare formularies
between plans, and allow for easier year-to-year comparisons with their
current plan. The continued use of four tiers will also minimize issuer
burden since, for PY 2023, issuers have already created standardized
plan options with formularies that include only four tiers of
prescription drug cost-sharing. We will consider including additional
drug tiers for future years, and invite comment on the appropriate
number of drug tiers to use in standardized plan options in the future.
However, we would continue to use four tiers of prescription drug cost-
sharing in standardized plan options for PY 2024 and subsequent PYs to
maintain continuity with our approach to standardized plan options in
PY 2023.
We are aware of concerns that issuers may not be including specific
drugs at appropriate cost-sharing tiers for the standardized plan
options; for example, some issuers may be including brand name drugs in
the generic drug cost-sharing tier, while others include generic drugs
in the preferred or non-preferred brand drug cost-sharing tiers. We
believe that consumers understand the difference between generic and
brand name drugs, and that it is reasonable to assume that consumers
expect that only generic drugs are covered at the cost-sharing amount
in the generic drug cost-sharing tier, and that only brand name drugs
are covered at the cost-sharing amount in the preferred or non-
preferred brand drug cost-sharing tiers.
Accordingly, we propose to revise Sec. 156.201 to add a new
paragraph (c) specifying that issuers of standardized plan options must
(1) place all covered generic drugs in the standardized plan options'
generic drug cost-sharing tier, or the specialty drug tier if there is
an appropriate and non-discriminatory basis in accordance with Sec.
156.125 for doing so, and (2) place brand name drugs in either the
standardized plan options' preferred brand or non-preferred brand
tiers, or specialty drug tier if there is an appropriate and non-
discriminatory basis in accordance with Sec. 156.125 for doing so. For
purposes of this proposal, ``non-discriminatory basis'' means there
must be a clinical basis for placing a particular prescription drug in
the specialty drug tier in accordance with Sec. 156.125.
We also specify that within the Prescription Drug Template, for
standardized plan options, issuers should enter zero cost preventive
drugs for tier one, generic drugs for tier two, preferred brand drugs
for tier three, non-preferred drugs for tier four, specialty drugs for
tier five, and medical services drugs for tier six, if applicable.
We propose the approach described in this section for PY 2024 and
subsequent PYs for several reasons. To begin, we are continuing to
require FFE and SBE-FP issuers to offer standardized plan options in
large part due to continued plan proliferation, which has only
increased since the standardized plan option requirements were
finalized in the 2023 Payment Notice. With this continued plan
proliferation, it is increasingly important to continue to attempt to
streamline and simplify the plan selection process for consumers on the
Exchanges. We believe these standardized plan options can continue to
play a meaningful role in that simplification by reducing the number of
variables that consumers have to consider when selecting a plan option,
thus allowing consumers to more easily compare available plan options.
More specifically, with these standardized plan options, consumers will
continue to be able to take other meaningful factors into account, such
as networks, formularies, and premiums, when selecting a plan option.
We further believe these standardized plan options include several
distinctive features, such as enhanced pre-deductible coverage for
several benefit categories, that will continue to play an important
role in reducing barriers to access, combatting discriminatory benefit
designs, and advancing health equity. Including enhanced pre-deductible
coverage for these benefit categories will ensure consumers are more
easily able to access these services without first meeting their
deductibles. Furthermore, including copayments instead of coinsurance
rates for a greater number of benefit categories will enhance consumer
certainty and reduce the risk of unexpected financial harm sometimes
associated with high coinsurance rates.
Additionally, given that insufficient time has passed to assess all
the impacts of the standardized plan option requirements finalized in
the 2023 Payment Notice, we propose to maintain a high degree of
continuity with respect to many of the standardized plan option
policies previously finalized to reduce the risk of disruption for all
involved interested parties, including issuers, agents, brokers,
States, and enrollees. We believe making major departures from the
methodology used to create the standardized plan options as finalized
in the 2023 Payment Notice could result in drastic changes in these
plan designs that could potentially create undue burden for these
interested parties. Furthermore, if the standardized plan options that
HHS creates vary significantly from year to year, those enrolled in
these plans could experience unexpected financial harm if the cost-
sharing for services they rely upon differs substantially from the
previous year. Ultimately, we believe consistency in standardized plan
options is important to allow both issuers and enrollees to become
accustomed to these plan designs.
We seek comment on our proposed approach to standardized plan
options for PY 2024 and subsequent PYs. We also seek comment on the
specific approach to tiering for these standardized plan options within
the Prescription Drug Template.
[[Page 78278]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.020
[[Page 78279]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.021
4. Non-Standardized Plan Option Limits (Sec. 156.202)
At Sec. 156.202, HHS proposes to exercise the authority under
sections 1311(c)(1) and 1321(a)(1)(B) of the ACA to limit the number of
non-standardized plan options that issuers of QHPs can offer through
Exchanges on the Federal platform (including State-based Exchanges on
the Federal Platform) to two non-standardized plan options per product
network type (as described in the definition of ``product'' at Sec.
144.103) and metal level (excluding catastrophic plans), in any service
area, for PY 2024 and beyond, as a condition of QHP certification.
Section 1311(c)(1) of the ACA directs the Secretary to establish
criteria for the certification of health plans as QHPs. Section
1321(a)(1)(B) of the ACA directs the Secretary to issue regulations
that set standards for meeting the requirements of title I of the ACA
with respect to, among other things, the offering of QHPs through such
Exchanges.
Under this proposed requirement, an issuer would, for example, be
limited to offering through an Exchange two gold HMO and two gold PPO
non-standardized plan options in any service area in PY 2024 or any
subsequent PY. As an additional clarifying example, if an issuer wanted
to offer two Statewide bronze HMO non-standardized plan options as well
as two additional bronze HMO non-standardized plan options in one
particular service area that covers less than the entire State, in the
service areas that all four plans would cover, the issuer could choose
to offer through the Exchange either the two bronze HMO non-
standardized plan options offered Statewide or the two bronze HMO non-
standardized plan options offered in that particular service area (or
any combination thereof, so long as the total number of non-
standardized plan options does not exceed the limit of two per issuer,
product network type, and metal level in the service area).
Similar to the approach taken with respect to standardized plan
options in the 2023 Payment Notice and in this proposed rule, HHS
proposes to not apply this requirement to issuers in State Exchanges
for several reasons. First, HHS does not wish to impose duplicative
requirements on issuers in the State Exchanges that already limit the
number of non-standardized plan options. Additionally, HHS believes
that State Exchanges are best positioned to understand both the nuances
of their respective markets and consumer needs within those markets.
Finally, HHS
[[Page 78280]]
believes that States that have invested the necessary time and
resources to become State Exchanges have done so in order to implement
innovative policies that differ from those on the FFEs, and HHS does
not wish to impede these innovative policies, so long as they comply
with existing legal requirements.
However, consistent with the approach taken with respect to
standardized plan options in the 2023 Payment Notice and in this this
proposed rule, since SBE-FPs use the same platform as the FFEs, HHS
proposes to apply this requirement equally on FFEs and SBE-FPs. HHS
believes that proposing a distinction between FFEs and SBE-FPs for
purposes of this requirement would create a substantial financial and
operational burden that HHS believes outweighs the benefit of
permitting such a distinction.
Finally, also in alignment with the approach taken with
standardized plan options in the 2023 Payment Notice as well as the
approach taken in this proposed rule, HHS proposes that this proposed
requirement would not apply to plans offered through the SHOPs or to
SADPs, given that the nature of these markets differ substantially from
the individual medical QHP market, in terms of issuer participation,
plan offerings, plan enrollment, and services covered. For example, the
degree of plan proliferation observed in individual market medical QHPs
over the last several plan years is not evident to the same degree for
QHPs offered through the SHOPs or for SADPs offered in the individual
market. For these reasons, HHS does not believe the same requirements
should be applied to these other markets.
HHS believes that given the large number of plan offerings that
would continue to exist on the Exchanges, a sufficiently diverse range
of plan offerings would still exist for consumers to continue to select
innovative plans that meet their unique health needs, even if HHS did
ultimately choose to limit the number of non-standardized plan options
that issuers can offer. Thus, even if consumers believe that their
health needs may not be best met with the standardized plan options
included in this current rulemaking, they would still have the option
to select from a sufficient number of other non-standardized plan
options.
Under this proposed limit, we estimate that the weighted average
number of non-standardized plan options (which does not take into
consideration standardized plan options) available to each consumer
would be reduced from approximately 107.8 in PY 2022 to 37.2 in PY
2024, which we believe still provides consumers with a sufficient
number of plan offerings.\195\ Additionally, we estimate that of a
total of 106,037 non-standardized plan option plan-county combinations
offered in PY 2022, approximately 60,949 (57.5 percent) of these plan-
county combinations would no longer be permitted to be offered, a
number we believe would still provide consumers with a sufficient
degree of choice during the plan selection process.\196\
---------------------------------------------------------------------------
\195\ Utilizing weighted as opposed to unweighted averages takes
into consideration the number of enrollees in a particular service
area when calculating the average number of plans available to
enrollees. As a result of weighting by enrollment, service areas
with a higher number of enrollees have a greater impact on the
overall average than service areas with a lower number of enrollees.
Weighting averages allows a more representative metric to be
calculated that more closely resembles the actual experience of
enrollees.
\196\ Plan-county combinations are the count of unique plan ID
and FIPS code combinations. This measure is used because a single
plan may be available in multiple counties, and specific limits on
non-standardized plan options may have different impacts on one
county where there are four plans of the same product network type
and metal level versus another county where there are only two plans
of the same product network type and service area, for example.
---------------------------------------------------------------------------
Finally, if this limit were adopted, we estimate that of the
approximately 10.21 million enrollees in the FFEs and SBE-FPs in PY
2022, approximately 2.72 million (26.6 percent) of these enrollees
would have their current plan offerings affected, and issuers would
therefore be required to select another QHP to crosswalk these
enrollees into for PY 2024.\197\ CMS would utilize the existing
discontinuation notices and process as well as the current re-
enrollment hierarchy at Sec. 155.335(j) to ensure a seamless
transition and continuity of coverage for affected enrollees. In
addition, CMS would ensure that the necessary consumer assistance would
be made available to affected enrollees as part of the expanded funding
for Navigator programs.
---------------------------------------------------------------------------
\197\ These calculations assume that the non-standardized plan
options removed due to the proposed limit would be those with the
fewest enrollees based on PY 2022 data, which includes individual
market medical QHPs for Exchanges using the HealthCare.gov
eligibility and enrollment platform, including SBE-FPs.
---------------------------------------------------------------------------
In the 2023 Payment Notice, HHS solicited comment on enhancing
choice architecture and on preventing plan choice overload for
consumers on HealthCare.gov (87 FR 689 through 691 and 87 FR 27345
through 27347). In this comment solicitation, HHS noted that although
it continues to prioritize competition and choice on the Exchanges, it
was concerned about plan choice overload, which can result when
consumers have too many choices in plan options on an Exchange. HHS
referred to a 2016 report by the RAND Corporation reviewing over 100
studies which concluded that having too many health plan choices can
lead to poor enrollment decisions due to the difficulty consumers face
in processing complex health insurance information.\198\ HHS also
referred to a study of consumer behavior in Medicare Part D, Medicare
Advantage, and Medigap that demonstrated that a choice of 15 or fewer
plans was associated with higher enrollment rates, while a choice of 30
or more plans led to a decline in enrollment rates.\199\
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\198\ Taylor EA, Carman KG, Lopez A, Muchow AN, Roshan P, and
Eibner C. Consumer Decisionmaking in the Health Care Marketplace.
RAND Corporation. 2016.
\199\ Chao Zhou and Yuting Zhang, ``The Vast Majority of
Medicare Part D Beneficiaries Still Don't Choose the Cheapest Plans
That Meet Their Medication Needs.'' Health Affairs, 31, no.10
(2012): 2259-2265.
---------------------------------------------------------------------------
With this concern in mind, HHS explained in the 2023 Payment Notice
that it was interested in exploring possible methods of improving
choice architecture and preventing plan choice overload. HHS expressed
interest in exploring the feasibility and utility of limiting the
number of non-standardized plan options that FFE and SBE-FP issuers can
offer through the Exchanges in future plan years as one option to
reduce the risk of plan choice overload and to further streamline and
optimize the plan selection process for consumers on the Exchanges.
Accordingly, HHS sought comment on the impact of limiting the number of
non-standardized plan options that issuers can offer through the
Exchanges, on effective methods to achieve this goal, the advantages
and disadvantages of these methods, and if there were alternative
methods not considered.
In response to this comment solicitation, many commenters agreed
that the number of plan options that consumers can choose from on the
Exchanges has increased beyond a point that is productive for
consumers. Many of these commenters further explained that consumers do
not have the time, resources, our health literacy to be able to
meaningfully compare all available plan options. These commenters also
agreed that when consumers are faced with an overwhelming number of
plan options, many of which are similar with only minor differences
between them, the risk of plan choice overload is significantly
exacerbated.
Similarly, during the standardized plan option interested party
engagement
[[Page 78281]]
sessions HHS conducted after publishing the 2023 Payment Notice, many
participants agreed that the number of plan options was far too high
and supported taking additional action to prevent plan choice overload.
In short, many 2023 Payment Notice commenters and interested party
engagement participants supported limiting the number of non-
standardized plan options that issuers can offer to streamline the plan
selection process for consumers on the Exchanges.
In addition, current QHP submission data provide support for the
argument that enacting such a limit would be beneficial for consumers.
For example, it is estimated that there will be a weighted average of
113.6 plans available per enrollee on HealthCare.gov in PY 2023
compared to a weighted average of 107.8 plans available per enrollee in
PY 2022 and a weighted average of 25.9 plans available per enrollee in
PY 2019.\200\ Similarly, it is expected that there will be a weighted
average of 18.3 plan offerings per issuer in PY 2023 compared to 17.1
plan offerings per issuer in PY 2022 and 9.7 plan offerings per issuer
in PY 2019.\201\ With this continued plan proliferation for both
enrollees and issuers, HHS believes that limiting the number of non-
standardized plan options that FFE and SBE-FP issuers of QHPs can offer
through the Exchanges beginning in PY 2024 could greatly enhance the
consumer experience on HealthCare.gov.
---------------------------------------------------------------------------
\200\ Weighted averages were calculated by accounting for the
number of enrollees in particular service areas, with service areas
with a higher number of enrollees having a more significant impact
on the overall average than service areas with a lower number of
enrollees.
\201\ Ibid.
---------------------------------------------------------------------------
To reduce the risk of plan choice overload, HHS also considered
solely focusing on enhancing choice architecture on HealthCare.gov,
instead of enhancing choice architecture in conjunction with limiting
the number of non-standardized plan options that issuers can offer, an
approach recommended by several commenters in the 2023 Payment Notice.
HHS agrees that enhancements to the consumer experience on
HealthCare.gov are critical in ensuring that consumers are able to more
meaningfully compare plan choices and more easily select a health plan
that meets their unique health needs. As such, HHS made several
enhancements to HealthCare.gov for the open enrollment period for PY
2023. HHS also intends to continue conducting research to inform
further enhancements to the consumer experience on HealthCare.gov for
PY 2024 and subsequent plan years.
That said, HHS believes that enhancing choice architecture on
HealthCare.gov is necessary but, alone, insufficient to reduce the risk
of plan choice overload for several reasons. First, HealthCare.gov is
not the only pathway for consumers to search for, compare, select, and
enroll in a QHP, and it is not the only information resource consumers
seek when considering Exchange coverage. Instead, consumers shop
through a multitude of channels, sometimes utilizing a mix of customer
service channels including the Marketplace Call Center; online on
HealthCare.gov; through assisters, agents, and brokers; and through
certified enrollment partners (such as Classic DE and EDE web brokers
and issuers). Thus, HHS believes that consumers enrolling in QHPs
through these alternative pathways would not benefit to the same degree
as those enrolling through HealthCare.gov if HHS focused on reducing
plan choice overload solely by making enhancements to HealthCare.gov.
Moreover, considering that an increasingly greater portion of QHP
enrollment is occurring through these alternative enrollment pathways,
HHS believes that a more comprehensive approach to reducing plan choice
overload that would also benefit those utilizing these alternative
enrollment pathways is required.
Furthermore, while enhancements to choice architecture and the plan
comparison experience can play a critical role in streamlining the plan
selection process and reducing the risk of plan choice overload, the
number of plans available per enrollee has increased beyond a number
that is beneficial for consumers, and this high number of plan choices
makes it increasingly difficult to meaningfully manage choice
architecture on HealthCare.gov and through other Exchange customer
service channels.
Relatedly, HHS believes that low-income consumers would
particularly benefit from a policy that limits the number of plans.
This is because silver plans deliver the most value to low-income
consumers, but it is exactly these consumers--who often have the lowest
health insurance literacy--who now face choosing among the highest
number of near-duplicate silver plans, which will continue unless
limits on the number of these plans are set. Near-duplicate plans are
the most difficult to filter and sort out by interface improvements.
As such, HHS believes that having an excessive number of plans
(particularly those at the silver metal level) places an inequitable
burden on those who need insurance the most, those who face the
greatest challenges in selecting the most suitable health plan, and
those who can least withstand the consequences of choosing a plan that
costs too much and delivers too little. For this reason, HHS believes
that reducing the number of available plans (particularly silver plans)
by limiting the number of non-standardized plan options that issuers
can offer, can play an important role in advancing the agency's
commitments to health equity.
In short, HHS believes that limiting the number of non-standardized
plan options that issuers can offer in conjunction with enhancing the
plan comparison experience on HealthCare.gov is the most effective
method to streamline the plan selection process and to reduce the risk
of plan choice overload for consumers on the HealthCare.gov Exchanges.
As an alternative to limiting the number of non-standardized plan
options that issuers in FFEs and SBE-FPs can offer through the
Exchanges to reduce the risk of plan choice overload, HHS could also
apply a meaningful difference standard. Such a standard was previously
codified at Sec. 156.298.
The original meaningful difference standard was introduced in the
2015 Payment Notice, revised in the 2017 Payment Notice, and
discontinued and removed from regulation in the 2019 Payment Notice.
The meaningful difference standard was originally intended to enhance
the consumer experience on the Exchanges by preventing duplicative plan
offerings. The decision to discontinue the meaningful difference
standard in the 2019 Payment Notice was made largely due to the
decreased number of plan offerings on the Exchanges (that is, there was
a weighted average of 25.9 plans available per enrollee in PY 2019), as
well as the low number of plans flagged under the prior review.
Under the original meaningful difference standard introduced in the
2015 Payment Notice, a plan was considered to be ``meaningfully
different'' from another plan in the same service area and metal tier
(including catastrophic plans) if a reasonable consumer would be able
to identify one or more material differences among the following
characteristics between the plan and other plan offerings: (1) cost
sharing; (2) provider networks; (3) covered benefits; (4) plan type;
(5) Health Savings Account eligibility; or (6) self-only, non-self-
only, or child only plan offerings (79 FR 13813, 13840). Additionally,
CMS believed that a
[[Page 78282]]
reasonable consumer would be likely to identify a difference in MOOP of
$100 or more or a difference in deductible of $50 for purposes of the
meaningful difference standard.\202\ The 2017 Payment Notice eliminated
the Health Savings Account eligibility element, and revised the self-
only, non-self-only, or child-only plan offerings element (87 FR 27208,
27345). In the 2017 Letter to Issuers, the MOOP and deductible dollar
difference thresholds were increased to $500 and $250,
respectively.\203\
---------------------------------------------------------------------------
\202\ 2015 Letter to Issuers in the Federally-facilitated
Marketplaces, chapter 3, section 3. Available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2015-final-issuer-letter-3-14-2014.pdf.
\203\ 2017 Letter to Issuers in the Federally-facilitated
Marketplaces, chapter 2, section 12. Available at https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/final-2017-letter-to-issuers-2-29-16.pdf.
---------------------------------------------------------------------------
In the 2023 Payment Notice comment solicitation on enhancing choice
architecture and preventing plan choice overload (87 FR 27208, 27345),
in addition to soliciting comment on limiting the number of non-
standardized plan options that issuers can offer, HHS also solicited
comment on resuming the meaningful difference standard as one potential
method it could use to reduce the risk of plan choice overload. In
response to this comment solicitation, many commenters and standardized
plan option interested party engagement participants supported resuming
the meaningful difference standard, with the caveat that the standard
should be strengthened since the original version of the standard from
the 2015 Payment Notice as well as the updated version of the standard
from the 2017 Payment Notice both failed to meaningfully reduce
duplicative plan offerings.
These commenters and workgroup participants further explained that
earlier versions of the meaningful difference standard relied on
several criteria and difference thresholds (that is, only having one
difference among the following attributes: cost sharing, provider
networks, covered benefits, plan type, Health Savings Account
eligibility, or self-only, non-self-only, or child only plan offerings)
which allowed issuers to more easily meet the standard. Several of
these commenters and workgroup participants noted that no State
Exchange currently utilizes the meaningful difference standard to
reduce the risk of plan choice overload.
As such, HHS proposes, as an alternative to our proposal to limit
the number of non-standardized plan options that an FFE or SBE-FP
issuer may offer on the Exchange, to impose a new meaningful difference
standard, which would be more stringent than the previous standard, for
PY 2024 and subsequent PYs. Specifically, instead of including all of
the criteria from the original standard from the 2015 Payment Notice
(that is, cost sharing, provider networks, covered benefits, plan type,
Health Savings Account eligibility, or self-only, non-self-only, or
child only plan offerings), HHS proposes grouping plans by issuer ID,
county, metal level, product network type, and deductible integration
type, and then evaluating whether plans within each group are
``meaningfully different'' based on differences in deductible amounts.
With this proposed approach, two plans would need to have
deductibles that differ by more than $1,000 to satisfy the new proposed
meaningful difference standard. We believe that adopting this approach
for a new meaningful difference standard would more effectively reduce
the risk of plan choice overload and streamline the plan selection
process for consumers on the Exchanges. With a dollar deductible
difference threshold of $1,000, we estimate that the weighted average
number of non-standardized plan options (which does not take into
consideration standardized plan options) available to each consumer
would be reduced from approximately 107.8 in PY 2022 to 53.2 in PY
2024, which we believe still provides consumers with a sufficient
number of plan offerings. In addition, we estimate that of a total of
106,037 non-standardized plan option plan-county combinations offered
in PY 2022, approximately 49,629 (46.8 percent) of these plan-county
combinations would no longer be permitted to be offered, a number we
believe would still provide consumers with a sufficient degree of
choice during the plan selection process.\204\ If this dollar
deductible difference threshold were adopted, we estimate that of the
approximately 10.21 million enrollees in the FFEs and SBE-FPs in PY
2022, approximately 2.64 million (25.9 percent) of these enrollees
would have their current plan offerings affected.\205\
---------------------------------------------------------------------------
\204\ Plan-county combinations are the count of unique plan ID
and FIPS code combinations. This measure is used because a single
plan may be available in multiple counties, and specific limits on
non-standardized plan options or specific dollar deductible
difference thresholds may have different impacts on one county where
there are four plans of the same product network type and metal
level versus another county where there are only two plans of the
same product network type and metal level, for example.
\205\ These calculations assume that the non-standardized plan
options removed due to the proposed limit would be those with the
fewest enrollees based on PY 2022 data, which includes individual
market medical QHPs for Exchanges using the HealthCare.gov
eligibility and enrollment platform, including SBE-FPs.
---------------------------------------------------------------------------
We seek comment on the feasibility and utility of limiting the
number of non-standardized plan options that FFE and SBE-FP issuers can
offer through the Exchanges beginning in PY 2024. We also seek comment
on whether the limit of two non-standardized plan options per issuer,
product network type, and metal level in any service area is the most
appropriate approach, or if a stricter or more relaxed limit should be
adopted instead. In addition, we seek comment on the advantages and
disadvantages of utilizing a phased approached of limiting the number
of non-standardized plan options (for example, if there were a limit of
three non-standardized plan options per issuer, product network type,
metal level, and service area for PY 2024, two for PY 2025, and one for
PY 2026). We also seek comment on the effect that adopting such a limit
would have on particular product network types, and whether this limit
would cause a proliferation of product network types that are not
actually differentiated for consumers.
Furthermore, we seek comment on whether we should consider
additional factors, such as variations of products or networks, when
limiting the number of non-standardized plan options--which would mean
that issuers would be limited to offering two non-standardized plan
options per product network type, metal level, product, and network
variation (for example, by network ID) in any service area (or some
combination thereof). If we were to adopt such an approach, issuers
would be permitted to offer two non-standardized gold HMOs within one
product as well as an additional two non-standardized gold HMOs within
a second product in a particular service area, for example. This would
also mean that issuers would be permitted to offer two non-standardized
gold HMOs with one particular network ID as well as two additional non-
standardized gold HMOs with a different network ID in a particular
service area, for example.
We also seek comment on whether permitting additional variation
only for specific benefits, such as adult dental and adult vision
benefits, instead of permitting any variation in a product (for
example, by product ID) would be more appropriate--which would mean,
[[Page 78283]]
for example, that issuers could offer two gold HMO non-standardized
plan options without adult vision and dental benefits and two gold HMO
non-standardized plan options with adult vision and dental benefits in
the same service area.
In addition, we seek comment on imposing a new meaningful
difference standard in place of limiting the number of non-standardized
plan options that issuers can offer. We also seek comment on additional
or alternative specific criteria that would be appropriate to include
in the meaningful difference standard to determine whether plans are
``meaningfully different'' from one another, including whether the same
criteria and difference thresholds from the original standard from the
2015 Payment Notice or the updated difference thresholds from the 2017
Payment Notice should be instituted, or some combination thereof.
Finally, we seek comment on the specific deductible dollar difference
thresholds that would be appropriate to determine whether plans are
considered to be ``meaningfully different'' from other plans in the
same grouping, and whether a deductible threshold of $1,000 would be
most appropriate and effective, or if a stricter or more relaxed
threshold should be adopted instead.
5. QHP Rate and Benefit Information (Sec. 156.210)
a. Age on Effective Date for SADPs
We propose at new Sec. 156.210(d)(1) to require issuers of stand-
alone dental plans (SADPs), as a condition of Exchange certification,
to use an enrollee's age at the time of policy issuance or renewal
(referred to as age on effective date) as the sole method to calculate
an enrollee's age for rating and eligibility purposes, beginning with
Exchange certification for PY 2024. We propose that this requirement
apply to Exchange-certified SADPs, whether sold on- or off-Exchange.
Since PY 2014, the process the FFEs use in QHP certification allows
SADP issuers seeking certification of their SADPs to enter multiple
options to explain how age is determined for rating and eligibility
purposes. Because the Federal eligibility and enrollment platform
operationalizes the rating and eligibility standards when an applicant
seeks SADP coverage through an SBE-FP, issuers in SBE-FPs have also
been required to comply with this part of the process. While market
rules at Sec. 147.102(a)(1)(iii) require medical QHP issuers to enter
age on effective date as the method to calculate an enrollee's age for
rating and eligibility purposes, SADP issuers have been able to enter
any of the following four options in the Business Rules Template: (1)
Age on effective date; (2) Age on January 1st of the effective date
year; (3) Age on insurance date (age on birthday nearest the effective
date); or (4) Age on January 1st or July 1st.\206\
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\206\ See, for example, Qualified Health Plan Issuer Application
Instructions, Plan Year 2023, Extracted section: Section 3B:
Business Rules. https://www.qhpcertification.cms.gov/s/Business%20Rules.
---------------------------------------------------------------------------
Despite the availability of these other options for SADPs, age on
effective date is the most commonly used age rating methodology; the
vast majority of individual market SADP issuers have used the age on
effective date method since PY 2014. Not only is it the most commonly
used method, but it is also the most straightforward methodology for
consumers to understand. For example, under the age on effective date
method, if an enrollee is age 30 at the time of a plan's effective
date, the enrollee is rated at age 30 for the rest of the plan year.
The less commonly used options are likely more confusing for consumers,
who may experience a mismatch between their age on the date on which
they enrolled into an SADP versus the age on which the rate charged to
them is based, due to the alternate age calculation methodologies.
Thus, consumers can more easily understand the premium rate they are
charged when the age on effective date method is used instead of the
other methods, reducing consumers confusion.
Allowing Exchange-certified SADPs to rate by other methods imposes
unnecessary complexity, not only to CMS as operator of the FFEs and the
Federal eligibility and enrollment platform, but also to enrollment
partners and consumers in the Exchanges on the Federal platform. For
example, the added complexity results in occasional inability to
effectuate enrollment due to the unclear logic used to support the
uncommon and alternative Exchange-certified SADP rating methods, which
require expensive manual workarounds for the Exchanges on the Federal
platform and Exchange-certified SADP issuers. Using the other methods
also affects the efficiency of Classic DE and EDE partners, who rely
more on Application Programming Interfaces (APIs) and must account for
these alternate Exchange-certified SADP age calculation methods. It is
more challenging for the Classic DE and EDE partners to replicate the
logic needed for enrolling consumers into Exchange-certified SADPs
using methods other than the conventional age on effective date method.
Additionally, the more complicated alternative age calculation methods
currently in use make it more difficult for consumers to understand the
premium rate they are charged. Thus, requiring Exchange-certified SADPs
to use the age on effective date methodology to calculate an enrollee's
age as a condition of QHP certification, and consequently removing the
less commonly used and more complex age calculation methods, will
reduce consumer confusion and promote operational efficiency.
By helping to reduce consumer confusion and promote operational
efficiency during the QHP certification process, this proposed policy
would help facilitate more informed enrollment decisions and enrollment
satisfaction. Accordingly, we believe it is appropriate to extend this
proposed certification requirement to SADPs seeking certification on
the FFEs as well as the SBE-FPs and SBEs. We seek comment on any
anticipated challenges that this proposal could present for SBEs using
their own platform, and whether and to what extent we should, if this
proposal is finalized, limit or delay this proposed certification
requirement for those SBEs.
We acknowledge the potential that Exchange-certified SADPs whose
issuers use the alternative age calculation methods could withdraw from
the Exchanges rather than comply with this new requirement. However, we
do not anticipate that any such issuers would choose to withdraw from
the Exchanges because of this proposal; and even if an issuer were to
withdraw, we would expect that any such withdrawal would cause minimal
disruption to consumers and other Exchange-certified plans. Given that
a large majority of Exchange-certified SADP issuers are already using
the age on effective date method, and based on the current availability
of such plans in all service areas, we do not anticipate that consumers
or other Exchange-certified plans would be materially affected.\207\
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\207\ In the EHB Rule (78 FR at 12853), we operationalized
section 1302(b)(4)(F) of the ACA to permit QHP issuers to omit
coverage of the pediatric dental EHB if an Exchange-certified SADP
exists in the same service area in which they intend to offer
coverage. As a corollary, if no such SADP is offered through an
Exchange in that service area, then all health plans offered through
the Exchange in that service area would be required to provide
coverage of the pediatric dental EHB, as section 2707(a) of the PHS
Act requires all non-grandfathered plans in the individual and small
group markets to provide coverage of the EHB package described at
section 1302(a) of the ACA.
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We seek comment on this proposal to require Exchange-certified
SADPs, whether sold on- or off-Exchange, to use age on effective date
as the sole method
[[Page 78284]]
to calculate an enrollee's age for rating and eligibility purposes,
beginning with PY 2024.
b. Guaranteed Rates for SADPs
We propose at new Sec. 156.210(d)(2) to require issuers of SADPs,
as a condition of Exchange certification, to submit guaranteed rates
beginning with Exchange certification for PY 2024. We propose that this
requirement apply to Exchange-certified SADPs, whether they are sold
on- or off-Exchange.
SADPs are excepted benefits, as defined by section 2791(c)(2)(A) of
the PHS Act and HHS implementing regulations at Sec. Sec.
146.145(b)(3)(iii)(A) and 148.220(b)(1), and are not subject to the PHS
Act insurance market reform provisions that generally apply to non-
grandfathered health plans in the individual and group markets inside
and outside the Exchange.\208\ In particular, because SADP issuers are
not required to comply with the premium rating requirement under
section 2701 of the PHS Act applicable to non-grandfathered individual
and small group health insurance coverage, we have permitted SADP
issuers in the FFEs and SBE-FPs to comply with the rate information
submission requirements at Sec. 156.210 under a modified
standard.\209\ Specifically, CMS has historically granted SADP issuers
the flexibility to offer guaranteed or estimated rates. By indicating
the rate is a guaranteed rate, the SADP issuer commits to charging the
consumer the approved premium rate, which has been calculated using
consumers' geographic location, age, and other permissible rating
factors. Estimated rates require enrollees to contact the issuer to
determine a final rate.
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\208\ See 42 U.S.C. 300gg-21(b) and (c) and 42 U.S.C. 300gg-
63(b). Examples of PHS Act insurance market reforms added by the ACA
that do not apply to stand-alone dental plans include but are not
limited to section 2702 guaranteed availability standards, section
2703 guaranteed renewability standards, and section 2718 medical
loss ratio standards.
\209\ See, for example, the 2014 Final Letter to Issuers on
Federally-facilitated and State Partnership Exchanges for more
information on how SADPs in the FFEs and SBE-FPs have flexibility to
comply with the rate information submission requirements at Sec.
156.210.
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This flexibility for SADPs to offer estimated rates was effective
for SADP issuers beginning with PY 2014. It was necessary because the
relevant certification template was originally designed to support
medical QHPs, which forced operational limits that prevented the
accurate collection of rating rules for SADPs. Since PY 2014, we have
improved the certification templates to allow SADPs to set the maximum
age for dependents to 18, and to rate all such dependents. Thus, the
FFEs and SBE-FPs can now accommodate dental rating rules properly in
most reasonable circumstances.
We believe this proposal would significantly benefit enrollees.
Consistent with Sec. Sec. 156.440(b) and 156.470, APTC may be applied
to the pediatric dental EHB portion of SADP premiums. If SADP issuers
submit estimated rates and subsequently modify their actual rates, the
Exchanges, including State Exchanges (including State Exchanges on the
Federal platform) and FFEs, could incorrectly calculate APTC for the
pediatric dental EHB portion of a consumer's premium, which could
potentially cause consumer harm. Thus, since low-income individuals may
qualify for APTC \210\ and are disproportionately impacted by limited
access to affordable health care,\211\ we believe this proposed policy
change would help advance health equity by helping ensure that low-
income individuals who qualify for APTC are charged the correct premium
amount when enrolling in SADPs on the Exchange.
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\210\ The PTC is generally available to people who buy
Marketplace coverage and who have a household income that equals or
exceeds the Federal poverty level, and who meet other eligibility
criteria.
\211\ Research and policy analysis has shown that low-income
individuals are disproportionately impacted by lack of access to
affordable health care. According to a 2018 Health Affairs Health
Policy Brief, compared to higher-income Americans, low-income
individuals face greater barriers to accessing medical care. More
specifically, low-income individuals are less likely to have health
insurance, receive new drugs and technologies, and have ready access
to primary and specialty care. See Khullar, D., & Chokshi, D. A.
(2018). Health, Income, And Poverty: Where We Are And What Could
Help. Health Affairs. https://doi.org/10.1377/hpb20180817.901935.
Additionally, a 2007 study found that barriers to health care can be
insurmountable for low-income families, even those with insurance
coverage. In particular, this study found that families reported
three major barriers to health care: lack of insurance coverage,
poor access to services, and unaffordable costs. See DeVoe, J. E.,
Baez, A., Angier, H., Krois, L., Edlund, C., Carney, P. A. (2007).
Insurance + Access [ne] Health Care: Typology of Barriers to Health
Care Access for Low-Income Families. Annals of Family Medicine,
5(6), 511-518. https://doi.org/10.1370/afm.748.
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We acknowledge that requiring guaranteed rates presents a small
risk that SADP issuers that offer estimated rates could cease offering
SADPs on the Exchanges. While we recognize this risk, we strongly
believe that the benefits of this proposal far exceed the
disadvantages. Specifically, as discussed previously, we believe this
proposed policy change would significantly reduce the risk of consumer
harm by reducing the risk of incorrect APTC calculation for the
pediatric dental EHB portion of premiums. Thus, we believe this
proposed policy would have a positive financial impact by ensuring that
SADP enrollees receive the correct APTC calculation for the pediatric
dental EHB portion of premiums, and therefore, are charged the correct
premium rate.
We also note that although the FFEs and SBE-FP issuers currently
allow SADP issuers to submit estimated rates, the vast majority elect
to submit guaranteed rates. The vast majority of SADP issuers offering
on-Exchange and off-Exchange Exchange-certified SADPs also elect to
submit guaranteed rates. Given that most SADP issuers already submit
guaranteed rates, the majority of SADP issuers are unlikely to be
impacted by this proposal.
Because we believe this proposed policy would significantly benefit
enrollees by ensuring that SADP enrollees receive the correct APTC
calculation for the pediatric dental EHB portion of premiums, and
therefore, are charged the correct premium rate, we believe it is
appropriate to apply this proposed certification requirement to SADPs
seeking certification on the FFEs as well as the SBE-FPs and SBEs. We
seek comment on any anticipated challenges that this proposal could
present for SBEs using their own platform, and whether and to what
extent we should, if this proposal is finalized, limit or delay this
proposed certification requirement for those SBEs.
We seek comment on this proposal to require Exchange-certified SADP
issuers to submit guaranteed rates as a condition of Exchange
certification beginning with Exchange certification for PY 2024.
6. Plan and Plan Variation Marketing Name Requirements for QHPs (Sec.
156.225)
We propose to add a new paragraph (c) to Sec. 156.225 to require
that QHP plan and plan variation \212\ marketing names include correct
information, without omission of material fact, and do not include
content that is misleading. If finalized as proposed, CMS would review
plan and plan variation marketing names during the annual
[[Page 78285]]
QHP certification process in close collaboration with State regulators
in States with Exchanges on the Federal platform.
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\212\ In practice, CMS and interested parties often use the term
``plan variants'' to refer to ``plan variations.'' Per Sec.
156.400, plan variation means a zero-cost sharing plan variation, a
limited cost sharing plan variation, or a silver plan variation.
Issuers may choose to vary plan marketing name by the plan variant--
for example, use one plan marketing name for a silver plan that
meets the actuarial value (AV) requirements at Sec. 156.140(b)(2),
and a different name for that plan's equivalent that meets the AV
requirements at Sec. 156.420(a)(1), (2), or (3).
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Section 1311(c)(1)(A) of the ACA states that the Secretary shall
establish QHP certification criteria, which must include, at a minimum,
that a QHP meet marketing requirements and not employ marketing
practices or benefit designs that have the effect of discouraging
enrollment by individuals with significant health needs. CMS, States,
and QHP issuers work together to ensure that consumers can make
informed decisions when selecting a health insurance plan based on
factors such as QHP benefit design, cost-sharing requirements, and
available financial assistance. In PY 2022, Exchanges on the Federal
platform saw a significant increase in the number of plan and plan
variation marketing names that included cost-sharing information and
other benefit details. Following Open Enrollment for PY 2022, CMS
received complaints from consumers in multiple States who misunderstood
cost-sharing information in their QHP's marketing name.
Upon further investigation, CMS and State regulators determined
that this language was often incorrect or could be reasonably
interpreted by consumers as misleading based on information in
corresponding plan benefit documentation submitted as part of the QHP
certification process.\213\ CMS's review of QHP data for PY 2023
indicates continued use of cost-sharing information in plan and plan
variation marketing names.
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\213\ For example, in some cases a plan marketing name described
a limited benefit in a way that could be understood as being
unlimited, such as a ``$5 co-pay'' when the $5 co-pay was only
available for an initial visit. Consumers were concerned upon
learning the full extent of the cost-sharing for which they would be
responsible during the plan year.
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This proposed policy would require all information included in plan
and plan variation marketing names that relates to plan attributes to
correspond to and match information that issuers submit for the plan in
the Plans & Benefits Template, and in other materials submitted as part
of the QHP certification process, such as any content that is part of
the Summary of Benefits and Coverage. If necessary, this information
can be included in the ``Benefit Explanation'' field of the Plans &
Benefits Template. Consumers applying for coverage should be able to
understand references to benefit information in plan and plan variation
marketing names, and they should be able to confirm any information
from a plan or plan variation marketing name in the plan's publicly
available benefit descriptions. Also, plan benefit or cost sharing
information in a plan or plan variation marketing name should not
conflict with plan or plan variation information displayed on
HealthCare.gov during the plan selection process in terms of dollar
amount and, where applicable, terminology.
Under this proposal, as an example, CMS would flag plan and plan
variation marketing names for revision to help consumers understand the
cost-sharing and coverage implications. The following are examples of
information that should be validated to ensure accuracy and consistency
across the plan or plan variation marketing name, Plans & Benefits
Template, HealthCare.gov plan selection information, and other
applicable QHP certification materials. These examples are not all-
inclusive, but they illustrate the kinds of information in plan and
plan variation marketing names that could mislead consumers through
inaccurate information or omission of material facts.
Cost-sharing amounts that do not specify limitations the
plan or plan variation includes, such as whether the cost-sharing
amount is only available for drugs in a certain prescription drug
category/tier, providers in a specific network or tier, or for a
certain number of provider visits following which a higher cost-sharing
amount will apply;
Dollar amounts that do not specify what they refer to (for
example, deductible, maximum out-of-pocket, or something else), whether
they apply only to medical, drug, or another type of benefit, or
whether, in cases of deductible or maximum out-of-pocket amounts, they
apply to an individual or a family;
Benefits, such as adult dental care, that are listed in a
plan or plan variation marketing name to indicate that they are
covered, but that plan documents indicate are not covered; and
Reference(s) to health savings accounts (HSAs) in
marketing names of plans or plan variations that do not permit
enrollees to set up an HSA.\214\
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\214\ An HSA is a tax-exempt trust or custodial account that a
taxpayer may set up with a qualified HSA trustee to pay or reimburse
certain medical expenses they incur. (See IRS Publication 969
(2021), Health Savings Accounts and Other Tax-Favored Health Plans:
https://www.irs.gov/publications/p969#en_US_2021_publink1000204030.)
Taxpayers must meet certain requirements to qualify for an HSA,
including being enrolled in a High Deductible Health Plan (HDHP) as
defined in Section 223(c)(2) of the U.S. Tax Code. HDHP requirements
include minimum levels for family and individual deductible
amounts--for example, for calendar year 2022, an HDHP was defined as
a health plan with an annual deductible not less than $1,400 for
self-only coverage or $2,800 for family coverage, with annual out-
of-pocket expenses not more than $7,050 for self-only coverage or
$14,100 for family coverage. (See IRS Rev. Proc. 2021-25: https://www.irs.gov/pub/irs-drop/rp-21-25.pdf.) Plan variants with limited
or no cost sharing, such as those described at Sec. 156.420(a)(1)
and (b)(1), by definition do not meet the requirements to be HDHPs,
and enrollees in these plans therefore cannot set up an HSA. CMS
will consider references to HSAs in the names of plans that do not
qualify as HDHPs to be incorrect and misleading.
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We seek comment on this proposal and whether there are additional
methods of preventing consumer confusion and market disruption related
to this issue. In particular, we seek comment on the potential to
identify components of plan and plan variation marketing names that
could be uniformly structured and defined across QHPs, so as to
consistently communicate information and ensure that plan and plan
variation marketing names complement and do not contradict other
sources of plan detail, such as cost-sharing and benefit information,
displayed during the plan selection process on HealthCare.gov and other
enrollment platforms. For example, we seek comment on whether, to
address this, CMS should establish a required format for plan and plan
variation marketing names that specifies elements such as name of
issuer, metal level, and limited cost-sharing information.
7. Plans That Do Not Use a Provider Network: Network Adequacy (Sec.
156.230) and Essential Community Providers (Sec. 156.235)
We propose to revise the network adequacy and ECP standards at
Sec. Sec. 156.230 and 156.235 to state that all individual market QHPs
and SADPs and all SHOP QHPs across all Exchanges must use a network of
providers that complies with the standards described in those sections,
and to remove the exception that these sections do not apply to plans
that do not use a provider network.
In the Exchange Establishment Rule, we established the minimum
network adequacy criteria that health and dental plans must meet to be
certified as QHPs at Sec. 156.230. In the 2016 Payment Notice, we
modified Sec. 156.230(a), in part, to specify that network adequacy
requirements apply only to QHPs that use a provider network to deliver
services to enrollees and that a provider network includes only
providers that are contracted as in-network. We also revised Sec.
156.235(a) to state that the ECP criteria apply only to QHPs that use a
provider network. In Part 1 of the 2022
[[Page 78286]]
Payment Notice (86 FR 6138), we added section (f) to Sec. 156.230 to
state that a plan for which an issuer seeks QHP certification or any
certified QHP that does not use a provider network (meaning that the
plan or QHP does not condition or differentiate benefits based on
whether the issuer has a network participation agreement with a
provider that furnishes covered services) is not required to comply
with the network adequacy standards at paragraphs (a) through (e) of
Sec. 156.230 to qualify for certification as a QHP. In that rule, we
also stated that plans that do not utilize a provider network must
still comply with all applicable QHP certification requirements to
obtain QHP certification, which ensures that any plan that does not
comply with applicable QHP certification requirements will be denied
QHP certification (86 FR 6138).
Since 2016, only a single issuer has sought a certification on an
FFE for a plan that does not use a network. Despite lengthy
negotiations with this issuer, our experience with this plan convinced
us that commenters to Part 1 of the 2022 Payment Notice who raised
concerns about the burden plans without networks place on enrollees
appear to have been correct, and so, for that reason and the other
reasons explained below, we are proposing to revisit this policy.
Section 1311(c)(1)(B) and (C) of the ACA directs HHS to establish
by regulation certification criteria for QHPs, including criteria that
require QHPs to ensure a sufficient choice of providers (in a manner
consistent with applicable provisions under section 2702(c) of the PHS
Act, which governs insured health plans that include a provider
network), provide information to enrollees and prospective enrollees on
the availability of in-network and out-of-network providers, and to
include within health insurance plan provider networks those ECPs that
serve predominantly low income, medically underserved individuals. HHS
carries out this directive through establishing network adequacy and
ECP requirements and reviewing QHP compliance with such requirements.
When we added section (f) to Sec. 156.230 in Part 1 of the 2022
Payment Notice to except plans that do not use a provider network from
meeting the network adequacy standards described at Sec. 156.230(a)
through (e), we did not intend to allow a plan to ignore the minimum
statutory criteria for QHP certification. Plans without provider
networks still are required by section 1311(c)(1)(B) of the ACA to
ensure sufficient choice of providers and provide information to
enrollees and prospective enrollees on the availability of in-network
and out-of-network providers to obtain certification, even though they
are not currently subject to Sec. Sec. 156.230 and 156.235. Whether a
plan that does not use a network provides sufficient a choice of
providers is a more nuanced inquiry than a simple assertion that an
enrollee can receive benefits for any provider. For a prospective
enrollee, a ``sufficient choice of providers'' likely involves factors
like the burden of accessing those providers, including whether there
are providers nearby that they can see without unreasonable delay that
would accept such a plan's benefit amount as payment in full, or
whether they are able to receive all of the care for a specific health
condition from a single provider without incurring additional out-of-
pocket costs. These are among the factors involved in determining
whether a network plan is in compliance with the network adequacy and
ECP standards at Sec. Sec. 156.230 and 156.235; a plan's compliance
with these regulatory standards is one way that HHS can verify that
plans meet the statutory criteria that QHPs ensure a sufficient choice
of providers, including ECPs.
To more effectively ensure that all plans provide sufficient choice
of providers and to provide for consistent standards across all QHPs,
we believe it would be appropriate to revise the network adequacy and
ECP standards at Sec. Sec. 156.230 and 156.235 to state that all QHPs,
including SADPs, must use a network of providers that complies with the
standards described in those sections and to remove the exception at
Sec. 156.230(f). Consistent standards also would allow for easier
comparability across all QHPs in a more comprehensible manner for
prospective enrollees. The benefits of easier comparability between
plans and other challenges posed by plan choice overload are discussed
in more detail in the preamble sections about Standardized Plan Options
and Non-Standardized Plan Option Limits.
We have previously stated that ``nothing in [the ACA] requires a
QHP issuer to use a provider network,'' (84 FR at 6154) and it is true
that the ACA includes no standalone network requirement. However, after
revisiting the statute, we now doubt that a plan without a network can
comply with the statutory requirement at section 1311(c)(1)(C) of the
ACA that ``a plan shall, at a minimum . . . include within health
insurance plan networks those essential community providers, where
available, that serve predominately low-income, medically-underserved
individuals.'' We have always understood Section 1311(c)(1)(C) of the
ACA to require all plans to provide sufficient access to ECPs, where
available, whether or not the plan included a provider network. But we
have not previously considered whether this specific statutory text is
consistent with a policy exempting plans without a network from network
adequacy regulations. We now understand the statute's text to best
support a reading that access to ECPs will be provided ``within health
insurance networks.''
Additionally, under section 1311(e)(1)(B) of the ACA and Sec.
155.1000(c)(2), an Exchange may certify plans only if it determines
that making the plans available through the Exchange is in the
interests of qualified individuals. Section 155.1000 provides Exchanges
with broad discretion to certify health plans that may otherwise meet
the QHP certification standards specified in part 156. When we
implemented section 1311(e)(1)(B) of the ACA at Sec. 155.1000(c)(2) in
the Exchange Establishment Rule, we noted that ``an Exchange could
adopt an `any qualified plan' certification, engage in selective
certification, or negotiate with plans on a case-by-case basis'' (77 FR
18405). Under this authority, we believe that requiring QHPs to use a
provider network would be in the interests of qualified individuals and
would better protect consumers from potential harms that could arise in
cases where QHPs do not use provider networks. For example, the
implementation of a provider network can help mitigate against risks of
substantial out-of-pocket costs, ensure access without out-of-pocket
costs to preventive services that must be covered without cost sharing,
and, in the individual market, facilitate comparability of standardized
plan options. Furthermore, studies have found that provider networks
allow for insurer-negotiated prices and controlled (that is, reduced)
costs in the form of reduced patient cost sharing, premiums, and
service price, as compared with such services obtained out of
network.\215 216\
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\215\ Benson NM, Song Z. Prices And Cost Sharing For
Psychotherapy In Network Versus Out Of Network In The United States.
Health Aff (Millwood). 2020 Jul;39(7):1210-1218. https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.01468.
\216\ Song, Z., Johnson, W., Kennedy, K., Biniek, J. F., &
Wallace, J. Out-of-network spending mostly declined in privately
insured populations with a few notable exceptions from 2008 to 2016.
Health Aff. 2020;39(6), 1032-1041. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2019.01776.
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This proposed revision would assure HHS that all plans certified as
QHPs
[[Page 78287]]
offer sufficient choice of providers in compliance with a consistent
set of criteria for easier comparability across all QHPs and better
ensure substantive consumer protections afforded by the ACA without
undue barriers to access those protections. This consistency would be
valuable to consumers as it ensures all consumers will have access to a
set of providers with whom their plan has contracted in accordance with
our established network adequacy and ECP requirements and allows for
easier comparison between plans for prospective enrollees. This will
also allow consumers to seek care from providers with whom their plan
has negotiated a rate, limiting their potential exposure to out-of-
pocket costs under the plan.
Accordingly, pursuant to the authority delegated to HHS to
establish criteria for the certification of health plans as QHPs, we
propose to remove the exception at Sec. 156.230(f) and to revise
Sec. Sec. 156.230 and 156.235 to state that all individual market QHPs
and SADPs and all SHOP plan QHPs across all Exchanges-types must use a
network of providers that complies with the standards described in
those sections, beginning with PY 2024. Under this proposal, an
Exchange could not certify as a QHP a health plan that does not use a
network of providers. However, we solicit comment on whether it is
possible to design a plan that does not use a network in a way that
would address our concerns about the plan's ability to offer a
sufficient choice of providers without excessive burden on consumers,
or what regulatory standards such a plan could meet to ensure a
sufficient choice of providers without excessive burden on consumers.
This proposal would also generally apply to SADPs. Since 2014, the
FFEs have received, and approved, QHP certification applications for
SADPs that do not use a provider network in every plan year. However,
the number of SADPs that do not use a provider network has never
accounted for a significant number of SADPs approved as QHPs on the
FFEs. At their most prevalent in PY 2014, only 50 of the 1,521 SADPs
certified as QHPs on the FFEs were plans that do not use a provider
network. In PY 2022, only 8 of the 672 SADPs certified as QHPs on the
FFEs were plans that do not use a provider network.
Further, the number of SADPs on the FFEs that do not use a provider
network appears to be limited since 2017 to fewer and fewer States;
while 9 FFE States had SADPs that do not use a provider network
certified as QHPs in PY 2014, only 2 FFE States still had SADPs that do
not use a provider network certified in PY 2022. Since PY 2021, only 85
counties in Alaska and Montana still have SADPs that do not use a
provider network certified as QHPs. We assume that the few SADP issuers
that still offer SADPs that do not use a provider network on the FFEs
in Alaska and Montana only do so because of difficulty in maintaining a
sufficient provider network in those States. We believe it is
reasonable to assume that consumers increasingly gravitate towards
SADPs that use a network, given this overall decrease in the
availability of SADPs that do not use a provider network. We invite
comment to confirm these understandings, as well as comment on the
prevalence of SADPs that do not use a provider network offered outside
of the FFEs in the non-grandfathered individual and small group
markets.
[[Page 78288]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.022
Given the overall lack of popularity of SADPs that do not use a
provider network, we believe that consumers find that such plans do not
offer the same levels of protections against out-of-pocket costs as
network plans. Thus, we believe it would be appropriate to revise
Sec. Sec. 156.230 and 156.235 so that all SADPs must use a network of
providers that complies with the standards described in those sections
as a condition of QHP certification, beginning with PY 2024.
However, we are cognizant that it can be more challenging for SADPs
to establish a network of dental providers based on the availability of
nearby dental providers, and we are aware this proposal could result in
no SADPs offered through Exchanges in States like Alaska and Montana,
which have historically offered SADPs without
[[Page 78289]]
provider networks (see Table 12). Further, we are aware that having no
Exchange-certified SADPs offered through an Exchange in an area would
impact all non-grandfathered individual and small group plans in such
areas. Without an SADP available on the respective Exchange, all non-
grandfathered individual and small group health plans in impacted areas
would be required to cover the pediatric dental EHB. We note that
section 1302(b)(4)(F) of the ACA states that if such an SADP is offered
through an Exchange, another health plan offered through such Exchange
shall not fail to be treated as a QHP solely because the plan does not
offer coverage of pediatric dental benefits offered through the SADP.
In the EHB Rule (78 FR at 12853), we operationalized this provision
at section 1302(b)(4)(F) of the ACA to permit QHP issuers to omit
coverage of the pediatric dental EHB if an Exchange-certified SADP
exists in the same service area in which they intend to offer coverage.
As a corollary, if no such SADP is offered through an Exchange in that
service area, then all health plans offered through the Exchange in
that service area would be required to provide coverage of the
pediatric dental EHB, as section 2707(a) of the ACA requires all non-
grandfathered plans in the individual and small group markets to
provide coverage of the EHB package described at section 1302(a) of the
ACA. However, to our knowledge, at least one Exchange-certified SADP
has been offered in all service areas nationwide since implementation
of this requirement in 2014, and no Exchange has required a medical QHP
to provide coverage of the pediatric dental EHB in this manner. We
solicit comment to confirm this understanding.
To prevent a situation where this proposal would require health
plans in those areas to cover the pediatric dental EHB, we solicit
comment on the extent to which we should finalize a limited exception
to this proposal only for SADPs that sell plans in areas where it is
prohibitively difficult for the issuer to establish a network of dental
providers; this exception would not be applicable to health plans.
Under such an exception, we could consider an area to be
``prohibitively difficult'' for the SADP issuer to establish a network
of dental providers on a case-by-case basis, taking into account a
number of non-exhaustive factors, such as the availability of other
SADPs that use a provider network in the service area, and prior years'
network adequacy data to identify counties in which SADP issuers have
struggled to meet standards due to a shortage of dental providers.
Other factors could include an attestation from the issuer about
extreme difficulties in developing a dental provider network, or data
provided in the ECP/NA template or justification forms during the QHP
application submission process that reflect such extreme difficulties.
We seek comment on whether it would be appropriate to finalize such an
exception in this rule, other factors that we might consider in
evaluating whether an exception is appropriate, as well as alternative
approaches to such an exception.
We seek comment on this proposal, as well as on other topics
included in this section.
Compliance With Appointment Wait Time Standards
In the 2023 Payment Notice, HHS finalized the requirement that
issuers demonstrate compliance with appointment wait time standards via
attestation, beginning in PY 2024. Issuers must work with their network
providers to collect the necessary data to assess appointment wait
times and determine if their provider network meets the wait time
standards detailed in the 2023 Letter to Issuers, as CMS will begin
conducting such reviews of issuer attestations for PY 2024.
8. Essential Community Providers (Sec. 156.235)
We propose to expand access to care for low-income and medically
underserved consumers by strengthening ECP standards for QHP
certification, as discussed in this section. First, HHS proposes to
establish two additional stand-alone ECP categories at Sec.
156.235(a)(2)(ii)(B) for PY 2024 and beyond: Mental Health Facilities
and Substance Use Disorder (SUD) Treatment Centers. In doing so, two
provider types currently categorized as ``Other ECP Providers''
(Community Mental Health Centers and Substance Use Disorder (SUD)
Treatment Centers) would be recategorized within these new proposed
stand-alone ECP categories. We propose to crosswalk the Community
Mental Health Centers provider type into the newly created stand-alone
Mental Health Facilities category and the SUD Treatment Centers
provider type into the newly created stand-alone SUD Treatment Centers
category. Additionally, we propose to add Rural Emergency Hospitals
(REHs) as a provider type in the Other ECP Providers ECP category. This
addition reflects the fact that on or after January 1, 2023, REHs may
begin participating in the Medicare program. As CMS noted in July of
this year, ``[t]he REH designation provides an opportunity for Critical
Access Hospitals (CAHs) and certain rural hospitals to avert potential
closure and continue to provide essential services for the communities
they serve.'' \217\ HHS believes that the inclusion of REHs on the ECP
List may increase access to needed care for low-income and medically
underserved consumers in rural communities.
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\217\ https://www.cms.gov/newsroom/fact-sheets/rural-emergency-hospitals-proposed-rulemaking.
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ECPs include providers that serve predominantly low-income and
medically underserved individuals, and specifically include providers
described in section 340B(a)(4) of the PHS Act and section
1927(c)(1)(D)(i)(IV) of the Social Security Act (the Act). Section
156.235 establishes the requirements for the inclusion of ECPs in QHP
provider networks. Section 156.235(a) requires QHP issuers to include a
sufficient number and geographic distribution of ECPs in their
networks, where available. Each plan year, HHS releases a final list of
ECPs to assist issuers with identifying providers that qualify for
inclusion in a QHP issuer's plan network toward satisfaction of the ECP
standard under Sec. 156.235. The list is not exhaustive and does not
include every provider that participates or is eligible to participate
in the 340B drug program, every provider that is described under
section 1927(c)(1)(D)(i)(IV) of the Act, or every provider that may
otherwise qualify under Sec. 156.235. CMS endeavors to continue
improving the ECP list for future years. These efforts include direct
provider outreach to ECPs themselves, as well as reviewing the provider
data with Federal partners.
Section 156.235(b) establishes an Alternate ECP Standard for QHP
issuers that provide a majority of their covered professional services
through physicians employed directly by the issuer or a single
contracted medical group. We note that the above proposal establishing
two additional ECP categories and the proposed threshold requirements
discussed later in this section would affect all QHP issuers,
regardless of whether they are subject to the General ECP Standard
under Sec. 156.235(a) or Alternate ECP Standard under Sec.
156.235(b). However, SADP issuers would only be subject to such
requirements as applied to provider types that offer dental services,
as reflected in Sec. 156.235(a)(2)(ii)(B).
Currently, QHPs that utilize provider networks are required to
contract with at least 35 percent of available ECPs in each plan's
service area to participate in the plan's provider network. In
[[Page 78290]]
addition, under Sec. 156.235(a)(2)(ii)(B), medical QHPs must offer a
contract in good faith to at least one ECP in each of the available ECP
categories in each county in the plan's service area and offer a
contract in good faith to all available Indian health care providers in
the plan's service area. Under Sec. 156.235(a)(2)(ii)(B), the six ECP
categories currently include Federally Qualified Health Centers, Ryan
White Program Providers, Family Planning Providers, Indian Health Care
Providers, Inpatient Hospitals, and Other ECP Providers (currently
defined to include Substance Use Disorder Treatment Centers, Community
Mental Health Centers, Rural Health Clinics, Black Lung Clinics,
Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics, and
Tuberculosis Clinics).
The proposed establishment of two new stand-alone ECP categories
(Mental Health Facilities and SUD Treatment Centers) would strengthen
the ECP standard in two ways: (1) by requiring that medical QHP issuers
offer a contract in good faith to at least one SUD Treatment Center and
at least one Mental Health Facility that qualify as ECPs in each county
in the plan's service area, as opposed to being blended with other
provider types in the existing ``Other ECP Provider'' category; and (2)
by decreasing the number of provider types remaining in the ``Other ECP
Provider'' category, thereby increasing the likelihood that remaining
provider types included in the ``Other ECP Provider'' category will
receive a contract offer from a medical QHP issuer to satisfy the
requirement that they must offer a contract in good faith to at least
one provider in each ECP category in each county in the plan's service
area.
Given that the ECP standard is facility-based, if finalized as
proposed, the inclusion of SUD Treatment Centers and Mental Health
Facilities on the HHS ECP List would be limited to those facilities
identified by the Substance Abuse and Mental Health Services
Administration (SAMHSA) and/or CMS as providing such services, in
addition to fulfilling other ECP qualification requirements as
specified at Sec. 156.235(c).
If finalized as proposed, the eight available stand-alone ECP
categories would consist of the following: (1) Federally Qualified
Health Centers; (2) Ryan White Program Providers; (3) Family Planning
Providers; (4) Indian Health Care Providers; (5) Inpatient Hospitals,
(6) Mental Health Facilities; (7) SUD Treatment Centers, and (8) Other
ECP Providers, to include Rural Health Clinics, Black Lung Clinics,
Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics, and
Tuberculosis Clinics. The proposed ECP categories and ECP provider
types within those categories in the FFEs for PY 2024 and beyond are
set forth in Table 13.
[GRAPHIC] [TIFF OMITTED] TP21DE22.023
[[Page 78291]]
In addition, HHS proposes to revise Sec. 156.235(a)(2)(i) to
require QHPs to contract with at least a minimum percentage of
available ECPs in each plan's service area within certain ECP
categories, as specified by HHS. Specifically, HHS proposes to require
QHPs to contract with at least 35 percent of available FQHCs that
qualify as ECPs in the plan's service area and at least 35 percent of
available Family Planning Providers that qualify as ECPs in the plan's
service area. Furthermore, HHS proposes to revise Sec.
156.235(a)(2)(i) to clarify that these proposed requirements would be
in addition to the existing provision that QHPs must satisfy the
overall 35 percent ECP threshold requirement in the plan's service
area. We note that HHS would retain its current overall ECP provider
participation standard of 35 percent of available ECPs based on the
applicable PY HHS ECP list, including approved ECP write-ins that would
also count toward a QHP issuer's satisfaction of the 35 percent
threshold.
HHS is proposing that only two ECP categories, FQHCs and Family
Planning Providers, be subject to the additional 35 percent threshold
in PY 2024 and beyond. These two categories were selected, in part,
because they represent the two largest ECP categories; together, these
two categories comprise roughly 62 percent of all facilities on the ECP
List. Applying an additional 35 percent threshold to these two
categories could increase consumer access in low-income areas that
could benefit from the additional access to the broad range of health
care services that these particular providers offer. HHS may consider
applying a specified threshold to other ECP categories in future
rulemaking, if HHS finds that additional ECP categories contain a
sufficient number and geographic distribution of providers to allow for
application of the threshold without inflicting undue burden on issuers
by effectively forcing them to contract with a few specific providers.
Based on data from PY 2023, it is likely that a majority of issuers
would be able to meet or exceed the threshold requirements for FQHCs
and Family Planning Providers without needing to contract with
additional providers in these categories. To illustrate, if these
requirements had been in place for PY 2023, out of 137 QHP issuers on
the FFEs, 76 percent would have been able to meet or exceed the 35
percent FQHC threshold, while 61 percent would have been able to meet
or exceed the 35 percent Family Planning Provider threshold without
contracting with additional providers. For SADP issuers, 84 percent
would have been able to meet the 35 percent threshold requirement for
FQHCs offering dental services without contracting with additional
providers. In PY 2023, for medical QHPs, the mean and median
percentages of contracted ECPs for the FQHC category were 74 and 83
percent, respectively. For the Family Planning Providers category, the
mean and median percentages of contracted ECPs were 66 and 71 percent,
respectively. For SADPs, the mean and median percentages of contracted
ECPs for the FQHC category were 61 and 64 percent, respectively.
We acknowledge challenges associated with a general shortage and
uneven distribution of SUD Treatment Centers and Mental Health
Facilities. However, the ACA requires that a QHP's network include ECPs
where available. As such, the proposal to require QHPs to offer a
contract to at least one available SUD Treatment Center and one
available Mental Health Facility in every county in the plan's service
area does not unduly penalize issuers facing a lack of certain types of
ECPs within a service area, meaning that if there are no provider types
that map to a specified ECP category available within the respective
county, the issuer is not penalized. Further, as outlined in prior
Letters to Issuers, HHS prepares the applicable PY HHS ECP list that
potential QHPs use to identify eligible ECP facilities. The HHS ECP
list reflects eligible providers (that is, the denominator) from which
an issuer may select for contracting to count toward satisfying the ECP
standard. As a result, issuers are not disadvantaged if their service
areas contain fewer ECPs. HHS anticipates that any QHP issuers falling
short of the 35 percent threshold for PY 2024 and beyond could satisfy
the standard by using ECP write-ins and justifications. As in previous
years, if an issuer's application does not satisfy the ECP standard,
the issuer would be required to include as part of its application for
QHP certification a satisfactory justification.
We seek comment on these proposals.
9. Termination of Coverage or Enrollment for Qualified Individuals
(Sec. 156.270)
a. Establishing a Timeliness Standard for Notices of Payment
Delinquency
We propose to amend Sec. 156.270(f) by adding a timeliness
standard to the requirement for QHP issuers to send enrollees notice of
payment delinquency. Specifically, we propose to revise Sec.
156.270(f) to require issuers to send notice of payment delinquency
promptly and without undue delay. HHS has long required issuers to send
notices of non-payment of premium (77 FR 18469), so that enrollees who
become delinquent on premium payments are aware and have a chance to
avoid termination of coverage. In accordance with Sec. 156.270(a),
issuers may terminate coverage for the reasons specified in Sec.
155.430(b), which under paragraph (2)(ii) includes termination of
coverage due to non-payment of premiums. Enrollees who are receiving
APTC and who fail to timely pay their premiums are entitled to a 3-
month grace period, described at Sec. 156.270(d), during which they
may return to good standing by paying all outstanding premium before
the end of the 3 months. Enrollees who are not receiving APTC may also
be entitled to a grace period under State law, if applicable.
HHS has an interest in helping enrollees maintain coverage by
establishing basic standards of communication between the QHP issuer
and enrollee regarding premium payment status, especially at the start
of an enrollment and when an enrollment has entered delinquency for
failure to timely pay premium and is at risk for termination. For
example, before Exchange coverage is effectuated, the Exchanges on the
Federal platform generally require that the enrollee make a binder
payment (first month's premium) by prescribed due dates.\218\ At Sec.
156.270(f), HHS has also regulated on communicating to an enrollee when
they have become delinquent on premium payment and when their coverage
has been terminated. But while the regulation at Sec. 156.270(f)
requires that issuers notify enrollees when they become delinquent on
premium payments, CMS currently sets no timeliness requirements for
issuers. In conducting oversight of issuers, HHS is aware that in some
instances, issuers have delayed notifying enrollees of delinquency. HHS
is concerned that there may be situations in which enrollees are not
timely informed that they have become delinquent on premium payments,
thus limiting the amount of time they have available to rectify the
delinquency and avoid termination of coverage. In extreme cases, an
enrollee may not become aware that they have become delinquent until
termination of coverage has already occurred. For example, if an
enrollee (who was not receiving APTC) failed to pay August's premium
but was not informed by the issuer they had become delinquent until
September, they would have already lost coverage and would not have an
opportunity to
[[Page 78292]]
restore it. There may also be uncertainty among issuers regarding their
requirement to send notices of delinquency, since HHS has not provided
guidance on when this notice must be sent.
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\218\ See Sec. 155.400(e).
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Modifying Sec. 156.270(f) to require issuers to send notices of
payment delinquency promptly and without undue delay would ensure that
issuers are promptly sending these notices when enrollees fail to make
premium payments, so that enrollees are aware they are at risk of
losing coverage, including when they are entering a grace period
(either the 3-month grace period for enrollees who are receiving APTC,
or a State grace period if applicable). It would also provide clarity
to issuers regarding their obligation to send a notice when an enrollee
becomes delinquent on premium payment. Finally, updating this
regulation would serve HHS' goal of promoting continuity of coverage by
ensuring enrollees are aware they have become delinquent on premium
payment and have a chance to pay their outstanding premium to avoid
losing coverage. To further help ensure that notices are sent in a
timely and uniform manner, HHS also believes it would be important to
specify the number of days within which the issuer must send notice
from the time an enrollee becomes delinquent on payment. However, we
also recognize that issuers have a variety of practices for sending
delinquency notices, and thus we request comment on what a reasonable
timeframe would be for sending notices of delinquency to enrollees.
We seek comments on this proposal.
10. Final Deadline for Reporting Enrollment and Payment Inaccuracies
Discovered After the Initial 90-Day Reporting Window (Sec.
156.1210(c))
We propose to amend Sec. 156.1210(c) to remove the alternate
deadline at Sec. 156.1210(c)(2) that allows an issuer to describe all
data inaccuracies identified in a payment and collection report by the
date HHS notifies issuers that the HHS audit process with respect to
the plan year to which such inaccuracy relates has been completed, in
order for these data inaccuracies to be eligible for resolution.
In prior rulemakings (78 FR 65080 through 65081, 85 FR 29254, and
86 FR 24256 through 24258), we established provisions at Sec. 156.1210
related to the review and identification of inaccuracies in the monthly
payment and collection reports provided by HHS for Exchange coverage.
These reports currently include information on APTC the Federal
Government is paying to the issuer for each policy listed on the
report, any amounts owed by the issuer for FFE and SBE-FP user fees, as
well as any adjustments from previous payments under those programs.
This process is intended to confirm that accurate payments are made and
to facilitate adjustments where inaccuracies are identified. The
policies and standards governing this process have evolved over time as
HHS, State Exchanges, and issuers have gained experience with handling
payment errors and enrollment reconciliation activities for Exchange
coverage. Issuers are generally required to review these detailed
monthly reports against the payments they expect for each policy based
on the eligibility and enrollment information transmitted by the
Exchange, and any amounts it expects the Federal Government to collect
for FFE and SBE-FP user fees. If an issuer identifies an inaccuracy in
these amounts (including incorrect payment amounts, or extra or missing
policies in the report), it must notify HHS or the State Exchange (as
applicable) within certain timeframes. HHS works with issuers and State
Exchanges (as applicable) to resolve any discrepancies between the
amounts listed in the payment and collections report and the amounts
the issuer believes it should receive for the time period(s) specified
on the report. The prompt identification and correction of payment and
enrollment errors protects enrollees from unanticipated tax liability
that could result if the APTC is greater than the amount authorized by
the Exchange and accepted by the enrollee. It also supports the
efficient operation of Exchanges by aligning the Exchange's enrollment
and eligibility data, payments provided by and collected by HHS for
Exchange coverage, and the issuer's own records of payments due.
Section 156.1210(c) currently establishes the final deadline to
report inaccuracies identified in a payment and collections report for
discovered underpayments \219\ as before the later of (1) the end of
the 3-year period beginning at the end of the plan year to which the
inaccuracy relates or (2) the date by which HHS notifies issuers that
the HHS audit process with respect to the plan year to which such
inaccuracy relates has been completed. The final 3-year or end of the
HHS audit process deadline set forth in Sec. 156.1210(c)(1) and (2) is
significant because HHS will only provide payment to the issuer for
identified data inaccuracies related to discovered underpayments
reported before this deadline.\220\ As we explained in part 2 of the
2022 Payment Notice (86 FR 24257), under section 1313(a)(6) of the ACA,
``payments made by, through, or in connection with an Exchange are
subject to the False Claims Act (31 U.S.C. 3729, et. seq.) if those
payments include any Federal funds.'' As such, if any issuer has an
obligation to pay back APTC or pay additional user fees, the issuer
could be liable under the False Claims Act for knowingly and improperly
avoiding the obligation to pay. Section 156.1210(c)(3) therefore states
that if a payment error is discovered after the 3-year or end of audit
reporting deadline as set forth at Sec. 156.1210(c)(1) and (2), the
issuer is obligated to notify HHS and the State Exchange (as
applicable) and repay any overpayment.
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\219\ Underpayment refers to both APTC underpayments to the
issuer and user fee overpayments to HHS, for which an issuer would
be entitled to additional payment from HHS.
\220\ HHS will work with the issuer or the State Exchange (as
applicable) to resolve the inaccuracy in these situations as long as
the issuer meets other applicable requirements. For example, the
issuer must demonstrate that failure to identify the inaccuracy and
submit it to HHS or the State Exchange (as applicable) in a timely
manner (within the 90-day reporting window under Sec. 156.1210(a))
was not unreasonable or due to the issuer's misconduct or
negligence. See 45 CFR 156.1210(b)(2). In addition, once identified,
the issuer must notify HHS or the State Exchange (as applicable)
within 15 days of identifying the inaccuracy. See 45 CFR
156.1210(b)(1).
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After further consideration of the final deadline for reporting
identified data inaccuracies for discovered underpayments, we propose,
beginning with adjustments to APTC and user fee payments and
collections for 2015 plan year coverage,\221\ to remove the alternate
deadline currently set forth at Sec. 156.1210(c)(2) to ensure HHS and
Exchange processes for handling payment and enrollment disputes related
to discovered underpayments are completed before the existing IRS
limitation on filing corrected tax returns. We further propose to
revise Sec. 156.1210(c) to generally include the final 3-year deadline
to identify and report data inaccuracies for discovered
underpayments.\222\ As such, the first sentence in proposed new Sec.
156.1210(c) would provide that to be eligible for resolution under
Sec. 156.1210(b), the issuer must describe all inaccuracies identified
in a payment and collections report before the end of the 3-year period
beginning at the end of the plan
[[Page 78293]]
year to which the inaccuracy relates. By requiring all issuers in all
Exchanges \223\ to adhere to the final 3-year deadline for identifying
and reporting discovered underpayments, HHS would be balancing the
desire to continue to provide issuers flexibility to identify and
report discovered underpayments after the initial 90-day reporting
window at Sec. 156.1210(a), to encourage the prompt reporting and
timely resolution of data inaccuracies, and to establish a more
consistent, predictable, and less operationally burdensome process for
the identification and resolution of such inaccuracies for enrollees,
issuers, HHS, and State Exchanges.
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\221\ The 2014 plan year is excluded because the alternative
deadline for reporting inaccuracies closed upon completion of the
2014 audits. See CMS. (2019, April 1). CMS Issuer Audits of the
Advanced Payments of the Premium Tax Credit. www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/2014-CMS-APTC-Audits.PDF.
\222\ See 45 CFR 156.1210(c)(1).
\223\ The requirements captured in 45 CFR 156.1210 apply to all
issuers who receive APTC, including issuers in State Exchanges. See
part 2 of the 2022 Payment Notice, 86 FR at 24258.
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Under this proposal, and consistent with the deadline currently set
forth in Sec. 156.1210(c)(1), for 3 years after the end of the
applicable plan year, HHS would accept and work with the issuer (or
State Exchange, as applicable) to resolve the identified data
inaccuracies for discovered underpayments, and would process resulting
payment corrections through policy-level data, which would generate new
Forms 1095-A for impacted enrollees', if other applicable requirements
are met.\224\ Establishing a firm 3-year timeframe to resolve data
inaccuracies and make subsequent adjustments for discovered APTC
underpayments ensures that new Forms 1095-A are generated and sent to
enrollees and filed with the IRS with sufficient time for the enrollee
to potentially amend their tax filing with the IRS. This change would
therefore provide greater consistency and predictably for enrollees and
reduce potential confusion caused by the receipt of Forms 1095-A
outside of the allowable re-filing window with the IRS. In addition to
reducing enrollee confusion, requiring adherence to a firm 3-year final
deadline to report data inaccuracies for discovered APTC underpayments
(or user fee overpayments) would also benefit issuers by ensuring a
more consistent and predictable timeline for resolution of these data
inaccuracies. Aligning the payment and enrollment final dispute
timeline with the 3-year Form 1095-A timeline would limit
administrative burden on issuers, State Exchanges, and HHS by
standardizing these related processes for resolving errors and
generating new Forms 1095-A for enrollees.
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\224\ For example, the issuer must demonstrate the failure to
identify and promptly report the data inaccuracies and discovered
underpayments within the initial 90-day reporting window, under
Sec. 156.1210(a), was not unreasonable or due to the issuer's
misconduct or negligence. See Sec. 156.1210(b)(2). In addition,
once identified, the issuer must notify HHS or the State Exchange
(as applicable) within 15 days of identifying the inaccuracy. See
Sec. 156.1210(b)(1).
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Under this proposal, beginning with the 2020 plan year coverage,
HHS would not pay additional APTC payments or reimburse user fee
payments for FFE, SBE-FP, and SBE issuers for data inaccuracies
reported after the 3-year deadline. HHS would require issuers to adhere
to the 3-year deadline to submit all disputes and address all errors,
instead of utilizing the end of the audit process as an alternative
timeframe to receive additional APTC or reimbursement of user fee
payments beyond the 3-year deadline. Thus, HHS would not accept or take
action that results in an outgoing payment on data inaccuracies or
payment errors for 2020 plan year coverage that are reported after
December 31, 2023. Similarly, HHS would not accept or take action that
results in an outgoing payment on data inaccuracies or payment errors
for 2021 plan year coverage that are reported after December 31, 2024,
and so on.
Additionally, we propose that HHS would not accept or take action
that results in an outgoing payment on data inaccuracies or payment
errors for the 2015 through 2019 plan year coverage that are reported
after December 31, 2023. If finalized, this proposal would grant
issuers some additional time after this rule is finalized to submit any
inaccuracies for the 2015 through 2019 plan year coverage, for which
submission would no longer be permitted if this proposal was effective
upon finalization.
We are not proposing any changes to the general framework outlined
in Sec. 156.1210(c)(3), which currently states that if a payment error
is discovered after the final deadline set forth in Sec.
156.1210(c)(1) and (2), the issuer must notify HHS, the State Exchange,
or SBE-FP (as applicable) and repay any overpayments to HHS. We propose
to retain this language as the last sentence of new proposed Sec.
156.1210(c), except for the reference to the alternative deadline at
Sec. 156.1210(c)(2).
With regard to issuers in State Exchanges, we further affirm that
this proposal would not change the requirement that issuers promptly
identify and report data inaccuracies to the State Exchange.\225\ Under
the proposed revisions to Sec. 156.1210(c), issuers in State Exchanges
would be subject to the same final 3-year deadline to work with the
State Exchange to resolve any enrollment or payment inaccuracies
identified after the initial 90-day reporting window for discovered
underpayments. Similarly, we also propose that HHS would not make any
payments to issuers in State Exchanges on data inaccuracies or payment
errors for 2015 through 2019 plan year coverage that are reported after
December 31, 2023. Issuers in State Exchanges would also remain subject
to the existing requirement to report data inaccuracies identified at
any time when related to overpayments. We note that when HHS initially
proposed the deadline of 3 years or the date by which the HHS audit
process is completed, as currently described at Sec. 156.1210(c), we
requested comment on the ability of State Exchanges to resolve data
inaccuracies and report payment adjustments to HHS under the 3-year
deadline framework currently captured in Sec. 156.1210(c)(1). We did
not receive any comments objecting to this timeframe based on the
ability of State Exchanges to resolve such disputes, and therefore,
believe that the current proposal to set the final deadline to identify
and report data inaccuracies for discovered underpayments at 3 years is
reasonable and will not pose a challenge to State Exchanges or issuers.
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\225\ As previously noted, the requirements captured in 45 CFR
156.1210 apply to all issuers who receive APTC, including issuers in
State Exchanges. Also see part 2 of the 2022 Payment Notice, 86 FR
at 24258.
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We seek comment on this proposal.
11. Administrative Appeals (Sec. 156.1220)
As discussed in section III.A.7.d. of this preamble (HHS-RADV
Discrepancy and Administrative Appeals Process), we propose amendments
to Sec. 156.1220(a)(4)(ii) to add a reference to new proposed Sec.
153.630(d)(3). As discussed in section III.A.7.d of this preamble,
under new proposed Sec. 153.630(d)(3), we would retain the 30-
calendar-day window to confirm, or file a discrepancy, regarding the
calculation of the risk score error rate as a result of HHS-RADV. Under
this proposal, the cross-reference to Sec. 153.630(d)(2) in Sec.
156.1220(a)(4)(ii) would be maintained and would capture the new
proposed 15-calendar-day window to confirm, or file a discrepancy, for
SVA findings (if applicable).
In addition, we propose to amend Sec. 156.1220(b)(1) to address
situations when the last day of the period to request an informal
hearing does not fall on a business day. In these cases, we propose
that the deadline to request an informal hearing would be extended to
the next applicable business day. This proposal is consistent with our
policy
[[Page 78294]]
for other risk adjustment deadlines that do not fall on a business
day.\226\
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\226\ See, for example, 45 CFR 153.730.
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We solicit comment on these proposed amendments.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of the agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs).
A. Wage Estimates
To derive wage estimates, we generally used data from the Bureau of
Labor Statistics to derive average labor costs (including a 100 percent
increase for the cost of fringe benefits and overhead) for estimating
the burden associated with the ICRs.\227\ Table 14 in this proposed
rule presents the mean hourly wage, the cost of fringe benefits and
overhead, and the adjusted hourly wage.
---------------------------------------------------------------------------
\227\ See May 2021 Bureau of Labor Statistics, Occupational
Employment Statistics, National Occupational Employment and Wage
Estimates. Available at https://www.bls.gov/oes/current/oes_stru.htm.
---------------------------------------------------------------------------
As indicated, employee hourly wage estimates have been adjusted by
a factor of 100 percent. This is necessarily a rough adjustment, both
because fringe benefits and overhead costs vary significantly across
employers, and because methods of estimating these costs vary widely
across studies. Nonetheless, there is no practical alternative, and we
believe that doubling the hourly wage to estimate total cost is a
reasonably accurate estimation method.
[GRAPHIC] [TIFF OMITTED] TP21DE22.024
B. ICRs Regarding Repeal of Risk Adjustment State Flexibility To
Request a Reduction in Risk Adjustment State Transfers (Sec.
153.320(d))
We propose to repeal the flexibility for any State, including prior
participant States, to request a reduction in risk adjustment State
transfers in all State market risk pools beginning with the 2025
benefit year. As such, we propose several amendments to Sec.
153.320(d).
The burden currently associated with this requirement is the time
and effort for the State regulator to submit its request and supporting
evidence and analysis to HHS. In the Standards Related to Reinsurance,
Risk Corridors, and Risk Adjustment information collection (OMB control
number: 0938-1155), we estimated that submitting the request and
supporting evidence and analysis would take a business operations
specialist 40 hours (at a rate of $76.20 per hour) to prepare the
request and 20 hours for a senior operations manager (at a rate of
$110.82 per hour) to review the request and transmit it electronically
to HHS. We estimated that each State seeking a reduction would incur a
burden of 60 hours at a cost of approximately $5,264.40 per State to
comply with this reporting requirement (40 hours for the operations
specialist and 20 hours for the operations manager).
Since this proposal would eliminate the ability of the one prior
participating State (Alabama) to request this flexibility beginning
with benefit year 2025, we similarly propose to rescind this
information collection beginning with the 2025 benefit year. The burden
associated with this information collection estimated above would be
removed if this proposal is finalized, since no State would have the
opportunity to request this flexibility moving forward. This
information collection is approved under OMB control number 0938-1155,
and if this proposal is finalized, HHS would rescind the information
collection under OMB control number 0938-1155 accordingly and provide
the applicable comment periods once the policy is no longer in effect.
We seek comment on this proposed rescission.
C. ICRs Regarding Risk Adjustment Issuer Data Submission Requirements
(Sec. Sec. 153.610, 153.700, and 153.710)
We propose to require issuers to collect and make available for
HHS' extraction from issuers' EDGE servers a new data element, a QSEHRA
indicator. We propose to adopt the same transitional approach and
schedule for the population of the QSEHRA indicator as was finalized
for the ICHRA indicator in the 2023 Payment Notice. Under this
proposal, for the 2023 and 2024 benefit years, issuers would be
required to populate the QSEHRA indicator using
[[Page 78295]]
data they already collect or have accessible regarding their enrollees.
Then, beginning with the 2025 benefit year, issuers that do not have an
existing source to populate this field for particular enrollees would
be required to make a good faith effort to collect and submit the
QSEHRA indicator for these enrollees. We propose to extract this data
element beginning with the 2023 benefit year and also propose to
include the QSEHRA indicator in the enrollee-level EDGE limited data
sets available to qualified researchers upon request, once available.
We propose to begin collection of the QSEHRA indicator with the
2023 benefit year, and estimate that approximately 650 issuers of risk
adjustment covered plans would be subject to this data collection. We
propose to collect a QSEHRA indicator from issuers' ESES files and risk
adjustment recalibration enrollment files. We believe the burden
associated with the collection of this data would be similar to that of
the collection of ICHRA indicator finalized in the 2023 Payment Notice.
Much like the ICHRA indicator data, we believe that some issuers
already collect or have access to the relevant information to populate
the QSEHRA indicator. However, we do not believe the information to
populate the QSEHRA indicator is routinely collected by all issuers at
this time; therefore, we anticipate that there may be administrative
burden for some issuers in developing processes for collection,
validation, and submission of this new data element. In recognition of
the burden that collection of this new data element potentially would
pose for some issuers, we propose to adopt a transitional approach for
the QSEHRA indicator that mirrors the approach finalized for the ICHRA
indicator in the 2023 Payment Notice and is similar to how we have
handled other new data collection requirements.\228\ For successful
EDGE server data submission, each issuer would need to update their
file creation process to include the new data element, which would
require a one-time administrative cost. After incorporating the most
recently updated wage estimate data, we estimate this one-time
administrative cost at $579.96 per issuer (reflecting 6 hours of work
by a management analyst at an average hourly rate of $96.66 per hour).
Based on this, we estimate the cumulative one-time cost to update
issuers' file creation process to be $376,974 for 650 issuers (3,900
total hours for all issuers). We also estimate a cost of $96.66 in
total annual labor costs for each issuer which reflects 1 hour of work
by a management analyst per issuer at an average hourly rate of $96.66
per hour. Based on this, we estimate $62,829 in total annual labor
costs for 650 issuers (650 total hours per year for all issuers). We
believe that this proposed data collection should not pose significant
additional operational burden to issuers given that the operational
burden associated with populating the QSEHRA indicator should be aided
by the requirement finalized in the 2023 Payment Notice mandating the
collection of the ICHRA indicator in the same fashion. The proposed
extraction of the new proposed QSEHRA indicator should also not pose
additional burden to issuers since the creation and storage of the
extract--which issuers do not receive--are mainly handled by HHS. If
finalized, HHS would revise the information collection request to
account for the burden associated with this policy, and would provide
the applicable comment periods.\229\
---------------------------------------------------------------------------
\228\ For example, HHS did not penalize issuers for temporarily
submitting a default value for the in/out-of-network indictor for
the 2018 benefit year to give issuers time to make the necessary
changes to their operations and systems to comply with the new data
collection requirement, but required issuers to provide full and
accurate information for the in/out-of-network indicator beginning
with the 2019 benefit year.
\229\ Standards Related to Reinsurance, Risk Corridors, and Risk
Adjustment (OMB control number 0938-1155).
---------------------------------------------------------------------------
We also propose to amend the applicability date for the extraction
of the plan ID and rating area data elements to extend the extraction
of these two data elements to the 2017, 2018, 2019 and 2020 benefit
year data sets. As detailed earlier and in prior rulemakings, issuers
have been required to collect and submit these two data elements as
part of the required risk adjustment data since the 2014 benefit year.
Therefore, HHS estimates that the proposal to extract these data
elements would not pose additional operational burden to the majority
of issuers, since the creation and storage of the extract--which
issuers do not receive--is mainly handled by HHS. However, some issuers
may not have benefit year 2017, 2018, 2019, or 2020 data readily
available for extraction from their EDGE servers, and therefore, there
may be some burden associated with restoring past years' data to their
respective EDGE servers should this be the case. Our intention with
this policy proposal is to limit the burden on issuers for us to
collect and extract the plan ID and rating area data elements from
additional prior benefit year data. Therefore, while we broadly solicit
comment on these data collection proposals, we specifically solicit
comments on this burden estimate and ways that we can further limit the
burden on extracting these two data elements from the 2017, 2018, 2019
and 2020 benefit year data sets.
D. ICRs Regarding Risk Adjustment Data Validation Requirements When HHS
Operates Risk Adjustment (HHS-RADV) (Sec. 153.630)
Under Sec. 153.630(g)(2), issuers below a materiality threshold,
as defined by HHS, are exempt from the annual HHS-RADV audit
requirements in Sec. 153.630(b). While these issuers are exempt from
the annual HHS-RADV audit process, they are subject to random and
targeted sampling such that they undergo HHS-RADV approximately every 3
years (barring any risk-based triggers based on experience that would
warrant more frequent audits). We propose, beginning with 2022 benefit
year HHS-RADV, to change the materiality threshold from $15 million in
total annual premiums Statewide in the benefit year being audited to
30,000 BMM Statewide in the benefit year being audited.
We estimate that this proposal will not significantly impact issuer
burden relative to previous estimates for HHS-RADV and the current
materiality threshold. In particular, the proposed threshold will not
significantly alter the anticipated number of issuers that would fall
under the materiality threshold and be subject to random and targeted
sampling rather than the annual audit requirements. We estimate that
each year, on average, there are 197 issuers of risk adjustment covered
plans with total annual Statewide premiums below $15 million and 201
issuers of risk adjustment covered plans below 30,000 BMM Statewide. If
we assume one-third of issuers below the materiality threshold would be
subject to HHS-RADV each year, we estimate that the total number of
issuers selected for HHS-RADV that fall under the materiality threshold
would remain fairly constant. We believe that the number of issuers
participating in HHS-RADV for any given benefit year under the proposed
30,000 BMM Statewide threshold will not be significantly different than
the number of issuers participating under the current $15 million total
annual premium Statewide threshold and reflected in our current HHS-
RADV burden estimates, and therefore, we believe that there will not be
an overall increase or decrease in burden. If finalized, we would
revise the information collection currently approved under OMB control
number 0938-1155 to account for the changes to
[[Page 78296]]
the HHS definition for the materiality threshold in Sec.
153.630(g)(2).
E. ICRs Regarding Navigator, Non-Navigator Assistance Personnel, and
Certified Application Counselor Program Standards (Sec. Sec. 155.210
and 155.225)
This proposal would not impose any new information collection
requirements, that is, reporting, recordkeeping or third-party
disclosure requirements. Though CMS requires Navigator grantees to
track enrollment numbers on weekly, monthly, and quarterly progress
reports, this is already accounted for in an existing PRA package (OMB
control number 0938-1205, Exchange Functions: Standards for Navigators
and Non-Navigator Assistance Personnel--CAC), and they are not required
to specifically track enrollments completed for door-to-door
enrollments.
F. ICRs Regarding Providing Correct Information to the FFEs (Sec.
155.220(j))
As discussed in the preamble of this proposed rule, we are
proposing amendments to Sec. 155.220(j)(2)(ii) to require agents,
brokers, and web-brokers to document that eligibility application
information has been reviewed by and confirmed to be accurate by the
consumer or their authorized representative prior to application
submission. This proposal would require the consumer or their
authorized representative to take an action that produces a record that
they reviewed and confirmed the information on the eligibility
application to be accurate prior to application submission. This
documentation would be required to be maintained by agents, brokers,
and web-brokers for a minimum of 10 years and produced upon request in
response to monitoring, audit, and enforcement activities.
We estimate costs will be associated with this proposal, including
those related to documenting, maintaining, and producing the
documentation. Our proposal, if finalized, would not mandate any method
or prescribe a template for documenting that a consumer or their
authorized representative reviewed and confirmed the accuracy of their
eligibility application information. It would be up to the agents,
brokers, and web-brokers to determine the best way to meet these
proposed regulatory requirements.
Costs related to requiring the consumer take some affirmative
action to memorialize the review of application information are as
follows. We estimate it would take an additional 5 minutes for an
enrolling agent, broker, or web-broker to obtain documentation from a
consumer or their authorized representative that they have reviewed and
confirmed the accuracy of their application information. Billing at
$66.68 per hour using the Insurance Sales Agent occupation code, each
enrollment will have approximately $5.33 additional cost associated
with it based on extra time commitment. In PY 2021, agents submitted
3,630,849 policies. This makes the yearly total cost associated with
the extra time per enrollment approximately $19,352,425.17 (3,630,849 x
$5.33).
Costs associated with maintaining consumer or their authorized
representative's documentation would depend on the method selected by
the agent, broker, or web-broker to meet the regulatory requirements.
For those agents, brokers, or web-brokers currently meeting the
requirements, no additional costs would be incurred. If an enrolling
entity opts to use paper for documentation, they would bear the costs
of paper, ink and filing cabinets to store the paperwork.
HHS would only require an agent, broker, or web-broker to produce
retained records in limited circumstances related to monitoring, audit,
and enforcement activities. In instances of fraud investigation, HHS
typically asks for documentation associated with approximately 10
different applications, generally from the past 2 to 3 years. We
estimate it would take an agent approximately 2 hours to gather
consumer documentation for 10 applications. Each year, HHS generally
investigates approximately 50 agents, brokers, or web-brokers.
Therefore, we estimate the yearly cost of producing documentation for
HHS to be approximately $6,668 (($66.68 hourly rate x 2 hours) x 50).
The documentation would be able to be mailed electronically, so there
would be no cost associated with printing or mailing the documentation.
Agency-wide audits are not completed often by HHS but may become more
widespread. In those instances, HHS would ask the agency to produce a
certain number of records from the past 10 years.
We seek comment on these burden estimates.
G. ICRs Regarding Documenting Receipt of Consumer Consent (Sec.
155.220(j))
As discussed earlier in the preamble of this proposed rule, we are
proposing amendments to Sec. 155.220(j)(iii) to require agents,
brokers, and web-brokers to document the receipt of consumer consent.
This proposal would require the consumer or their authorized
representative to take an action that produces a record that they
provided consent. Agents, brokers, and web-brokers would be required to
maintain the records for a minimum of 10 years and produce the records
upon request in response to monitoring, audit, and enforcement
activities.
We estimate costs will be associated with this proposal, including
those related to documenting, maintaining, and producing the records of
consumer consent. Our proposal, if finalized, would not mandate any
method or prescribe a template for documenting receipt of consumer
consent. It would be up to the agents, brokers, and web-brokers to
determine the best way to meet these proposed regulatory requirements.
As agents, brokers, and web-brokers are currently required to obtain
consumer consent prior to assisting them, the requirement to obtain
consent would not add any costs to the enrolling agent, broker, or web-
broker.
Costs related to requiring that the consumer or their authorized
representative take some affirmative action to memorialize that consent
was provided are as follows. We estimate it would take about 5 minutes
for an enrolling agent, broker or web-broker to obtain consumer, or
their authorized representative, affirmation of their consent. Using
the adjusted hourly wage rate of $66.68 for an Insurance Sales Agent,
each enrollment will have approximately $5.33 in additional cost
associated with it based on the extra time commitment from these
proposed policy changes. In PY 2021, agents submitted 3,630,849
policies. Based on this number of enrollments, the total annual burden
is 290,468 hours with a total annual cost of $19,352,425.17. HHS would
only require an agent, broker, or web-broker to produce retained
records in limited circumstances related to fraud investigation or
agency audits. In instances of fraud investigation, HHS typically asks
for consent records of approximately 10 different applications,
generally from the past 2 to 3 years. We estimate it would take an
agent approximately 2 hours to gather consent documentation for 10
applications. Each year, HHS generally investigates approximately 50
agents, brokers, or web-brokers. Therefore, we estimate the yearly cost
of producing consumer consent documentation to HHS to be approximately
$6,668 (($66.68 hourly rate x 2 hours) x 50). These records are able to
be mailed electronically, so there would be no cost associated with
printing or mailing the records. Agency-wide audits are not completed
often by HHS but may become more widespread.
[[Page 78297]]
In those instances, HHS would ask the agency to produce a certain
number of records from the past 10 years.
The estimated total annual cost of memorializing the documentation
of consumer consent is $19,352,425.17, and the estimated total cost of
producing the retained eligibility and consent records is $6,668.00.
Combined, the total annual cost of the proposed information collection
requirements is $19,359,093.17.
We seek comment on these burden estimates.
H. ICRs Regarding Failure To File and Reconcile Process (Sec.
155.305(f))
We are proposing to amend current regulation at Sec. 155.305(f)(4)
under which an Exchange may not find a consumer eligible for APTC where
a consumer has failed to file a tax return reconciling their APTC for a
previous year to provide more flexibility to Exchanges to ensure that
consumers are complying with the requirement to file their Federal
income tax returns and reconcile past year's APTC, while ensuring
continuity of coverage in Exchange QHPs. We are proposing to provide
Exchanges the option to end APTC after 1 year of a taxpayer's (or
taxpayer's spouse, if married) failure to file and reconcile APTC, or
only after two consecutive years of a taxpayer's failure to file and
reconcile APTC.
On Exchanges on the Federal platform, FTR would otherwise be
conducted in the same as manner it had previously been conducted, with
minimal changes to the language of the Exchange application questions
necessary to obtain relevant information; as such, we anticipate that
the proposed amendment will not impact the information collection (OMB
control number 0938-1191) burden for consumers.
I. ICRs Regarding Income Inconsistencies (Sec. Sec. 155.315 and
155.320)
Section 155.320 requires the Exchange to generate an income DMI and
proceed with the process in Sec. 155.315(f)(1) through (4) when there
is no IRS data available to verify attested projected annual household
income or when such IRS data available but it is inconsistent with the
projected annual household income attestation. In order to verify an
applicant or enrollee's attested projected annual household income to
determinate eligibility for APTC and CSRs, an applicant generally must
mail or upload documentation which must then be reviewed by an HHS
eligibility support staffer. We propose to amend Sec. 155.320 to
require Exchanges to accept attestation when the Exchange requests tax
return data from the IRS to verify attested projected annual household
income, but the IRS confirms there is no such tax return data
available.
Based on historical DMI data, we estimate that HHS would conduct
document verification for 1.2 million fewer households per year. Once
households have submitted the required verification documents, we
estimate that it takes approximately 12 minutes for an eligibility
support staff person (occupation No. 43-4061), at an hourly cost of
$46.70, to review and verify submitted verification documents. The
proposed revisions to Sec. 155.320 would result in a decrease in
annual burden for the Federal Government of 240,000 hours at a cost of
$11,208,000.
In addition to the reduced administrative burden for HHS
eligibility support staff, the proposed change would reduce the time
consumers spend submitting documentation to verify their income. We
estimate that consumers each spend 1 hour to submit documentation and
that the proposed change would decrease burden on consumers by 1.2
million hours per year.
We would revise the information collection currently approved under
OMB control number 0938-1207 (Medicaid and Children's Health Insurance
Programs: Essential Health Benefits in Alternative Benefit Plans,
Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums
and Cost Sharing; Exchanges: Eligibility and Enrollment) to account for
this decreased burden. Given that this change entails a reduction in
consumer burden, the 30-day notice soliciting public comment will be
published in the Federal Register at a future date.
J. ICRs Regarding the Improper Payment Pre-Testing and Assessment
(IPPTA) for State Exchanges (Sec. Sec. 155.1500-155.1515)
As described in the preamble to Sec. 155.1510, the IPPTA is
proposed to replace the existing voluntary State engagement initiative
with mandatory participation and related requirements. The IPPTA is
designed to test processes and procedures that support HHS's review of
determinations of APTC made by State Exchanges and to prepare State
Exchanges for the planned measurement of improper payments.
In the preamble to Sec. 155.1510(a)(1), we propose that State
Exchanges provide to HHS: (1) the State Exchange's data dictionary
including attribute name, data type, allowable values, and description;
(2) an entity relationship diagram; and (3) business rules and related
calculations. This data documentation is currently retained by State
Exchanges in a digital format and can be electronically transmitted to
HHS. We estimate that the burden associated with this data transfer
would be no more than 22 hours.
In the preamble to Sec. 155.1510(a)(2), we propose that HHS will
provide State Exchanges with the pre-testing and assessment data
request form. HHS proposes to review the form and its instructions with
each State Exchange prior to the State Exchange completing and
returning the form and required data to HHS. Both the pre-testing and
assessment data request form and the requested source data are in an
electronic format. The burden associated with completion and return of
the pre-testing and assessment data request form and required data
would be the time it would take each State Exchange to meet with HHS to
review the form and its requirements, analyze and design the database
queries based on the data elements identified in the form,
electronically transmit the data to HHS, and meet with HHS to verify
and validate the data.
We expect respondent costs will not substantially vary since the
data being collected is largely in a digitized format and that each
State Exchange will be providing the application data and consumer
submitted documents for approximately 10 tax households. We seek
comment on these assumptions.
We estimate that gathering and transmitting the data documentation
as specified in Sec. 155.1510(a)(1) and completion of the pre-testing
and assessment data request form as specified in Sec. 155.1510(a)(2)
would take 530 hours per respondent at an estimated cost of $56,986.48
per respondent. To compile our estimates, we referenced our experience
collecting data in our FFE pilot initiative and in working with State
Exchanges in the existing voluntary State engagement initiative. We
identified specific personnel and the number of hours that would be
involved in collecting the data broken down by specific area (for
example, eligibility verification, auto-re-enrollment, periodic data
matching, enrollment reconciliation, plan management, and manual
reviews including document retrieval).
Hourly wage rates vary from $92.92 for a Computer Programmer to
$156.66 for a Computer and Information Systems Manager depending on
occupation code and function. With a mean hourly rate of $111.07 for
the respective occupation codes, the burden across the 18 State
Exchanges equals 9,540 hours for a total
[[Page 78298]]
cost of up to $1,025,756. We seek comment on these burden estimates.
K. ICRs Regarding QHP Rate and Benefit Information (Sec. 156.210)
a. Age on Effective Date for SADPs
In this proposed rule, we propose to require issuers of Exchange-
certified stand-alone dental plans (SADPs), whether they are sold on-
or off-Exchange, to use the age on effective date methodology as the
sole method to calculate an enrollee's age for rating and eligibility
purposes, as a condition of QHP certification, beginning with Exchange
certification for PY 2024. This rule does not propose to alter any of
the information collection requirements related to age determination
for rating and eligibility purposes during the QHP certification
process in a way that would create any additional costs or burdens for
issuers seeking QHP certification. This information collection is
currently approved under OMB control number 0938-1187.
b. Guaranteed Rates for SADPs
The proposal to require issuers of Exchange-certified SADPs,
whether they are sold on- or off-Exchange, to submit guaranteed rates,
as a condition of Exchange certification beginning with Exchange
certification for PY 2024, will not impose an additional burden on
issuers. Exchange-certified SADP issuers already submit either
guaranteed or estimated rates during QHP certification, and are
therefore, familiar with the QHP certification rate submission process.
This information collection is currently approved under OMB control
number 0938-1187.
L. ICRs Regarding Establishing a Timeliness Standard for Notices of
Payment Delinquency (Sec. 156.270)
The proposal to add a timeliness standard to the requirement for
QHP issuers to send enrollees notice of payment delinquency would not
impose an additional information burden on issuers. Per Sec.
156.270(f), issuers are already required to send notices to enrollees
when they become delinquent on premium payments, and this proposal
would not require any additional information collection. We are merely
proposing to add a requirement that issuers send these notices promptly
and without undue delay. This information collection is currently
approved under OMB control number 0938-1341 (CMS-10592).
M. Summary of Annual Burden Estimates for Proposed Requirements
[GRAPHIC] [TIFF OMITTED] TP21DE22.025
This proposed rule includes one proposal--repealing risk adjustment
State flexibility to request a reduction in risk adjustment State
transfers (Sec. 153.320(d))--with information collection requests
which seeks to use this rulemaking as the Federal Register notice
through which to receive comment on its proposed revisions to the
associated PRA package.
The following proposals with associated information collection
requests will be submitted for PRA approval outside of this rulemaking,
through separate Federal Register notices: risk adjustment issuer data
submission requirements (Sec. Sec. 153.610, 153,700, and 153.710); and
income inconsistencies (Sec. 155.320).
The HHS-RADV, Navigator, FTR, application to SADPs, and QHP rate
and benefit information proposals contain information collections which
are covered by the following PRA packages: Standards Related to
Reinsurance, Risk Corridors, and Risk Adjustment, OMB control number:
0938-1155; Cooperative Agreement to Support Navigators in Federally-
facilitated and State Partnership Exchanges, OMB control number: 0938-
1215; Data Collection to Support Eligibility Determinations for
Insurance Affordability Programs and Enrollment through Health Benefits
Exchanges, Medicaid and CHIP Agencies, OMB control number: 0938-1191;
Initial Plan Data Collection to Support QHP Certification and other
Financial Management and Exchange Operations, OMB control number: OMB
0938-1187; and Establishment of Qualified Health Plans and American
Health Benefit Exchanges, OMB control number: 0938-1156.
N. Submission of PRA-Related Comments
We have submitted a copy of this proposed rule to OMB for its
review of the rule's information collection and recordkeeping
requirements. These requirements are not effective until they have been
approved by the OMB. To obtain copies of the supporting statement and
any related forms for the proposed collections discussed above, please
access the CMS PRA website by copying and pasting the following web
address into your web browser: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing, or call
the Reports Clearance Office at 410-786-1326.
[[Page 78299]]
We invite public comments on these potential information collection
requirements. If you wish to comment, please submit your comments
electronically as specified in the ADDRESSES section of this proposed
rule and identify the rule (CMS-9899-P), the ICR's CFR citation, CMS ID
number, and OMB control number.
Comments must be received on/by February 13, 2023.
V. Regulatory Impact Analysis
A. Statement of Need
This rule proposes to improve risk adjustment and HHS-RADV policies
to use the most recent data to recalibrate the risk adjustment models
and reduce operational burden for HHS-RADV, and to update Navigator
standards to permit door-to-door and other unsolicited means of direct
contact. The rule also proposes to require agents, brokers, and web-
brokers to provide correct consumer information and document consumer
consent; and require Exchanges on the Federal platform to accept an
applicant's or enrollee's attestation of projected annual household
income when IRS data is not available and determine the applicant or
enrollee eligible for APTC or CSRs in accordance with the applicant's
or enrollee's attested projected household income. In addition, the
rule proposes to implement the IPPTA, reduce 2024 user fee rates to 2.5
percent of premiums for FFE issuers and 2.0 percent of premiums for
SBE-FP issuers, and make minor updates to standardized plan options and
limit the number of non-standardized plan options issuers can offer.
Finally, the rule proposes to require that QHP plan marketing names
include correct information, without omission of material fact, and do
not include content that is misleading; revise the network adequacy and
ECP standards Sec. Sec. 156.230 and 156.235 to state that all QHP
issuers, including SADPs, must use a network of providers that complies
with the standards described in those sections; expand access to care
for low-income and medically underserved consumers by strengthening ECP
standards for QHP certification; and add a timeliness standard to the
requirement for QHP issuers to send enrollees notice of payment
delinquency.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory action/s and/or with economically
significant effects ($100 million or more in any 1 year). Based on our
estimates, OMB's Office of Information and Regulatory Affairs has
determined this rulemaking is ``economically significant'' as measured
by the $100 million threshold. Accordingly, we have prepared an RIA
that to the best of our ability presents the costs and benefits of the
rulemaking. Therefore, OMB has reviewed these proposed regulations, and
the Departments have provided the following assessment of their impact.
C. Impact Estimates of the Payment Notice Provisions and Accounting
Table
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in
Table 16 showing the classification of the impact associated with the
provisions of this proposed rule.
This proposed rule proposes standards for programs that will have
numerous effects, including providing consumers with access to
affordable health insurance coverage, reducing the impact of adverse
selection, and stabilizing premiums in the individual and small group
health insurance markets and in an Exchange. We are unable to quantify
all benefits and costs of this proposed rule. The effects in Table 16
reflect qualitative assessment of impacts and estimated direct monetary
costs and transfers resulting from the provisions of this proposed rule
for health insurance issuers and consumers. The annual monetized
transfers described in Table 16 include changes to costs associated
with the risk adjustment user fee paid to HHS by issuers.
We are proposing the risk adjustment user fee of $0.21 PMPM for the
2024 benefit year to operate the risk adjustment program on behalf of
States,\230\ which we estimate to cost approximately $60 million in
benefit year 2024. This estimated total cost remains stable with the
approximately $60 million estimated for the 2023 benefit year.
---------------------------------------------------------------------------
\230\ As noted previously in this proposed rule, no State has
elected to operate the risk adjustment program for the 2024 benefit
year; therefore, HHS will operate the risk adjustment program for
all 50 States and the District of Columbia.
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Additionally, for 2024, we are proposing an FFE and SBE-FP user fee
rate of 2.5 and 2.0 percent of premiums, respectively. These user fee
rates are lower than the 2023 FFE and SBE-FP user fee rates of 2.75 and
2.25 percent of premiums, respectively.
For our proposed implementation of the IPPTA program, we estimate
record keeping costs for data submission to be approximately $1,025,756
beginning in PY 2024.
BILLING CODE 4120-01-P
[[Page 78300]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.026
[[Page 78301]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.027
BILLING CODE 4120-01-C
This RIA expands upon the impact analyses of previous rules and
utilizes the Congressional Budget Office's (CBO) analysis of the ACA's
impact on Federal
[[Page 78302]]
spending, revenue collections, and insurance enrollment. Table 17
summarizes the effects of the risk adjustment program on the Federal
budget from fiscal years 2024 through 2028, with the additional,
societal effects of this proposed rule discussed in this RIA. We do not
expect the provisions of this proposed rule to significantly alter
CBO's estimates of the budget impact of the premium stabilization
programs that are described in Table 17.\231\
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\231\ Reinsurance collections ended in FY 2018 and outlays in
subsequent years reflect remaining payments, refunds, and allowable
activities.
[GRAPHIC] [TIFF OMITTED] TP21DE22.028
1. Data for Risk Adjustment Model Recalibration for 2024 Benefit Year
We propose to use the 2018, 2019, and 2020 benefit year enrollee-
level EDGE data to recalibrate the 2024 benefit year risk adjustment
models with an exception for the use of the 2020 benefit year to
recalibrate the age-sex coefficients for the adult models.
Specifically, we propose to use only 2018 and 2019 benefit year
enrollee-level EDGE data to recalibrate the age-sex coefficients in the
adult models to account for the observed anomalous decreases in the
unconstrained coefficients for the 2020 benefit year enrollee-level
EDGE data for older adult enrollees, especially older female adult
enrollees. Consistent with the approach outlined in the 2020 Payment
Notice to no longer rely upon MarketScan[supreg] data for recalibrating
the risk adjustment models, under this proposal, we would continue to
recalibrate the risk adjustment models for the 2024 benefit year using
only enrollee-level EDGE data, and would continue to use blended, or
averaged, coefficients from the 3 years of separately solved models for
the 2024 benefit year model recalibration, with the noted exception for
recalibration of the adult models' age-sex factors. This approach seeks
to maintain stability in the markets, and therefore, we anticipate that
this proposal would have minimal impact on risk scores and transfers
for issuers in the individual and small group (including merged)
markets.
2. Repeal of Risk Adjustment State Flexibility To Request a Reduction
in Risk Adjustment State Transfers (Sec. 153.320(d))
We propose to eliminate the flexibility for any State, including
prior participant States, to request reductions of risk adjustment
State transfers calculated by HHS under the State payment transfer
formula beginning with the 2025 benefit year. We anticipate that this
change would have a minimal impact as only one State, Alabama, is
considered a prior participant and would no longer be able to request
reductions in risk adjustment transfers if this policy is finalized.
3. Risk Adjustment Issuer Data Requirements (Sec. Sec. 153.610,
153.700, and 153.710)
We are also proposing the collection and extraction of a new data
element, the QSEHRA indicator, as part of the required risk adjustment
data submissions issuers make accessible to HHS through their
respective EDGE servers. For the 2023 and 2024 benefit years, similar
to the transitional approach finalized for the ICHRA indicator, issuers
would be required to populate the field for the QSEHRA indicator using
only data they already collect or have accessible regarding their
enrollees. Then, beginning with the 2025 benefit year, the transitional
approach would end, and issuers would be required to populate the field
using available sources (for example, information from Exchanges, and
requesting information directly from enrollees) and, in the absence of
an existing source for particular enrollees, to make a good faith
effort to ensure collection and submission of the QSEHRA indicator for
these enrollees. HHS would provide additional details on what
constitutes a good faith effort to ensure collection and submission of
the QSEHRA indicator beginning with 2025 benefit year data submissions
in the future. An updated burden estimate associated with this policy
may be found in section IV of this proposed rule, in the ICRs Regarding
Risk Adjustment Issuer Data Submission Requirements (Sec. Sec.
153.610, 153.700, and 153.710) section earlier in this rule.
In addition, we propose to extract the plan ID and rating area data
elements from issuers' EDGE servers that issuers already make
accessible to HHS as part of the required risk adjustment data for
additional prior benefit years of data. Specifically, we propose to
amend the applicability date for the extraction of these two data
elements from issuers' enrollee-level EDGE data as finalized in the
2023 Payment Notice to also allow extraction of these data elements
from the 2017, 2018, 2019 and 2020 benefit year data.
4. Risk Adjustment User Fee for 2024 Benefit Year (Sec. 153.610(f))
For the 2024 benefit year, HHS will operate a risk adjustment
program in every State and the District of Columbia. As described in
the 2014 Payment Notice (78 FR 15416 through 15417), HHS' operation of
risk adjustment on behalf of States is funded through a risk adjustment
user fee. For the 2024 benefit year, we propose to use the same
methodology to estimate our
[[Page 78303]]
administrative expenses to operate the risk adjustment program as was
used in the 2023 Payment Notice. Risk adjustment user fee costs for the
2024 benefit year are expected to remain stable from the prior 2023
benefit year estimates. However, we project higher enrollment than our
prior estimates in the individual and small group (including merged)
markets in the 2023 and 2024 benefit years due to the enactment of the
ARP,\232\ and section 12001 of the IRA, which extended the enhanced PTC
subsidies in section 9661 of ARP through the 2025 benefit year. We
estimate that the total cost for HHS to operate the risk adjustment
program on behalf of States and the District of Columbia for 2024 will
be approximately $60 million, and therefore, the proposed risk
adjustment user fee would be $0.21 PMPM. Because enrollment projections
have increased for the 2023 and 2024 benefit year due to the IRA and
the proposed 2024 risk adjustment user fee is $0.01 PMPM lower than the
2023 user fee, we expect the proposed risk adjustment user fee for the
2024 benefit year to reduce the transfer amounts collected or paid by
issuers of risk adjustment covered plans.
---------------------------------------------------------------------------
\232\ Public Law 117-2.
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5. Risk Adjustment Data Validation Requirements When HHS Operates Risk
Adjustment (HHS-RADV) (Sec. 153.630)
We propose, beginning with 2022 benefit year HHS-RADV, to change
the HHS definition for the materiality threshold for the HHS-RADV
exemption under Sec. 153.630(g)(2) from $15 million total annual
premiums Statewide to 30,000 BMM Statewide in the benefit year being
audited. The purpose of this policy is to address the estimated
increase in costs to complete the IVA over the years and to ensure the
materiality threshold is not eroded as costs increase. We quantify this
increase in IVA cost in the Standards Related to Reinsurance, Risk
Corridors, Risk Adjustment, and Payment Appeal of the PRA (OMB Control
Number 0938-1155), which was updated in 2022.\233\ We believe that the
number of issuers exempt from HHS-RADV for any given benefit year under
the proposed 30,000 BMM threshold will not be significantly different
than the number of issuers exempt under the current $15 million total
annual premium Statewide threshold, and therefore, we believe that
there will not be an overall reduction in burden. However, those
issuers that are exempted from HHS-RADV will have less burden and
administrative costs than an issuer subject to these requirements.
---------------------------------------------------------------------------
\233\ Available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202207-0938-001.
---------------------------------------------------------------------------
We propose, beginning with 2021 benefit year HHS-RADV, to remove
the policy to only make adjustments to reflect exiting outlier issuers
HHS-RADV results when the issuer is a positive error rate outlier in
the applicable benefit year's HHS-RADV. Under the proposal to remove
this policy, exiting and non-exiting outlier issuers would be treated
the same, and HHS would apply HHS-RADV adjustments to risk scores and
risk adjustment State transfers for both positive and negative error
rate outlier exiting and non-exiting issuers. Based on our experience,
we estimate that the number of negative error rate outlier exiting
issuers in any given benefit year would be very small, and therefore,
we believe that changing this policy would not significantly increase
burden.
We also propose to change the attestation and discrepancy reporting
window to file a discrepancy report or confirm SVA findings from 30
calendar days to within 15 calendar days of the notification by HHS,
beginning with the 2022 benefit year HHS-RADV. Shortening this
attestation and discrepancy reporting window would improve HHS' ability
to finalize SVA findings results prior to release of the HHS Risk
Adjustment Data Validation (RADV) Results Memo and the Summary Report
of Risk Adjustment Data Validation Adjustments to Risk Adjustment
Transfers for the applicable benefit year in a timely fashion, which
would support timely reporting of information on HHS-RADV adjustments
to risk adjustment State transfers in issuers' MLR reports.
Based on our experience operating HHS-RADV, few issuers have
insufficient pairwise agreement and receive SVA findings, and the 15-
calendar-day attestation and discrepancy reporting window is consistent
with the IVA sample and EDGE discrepancy reporting windows under
Sec. Sec. 153.630(d)(1) and 153.710(d)(1). Further, HHS believes that
this shortened reporting window would not be overly burdensome to the
few impacted issuers, and that any disadvantages of this shortened
reporting window would be outweighed by the benefits of timely
resolution of any discrepancies before the release of the applicable
benefit year HHS Risk Adjustment Data Validation (RADV) Results Memo
and the Summary Report of Risk Adjustment Data Validation Adjustments
to Risk Adjustment Transfers for the applicable benefit year.
6. EDGE Discrepancy Materiality Threshold (Sec. 153.710)
We propose to amend the materiality threshold for EDGE
discrepancies at Sec. 153.710(e) to align with the materiality
threshold as described in the preamble of part 2 of the 2022 Payment
Notice final rule (86 FR 24194 through 24195) to reflect that the
amount in dispute must equal to or exceeds $100,000 or 1 percent of the
total estimated transfer amount in the applicable State market risk
pool, whichever is less. HHS generally only takes action on reported
material EDGE discrepancies when an issuer's submission of incorrect
EDGE server premium data has the effect of increasing or decreasing the
magnitude of the risk adjustment transfers to other issuers in the
market (83 FR 16970 through 16971). We do not believe that the proposal
related to the materiality threshold for EDGE discrepancies would
impose additional administrative burden on issuers beyond the effort
already required to submit data to HHS for the purposes of operating
State market risk pool transfers, as previously estimated in part 2 of
the 2022 Payment Notice (86 FR 24273 through 24274).
7. Exchange Blueprint Approval Timelines (Sec. 155.106)
As discussed in the preamble of this proposed rule, the proposed
regulatory amendments would not eliminate the requirement for States
seeking to transition to a different Exchange operational model (FFE to
SBE-FP or SBE, or SBE-FP to SBE) to submit an Exchange Blueprint or for
HHS to approve, or conditionally approve, a State's Exchange Blueprint.
It would only impact the timeline, by providing additional time, for
HHS to provide approval, or conditional approval.
We do not estimate any burden associated with this proposal as
States are currently required to submit an Exchange Blueprint to HHS
for approval, or conditional approval, and HHS is currently required to
approve, or conditionally approve, a State's Exchange Blueprint.
We seek comment on this estimate.
8. Navigator, Non-Navigator Assistance Personnel, and Certified
Application Counselor Program Standards (Sec. Sec. 155.210 and
155.225)
As discussed in the preamble, this new language would permit
enrollment assistance on initial door-to-door outreach. Currently,
Assisters are permitted to go door-to-door to engage in outreach and
education activities, just not enrollment assistance. Therefore, this
proposed change would
[[Page 78304]]
not impose any new or additional opportunity costs on Navigators, non-
Navigator assistance personnel, or CACs, and we do not anticipate any
estimated burden associated with this proposal. The benefits of this
proposal would be eliminating barriers to coverage access by maximizing
pathways to enrollment. We believe it is important to be able to
increase access to coverage for those whose ability to travel is
impeded due to mobility, sensory or other disabilities, who are
immunocompromised, and who are limited by a lack of transportation. We
anticipate that this proposal would be a positive step toward enabling
Assisters to reach a broader consumer base in a timely manner--helping
to reduce uninsured rates and health disparities by removing underlying
barriers to accessing health coverage.
We seek comment on these assumptions, specifically about any
reduction in costs, benefits, or burdens on Navigators, non-Navigator
assistance personnel, CACs, and consumers as related to this proposal.
9. Extension of Time To Review Suspension Rebuttal Evidence and
Termination Reconsideration Requests (Sec. Sec. 155.220(g) and
155.220(h))
As discussed in the preamble of this proposed rule, the proposed
regulatory amendments would provide HHS with up to an additional 15
calendar days to review evidence submitted by agents, brokers, or web-
brokers to rebut allegations that led to the suspension of their
Exchange agreement(s) and up to an additional 30 calendar days to
review evidence submitted by agents, brokers, or web-brokers to request
reconsideration of termination of their Exchange agreement(s).
We do not estimate much burden associated with this proposal, as
there is no requirement for HHS to utilize the additional 15 or 30
calendar days and this will only impact a very small percentage of
enrolling agents, brokers, or web-brokers. Only those agents, brokers,
or web-brokers that are reasonably suspected to have engaged in fraud
or abusive conduct, or those with a specific finding of non-compliance
against them or who have exhibited a pattern of non-compliance or abuse
that may pose imminent consumer harm would be impacted.
As discussed in the preamble, this proposal would not impose any
new requirements on agents, brokers, or web-brokers. At present,
agents, brokers, or web-brokers whose Exchange agreement(s) are
suspended or terminated may submit rebuttal evidence or reconsideration
requests for HHS to consider. During this review, the submitting agent,
broker, or web-broker remains unable to enroll consumers on the FFEs.
This process would not change. While we would be increasing the amount
of potential time the review process would take, which could lead to
slightly longer periods during which agents, brokers, or web-brokers
cannot enroll consumers through the FFEs and SBE-FPs, we would not be
mandating HHS utilize the additional 15 or 30 calendars days for its
reviews. For this reason, we do not expect any impact on agents,
brokers, or web-brokers based on this proposal. We seek comment on this
assumption.
10. Providing Correct Information to the FFEs and Documenting Receipt
of Consumer Consent (Sec. 155.220(j))
As discussed in the preamble of this proposed rule, the proposed
regulatory amendments would require agents, brokers, and web-brokers
assisting with and facilitating enrollment through FFEs and SBE-FPs or
assisting an individual with applying for APTC and CSRs for QHPs to
document that eligibility application information has been reviewed by
and confirmed to be accurate by the consumer or their authorized
representative prior to application submission. The proposal would
require the consumer or their authorized representative taking an
action that produces a record showing the consumer or their authorized
representative reviewed and confirmed the accuracy of their application
information that must be maintained by the assisting agent, broker, or
web-broker and produced to confirm the submitted eligibility
application information was reviewed and confirmed to be accurate by
the consumer or their authorized representative.
Also discussed in the preamble of this proposed rule, the proposed
regulatory amendments would require agents, brokers, and web-brokers
assisting with and facilitating enrollment through FFEs and SBE-FPs or
assisting an individual with applying for APTC and CSRs for QHPs to
document the receipt of consent from the consumer or their authorized
representative, designated in compliance with Sec. 155.227, qualified
employers, or qualified employees they are assisting. The proposal
would require the consumer or their authorized representative taking an
action that produces a record of consent that must be maintained by the
assisting agent, broker, or web-broker and produced to confirm the
consumer or their authorized representative's consent was provided. As
these two documentation processes would likely be occurring as part of
the same consumer interaction,\234\ the two proposals are discussed
below together.
---------------------------------------------------------------------------
\234\ We note that obtaining documentation of consumer consent
must occur before an application is completed. In contrast,
obtaining documentation that a consumer has reviewed and confirmed
the accuracy of their application information must necessarily take
place during or after the application is completed. However, we
expect generally that application completion, including the
documentation we are proposing to require before and after the
completion of the application, would occur as part of a single
interaction in most cases.
---------------------------------------------------------------------------
A potential cost to consider is the additional time it would take
to process and submit each consumer's application. It currently takes
approximately 30 minutes for an assisting agent, broker, or web-broker
to submit a consumer's application. These proposed requirements may add
approximately five minutes additional time, per proposal, to each
application, making each application submission take 40 minutes under
the new proposed policies. This means that for every six policies
submitted under the proposed regulatory requirements, there would have
been two additional applications that could have been submitted under
the former regulatory requirements (10 extra minutes per application x
3 applications = 30 minutes, which is the estimated completion time for
applications at present). If we assume agents, brokers, and web-brokers
work traditional 8-hour days, they would have been able to enroll
approximately 4 more consumers per day (1 application per 30 minutes =
16 per day; 1 application per 40 minutes = 12 per day). An
approximation of commission for each submitted policy is $16.67.\235\
Therefore, the proposed regulatory text may result in $66.68 lost per
day per agent, broker, or web-broker. ($16.67 x 4 less applications
submitted).
---------------------------------------------------------------------------
\235\ This was derived using the Insurance Sales Agent mean
hourly wage from the above wage estimate table of $33.34 and
dividing in-half.
---------------------------------------------------------------------------
However, there would only be a potential loss of income if an
agent, broker, or web-broker were constantly enrolling consumers and
running out of time during the workday. It is unlikely agents, brokers,
and web-brokers are constantly enrolling consumers non-stop throughout
an 8-hour workday. During PY 2021, agents submitted 3,630,849 policies.
The top 1 percent of agents \236\ submitted 1,159,608 policies during
PY 2021, which equals approximately 7 submitted policies per day.\237\
As it was determined under the
[[Page 78305]]
new proposed policies that an agent could submit approximately 12
applications per day, there is no clear impact associated with this
proposal as far as the number of applications being submitted. However,
this could be different during Open Enrollment Period (OEP) as that
generally has more activity than regular business days. During PY 2022
Open Enrollment, agents submitted 2,572,341 applications, which
translates to 38 per agent. The top selling 1 percent of agents
submitted 689,146 applications during Open Enrollment, which is
approximately 18 applications per day.\238\ Under the proposed
regulatory amendments, a top-selling agent could lose approximately 6
applications per day due to time constraints. OEP runs from November 1
through January 15, which is 76 days. Under the assumption an agent is
working 5 days per work for eight hours per day, an agent would submit
330 fewer applications during OEP (55 days working x 6 fewer
applications per day). Using the above reference of $16.67 commission
gained per submitted policy, a top-selling agent may lose $5,501.10 in
commissions during OEP (330 applications x $16.67). It is likely these
agents are working more hours than we accounted for, meaning the 330
fewer applications is an estimate such that the actual loss of
commission would be less than we estimated. We seek comment on these
burden estimates.
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\236\ The current number of agents registered with the Exchange
is 66,893. We looked at data from the 668 top-selling agents.
\237\ This assumed an agent worked 250 days per year (50 weeks
at 5 days per week).
\238\ This assumed an agent worked 5 days per week at 8 hours
per day, which is likely a low estimate.
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11. Failure To File and Reconcile Process (Sec. 155.305)
We propose to require that Exchanges instead determine an enrollee
as ineligible for APTC if their taxpayer did not file a Federal income
tax return and reconcile their APTC for two consecutive tax years,
rather than one tax year as currently outlined at Sec. 155.305(f)(4).
We believe this proposal would benefit both Exchanges and consumers as
it provides Exchanges with additional flexibility with their FTR
operations and procedures, while ensuring continuity of coverage for
consumers, that would otherwise go uninsured after losing ATPC to help
pay for their Exchange QHPs.
We anticipate that this proposal would increase APTC expenditures
by promoting continuous enrollment of consumers with APTC, who, absent
this proposal, would likely choose to terminate their coverage
altogether after losing their APTC eligibility due to having an FTR
status. Based on HHS' own analysis, for Open Enrollment 2020, about
116,000 enrollees with an FTR status were automatically re-enrolled
into an Exchange QHP without APTC; by March 2020, approximately 14,000
(12 percent) of those enrollees were still enrolled in an Exchange QHP.
With the new 2-year FTR proposal, if those enrollees that ended their
QHP coverage after losing APTC were given another year of APTC
eligibility to come into compliance with the requirement to file and
reconcile, we estimate that about 102,000 enrollees would have retained
coverage with APTC for another coverage year; however, based on HHS'
experience running FTR since 2015, we anticipate that about 20,400 (20
percent) of these enrollees are likely to receive a second FTR flag.
Therefore, we estimate that this 2-year FTR proposal is likely to
increase APTC expenditures by approximately $373 million per year
beginning in benefit year 2024.
HHS is also aware of five States that have only recently
transitioned to operating their own State Exchange and have not yet
fully implemented the infrastructure to run FTR operations for plan
years through 2023 due to the flexibility the Exchanges were given to
temporarily pause FTR operations between 2021 and 2023 due to the
COVID-19 public health emergency. We estimate the one-time costs for
these five States to fully implement the functionality and
infrastructure to conduct FTR operations to be approximately $6.6
million and estimate that the annual costs to maintain FTR operations
to be approximately $10 million.
We invite comments from interested parties on this proposal,
including regarding additional costs, burdens, and benefits to issuers,
consumers, and Exchanges as a result of this proposal.
12. Income Inconsistencies (Sec. Sec. 155.315 and 155.320)
We anticipate that proposed revision to Sec. 155.315 would impose
a minimal regulatory and cost burden on Exchanges using the Federal
platform and State Exchanges in order to grant the 60-day extension for
income DMIs. We estimate that the proposed change to grant a 60-day
extension to applicants with income DMIs would result in a $500,000
one-time cost to Exchanges on the Federal platform and to each of the
State Exchanges using their own platform. Therefore, we estimate that
the total cost for State Exchanges would be $9 million to comply with
the requirement to grant the 60-day extension, and the total cost to
the Federal Government would be $500,000.
We anticipate that the proposed revisions to Sec. 155.320 would
impose a minimal regulatory burden and a one-time cost burden on the
Exchanges using the Federal platform and State Exchanges using their
own platform. We estimate that the proposed change to accept the income
attestation for households for which the Exchange requests tax return
data from the IRS to verify attested projected annual household income
but for whom the IRS confirms there is no such tax return data
available would result in a $500,000 one-time cost to the Federal
Government and a one-time cost of $500,000 to each of the State
Exchanges using their own platform. We also anticipate $175 million in
increased APTC costs annually as a result of this proposal, due to
applicants remaining enrolled through the end of the plan year instead
of losing eligibility for APTC due to not providing sufficient
documentation to verify their projected household income.
However, we do anticipate that the proposed revisions to Sec.
155.320 would also result in some decreases in ongoing administrative
costs for the Exchanges using the Federal platform and State Exchanges.
The proposed change would eliminate the requirement to generate income
DMIs when the Exchange requests tax return data from the IRS for an
applicant or enrollee and the IRS confirms no such data is available.
For Exchanges on the Federal platform, we anticipate that this will
result in 1.2 million fewer households receiving an income DMI, which
would result in $66 million in annual cost savings to the Federal
Government. Additionally, State Exchanges using their own platform
would also experience annual cost savings of $37 million due to this
proposed change.
We do not anticipate that these proposed changes would impose a
cost or regulatory burden on issuers. However, the proposed changes
would have a financial impact on issuers via the continued enrollment
of consumers who otherwise would have experienced APTC adjustment and
are thus likely to disenroll.
13. Annual Eligibility Redetermination (Sec. 155.335(j))
We propose revising Sec. 155.335(j) to allow the Exchange,
beginning in PY 2024, to direct re-enrollment for enrollees who are
eligible for CSR in accordance with Sec. 155.305(g) from a bronze QHP
to a silver QHP with a lower or equivalent premium after APTC within
the same product and QHP issuer, regardless of whether their current
plan is available or not. We also
[[Page 78306]]
propose to amend the Exchange re-enrollment hierarchy to allow all
Exchanges (Exchanges on the Federal platform and SBEs) to ensure
enrollees whose QHPs are no longer available to them and enrollees who
would be re-enrolled into a silver-level QHP in order to receive
income-based CSRs are re-enrolled into plans with the most similar
network to the plan they had in the previous year, provided that
certain conditions are met.
We propose revising paragraph (j)(2)(i) to state that if the
enrollee is not CSR eligible, the Exchange will re-enroll the enrollee
in a QHP at the same metal level as and with the most similar network
compared to the enrollee's current QHP. We propose amending and
redesignating paragraphs (j)(2)(ii) and (iii) as paragraphs (j)(2)(iv)
and (v), respectively, to specify that the enrollee's provider network
must also be considered in re-enrollment determinations. We also
propose adding a new paragraph (j)(2)(ii) to establish that if the
enrollee is CSR-eligible, in accordance with Sec. 155.305(g), and the
enrollee's current QHP is a bronze level plan, the Exchange will re-
enroll the enrollee either in a bronze level QHP, or, at the option of
the Exchange, in a silver level QHP that has a lower or equivalent
premium after APTC and has the most similar network compared to the
enrollee's current QHP in the product offered by the same issuer
through the Exchange that is most similar to the enrollee's current
product. Lastly, we propose to add a new paragraph (j)(2)(iii) to
establish that if the enrollee is CSR-eligible, in accordance with
Sec. 155.305(g), and the enrollee's current QHP is not a bronze level
plan, the enrollee will be re-enrolled in a QHP at the same metal level
that has the most similar network compared to the enrollee's current
QHP in the product offered by the same issuer that is the most similar
to the enrollee's current product.
We anticipate that the inclusion of additional criteria in the
Federal hierarchy for re-enrollment would increase costs and burden for
issuer and Exchanges, although we are unable to quantify this increase.
However, we believe initially limiting the scope to only CSR-eligible
enrollees who are currently in a bronze QHP and have a lower cost
silver CSR QHP available would allow issuers and Exchanges to
incrementally update their processes, as opposed to incorporating both
premium (after APTC) and out-of-pocket cost (OOPC) throughout the
hierarchy in PY 2024. Additionally, we believe that allowing the
Exchange to direct re-enrollment for CSR-eligible enrollees from bronze
plans to silver CSR plans with lower or equivalent premium after APTC
would facilitate enrollment into silver CSR plans and help reduce CSR
forfeiture. We believe these proposed changes to the re-enrollment
process, in combination with improved consumer notification, would
further streamline the consumer shopping experience, enhance consumer
understanding of plan options, and help move enrollment into more
affordable, higher generosity plans, especially in cases where market
conditions have substantially increased the old plan's cost. By
amending the current Federal hierarchy for re-enrollment to incorporate
provider networks and facilitate enrollment into lower cost, higher
generosity plans, we believe we would be promoting consumer access to
affordable, high-quality coverage.
We seek comment on the estimated costs and benefits described in
this section, as well as any additional impacts on consumers, issuers,
and Exchanges as a result of this proposal.
14. Coverage Effective Dates for Qualified Individuals Losing Other
Minimum Essential Coverage (Sec. 155.420(b))
We propose to add paragraph (b)(2)(iv) to Sec. 155.420(b) to
provide earlier SEP coverage effective dates for qualifying individuals
who attest to a future loss of MEC, such as coverage offered through an
employer, Medicaid, CHIP, or Medicare., within 60 days before such loss
of MEC s. Currently, the earliest start date for Exchange coverage when
a qualifying individual attests to a future loss of MEC is the first
day of the month following the date of loss of MEC, which may result in
coverage gaps when consumers lose forms of MEC (other than Exchange
coverage) mid-month. We believe that this proposed change is necessary
to ensure that qualifying individuals are able to seamlessly transition
from other non-Exchange MEC to Exchange coverage as quickly as possible
with minimal coverage gaps. As discussed earlier in preamble, ensuring
smooth and quick transitions into Exchange coverage will be especially
critical once the COVID-19 PHE comes to an end and higher numbers of
consumers lose their Medicaid or CHIP coverage and transition to
Exchange coverage, as applicable.
Based on HHS' own analysis, for plan years 2019 through 2021,
approximately 214,000 households seeking coverage on Exchanges using
the Federal platform reported a future mid-month loss of MEC date and
ultimately did not enroll in a QHP. In PY 2021, about 45,000 households
attested to a future mid-month loss of coverage MEC date and did not
enroll in QHP coverage. If these consumers had been given the
opportunity for Exchange coverage to begin the first of the month in
which their prior mid-month loss of MEC coverage end date occurred,
rather than having to wait weeks for their coverage to start, these
consumers could have avoided a gap in coverage and could have received
an additional month of APTC, given our interpretation of IRS'
definition of a coverage month, which we plan to codify in the final
rule. Therefore, for consumers who report a future loss of MEC,
especially those who reside in States that allow mid-month terminations
for Medicaid or CHIP, we estimate that this proposed change could
increase APTC expenditures by approximately $161 million dollars per
coverage year by allowing Exchange coverage to start the first of the
month in which the mid-month loss of MEC or COBRA occurs and assuming
that similar volume of consumers would choose enroll in an Exchange
QHP, however, this number could be slightly lower but we are unable to
estimate what proportion of consumers would still elect to not enroll
in an Exchange QHP. We also anticipate additional costs to certain
consumers as some consumers would be required to pay for an additional
month of Exchange coverage for which they would not have previously
been eligible while also still possibly paying for one last month of
their prior MEC coverage. However, in order to mitigate adverse
selection concerns, we are not proposing that Exchanges permit
consumers to select a different, prospective coverage start date, such
as the first of the month following plan selection. We also seek
comment from issuers regarding any additional or remaining risk
regarding mid-month coverage effective dates.
We seek comment on this proposal, specifically about any additional
costs, benefits, or burdens on State Exchanges, issuers, and consumers
as related to this proposal.
15. Special Rule for Loss of Medicaid or CHIP Coverage (Sec.
155.420(c))
We propose to add paragraph (c)(6) to Sec. 155.420(c) to provide
qualifying individuals losing Medicaid or CHIP that is considered MEC
in accordance with Sec. 155.420(d)(1)(i), and who qualify for a
special enrollment period, with up to 60 days before and up to 90 days
after their loss of coverage to enroll in QHP coverage. We believe that
this proposed change is necessary to ensure that qualifying individuals
are able to seamlessly transition from Medicaid or
[[Page 78307]]
CHIP into Exchange coverage as quickly as possible with little to no
coverage gaps. As discussed earlier in preamble, ensuring smooth and
quick transitions into Exchange coverage will be especially critical
once the COVID-19 PHE comes to an end and higher numbers of consumers
lose their Medicaid or CHIP coverage and transition to Exchange
coverage, as applicable.
Based on HHS's own analysis, in plan year 2019, about 60,000
consumers seeking coverage on Exchanges using the Federal platform
attested to a Medicaid/CHIP loss or denial between 60 to 90 days prior
on their HealthCare.gov application. We estimate that this proposed
change to permit Exchanges to use a special rule to provide consumers
losing Medicaid or CHIP with 90 days after their loss of Medicaid or
CHIP to enroll in QHP coverage would increase APTC expenditures by
approximately $98 million per year.
We seek comment on this proposal, specifically about any additional
costs, benefits, or burdens on States, issuers, and consumers as
related to this proposal.
16. Plan Display Error Special Enrollment Periods (Sec. 155.420(d))
We anticipate that revisions to Sec. 155.420(d)(12) would maintain
current regulatory burden and cost on issuers. As discussed earlier in
preamble, our proposal to make necessary changes to the text of Sec.
155.420(d)(12) is to align the policy for granting SEPs to persons who
are adversely affected by a plan display error with current plan
display error SEP operations. Our proposal would have minimal
operational impact, as interested parties such as issuers, States, and
the Exchanges on the Federal platform currently have the infrastructure
to demonstrate that a material plan display error influenced a
qualified individual's, enrollee's, or their dependents' enrollment
and, or decision to purchase a QHP through the Exchange. This does not
impose additional regulatory burden or costs because the revisions do
not require the consumers, HHS, or issuers to conduct new or additional
processes to existing data change requirements.
17. Termination of Exchange Enrollment or Coverage (Sec. 155.430)
We anticipate that the proposal to expressly prohibit issuers from
terminating coverage for policy dependent children because they reached
the maximum allowable age mid-plan year would benefit affected
enrollees by providing clarity regarding their ability to maintain
coverage. Because this prohibition has already been in place on the
Exchanges on the Federal platform, we do not anticipate a financial
impact to issuers or HHS. There may be some minor costs for State
Exchanges that choose to implement this prohibition and have not
previously done so, but we do not have adequate data to estimate these
costs. We seek comment on these benefit and burden assumptions.
18. Improper Payment Pre-Testing and Assessment for State Exchanges
(Sec. 155.1500)
This proposal would prepare HHS to implement the Payment Integrity
Information Act of 2019 (PIIA) requirements for State Exchanges. As
described in the preamble earlier in this proposed rule, the PIIA
requires that agencies measure the improper payments rate for programs
susceptible to significant improper payments. HHS already undertakes
annual measurements for Medicare, Medicaid, FFEs, and SBE-FPs. This
proposed rule would lay the groundwork to complete the Exchanges'
measurement program by including State Exchanges and to enable HHS to
estimate improper payment rates as mandated by statute.
This proposal tests State Exchanges' readiness to provide the
information necessary to measure the rate of improper payments. Even
slight decreases in this rate would accrue large taxpayer savings. The
IPPTA incurs approximately $57,000 in costs per respondent.
Nevertheless, HHS believes that the potential benefits of this
regulatory action justify the present costs.
This proposal would prepare HHS to implement the statutory
requirement for measurement of improper payments for programs
susceptible to significant improper payments. We have quantified the
costs for this proposal. Neither this IPPTA nor any follow-on program
should affect transfers between parties.
19. FFE and SBE-FP User Fee Rates for the 2024 Benefit Year (Sec.
156.50)
We are proposing an FFE user fee rate of 2.5 percent of monthly
premiums for the 2024 benefit year, which is a decrease from the 2.75
percent FFE user fee rate finalized in the 2023 Payment Notice (87 FR
27289). We also propose an SBE-FP user fee rate of 2.0 percent for the
2024 benefit year, which is a decrease from the 2.25 percent SBE-FP
user fee rate finalized in the 2023 Payment Notice. Based on our
estimated costs, enrollment (including anticipated transitions of
States from the FFE and SBE-FP models to either the SBE-FP or State
Exchange model), premiums for the 2024 benefit year, and proposed user
fee rates, we are estimating that FFE and SBE-FP user fee transfers
from issuers to the Federal Government would be $170 million lower
compared to those estimated for the prior benefit year. We also
anticipate that the lower user fee rates may exert downward pressure on
premiums.
20. Standardized Plans
a. Standardized Plan Options (Sec. 156.201)
At Sec. 156.201, we propose minor updates to our approach to
standardized plan options for PY 2024 and subsequent PYs. In
particular, in contrast to the policy finalized in the 2023 Payment
Notice, HHS proposes, for PY 2024 and subsequent PYs, to no longer
include a standardized plan option for the non-expanded bronze metal
level. Accordingly, HHS proposes at new Sec. 156.201(b) that for PY
2024 and subsequent PYs, FFE and SBE-FP issuers offering QHPs through
the Exchanges must offer standardized QHP options designed by HHS at
every product network type (as described in the definition of
``product'' at Sec. 144.103), at every metal level except the non-
expanded bronze level, and throughout every service area that they
offer non-standardized QHP options.
HHS believes that maintaining the highest degree of continuity
possible in the approach to standardized plan options minimizes the
risk of disruption for a range of interested parties, including
issuers, agents, brokers, States, and enrollees. HHS believes that
making major departures from the approach to standardized plan options
in the 2023 Payment Notice could result in drastic changes in these
plan designs that could potentially cause undue burden for these
interested parties. Furthermore, if the standardized plan options HHS
creates vary significantly from year to year, those enrolled in these
plans could experience unexpected financial harm if the cost-sharing
for services they rely upon differs substantially from the previous
year. Ultimately, HHS believes consistency in standardized plan options
is important to allow both issuers and enrollees to become accustomed
to these plan designs.
Thus, similar to the approach taken in the 2023 Payment Notice, HHS
proposes to create standardized plan options that would continue to
resemble the most popular QHP offerings that millions of consumers are
already enrolled in. As such, these proposed standardized plan options
are based on refreshed PY 2022
[[Page 78308]]
cost-sharing and enrollment data to ensure that these plans continue to
reflect the most popular offerings in the Exchanges.
With HHS proposing to maintain a similar approach to standardized
plan options to that taken in the 2023 Payment Notice, issuers would
continue to be able to utilize many existing benefit packages,
networks, and formularies, including those paired with standardized
plan options for PY 2023. Furthermore, since HHS is proposing to
require QHP issuers to offer standardized plan options at every product
network type, at every metal level except the non-expanded bronze metal
level, and throughout every service area they also offer non-
standardized plan options (but not for different product network types,
metal levels, and service areas where they do not also offer non-
standardized plan options), issuers would continue to not be required
to extend plan offerings beyond their existing service areas.
Furthermore, as discussed earlier in the preamble, HHS noted that
it would continue to differentially display standardized plan options
on HealthCare.gov per the existing authority at Sec. 155.205(b)(1).
Since HHS would continue to assume the burden for differentially
displaying standardized plan options on HealthCare.gov, FFE and SBE-FP
issuers would continue to not be subject to this burden.
In addition, as noted in the preamble, HHS would continue
enforcement of the standardized plan option display requirements for
approved web-brokers and QHP issuers using a direct enrollment pathway
to facilitate enrollment through an FFE or SBE-FP--including both the
Classic DE and EDE Pathways--at Sec. Sec. 155.220(c)(3)(i)(H) and
156.265(b)(3)(iv), respectively. HHS believes that continuing the
enforcement of these differential display requirements would not
require significant modification of these entities' platforms and non-
Exchange websites, especially since the majority of this burden already
occurred when the standardized plan option differential display
requirements were first finalized in the 2018 Payment Notice \239\ or
when enforcement of these requirements resumed beginning with the PY
2023 open enrollment period.
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\239\ These differential display requirements were first
effective and enforced beginning with PY 2018. See 81 FR 94117
through 94118, 94148.
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Finally, since HHS would continue to allow these entities to submit
requests to deviate from the manner in which standardized plan options
are differentially displayed on HealthCare.gov, the burden for these
entities would continue to be minimized. HHS intends to continue
providing access to information on standardized plan options to web-
brokers through the Health Insurance Marketplace Public Use Files
(PUFs) and QHP Landscape file to further minimize burden. Specific
burden estimates for these requirements can be found in the
corresponding ICR sections for Sec. Sec. 155.220 and 156.265 of the
2023 Payment Notice (87 FR 698 and 699 and 87 FR 27360 and 27361).
b. Non-Standardized Plan Option Limits (Sec. 156.202)
At Sec. 156.202, we propose to limit the number of non-
standardized plan options that issuers of individual market medical
QHPs can offer through the FFEs and SBE-FPs to two per product network
type, metal level, and service area. If such a limit were adopted in PY
2024, it is estimated that the weighted average number of non-
standardized plan options (which does not take into consideration
standardized plan options) available to each consumer would be reduced
from approximately 107.8 in PY 2022 to 37.2 in PY 2024. Furthermore, it
is estimated that approximately 60,949 of a total 106,037 non-
standardized plan option plan-county combinations (amounting to 57.5
percent of non-standardized plan option plan-county combinations) would
be discontinued.\240\ Finally, it is estimated that approximately 2.72
million of the approximate 10.21 million enrollees on the FFEs and SBE-
FPs (amounting to 26.6 percent of enrollees) would be affected by these
discontinuations.\241\
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\240\ Plan-county combinations are the count of unique plan ID
and FIPS code combinations. This measure is used because a single
plan may be available in multiple counties, and specific limits on
non-standardized plan options may have different impacts on one
county where there are four plans of the same product network type
and metal level versus another county where there are only two plans
of the same product network type and service area, for example.
\241\ These calculations assume that the non-standardized plan
options removed due to the proposed limit would be those with the
fewest enrollees based on PY 2022 data, which includes individual
market medical QHPs for Exchanges using the HealthCare.gov
eligibility and enrollment platform, including SBE-FPs.
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The total number of QHPs that would have to undergo QHP
certification each year would be reduced as a result of limiting the
number of non-standardized plan options. Relatedly, although issuers
would be required to select another QHP to which to crosswalk affected
enrollees from discontinued non-standardized plan options, the existing
discontinuation notices and process as well as the current re-
enrollment hierarchy and corresponding crosswalk process outlined at
Sec. 155.335(j) could accommodate crosswalking these affected
enrollees, and no additional modification to these processes or to this
re-enrollment hierarchy would be required. Finally, no additional
action would be required from consumers to complete this crosswalking
process.
We do not have sufficient data to estimate the costs associated
with these proposed changes, so we seek comment from interested parties
regarding cost estimates and data sources.
21. QHP Rate and Benefit Information (Sec. 156.210)
a. Age on Effective Date for SADPs
This rule proposes standards related to the rate submission process
for Exchange-certified SADPs during QHP certification. This rule
proposes to modify the rate submission process to require issuers of
Exchange-certified SADPs, whether they are sold on- or off-Exchange, to
use age on effective date as the sole method to calculate an enrollee's
age for rating and eligibility purposes beginning with Exchange
certification in PY 2024. Requiring these issuers to use the age on
effective date methodology for calculating an enrollee's age, and
consequently removing the less common and more complex age calculation
methods, will reduce potential consumer confusion and the burden placed
on Exchange interested parties (including issuers, as well as DE and
EDE partners) by promoting operational efficiency.
This proposed policy change reduces the risk of consumer harm and
confusion since the age on effective date method allows consumers to
more easily understand the rate they are charged. This proposed policy
also helps reduce enrollment blockers, which will improve the
efficiency of the enrollment process and reduce the burden placed on
Exchange interested parties (including issuers, as well as DE and EDE
partners). Therefore, this proposed policy helps facilitate more
informed enrollment decisions and enrollment satisfaction.
We also do not anticipate any negative financial impact as a result
of this proposed policy, given that it would be a small operational
change. If anything, this proposed policy has the potential to reduce
financial burden on issuers and CMS, as removing the other age rating
methods would reduce the added expense and slower development times
that must account for test cases in
[[Page 78309]]
the rating engine for the less commonly used and more complex methods.
Additionally, this proposed policy change would not create any
additional information submission burden, as it would apply to
information that Exchange issuers already submit as part of the QHP
certification process.
b. Guaranteed Rates for SADPs
This rule proposes standards related to the rate submission process
for Exchange-certified SADPs during QHP certification. This rule
proposes to modify the rate submission process to require issuers of
Exchange-certified SADPs, whether they are sold on- or off-Exchange, to
submit guaranteed rates beginning with Exchange certification in PY
2024. Requiring guaranteed rates would reduce potential consumer harm
and burden associated with incorrect APTC calculation for the pediatric
dental EHB portion of premiums, and the need for consumers to contact
issuers who post estimated rates for final rates.
Requiring guaranteed rates would reduce the risk of consumer harm
by reducing the risk of incorrect APTC calculation for the pediatric
dental EHB portion of premiums. Therefore, we believe that this
proposed policy change would support health equity by helping to ensure
that low-income enrollees who qualify for APTC are charged the correct
premium amount. Beyond reducing the potential for consumer financial
harm, this proposed policy would also reduce the burden placed on
consumers because it would allow them to rely on the information they
see on the issuer's website and not have to contact issuers for final
rates after the QHP certification process.
22. Plan and Plan Variation Marketing Name Requirements for QHPs (Sec.
156.225)
We propose at Sec. 156.225 to require that QHP plan and plan
variation marketing names include correct information, without omission
of material fact, and do not include content that is misleading. CMS,
States, and QHP issuers work together to ensure that consumers can make
informed decisions when selecting a health insurance plan based on
factors such as QHP benefit design, cost-sharing requirements, and
available financial assistance. In PY 2022, Exchanges on the Federal
platform saw a significant increase in the number of plan and plan
variation marketing names using cost-sharing information and other
benefit details. Following Open Enrollment for PY 2022, CMS received
complaints from consumers in multiple States who misunderstood cost-
sharing information in their QHP's marketing name. We believe that
clear policy can result in plan and plan variation marketing names that
reduce consumer confusion.
By providing standards that help ensure plan and plan variation
marketing names are clear and accurate, we anticipate the proposed
policy will reduce burden on consumers and on those who help consumers
to enroll in Exchange coverage because it will allow them to rely on
information they see during the plan selection process. In addition, we
believe that the proposed standards for plan and plan variation
marketing names would have an overall positive impact on other Exchange
interested parties as well, by ensuring that the consumer education
that plans use to compete in the individual health insurance market is
clear and accurate.
This proposed policy may require additional effort during the QHP
certification process on the part of Exchange issuers to comply with
new plan marketing name standards. However, we would work to streamline
this process by incorporating education about plan and plan variation
marketing name standards into the annual QHP certification process, and
proactively addressing issuer and State questions through existing
outreach and education vehicles including webinars, email blasts, and
regularly scheduled meetings on individual health insurance market
policy and operations.
The proposed policy would not create any new information submission
burden, because it would apply to information that Exchange issuers
already submit as part of the QHP certification process. Additionally,
while requiring increased effort initially, we believe this proposed
policy would ultimately decrease issuer and State effort following QHP
certification, and during and after the annual Open Enrollment Period,
by reducing the number of plan and plan variation marketing name-
related consumer complaints to triage and, in some cases, special
enrollment periods to be provided.
We seek comment on the burden that this proposed policy would
impose, and on the burden reduction it could provide. We also seek
comment on how CMS can further alleviate any burden associated with
this proposed policy, such as through technical assistance to Exchange
interested parties, including issuers and enrollment assisters.
Finally, we also believe that the proposed policy would promote
health equity by reducing the likelihood of QHP benefit
misunderstanding and confusion that leads to less informed enrollment
decisions, especially for consumers with low health literacy, which is
disproportionately experienced among underserved communities and other
vulnerable populations. For example, a 2022 study found higher self-
reported low health literacy among people who are Hispanic, non-U.S.
citizens, unemployed, or who have less than a high school
education.\242\ A 2019 study that tested participants' knowledge of
health insurance terminology found statistically significant
disparities based on race, ethnicity, and language preference.\243\ We
seek comment on this proposal and on whether this proposal would
promote health equity, and on additional ways that CMS can support
health insurance literacy through plan marketing guidance and technical
assistance.
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\242\ Edward J, Wiggins A, Young MH, Rayens MK. Significant
Disparities Exist in Consumer Health Insurance Literacy:
Implications for Health Care Reform. Health Lit Res Pract. 2019 Nov
5;3(4):e250-e258. doi: 10.3928/24748307-20190923-01. PMID: 31768496;
PMCID: PMC6831506.
\243\ Villagra VG, Bhuva B, Coman E, Smith DO, Fifield J. Health
insurance literacy: disparities by race, ethnicity, and language
preference. Am J Manag Care. 2019 Mar 1;25(3):e71-e75. PMID:
30875174.
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23. Network Adequacy (Sec. 156.230)
Regarding HHS's proposal to require all QHP issuers, including SADP
issuers, to utilize a contracted network of providers and comply with
network adequacy standards at Sec. 156.230 and ECP standards at Sec.
156.235, we acknowledge that SADP issuers that only offer plans that do
not use a provider network and that want to be certified may initially
face increased costs associated with developing contractual
relationships with providers or leveraging pre-existing networks
associated with their other plans. However, studies have found that
provider networks allow for insurer-negotiated prices and controlled
(that is, reduced) costs in the form of reduced patient cost-sharing,
premiums, and service price, as compared with such services obtained
out of network.\244\ \245\ We expect any initial increased issuer costs
to differ from the costs experienced once such provider
[[Page 78310]]
contractual relationships have been established or pre-existing
networks associated with their other plans have been leveraged. We
request comment on whether and how to extrapolate from literature on
voluntary network formation for purposes of assessing impacts of this
regulatory provision.
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\244\ Benson NM, Song Z. Prices And Cost Sharing For
Psychotherapy In Network Versus Out Of Network In The United States.
Health Aff (Millwood). 2020 Jul;39(7):1210-1218. https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.01468.
\245\ Song, Z., Johnson, W., Kennedy, K., Biniek, J. F., &
Wallace, J. Out-of-network spending mostly declined in privately
insured populations with a few notable exceptions from 2008 to 2016.
Health Aff. 2020;39(6), 1032-1041. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2019.01776.
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For SADPs that do not use a provider network, this proposal would
require these issuers to contract with providers in accordance with our
existing network adequacy requirements or withdraw from the Exchange.
The latter may create a burden for enrollees and QHP plans in the
service area if no SADPs remain. However, we expect this burden to only
affect a small number of consumers, given the overall small number of
Exchange-certified SADPs that do not use a provider network on the
FFEs. As discussed further in Table 12 in the preamble for part 156,
over the last few years, fewer than 100 counties have had SADPs without
provider networks, and most of these counties had SADPs with provider
network options available. For PY 2022, there were only 8 Exchange-
certified SADPs without provider networks in the FFEs. Similarly, the
number of States with these types of plans has decreased over time. At
its highest, in 2014, 9 FFE States had Exchange-certified SADPs without
provider networks. Since PY 2020, this number has dropped to 4 or fewer
FFE States, with only 2 FFE States having this plan type in PYs 2022
and 2023. Additionally, Exchange-certified SADPs with provider networks
are becoming more available in counties that previously only had no-
network SADP options: for PYs 2022 and 2023, only 2 FFE States (Alaska
and Montana) offer Exchange-certified SADPs without provider networks.
For Montana, all counties offering this plan type also offer Exchange-
certified SADPs with provider networks. For Alaska in PYs 2022 and
2023, 90 percent of counties with Exchange-certified SADPs without
provider networks have no Exchange-certified SADPs with provider
networks.
We anticipate approximately 2,200 enrollees will be affected by
this proposal. Enrollees in SADPs that choose not to comply with this
requirement would need to select a different plan for coverage, which
may cause hardship if the enrollee cannot access assistance, requires
culturally and linguistically appropriate support, and/or does not have
an understanding of health insurance design and benefits. In the event
service areas are left without SADPs due to the provider network
requirement, health plans will have to amend their benefits to include
the pediatric dental benefit EHB. This change may require costs for
issuers to build the benefit and contract with providers.
These impacts may be mitigated if we finalize a limited exception
to allow SADPs to not use a provider network in areas where it is
prohibitively difficult for the SADP issuer to establish a network of
dental providers that complies with Sec. Sec. 156.230 and 156.235.
Finally, we do not anticipate any impact as a result of this
proposal on health plans that do not use a network, given our
understanding that no such plan is currently certified as a QHP by an
Exchange, but solicit comment to inform that understanding.
24. Essential Community Providers (Sec. Sec. 156.235(a)(2)(i) and
156.235(a)(2)(ii)(B))
Regarding HHS's proposal to strengthen the ECP standards under
Sec. 156.235(a)(2)(i) by requiring QHPs to contract with at least 35
percent of available FQHCs that qualify as ECPs in the plan's service
area and at least 35 percent of available Family Planning Providers
that qualify as ECPs in the plan's service area, we acknowledge that
issuers whose provider networks do not currently include such a
percentage of these provider types that qualify as ECPs may face
increased costs associated with complying with the proposed policies.
However, we do not expect this increase to be prohibitive. Based on
data from PY 2023, it is likely that a majority of issuers would be
able to meet or exceed the threshold requirements for FQHCs and Family
Planning Providers without needing to contract with additional
providers in these categories.
To illustrate, if these requirements had been in place for PY 2023,
out of 137 QHP issuers on the FFEs, 76 percent would have been able to
meet or exceed the 35 percent FQHC threshold, while 61 percent would
have been able to meet or exceed the 35 percent Family Planning
Provider threshold without contracting with additional providers. For
SADP issuers, 84 percent would have been able to meet the 35 percent
threshold requirement for FQHCs offering dental services without
contracting with additional providers. In PY 2023, for medical QHPs,
the mean and median ECP percentages for the FQHC category were 74 and
83 percent, respectively. For the Family Planning Providers category,
the mean and median ECP percentages were 66 and 71 percent,
respectively. For SADPs, the mean and median ECP percentages for the
FQHC category were 61 and 64 percent, respectively.
Regarding HHS's proposal to strengthen the ECP standards under
Sec. 156.235(a)(2)(ii)(B) by establishing two additional stand-alone
ECP categories to include SUD Treatment Centers and Mental Health
Facilities, we acknowledge challenges associated with a general
shortage and uneven distribution of SUD Treatment Centers and mental
health providers. However, the ACA requires that a QHP's network
include ECPs where available. As such, the proposal to require QHPs to
offer a contract to at least one available SUD Treatment Center and one
available Mental Health Facility in every county in the plan's service
area does not unduly penalize issuers facing a lack of certain types of
ECPs within a service area, meaning that if there are no provider types
that map to a specified ECP category available within the respective
county, the issuer is not penalized. Further, as outlined in prior
Letters to Issuers, HHS prepares the applicable PY HHS ECP list that
potential QHPs use to identify eligible ECP facilities. The HHS ECP
list reflects the total supply of eligible providers (that is, the
denominator) from which an issuer may select for contracting to count
toward satisfying the ECP standard. As a result, issuers are not
disadvantaged if their service areas contain fewer ECPs. HHS
anticipates that any QHP issuers falling short of the 35 percent
threshold for PY 2024 could satisfy the standard by using ECP write-ins
and justifications. As in previous years, if an issuer's application
does not satisfy the ECP standard, the issuer would be required to
include as part of its application for QHP certification a satisfactory
justification.
25. Termination of Coverage or Enrollment for Qualified Individuals
(Sec. 156.270)
We propose to amend Sec. 156.270(f) by adding a timeliness
standard to the requirement for QHP issuers to send enrollees notice of
payment delinquency. Specifically, we propose to revise Sec.
156.270(f) to require issuers to send notice of payment delinquency
promptly and without undue delay. We anticipate that this proposal
would be beneficial to enrollees who become delinquent on premium
payments by ensuring they are properly informed of their delinquency in
time to avoid losing coverage. It may be especially beneficial to
enrollees who are low income, who would be especially negatively
impacted by disruptions in coverage. We expect some minimal costs to
issuers associated with updating their internal processes to ensure
compliance with the finalized
[[Page 78311]]
timeliness standard, but do not have adequate data to estimate these
costs. We seek comment on the benefit and cost assumptions of this
proposal.
26. Final Deadline for Reporting Enrollment and Payment Inaccuracies
Discovered After the Initial 90-Day Reporting Window (Sec.
156.1210(c))
We propose to amend Sec. 156.1210(c) to remove the alternate
deadline at Sec. 156.1210(c)(2), which requires an issuer to describe
all data inaccuracies identified in a payment and collection report by
the date HHS notifies issuers that the HHS audit process with respect
to the plan year to which such inaccuracy relates has been completed,
in order for these data inaccuracies to be eligible for resolution.
Under this proposal, we would retain only the deadline at Sec.
156.1210(c)(1), which requires that issuers describe all inaccuracies
identified in a payment and collections report within 3 years of the
end of the applicable plan year to which the inaccuracy relates to be
eligible to receive an adjustment to correct an underpayment. Under
this proposal, beginning with the 2020 plan year coverage, HHS would
not pay additional APTC payments or reimburse user fee payments for
FFE, SBE-FP, and SBE issuers for data inaccuracies reported after the
3-year deadline. Further, we propose that HHS would not accept or take
action that results in an outgoing payment on data inaccuracies or
payment errors for the 2015 through 2019 plan year coverage that are
reported after December 31, 2023. We anticipate that this proposed
change would result in a less operationally burdensome process for the
identification and resolution of these data inaccuracies for issuers,
State Exchanges, and HHS, and a slight reduction in associated burdens,
such as resolution of data inaccuracies for discovered underpayments.
However, we anticipate the impact would be minimal, if any, and result
in no significant financial impact.
27. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed or final
rule, we should estimate the cost associated with regulatory review.
Due to the uncertainty involved with accurately quantifying the number
of entities that will review the rule, we assume that the total number
of unique commenters on last year's proposed rule (465) will be the
number of reviewers of this proposed rule. We acknowledge that this
assumption may understate or overstate the costs of reviewing this
rule. It is possible that not all commenters reviewed last year's rule
in detail, and it is also possible that some reviewers chose not to
comment on the proposed rule. For these reasons, we thought that the
number of past commenters would be a fair estimate of the number of
reviewers of this rule. We welcome any comments on the approach in
estimating the number of entities which will review this proposed rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this proposed rule,
and therefore, for the purposes of our estimate we assume that each
reviewer reads approximately 50 percent of the rule. We seek comments
on this assumption.
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $115.22 per hour, including overhead and fringe
benefits.\246\ Assuming an average reading speed, we estimate that it
would take approximately 1 hour for the staff to review half of this
proposed or final rule. For each entity that reviews the rule, the
estimated cost is $115.22 (1-hour x $115.22). Therefore, we estimate
that the total cost of reviewing this regulation is $53,577.30 ($115.22
x 465).
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\246\ https://www.bls.gov/oes/current/oes_nat.htm.
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D. Regulatory Alternatives Considered
With respect to the inclusion or exclusion of the 2020 benefit year
enrollee-level EDGE data in the recalibration of 2024 benefit year risk
adjustment models, we considered a variety of alternative options to
our proposal to use 2018, 2019, and 2020 enrollee-level EDGE data with
an exception to exclude 2020 benefit year data from recalibration of
the age-sex coefficients for the adult models, which is the fourth
option outlined above. The first option considered was to maintain
current policy, recalibrating the risk adjustment models using 2018,
2019, and 2020 enrollee-level EDGE data (without any adjustment). The
second option involved using 2018, 2019, and 2020 enrollee-level EDGE
data, but assigning a lower weight to the 2020 data. The third option
we considered would utilize 4 years of enrollee-level EDGE data,
instead of three, to recalibrate the risk adjustment models using 2017,
2018, 2019, and 2020 data. The fifth option would exclude the 2020
enrollee-level EDGE data and use the 2017, 2018, and 2019 enrollee-
level EDGE data in recalibration for the 2024 benefit year or to use
the final 2023 models as the 2024 risk adjustment models. The sixth and
final option we considered would use 2 years of enrollee-level EDGE
data for 2024 benefit year recalibration--only 2018 and 2019 data.
Our analyses found that the 2019 and 2020 benefit year enrollee-
level EDGE recalibration data were largely comparable, however, there
were observed anomalous decreases in the unconstrained coefficients for
the 2020 benefit year enrollee-level EDGE recalibration data for older
adult enrollees, especially older female enrollees. Option 1 therefore
would not address the identified anomalous trend that is not expected
to continue in future benefit years.
The second option would represent a compromise between those who
wish to include 2020 data in model recalibration and those who wish to
exclude 2020 data, by capturing the utilization and spending patterns
underlying the 2020 data while dampening its effects in the model.
However, we were concerned this approach would require finding an
appropriate weighting methodology, and we are further concerned that
broadly dampening the effect of the 2020 benefit year data in the
models defeats the purpose of adding the next available benefit year of
data as part of model recalibration because doing so would prevent the
models from reflecting changes in utilization and cost of care that are
unrelated to the impact of the COVID-19 PHE. There are similar concerns
with option 3 and the inclusion of an additional prior benefit year
(that is, 2017) to recalibrate the 2024 benefit year models to dampen
the impact of the 2020 benefit year data. We do not believe that such a
broad dampening is necessary because the anomalous coefficient changes
identified from the 2020 benefit year data were largely limited to the
adult model age-sex coefficients, and incorporating an additional prior
benefit year of data would dampen the impact of the 2020 benefit year
data on other factors and would prevent the models from reflecting
changes in utilization and cost of care that are unrelated to the
impact of the COVID-19 PHE.
We are similarly concerned about options 5 and 6, which would
involve the complete exclusion of 2020 benefit year data, because both
of these options would result in reliance on data that may not be the
most reflective data set of the utilization and spending trends.
Furthermore, there are questions about whether there is a sufficient
justification to completely exclude 2020 benefit year
[[Page 78312]]
enrollee-level EDGE recalibration data in the recalibration of the risk
adjustment models. The sixth option has the same limitations and would
also have the additional drawback of decreasing the stabilizing effect
of using multiple years of data in model recalibration. More
specifically, because this option would reduce the number of years of
data used, a change in a coefficient occurring in just 1 year of the
data that is actually included in recalibration (that is, the 2018 or
2019 benefit years of enrollee-level EDGE recalibration data) would
have a greater impact on the risk adjustment model coefficients due to
the increase in the reliance of the blended coefficients on the
remaining 2 years of data.
We solicit comment on all of these alternatives for the use of the
2020 enrollee-level EDGE data in the 2024 benefit year risk adjustment
model recalibration.
In developing the updated materiality threshold for HHS-RADV
proposed in this rule, we sought to ensure the materiality threshold
would ease the burden of annual audit requirements for smaller issuers
of risk adjustment covered plans that do not materially impact risk. To
do this, we considered the costs associated with hiring an initial
validation auditor and submitting IVA results and the relative growth
of issuers' total annual premiums Statewide and total BMM. We also
evaluated the benefits of shifting to a threshold based on BMM rather
than annual premiums, and we are proposing changing the materiality
threshold from $15 million in total annual premiums Statewide to 30,000
BMM Statewide. As an alternative option, we considered increasing the
threshold to $17 million in total annual premiums Statewide and
maintaining a cutoff based on premium dollars (instead of BMMs).
However, we were concerned that a premium threshold would fail to
capture small issuers overtime as PMPM premiums grow and would require
more regular updates to the materiality threshold to maintain the
current balance. The use of a BMM threshold avoids this issue. We
invite comment on our proposed materiality threshold and on the
potential alternative option to update the threshold to $17 million
annual premiums Statewide for the benefit year being audited, and we
also invite comment on the applicability date for when the new
materiality threshold should begin to apply.
Regarding our proposal to require Exchanges to determine an
enrollee as ineligible for APTC after having failed to file and
reconcile for two consecutive tax years rather than after one tax year,
we considered multiple alternatives. One alternative we considered was
extending the current pause on FTR operations through plan year 2024,
while HHS continued to examine the current FTR process, and explore
ways in which the FTR process could promote continuity of coverage,
while maintaining its critical program integrity function to ensure
that only enrollees eligible for APTC continue to do so. Another
alternative we considered was repealing the requirement under 45 CFR
155.305(f)(4) that a taxpayer(s) must file a Federal income tax return
and reconcile their APTC for any tax year in which they or their tax
household received APTC in order to continue their eligibility for
APTC. However, we wanted to maintain the program integrity benefits of
the FTR process, and believe there is still value in ensuring that only
people who are filing and reconciling remain eligible to receive APTC.
Because of this, we have amended our proposal and are instead proposing
requiring that Exchanges end APTC only after two consecutive years of
FTR status rather than ending APTC after a single year.
We considered two alternatives to accepting attestation to
determine household income for households for which IRS does not return
any data and expanding the amount of time to resolve income DMIs to
meet the goal of increased consumer service and advancing health
equity. We considered establishing a threshold when adjusting APTC
following an income inconsistency period. Under this alternative, HHS
would continue current operations but would not eliminate APTC
eligibility completely if consumers are unable to provide sufficient
documentation. While this alternative would require fewer changes to
implement, our current proposal would create better outcomes for more
consumers and decrease administrative burden. Additionally, we
considered eliminating income DMIs for all consumers, including those
for whom the Exchanges have IRS data, due to the large burden the
income verification process places on consumers, but we found that the
verification process was required for consumers with IRS data, and that
consumers with other IRS data would have their household income
adjusted based on that data as opposed to those without IRS data who
would instead lose all of their APTC.
In developing the proposal for re-enrollment hierarchy, we
considered a variety of alternatives, including making no
modifications. We also considered revising the policy, beginning in PY
2024, such that the Exchange could direct re-enrollment for income-
based CSR-eligible enrollees from a bronze QHP to a silver QHP with a
$0 net premium within the same product and QHP issuer, regardless if
the enrollee's current plan is available. Under this alternative we
considered revising the policy to allow the Exchange to ensure the
enrollee's coverage retained a similar provider network throughout the
Federal hierarchy for re-enrollment. While we believe this may slightly
reduce operational complexity, we believe income-based CSR-eligible
enrollees who have a de minimis or non-zero-dollar premium would still
greatly benefit from having their coverage renewed into a silver CSR
QHP with a lower or equivalent net premium and OOPC, by saving
thousands in care costs.
We also considered revising the policy, beginning in PY 2024, such
that the Exchange could: (1) direct re-enrollment, for income-based
CSR-eligible enrollees, from a bronze QHP to a silver QHP with a lower
or equivalent net premium and total OOPC within the same product and
QHP issuer regardless if their current plan is available; (2) if their
current plan is available and the enrollee is not income-based CSR
eligible, re-enroll the enrollee's coverage in the enrollee's same
plan; (3) if their current plan is not available and the enrollee is
not income-based CSR eligible, direct re-enrollment to a plan at the
same metal level that has a lower or equivalent net premium and total
out-of-pocket cost compared to the enrollee's current QHP within the
same product and QHP issuer; and (4) if a plan at the same metal level
as their current QHP is not available and the enrollee is not income-
based CSR eligible, direct re-enrollment to a QHP that is one metal
level higher or lower than the enrollee's current QHP and has a lower
or equivalent net premium and total OOPC compared to the enrollee's
current QHP within the same product and issuer. Under this alternative,
we considered revising the policy to allow the Exchange to ensure the
enrollee's coverage retained a similar provider network throughout the
Federal hierarchy for re-enrollment. While we believe this alternative
would be beneficial for all enrollees, we understand this would pose a
substantial operational burden and complexities for issuers and
Exchanges to shift from the current policy to this revised alternative.
We believe an incremental change would help issuers and Exchanges
diligently and appropriately adjust their re-enrollment operations. We
solicit comment on all
[[Page 78313]]
aspects of the re-enrollment proposal at Sec. 155.335(j).
HHS considered taking no action related to the two technical
corrections to the regulatory text at Sec. 155.420(a)(4)(ii)(A) and
(B). However, HHS felt these changes were necessary to make it
explicitly clear that when a qualified individual or enrollee, or his
or her dependent, experiences the special enrollment period triggering
event, all members of a household may enroll in or change plans
together in response to the event experienced by one member of the
household. These proposed technical corrections should eliminate any
confusion surrounding special enrollment period triggering events and
may help Exchanges and other interested parties more effectively
communicate and message rules that determine eligibility for special
enrollment periods and how plan category limitations may apply for
certain special enrollment periods as outlined under Sec. 155.420(a).
We considered taking no action related to our proposal to revise
paragraph Sec. 155.420(b)(2)(iv), to provide Exchanges with more
flexibility by allowing Exchanges the option to provide consumers with
earlier coverage effective dates so that consumers are able to
seamlessly transition from one form of coverage to Exchange coverage as
quickly as possible with no coverage gaps. However, we believe that
many consumers would benefit from this proposed change, especially
those consumers whose States allow for mid-month terminations for
Medicaid/CHIP or those consumers whose COBRA coverage ends mid-month
and who report their coverage loss to the Exchange before it happens.
We also considered allowing consumers the option to request a
prospective coverage start date rather than the day following loss of
MEC or COBRA coverage but we determined that this could introduce
adverse selection as consumers could choose to delay enrolling in
Exchange coverage and paying premiums until coverage was necessary.
Finally, we also considered for consumers attesting to a past loss of
MEC and who also report a mid-month coverage loss that Exchange
coverage would be effective retroactively back to the first day after
the prior coverage loss date. For example, if a consumer lost coverage
on July 15, coverage would be effective retroactively back to July 16.
We decided against this option as it would require a statutory change
to allow for mid-month PTC for consumers losing MEC mid-month, in
addition to being too operationally complex for both Exchanges and
issuers to implement.
We considered taking no action related to our proposal to add new
paragraph Sec. 155.420(c)(6), to ensure that qualifying individuals
losing Medicaid or CHIP coverage are able to seamlessly transition to
Exchange coverage as quickly as possible with little to no coverage
gaps. However, we believe that many consumers will benefit from this
proposed change, especially during the PHE unwinding period, where many
consumers will need to seamlessly transition off Medicaid or CHIP and
into Exchange coverage. We also considered whether this proposed change
should be broadened to include consumers in other disadvantaged groups
such as those impacted by natural disasters or other exceptional
circumstances, consumers losing Medicaid or CHIP that is not considered
MEC, and consumers who are denied Medicaid or CHIP coverage. We decided
not to include other groups, such as those residing in a Federal
Emergency Management Agency (FEMA) declared disaster area, as current
CMS guidance requires that an SEP be made available for an additional
60 days after the end of a FEMA declaration.\247\ Additionally, for
other exceptional circumstances, there is flexibility under Sec.
155.420(d)(9) that CMS may offer impacted consumers more time to enroll
under an SEP depending on the type of exceptional circumstance, like a
national PHE such as COVID-19. Finally, regarding the population that
is denied Medicaid or CHIP coverage, we also considered whether to
extend the SEP window length from 60 days to 90 days for the population
that is denied Medicaid or CHIP, however, we chose not to extend the
SEP window length for this population as there is no 90 day
reconsideration period that needs alignment for consumers denied
Medicaid or CHIP as there is for consumers who have lost eligibility
for Medicaid or CHIP as described earlier in preamble.
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\247\ https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/8-9-natural-disaster-SEP.pdf.
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We considered taking no action regarding our proposal to modify
Sec. 155.430(b) to expressly prohibit issuers from terminating
coverage for policy dependent enrollees because they reached the
maximum allowable age mid-Plan Year. However, we believe it is
important to provide clarity to issuers and consumers regarding this
policy so that coverage is not prematurely disrupted.
In developing the IPPTA policies contained in this proposed rule
(Sec. 155.1500), we requested to meet individually with each State
Exchange currently participating in the voluntary State engagement
initiative in order to gather State-specific information regarding
options for data collection that would impose the least burden on State
Exchanges. Based on information provided by those State Exchanges that
were able to participate in the meetings, we considered several data
collection options but chose the option that provides State Exchanges
with the greatest amount of control in aligning their source data to
the requested data elements. In addition, the proposed data collection
option requests that the State Exchange provide no fewer than 10
sampled tax households that we propose the State Exchange would
identify based upon fulfilling the scenarios described in the preamble.
An alternative option consisted of allowing the State Exchange to
provide to HHS all of the source data in an unstructured format for the
respective, sampled tax households. HHS using its own resources would
then map the State Exchange source data to the required data elements
that are necessary for performing the pre-testing and assessment. The
mapping process would require consultative sessions with each State
Exchange and a validation process to ensure the accurate mapping of the
data. While the proposed pre-testing and assessment data request form
also entails a process to validate the data with the State Exchanges,
the consultative process associated with this alternative data
collection mechanism would entail more frequency and a higher level of
intensity.
We invite comment on this proposed data collection option and
invite comment on potential alternative data collection options.
With respect to standardized plan options, we considered a range of
options for the proposed policy approach at Sec. 156.201, such as
modifying the methodology used to create the standardized plan options
for PY 2024 and subsequent PYs. Specifically, we considered including
more than four tiers of prescription drug cost-sharing in the
standardized plan option formularies. We also considered lowering the
deductibles in these plan designs and offsetting this increase in plan
generosity by increasing cost-sharing amounts for several benefit
categories. We also considered simultaneously maintaining the current
cost-sharing structures and decreasing the deductibles for these plan
designs, which would have increased the AVs of these plans to be at the
ceiling of each AV de minimis range. Ultimately, we
[[Page 78314]]
decided to maintain the AVs of these plans near the floor of each de
minimis range by largely maintaining the cost-sharing structures and
deductible values from the standardized plan options from PY 2023, as
well as by increasing the MOOP values for these plan designs. We
believe this proposed approach would strike the greatest balance in
providing enhanced pre-deductible coverage while ensuring competitive
premiums for these standardized plan options.
We invite comment on this proposed approach.
With respect to non-standardized plan option limits, we considered
a range of options for the proposed policy approach at Sec. 156.202.
Specifically, we considered limiting the number of non-standardized
plan options to three, two, or one per issuer, product network type,
metal level, and service area combination. We also considered no longer
permitting non-standardized plan options to be offered through the
Exchanges.
We also considered redeploying the meaningful difference standard,
which was previously codified at Sec. 156.298, either in place of or
in conjunction with imposing limits on the number of non-standardized
plan options that issuers can offer through the Exchanges. In this
scenario, we considered selecting from among several combinations of
the criteria in the original version of the meaningful difference
standard to determine whether plans are ``meaningfully different'' from
one another.\248\ Specifically, we considered using only a difference
in deductible type (that is, integrated or separate medical and drug
deductible), as well as a $1,000 difference in deductible to determine
whether plans are ``meaningfully different'' from one another.
---------------------------------------------------------------------------
\248\ Under the original meaningful difference standard, a plan
was considered to be ``meaningfully different'' from other plans in
the same product network type, metal level, and service area
combination if the plan had at least one of the following
characteristics: difference in network ID, difference in formulary
ID, difference in MOOP type, difference in deductible, multiple in-
network provider tiers rather than only one, a difference of $500 or
more in MOOP, a difference of $250 or more in deductible, or any
difference in covered benefits.
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We believe the proposed approach of limiting the number of non-
standardized plan options to two per issuer, product network type,
service area, and metal level would most significantly reduce the risk
of plan choice overload, streamlining the plan selection process and
enhancing choice architecture for consumers on the Exchanges.
We invite comment on this proposed approach.
With respect to plan and plan variation marketing names, we
considered issuing sub-regulatory guidance in lieu of proposed
rulemaking to require that marketing names include correct information,
without omission of material fact, and not include content that is
misleading. However, given the important role that plan and plan
variation marketing names play in facilitating plan competition through
consumer education on Exchanges, we are proposing this requirement in
regulation to allow interested parties the opportunity to comment.
We considered leaving the ECP provider participation threshold and
major ECP categories unchanged from PY 2023, but elected to propose
these changes to ECP policy in an effort to increase access to care,
particularly mental health care and SUD treatment, for low-income and
medically underserved consumers. We invite comment on these proposals.
We considered not introducing a proposal to require all QHP
issuers, including stand-alone dental plans, to utilize a contracted
network of providers, but elected to propose this change to network
adequacy policy in an effort to ensure that consumers have access to
insurer-negotiated prices and reduced costs in the form of reduced
cost-sharing, premiums, and service price, as compared with cost-
sharing, premiums, and service prices obtained from plans with no
network of contracted providers. We invite comment on this proposal.
We considered not proposing an amendment to Sec. 156.270(f) to add
a timeliness standard to the requirement for QHP issuers to send
enrollees notices of payment delinquency. However, because there is
currently no timeliness standard for delinquency notices, we are
concerned that there is a risk that enrollees may not receive
sufficient notice of their delinquency in order to avoid termination of
coverage. We also considered proposing requirements on how much advance
notice issuers must provide on premium bills after coverage is
effectuated, but have declined to propose regulation here, determining
that our focus on delinquency notice timeliness will have the desired
impact without creating potential conflicts with the existing pattern
of State rules and issuer practices that have long applied in the
individual market.
E. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, we estimate that
small businesses, nonprofit organizations, and small governmental
jurisdictions are small entities as that term is used in the RFA. The
great majority of hospitals and most other health care providers and
suppliers are small entities, either by being nonprofit organizations
or by meeting the SBA definition of a small business (having revenues
of less than $8.0 million to $41.5 million in any 1 year). Individuals
and States are not included in the definition of a small entity.
For purposes of the RFA, we believe that health insurance issuers
and group health plans would be classified under the North American
Industry Classification System (NAICS) code 524114 (Direct Health and
Medical Insurance Carriers). According to SBA size standards, entities
with average annual receipts of $41.5 million or less would be
considered small entities for these NAICS codes. Issuers could possibly
be classified in 621491 (HMO Medical Centers) and, if this is the case,
the SBA size standard would be $35 million or less.\249\ We believe
that few, if any, insurance companies underwriting comprehensive health
insurance policies (in contrast, for example, to travel insurance
policies or dental discount policies) fall below these size thresholds.
Based on data from MLR annual report submissions for the 2020 MLR
reporting year, approximately 78 out of 480 issuers of health insurance
coverage nationwide had total premium revenue of $41.5 million or
less.\250\ This estimate may overstate the actual number of small
health insurance issuers that may be affected, since over 76 percent of
these small issuers belong to larger holding groups, and many, if not
all, of these small companies are likely to have non-health lines of
business that will result in their revenues exceeding $41.5 million.
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\249\ https://www.sba.gov/document/support--table-size-standards.
\250\ Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
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In this proposed rule, we propose standards for the risk adjustment
and HHS-RADV programs, which are intended to stabilize premiums and
reduce incentives for issuers to avoid higher-risk enrollees. Because
we believe that insurance firms offering comprehensive health insurance
policies generally exceed the size thresholds for ``small entities''
established by the SBA, we do not
[[Page 78315]]
believe that an initial regulatory flexibility analysis is required for
such firms. Furthermore, the proposals related to IPPTA at Sec. Sec.
155.1500-155.1515 will affect only State Exchanges. As State
governments do not constitute small entities under the statutory
definition, and as all State Exchanges have revenues exceeding $5
million, an impact analysis for these provisions is not required under
the RFA.
As its measure of significant economic impact on a substantial
number of small entities, HHS uses a change in revenue of more than 3
to 5 percent. We do not believe that this threshold will be reached by
the requirements in this proposed rule. Therefore, the Secretary has
certified that this proposed rule will not have a significant economic
impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. While this rule is not
subject to section 1102 of the Act, we have determined that this
proposed rule would not affect small rural hospitals. Therefore, the
Secretary has certified that this proposed rule will not have a
significant impact on the operations of a substantial number of small
rural hospitals.
F. Unfunded Mandates Reform Act (UMRA)
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2022, that
threshold is approximately $165 million. Although we have not been able
to quantify all costs, we expect the combined impact on State, local,
or Tribal governments and the private sector does not meet the UMRA
definition of unfunded mandate.
G. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications.
In compliance with the requirement of E.O. 13132 that agencies
examine closely any policies that may have Federalism implications or
limit the policy making discretion of the States, we have engaged in
efforts to consult with and work cooperatively with affected States,
including participating in conference calls with and attending
conferences of the NAIC, and consulting with State insurance officials
on an individual basis.
While developing this rule, we attempted to balance the States'
interests in regulating health insurance issuers with the need to
ensure market stability. By doing so, we complied with the requirements
of E.O. 13132.
Because States have flexibility in designing their Exchange and
Exchange-related programs, State decisions will ultimately influence
both administrative expenses and overall premiums. States are not
required to establish an Exchange or risk adjustment program. For
States that elected previously to operate an Exchange, those States had
the opportunity to use funds under Exchange Planning and Establishment
Grants to fund the development of data. Accordingly, some of the
initial cost of creating programs was funded by Exchange Planning and
Establishment Grants. After establishment, Exchanges must be
financially self-sustaining, with revenue sources at the discretion of
the State. Current State Exchanges charge user fees to issuers.
In our view, while this proposed rule would not impose substantial
direct requirement costs on State and local governments, this
regulation has Federalism implications due to potential direct effects
on the distribution of power and responsibilities among the State and
Federal Governments relating to determining standards relating to
health insurance that is offered in the individual and small group
markets. For example, the repeal of the risk adjustment State
flexibility policy may have Federalism implications, but they are
mitigated because States have the option to operate their own Exchange
and risk adjustment program if they believe the HHS risk adjustment
methodology does not account for State-specific factors unique to the
State's markets.
As previously noted, the proposals in this rule related to IPPTA
would impose a minimal unfunded mandate on State Exchanges to supply
data for the improper payment calculation. Accordingly, E.O. 13132 does
not apply to this section of the proposed rule. In addition, statute
requires HHS to determine the amount and rate of improper payments.
Finally, States have the option to choose an FFE or SBE-FP, each of
which place different Federal burdens on the State. As the IPPTA
section of the proposed rule should not conflict with State law, HHS
does not anticipate any preemption of State law. We invite State
Exchanges to submit comments on this section of the proposed rule if
they believe it would conflict with State law.
In addition, we believe this proposed regulation does have
Federalism implications due to our proposal that Exchanges offer
earlier effective dates for consumers attesting to future mid-month
loss of MEC or COBRA coverage. However, the Federalism implications are
mitigated as Exchanges would have the flexibility to continue offering
the current coverage effective dates as described at Sec.
155.420(b)(2)(iv) or the new proposed earlier effective dates for
consumers attesting to a future loss of MEC as described earlier in
preamble. In addition, through the cross-references in Sec.
147.104(b)(5), the new proposed earlier coverage effective dates for
consumers attesting to a future loss of MEC would be applicable market-
wide at the option of the applicable State authority.
Additionally, we believe this proposed regulation does have
Federalism implications due to our proposal that Exchanges provide
consumers losing Medicaid or CHIP with a 90-day special enrollment
period window to enroll in an Exchange QHP rather than the current 60-
day window. However, the Federalism implications are mitigated as
Exchanges will have the flexibility to decide whether to continue
providing 60 days before or 60 days after for consumers losing Medicaid
or CHIP to enroll in a QHP plan as described at Sec. 155.420(c)(1) or
to implement the proposed new special rule providing consumers with 60
days before or 90 days after their loss of Medicaid or CHIP to enroll
in QHP coverage.
List of Subjects
45 CFR Part 153
Administrative practice and procedure, Health care, Health
insurance, Health records, Intergovernmental relations, Organization
and functions (Government agencies), Reporting and recordkeeping
requirements.
45 CFR Part 155
Administrative practice and procedure, Advertising, Brokers,
[[Page 78316]]
Conflict of interests, Consumer protection, Grants administration,
Grant programs-health, Health care, Health insurance, Health
maintenance organizations (HMO), Health records, Hospitals, Indians,
Individuals with disabilities, Intergovernmental relations, Loan
programs-health, Medicaid, Organization and functions (Government
agencies), Public assistance programs, Reporting and recordkeeping
requirements, Technical assistance, Women and youth.
45 CFR Part 156
Administrative practice and procedure, Advertising, Advisory
committees, Brokers, Conflict of interests, Consumer protection, Grant
programs-health, Grants administration, Health care, Health insurance,
Health maintenance organization (HMO), Health records, Hospitals,
Indians, Individuals with disabilities, Loan programs-health, Medicaid,
Organization and functions (Government agencies), Public assistance
programs, Reporting and recordkeeping requirements, State and local
governments, Sunshine Act, Technical assistance, Women, and Youth.
For the reasons set forth in the preamble, under the authority at 5
U.S.C. 301, the Department of Health and Human Services proposes to
amend 45 CFR subtitle A, subchapter B, as set forth below.
PART 153--STANDARDS RELATED TO REINSURANCE, RISK CORRIDORS, AND
RISK ADJUSTMENT UNDER THE AFFORDABLE CARE ACT
0
1. The authority citation for part 153 continues to read as follows:
Authority: 42 U.S.C. 18031, 18041, and 18061 through 18063.
0
2. Amend Sec. 153.320 by revising paragraphs (d) introductory text,
(d)(1)(iv), and (d)(4)(i)(B) to read as follows:
Sec. 153.320 Federally certified risk adjustment methodology
* * * * *
(d) State flexibility to request reductions to transfers. For the
2020 through 2023 benefit years, States can request to reduce risk
adjustment transfers in the State's individual catastrophic, individual
non-catastrophic, small group, or merged market risk pool by up to 50
percent in States where HHS operates the risk adjustment program. For
the 2024 benefit year, only prior participants, as defined in paragraph
(d)(5) of this section, may request to reduce risk adjustment transfers
in the State's individual catastrophic, individual non-catastrophic,
small group, or merged market risk pool by up to 50 percent in States
where HHS operates the risk adjustment program.
(1) * * *
(i) * * *
(iv) For the 2024 benefit year only, a justification for the
requested reduction demonstrating the requested reduction would have de
minimis impact on the necessary premium increase to cover the transfers
for issuers that would receive reduced transfer payments.
* * * * *
(4) * * *
(B) For the 2024 benefit year only, that the requested reduction
would have de minimis impact on the necessary premium increase to cover
the transfers for issuers that would receive reduced transfer payments.
* * * * *
0
3. Section 153.630 is amended by--
0
a. Revising paragraph (d)(2);
0
b. Redesignating paragraph (d)(3) as paragraph (d)(4); and
0
c. Adding new paragraph (d)(3).
The revision and addition read as follows:
Sec. 153.630 Data validation requirements when HHS operates risk
adjustment.
* * * * *
(d) * * *
(2) Within 15 calendar days of the notification of the findings of
a second validation audit (if applicable) by HHS, in the manner set
forth by HHS, an issuer must confirm the findings of the second
validation audit (if applicable), or file a discrepancy report to
dispute the findings of a second validation audit (if applicable).
(3) Within 30 calendar days of the notification by HHS of the
calculation of a risk score error rate, in the manner set forth by HHS,
an issuer must confirm the calculation of the risk score error rate as
a result of risk adjustment data validation, or file a discrepancy
report to dispute the calculation of a risk score error rate as a
result of risk adjustment data validation.
* * * * *
0
4. Section 153.710 is amended by revising paragraphs (e) and (h)(1)
introductory text to read as follows:
Sec. 153.710 Data requirements.
* * * * *
(e) Materiality threshold. HHS will consider a discrepancy reported
under paragraph (d)(2) of this section to be material if the amount in
dispute is equal to or exceeds $100,000 or 1 percent of the total
estimated transfer amount in the applicable State market risk pool,
whichever is less.
* * * * *
(h) * * *
(1) Notwithstanding any discrepancy report made under paragraph
(d)(2) of this section, any discrepancy filed under Sec. 153.630(d)(2)
or (3), or any request for reconsideration under Sec. 156.1220(a) of
this subchapter with respect to any risk adjustment payment or charge,
including an assessment of risk adjustment user fees and risk
adjustment data validation adjustments; reinsurance payment; cost-
sharing reduction payment or charge; or risk corridors payment or
charge, unless the dispute has been resolved, an issuer must report,
for purposes of the risk corridors and MLR programs:
* * * * *
PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
0
5. The authority citation for part 155 continues to read as follows:
Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042,
18051, 18054, 18071, and 18081-18083.
0
6. Section 155.106 is amended by revising paragraphs (a)(3) and (c)(3)
to read as follows:
Sec. 155.106 Election to operate an Exchange after 2014.
(a) * * *
(3) Have in effect an approved, or conditionally approved, Exchange
Blueprint and operational readiness assessment prior to the date on
which the Exchange would begin open enrollment as a State Exchange;
* * * * *
(c) * * *
(3) Have in effect an approved, or conditionally approved, Exchange
Blueprint and operational readiness assessment prior to the date on
which the Exchange proposes to begin open enrollment as an SBE-FP, in
accordance with HHS rules, as a State Exchange utilizing the Federal
platform;
* * * * *
Sec. 155.210 [Amended]
0
7. Section 155.210 is amended by removing and reserving paragraph
(d)(8).
0
8. Section 155.220 is amended by--
0
a. Revising paragraphs (g)(5)(i)(B), (h)(3), and (j)(2)(ii)
introductory text;
0
b. Redesignating paragraphs (j)(2)(ii)(A) through (D) as paragraphs
(j)(2)(ii)(B), through (E), respectively;
0
c. Adding new paragraph ((j)(2)(ii)(A); and
[[Page 78317]]
0
d. Revising paragraph (j)(2)(iii).
The revisions and additions read as follows:
Sec. 155.220 Ability of States to permit agents and brokers and web-
brokers to assist qualified individuals, qualified employers, or
qualified employees enrolling QHPs.
* * * * *
(g) * * *
(5) * * *
(i) * * *
(B) The agent, broker, or web-broker may submit evidence in a form
and manner to be specified by HHS, to rebut the allegation during this
90-day period. If the agent, broker, or web-broker submits such
evidence during the suspension period, HHS will review the evidence and
make a determination whether to lift the suspension within 45 calendar
days of receipt of such evidence. If the rebuttal evidence does not
persuade HHS to lift the suspension, or if the agent, broker, or web-
broker fails to submit rebuttal evidence during the suspension period,
HHS may terminate the agent's, broker's, or web-broker's agreements
required under paragraph (d) of this section and under Sec. 155.260(b)
for cause under paragraph (g)(5)(ii) of this section.
* * * * *
(h) * * *
(3) Notice of reconsideration decision. The HHS reconsideration
entity will provide the agent, broker, or web-broker with a written
notice of the reconsideration decision within 60 calendar days of the
date it receives the request for reconsideration. This decision will
constitute HHS' final determination.
* * * * *
(j) * * *
(2) * * *
(ii) Provide the Federally-facilitated Exchanges with correct
information, and document that eligibility application information has
been reviewed by and confirmed to be accurate by the consumer, or the
consumer's authorized representative designated in compliance with
Sec. 155.227, prior to the submission of information under section
1411(b) of the Affordable Care Act, including but not limited to:
(A) Documenting that eligibility application information has been
reviewed by and confirmed to be accurate by the consumer or the
consumer's authorized representative must require the consumer or their
authorized representative to take an action that produces a record that
can be maintained by the individual or entity described in paragraph
(j)(1) of this section and produced to confirm the consumer or their
authorized representative has reviewed and confirmed the accuracy of
the eligibility application information. Non-exhaustive examples of
acceptable documentation include obtaining the signature of the
consumer or their authorized representative (electronically or
otherwise), verbal confirmation by the consumer or their authorized
representative that is captured in an audio recording, a written
response (electronic or otherwise) from the consumer or their
authorized representative to a communication sent by the agent, broker,
or web-broker, or other similar means or methods specified by HHS in
guidance.
(1) The documentation required under paragraph (j)(2)(ii)(A) of
this section must include the date the information was reviewed, the
name of the consumer or their authorized representative, an explanation
of the attestations at the end of the eligibility application, and the
name of the assisting agent, broker, or web-broker.
(2) An individual or entity described in paragraph (j)(1) of this
section must maintain the documentation described in paragraph
(j)(2)(ii)(A) of this section for a minimum of ten years, and produce
the documentation upon request in response to monitoring, audit, and
enforcement activities conducted consistent with paragraphs (c)(5),
(g), (h), and (k) of this section.
* * * * *
(iii) Obtain and document the receipt of consent of the consumer or
their authorized representative designated in compliance with Sec.
155.227, employer, or employee prior to assisting with or facilitating
enrollment through a Federally-facilitated Exchange or assisting the
individual in applying for advance payments of the premium tax credit
and cost-sharing reductions for QHPs;
(A) Obtaining and documenting the receipt of consent must require
the consumer, or the consumer's authorized representative designated in
compliance with Sec. 155.227, to take an action that produces a record
that can be maintained and produced by an individual or entity
described in paragraph (j)(1) of this section to confirm the consumer's
or their authorized representative's consent has been provided. Non-
exhaustive examples of acceptable documentation of consent include
obtaining the signature of the consumer or their authorized
representative (electronically or otherwise), verbal confirmation by
the consumer or their authorized representative that is captured in an
audio recording, a response from the consumer or their authorized
representative to an electronic or other communication sent by the
agent, broker, or web-broker.
(B) The documentation required under paragraph (j)(2)(iii)(A) of
this section must include a description of the scope, purpose, and
duration of the consent provided by the consumer or their authorized
representative designated in compliance with Sec. 155.227, the date
consent was given, name of the consumer or their authorized
representative, and the name of the agent, broker, web-broker, or
agency being granted consent, as well as a process through which the
consumer or their authorized representative may rescind the consent.
(C) An individual or entity described in paragraph (j)(1) of this
section must maintain the documentation described in paragraph
(j)(2)(iii)(A) of this section for a minimum of 10 years, and produce
the documentation upon request in response to monitoring, audit, and
enforcement activities conducted consistent with paragraphs (c)(5),
(g), (h), and (k) of this section.
* * * * *
Sec. 155.225 [Amended]
0
9. Section 155.225 is amended by removing and reserving paragraph
(g)(5).
0
10. Section 155.305 is amended by revising paragraph (f)(4) to read as
follows.
Sec. 155.305 Eligibility standards.
* * * * *
(f) * * *
(4) Compliance with filing requirement. Beginning January 1, 2024,
the Exchange may not determine a tax filer eligible for APTC if the IRS
notifies HHS and HHS notifies the Exchange as part of the process
described in Sec. 155.320(c)(3) that APTC payments were made on behalf
of the tax filer or either spouse if the tax filer is a married couple
for two consecutive years for which tax data would be utilized for
verification of household income and family size in accordance with
Sec. 155.320(c)(1)(i), and the tax filer or his or her spouse did not
comply with the requirement to file an income tax return for that year
and for the previous year as required by 26 U.S.C. 6011, 6012, and
their implementing regulations and reconcile APTC for that period.
* * * * *
0
11. Section 155.315 is amended by adding paragraph (f)(7) to read as
follows:
[[Page 78318]]
Sec. 155.315 Verification process related to eligibility for
enrollment in a QHP through the Exchange.
* * * * *
(f) * * *
(7) Must extend the period described in paragraph (f)(2)(ii) of
this section by a period of 60 days for an applicant if the applicant
is required to present satisfactory documentary evidence to verify
household income.
* * * * *
0
12. Section 155.320 is amended by adding paragraph (c)(5) to read as
follows:
Sec. 155.320 Verification process related to eligibility for
insurance affordability programs.
* * * * *
(c) * * *
(5) Notwithstanding any other requirement described in this
paragraph (c) to the contrary, when the Exchange requests tax return
data and family size from the Secretary of Treasury as described in
Sec. 155.320(c)(1)(i)(A) but no such data is returned for an
applicant, the Exchange will accept that applicant's attestation of
income and family size without further verification.
* * * * *
0
13. Section 155.335 is amended by revising paragraphs (j)(1)(i),
(j)(1)(ii), (j)(1)(iii)(A) and (B), (j)(1)(iv), (j)(2)(i) through (iii)
and adding paragraphs (j)(2)(iv) and (v) to read as follows:
Sec. 155.335 Annual eligibility redetermination.
* * * * *
(j) * * *
(1) * * *
(i) If the enrollee's current QHP is available through the Exchange
and -
(A) The enrollee is not CSR-eligible, in accordance with Sec.
155.305(g), the Exchange will re-enroll the enrollee in the same plan
as the enrollee's current QHP.
(B) The enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is a bronze level plan, the
Exchange will re-enroll the enrollee either in the same plan as the
enrollee's current QHP, or, at the option of the Exchange, in a silver
level QHP within the same product that has a lower or equivalent
premium after APTC and that has the most similar network compared to
the enrollee's current QHP;
(C) The enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is not a bronze level plan,
the Exchange will re-enroll the enrollee in the same plan as the
enrollee's current QHP.
(ii) If the enrollee's current QHP is not available through the
Exchange and -
(A) The enrollee is not CSR-eligible, in accordance with Sec.
155.305(g), the Exchange will re-enroll the enrollee in a QHP within
the same product, at the same metal level and that has the most similar
network compared to the enrollee's current QHP.
(B) The enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is a bronze level plan, the
Exchange will re-enroll the enrollee either in a bronze level QHP
within the same product, or, at the option of Exchange, in a silver
level QHP within the same product that has a lower or equivalent
premium after APTC and that has the most similar network compared to
the enrollee's current QHP;
(C) The enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is not a bronze level plan,
the Exchange will re-enroll the enrollee in a QHP within the same
product at the same metal level and that has the most similar network
compared to the enrollee's current QHP;
(iii) * * *
(A) The enrollee's current QHP is a silver level plan, the Exchange
will re-enroll the enrollee in a silver level QHP under a different
product offered by the same QHP issuer that is most similar to and that
has the most similar network compared to the enrollee's current
product. If no such silver level QHP is available for enrollment
through the Exchange, the Exchange will re-enroll the enrollee in a QHP
under the same product that is one metal level higher or lower than the
enrollee's current QHP and that has the most similar network compared
to the enrollee's current QHP;
(B) The enrollee's current QHP is not a silver level plan, the
Exchange will re-enroll the enrollee under the same product that is one
metal level higher or lower than the enrollee's current QHP and that
has the most similar network compared to the enrollee's current QHP and
; or
(iv) If the enrollee's current QHP is not available through the
Exchange and the enrollee's product no longer includes a QHP that is at
the same metal level as, or one metal level higher or lower than the
enrollee's current QHP, the Exchange will re-enroll the enrollee in any
other QHP offered under the product in which the enrollee's current QHP
is offered in which the enrollee is eligible to enroll that has the
most similar network compared to the enrollee's current QHP.
(2) * * *
(i) If the enrollee is not CSR eligible, the Exchange will re-
enroll the enrollee in a QHP in the product offered by the same issuer
that is the most similar to the enrollee's current product at the same
metal level as and with the most similar network compared to the
enrollee's current QHP;
(ii) If the enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is a bronze level plan, the
Exchange will re-enroll the enrollee either in a bronze level QHP, or,
at the option of the Exchange, in a silver level QHP that has a lower
or equivalent premium after APTC and that has the most similar network
compared to the enrollee's current QHP in the product offered by the
same issuer through the Exchange that is most similar to the enrollee's
current product;
(iii) If the enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is not a bronze level plan,
the Exchange will re-enroll the enrollee in a QHP at the same metal
level that has the most similar network compared to the enrollee's
current QHP in the product offered by the same issuer that is the most
similar to the enrollee's current product;
(iv) If the issuer does not offer another QHP at the same metal
level as the enrollee's current QHP, the Exchange will re-enroll the
enrollee in a QHP that is one metal level higher or lower than the
enrollee's current QHP and that has the most similar network compared
to the enrollee's current QHP in the product offered by the same issuer
through the Exchange that is the most similar to the enrollee's current
product; or
(v) If the issuer does not offer another QHP through the Exchange
at the same metal level as, or one metal level higher or lower than the
enrollee's current QHP, the Exchange will re-enroll the enrollee in any
other QHP offered by the same issuer in which the enrollee is eligible
to enroll in the product that is most similar to the enrollee's current
product and in a QHP within that product that has the most similar
network to the enrollee's current QHP.
* * * * *
0
14. Section 155.420 is amended by--
0
a. Revising paragraphs (a)(4)(ii)(A) and (B), (b)(2)(iv), and (c)(2);
0
b. Adding paragraph (c)(6); and
0
c. Revising paragraph (d)(12).
The revisions and addition read as follows:
Sec. 155.420 Special enrollment periods.
(a) * * *
(4) * * *
(ii) * * *
(A) If an enrollee or his or her dependents become newly eligible
for cost-sharing reductions in accordance with paragraph (d)(6)(i) or
(ii) of this section and the enrollee or his or her
[[Page 78319]]
dependents are not enrolled in a silver-level QHP, the Exchange must
allow the enrollee and his or her dependents to change to a silver-
level QHP if they elect to change their QHP enrollment; or
(B) Beginning January 2022, if an enrollee or his or her dependents
become newly ineligible for cost-sharing reductions in accordance with
paragraph (d)(6)(i) or (ii) of this section and the enrollee or his or
her dependents are enrolled in a silver-level QHP, the Exchange must
allow the enrollee and his or her dependents to change to a QHP one
metal level higher or lower if they elect to change their QHP
enrollment;
* * * * *
(b) * * *
(2) * * *
(iv) If a qualified individual, enrollee, or dependent, as
applicable, loses coverage as described in paragraphs (d)(1) or
(d)(6)(iii) of this section, or is enrolled in COBRA continuation
coverage for which an employer is paying all or part of the premiums,
or for which a government entity is providing subsidies, and the
employer contributions or government subsidies completely cease as
described in paragraph (d)(15) of this section, gains access to a new
QHP as described in paragraph (d)(7) of this section, becomes newly
eligible for enrollment in a QHP through the Exchange in accordance
with Sec. 155.305(a)(2) as described in paragraph (d)(3) of this
section, becomes newly eligible for advance payments of the premium tax
credit in conjunction with a permanent move as described in paragraph
(d)(6)(iv) of this section, and if the plan selection is made on or
before the day of the triggering event, the Exchange must ensure that
the coverage effective date is the first day of the month following the
date of the triggering event. If the plan selection is made after the
date of the triggering event, the Exchange must ensure that coverage is
effective in accordance with paragraph (b)(1) of this section or on the
first day of the following month, at the option of the Exchange.
Notwithstanding the requirements of this paragraph (b)(2)(iv), and at
the option of the Exchange, if the plan selection is made on or before
the last day of the month preceding the triggering event, the Exchange
must ensure that the coverage effective date is the first of the month
in which the triggering event occurs for losses of coverage as
described in paragraphs (d)(1), (d)(6)(iii), and (d)(15) of this
section.
* * * * *
(c) * * *
(2) Advanced availability. A qualified individual or his or her
dependent who is described in paragraph (d)(1), (d)(6)(iii), or (d)(15)
of this section has 60 days before and, unless the Exchange exercises
the option in paragraph (c)(6) of this section, 60 days after the
triggering event to select a QHP. At the option of the Exchange, a
qualified individual or his or her dependent who is described in
paragraph (d)(7) of this section; who is described in paragraph
(d)(6)(iv) of this section becomes newly eligible for advance payments
of the premium tax credit as a result of a permanent move to a new
State; or who is described in paragraph (d)(3) of this section and
becomes newly eligible for enrollment in a QHP through the Exchange
because he or she newly satisfies the requirements under Sec.
155.305(a)(2), has 60 days before or after the triggering event to
select a QHP.
* * * * *
(6) Special rule for individuals losing Medicaid or CHIP. Beginning
January 1, 2024, at the option of the Exchange, a qualified individual
or his or her dependent(s) who is described in paragraph (d)(1)(i) of
this section and whose loss of coverage is a loss of Medicaid or CHIP
coverage shall have 90 days after the triggering event to select a QHP.
* * * * *
(d) * * *
(12) The enrollment in a QHP through the Exchange was influenced by
a material error related to plan benefits, service area, cost-sharing,
or premium. A material error is one that is likely to have influenced a
qualified individual's, enrollee's, or their dependent's enrollment in
a QHP.
* * * * *
0
15. Section 155.430 is amended by adding paragraph (b)(3) to read as
follows:
Sec. 155.430 Termination of Exchange enrollment or coverage.
* * * * *
(b) * * *
(3) Prohibition of issuer-initiated terminations due to aging-off.
Exchanges on the Federal platform must, and State Exchanges using their
own platform may, prohibit QHP issuers from terminating dependent
coverage of a child before the end of the plan year in which the child
attains age 26, or before the end of the plan year in which the child
attains the maximum age a QHP issuer is required to make available
dependent coverage of children under applicable State law, on the basis
of the child's age, unless otherwise permitted.
* * * * *
0
16. Section 155.505 is amended by revising paragraph (g) to read as
follows:
Sec. 155.505 General eligibility appeals requirements.
* * * * *
(g) Review of Exchange Eligibility Appeal Decisions. An appellant
may seek review of Exchange eligibility appeal decisions issued under
paragraph (b) of this section as follows:
(1) Administrative Review. The Administrator may review an Exchange
eligibility appeal decision as follows:
(i) Request by a party to the appeal. (A) Within 14 calendar days
of the date of the Exchange eligibility appeal decision issued by an
impartial official as described in Sec. 155.535(c)(4), a party to the
appeal may request review of the Exchange eligibility appeal decision
by the CMS Administrator. Such a request may be made even if the CMS
Administrator has already at their initiative declined review as
described in paragraph (g)(1)(ii)(B) of this section. If the CMS
Administrator accepts that party's request for a review after having
declined review, then the CMS Administrator's initial declination to
review the eligibility appeal decision is void.
(B) Within 30 days of the date of the party's request for
administrative review, the CMS Administrator may:
(1) Decline to review the Exchange eligibility appeal decision;
(2) Render a final decision as described in Sec. 155.545 (a)(1)
based on their review of the eligibility appeal decision; or
(3) Choose to take no action on the request for review.
(C) The Exchange eligibility appeal decision of the impartial
official as described in Sec. 155.535(c)(4) is final as of the date of
the Exchange eligibility appeal decision if the CMS Administrator
declines the party's request for review or if the CMS Administrator
does not take any action on the party's request for review by the end
of the 30-day period described in paragraph (a)(ii).
(ii) Review at the discretion of the CMS Administrator. (A) Within
14 calendar days of the date of the Exchange eligibility appeal
decision issued by an impartial official as described in Sec.
155.535(c)(4), the CMS Administrator may initiate a review of an
eligibility appeal decision at their discretion.
(B) Within 30 days of the date the CMS Administrator initiates a
review, the CMS Administrator may:
[[Page 78320]]
(1) Decline to review the Exchange eligibility appeal decision;
(2) Render a final decision as described in Sec. 155.545 (a)(1)
based on their review of the eligibility appeal decision; or
(3) Choose to take no action on the Exchange eligibility appeal
decision.
(C) The eligibility Exchange appeal decision of the impartial
official as described in Sec. 155.535(c)(4) is final as of the date of
the Exchange eligibility appeal decision if the CMS Administrator
declines to review the eligibility appeal decision or chooses to take
no action by the end of the 30-day period described in paragraph
(g)(1)(i)(B) of this section.
(iii) Effective dates. If a party requests a review of an Exchange
eligibility appeal decision by the CMS Administrator or the CMS
Administrator initiates a review of an Exchange eligibility appeal
decision at their own discretion, the eligibility appeal decision is
effective as follows:
(A) If an Exchange eligibility appeal decision is final pursuant to
paragraphs (g)(1)(ii)(B) of this section and (g)(1)(ii)(C) in this
section, the Exchange eligibility appeal decision of the impartial
official as described in Sec. 155.535(c)(4) is effective as of the
date of the official's decision.
(B) If the CMS Administrator renders a final decision after
reviewing an Exchange eligibility appeal decision as described in
paragraphs (g)(1)(i)(B)(2) and (1)(ii)(B)(2) of this section, the CMS
Administrator may choose to change the effective date of the Exchange
eligibility appeal decision as described in Sec. 155.545 (a)(5).
(iv) Informal resolution decisions as described in Sec.
155.535(a)(4) are not subject to administrative review by the CMS
Administrator.
(2) Judicial Review. To the extent it is available by law, an
appellant may seek judicial review of a final Exchange eligibility
appeal decision.
* * * * *
0
17. Add subpart P to read as follows:
Subpart P--Improper Payment Pre-Testing and Assessment (IPPTA) for
State Exchanges
Sec.
155.1500 Purpose and scope.
155.1505 Definitions.
155.1510 Data submission.
155.1515 Pre-testing and assessment procedures.
Subpart P--Improper Payment Pre-Testing and Assessment (IPPTA) for
State Exchanges
Sec. 155.1500 Purpose and scope.
(a) This subpart sets forth the requirements of the IPPTA. The
IPPTA is an initiative between HHS and the State Exchanges. These
requirements are intended to:
(1) Prepare State Exchanges for the planned measurement of improper
payments.
(2) Test processes and procedures that support HHS's review of
determinations of APTC made by State Exchanges.
(3) Provide a mechanism for HHS and State Exchanges to share
information that will aid in developing an efficient measurement
process.
(b) [Reserved]
Sec. 155.1505 Definitions.
As used in this subpart--
Business rules means the State Exchange's internal directives
defining, guiding, or constraining the State Exchange's actions when
making eligibility determinations and related APTC calculations.
Entity relationship diagram means a graphical representation
illustrating the organization and relationship of the data elements
that are pertinent to applications for QHP and associated APTC
payments.
Pre-testing and assessment means the process that uses the
procedures specified in Sec. 155.1515 to prepare State Exchanges for
the planned measurement of improper payments of APTC.
Pre-testing and assessment checklist means the document that
contains criteria that HHS will use to review a State Exchange's
ability to accomplish the requirements of the IPPTA.
Pre-testing and assessment data request form means the document
that specifies the structure for the data elements that HHS will
require each State Exchange to submit.
Pre-testing and assessment period means the one calendar year
timespan during which HHS will engage in pre-testing and assessment
procedures with a State Exchange.
Pre-testing and assessment plan means the template developed by HHS
in collaboration with each State Exchange enumerating the procedures,
sequence, and schedule to accomplish pre-testing and assessment.
Pre-testing and assessment report means the summary report provided
by HHS to each State Exchange at the end of the State Exchange's pre-
testing and assessment period that will include, but not be limited to,
the State Exchange's status regarding completion of each of the pre-
testing and assessment procedures specified in Sec. 155.1515, as well
as observations and recommendations that result from processing and
reviewing the data submitted by the State Exchange to HHS.
Sec. 155.1510 Data submission.
(a) Requirements. For purposes of the IPPTA, a State Exchange must
submit the following information in a form and manner specified by HHS:
(1) Data documentation. The State Exchange must provide to HHS the
following data documentation:
(i) The State Exchange's data dictionary including attribute name,
data type, allowable values, and description;
(ii) An entity relationship diagram, which shall include the
structure of the data tables and the residing data elements that
identify the relationships between the data tables; and
(iii) Business rules and related calculations.
(2) Data for processing and testing. The State Exchange must use
the pre-testing and assessment data request form, or other method as
specified by HHS, to submit to HHS the application data associated with
no fewer than 10 tax household identification numbers and the
associated policy identification numbers that address scenarios
specified by HHS to allow HHS to test all of the pre-testing and
assessment processes and procedures.
(b) Timing. The State Exchange must submit the information
specified in paragraph (a) of this section within the timelines in the
pre-testing and assessment plan specified in Sec. 155.1515.
Sec. 155.1515 Pre-testing and assessment procedures.
(a) General requirement. The State Exchanges are required to
participate in the IPPTA for a period of one calendar year. The State
Exchange and HHS will execute the pre-testing and assessment procedures
in this section within the timelines in the pre-testing and assessment
plan.
(b) Orientation and planning processes. (1) As a part of the
orientation process, HHS will provide State Exchanges with an overview
of the pre-testing and assessment procedures and identify documentation
that a State Exchange must provide to HHS for pre-testing and
assessment.
(2) As a part of the planning process, HHS, in collaboration with
each State Exchange, will develop a pre-testing and assessment plan
that takes into consideration relevant activities, if any, that were
completed during a prior,
[[Page 78321]]
voluntary State engagement. The pre-testing and assessment plan will
include the pre-testing and assessment checklist.
(3) At the conclusion of the pre-testing and assessment planning
process, HHS will issue the pre-testing and assessment plan specific to
that State Exchange. The pre-testing and assessment plan will be for
HHS and State Exchange internal use only and will not be made available
to the public by HHS unless otherwise required by law.
(c) Notifications and updates. (1) Notifications. As needed
throughout the pre-testing and assessment period, HHS will issue
notifications to State Exchanges concerning information related to the
pre-testing and assessment processes and procedures.
(2) Updates regarding changes. Throughout the pre-testing and
assessment period, the State Exchange must provide HHS with information
regarding any operational, policy, business rules, information
technology, or other changes that may impact the ability of the State
Exchange to satisfy the requirements of the pre-testing and assessment.
(d) Submission of required data and data documentation. As
specified in Sec. 155.1510, HHS will inform State Exchanges about the
form and manner for State Exchanges to submit required data and data
documentation to HHS in accordance with the pre-testing and assessment
plan.
(e) Data processing. (1) HHS will coordinate with each State
Exchange to track and manage the data and data documentation submitted
by a State Exchange as specified in Sec. 155.1510(a)(1) and (2).
(2) HHS will coordinate with each State Exchange to provide
assistance in aligning the data specified in Sec. 155.1510(a)(2) from
the State Exchange's existing data structure to the standardized set of
data elements.
(3) HHS will coordinate with each State Exchange to interpret and
validate the data specified in Sec. 155.1510(a)(2).
(4) HHS will use the data and data documentation submitted by the
State Exchange to execute the pre-testing and assessment procedures.
(f) Pre-testing and assessment checklist. HHS will issue the pre-
testing and assessment checklist as part of the pre-testing and
assessment plan. The pre-testing and assessment checklist criteria will
include but are not limited to:
(1) A State Exchange's submission of the data documentation as
specified in Sec. 155.1510(a)(1).
(2) A State Exchange's submission of the data for processing and
testing as specified in Sec. 155.1510(a)(2); and
(3) A State Exchange's completion of the pre-testing and assessment
processes and procedures related to the IPPTA program.
(g) Pre-testing and assessment report. Subsequent to the completion
of a State Exchange's pre-testing and assessment period, HHS will issue
a pre-testing and assessment report specific to that State Exchange.
The pre-testing and assessment report will be for HHS and State
Exchange internal use only and will not be made available to the public
by HHS unless otherwise required by law.
PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES
0
The authority citation for part 156 continues to read as follows:
Authority: 42 U.S.C. 18021-18024, 18031-18032, 18041-18042,
18044, 18054, 18061, 18063, 18071, 18082, and 26 U.S.C. 36B.
0
18. Section 156.201 is revised to read as follows:
Sec. 156.201 Standardized plan options.
A QHP issuer in a Federally-facilitated Exchange or a State-based
Exchange on the Federal platform, other than an issuer that is already
required to offer standardized plan options under State action taking
place on or before January 1, 2020, must:
(a) For the plan year 2023, offer in the individual market at least
one standardized QHP option, defined at Sec. 155.20 of this
subchapter, at every product network type, as the term is described in
the definition of ``product'' at Sec. 144.103 of this subchapter, at
every metal level, and throughout every service area that it also
offers non-standardized QHP options, including, for silver plans, for
the income-based cost-sharing reduction plan variations, as provided
for at Sec. 156.420(a); and
(b) For plan year 2024 and subsequent plan years, offer in the
individual market at least one standardized QHP option, defined at
Sec. 155.20 of this subchapter, at every product network type, as the
term is described in the definition of ``product'' at Sec. 144.103 of
this subchapter, at every metal level except the non-expanded bronze
metal level, and throughout every service area that it also offers non-
standardized QHP options, including, for silver plans, for the income-
based cost-sharing reduction plan variations, as provided for at Sec.
156.420(a)
(c) With respect to covered drugs:
(1) Place all covered generic drugs in the standardized plan
options' generic drug cost-sharing tier, or the specialty drug tier if
there is an appropriate and non-discriminatory basis in accordance with
Sec. 156.125 for doing so; and
(2) Place all covered brand drugs in either the standardized plan
options' preferred brand or non-preferred brand drug cost-sharing tier,
or the specialty drug cost-sharing tier if there is an appropriate and
non-discriminatory basis in accordance with Sec. 156.125 for doing so.
0
19. Section 156.202 is added to read as follows:
Sec. 156.202 Non-standardized plan option limits.
For the plan year 2024 and subsequent plan years, a QHP issuer in a
Federally-facilitated Exchange or a State-based Exchange on the Federal
platform is limited to offering two non-standardized plan options per
product network type, as the term is described in the definition of
``product'' at Sec. 144.103 of this subchapter, and metal level
(excluding catastrophic plans), in any service area.
0
20. Section 156.210 is amended by adding paragraph (d) to read as
follows:
The addition reads as follows:
Sec. 156.210 QHP rate and benefit information.
(d) Rate requirements for stand-alone dental plans. For benefit and
plan years beginning on or after January 1, 2024:
(1) Age on effective date. The premium rate charged by an issuer of
stand-alone dental plans may vary with respect to the particular plan
or coverage involved by determining the enrollee's age. Any age
calculation for rating and eligibility purposes must be based on the
age as of the time of policy issuance or renewal.
(2) Guaranteed rates. An issuer of stand-alone dental plans must
set guaranteed rates.
0
21. Section 156.225 is amended by --
0
a. In paragraph (a) removing ``and'' from the end of the paragraph; and
0
b. In paragraph (b) removing ``.'' from the end of the paragraph and
replacing it with ``; and''; and
0
c. By adding paragraph (c).
The addition reads as follows:
Sec. 156.225 Marketing and Benefit Design of QHPs.
* * * * *
(c) Plan marketing names. Offer plans and plan variations with
marketing names that include correct information, without omission of
material fact, and
[[Page 78322]]
do not include content that is misleading.
* * * * *
0
22. Section 156.230 is amended by--
0
a. Revising paragraphs (a)(1) introductory text and (e) introductory
text; and
0
b. Removing and reserving paragraph (f).
The revisions read as follows:
Sec. 156.230 Network adequacy standards.
(a) General requirement. (1) Each QHP issuer must use a provider
network and ensure that the provider network consisting of in-network
providers, as available to all enrollees, meets the following
standards:
* * * * *
(e) Out-of-network cost-sharing. Beginning for the 2018 and later
benefit years, for a network to be deemed adequate, each QHP must:
* * * * *
0
23. Section 156.235 is amended by revising paragraphs (a)(1), (a)(2)(i)
and (a)(2)(ii)(B) to read as follows:
Sec. 156.235 Essential community providers.
(a) * * *
(1) A QHP issuer must include in its provider network a sufficient
number and geographic distribution of essential community providers
(ECPs), where available, to ensure reasonable and timely access to a
broad range of such providers for low-income individuals or individuals
residing in Health Professional Shortage Areas within the QHP's service
area, in accordance with the Exchange's network adequacy standards.
(2) * * *
(i) The QHP issuer's provider network includes as participating
providers at least a minimum percentage, as specified by HHS, of
available ECPs in each plan's service area collectively across all ECP
categories defined under paragraph (ii)(B) of this section, and at
least a minimum percentage of available ECPs in each plan's service
area within certain individual ECP categories, as specified by HHS.
Multiple providers at a single location will count as a single ECP
toward both the available ECPs in the plan's service area and the
issuer's satisfaction of the ECP participation standard. For plans that
use tiered networks, to count toward the issuer's satisfaction of the
ECP standards, providers must be contracted within the network tier
that results in the lowest cost-sharing obligation. For plans with two
network tiers (for example, participating providers and preferred
providers), such as many PPOs, where cost-sharing is lower for
preferred providers, only preferred providers will be counted towards
ECP standards.; and
(ii) * * *
(B) At least one ECP in each of the eight (8) ECP categories in
each county in the service area, where an ECP in that category is
available and provides medical or dental services that are covered by
the issuer plan type. The ECP categories are: Federally Qualified
Health Centers, Ryan White Program Providers, Family Planning
Providers, Indian Health Care Providers, Inpatient Hospitals, Mental
Health Facilities, Substance Use Disorder Treatment Centers, and Other
ECP Providers. The Other ECP Providers category includes the following
types of providers: Rural Health Clinics, Black Lung Clinics,
Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics,
Tuberculosis Clinics, and Rural Emergency Hospitals
* * * * *
0
24. Section 156.270 is amended by revising paragraph (f) to read as
follows:
Sec. 156.270 Termination of coverage or enrollment for qualified
individuals
* * * * *
(f) Notice of non-payment of premiums. If an enrollee is delinquent
on premium payment, the QHP issuer must provide the enrollee with
notice of such payment delinquency promptly and without undue delay.
* * * * *
0
25. Section 156.1210 is amended by revising paragraph (c) to read as
follows:
Sec. 156.1210 Dispute submission.
* * * * *
(c) Deadline for describing inaccuracies. To be eligible for
resolution under paragraph (b) of this section, an issuer must describe
all inaccuracies identified in a payment and collections report before
the end of the 3-year period beginning at the end of the plan year to
which the inaccuracy relates. For plan years 2015 through 2019, to be
eligible for resolution under paragraph (b) of this section, an issuer
must describe all inaccuracies identified in a payment and collections
report before January 1, 2024. If a payment error is discovered after
the timeframe set forth in this paragraph, the issuer must notify HHS,
the State Exchange, or SBE-FP (as applicable) and repay any
overpayments to HHS.
0
26. Section 156.1220 is amended by revising paragraphs (a)(4)(ii) and
(b)(1) to read as follows:
Sec. 156.1220 Administrative appeals.
(a) * * *
(4) * * *
(ii) Notwithstanding paragraph (a)(1) of this section, a
reconsideration with respect to a processing error by HHS, HHS's
incorrect application of the relevant methodology, or HHS's
mathematical error may be requested only if, to the extent the issue
could have been previously identified, the issuer notified HHS of the
dispute through the applicable process for reporting a discrepancy set
forth in Sec. Sec. 153.630(d)(2) and (3), 153.710(d)(2), and
156.430(h)(1) of this subchapter, it was so identified and remains
unresolved.
* * * * *
(b) * * *
(1) Manner and timing for request. A request for an informal
hearing must be made in writing and filed with HHS within 30 calendar
days of the date of the reconsideration decision under paragraph (a)(5)
of this section. If the last day of this period is not a business day,
the request for an informal hearing must be made in writing and filed
by the next applicable business day.
* * * * *
Dated: December 12, 2022.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2022-27206 Filed 12-14-22; 4:15 pm]
BILLING CODE 4120-01-P