Reducing the Regulatory Stranglehold on Federally Facilitated Exchanges: Will It Work?

by BakerHostetler
Contact

BakerHostetler

The Centers for Medicare and Medicaid Services (CMS) recently issued a proposed rule aimed at improving the individual and small group markets that have been plagued with instability as issuers continue exiting the Exchanges. While the proposed rule is primarily focused on the Federally-facilitated Exchanges (FFEs), CMS is encouraging state-based Exchanges to adopt similar policies. Whether the proposed rule is the first of many steps in a “repair” scenario advocated by some in the GOP as an alternative to the nullification of the Affordable Care Act (ACA), or merely a curative backstop on the road to a full repeal, providers are likely to experience a further erosion in network participation and in network payment rates.

The overarching intent of the proposed rule is to “provide more flexibility to issuers to help attract healthy consumers to enroll in health insurance coverage, improving the risk pool and bringing stability and certainty to the individual and small group markets.” To that end, the proposed rule attempts to achieve this goal by focusing on several aspects of the FFEs:

  • Shortening the open enrollment periods.
  • Increasing pre-enrollment verification of eligibility for all categories of individual market special enrollment periods.
  • Changing the rules with regard to guaranteed availability by allowing an issuer to apply a premium to past debt owed – designed to remove abuse by purchasers who only paid when they needed the service.
  • Increasing the de minimis variation in actuarial values.

Additionally, and of note for providers, network adequacy provisions were loosened, with more control and flexibility proposed for states in an effort to attract issuers in difficult rural markets. CMS requests comments on the proposed rule by March 7, 2017.

Open enrollment; pre-enrollment verification

In an effort to better align the open enrollment period with Medicare and employer-based coverage, the proposed rule provides for an open enrollment period beginning on November 2, 2017, and ending on December 15, 2017, for plan year 2018. Along with this change, CMS proposes to increase pre-enrollment verification for special enrollment periods in an effort to curb reported abuses during changes in coverage such as adding a new dependent or other changes in life circumstances. Specifically, this provision addresses enrollee misuse of the special enrollment periods for upgrading metal coverage levels during the plan year, a practice that increases the potential for adverse selection and discourages issuers from participating in the marketplace.

Continuous coverage

Additionally, the proposed rule aims to curtail reported abuses associated with the ACA’s continuous coverage provisions, which prevent issuers from denying coverage to applicants irrespective of their past failures to pay premiums or instances where there has been a break in coverage. The continuous coverage provision has drawn criticism from the health insurance industry because it allows individuals to delay signing up for coverage until they are afflicted with an illness or injury. CMS is seeking comments on several proposed continuous coverage requirements with regard to the special enrollment periods, including (1) evidence of prior coverage for six to 12 months, (2) a 90-day waiting period before effectuating enrollment or (3) a late enrollment penalty.

De minimis range in actuarial values

The concept of changing the de minimis range in actuarial values would increase the acceptable ranges that a particular metal level could vary while retaining its category as bronze, gold or platinum. Silver plans were not included in this change.  While this could provide for lower-cost options, it also allows the issuer to offer less coverage in each metal option – a potential concern for beneficiaries who need to understand what they are purchasing and the limits of the coverage being provided.

Network adequacy

The changes proposed to the network adequacy requirements could increase concern for certain providers. This is an area already fraught with controversy as certain “high cost” providers are being terminated from networks across the U.S. The proposed rule would loosen requirements with regard to the need for certain “essential community providers” (ECPs), which include providers serving predominantly low-income and medically underserved individuals, such as those that are described in Section 340B of the Public Health Service Act. In an effort to “lessen the regulatory burden on issuers,” the required percentage of ECPs in a specific network would be reduced from 30 percent to 20 percent in each service area. Additionally, the proposed rule would allow issuers to write in ECPs that are not in the CMS database, and if they cannot satisfy the ECP regulatory standard, to provide a narrative explaining how their networks will provide an adequate level of service for low-income and medically underserved enrollees.

Most notable, however, is the proposal to delegate determination of network adequacy to the states, which does not bode well for providers that have complained about narrowing networks. Specifically for plan year 2018, CMS proposes “to defer to the States’ reviews in States with the authority that is at least equal to the ‘reasonable access standard’ defined in §156.230 and means to assess issuer network adequacy, regardless of whether the Exchange is a State-based Exchange (SBE) or FFE, and regardless of whether the State performs plan management functions.” This proposal is certain to increase the trend toward narrowly tailored network designs and raises the question of at what point do rare and unique services become inaccessible to those with coverage through the Exchanges.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:

BakerHostetler
Contact
more
less

BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.