CMS Issues Program Integrity Guidelines for Marketplace
This law alert was written for, and previously distributed by, the American Health Lawyers Association. © 2013 American Health Lawyers Association, Washington, DC. Reprint permission granted.
On June 14, the Centers for Medicare & Medicaid Services (CMS) released Proposed Rule CMS 9957-P regarding the program integrity of state marketplaces, issuers offering coverage in the federally facilitated exchanges (FFEs), advance payment of the premium tax credit and cost-sharing reductions, and premium stabilization programs. With the proposed provisions, the U.S. Department of Health & Human Services (HHS) seeks to "safeguard federal funds and to protect consumers by ensuring that issuers and other entities comply with federal standards meant to ensure consumers have access to quality affordable health insurance."
Beginning October 1 for coverage as of January 1, 2014, qualified individuals and qualified employers will be able to purchase qualified health plans (QHPs)--private health insurance that has been certified as meeting specific standards. The purchase of QHPs will be through competitive marketplaces called insurance exchanges, also known as health insurance marketplaces. These include the state-based marketplaces (SBMs) and FFEs. CMS-9957-P establishes oversight and financial integrity standards for these marketplaces.
Oversight of State-Operated Premium Stabilization Programs
The Affordable Care Act provides for the establishment of a transitional reinsurance program in each state to help stabilize premiums for coverage in the individual market from 2014 through 2016. HHS proposes standards for the oversight of states that operate risk adjustment or reinsurance programs. These include accounting requirements for state-operated reinsurance and risk adjustment programs as well as summary reports and independent audits for these programs.
Advance Payments of the Premium Tax Credit and Cost-Sharing Reductions
HHS proposes timeframes for refunds to be made to eligible enrollees and providers where a state exchange is facilitating the collection and payment of premiums to QHP issuers. An example of a refund would be if the QHP issuer incorrectly applies the advance payment of the premium tax credit. These provisions are similar to the provisions related to when a QHP issuer is collecting premiums directly from enrollees and does not apply the advance payment to the premium tax credit to the enrollee's portion of the premiums.
Cost-sharing reduction reimbursements and advance payment of the premium tax credit are federal funds that HHS will make directly to QHP issuers. Therefore, HHS also proposes general standards necessary for the oversight of these payments, including the maintenance of records, annual reporting of summary level statistics, and audits.
Different Payment Forms
QHPs must accept a variety of forms of payment to guarantee that the lack of a bank account would not affect enrollment. The required forms of payment include paper checks, cashier's checks, money orders, and prepaid debit cards so that individuals without a bank account will have options for making monthly premium payments.
HHS proposes standards for the oversight of SBMs including monitoring, reporting, and oversight of financial activities and marketplace activities.
HHS proposes standards for the oversight of the FFEs which focus on program compliance while "preserving states' traditional role in overseeing the general insurance market." These include QHPs maintaining all documents and records. HHS will use civil monetary penalties (CMPs) and QHP decertification as the tools for addressing noncompliance of QHP issuers in FFEs. For example, falsifying information that HHS relies upon to make evaluations of a QHP issuer's ongoing compliance with exchange standards could result in a CMP. HHS proposes factors that will be taken into account when assessing CMPs such as level and frequency of violations.
SHOPs
Section 1311 (b) of the Affordable Care Act provides that states may establish and operate an exchange that "both facilitates the purchase of QHPs and provides for the establishment" of a state-based small business health options program (SHOP). Previously, HHS interpreted this section to mean that a state had to carry out both functions to establish an exchange. HHS now interprets Sections 1311 (b) and 1321 of the Affordable Care Act to allow states to operate a SHOP without establishing and operating an individual market exchange. If the state chooses to operate a SHOP and not the individual market exchange, then HHS will operate the FFE in that state.
Enrollment Assistance
The rule builds on existing standards for agents and brokers and clarifies how agents and brokers will assist consumers and small businesses in FFEs. These include web broker policies and procedures as well as a proposed standard requiring agents and brokers assisting or enrolling consumers in the individual market of an FFE to establish policies and procedures, train employees on these policies and procedures, and ensure compliance.
HHS proposes the standards for the enrollee satisfaction survey and process for approving and overseeing survey vendors to administer the survey for QHP issuers in the marketplace.
Conclusion
According to CMS Administrator Marilyn Tavenner, the issuance comes as a "signal that we're ready to build on our ongoing efforts and ensure that the new systems are fiscally sound." With open enrollment in the marketplace just a few months away, the ruling provides guidance and clarification for states and issuers within the FFE. The FFEs will operate in 33 states that are not setting up their own SBMs.