CMS officials say they are making changes to the HIX risk corridors program to account for "unexpected administrative costs and pricing uncertainties."
Federal officials have released market standards and regulations for the PPACA exchanges. The final 2015 rule, released last week, includes risk program adjustments crafted to ease upward pressure on premium rates, more robust collection of quality information from insurers, and tighter standards for "navigators" who help people pick the HIX health plan that best suits their needs.
In addition to those changes, the final rule requires health plans to make coverage decisions within 24 hours on essential prescription drugs that are not covered by the plan. It also provides flexibility to states in the administration of the Small Business Health Options Program, within which PPACA exchanges offer group insurance coverage to small employers.
Insurers Prep 2015 HIX Premium Rates
"This rule will help to improve consumer protections, keep premiums affordable, and make additional information available to consumers in the future, such as quality ratings that will help them to better compare and choose plans," CMS officials said in a blog post Friday.
Accounting for HIX Risk
In a fact sheet accompanying the rule's release, CMS officials said they are making changes to the HIX risk corridors program to account for "unexpected administrative costs and pricing uncertainties." The risk corridor changes feature raising the ceiling on administrative costs by two percentage points and raising the floor on profits by two percent.
"Health plans can have more administrative costs and more profits in 2015," says Jenn Kowalski, a vice president at DC-based Avalere Health who leads the company's healthcare reform practice.
She says the final rule also sets new regulations for the exchanges' reinsurance fund. Under the PPACA, reinsurance fees are collected from all health plans to fund the HIX reinsurance fund, which helps health plans offering individual policies on the exchanges pay for costly patient cases. "That's a positive for the plans," Kowalski said.
Michelle Oxman, a health law analyst at Wolters Kluwer's Health Reform KnowlEDGE Center in Illinois, says CMS officials have signaled strong support for the HIX reinsurance program. "In the preamble [of the Final 2015 rule], the agency says that it intends to retain any excess collections to safeguard against shortfalls in future years and that if collections are not sufficient to make the required payments in one year, the amounts due to issuers will be paid from the next year's collections."
Quality Reporting
The final rule boosts quality reporting requirements for health plans. CMS plans to require publication of quality rating information on all PPACA exchange websites before the open enrollment period for the 2017 plan year. Metrics for gauging health plan enrollee satisfaction are among the quality measures to be added.
"It probably will look a lot like the Medicare Advantage stars system," Kowalski says of quality ratings for health plans offered on the exchanges. "It will be organized into domains of related measures, then the individual measures themselves."
Oxman says CMS will be collecting quality data from state and federally operated exchanges to "ensure consistency," but many details of the quality reporting effort have not been finalized. "The agency is still trying to figure out how 'granular' the reporting/rating should be," she says. "For example, should plans be sorted by metal level, as well as PPO vs. HMO?"
Navigator Standards
The HIX rules for 2015 include new regulations "to ensure that Navigators and other assisters are able to carry out their responsibilities to help consumers enroll in insurance coverage while meeting federal requirements for assister programs," CMS fact sheet says.
When the proposed Final 2015 rule for the exchanges was released in March, a CMS spokeswoman confirmed that the navigator regulations were aimed at states such as Missouri and Tennessee that had passed laws to restrict the activities of people assigned to assist HIX enrollees.
Oxman says the final rule strengthens the navigator program internally and externally: "Navigators and consumer assistance providers may be required to produce corrective action plans and pay civil money penalties if the Department of Health and Human Services finds they have violated federal requirements. The limits on states' power to regulate navigators are spelled out a bit more because of the turf war."
Exchange 'Growing Pains'
While CMS officials appear pleased with the evolution of the PPACA exchanges, the Medical Group Management Association raised a red flag on Tuesday.
MGMA conducted research in April to assess the impact PPACA exchanges have been having on group medical practices. The research includes responses from more than 700 medical groups that employ a total of 40,000 physicians.
"Physician group practices are expressing dissatisfaction with the complexity and lack of information associated with insurance products sold on ACA exchanges," MGMA President and CEO Susan Turney, MD, said Tuesday in a media statement.
In a phone interview Tuesday, MGMA Senior VP Anders Gilberg said "there are some definite growing pains" on the exchanges that are affecting physicians. In particular, he said, medical practices are struggling to get information from insurers operating on the exchanges and are facing problems linked to the so-called narrow networks that many insurance carriers established for exchange patients as a cost-containment measure.
Medical practices are being forced to allocate limited administrative resources in often fruitless efforts to contact insurers about health plan deductibles and insurance eligibility verification, he added. "It's critical for the providers to talk with patients about cost sharing," Anders said, explaining that many exchange participants have opted to purchase health plans with deductibles that result in high out-of-pocket expenses.
Anders said narrow networks have been a major source of frustration for MGMA members. "Even if you are in a network, the referrals you used to make are much harder. Our groups and physicians are not denying care, but they want their patients to get the most out of their insurance."
MGMA plans to conduct another survey of its members in the fall to see whether the growing pains on the exchanges are persistent or improving.
Christopher Cheney is the CMO editor at HealthLeaders.