As the inaugural open enrollment period for the new individual health coverage exchanges comes to a close, CMS officials are proposing several changes and additions to the Patient Protection and Affordable Care Act to ensure that HIX hold and grow.
In a 278-page document released this month, federal officials propose to fine-tune, optimize and strengthen the new public health insurance exchanges, including the creation of new laws to protect federal consumer advisers from state interference in performing their duties.
Titled "Patient Protection and Affordable Care Act; Exchange and Insurance Market Standards for 2015 and Beyond, the document also provides details about innovations set to be introduced to the exchanges in 2015 and 2016 such as an Enrollee Satisfaction Survey to gauge beneficiary opinion about their insurance policies and a Marketplace Survey to help "assess consumer experience" with the exchanges. The proposed rule and law changes were prepared by the Centers for Medicare & Medicaid Services.
CMS Announces HIX Changes for 2015
A CMS spokeswoman contacted Thursday said that many of the proposed changes were based on experience from the new public exchanges' initial open enrollment period, which began in October and comes to a close on March 31.
In a clear sign that CMS is beginning to focus on the finer points of exchange operations as opposed to the launch and enrollment efforts that have dominated the agency's attention for more than a year, the "Standards for 2015 and Beyond" document provides guidance for several operational details that had not been previously addressed.
These proposed rule changes cover a wide array of issues, from how health plans should bill beneficiaries for time periods of less than a month as in the case of a birth, to spelling out the difference between the terms "cancellation" and "termination."
Michelle Oxman, a legal expert at Wolters Kluwer's Health Reform Knowledge Center, said the "Standards for 2015 and Beyond" document contains both housekeeping items and specific instructions for exchange features that have increased in importance now that the exchanges have been established.
"Several changes address items that weren't covered in previous rule making. The proration of premiums for less than one month of coverage and the distinction between cancellation and termination could be considered tweaks or clean-up," she said.
"Quality reporting on plans wasn't critical until now, but was required. The marketplace survey and enrollment satisfaction survey are added to collect consumer opinion now that the law has actually been implemented."
Changes to PPACA Proposed
In an apparent reaction to states that have sought to place restrictions on the activities of federal consumer advisers who are helping individuals enroll on the public exchanges, CMS officials are proposing several changes and additions to the Patient Protection and Affordable Care Act, the landmark healthcare reform law that created the exchanges.
Several states have passed laws to set registration requirements and standards for those who provide formal health insurance advice to consumers. Last year, Missouri adopted one of the most far-reaching state laws, the Health Insurance Marketplace Innovation Act. A federal District Court judge issued an injunction against the Missouri law in January, ruling the PPACA preempts state laws that interfere with exchange navigators.
"It's fair to say that [CMS] is responding to attempts by some state legislatures to interfere with the work of navigators and their role in implementing the ACA," Oxman said. "The states that have been the most active in legislating requirements for navigators are Missouri, Tennessee, and Texas. All three state governments have been hostile to the implementation of the ACA from the beginning. A federal court enjoined Missouri from enforcing its 'Health Insurance Marketplace Innovation Act'… which not only required licensing but prohibited navigators from giving information about the terms and benefits of health plans, which is exactly what the ACA and regulation direct them to do. CMS is stating very clearly what kinds of regulation will be considered interference with purpose of the law so that the courts can decide what regulations are preempted."
Navigator 'Interference'
CMS's proposed protections for federal "navigators, non-navigator assistance personnel, or certified application counselors" are relatively clear.
"These proposed amendments are directed at non-Federal requirements that conflict with Federal statutory or regulatory standards and that either, on their face, prevent assisters from performing their Federally required duties, or that would conflict with Federal standards," the CMS document says.
CMS is seeking to overturn any state law that prevents federal consumer advisers "from carrying out Federally mandated duties or from otherwise meeting Federal standards that apply to them, or if a non-Federal requirement would make it impossible for an Exchange to implement those consumer assistance programs consistent with the Federal statutes and regulations governing those programs."
A CMS spokeswoman confirmed that the intent of the proposed rule and law changes for navigators is to clarify the kinds of state laws that can be put in place for licensing, certification or other standards. She said the PPACA preempts state laws that conflict with the federal healthcare reform law or prevent federal consumer advisers from performing their duties.
The "Standards for 2015 and Beyond" document spells out allowable state regulation of navigators: "A State may require these types of Exchange-approved assisters to undergo fingerprinting or background checks before they can operate in a State, so long as a State's implementation of these additional requirements does not prevent the Exchange from implementing these consumer assistance programs in the State consistent with Federal standards or make it impossible for the assisters to perform their Federally required duties."
A Missouri Department of Insurance spokesman said state officials could not comment on the navigator issue because of ongoing federal litigation linked to the Health Insurance Marketplace Innovation Act. Texas officials did not respond to requests for comment.
Kate Abernathy, a spokeswoman for the Tennessee Department of Commerce and Insurance, said her state's legislature unanimously adopted a law on registration of navigators. "That's what we will continue to do until we're told otherwise," she said. "We're just trying to do what our legislature tells us to do."
Help for Health Plans
The "Standards for 2015 and Beyond" document includes allowances for health plans that are linked to the exchange rollout and expenses tied to the conversion to the new ICD-10 code set for medical diagnoses and inpatient procedures.
With the 2014 and 2015 exchange beneficiary pools likely to be more costly to care for than anticipated, CMS is proposing to adjust several mechanisms that offset health plan risk, Wolters Kluwer's Oxman said.
"[CMS] is going the extra mile for insurers who are afraid of having too many sick people on their plans through the exchange, by: one, reallocating the required reinsurance contributions so that Treasury is paid last; two, increasing the permitted administrative expenses by 2 percent; and three, raising the 'profit floor' from 3 percent to 5 percent for purposes of risk corridor adjustments," Oxman said.
"The reasons cited are increased risks to issuers of qualified health plans because of the decision to let people keep noncompliant plans and the fact that these issuers will continue to monitor the risks posed by people currently in the high risk pools and the uncertain costs of reinsurance."
The CMS says federal officials recognize health plans face several risk factors in the 2015 plan year including: additional administrative costs, risk pool effects and uncertainty in the 2015 benefit year related to state renewal of non-ACA compliant plans; the time it will take to fully assess the risk profile of 2014 enrollees given the six-month initial open enrollment period; protracted phase-outs of high-risk pools; and the scheduled decline in reinsurance program payments.
To help compensate exchange health plans for costs related to ICD-10 conversion, CMS officials are proposing to extend an existing compensation rule indefinitely, Oxman said.
"The proposed change would extend the existing rule to include 2014 and any later year of implementation if CMS delays ICD-10 again," she said. "The rule allows … issuers to count the costs of the conversion incurred in the year the changes become effective, up to 0.3 percent of earned premiums, as quality improvement activities. This amount would count toward the 'medical loss' in the medical loss ratio as if it had been spent on patient care."
Christopher Cheney is the CMO editor at HealthLeaders.