CMS announces the release of $22 Million in Health Insurance Enforcement and Consumer Protections grant funding

On June 15, 2016, the Centers for Medicare and Medicaid (CMS) announced the release of $22 million in grant funding for State planning and implementing of the health insurance market reform provisions of the Affordable Care Act (ACA). The grants are aimed at helping States ensure their laws, regulations and procedures are in line with Federal requirements and that the States are able to effectively monitor and enforce health insurance market reforms and consumer protections under the ACA. States must submit a letter of intent by July 6th. Grant applications are due August 15th at 3:00 pm.

The funding is available for implementing one or more of the following provisions:

• Section 2707 – Non-discrimination under Comprehensive Health Insurance Coverage (Essential Health Benefits or EHB)
• Section 2713 – Coverage of Preventive Health Services
• Section 2718 – Bringing down the Cost of Health Care Coverage (Medical Loss Ratio or MLR)
• Section 2719 – Appeals Process
• Section 2726 – Parity in Mental Health and Substance Use Disorder Benefits

Applicants may use grant funds for a variety of planning and implementation activities related to these provisions, including:

• Form review
• Market conduct
• Market analysis
• Financial examinations
• Consumer compliant investigations

CMS specifically recommends the following focus areas:

• Develop or use procedures and/or tools to identify discriminatory benefit design;
• Use tools or hire staff to conduct formulary review for compliance with EHB standards;
• Review of issuer policy forms to ensure coverage without cost sharing for preventive health services;
• Perform substantive testing of an issuer’s MLR Annual Report against each element of the MLR regulations;
• Review additional processes as part of MLR oversight;
• Bringing claim denial external review process up to the NAIC standard;
• Review of forms, plan descriptions, and other plan documents to ensure mental health and substance use disorder parity.

Eligibility

• All states that enforce the ACA market reforms, or seek to begin enforcing all of the reforms, are eligible for funding.
• Page 16 of the Funding Opportunity Announcement (FOA) states: “Applicants must ensure that they are only seeking funding to plan and implement those provisions that they are not currently receiving Federal grant funding to plan and implement.”  States applying for funding must note how they will enhance their current enforcement status.
• States that currently enforce market reforms must ensure that the State share of funds for such activities will not be less than expended in the prior year.
• While States cannot use the award for “more of the same” work they are currently doing under rate review grants or for overall plan management, they can use the funds to enhance their plan management review related to the specific provisions noted.

Funding & Award

• Available funds amount to $22 million total, awarded based on availability.
• CMS will respond to the required Letter of Intent (July 6th) to determine the amount available to each recipient. Total funding allocations per applicant will be published on July 15th.
• Grant timeline is expected to be 24 months.
• Grants will be for an expected minimum of approximately $250,000 for the length of the award.
  • After providing baseline, “Selected Market Reforms” funds will be awarded as a flat dollar amount for each selected market reform—this will be the same for all States and determined based on the anticipated impact the selected market reform will have on consumers and their premiums.
    • Some market reform provisions will receive more funds than others, the hierarchy is: (1) Parity in Mental Health and Substance Use Disorder Benefits, (2) Coverage of Preventive Health Services, (3) Non-discrimination under Comprehensive Health Insurance Coverage, (4) Bringing down the Cost of Health Care Coverage (MLR), and (5) Appeals Process.
  • If funds remain, States may also receive awards called “Workload” funds. Workload funds are determined based on the population and number of health insurance issuers in the State.
• States can get the most money by:
  • Selecting the highest-priority items; and / or
  • Selecting the highest number of market reform provisions.
• Grant awards will be issued October 19, 2016 for a performance period from October 19, 2016 to October 18, 2018.

Sample Project Ideas

• Preventative Cost Sharing Review 
  • We know that on-the-ground coverage of certain preventive health care services has been an issue. Although we can review the forms and benefit documents, the Qualified Health Plan (QHP) review process limits the ability to review how issuers administer the plans.
  • At this time, States rely on word of mouth and appeals to understand adherence to the requirements set forth in the ACA and subsequent regulations pertaining to preventative cost sharing.
  • Regulators could conduct spot checks of claims for particular services and/or pharmacy benefits, as well as a survey of issuers to see how the benefits are being administered and adjudicated throughout the plan year.
• Mental Health Parity-Substance Abuse Treatment 
  • As of January 1, 2015, most insurance plans must cover mental health services, including Substance Use Disorder (SUD), at levels equivalent or greater to their coverage for medical and surgical.
  • Regulators could undergo review of carriers to ensure that companies are appropriately covering substance abuse treatment, looking in detail at differences in claim adjudications in particular denials.
  • Additionally, the administration of Medication Assisted Treatment (MAT) is often fraught with obstacles, including multiple levels of required authorization. Overly burdensome administration is often a barrier to care, so a study could be done of how, and with what requirements, MAT is administered and whether it meets the standards set forth in the Mental Health Parity Act.
  • As part of this work, an examination of the issuer’s network adequacy for SUD treatment could also be examined. States could create a data set for issuers to respond to or examine a sub-section of provider types so that the States can gain perspective on the breadth of SUD treatment by carrier and county.

These are just a few examples of project ideas that meet CMS criteria and advance CMS’s priorities for the new funding opportunity.  PCG’s team of regulatory experts can help you plan and implement innovative marketing conduct projects that address the specific needs in your state in accordance with CMS requirements and priorities.  Contact PCG’s team at HealthPolicyNews@pcgus.com for more information.

Next Steps

• Submit a letter of intent by July 6th (mandatory, non-binding) to James.Taing@cms.hhs.gov, explaining the State’s intent to apply and listing exactly which market reform provisions that it seeks to fund.
• There will be a pre-application conference call, TBA.
• Grant applications will be due August 15th at 3:00 pm.
• More detailed information about the application process and requirements can be found in the FOA.

Published by Margot Thistle

Margot Thistle, Esq. is a managing editor of Health Policy News who has spent much of her career working directly on Affordable Care Act policy and implementation, including having lead plan management operational and policy planning for Vermont Health Connect, a state-based exchange. During her time at PCG, Ms. Thistle has worked extensively with state insurance departments and state agencies on health policy, market stabilization, and regulatory compliance matters. Ms. Thistle provides broad policy and regulatory support to PCG’s other health care clients across the country, analyzing policy and regulatory developments, providing strategic advice relative to regulatory questions, and drafting policy briefs and position papers. Ms. Thistle still has her admission ticket to the signing of Chapter 58 of the Acts of 2006, the historical Massachusetts health reform bill that preceded the ACA. View all posts by Margot Thistle