With filing deadlines quickly approaching, the Centers for Medicare and Medicaid Services (CMS) released final versions of the Notice of Benefit and Payment Parameters (NBPP) for 2021 and the 2021 Letter to Issuers in the Federally-facilitated Exchanges (Letter) on May 7, 2020. At the same time, CMS released accompanying guidance: Key Dates for Calendar Year 2020 and the Revised Guidance on Unified Rate Review Timeline, which were revised to address timing challenges raised by the COVID-19 pandemic.
As we have seen in recent years, there are limited changes to the guidance from prior years and few changes made in finalizing the proposed guidance. In order to assist states as most prepare to receive and review plan filings, we have updated our analysis of the proposed guidance to flag notable changes from the proposed regulations. Below, we provide updates to topics we had previously flagged for state consideration. We have included updates specific to the federal response to the COVID-19 pandemic.
All changes from the proposed guidance to the final guidance are flagged with red text.
Essential Health Benefit Defrayal Policy
CMS finalized one of the big changes that was proposed in the draft NBPP, which relates to the cost-defrayal requirements relative to the adoption of new state mandated benefits, as well as ongoing tracking and monitoring of state mandates that may exceed the Essential Health Benefits (EHBs). In previous years’ guidance, CMS outlined the flexibility relative to cost-defrayal, but in October 2018 issued further guidance on the topic, including an FAQ.
Being able to supplement or change the benchmark is not new flexibility, as states have been able to mandate additional benefits under the ACA that exceeded the ten EHBs. However, states do have to defray the cost of covering non-EHB benefits by either making payments to qualified health plan (QHP) enrollees or the applicable insurance carrier. Despite concerns from many commenters, CMS finalized its proposals relative to the process for identifying state-mandated benefits that are subject to defrayal. Specifically, as proposed, states must report annually on state benefit mandates. In reporting Year 1 (2021), states must outline all benefits (both before and after 12/31/2011) in addition to the EHB, as well as the state action and enactment date of the mandate, the benefits required and include citations. States will be responsible for ensuring compliance with the defrayal policy payment requirements for identified benefits. After Year 1, states must update the report with any new mandates. The EHB reports must be signed by a state official who can attest to their accuracy. The first report will be due July 1, 2021, and the state must attest to the accuracy of the information for 60 days prior to the reporting deadline (as of May 2, 2021). If states do not submit updates by the deadline, CMS will review and define EHBs on behalf of a state.
In other developments related to EHBs, CMS finalized the proposed deadline of May 7, 2021 for states to select new EHB benchmarks for the 2023 plan year and to notify CMS that they will permit cross-category substitutions.
Passage of last December’s budget bill led most to believe that auto re-enrollment would not be addressed in this year’s NBPP. CMS did, however, propose more limited changes targeted at those who would be auto re-enrolled with no premiums due to Advance Premium Tax Credits (APTCs). CMS had proposed to either reduce or eliminate APTCs that would otherwise fully cover the enrollee’s premium unless that individual actively re-enrolled and applied for financial assistance. That proposal raised concerns for many about a new kind of surprise bill, especially for those who have become accustomed to auto re-enrollment.
Following overwhelming opposition to the proposed changes to the automatic re-enrollment process, CMS announced that those changes were not included in the final rule. Instead, the automatic re-enrollment process remains the same in 2021.
As it does annually, the NBPP contains the Exchange / Qualified Health Plan payment parameters for the coming year.
In the proposed rule, CMS invited comment on its consideration of reducing the federal user fees for Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal Platform (SBE-FP) in order to mitigate premium increases and enrollment decreases and based on potential savings from cost-saving measures it had implemented over prior years. However, in its final guidance, CMS chose to maintain the federal Exchange user fees at current rates:
- 3 percent of monthly premiums for FFEs.
- 2.5 percent of monthly premiums for SBE-FPs.
Maximum Out of Pocket and Cost-Sharing Reduction Plan Variations
As required under the ACA, CMS had proposed increases to the annual limit on cost-sharing for Qualified Health Plans, including for cost-sharing reduction (CSR) plan variations, based on the proposed 2021 premium adjustment percentage. CMS finalized the proposed amounts for cost-sharing limitations, as follows:
Additionally, as proposed in the draft NBPP, the final guidance maintains the annual limitation on cost sharing for stand-alone dental plans (SADPs) at the current amounts of $350 for one child and $700 for multiple children. The required contribution percentage for the purposes of identifying eligibility for catastrophic coverage was also updated.
Changes in Light of the COVID-19 Pandemic
Timeline for QHP Certification and Rate Review
CMS released the key dates for QHP certification and rate review, which closely mirror past years’ dates. However, in response to the COVID-19 pandemic, CMS’s final guidance provides issuers an extension on three deadlines for Plan Year 2021:
- Deadline to finalize initial rate filings: postponed from July 22nd to August 7th
- Date that initial rate changes will be posted: postponed from August 1st until August 14th
- Final deadline for issuers to change QHP applications: postponed from August 19th to August 26th
Below, we included a visual of the timeline for use by states as they finalize their own internal form and rate review deadlines and move though the annual QHP certification process.
Focus on Telehealth
While the final guidance contains no changes relative to network adequacy or essential community providers (ECPs), CMS noted that it “strongly encourages all issuers to consider increasing the use of telehealth services” to ensure adequate access to covered services. This includes increasing telehealth services as part of a contingency plan to ensure QHPs provide adequate access to ECP types that may be missing from a plan’s network.
Flexibility Related to Reporting and Accreditation
In the final Letter, CMS notes the suspension of quality-related reporting requirements for Plan Year 2021—specifically, the Quality Rating System (QRS) and QHP Enrollee Experience Survey—due to the COVID-19 public health emergency. In a memo issued on April 18, 2020, CMS directed QHP issuers to cease collecting data required to calculate ratings. Despite this change, CMS will continue to require display of QHP quality rating information for Exchanges and encourages QHP issuers to continue using clinical quality measures and survey measure data for internal quality improvement purposes.
The final Letter also suspends reporting of Quality Improvement Strategy (QIS) data and delays submissions relative to the Plan Year 2021 certification period. CMS encourages State-based Exchanges to take a similar approach.
Likewise, given prior guidance to accrediting entities during the public health emergency, CMS noted that it may “provide flexibilities” relative to health plan accreditation reviews as appropriate.
CMS’s final guidance also finalizes several other technical changes:
- Amendments to Medical Loss Ratio (MLR) provisions ensuring that a broader range of prescription drug savings, outsourced services and wellness incentives are accurately reflected in the MLR calculation, to be effective for the 2022 reporting year.
- Not taking enforcement action against Exchanges that do not perform random Employer-Sponsored Coverage verification sampling.
- Clarifying that Exchanges will not redetermine eligibility for financial assistance in certain circumstances.
- Changes to the Risk Adjustment program fee and recalibration process and Risk Adjustment Data Validation.
If states have any questions on policy changes or would like assistance in considerations for implementation, please contact us at firstname.lastname@example.org