As we noted in the recent recent Health Policy News overview of the second Final Notice of Benefit and Payment Parameters (NBPP) for 2022, the process of finalizing Exchange guidance for 2022 overlapped with the change in the Federal administration earlier this year. As the former administration was preparing to leave office, it declined to finalize some of the more routine guidance, leaving it to the new administration to address many of the proposals its predecessor had put forth last fall. The Centers for Medicare and Medicaid Services (CMS) finalized those proposals earlier this month in the second NBPP.
On the other hand, the new administration was blocked from taking action on some of the major and more controversial proposals that the former administration finalized in the original final NBPP for 2022; because these proposals have already been finalized, making further changes to them will require a full rulemaking process. Despite this, as part of the process of making immediate policy changes related to the Exchanges and Qualified Health Plans (QHPs), the Biden administration used the second NBPP to preview topics to which it will seek to make changes going forward. We outline those topics—as well as other areas to keep an eye on in the coming months—below.
CMS noted in the preamble to the second NBPP that it intends to adjust the Plan Year 2022 Exchange user fees, which the original final NBPP reduced, in future rulemaking.
As outlined below, the user fees were reduced by three-quarters of a percentage point between 2021 and 2022. CMS proposes to increase those user fees by half of a percentage point, with a net decrease of one-quarter of a percentage point between 2021 and 2022 following that projected change.
Direct Enrollment and Section 1332 Waiver Standards
While not directly addressed in the second NBPP, it is likely that CMS will also take a fresh look at the changes to direct enrollment and Section 1332 Waiver standards, the two additional major policy changes that the Trump administration finalized in the first NBPP for 2022.
As a reminder, the first NBPP for 2022 allowed Exchanges to eliminate their enrollment function in favor of authorizing private entities to conduct direct enrollment as the sole option for Exchange enrollment. This eliminated the role of Exchanges as a one-stop shop to compare and enroll in QHPs and receive determination for financial subsidies, effectively gutting a cornerstone of the Affordable Care Act. The former administration also used the first NBPP for 2022 to enshrine in rules the controversial 2018 guidance on Section 1332 Waivers, which relaxes the standards for meeting the Section 1332 guardrails of comprehensiveness, affordability, coverage, and federal deficit neutrality—in addition to making the state authority requirement more flexible. The Biden administration is also expected to address these changes in future rulemaking.
Response to Columbus v. Trump: Network Adequacy and Standardized Plans
As also noted in our overview of the policy changes made in the second NBPP for 2022, CMS used the second NBPP to take action required by the decision in the case of City of Columbus v. Cochran (also known as Columbus v. Trump), issued on March 4, 2021. The case challenged nine policy changes included in the NBPP for 2019; the court overturned four of those changes, two of which CMS immediately addressed in the second NBPP:
- the required change to the calculation of expenses for quality improvement activities for the purposes of Medical Loss Ratio calculation and rebates; and
- required changes to income verification standards.
In the second NBPP’s preamble, CMS outlined the other required changes that will take longer to implement, as carriers have already designed their plans and are in the process of the certification process for the 2022 plan year. Given this timing, CMS will address the following required changes for the 2023 plan year:
- Network Adequacy – CMS intends to set up a new network adequacy review process for 2023 and future plan years and will no longer defer to state reviews. CMS will outline how it will implement this change in future rulemaking.
- Standardized Plans –CMS will design, propose, and release new standardized options as part of the process of finalizing the NBPP for 2023, and alter HelathCare.gov to allow for differential display. Direct enrollment platforms will also need to be adjusted to allow for differential display.
CMS also noted that it might address provisions that were challenged in the lawsuit but upheld by the court in upcoming rulemaking. These provisions relate to:
- Reconciliation of advance premium tax credits;
- Federal oversight of direct enrollment;
- Navigator selection standards;
- The Small Business Health Options Program (SHOP); and/or
- Review of student health plan rates and the threshold for rate review.
As always, Health Policy News will bring you updates on Exchange policy developments as they occur.