Exchange Guidance
As expected and previewed in Part 2 of the final Notice of Benefit and Payment Parameters for 2022 (NBPP), the Biden Administration issued its first independent Exchange rule on June 28, 2021: Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Markets for 2022 and Beyond Proposed Rule – on June 28, 2021. This proposed rule came on the heels of the much-awaited Supreme Court decision in California v. Texas, which upheld the Affordable Care Act.
In the rule, the Centers for Medicare and Medicaid Services (CMS) proposes broader changes to the Exchange standards than it was able to enact in the process of finalizing the NBPP. In its prior rulemaking, CMS was limited to acting on proposals that the prior administration did not finalize in Part 1 of the NBPP before leaving office. This latest Exchange rulemaking addresses issues that do not fall in that category, representing a reset similar to President Trump’s issuance of the Market Stabilization Rule after entering office.
In addition to addressing many of the policies on its priority list, the proposed rule also foreshadows additional policy provisions that the administration is still reviewing and/or needs more time in which to implement changes:
- CMS noted that there is not time to reinstitute the standardized plan options (as required by the ruling in City of Columbus v. Cochran) ahead of the 2022 Open Enrollment Period (OEP), but that it intends to do this and propose plan designs in the 2023 NBPP.
- Similarly, CMS is not able to make the changes required to Federal network adequacy reviews in time for the 2022 OEP but noted that it will do so via future rulemaking.
- CMS also noted to that it will review the current policy for applying premium payments when past due amounts have not yet been paid in the NBPP for 2023.
Below, Health Policy News has summarized key aspects of the proposed rule.
Exchange User Fees
The rule proposes the following increases in Exchange User Fees:
- Federally-facilitated Exchange user fee – 2.75 percent (increased from 2.25 percent)
- State-based Exchange-Federal Platform user fee – 2.25 percent (increased from 1.75 percent)
These increases would be used to fund enhanced outreach and enrollment, as well as the Navigator program.
Open Enrollment Period
The rule proposes extending the Marketplace OEP from November 1st through January 15th starting in 2022.
Direct Enrollment
CMS is proposing a repeal of the Exchange Direct Enrollment option enacted via Part 1 of the NBPP. If it is repealed in the final rule, states will no longer have the option to facilitate enrollment solely through a private direct enrollment entity in place of an Exchange platform. No state had yet begun pursuing this enrollment option.
Section 1332 Waiver Requirements
The Department of Health and Human Services (HHS) and the Department of Treasury jointly proposed removing the enhanced flexibility relative to Section 1332 Waiver guardrails[1], enacted via Part 1 of the NBPP, from the regulations. In its place, the Departments would rely on the statutory and regulatory language, as well as their interpretative policy statements outlined in the preamble—which largely align with the prior interpretations included in the 2015 Section 1332 Guidance—in reviewing waiver applications. This course of action would ensure that assessments of guardrail compliance are based on those enrolled in affordable, comprehensive coverage, and not just those eligible for such coverage.
More specifically, removing the enhanced flexibility from the final rule would have the following ramifications for guardrail compliance standards:
- Comprehensiveness guardrail: Coverage under a waiver must be at least as comprehensive overall for all residents as it would be without the waiver—with “comprehensiveness” referring to the scope of benefits in relation to EHB requirements, the state’s EHB benchmark plan and, in some cases, Medicaid and CHIP coverage. Specific focus would be given to the impact on vulnerable and underserved residents.
- Affordability guardrail: Coverage under a waiver must be at least as affordable for all state residents as coverage without the waiver—with “affordability” referring to residents’ ability to pay for healthcare expenses and measured by comparing expected out-of-pocket spending for coverage and services to income. Specific focus would be given to individuals with large health care spending burdens relative to their income as well as the number of individuals with cost-sharing protections.
- Coverage guardrail: The waiver must provide minimum essential coverage (MEC) to a comparable number of people as would have MEC without the waiver, with the impact on all state residents considered (including those enrolled in public programs). Specific focus would be given to the impact on vulnerable and underserved residents as well as any impact on gaps in coverage or discontinuation of coverage. The assessment would look at the number of people that are enrolled in coverage.
- Deficit neutrality guardrail: The projected Federal spending net of Federal revenues under the waiver must be equal or lower than it would be without the waiver. All changes in tax and other forms of revenue and financial assistance, other direct spending, and administrative costs would be considered.
The Departments also specifically note in the preamble that, for states that propose joint Section 1332 and 1115 Waivers, savings accrued under a Section 1115 Waiver and any proposed changes to Medicaid or CHIP state plans that are subject to Federal approval will not be factored into the assessment of deficit neutrality of the Section 1332 Waiver. However, changes in Federal spending on Medicaid or CHIP that result directly from the Section 1332 Waiver will be considered.
The Departments expressed an interest in receiving comments regarding existing policies that are in line with the guardrails and would encourage states to use Section 1332 Waivers in innovative ways to promote equity and access to comprehensive coverage.
The Departments also proposed including additional information about requirements that must be met for waiver approval; suggested timelines for waiver submission; the review process; analytical requirements; operational considerations; the calculation of pass-through funding; and the process for amending and extending Section 1332 Waivers. Finally, the rule proposes flexibilities in the public notice requirements and post-award public participation requirements in the case of emergent situations if certain criteria are met.
The Departments also note in the preamble that they reserve the right to further evaluate approved waivers and suspend or terminate any that it finds materially fail to comply with the terms and conditions or the waiver or the guardrails, laws, and regulations.
Additional Proposals
Other changes proposed in the rule include:
- Clarifying that all health plans must comply with mental health parity and that, to comply with Essential Health Benefit requirements, plans must provide mental health and substance use disorder coverage.
- Creating a new monthly special enrollment period for individuals who are eligible for Advance Premium Tax Credits (APTCs) and whose incomes are projected to be no more than 150 percent of the Federal Poverty Level – a provision outlined in further detail in this edition’s COVID update article. The rule also proposed clarifying the existing SEP for those who become newly eligible or ineligible for APTCs.
- Reinstating requirements that FFE Navigators provide consumers with post-enrollment information and assistance, including related to eligibility appeals, premium-tax credit reconciliation, and healthcare coverage concepts and rights.
- Eliminating the requirement that separate bills and payments be sent for the portion of insurance premiums attributable to coverage for abortion services.
Comments on the proposed rule are due on July 28, 2021.
No Surprises Act Rule
Shortly after the release of the proposed Exchange rule, the Departments of HHS, Labor and Treasury, along with the Office of Personnel Management, issued an interim final rule (“NSA Rule”) to implement portions of the No Surprises Act (NSA). The NSA, which was adopted at the end of 2020, protects individuals against surprise medical bills for the following:
- Emergency services and air ambulance services provided by out-of-network providers
- Certain non-emergency services provided by out-of-network providers at in-network facilities (such as hospitals and ambulatory surgical centers)
Under the NSA Rule, plans that cover emergency services (defined as items and services needed to screen, treat, and stabilize a patient with an emergency medical condition from the point of evaluation and treatment through stabilization, when the patient can consent to transfer), must do so:
- Without prior authorization;
- Regardless of whether the provider or facility are in-network;
- Subject to the prudent lay person standard and not based on diagnostic codes;
- Without requiring a time limit between onset of symptoms and care being sought;
- Regardless of any other terms or conditions of the plan, other than exclusion or coordination of benefits;
- without applying general plan exclusions; and
- subject to the same cost-sharing as for in-network benefits (as outlined under the rule, cost-sharing must also be counted toward in-network deductibles and out-of-pocket maximums).
Balance billing is also prohibited.
Additionally, the NSA Rule addresses when patients can be balance-billed for post-stabilization services:
- If the patient can travel to an inpatient facility within a reasonable distance and with non-medical/non-emergency transport;
- If the patient gives informed consent to the care and being balanced billed; and
- If the provider or facility meets all Federal and State requirements.
The rule also outlines the process for determining the rate to be paid in cases that the NSA applies. Rates are tied to:
- Amounts determined by an All-Payer Model Agreement under a Section 1115 Waiver (as applicable);
- An amount determined by state law (as applicable);
- An amount agreed upon by the plan/issuer and the provider facility; or
- An amount determined by independent dispute resolution.
Further guidance will be issued regarding dispute resolution.
Finally, the rule addresses notices that providers or facilities can provide to patients to gain consent for increased out-of-network charges in certain circumstances (not applicable to ancillary services for non-emergency care), as well as notices that providers and facilities must make publicly available about the NSA.
The NSA Rule will go into effect on January 1, 2022, and comments on the rule may be submitted through September 7, 2021.
Footnotes
[1] 1. The proposal will provide coverage that is at least as comprehensive as without the waiver; 2. The proposal will provide coverage and cost-sharing protections that are at least as affordable as without the waiver; 3. the proposal will provide coverage to at least a comparable number of the state’s residents as without the waiver; and 4. the proposal will not increase the federal deficit.
