New CMS rules boost consumer protections in exchange plans

Modern Healthcare Reports:

“The CMS Friday issued final market rules for 2016 (PDF) for the state and federal insurance exchanges. The regulations include stronger requirements for insurers to provide accessible, reliable information about provider networks and drug formularies so that exchange customers can make informed choices.

“CMS is working to improve the consumer experience and promote accountability, uniformity and transparency in private health insurance,” CMS Administrator Marilyn Tavenner said in a written statement. Tavenner is stepping down from the agency’s top post later this month.

For 2016 coverage, the open-enrollment period will run from Nov. 1 through Jan. 31, moving it up by two weeks from this year. Previously, the CMS had proposed closing the sign-up period on Dec. 15, 2015. “We were persuaded by the concerns expressed by many commenters about the additional burden caused by shifting the annual open-enrollment period, and therefore we are finalizing an annual open-enrollment period for the 2016 benefit year that begins one month later than the one we had proposed,” the final rule states.

Critics, though, said the agency should either have moved the enrollment period up to before the Christmas holiday period or moved it back to coincide with tax return filing season.

In addition, the agency announced that there will be a 3.5% fee assessed on premiums purchased through the federal exchange to cover operational costs. That’s the same assessment level as in the first two years of operations and is expected to raise $1.5 billion.

The final rule indicates that HHS is monitoring the adequacy of provider networks offered by exchange health plans. But the agency reiterated that it is waiting to see how a model law being drafted by the National Association of Insurance Commissioners turns out before it takes additional regulatory action.

However, HHS is encouraging insurers to allow new customers a 30-day grace period to find an in-network provider to meet their needs before imposing out-of-network cost-sharing. That would allow clients to continue getting the treatment they need without worrying about incurring exorbitant medical bills.

After hearing widespread complaints of insurers not having up-to-date provider directories, HHS is expecting health plans to publish up-to-date, accurate, and complete provider directories, including information on which providers are accepting new patients, the provider’s location, contact information and any institutional affiliations in a manner that is easily accessible.

As part of this requirement, insurers must update the directory information at least once a month. A provider directory will be considered easily accessible when the general public is able to view all of the current providers for a plan on a public website through a clearly identifiable link or tab without having to create or access an account or enter a policy number.

Similarly, HHS is requiring health plans to post their drug formularies on their websites and that they be updated in real time. In addition, HHS is requiring that drug formularies and provider networks be made available in “machine-readable” files. That will allow independent entities to extract the data and create tools to help consumers make more informed choices about which plans will best meet their needs.

The agency increased protections for consumers to appeal decisions when they find out that drugs aren’t covered by their plans. Under the final rule, insurers must review those decisions within 72 hours if a customer files an appeal. In addition, the client can seek an expedited review that must be conducted within 24 hours. The customer can also ask for an external review of the decision to deny coverage for the drug in some circumstances.

The CMS also issued updated rules for risk-mitigation programs designed to shield insurers selling products on the exchanges from exorbitant financial losses if they sign up a sicker-than-expected member pool. The reinsurance program, which provides financial relief to insurers that end up with exorbitantly expensive customers, is expected to cost $4 billion in 2016. Insurers will be able to offset 50% of costs for customers whose medical bills top $90,000 up until they reach $250,000. During the current year, insurers can begin collecting reinsurance funds when a customer’s medical bills reach $45,000.

“We believe setting the coinsurance rate at 50% and increasing the attachment point allows for the reinsurance program to help pay for nearly the same group of high-cost enrollees as was the case for the 2014 and 2015 benefit years, while still encouraging issuers to contain costs,” the rule states.

HHS also reiterated that it expects the risk corridor program to be budget-neutral, but indicated that it will make good on all payments if that does not prove to be the case. Under that program, insurers that end up with a disproportionately expensive exchange customer pool receive payments from the federal government, while those that attract a healthier, less-costly customer pool must pay into the fund.

“HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers,” the rule states. “In the unlikely event that risk corridors collections, including any potential carryover from the prior years, are insufficient to make risk corridors payments for the 2016 program year, HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.”

HHS is also bolstering language requirements for insurers selling products through the state and federal exchanges. They’ll now be compelled to provide interpreter services in at least 150 languages. However, HHS opted not to implement the same language-access requirement for navigators that help individuals enroll in coverage. The agency also opted not to move forward with any language requirements for written materials.

Some consumer advocates had been lobbying HHS to include pregnancy as a life-change circumstance that would allow women to enroll in coverage outside of the open-enrollment window. But the agency didn’t include such a provision in the final rule. Insurers had strongly opposed it, arguing that would lead some women to wait to sign up for coverage until they got pregnant, leading to adverse selection and higher costs.

“We believe the Department of Health and Human Services can and should fix this problem,” Christina Postolowski, health policy manager at Young Invincibles, said in a written statement. “The average cost of maternity care and delivery without complications is $23,000. HHS has stood on the side of expanding access to coverage for millions of people. That shouldn’t change now.”