Dec 28 -- Centers for Medicare & Medicaid Services (CMS), HHS. This proposed rule includes proposed payment parameters and provisions related to the risk adjustment and risk adjustment data validation programs, as well as proposed 2023 user fee rates for issuers offering qualified health plans (QHPs) through federally-facilitated Exchanges and State-based Exchanges on the Federal platform. This proposed rule also proposes requirements related to prohibiting discrimination based on sexual orientation and gender identity; guaranteed availability; the offering of QHP standardized options through Exchanges on the Federal platform; requirements for agents, brokers, web-brokers, and issuers assisting consumers with enrollment through Exchanges that use the Federal platform; verification standards related to employer sponsored coverage; Exchange eligibility determinations during a benefit year; special enrollment period verification; cost-sharing requirements; Essential Health Benefits (EHBs); Actuarial Value (AV); QHP issuer quality improvement strategies; accounting for quality improvement activity (QIA) expenses and provider incentives for medical loss ratio (MLR) reporting and rebate calculation purposes; reenrollment, and requirements related to a new State Exchange improper payment measurement program. This proposed rule also seeks comment on how HHS can advance health equity through QHP certification standards and otherwise in the individual and group health insurance markets, and how HHS might address plan choice overload in the Exchanges. To be assured consideration, comments must be received no later than 5 p.m. on January 27, 2022.
Fact Sheet text:
In the HHS Notice of Benefit and Payment Parameters for 2023 Proposed Rule released today, the Centers for Medicare & Medicaid Services (CMS) proposed standards for issuers and Marketplaces, as well as requirements for agents, brokers, web brokers, and issuers assisting consumers with enrollment through Marketplaces that use the federal platform. . . .
CMS proposes to conduct network adequacy reviews in all Federally-facilitated Marketplace (FFM) states except for states performing plan management functions that adhere to a standard as stringent as the federal standard and elect to perform their own reviews. The federal standard would be based on quantitative time and distance standards and appointment wait time standards, and reviews would occur prospectively during the Qualified Health Plan (QHP) certification process. . . . CMS also proposes to collect data from issuers on which of their in-network providers offer telehealth services.
Standardized Plan Options
CMS proposes to require issuers in the FFMs and State-based Marketplaces on the Federal Platform (SBM-FPs) to offer standardized plan options at every product network type, metal level, and throughout every service area that they offer non-standardized options in plan year (PY) 2023. . . .
Prohibit Discrimination Based on Sexual Orientation and Gender Identity
CMS proposes to prohibit Marketplaces, issuers, agents, and brokers from discriminating against consumers based on sexual orientation and gender identity. . . .
Refine Essential Health Benefits (EHBs) Nondiscrimination Policy for Health Plan Designs
CMS proposes to refine the EHB nondiscrimination policy to ensure that benefit designs, and particularly benefit limitations and plan coverage requirements, are based on clinical evidence. . . .
Special Enrollment Period (SEP) Verification
CMS proposes scaling back pre-enrollment SEP verification in the FFMs and SBM-FPs to include only the SEP for loss of minimum essential coverage—the SEP type that comprises the majority of all SEP enrollments on the Marketplaces on the federal platform—and to clarify that Marketplaces maintain the option to verify eligibility for any SEP types and may provide an exception to pre-enrollment SEP verification for circumstances that could include natural disasters or public health emergencies impacting consumers or the Marketplace. . . .
Updating Quality Improvement Strategy (QIS) Standards to Require Issuers to Address Health and Health Care Disparities
CMS proposes to update the QIS standards beginning in PY2023 to require QHP issuers to address health and health care disparities as a specific topic area within their QIS. . . .
Raise the Essential Community Provider (ECP) Threshold from 20 to 35 percent
For PY2023 and beyond, we propose increasing the ECP threshold from 20 to 35 percent of available ECPs in each plan’s service area. . . .
FFM and SBM-FP User Fees
For the 2023 benefit year, CMS proposes to maintain the FFM user fee rate of 2.75% of premium and the SBM-FP user fee rate of 2.25% of premium based on the portion of FFM user fee-eligible costs allocated to SBM-FP activities.
CMS proposes a number of changes to the risk adjustment models that would improve prediction in the adult and child models for the lowest-risk enrollees, the highest-risk enrollees, and partial-year enrollees, whose plan liabilities are underpredicted in the current models. Beginning with the 2023 benefit year, CMS proposes the following risk adjustment model changes: (1) adding a two-stage weighted approach to the adult and child models; (2) removing the current severity illness factors from the adult models and adding an interacted hierarchical condition category (HCC) count model specification to the adult and child models; and (3) replacing the current enrollment duration factors in the adult models with HCC-contingent enrollment duration factors.
CMS also proposes the following changes to model recalibration for the 2023 benefit year risk adjustment models: (1) using the 2017, 2018, and 2019 enrollee-level EDGE data for model recalibration; (2) applying a market pricing adjustment to the plan liability associated with Hepatitis C drugs; and (3) using the fourth quarter (Q4) prescription drug categories (RXC) mapping document for each benefit year of recalibration data, with the exception of 2017 enrollee-level EDGE data. In addition, CMS discusses considerations of the targeted removal of the mapping of hydroxychloroquine sulfate to Immune Suppressants and Immunomodulators (RXC 09) in the 2018 and 2019 benefit year enrollee-level EDGE data used for the 2023 benefit year model recalibration, as well as the targeted removal of Descovy® from mapping to Anti-HIV Agents (RXC 01) in all three benefit year enrollee-level EDGE datasets used for the 2023 benefit year model recalibration.
CMS also proposes to collect and extract through issuers’ EDGE servers five new data elements including ZIP code, race, ethnicity, individual coverage health reimbursement arrangement (ICHRA) indicator, and a subsidy indicator as part of the required risk adjustment data that issuers must make accessible to HHS in states where HHS is operating the risk adjustment program. CMS also proposes to extract three new data elements issuers already provide through their EDGE servers as part of the required risk adjustment data submissions (plan ID, rating area, and subscriber indicator), and to expand the permitted uses of the risk adjustment data and reports. CMS also proposes a risk adjustment user fee for the 2023 benefit year of $0.22 per member per month.
Finally, CMS proposes to repeal the ability for states to request a reduction in risk adjustment state transfers starting with the 2024 benefit year, while proposing to provide an exception for states that previously requested such flexibility. CMS also solicits comments on the requests submitted by Alabama to reduce risk adjustment state transfers in the individual (catastrophic and non-catastrophic risk pools) and small group markets for the 2023 benefit year.
HHS Risk Adjustment Data Validation (HHS-RADV)
CMS proposes further refinements to the HHS-RADV error rate calculation methodology beginning with the 2021 benefit year and beyond to: (1) extend the application of Super HCCs to also apply coefficient estimation groups throughout the HHS-RADV error rate calculation processes; (2) specify that the Super HCCs will be defined separately according to the age group model to which an enrollee is subject; and (3) constrain to zero any outlier negative failure rate in a failure rate group, regardless of whether the outlier issuer has a negative or positive error rate. . . .
Premium Adjustment Percentage and Payment Parameters
CMS will issue the 2023 benefit year premium adjustment percentage, the maximum annual limitation on cost sharing, reduced maximum annual limitation on cost sharing, and the required contribution percentage (payment parameters) in guidance by January 2022, consistent with policy finalized in the 2022 Payment Notice (86 FR 24140).
Prohibit Inclusion of Indirect Quality Improvement Activity (QIA) Expenses in Medical Loss Ratio (MLR)
CMS proposes to specify that QIA expenses that may be included for MLR reporting and rebate calculation purposes are only those expenses that are directly related to activities that improve health care quality. . . .
Advanced Payments of the Premium Tax Credit (APTC) Proration
CMS proposes that beginning in the 2024 benefit year, all Marketplaces, specifically certain State-based Marketplaces that have not done so, would be required to prorate APTC due to issuers when an enrollee is enrolled in a particular policy for less than the full coverage month. This method of administering APTC would help prevent APTC overpayment that exceeds an enrollee’s premium tax credit, and thus protect the enrollee from potentially incurring additional income tax liability.
Require the Display of Explanations for QHP Recommendations on Web Broker Websites
CMS proposes to require web broker websites to display a prominent and clear explanation of the rationale for explicit QHP recommendations and the methodology for default display of QHPs on their websites (for example, alphabetically based on plan name, from lowest to highest premium, etc.) to ensure consumers are better able to make informed decisions and shop for and select QHPs that best fit their needs.
Prohibit QHP Advertising on Web Broker Websites
CMS proposes prohibiting QHP advertising, or otherwise providing favored or “preferred placement” in the display of QHPs on web broker websites based on compensation an agent, broker, or web-broker receives from QHP issuers.
Benefit and Payment Parameters for 2023 Proposed Rule: https://www.federalregister.gov/documents/2022/01/05/2021-28317/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2023
Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/hhs-notice-benefit-and-payment-parameters-2023-proposed-rule-fact-sheet
Press Release: https://www.cms.gov/newsroom/press-releases/hhs-make-coverage-more-accessible-and-affordable-millions-americans-2023
HHS-Operated Risk Adjustment Technical Paper on Possible Model Changes: Summary Results for Transfer Simulations: https://www.cms.gov/files/document/report-summary-results-transfer-simulations.pdf
Facilitating Consumer Choice: Standardized Plans in Health Insurance Marketplaces: https://aspe.hhs.gov/reports/standardized-plans-health-insurance-marketplaces
Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2023 Benefit Year: https://www.cms.gov/files/document/2023-papi-parameters-guidance-v4-final-12-27-21-508.pdf
Health Affairs, "Proposed 2023 Payment Rule, Part 1: Essential Health Benefits And Other Market Reforms," Dec 29 https://www.healthaffairs.org/do/10.1377/forefront.20211229.814389/full/
"Part 2: Standard Plans And Other Exchange Provisions," Dec 30 https://www.healthaffairs.org/do/10.1377/forefront.20211230.643279/full/