Implementing Health Reform: The Qualified Health Plan Federal Exchange Participation Agreement And More

CMS continues to put the pieces into place that are needed for the launch of the 2015 coverage year.  On October 16, 2014, the Centers for Medicare and Medicaid Services released at its website the certification agreement and privacy and security agreement that qualified health plan (QHP) insurers must sign with CMS to access the federally facilitated exchange (FFE), the federally facilitated SHOP (FF-SHOP), and CMS Data Services Hub.  The agreement focuses primarily on obligations that the QHP insurer undertakes to protect personally identifiable information and to ensure secure communications with CMS, although it also addresses the effective date and termination of the agreement and a few other issues.  Most of the terms of the agreement are unremarkable, and this post will only comment on a few.

QHP insurers undertake under the agreement to protect personally identifiable information and to ensure secure communications with CMS in conformity with applicable laws, regulations, and standards.  They must also ensure that their contractors and downstream entities comply with these requirements.  QHP insurers agree to report any personally identifiable information incidents or breaches to CMS within 72 to 96 hours.  This is a far cry from the one-hour breach reporting requirement proposed by CMS last year but never finalized, but perhaps recognizes the difficult of identifying and assessing a security breach.

The agreement expressly recognizes that QHP insurers have developed their products based on the assumption that advance premium tax credits and cost-sharing reduction payments will be available through the marketplace and that QHP insurers could have cause to terminate the agreement if this assumption ceases to be valid.  This could be interpreted as a reference to the Halbig/King litigation which currently threatens the availability of tax credits and cost-sharing reduction payments through the FFE, but could also have been included in recognition of the likely Republican takeover of the Senate and the possibility that the Republicans may accomplish through budget reconciliation or otherwise their longstanding goal of repealing the ACA.  As the agreement is renewable from year to year, this clause may contemplate contingencies in the indefinite as well as the near future.

It should be noted that the contract contains no contingency for termination in the event that the risk corridor program is defunded, reflecting no doubt CMS confidence that the program is funded for 2015.

Finally, the agreement permits CMS to terminate its agreement with a QHP insurer for cause with 60 days notice for material breach.  When CMS notifies a QHP insurer of a material breach, the insurer must respond within 7 days with a plan and time frame to cure the breach and must then cure it within 30 days of the original notice.  If a QHP insurer is in “habitual default,” defined as being served with a 60-day notice more than 3 times in any calendar year, CMS may in its discretion terminate the agreement without further opportunity to cure. Termination would not free the QHP insurer from a continuing obligation to continue coverage as required by state law.

A second document that was released in September but only recently came to my attention is the 2015 technical guidance for the beta test of the quality rating system (QRS) and qualified health plan enrollee experience survey.  The ACA requires CMS to develop a quality rating system for QHPs offered through the marketplaces, as well as an enrollee satisfaction survey system to evaluate the satisfaction of QHP members.  The quality rating system was described in late 2013 in a notice with comment and implemented by the exchange standards final rule in May of 2014.  The QHP enrollee survey is available here in English.  (It is also available in Spanish and Chinese).

The beta test document sets out requirements that QHPs must meet in 2015 to beta test the QRS and QHP enrollee survey.  The requirements apply to both the FFE and state-operated exchanges.  The QRS is intended to align QHP quality reporting standards with the National Quality Strategy priorities for improving the quality of health and health care.  Beta test results will be used to refine the QRS scoring specifications and rating methodology for 2016, while the validity of the questionnaire items and effectiveness of the survey procedure will be continually reviewed and improved.

Release of survey information is not required for 2015, but quality rating and enrollee satisfaction information will be available for the 2017 open enrollment period in 2016.  QRS clinical measure data and a subset of QHP enrollee survey data will be validated and aggregated to produce quality ratings for plans on a 1 to 5 star rating scale, and will be prominently displayed on marketplace websites to assist consumers in comparing QHPs.

Data will be collected by QHP insurer and product type (HMO, PPO, etc.) for products that had enrollments of 500 or more as of July 1, 2014.  QHPs are responsible for collecting clinical measure data and for submission of a QHP enrollee survey sampling frame.  Both will be validated by a HEDIS compliance auditor.  QHP enrollee survey vendors will conduct the survey and submit the survey data to CMS, while the validated clinical data will be submitted through the NCQA’s interactive Data Submission Survey.

For 2015, the QRS is composed of 29 measures, some of which are quite general and are in fact based on multiple questions, such as access to care or care coordination measures, and some of which are quite specific, such as Chlamydia screening for women or cervical cancer screening measures.  For 2016 and 2017, 14 more measures will be added.  The QHP enrollee survey draws heavily from the CAHPS health plan surveys used widely to assess performance in other governmental programs and commercial health plan performance.

The methodology CMS will use for compiling and aggregating data into plan rankings is described in great detail. QRS data and enrollee survey information will be compiled into 8 domain measures, which will be further compiled into 3 summary indicators.

An October 20 FAQ on the REGTAP website states that CMS will not enforce the transparency requirements of sections 1311(e)(3) and 2715A of the Affordable Care Act until guidance is released on these requirements. CMS continues to release FAQs at the REGTAP site, which in recent weeks have focused primarily on the SHOP exchange and on the reinsurance and risk-adjustment programs.

  1. sections 1311(e)(3) and 2715A require QHPs, but also group health plans and insurers, to submit to the marketplaces and to HHS and state insurance commissioners for release to the public information regarding:

(i) Claims payment policies and practices.

(ii) Periodic financial disclosures.

(iii) Data on enrollment.

(iv) Data on disenrollment.

(v) Data on the number of claims that are denied.

(vi) Data on rating practices.

(vii) Information on cost-sharing and payments with respect to any out-of-network coverage.

(viii) Information on enrollee and participant rights under this title.

(ix) Other information as determined appropriate by the Secretary

CMS had earlier said that plans would begin reporting this information after the 2014 benefit year.  It is disappointing that reporting will be further delayed.  In the interim, it is hoped that the NAIC and the states will take the initiative in fulfilling the ACA’s promise of health plan transparency. The NAIC is currently considering the collection of health plan data to this end.

Basic Health Plans.  On October 21, 2014, HHS released its proposed methodology for determining federal funding amounts should a state establish a Basic Health Program for 2016.  The Basic Health Program allows states the option of offering standard health plan coverage for individuals with incomes between 133 and 200 percent of poverty who are not eligible for Medicaid, CHIP, or other government programs, or employer sponsored insurance.  Lawful immigrants who do not qualify for Medicaid and have incomes below 133 percent of poverty also quality.  A state that operates a Basic Health Program will receive federal funding equal to 95 percent of the premium tax credits and cost-sharing reduction payments that enrollees would have received had they enrolled in qualified health plans through the marketplaces.

The Basic Health Program final rule was published in March of 2014 and was analyzed here.   At this point, it is not clear that any state is interested in the Basic Health Program, but the ACA requires the establishment of an annual rate methodology.

The 2016 Basic Health Program funding methodology is identical to that used in 2015, except that the values have been updated.   The 2015 methodology was described in this Blog at the time it was issued, and the reader is referred to that post for further details.  Essentially, the proposed payment methodology attempts to estimate the amount that the enrollees in the program would have received in premium tax credits and cost-sharing reduction payments had they received marketplace coverage, so that states can be paid 95 percent of that amount.  To do this, the methodology constructs rate cells consisting of unique combinations of age range, geographic area, coverage category (self-only, two-adult), household size, and income range — the variables that result in different premium tax credits and cost-sharing reduction payments for different enrollees.

Plan enrollees are assigned to each cell.  In most states, most children would be covered by Medicaid or CHIP rather than the BHP.

The proposed methodology then calculates premium tax credits by estimating the difference between the average premium of the second-lowest-cost silver plan available to individuals in each rate cell and the average amount that individuals in that cell would have had to pay for the second-lowest-cost silver plan given their income.  Average cost-sharing reduction payments are calculated by estimating the average payment that would be made for the individuals in each rate cell.  Projected end-of-the-year reconciliation of premium tax credits is also taken into account, as is an adjustment for American Indians and Alaskan Natives.

States are given the option of using either actual 2016 marketplace premiums or, if they prefer, 2015 premiums projected forward with a set trend rate.  States may also propose a methodology to determine an adjustment for a difference in health status between the Basic Health Population and the individual marketplace. CMS believes that there is no difference.  Payments will be made quarterly based on the last quarter of enrollment and reconciled for actual enrollment at the end of each quarter.

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