Thursday, February 18, 2016

CMS Increases ACA Oversight & Wants to Classify Provider Networks

What can we expect from CMS in 2017?  More oversight, that is what.  CMS intends to take on a bigger regulatory role in reviewing ACA premium rates and categorizing provider networks for qualified health plans (QHPs) offered via the 36 insurance exchanges that rely on the federal platform.

On 12-23-15, CMS issued its fourth annual draft “Letter to Issuers” that participate in the federally facilitated exchanges (FFEs). The 85-page letter reiterates, and in some areas fleshes out, changes that CMS proposed in its nearly 400-page Notice of Benefit and Payment Parameters (BPP) in November. Carriers and other stakeholders have until Jan. 18 to submit comments on the letter.  Carriers, according to CMS’s letter and BPP, must also submit to CMS the Unified Rate Review Template for their QHPs, even if they propose no rate change or a rate decrease.
Apparently CMS will now be less willing to defer to market forces and state regulators in reviewing and certifying 2017 QHPs.  Increased CMS oversight might draw criticism from both insurers and states given current insurer losses, continued funding uncertainties, and the polarized politics of the Affordable Care Act (ACA).  While the letter is aimed at states that rely on, it acknowledges that state-based exchanges (SBEs) have the authority to follow the same rules.
While I recognize the need for oversight, I hope this new oversight does not also introduce a new expense in the so called “Affordable” Care Act.

Another area that CMS is looking to regulate is to classify provider networks.  Beginning in 2017, CMS proposes classifying QHP provider networks into one of three tiers. This means that one of the biggest challenges I’ve had in my 23 year insurance career – lack of provider access to a QHP - may get some relief soon.  Health plans that have larger networks will be labeled as “Broad,” while those that are unusually narrow will be classified as “Basic.” Networks that are within one standard deviation of the mean PPR would be classified as “Standard.”  Each network would be compared to networks used by other QHPs in the same geographic area, CMS explained.
Information about a network’s relative breadth would be made available to health plan shoppers, according to the letter.  It also would compare the number of providers in a network to the number of providers included in all QHP networks in a county. This “Provider Participation Rate” (PPR) would then be used as a baseline.
CMS outlined its intention to review network adequacy in its nearly 400-page Notice of Benefit and Payment Parameters (BPP) in November, but only hinted that it might eventually rate provider networks.  CMS also proposed maximum travel times and distance standards for a variety of provider types. For each specialty and standard listed, the issuer would need to provide access to at least one provider for at least 90% of enrollees. CMS expects that insurers will be able to meet the standards at least 90% of the time and will not need to submit justifications more than 10% of the time.
Let’s all hope these proposals take shape before the 2017 enrollment season.

Mike smith, President