Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2024, 78206-78322 [2022-27206]
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Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
45 CFR Parts 153, 155, and 156
[CMS–9899–P]
RIN 0938–AU97
Patient Protection and Affordable Care
Act, HHS Notice of Benefit and
Payment Parameters for 2024
Centers for Medicare &
Medicaid Services (CMS), Department
of Health and Human Services (HHS).
ACTION: Proposed rule.
AGENCY:
This proposed rule includes
proposed payment parameters and
provisions related to the HHS-operated
risk adjustment and risk adjustment
data validation programs, as well as
proposed 2024 user fee rates for issuers
offering qualified health plans (QHPs)
through Federally-facilitated Exchanges
(FFEs) and State-based Exchanges on
the Federal platform (SBE–FPs). This
proposed rule also proposes
requirements related to updating
standardized plan options and reducing
plan choice overload; re-enrollment
hierarchy; plan and plan variation
marketing name requirements for QHPs;
essential community providers (ECPs)
and network adequacy; failure to file
and reconcile; special enrollment
periods (SEPs); the annual household
income verification; the deadline for
QHP issuers to report enrollment and
payment inaccuracies; requirements
related to the State Exchange improper
payment measurement program; and
requirements for agents, brokers, and
web-brokers assisting FFE and SBE–FP
consumers.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, by no
later than 5 p.m. on January 30, 2023.
ADDRESSES: In commenting, please refer
to file code CMS–9899–P.
Comments, including mass comment
submissions, must be submitted in one
of the following three ways (please
choose only one of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to https://www.regulations.gov. Follow
the ‘‘Submit a comment’’ instructions.
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–9899–P, P.O. Box 8016, Baltimore,
MD 21244–8016.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
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SUMMARY:
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3. By express or overnight mail. You
may send written comments to the
following address ONLY:
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, Attention: CMS–9899–
P, Mail Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Jeff Wu, (301) 492–4305, Rogelyn
McLean, (301) 492–4229, Grace Bristol,
(410) 786–8437, for general information.
Jacquelyn Rudich, (301) 492–5211,
Bryan Kirk, (443) 745–8999, or Joshua
Paul, (301) 492–4347, for matters related
to HHS-operated risk adjustment.
Leanne Klock, (410) 786–1045, or
Joshua Paul, (301) 492–4347, for matters
related to risk adjustment data
validation (HHS–RADV).
Aaron Franz, (410) 786–8027, or
Leanne Klock, (410) 786–1045, for
matters related to FFE and SBE–FP user
fees.
Jacob LaGrand, (301) 492–4400, for
matters related to actuarial value (AV).
Brian Gubin, (401) 786–1659, for
matters related to agent, broker, and
web-broker guidelines.
Claire Curtin, (301) 492–4400 or
Marisa Beatley, (301) 492–4307, for
matters related to failure to file and
reconcile.
Grace Bridges, (301) 492–5228, or
Natalie Myren, (667) 290–8511, for
matters related to the verification
process related to eligibility for
insurance affordability programs.
Zarah Ghiasuddin, (301) 356–3598,
for matters related to re-enrollment in
the Exchanges.
Nicholas Eckart, (301) 492–4452, for
matters related to enrollment of
qualified individuals into QHPs and
termination of Exchange enrollment or
coverage.
Marisa Beatley, (301) 492–4307, or
Dena Nelson, (240) 401–3535, for
matters related to qualified individuals
losing MEC and qualifying for SEPs.
Samantha Nguyen Kella, (816) 426–
6339, for matters related to plan display
error SEPs.
Eva LaManna, (301) 492–5565, or
Ellen Kuhn, (410) 786–1695, for matters
related to the eligibility appeals
requirements.
Linus Bicker, (803) 931–6185, for
matters related to State Exchange
improper payment measurement.
Alexandra Gribbin, (667) 290–9977,
for matters related to stand-alone dental
plans.
Nikolas Berkobien, (667) 290–9903,
for matters related to standardized plan
options.
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Carolyn Kraemer, (301) 492–4197, for
matters related to plan and plan
variation marketing name requirements
for QHPs.
Emily Martin, (301) 492–4423, or
Deborah Hunter, (443) 386–3651, for
matters related to network adequacy and
ECPs.
Zarin Ahmed, (301) 492–4400, for
matters related to termination of
coverage or enrollment for qualified
individuals.
Nora Simmons, (410) 786–1981 for
matters related to reporting enrollment
and payment inaccuracies.
Jenny Chen, (301) 492–5156, or Shilpa
Gogna, (301) 492–4257, for matters
related to State Exchange Blueprint
approval timelines.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post comments received
before the close of the comment period
on the following website as soon as
possible after they have been received:
https://www.regulations.gov. Follow the
search instructions on that website to
view public comments. CMS will not
post on Regulations.gov public
comments that make threats to
individuals or institutions or suggest
that the individual will take actions to
harm the individual. CMS continues to
encourage individuals not to submit
duplicative comments. We will post
acceptable comments from multiple
unique commenters even if the content
is identical or nearly identical to other
comments.
Table of Contents
I. Executive Summary
II. Background
A. Legislative and Regulatory Overview
B. Summary of Major Provisions
III. Provisions of the Proposed Regulations
A. Part 153—Standards Related to
Reinsurance, Risk Corridors, and Risk
Adjustment
B. Part 155—Exchange Establishment
Standards and Other Related Standards
Under the Affordable Care Act
C. Part 156—Health Insurance Issuer
Standards Under the Affordable Care
Act, Including Standards Related to
Exchanges
IV. Collection of Information Requirements
A. Wage Estimates
B. ICRs Regarding Repeal of Risk
Adjustment State Flexibility To Request
a Reduction in Risk Adjustment State
Transfers (§ 153.320(d))
C. ICRs Regarding Risk Adjustment Issuer
Data Submission Requirements
(§§ 153.610, 153.700, and 153.710)
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D. ICRs Regarding Risk Adjustment Data
Validation Requirements When HHS
Operates Risk Adjustment (HHS–RADV)
(§ 153.630)
E. ICRs Regarding Navigator, NonNavigator Assistance Personnel, and
Certified Application Counselor Program
Standards (§§ 155.210 and 155.225)
F. ICRs Regarding Providing Correct
Information to the FFEs (§ 155.220(j))
G. ICRs Regarding Documenting Receipt of
Consumer Consent (§ 155.220(j))
H. ICRs Regarding Failure To File and
Reconcile Process (§ 155.305(f))
I. ICRs Regarding Income Inconsistencies
(§§ 155.315 and 155.320)
J. ICRs Regarding the Improper Payment
Pre-Testing and Assessment (IPPTA) for
State Exchanges (§§ 155.1500–155.1515)
K. ICRs Regarding QHP Rate and Benefit
Information (§ 156.210)
L. ICRs Regarding Establishing a
Timeliness Standard for Notices of
Payment Delinquency (§ 156.270)
M. Summary of Annual Burden Estimates
for Proposed Requirements
N. Submission of PRA-Related Comments
V. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Impact Estimates of the Payment Notice
Provisions and Accounting Table
D. Regulatory Alternatives Considered
E. Regulatory Flexibility Act (RFA)
F. Unfunded Mandates Reform Act
(UMRA)
G. Federalism
I. Executive Summary
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We are proposing changes to the
provisions and parameters implemented
through prior rulemaking to implement
the Patient Protection and Affordable
Care Act (ACA).1 These proposals are
published under the authority granted
to the Secretary by the ACA and the
Public Health Service (PHS) Act.2 In
this proposed rule, we propose changes
related to some of these ACA provisions
and parameters we previously
implemented and propose to implement
new provisions. Our goal with the
proposals is providing quality,
affordable coverage to consumers while
minimizing administrative burden and
ensuring program integrity. The changes
proposed in this rule are also intended
to help advance health equity and
mitigate health disparities.
1 The Patient Protection and Affordable Care Act
(Pub. L. 111–148) was enacted on March 23, 2010.
The Healthcare and Education Reconciliation Act of
2010 (Pub. L. 111–152), which amended and
revised several provisions of the Patient Protection
and Affordable Care Act, was enacted on March 30,
2010. In this rulemaking, the two statutes are
referred to collectively as the ‘‘Patient Protection
and Affordable Care Act,’’ ‘‘Affordable Care Act,’’
or ‘‘ACA.’’
2 See sections 1311, 1312, 1313, 1321, and 1343
of the ACA and section 2792 of the PHS Act.
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II. Background
A. Legislative and Regulatory Overview
Title I of the Health Insurance
Portability and Accountability Act of
1996 (HIPAA) added a new title XXVII
to the PHS Act to establish various
reforms to the group and individual
health insurance markets.
These provisions of the PHS Act were
later augmented by other laws,
including the ACA. Subtitles A and C of
title I of the ACA reorganized, amended,
and added to the provisions of part A of
title XXVII of the PHS Act relating to
group health plans and health insurance
issuers in the group and individual
markets. The term ‘‘group health plan’’
includes both insured and self-insured
group health plans.
Section 2702 of the PHS Act, as added
by the ACA, establishes requirements
for guaranteed availability of coverage
in the group and individual markets.
Section 1301(a)(1)(B) of the ACA
directs all issuers of QHPs to cover the
essential health benefit (EHB) package
described in section 1302(a) of the ACA,
including coverage of the services
described in section 1302(b) of the ACA,
adherence to the cost-sharing limits
described in section 1302(c) of the ACA,
and meeting the AV levels established
in section 1302(d) of the ACA. Section
2707(a) of the PHS Act, which is
effective for plan or policy years
beginning on or after January 1, 2014,
extends the requirement to cover the
EHB package to non-grandfathered
individual and small group health
insurance coverage, irrespective of
whether such coverage is offered
through an Exchange. In addition,
section 2707(b) of the PHS Act directs
non-grandfathered group health plans to
ensure that cost-sharing under the plan
does not exceed the limitations
described in section 1302(c)(1) of the
ACA.
Section 1302 of the ACA provides for
the establishment of an EHB package
that includes coverage of EHBs (as
defined by the Secretary of HHS), costsharing limits, and AV requirements.
The law directs that EHBs be equal in
scope to the benefits provided under a
typical employer plan, and that they
cover at least the following 10 general
categories: ambulatory patient services;
emergency services; hospitalization;
maternity and newborn care; mental
health and substance use disorder
services, including behavioral health
treatment; prescription drugs;
rehabilitative and habilitative services
and devices; laboratory services;
preventive and wellness services and
chronic disease management; and
pediatric services, including oral and
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vision care. Section 1302(d) of the ACA
describes the various levels of coverage
based on their AV. Consistent with
section 1302(d)(2)(A) of the ACA, AV is
calculated based on the provision of
EHB to a standard population. Section
1302(d)(3) of the ACA directs the
Secretary of HHS to develop guidelines
that allow for de minimis variation in
AV calculations. Sections 1302(b)(4)(A)
through (D) of the ACA establish that
the Secretary must define EHB in a
manner that: (1) Reflects appropriate
balance among the 10 categories; (2) is
not designed in such a way as to
discriminate based on age, disability, or
expected length of life; (3) takes into
account the health care needs of diverse
segments of the population; and (4) does
not allow denials of EHBs based on age,
life expectancy, disability, degree of
medical dependency, or quality of life.
Section 1311(c) of the ACA provides
the Secretary the authority to issue
regulations to establish criteria for the
certification of QHPs. Section
1311(c)(1)(B) of the ACA requires,
among the criteria for certification that
the Secretary must establish by
regulation that QHPs ensure a sufficient
choice of providers. Section 1311(e)(1)
of the ACA grants the Exchange the
authority to certify a health plan as a
QHP if the health plan meets the
Secretary’s requirements for
certification issued under section
1311(c) of the ACA, and the Exchange
determines that making the plan
available through the Exchange is in the
interests of qualified individuals and
qualified employers in the State. Section
1311(c)(6)(C) of the ACA directs the
Secretary of HHS to require an Exchange
to provide for special enrollment
periods and section 1311(c)(6)(D) of the
ACA directs the Secretary of HHS to
require an Exchange to provide for a
monthly enrollment period for Indians,
as defined by section 4 of the Indian
Health Care Improvement Act.
Section 1311(d)(3)(B) of the ACA
permits a State, at its option, to require
QHPs to cover benefits in addition to
EHB. This section also requires a State
to make payments, either to the
individual enrollee or to the issuer on
behalf of the enrollee, to defray the cost
of these additional State-required
benefits.
Section 1312(c) of the ACA generally
requires a health insurance issuer to
consider all enrollees in all health plans
(except grandfathered health plans)
offered by such issuer to be members of
a single risk pool for each of its
individual and small group markets.
States have the option to merge the
individual and small group market risk
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pools under section 1312(c)(3) of the
ACA.
Section 1312(e) of the ACA provides
the Secretary with the authority to
establish procedures under which a
State may allow agents or brokers to (1)
enroll qualified individuals and
qualified employers in QHPs offered
through Exchanges and (2) assist
individuals in applying for premium tax
credits (PTC) and cost-sharing
reductions (CSRs) for QHPs sold
through an Exchange.
Sections 1313 and 1321 of the ACA
provide the Secretary with the authority
to oversee the financial integrity of State
Exchanges, their compliance with HHS
standards, and the efficient and nondiscriminatory administration of State
Exchange activities. Section
1313(a)(5)(A) of the ACA provides the
Secretary with the authority to
implement any measure or procedure
that the Secretary determines is
appropriate to reduce fraud and abuse
in the administration of the Exchanges.
Section 1321 of the ACA provides for
State flexibility in the operation and
enforcement of Exchanges and related
requirements.
Section 1321(a) of the ACA provides
broad authority for the Secretary to
establish standards and regulations to
implement the statutory requirements
related to Exchanges, QHPs and other
components of title I of the ACA,
including such other requirements as
the Secretary determines appropriate.
When operating an FFE under section
1321(c)(1) of the ACA, HHS has the
authority under sections 1321(c)(1) and
1311(d)(5)(A) of the ACA to collect and
spend user fees. Office of Management
and Budget (OMB) Circular A–25
Revised establishes Federal policy
regarding user fees and specifies that a
user charge will be assessed against
each identifiable recipient for special
benefits derived from Federal activities
beyond those received by the general
public.
Section 1321(d) of the ACA provides
that nothing in title I of the ACA must
be construed to preempt any State law
that does not prevent the application of
title I of the ACA. Section 1311(k) of the
ACA specifies that Exchanges may not
establish rules that conflict with or
prevent the application of regulations
issued by the Secretary.
Section 1343 of the ACA establishes
a permanent risk adjustment program to
provide payments to health insurance
issuers that attract higher-than-average
risk populations, such as those with
chronic conditions, funded by payments
from those that attract lower-thanaverage risk populations, thereby
reducing incentives for issuers to avoid
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higher-risk enrollees. Section 1343(b) of
the ACA provides that the Secretary, in
consultation with States, shall establish
criteria and methods to be used in
carrying out the risk adjustment
activities under this section. Consistent
with section 1321(c) of the ACA, the
Secretary is responsible for operating
the risk adjustment program in any State
the fails to do so.3
Section 1401(a) of the ACA added
section 36B to the Internal Revenue
Code (the Code), which, among other
things, requires that a taxpayer reconcile
APTC for a year of coverage with the
amount of the PTC the taxpayer is
allowed for the year.
Section 1402 of the ACA provides for,
among other things, reductions in costsharing for EHB for qualified low- and
moderate-income enrollees in silver
level QHPs offered through the
individual market Exchanges. This
section also provides for reductions in
cost-sharing for Indians enrolled in
QHPs at any metal level.
Section 1411(c) of the ACA requires
the Secretary to submit certain
information provided by applicants
under section 1411(b) of the ACA to
other Federal officials for verification,
including income and family size
information to the Secretary of the
Treasury. Section 1411(d) of the ACA
provides that the Secretary must verify
the accuracy of information provided by
applicants under section 1411(b) of the
ACA, for which section 1411(c) of the
ACA does not prescribe a specific
verification procedure, in such manner
as the Secretary determines appropriate.
Section 1411(f) of the ACA requires
the Secretary, in consultation with the
Treasury and Homeland Security
Department Secretaries and the
Commissioner of Social Security, to
establish procedures for hearing and
making decisions governing appeals of
Exchange eligibility determinations.
Section 1411(f)(1)(B) of the ACA
requires the Secretary to establish
procedures to redetermine eligibility on
a periodic basis, in appropriate
circumstances, including eligibility to
purchase a QHP through the Exchange
and for advance payments of the
premium tax credit (APTC) and CSRs.
Section 1411(g) of the ACA allows the
use of applicant information only for the
limited purposes of, and to the extent
necessary to, ensure the efficient
operation of the Exchange, including by
verifying eligibility to enroll through the
3 In the 2014 through 2016 benefit years, HHS
operated the risk adjustment program in every State
and the District of Columbia, except Massachusetts.
Beginning with the 2017 benefit year, HHS has
operated the risk adjustment program in all 50
States and the District of Columbia.
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Exchange and for APTC and CSRs, and
limits the disclosure of such
information.
Section 5000A of the Code, as added
by section 1501(b) of the ACA, requires
individuals to have minimum essential
coverage (MEC) for each month, qualify
for an exemption, or make an individual
shared responsibility payment. Under
the Tax Cuts and Jobs Act, which was
enacted on December 22, 2017, the
individual shared responsibility
payment is reduced to $0, effective for
months beginning after December 31,
2018. Notwithstanding that reduction,
certain exemptions are still relevant to
determine whether individuals age 30
and above qualify to enroll in
catastrophic coverage under
§§ 155.305(h) and 156.155(a)(5).
1. Premium Stabilization Programs
The premium stabilization programs
refer to the risk adjustment, risk
corridors, and reinsurance programs
established by the ACA.4 For past
rulemaking, we refer readers to the
following rules:
• In the March 23, 2012 Federal
Register (77 FR 17219) (Premium
Stabilization Rule), we implemented the
premium stabilization programs.
• In the March 11, 2013 Federal
Register (78 FR 15409) (2014 Payment
Notice), we finalized the benefit and
payment parameters for the 2014 benefit
year to expand the provisions related to
the premium stabilization programs and
set forth payment parameters in those
programs.
• In the October 30, 2013 Federal
Register (78 FR 65046), we finalized the
modification to the HHS-operated
methodology related to community
rating States.
• In the November 6, 2013 Federal
Register (78 FR 66653), we published a
correcting amendment to the 2014
Payment Notice final rule to address
how an enrollee’s age for the risk score
calculation would be determined under
the HHS-operated risk adjustment
methodology.
• In the March 11, 2014 Federal
Register (79 FR 13743) (2015 Payment
Notice), we finalized the benefit and
payment parameters for the 2015 benefit
year to expand the provisions related to
the premium stabilization programs, set
forth certain oversight provisions, and
established payment parameters in
those programs.
• In the May 27, 2014 Federal
Register (79 FR 30240), we announced
4 See ACA section 1341 (transitional reinsurance
program), ACA section 1342 (risk corridors
program), and ACA section 1343 (risk adjustment
program).
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the 2015 fiscal year sequestration rate
for the risk adjustment program.
• In the February 27, 2015 Federal
Register (80 FR 10749) (2016 Payment
Notice), we finalized the benefit and
payment parameters for the 2016 benefit
year to expand the provisions related to
the premium stabilization programs, set
forth certain oversight provisions, and
established the payment parameters in
those programs.
• In the March 8, 2016 Federal
Register (81 FR 12203) (2017 Payment
Notice), we finalized the benefit and
payment parameters for the 2017 benefit
year to expand the provisions related to
the premium stabilization programs, set
forth certain oversight provisions, and
established the payment parameters in
those programs.
• In the December 22, 2016 Federal
Register (81 FR 94058) (2018 Payment
Notice), we finalized the benefit and
payment parameters for the 2018 benefit
year, added the high-cost risk pool
parameters to the HHS risk adjustment
methodology, incorporated prescription
drug factors in the adult models,
established enrollment duration factors
for the adult models, and finalized
policies related to the collection and use
of enrollee-level External Data Gathering
Environment (EDGE) data.
• In the April 17, 2018 Federal
Register (83 FR 16930) (2019 Payment
Notice), we finalized the benefit and
payment parameters for 2019 benefit
year, created the State flexibility
framework permitting States to request
a reduction in risk adjustment State
transfers calculated by HHS, and
adopted a new methodology for HHS–
RADV adjustments to transfers.
• In the May 11, 2018 Federal
Register (83 FR 21925), we published a
correction to the 2019 risk adjustment
coefficients in the 2019 Payment Notice
final rule.
• On July 27, 2018, consistent with 45
CFR 153.320(b)(1)(i), we updated the
2019 benefit year final risk adjustment
model coefficients to reflect an
additional recalibration related to an
update to the 2016 enrollee-level EDGE
dataset.5
• In the July 30, 2018 Federal
Register (83 FR 36456), we adopted the
2017 benefit year risk adjustment
methodology as established in the final
rules published in the March 23, 2012
(77 FR 17220 through 17252) and March
8, 2016 editions of the Federal Register
(81 FR 12204 through 12352). The final
rule set forth an additional explanation
of the rationale supporting the use of
Statewide average premium in the HHSoperated risk adjustment State payment
transfer formula for the 2017 benefit
year, including the reasons why the
program is operated in a budget-neutral
manner. The final rule also permitted
HHS to resume 2017 benefit year risk
adjustment payments and charges. HHS
also provided guidance as to the
operation of the HHS-operated risk
adjustment program for the 2017 benefit
year in light of the publication of the
final rule.
• In the December 10, 2018 Federal
Register (83 FR 63419), we adopted the
2018 benefit year HHS-operated risk
adjustment methodology as established
in the final rules published in the March
23, 2012 (77 FR 17219) and the
December 22, 2016 (81 FR 94058)
editions of the Federal Register. In the
rule, we set forth an additional
explanation of the rationale supporting
the use of Statewide average premium
in the HHS-operated risk adjustment
State payment transfer formula for the
2018 benefit year, including the reasons
why the program is operated in a
budget-neutral manner.
• In the April 25, 2019 Federal
Register (84 FR 17454) (2020 Payment
Notice), we finalized the benefit and
payment parameters for 2020 benefit
year, as well as the policies related to
making the enrollee-level EDGE data
available as a limited data set for
research purposes and expanding the
HHS uses of the enrollee-level EDGE
data, approval of the request from
Alabama to reduce risk adjustment
transfers by 50 percent in the small
group market for the 2020 benefit year,
and updates to HHS–RADV program
requirements.
• On May 12, 2020, consistent with
153.320(b)(1)(i), we published the 2021
Benefit Year Final HHS Risk
Adjustment Model Coefficients on the
CCIIO website.6
• In the May 14, 2020 Federal
Register (85 FR 29164) (2021 Payment
Notice), we finalized the benefit and
payment parameters for 2021 benefit
year, as well as adopted updates to the
risk adjustment models’ hierarchical
condition categories (HCCs) to transition
to ICD–10 codes, approved the request
from Alabama to reduce risk adjustment
transfers by 50 percent in small group
market for the 2021 benefit year, and
modified the outlier identification
process under the HHS–RADV program.
• In the December 1, 2020 Federal
Register (85 FR 76979) (Amendments to
the HHS-Operated Risk Adjustment
Data Validation Under the Patient
Protection and Affordable Care Act’s
HHS-Operated Risk Adjustment
Program (2020 HHS–RADV
Amendments Rule)), we adopted the
creation and application of Super HCCs
in the sorting step that assigns HCCs to
failure rate groups, finalized a sliding
scale adjustment in HHS–RADV error
rate calculation, and added a constraint
for negative error rate outliers with a
negative error rate. We also established
a transition from the prospective
application of HHS–RADV adjustments
to apply HHS–RADV results to risk
scores from the same benefit year as that
being audited.
• In the September 2, 2020 Federal
Register (85 FR 54820), we issued an
interim final rule containing certain
policy and regulatory revisions in
response to the COVID–19 public health
emergency (PHE), wherein we set forth
risk adjustment reporting requirements
for issuers offering temporary premium
credits in the 2020 benefit year.
• In the May 5, 2021 Federal Register
(86 FR 24140), we issued part 2 of the
2022 Payment Notice final rule (2022
Payment Notice) finalizing a subset of
proposals from the 2022 Payment Notice
proposed rule, including policy and
regulatory revisions related to the risk
adjustment program, finalization of the
benefit and payment parameters for the
2022 benefit year, and approval of the
request from Alabama to reduce risk
adjustment transfers by 50 percent in
the individual and small group markets
for the 2022 benefit year. In addition,
this final rule established a revised
schedule of collections for HHS–RADV
and updated the provisions regulating
second validation audit (SVA) and
initial validation audit (IVA) entities.
• On July 19, 2021, consistent with
§ 153.320(b)(1)(i), we released Updated
2022 Benefit Year Final HHS Risk
Adjustment Model Coefficients on the
CCIIO website, announcing some minor
revisions to the 2022 benefit year final
risk adjustment adult model
coefficients.7
• In the May 6, 2022 Federal Register
(87 FR 27208) (2023 Payment Notice),
we finalized revisions related to the risk
adjustment program, including the
benefit and payment parameters for the
2023 benefit year, risk adjustment
model recalibration, and collection and
extraction of enrollee-level EDGE data.
5 CMS. (2018, July 27). Updated 2019 Benefit
Year Final HHS Risk Adjustment Model
Coefficients. https://www.cms.gov/CCIIO/
Resources/Regulations-and-Guidance/Downloads/
2019-Updtd-Final-HHS-RA-Model-Coefficients.pdf.
6 CMS. (2020, May 12). Final 2021 Benefit Year
Final HHS Risk Adjustment Model Coefficients.
https://www.cms.gov/CCIIO/Resources/Regulationsand-Guidance/Downloads/Final-2021-Benefit-YearFinal-HHS-Risk-Adjustment-Model-Coefficients.pdf.
7 See CMS. (2021, July 19). 2022 Benefit Year
Final HHS Risk Adjustment Model Coefficients.
https://www.cms.gov/files/document/updated2022-benefit-year-final-hhs-risk-adjustment-modelcoefficients-clean-version-508.pdf.
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We also finalized the adoption of the
interacted HCC count specification for
the adult and child models, along with
modified enrollment duration factors for
the adult model models, beginning with
the 2023 benefit year.8 We also repealed
the ability for States, other than prior
participants, to request a reduction in
risk adjustment State transfers starting
with the 2024 benefit year. In addition,
we approved a 25 percent reduction to
2023 benefit year transfers in Alabama’s
individual market and a 10 percent
reduction to 2023 benefit year transfers
in Alabama’s small group market. We
also finalized further refinements to the
HHS–RADV error rate calculation
methodology beginning with the 2021
benefit year and beyond.
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2. Program Integrity
We have finalized program integrity
standards related to the Exchanges and
premium stabilization programs in two
rules: the ‘‘first Program Integrity Rule’’
published in the August 30, 2013
Federal Register (78 FR 54069), and the
‘‘second Program Integrity Rule’’
published in the October 30, 2013
Federal Register (78 FR 65045). We also
refer readers to the 2019 Patient
Protection and Affordable Care Act;
Exchange Program Integrity rule
published in the December 27, 2019
Federal Register (84 FR 71674).
3. Market Rules
For past rulemaking related to the
market rules, we refer readers to the
following rules:
• In the April 8, 1997 Federal
Register (62 FR 16894), HHS, with the
Department of Labor and Department of
the Treasury, published an interim final
rule relating to the HIPAA health
insurance reforms. In the February 27,
2013 Federal Register (78 FR 13406)
(2014 Market Rules), we published the
health insurance market rules.
• In the May 27, 2014 Federal
Register (79 FR 30240) (2015 Market
Standards Rule), we published the
Exchange and Insurance Market
Standards for 2015 and Beyond.
• In the December 22, 2016 Federal
Register (81 FR 94058), we provided
additional guidance on guaranteed
availability and guaranteed
renewability.
• In the April 18, 2017 Federal
Register (82 FR 18346) (Market
Stabilization final rule), we further
interpreted the guaranteed availability
provision.
8 On May 6, 2022, we also published the 2023
Benefit Year Final HHS Risk Adjustment Model
Coefficients at https://www.cms.gov/files/
document/2023-benefit-year-final-hhs-riskadjustment-model-coefficients.pdf.
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• In the April 17, 2018 Federal
Register (83 FR 17058) (2019 Payment
Notice final rule), we clarified that
certain exceptions to the special
enrollment periods only apply to
coverage offered outside of the
Exchange in the individual market.
• In the June 19, 2020 Federal
Register (85 FR 37160) (2020 section
1557 final rule), in which HHS
discussed section 1557 of the ACA, HHS
removed nondiscrimination protections
based on gender identity and sexual
orientation from the guaranteed
availability regulation.
• In part 2 of the 2022 Payment
Notice final rule in the May 5, 2021
Federal Register (86 FR 24140), we
made additional amendments to the
guaranteed availability regulation
regarding special enrollment periods
and finalized new special enrollment
periods related to untimely notice of
triggering events, cessation of employer
contributions or government subsidies
to COBRA continuation coverage, and
loss of APTC eligibility.
• In the September 27, 2021 Federal
Register (86 FR 53412) (part 3 of the
2022 Payment Notice final rule), which
was published by HHS and the
Department of the Treasury, we
finalized additional amendments to the
guaranteed availability regulations
regarding special enrollment periods.
• In the May 6, 2022 Federal Register
(87 FR 27208), we finalized a revision
to our interpretation of the guaranteed
availability requirement to prohibit
issuers from applying a premium
payment to an individual’s or
employer’s past debt owed for coverage
and refusing to effectuate enrollment in
new coverage.
4. Exchanges
We published a request for comment
relating to Exchanges in the August 3,
2010 Federal Register (75 FR 45584).
We issued initial guidance to States on
Exchanges on November 18, 2010. In the
March 27, 2012 Federal Register (77 FR
18309) (Exchange Establishment Rule),
we implemented the Affordable
Insurance Exchanges (‘‘Exchanges’’),
consistent with title I of the ACA, to
provide competitive marketplaces for
individuals and small employers to
directly compare available private
health insurance options on the basis of
price, quality, and other factors. This
included implementation of
components of the Exchanges and
standards for eligibility for Exchanges,
as well as network adequacy and ECP
certification standards.
In the 2014 Payment Notice and the
Amendments to the HHS Notice of
Benefit and Payment Parameters for
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2014 interim final rule, published in the
March 11, 2013 Federal Register (78 FR
15541), we set forth standards related to
Exchange user fees. We established an
adjustment to the FFE user fee in the
Coverage of Certain Preventive Services
under the Affordable Care Act final rule,
published in the July 2, 2013 Federal
Register (78 FR 39869) (Preventive
Services Rule).
In the 2016 Payment Notice, we also
set forth the ECP certification standard
at § 156.235, with revisions in the 2017
Payment Notice in the March 8, 2016
Federal Register (81 FR 12203) and the
2018 Payment Notice in the December
22, 2016 Federal Register (81 FR
94058).
In an interim final rule, published in
the May 11, 2016 Federal Register (81
FR 29146), we made amendments to the
parameters of certain special enrollment
periods (2016 Interim Final Rule). We
finalized these in the 2018 Payment
Notice final rule, published in the
December 22, 2016 Federal Register (81
FR 94058).
In the April 18, 2017 Market
Stabilization final rule Federal Register
(82 FR 18346), we amended standards
relating to special enrollment periods
and QHP certification. In the 2019
Payment Notice final rule, published in
the April 17, 2018 Federal Register (83
FR 16930), we modified parameters
around certain special enrollment
periods. In the April 25, 2019 Federal
Register (84 FR 17454), the final 2020
Payment Notice established a new
special enrollment period.
We published the final rule in the
May 14, 2020 Federal Register (85 FR
29164) (2021 Payment Notice).
In the January 19, 2021 Federal
Register (86 FR 6138), we finalized part
1 of the 2022 Payment Notice final rule
that finalized only a subset of the
proposals in the 2022 Payment Notice
proposed rule. In the May 5, 2021
Federal Register (86 FR 24140), we
published part 2 of the 2022 Payment
Notice final rule. In the September 27,
2021 Federal Register (86 FR 53412)
part 3 of the 2022 Payment Notice final
rule, in conjunction with the
Department of the Treasury, we
finalized amendments to certain
policies in part 1 of the 2022 Payment
Notice final rule.
In the May 6, 2022 Federal Register
(87 FR 27208), we finalized changes to
maintain the user fee rate for issuers
offering plans through the FFEs and
maintain the user fee rate for issuers
offering plans through the SBE–FPs. We
also finalized various policies to address
certain agent, broker, and web-broker
practices and conduct. We also finalized
updates to the requirement that all
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Exchanges conduct special enrollment
period verifications.
5. Essential Health Benefits
On December 16, 2011, HHS released
a bulletin that outlined an intended
regulatory approach for defining EHB,
including a benchmark-based
framework. We established
requirements relating to EHBs in the
Standards Related to Essential Health
Benefits, Actuarial Value, and
Accreditation Final Rule, which was
published in the February 25, 2013
Federal Register (78 FR 12833) (EHB
Rule). In the 2019 Payment Notice,
published in the April 17, 2018 Federal
Register (83 FR 16930), we added
§ 156.111 to provide States with
additional options from which to select
an EHB-benchmark plan for plan years
(PYs) 2020 and beyond.
B. Summary of Major Provisions
The regulations outlined in this
proposed rule would be codified in 45
CFR parts 153, 155, and 156.
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1. 45 CFR Part 153
In accordance with the OMB Report to
Congress on the Joint Committee
Reductions for Fiscal Year 2023, the
permanent risk adjustment program is
subject to the fiscal year 2023
sequestration.9 Therefore, the risk
adjustment program will be sequestered
at a rate of 5.7 percent for payments
made from fiscal year 2023 resources
(that is, funds collected during the 2023
fiscal year). The funds that are
sequestered in fiscal year 2023 from the
risk adjustment program will become
available for payment to issuers in fiscal
year 2024 without further Congressional
action. HHS did not receive any
requests from States to operate risk
adjustment for the 2024 benefit year;
therefore, HHS will operate risk
adjustment in every State and the
District of Columbia for the 2024 benefit
year.
We propose to recalibrate the 2024
benefit year risk adjustment models
using the 2018, 2019, and 2020 benefit
year enrollee-level EDGE data, with an
exception for the use of the 2020 benefit
year to recalibrate the adult model agesex coefficients. We propose to use only
2018 and 2019 benefit year enrolleelevel EDGE data in the recalibration of
the adult age-sex coefficients to account
for the observed anomalies in the 2020
benefit year enrollee-level EDGE data for
9 OMB. (2022, March 28). OMB Report to the
Congress on the BBEDCA 251A Sequestration for
Fiscal Year 2023. https://www.whitehouse.gov/
wpcontent/uploads/2022/03/BBEDCA_251A_
Sequestration_Report_FY2023.pdf.
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older adult enrollees, especially older
adult female enrollees.
For the 2024 benefit year, we propose
to continue applying a market pricing
adjustment to the plan liability
associated with Hepatitis C drugs in the
risk adjustment models (see, for
example, 84 FR 17463 through 17466).
In addition, we are soliciting comment
on whether to consider adding a new
payment HCC for gender dysphoria to
the risk adjustment models for future
years.
We propose under § 153.320(d) to
repeal the flexibility for States to request
reductions of risk adjustment State
transfers calculated by HHS under the
State payment transfer formula in all
State market risk pools, including prior
participant States that previously
requested a reduction, for the 2025
benefit year and beyond. We also seek
comment on the requests from Alabama
to reduce risk adjustment State transfers
in its individual and small group
markets by 50 percent for the 2024
benefit year.
Additionally, we propose, beginning
with the 2023 benefit year, to collect
and extract from issuers’ EDGE servers
through issuers’ EDGE Server
Enrollment Submission (ESES) files and
risk adjustment recalibration enrollment
files a new data element, a Qualified
Small Employer Health Reimbursement
Arrangement (QSEHRA) indicator. In
addition, we propose to extract the plan
identifier and rating area data elements
from issuers’ EDGE servers for benefit
years prior to the 2021 benefit year. We
also propose a risk adjustment user fee
for the 2024 benefit year of $0.21 per
member per month (PMPM).
Beginning with the 2022 benefit year
HHS–RADV, we propose to change the
materiality threshold established under
§ 153.630(g)(2) for random and targeted
sampling from $15 million in total
annual premiums Statewide to 30,000
total billable member months (BMM)
Statewide, calculated by combining an
issuer’s enrollment in a State’s
individual non-catastrophic,
catastrophic, small group, and merged
markets, as applicable, in the benefit
year being audited.
Beginning with the 2021 benefit year
HHS–RADV, we propose to no longer
exempt exiting issuers from adjustments
to risk scores and risk adjustment
transfers when they are negative error
rate outliers in the applicable benefit
year’s HHS–RADV. Thus, HHS would
apply HHS–RADV results to adjust the
plan liability risk scores and State
transfers of all issuers. We also solicit
comments on discontinuing the use of
the lifelong permanent condition list
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78211
and the use of Non-EDGE Claims in
HHS–RADV.
We propose to shorten the window to
confirm the findings of the second
validation audit (SVA) (if applicable),10
or file a discrepancy report to dispute
the SVA findings, to within 15 calendar
days of the notification by HHS,
beginning with the 2022 benefit year
HHS–RADV.
We propose to amend the EDGE
discrepancy materiality threshold set
forth at § 153.710(e) to align with and
mirror the policy finalized in preamble
in part 2 of the 2022 Payment Notice (86
FR 24194 through 24195). That is, the
materiality threshold at § 153.710(e)
would be revised to provide that the
amount in dispute must equal or exceed
$100,000 or one percent of the total
estimated transfer amount in the
applicable State market risk pool,
whichever is less.
2. 45 CFR Part 155
In part 155, we propose to revise the
Exchange Blueprint approval timelines
for States transitioning from either a
FFE to a SBE–FP or to a State-based
Exchange (SBE), or from a SBE–FP to a
SBE. We propose to remove the
deadlines for when HHS provides
approval, or conditional approval, on an
Exchange Blueprint, and instead
propose to require that such approval is
provided at some point prior to the date
on which the Exchange proposes to
begin open enrollment either as an SBE
or SBE–FP.
We propose a change to address the
standards applicable to Navigators and
other assisters and their consumer
service functions. At § 155.210(d)(8), we
propose to remove the prohibition on
Navigators from going door-to-door or
using other unsolicited means of direct
contact to help provide consumers with
enrollment assistance. The proposal
would also apply to non-Navigator
assistance personnel in FFEs and in
State Exchanges if funded with section
1311(a) Exchange Establishment grants,
through the reference to § 155.210(d) in
§ 155.215(a)(2)(i). In § 155.225(g)(5), we
propose to remove the prohibition on
certified application counselors from
going door-to-door or using unsolicited
means of direct contact to help
consumers fill out applications or enroll
in health coverage. We believe that
these proposals would allow Navigators
and other assisters in the FFEs to help
more consumers.
In part 155, we propose changes to
address certain agent, broker, and web10 Only those issuers who have insufficient
pairwise agreement between the Initial Validation
Audit (IVA) and SVA receive SVA findings. See 84
FR 17495; 86 FR 24201.
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broker practices. We propose to allow
HHS up to an additional 15 calendar
days to review evidence submitted by
agents, brokers, or web-brokers to rebut
allegations that led to suspension of
their Exchange agreement(s). We also
propose to allow HHS up to an
additional 30 calendar days to review
evidence submitted by agents, brokers,
or web-brokers that led to termination of
their Exchange agreement(s). The
proposal would provide HHS with up to
45 or 60 calendar days to review and
respond to such evidence or requests for
reconsideration submitted by agents,
brokers, or web-brokers stemming from
the suspension or termination of their
Exchange agreement(s), respectively.
Further, we propose to require agents,
brokers, or web-brokers assisting
consumers with completing eligibility
applications through the FFEs and SBE–
FPs or assisting an individual with
applying for APTC and CSRs for QHPs
to document that eligibility application
information has been reviewed by and
confirmed to be accurate by the
consumer or their authorized
representative prior to application
submission. We propose that the
documentation would be required to
include: the date the information was
reviewed; the name of the consumer or
their authorized representative; an
explanation of the attestations at the end
of the eligibility application; and the
name of the assisting agent, broker, or
web-broker. Furthermore, the
documentation would be required to be
maintained by the agent, broker, or webbroker for a minimum of 10 years and
produced upon request in response to
monitoring, audit, and enforcement
activities.
We also propose to require agents,
brokers, or web-brokers assisting
consumers with applying and enrolling
through FFEs and SBE–FPs, making
updates to an existing application, or
assisting an individual with applying
for APTC and CSRs for QHPs to
document the receipt of consent from
the consumer or their authorized
representative seeking assistance prior
to providing assistance, which would
include the consumer taking an action
that produces a record of consent and
the maintenance of that record by the
agent, broker, or web-broker. We also
propose standards for the content of the
documentation of consent, including
that it would be required to include a
description of the scope, purpose, and
duration of the consent provided by the
consumer or their authorized
representative, the date consent was
given, name of the consumer or their
authorized representative, and the name
of the agent, broker, web-broker, or
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agency being granted consent, as well as
the process by which the consumer or
their authorized representative may
rescind consent. Further, we propose
that agents, brokers, or web-brokers
would be required to maintain the
consent documentation for a minimum
of 10 years and produced upon request
in response to monitoring, audit, and
enforcement activities.
We propose to revise the failure to file
and reconcile (FTR) process at
§ 155.305(f)(4). First, we are proposing
codify CMS’s guidance that, for plan
year 2023 coverage, the Exchanges on
the Federal platform would not act on
data from the IRS for consumers who
have failed to file tax returns and
reconcile a previous year’s APTC with
the PTC allowed for the year. Second,
we propose to provide that, beginning
on January 1, 2024, Exchanges must
once again determine enrollees
ineligible for APTC when HHS notifies
the Exchange that a taxpayer (or a
taxpayer’s spouse, if married) has failed
to file a Federal income tax return and
reconcile their past APTC. However, we
propose that an Exchange may only
determine enrollees ineligible for APTC
after a taxpayer (or a taxpayer’s spouse,
if married) has failed to file a Federal
income tax return and reconcile their
past APTC for two consecutive years.
We also propose a technical correction
to § 155.305(f)(4) to clarify that HHS
receives data from the IRS for
consumers who have failed to file tax
returns and reconcile a previous year’s
APTC.
We propose to amend § 155.320 to
require Exchanges to accept an
applicant’s attestation of projected
annual household income when the
Exchange requests tax return data from
the IRS to verify attested projected
annual household income, but the IRS
confirms there is no such tax return data
available. Further, we propose to revise
§ 155.315 to add that an enrollee with
income inconsistencies must receive a
60-day extension in addition to the 90
days currently provided in
§ 155.315(f)(2)(ii). These changes would
ensure consumers are treated equitably,
ensure continuous coverage, and
strengthen the risk pool.
In the 2023 Payment Notice proposed
rule (87 FR 584, 652), we solicited
comments on revising the re-enrollment
hierarchy at § 155.335(j) at a later date,
and, after considering comments, we
now propose amending and adding
several provisions to this regulation to
provide Exchanges (including
Exchanges on the Federal platform and
SBEs) with the option to make certain
changes to the re-enrollment hierarchy
beginning for PY 2024. Specifically, we
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propose to allow Exchanges to direct reenrollment for CSR-eligible enrollees
from a bronze QHP to a silver QHP with
a lower or equivalent net premium
under the same product and QHP issuer,
regardless of whether the enrollee’s
current plan is available. We believe
directing re-enrollment into lower or
same cost, high generosity plans would
place enrollees in more affordable plans
with lower out-of-pocket costs, which
would lower health insurance costs for
those lower-income (CSR-eligible)
individuals. We also propose to allow
the Exchange to incorporate provider
network considerations into the
Exchange re-enrollment hierarchy.
We are proposing changes related to
SEPs at § 155.420. First, we propose two
technical corrections to
§ 155.420(a)(4)(ii)(A) and (B) to align the
text with § 155.420(a)(d)(6)(i) and (ii).
The proposed revisions would clarify
that only one person in a tax household
applying for coverage or financial
assistance through the Exchange must
qualify for an SEP in order for the entire
tax household to qualify for the SEP.
Second, we propose to change the
current coverage effective date
requirements at § 155.420(b)(2)(iv) to
permit Exchanges to offer earlier
coverage effective start dates for
consumers attesting to a future loss of
MEC. These changes would ensure
qualifying individuals are able to
seamlessly transition from other forms
of coverage to Exchange coverage as
quickly as possible with minimal
coverage gaps.
Third, to mitigate coverage gaps, we
are proposing to add § 155.420(c)(6) in
which Exchanges would have the option
to implement a new special rule for
consumers eligible for a SEP under
§ 155.420(d)(1) due to loss of Medicaid
or CHIP coverage which would give
consumers up to 90 days after their loss
of Medicaid or CHIP coverage to select
a plan for Exchange coverage. Fourth,
we are proposing to revise
§ 155.420(d)(12) to align the policy of
the Exchanges on the Federal platform
for granting SEPs to persons who are
adversely affected by a plan display
error with current plan display error
SEP operations. The proposal would
remove the burden from the consumer
to solely demonstrate to the Exchange
that a material plan display error has
influenced the consumer’s decision to
purchase a QHP through the Exchange.
We propose to add § 155.430(b)(3) to
explicitly prohibit issuers participating
in Exchanges on the Federal platform
from terminating coverage for a
dependent child prior to the end of the
plan year because the dependent child
has reached the applicable maximum
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age. This change would provide clarity
to issuers participating in Exchanges on
the Federal platform regarding their
obligation to maintain coverage for
dependent children, as well as to
enrollees regarding their ability to
maintain coverage for dependent
children. This proposal would be
optional for State Exchanges.
We propose to revise § 155.505(g) to
acknowledge the ability of the CMS
Administrator to review Exchange
eligibility appeals decisions prior to
judicial review. This change would
provide appellants and other parties
with accurate information about the
availability of administrative review by
the CMS Administrator if they are
dissatisfied with their eligibility appeal
decision.
HHS proposes to implement a new
Improper Payment Pre-Testing and
Assessment (IPPTA) program under
which State Exchanges will be required
to participate in pre-audit activities that
will prepare State Exchanges for
complying with audits required under
the Payment Integrity Information Act of
2019 (PIIA). Activities under the
proposed IPPTA program would
provide State Exchanges experience
helpful to preparing for future PIIA
audits and will help HHS design and
refine appropriate requirements for
future PIIA audits of State Exchanges.
3. 45 CFR Part 156
In part 156, we propose user fee rates
for the 2024 benefit year for all issuers
participating on the Exchanges using the
Federal platform. For the 2024 benefit
year, we propose an FFE user fee rate of
2.5 percent of total monthly premiums
and an SBE–FP user fee rate of 2.0
percent of total monthly premiums.
HHS will issue the 2024 benefit year
premium adjustment percentage index
and related payment parameters in
guidance, consistent with the policy
finalized in part 2 of the 2022 Payment
Notice.
For PY 2024 and subsequent PYs,
HHS would maintain a large degree of
continuity with the approach to
standardized plan options finalized in
the 2023 Payment Notice and proposes
only minor updates in this proposed
rule. In particular, in contrast to the
policy finalized in the 2023 Payment
Notice, we are proposing to no longer
include a standardized plan option for
the non-expanded bronze metal level,
mainly due to AV constraints. Thus, for
PY 2024 and subsequent PYs, we
propose standardized plan options for
the following metal levels: one bronze
plan that meets the requirement to have
an AV up to five percentage points
above the 60 percent standard, as
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specified in § 156.140(c) (known as an
expanded bronze plan); one standard
silver plan; one version of each of the
three income-based silver CSR plan
variations; one gold plan; and one
platinum plan. We would continue to
differentially display standardized plan
options, including those standardized
plan options required under State action
that took place on or before January 1,
2020, on HealthCare.gov, and would
continue enforcement of the
standardized plan options display
requirements for approved web-brokers
and QHP issuers using a direct
enrollment pathway to facilitate
enrollment through an FFE or SBE–FP—
including both the Classic Direct
Enrollment (DE) and Enhanced Direct
Enrollment (EDE) Pathways.
To mitigate the risk of choice
overload, HHS proposes to limit the
number of non-standardized plan
options that QHP issuers may offer
through the Exchanges using the Federal
platform to two non-standardized plan
options per product network type and
metal level (excluding catastrophic
plans), in any service area for PY 2024
and beyond. In addition, HHS proposes,
as an alternative to the proposal to limit
the number of non-standardized plan
options that an FFE or SBE–FP issuer
may offer on the Exchange, to apply a
meaningful difference standard which
would be more stringent than the
previous standard. HHS proposes to
strengthen the standard by modifying
the criteria and difference thresholds
used to determine whether plans are
‘‘meaningfully different’’ from one
another.
We propose to require stand-alone
dental plan (SADP) issuers to use age on
effective date as the sole method to
calculate an enrollee’s age for rating and
eligibility purposes beginning with
Exchange certification for PY 2024.
Requiring SADPs to use the age on
effective date methodology to calculate
an enrollee’s age as a condition of QHP
certification, and consequently
removing the less commonly used and
more complex age calculation methods,
would reduce consumer confusion and
promote operational efficiency. We
propose that this policy would apply to
Exchange-certified SADPs as a
requirement of certification, whether
they are sold on- or off-Exchange.
In addition, we propose to require
Exchange-certified SADP issuers to
submit guaranteed rates as a condition
of QHP certification beginning with
Exchange certification for PY 2024. This
change would help reduce the risk of
incorrect APTC calculation for the
pediatric dental EHB portion of
premiums, thereby reducing the risk of
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consumer harm. We propose that this
policy would apply to Exchangecertified SADPs as a requirement of
certification, whether they are sold onor off-Exchange.
We propose at § 156.225 to require
that plan and plan variation marketing
names for QHPs offered through
Exchanges on the Federal platform
include correct information, without
omission of material fact, and not
include content that is misleading. If
finalized as proposed, CMS would
review plan and plan variation
marketing names during the annual
QHP certification process in close
collaboration with State regulators.
We propose to revise the network
adequacy and ECP standards at
§§ 156.230 and 156.235 to provide that
all individual market QHPs and SADPs
and all Small Business Health Options
Program (SHOP) QHPs across all
Exchanges must use a network of
providers that complies with the
network adequacy and ECP standards in
those sections, and to remove the
exception that these sections do not
apply to plans that do not use a provider
network.
To expand access to care for lowincome and medically underserved
consumers, we propose to establish two
additional stand-alone ECP categories at
§ 156.235(a)(2)(ii)(B) for PY 2024 and
subsequent PYs, Mental Health
Facilities and Substance Use Disorder
Treatment Centers. HHS also proposes
to require QHP issuers to contract with
at least 35 percent of available FQHCs
and at least 35 percent of available
Family Planning Providers that qualify
as an ECP in the plan’s service area, in
addition to meeting the current overall
35 percent ECP threshold requirement
in the plan’s service area.
We propose to add a timeliness
standard to the requirement at
§ 156.270(f) for QHP issuers to send
enrollees a notice of payment
delinquency. Specifically, we propose
to require issuers to send notices of
payment delinquency promptly and
without undue delay. This proposed
revision will help ensure that enrollees
are aware they are at risk of losing
coverage and can avoid losing coverage
by paying any outstanding premium
amounts promptly.
We propose to revise the final
deadline in § 156.1210(c) for issuers to
report data inaccuracies identified in
payment and collections reports for
discovered underpayments of APTC to
the issuer and user fee overpayments to
HHS. Specifically, we propose to
remove the deadline set forth at
§ 156.1210(c)(2). Under this proposal,
we would retain only the deadline at
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§ 156.1210(c)(1), which requires that
issuers describe all inaccuracies
identified in a payment and collections
report within three years of the end of
the applicable plan year to which the
inaccuracy relates to be eligible to
receive an adjustment to correct an
underpayment of APTC to the issuer
and user fee overpayments to HHS.
Under this proposal, beginning with the
2020 plan year coverage, HHS would
not pay additional APTC payments or
reimburse user fee payments for FFE,
SBE–FP, and SBE issuers for data
inaccuracies reported after the 3-year
deadline. Further, we propose that HHS
would not accept or take action that
results in an outgoing payment on data
inaccuracies or payment errors (except
those identifying an overpayment by
HHS) for the 2015 through 2019 plan
year coverage that are reported after
December 31, 2023. This proposal
would better align with the existing IRS
limitation on filing corrected Federal tax
returns and reduce administrative and
operational burden on issuers, State
Exchanges, and HHS when handling
payment and enrollment dispute.
III. Provisions of the Proposed
Regulations
A. Part 153—Standards Related to
Reinsurance, Risk Corridors, and Risk
Adjustment
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In subparts A, D, G, and H of part 153,
we established standards for the
administration of the risk adjustment
program. The risk adjustment program
is a permanent program created by
section 1343 of the ACA that transfers
funds from lower-than-average risk, risk
adjustment covered plans to higherthan-average risk, risk adjustment
covered plans in the individual, small
group markets, or merged markets,
inside and outside the Exchanges. In
accordance with § 153.310(a), a State
that is approved or conditionally
approved by the Secretary to operate an
Exchange may establish a risk
adjustment program, or have HHS do so
on its behalf.11 HHS did not receive any
requests from States to operate risk
adjustment for the 2024 benefit year.
Therefore, HHS will operate risk
adjustment in every State and the
District of Columbia for the 2024 benefit
year.
1. Sequestration
In accordance with the OMB Report to
Congress on the Joint Committee
Reductions for Fiscal Year 2023, the
permanent risk adjustment program is
subject to the fiscal year 2023
11 See
also 42 U.S.C. 18041(c)(1).
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sequestration.12 The Federal
Government’s 2023 fiscal year began on
October 1, 2022. Therefore, the risk
adjustment program will be sequestered
at a rate of 5.7 percent for payments
made from fiscal year 2023 resources
(that is, funds collected during the 2023
fiscal year).
HHS, in coordination with OMB, has
determined that, under section 256(k)(6)
of the Balanced Budget and Emergency
Deficit Control Act of 1985,13 as
amended, and the underlying authority
for the risk adjustment program, the
funds that are sequestered in fiscal year
2023 from the risk adjustment program
will become available for payment to
issuers in fiscal year 2024 without
further Congressional action. If Congress
does not enact deficit reduction
provisions that replace the Joint
Committee reductions, the program
would be sequestered in future fiscal
years, and any sequestered funding
would become available in the fiscal
year following that in which it was
sequestered.
Additionally, we note that the
Infrastructure Investment and Jobs
Act 14 amended section 251A(6) of the
Balanced Budget and Emergency Deficit
Control Act of 1985 and extended
sequestration for the risk adjustment
program through fiscal year 2031 at a
rate of 5.7 percent per fiscal year.15 16
2. HHS Risk Adjustment (§ 153.320)
The HHS risk adjustment models
predict plan liability for an average
enrollee based on that person’s age, sex,
and diagnoses (also referred to as
hierarchical condition categories
(HCCs)), producing a risk score. The
HHS risk adjustment methodology
utilizes separate models for adults,
children, and infants to account for
clinical and cost differences in each age
group. In the adult and child models,
the relative risk assigned to an
individual’s age, sex, and diagnoses are
added together to produce an individual
risk score. Additionally, to calculate
enrollee risk scores in the adult models,
we added enrollment duration factors
12 OMB. (2022, March 28). OMB Report to the
Congress on the BBEDCA 251A Sequestration for
Fiscal Year 2023. https://www.whitehouse.gov/wpcontent/uploads/2022/03/BBEDCA_251A_
Sequestration_Report_FY2023.pdf.
13 Public Law 99–177 (1985).
14 Public Law 117–58, 135 Stat. 429 (2021).
15 2 U.S.C. 901a.
16 The Coronavirus Aid, Relief, and Economic
Security (CARES) Act previously amended section
251A(6) of the Balanced Budget and Emergency
Deficit Control Act of 1985 and extended
sequestration for the risk adjustment program
through fiscal year 2023 at a rate of 5.7 percent per
fiscal year. Section 4408 of the CARES Act, Public
Law 116–136, 134 Stat. 281 (2020).
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beginning with the 2017 benefit year,17
and prescription drug categories (RXCs)
beginning with the 2018 benefit year.18
Infant risk scores are determined by
inclusion in one of 25 mutually
exclusive groups, based on the infant’s
maturity and the severity of diagnoses.
If applicable, the risk score for adults,
children, or infants is multiplied by a
cost-sharing reduction (CSR) factor. The
enrollment-weighted average risk score
of all enrollees in a particular risk
adjustment covered plan (also referred
to as the plan liability risk score (PLRS))
within a geographic rating area is one of
the inputs into the risk adjustment State
payment transfer formula,19 which
determines the State transfer payment or
charge that an issuer will receive or be
required to pay for that plan for the
applicable State market risk pool. Thus,
the HHS risk adjustment models predict
average group costs to account for risk
across plans, in keeping with the
Actuarial Standards Board’s Actuarial
Standards of Practice for risk
classification.
a. Data for Risk Adjustment Model
Recalibration for 2024 Benefit Year
We propose to use 2018, 2019 and
2020 benefit year enrollee-level EDGE
data to recalibrate the 2024 benefit year
risk adjustment models with an
exception to exclude the 2020 benefit
year data from the blending of the agesex coefficients for the adult models.
In accordance with § 153.320, HHS
develops and publishes the risk
adjustment methodology applicable in
States where HHS operates the program,
including the draft factors to be
employed in the models for the benefit
year. This includes information related
to the annual recalibration of the risk
adjustment models using data from the
most recent available prior benefit years
trended forwarded to reflect the
17 For the 2017 through 2022 benefit years, there
is a set of 11 binary enrollment duration factors in
the adult models that decrease monotonically from
one to 11 months, reflecting the increased
annualized costs associated with fewer months of
enrollments. See, for example, 81 FR 94071 through
94074. These enrollment duration factors were
replaced beginning with the 2023 benefit year with
HCC-contingent enrollment duration factors for up
to 6 months in the adult models. See, for example,
87 FR 27228 through 27230.
18 For the 2018 benefit year, there were 12 RXCs,
but starting with the 2019 benefit year, the two
severity-only RXCs were removed from the adult
risk adjustment models. See, for example, 83 FR
16941.
19 The State payment transfer formula refers to the
part of the HHS risk adjustment methodology that
calculates payments and charges at the State market
risk pool level prior to the calculation of the highcost risk pool payment and charge terms that apply
beginning with the 2018 BY. See, for example, 81
FR 94080.
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applicable benefit year of risk
adjustment.
Our proposed approach for 2024
recalibration aligns with the approach
finalized in the 2022 Payment Notice
(86 FR 24151 through 24155) and
reiterated in the 2023 Payment Notice
(87 FR 27220 through 27221), that
involves use of the 3 most recent
consecutive years of enrollee-level
EDGE data that are available at the time
we incorporate the data in the draft
recalibrated coefficients published in
the proposed rule for the applicable
benefit year, and not updating the
coefficients between the proposed and
final rules if an additional year of
enrollee-level EDGE data becomes
available for incorporation. We continue
to believe this approach promotes
stability, better meets the goal of the risk
adjustment program, and allows issuers
more time to incorporate this
information when pricing their plans for
the upcoming benefit year than the
previous approach which allowed for
updates to the data used for
recalibration if more data became
available between the proposed and
final rules.
As such, we propose to determine
coefficients for the 2024 benefit year
based on a blend of separately solved
coefficients from the 2018, 2019, and
2020 benefit years of enrollee-level
EDGE data, with an exception to
exclude the 2020 benefit year data from
the blending of the age-sex coefficients
for the adult models. For all adult model
age-sex coefficients, we propose to use
only 2018 and 2019 benefit year
enrollee-level EDGE data in
recalibration to account for the observed
anomalous decreases in the
unconstrained coefficients 20 for the
2020 benefit year enrollee-level EDGE
data for older adult enrollees, especially
older adult female enrollees.
To further explain, due to the
potential impact of the COVID–19 PHE
20 HHS constrains the risk adjustment models in
multiple distinct ways during model recalibration.
These include (1) coefficient estimation groups, also
referred to as G-Groups in the Risk Adjustment Do
It Yourself (DIY) Software, (2) a priori stability
constraints, and (3) hierarchy violation constraints.
Of these, coefficient estimation groups and a priori
stability constraints are applied prior to model
fitting. The hierarchy violation constraints are
applied after the initial estimates of coefficients are
produced. We refer to the models and coefficients
prior to the application of hierarchy violation
constraints as the ‘‘unconstrained models’’ and
‘‘unconstrained coefficients,’’ respectively. For a
description of the various constraints we apply to
the risk adjustment models, see, CMS’ ‘‘Potential
Updates to HHS–HCCs for the HHS-operated Risk
Adjustment Program’’ (the ‘‘2019 White Paper’’)
(June 17, 2019). https://www.cms.gov/CCIIO/
Resources/Regulations-and-Guidance/Downloads/
Potential-Updates-to-HHS-HCCs-HHS-operatedRisk-Adjustment-Program.pdf.
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on costs and utilization of services in
2020, HHS considered whether the 2020
enrollee-level EDGE data was
appropriate for use in the annual model
recalibration for the HHS-operated risk
adjustment program applicable to the
individual and small group (including
merged) markets. As part of this
analysis, we considered comments
received in response to the 2023
Payment Notice proposed rule (87 FR
598), wherein we sought comments on
the future use of the 2020 enrollee-level
EDGE data due to the potential impact
of the COVID–19 PHE. The current
policy that involves using the 3 most
recent years of EDGE data available as
of the proposed rule for the annual risk
adjustment model recalibration
promotes stability and ensures the
models reflect the year-over-year
changes to the markets’ patterns of
utilization and spending without overrelying on any factors unique to one
particular year. This approach was put
in place based on feedback from issuers
and other interested parties and our
experience operating the program since
the 2014 benefit year. Furthermore, we
know from our experience that every
year of data can be unique and therefore
some level of deviation from year to
year is expected.21 These general
considerations all weigh in favor of
including the 2020 benefit year data in
the recalibration of the risk adjustment
models.
However, we recognize that if a
benefit year has significant changes that
differentially impact certain conditions
or populations relative to others, or is
sufficiently anomalous relative to
expected future patterns of care, we
should carefully consider what impact
that benefit year of data could have if it
is used in the annual model
recalibration for the HHS-operated risk
adjustment program. This includes
consideration of whether to exclude or
adjust that benefit year of data to
increase the models’ predictive validity
or otherwise limit the impact of
anomalous trends. The situation
presented by the COVID–19 PHE and its
potential impact on utilization and costs
in the 2020 benefit year is an example 22
of a situation that requires this
additional consideration. Thus, to help
21 Every year we expect some shifting in
treatment and cost patterns, for example as new
drugs come to market. Our goal in using multiple
years of data for model calibration is to capture
some degree of year-to-year cost shifting without
over-relying on any factors unique to one particular
year.
22 In the 10 years since the start of HHS model
calibration for benefit year 2014, the COVID–19
PHE has been the only such situation to date. Other
events and policy changes have not risen to the
same level of uniqueness or impact.
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further inform HHS’ decision on
whether it is appropriate to use 2020
enrollee-level EDGE data to calibrate the
risk adjustment coefficients, HHS
analyzed the 2020 benefit year enrolleelevel EDGE recalibration data to assess
how it compares to 2019 benefit year
enrollee-level EDGE recalibration data.
Our results found:
• The total sample size in the
recalibration data set was similar
between the 2019 and 2020 benefit
years, with the individual market at the
national level seeing an increase in
enrollment in the 2020 benefit year and
the small group market at the national
level seeing a slight decrease in
enrollment in the 2020 benefit year.
• In the 2020 EDGE enrollee-level
recalibration data set, even though
PMPM spending dropped substantially
between March and April 2020, the total
PMPM spending in the 2020 benefit
year was similar to the 2019 benefit
year, with the institutional and
professional services PMPM slightly
decreasing, preventive services PMPM
notably decreasing, and the drug PMPM
increasing. This represents a departure
from historical medical costs trends,
which have generally seen increases
year-over-year in all cost categories.
• Across all data submitted through
issuer’s EDGE servers for the 2020
benefit year, we observed a large
increase in telehealth paid claims
amounts when compared to all data
submitted through issuer’s EDGE servers
for the 2019 benefit year.
• The number of enrollees with one
or more HCC was relatively stable
between the 2019 and 2020 benefit year
enrollee-level EDGE recalibration data
sets in both the recalibration and full
data sets.23
• Individual HCC frequencies and
costs generally remained constant
between the 2019 and 2020 benefit year
enrollee-level EDGE recalibration data
sets, even for the HCCs related to the
severe manifestations of COVID–19. An
exception was a notable increase in
frequency for HCC 127 CardioRespiratory Failure and Shock,
Including Respiratory Distress
Syndromes, which was likely coded for
cases in which acute respiratory distress
syndrome (ARDS) was a manifestation
of COVID–19, but relative allowed
charges, and therefore, risk adjustment
model coefficients, for HCC 127
remained similar in 2020 compared to
2019.
23 CMS. (2021, June 30). Summary Report on
Permanent Risk Adjustment Transfers for the 2020
Benefit Year. https://www.cms.gov/CCIIO/
Programs-and-Initiatives/Premium-StabilizationPrograms/Downloads/RA-Report-BY2020.pdf.
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• RXC frequencies and costs were
generally stable between the 2019 and
2020 benefit year enrollee-level EDGE
recalibration data sets, with the
exception of RXC 10 Cystic Fibrosis
Agents, for which a new drug was
introduced that increased costs in the
2020 data compared to the 2019 data.
• The unconstrained coefficients for
the 2020 benefit year enrollee-level
EDGE recalibration data are similar to
the 2019 benefit year’s unconstrainted
coefficients with one exception. The
exception exists within the age-sex
coefficients in the adult models where
we found decreases among coefficients
for older enrollees, especially female
enrollees, which are likely due to
decreases in discretionary spending
among this age group in the 2020 benefit
year.
In short, on many key dimensions,
HHS found that the 2019 benefit year
and 2020 benefit year enrollee-level
EDGE data recalibration were largely
comparable.
With this analysis in mind, and based
on the comments received in response
to the 2023 Payment Notice proposed
rule,24 HHS considered six different
options for handling the 2020 benefit
year enrollee-level EDGE recalibration
data for purposes of the annual
recalibration of the HHS risk adjustment
models for the 2024 benefit year.25 Four
options involve the use of 2020 benefit
year enrollee-level EDGE recalibration
data in the risk adjustment model
recalibration, and two involve the
exclusion of the 2020 benefit year data.
These six options are as follows:
• Option 1: Maintain the current
policy, recalibrating the 2024 benefit
year risk adjustment models using 2018,
24 These comments offered a variety of
perspectives with some commenters stating that
2020 enrollee-level EDGE data should be used for
model recalibration as normal, a few commenters
suggesting that 2020 enrollee-level EDGE data
should be excluded entirely, one commenter
recommending that 2020 enrollee-level EDGE data
should be used with a different weight assigned,
and several commenters suggesting HHS release a
technical paper on the use of 2020 enrollee-level
EDGE data, with several suggesting HHS do a
comparison of coefficients with and without the
2020 enrollee-level EDGE data to review relative
changes in coefficients, and evaluate changes for
clinical reasonability and consistency with 2018
and 2019 enrollee-level EDGE data. See 87 FR
27220 through 27221.
25 The proposals related to the use of 2020 benefit
year enrollee-level EDGE data in this rule for model
recalibration purposes are focused on the 2024
benefit year models. Consistent with the approach
finalized in part 2 of the 2022 Payment Notice (86
FR 24151 through 24155), any changes to the use
of the 3 most recent consecutive years of enrolleelevel EDGE data, including proposals related to the
use of 2020 benefit year data, for recalibration of the
2025 and 2026 benefit year HHS risk adjustment
models would be addressed and proposed in a
future rulemaking.
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2019, and 2020 enrollee-level EDGE
data with no exceptions or
modifications.
• Option 2: Maintain the current
policy, recalibrating the 2024 benefit
year risk adjustment models using 2018,
2019, and 2020 benefit year enrolleelevel EDGE recalibration data, but assign
a lower weight to 2020 data. Assigning
a lower weight to the 2020 data would
dampen its impact on the models while
continuing to capture in part the
utilization and spending patterns
underlying the data.
• Option 3: Utilize 4 years of
enrollee-level EDGE data, instead of
three, to recalibrate the 2024 benefit
year risk adjustment models using 2017,
2018, 2019, and 2020 benefit year data.
This would serve the purpose of
dampening the effect of the 2020 data
on the models by incorporating an extra
year of data from a prior benefit year
that was not impacted by the COVID–19
PHE.
• Option 4: Maintain the current
policy, recalibrating the 2024 benefit
year risk adjustment models using 2018,
2019, and 2020 enrollee-level EDGE
recalibration data with an exception to
exclude the 2020 benefit year data from
the blending of the age-sex coefficients
for the adult models. Under this option,
we would determine coefficients for the
2024 benefit year based on a blend of
separately solved coefficients from the
2018, 2019, and 2020 benefit years of
enrollee-level EDGE recalibration data
and would exclude the 2020 benefit
year from the recalibration of the adult
models’ age-sex coefficients. Instead,
only 2018 and 2019 benefit year
enrollee-level EDGE recalibration data
would be used to recalibrate the adult
risk adjustment models age-sex
coefficients.26
• Option 5: Exclude the 2020 benefit
year enrollee-level EDGE recalibration
data and instead use the 2017, 2018, and
2019 benefit year enrollee-level EDGE
recalibration data, trended forward to
the 2024 benefit year, in recalibration of
the risk adjustment models for the 2024
benefit year, or use the final 2023 risk
adjustment model coefficients for the
2024 benefit year without trending the
data to account for inflation and
changes in costs and utilization between
the 2023 and 2024 benefit years.
26 This is a similar approach to that taken in part
2 of the 2022 Payment Notice, where we only used
2016 and 2017 enrollee-level EDGE data for the
limited purpose of developing the RXC 09
coefficients, RXC 09 HCC related coefficients, and
RXC 09 interaction term coefficients for the 2022
benefit year adult models, given concerns regarding
unrepresentative expenditures and off-label
prescribing of hydroxychloroquine during the
COVID–19 PHE relative to drugs that enrollees with
HCC 048, 056, or 057 may take. See 86 FR 24180.
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• Option 6: Exclude the 2020 benefit
year enrollee-level EDGE recalibration
data and instead use only 2 years of
enrollee-level EDGE data for
recalibration—that is, use only 2018 and
2019 benefit year data to recalibrate the
2024 risk adjustment models.
Although it is true our analyses found
that the 2019 and 2020 benefit year
enrollee-level EDGE recalibration data
were largely comparable, there were
observed anomalous decreases in the
unconstrained age-sex coefficients for
the 2020 benefit year enrollee-level
EDGE recalibration data for older adult
enrollees, especially older female
enrollees. We are therefore concerned
that not making any adjustments with
respect to the use of 2020 enrollee-level
EDGE recalibration data could have an
undue impact on the risk captured by
the age-sex factors in the adult models
such that these factors would less
accurately reflect the expected spending
patterns for the 2024 benefit year.
Option 1 would not address the
identified anomalous trend that is not
expected to continue in future benefit
years. Option 2 represents a middle
ground between those commenters who
expressed support for including 2020
benefit year data in model recalibration
and those who expressed support for
excluding the data, by capturing the
utilization and spending patterns
underlying the 2020 data while
dampening its effects in the models.
However, we are concerned this
approach would require identifying an
appropriate weighting methodology
other than the equal weighting that we
generally use to blend the factors from
the 3 data years, and we do not believe
there is a self-evident method of
weighting 2020 data differently for this
purpose. Furthermore, we are concerned
that dampening the effect of the 2020
benefit year data in all of the models for
all factors (as opposed to just the age-sex
factors in the adult models) defeats the
purpose of using the next available
benefit year of data to recalibrate the
models, because doing so would prevent
the models from reflecting changes in
utilization and cost of care that are
unrelated to the impact of the COVID–
19 PHE. There are similar concerns with
option 3 and the inclusion of an
additional prior benefit year (that is,
2017) to recalibrate the 2024 benefit
year models to dampen the impact of
the 2020 benefit year data. We do not
believe that such a broad dampening is
necessary since the anomalous
coefficient changes identified from the
2020 benefit year data were largely
limited to the adult model age-sex
coefficients and incorporating an
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additional prior benefit year of data
would dampen the impact of the 2020
benefit year data on other factors (for
example, HCCs, RXCs, and interaction
factors) and would prevent the models
from reflecting changes in utilization
and cost of care that are unrelated to the
impact of the COVID–19 PHE.
Furthermore, option 3 would use older
data to fit the 2024 benefit year risk
adjustment models than options 1 and
2 (that is, 2017 benefit year data), which
may impact the risk adjustment models
such that they reflect older cost and
utilization trends than would be
desirable.
We are similarly concerned about
options 5 and 6, which would involve
the complete exclusion of 2020 benefit
year data. With respect to option 5,
although using the same data years for
2024 benefit year model recalibration as
2023 benefit year model recalibration or
using the 2023 benefit year models for
the 2024 benefit year would likely yield
the same or similar coefficients 27 to
those published for the 2023 benefit
year, thereby providing stability that
issuers may find desirable, we are
concerned this approach would also
involve the use of older data as with
option 3, which may not be the data set
that would best reflect current
utilization and spending trends
including changes in drug prescribing
patterns. In addition, our analyses of the
2020 benefit year enrollee-level EDGE
recalibration data found that it was
largely comparable with the 2019
benefit year data set and we did not
identify other major anomalous trends
in our comparison of the unconstrained
HCC coefficients in the 2019 and 2020
enrollee-level EDGE recalibration data
sets, which raises the question about
whether there is a sufficient justification
to completely exclude 2020 benefit year
enrollee-level EDGE recalibration data
in the recalibration of the risk
adjustment models.
Option 6 has the same drawbacks as
option 5—that is, it would not use the
most recently available data for the
applicable benefit year model
recalibration, which may be the data set
that would best reflect current
utilization and spending trends, and
raises the same question about whether
there is a sufficient justification to
completely exclude the 2020 benefit
year data for model recalibration
purposes. This option has the additional
drawback of decreasing the stabilizing
27 We expect that the trending of the prior benefit
year data to reflect the anticipated costs and
spending trends in the applicable future benefit
year of risk adjustment that occurs as part of the
annual model recalibration effort would impact the
2024 risk adjustment model coefficients.
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effect of using multiple years of data, as
our goal in using multiple years of data
for model calibration is to capture some
degree of year-to-year cost shifting
without over-relying on any factors
unique to one particular year. When
using 2 years of data, each year is
weighted at 50 percent, but with 3 years
of data, each year is weighted at 33.3
percent. As such, a change in a
coefficient occurring in 1 year of the
data that is actually included in
recalibration would have a greater
impact on the risk adjustment model
coefficients if only using 2 years of data
rather than 3 years, due to the increase
in the reliance of the blended
coefficients on the remaining 2 years of
data.28
After consideration of these different
options, we propose option 4—that is,
maintain the current policy of using the
3 most recent consecutive benefit year
data sets that are available at the time
of publication of this proposed rule,
with a narrowly tailored exception to
exclude the 2020 benefit year data from
the blending of the age-sex coefficients
for the adult models. Under this
proposal, we would determine
coefficients for the 2024 benefit year
based on a blend of separately solved
coefficients from the 2018, 2019, and
2020 benefit years of enrollee-level
EDGE recalibration data except for the
coefficients for the adult age-sex factors,
which would instead be based on a
blend of separately solved coefficients
from only the 2018 and 2019 benefit
year enrollee-level EDGE recalibration.
This approach preserves the current
policy and use of the 3 most recent
consecutive years of data available for
the majority of the risk adjustment
model coefficients, allowing for the use
of the next available benefit year of data
to recalibrate models that appears to be
largely comparable with 2019 benefit
year data to reflect changes in cost and
utilization patterns for payment HCCs,
RXCs, enrollment duration factors and
interaction factors. At the same time, it
28 We do not have the same concerns with respect
to using only 2 years of data for recalibration of the
adult model age-sex coefficients because age-sex
coefficients tend to contribute less to enrollees’ risk
scores than HCC, RXC, and interaction coefficients,
so changes in a single age-sex coefficient in one of
the remaining years of data is less likely to have an
undue impact. Additionally, the age-sex coefficients
are derived from substantially larger samples of
enrollees and are therefore theoretically more stable
than HCC, RXC, enrollment duration and
interaction coefficients. Furthermore, the anomalies
seen in the age-sex coefficients fit with the 2020
EDGE data systematically impact a wide range of
enrollees. As such, we believe the risks of including
2020 EDGE data in blending of the age-sex
coefficients outweighs the risks of only using the
2018 and 2019 benefit years of EDGE data to blend
the age-sex coefficients for the 2024 benefit year
adult models.
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includes an exception narrowly tailored
to account for the observed anomalous
decreases in the unconstrainted
coefficients for the 2020 benefit year
enrollee-level EDGE recalibration data
for older adult enrollees, especially
female enrollees. Thus, we believe that
this offers a balanced approach to the
use of 2020 benefit year enrollee-level
EDGE recalibration data for model
recalibration purposes while also
addressing the limited observed
anomalous trends in the 2020 benefit
year enrollee-level EDGE recalibration
data.
Our proposal to adopt option 4 is
narrowly tailored to only address the
observed trend in the unconstrained
age-sex coefficients for the 2020 benefit
year enrollee-level EDGE recalibration
data for older adult enrollees, especially
older adult female enrollees, which are
likely due to decreases in discretionary
spending among this age group in the
2020 benefit year. We are not proposing
adjustments in response to the other
trends observed in the 2020 benefit year
enrollee-level EDGE recalibration data,
such as the decrease in PMPM spending
that occurred in March and April
2020,29 because we generally found that
the 2020 benefit year data and trends
were otherwise largely comparable with
the 2019 benefit year data and we did
not identify other anomalous trends in
our comparison of the unconstrained
HCC coefficients in the 2019 and 2020
benefit year enrollee-level EDGE
recalibration data sets. We further note
that the coefficients fit by the risk
adjustment models reflect the cost of
treatment rather than the number of
enrollees accessing treatment or when
during the year the treatment is
accessed. Therefore, even though there
was some observed decreased
utilization in the 2020 benefit year
enrollee-level EDGE recalibration data,
the lack of change in diagnosis-related
coefficients between the models fit with
prior years of enrollee-level EDGE
recalibration data and the models fit
with 2020 enrollee-level EDGE
recalibration data indicates that when
an enrollee was able to access care and
a diagnosis was recorded on EDGE for
the benefit year, the cost of treatment of
their diagnosed conditions was similar
to that experienced in previous benefit
years. As such, we believe the 2020
enrollee-level EDGE recalibration data is
sufficiently similar to prior years of
enrollee level EDGE recalibration data to
29 As noted above, even though PMPM spending
dropped substantially between March and April
2020, our analysis found that total PMPM spending
in the 2020 benefit year was generally similar to the
2019 benefit year.
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use in the fitting of coefficients for
HCCs, RXCs, their interactions, and
enrollment duration factors. We also do
not believe that any 2020 enrollee-level
EDGE recalibration data exceptions are
needed for the child or infant risk
adjustment models because among those
models we did not observe anomalous
trends between age-sex groups
analogous to those trends observed that
differentially impacted age-sex factors
in the adult models. The draft
coefficients listed in Tables 2 through 7
of this proposed rule reflect the use of
2018, 2019, and 2020 benefit year
enrollee-level EDGE recalibration data,
with an exception to exclude the 2020
benefit year data from the blending of
the age-sex coefficients for the adult
models, as well as the other risk
adjustment model updates proposed in
this proposed rule.30
To aid interested parties in their
consideration of the proposed option,
we are providing in Table 1 the values
for the adult age-sex coefficients under
option 1, which blends the age-sex
coefficients using all three benefit years
(2018, 2019 and 2020). Interested parties
may compare the coefficients in Table 1
(reflecting option 1) to those in Table 2
(reflecting proposed option 4) to
understand the impact of the 2020
enrollee-level EDGE data on the blended
age-sex coefficients for the 2024 benefit
year.
TABLE 1: Adult Risk Adjustment Age-Sex Coefficients31 for the 2024 Benefit Year Using
2018, 2019 and 2020 Benefit Years of Enrollee-Level EDGE Data (Option 1)
Platinum
0.189
0.192
0.223
0.244
0.280
0.309
0.391
0.441
0.493
0.286
0.307
0.373
0.440
0.497
0.501
0.544
0.512
0.511
Gold
0.121
0.120
0.145
0.159
0.189
0.211
0.284
0.325
0.366
0.186
0.199
0.257
0.317
0.368
0.368
0.407
0.376
0.372
Sihcr
0.080
0.078
0.097
0.105
0.129
0.147
0.213
0.246
0.279
0.121
0.129
0.180
0.234
0.279
0.276
0.309
0.278
0.271
2020 enrollee-level EDGE recalibration
data, with an exception to exclude the
2020 benefit year data from the blending
of the age-sex coefficients for the adult
models. We also seek comment on all of
the alternative approaches outlined
above.
Bronze
0.052
0.049
0.062
0.065
0.083
0.097
0.157
0.185
0.211
0.075
0.078
0.122
0.172
0.210
0.201
0.230
0.199
0.190
Catastrophic
0.051
0.047
0.061
0.064
0.082
0.095
0.155
0.183
0.209
0.073
0.076
0.120
0.170
0.207
0.198
0.227
0.196
0.188
In addition to considering alternative
options to recalibration in this section,
we note that the coefficients could
change if we identify an error after
publication of this rule or if some or all
of the proposed model changes are not
finalized or are modified in response to
comments. In addition, consistent with
§ 153.320(b)(1)(i), if we are unable to
finalize the final coefficients in time for
publication in the final rule, we would
publish the final coefficients for the
2024 benefit year in guidance soon after
the publication of the final rule.
We seek comment on the proposal to
determine 2024 benefit year coefficients
based on a blend of separately solved
coefficients from the 2018, 2019, and
b. Pricing Adjustment for the Hepatitis
C Drugs
For the 2024 benefit year, we propose
to continue applying a market pricing
adjustment to the plan liability
associated with Hepatitis C drugs in the
risk adjustment models.32 Since the
2020 benefit year risk adjustment
models, we have been making a market
pricing adjustment to the plan liability
associated with Hepatitis C drugs to
reflect future market pricing prior to
solving for coefficients for the models.33
The purpose of this market pricing
adjustment is to account for significant
pricing changes associated with the
introduction of new and generic
Hepatitis C drugs between the data years
used for recalibrating the models and
the applicable recalibration benefit
year.34
We have committed to reassessing
this pricing adjustment with additional
years of enrollee-level EDGE data, as
data become available. As part of the
2024 benefit year model recalibration,
we reassessed the cost trend for
Hepatitis C drugs using available
30 Similar to recalibration of the 2023 risk
adjustment adult models and consistent with the
policies adopted in the 2023 Payment Notice, the
draft factors in this rule also reflect the removal of
the mapping of hydroxychloroquine sulfate to RXC
09 (Immune Suppressants and Immunomodulators)
and the related RXC 09 interactions (RXC 09 ×
HCC056 or 057 and 048 or 041; RXC 09 × HCC056;
RXC 09 × HCC 057; RXC 09 × HCC048, 041) from
the 2018 and 2019 benefit year enrollee-level EDGE
data sets for purposes of recalibrating the 2024
benefit year adult models. See 87 FR 27232 through
27235. Additionally, the draft factors for the adult
models reflect the use of the final, fourth quarter
(Q4) RXC mapping document that was applicable
for each benefit year of data included in the current
year’s model recalibration (except under
extenuating circumstances that can result in
targeted changes to RXC mappings). See 87 FR at
27231 through 27232.
31 All coefficients in Table 2 except for the adult
age-sex factors are blended using all three benefit
years of enrollee-level EDGE data (2018, 2019, and
2020). Option 1 and proposed option 4 only differ
in the values of the adult age-sex coefficients. As
such, in Table 1, we only provide the adult age-sex
coefficients for option 1.
32 See for example, 84 FR 17463 through 17466.
33 The Hepatitis C drugs market pricing
adjustment to plan liability is applied for all
enrollees taking Hepatitis C drugs in the data used
for recalibration.
34 Silseth, S., & Shaw, H. (2021). Analysis of
prescription drugs for the treatment of hepatitis C
in the United States. Milliman White Paper. https://
www.milliman.com/-/media/milliman/pdfs/2021articles/6-11-21-analysis-prescription-drugstreatment-hepatitis-c-us.ashx.
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Factor
Age 21-24, Male
Age 25-29, Male
Age 30-34, Male
Age 35-39, Male
Age 40-44, Male
Age 45-49, Male
Age 50-54, Male
Age 55-59, Male
Age 60-64, Male
Age 21-24, Female
Age 25-29, Female
Age 30-34, Female
Age 35-39, Female
Age 40-44, Female
Age 45-49, Female
Age 50-54, Female
Age 55-59, Female
Age 60-64, Female
lotter on DSK11XQN23PROD with PROPOSALS2
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
associated with Hepatitis C drugs for the
2024 benefit year.
enrollee-level EDGE data (including
2020 benefit year data) to consider
whether the adjustment was still needed
and if it is still needed, whether it
should be modified. We found that the
data for the Hepatitis C RXC that would
be used for the 2024 benefit year
recalibration 35 still do not account for
the significant pricing changes due to
the introduction of new Hepatitis C
drugs, and therefore, do not precisely
reflect the average cost of Hepatitis C
treatments applicable to the benefit year
in question.
Specifically, generic Hepatitis C drugs
did not become available on the market
until 2019, and we propose to use 2018
benefit year EDGE data in the 2024
benefit year model recalibration.36 Due
to the lag between the data years used
to recalibrate the risk adjustment
models and the applicable benefit year
of risk adjustment, as well as the
expectation that the costs for Hepatitis
C drugs will not increase at the same
rate as other drug costs between the data
year and the applicable benefit year of
risk adjustment, we do not believe that
the trends used to reflect growth in the
cost of prescription drugs due to
inflation and related factors for
recalibrating the models will
appropriately reflect the average cost of
Hepatitis C treatments expected in the
2024 benefit year. Therefore, we
continue to believe a market pricing
adjustment specific to Hepatitis C drugs
in our models for the 2024 benefit year
is necessary to account for the
significant pricing changes associated
with the introduction of new and
generic Hepatitis C drugs between the
data years used for recalibrating the
models and the applicable recalibration
benefit year. We intend to continue to
assess this pricing adjustment in future
benefit year recalibrations using
additional years of enrollee-level EDGE
data.
We seek comment on our proposal to
continue applying a market pricing
adjustment to the plan liability
HHS requests information on adding
a payment HCC for gender dysphoria to
the HHS-operated risk adjustment
models for future benefit years. As part
of the ongoing assessment of
improvements to the HHS-operated risk
adjustment program, HHS considers
whether adjustments are needed to the
payment HCCs in the risk adjustment
models.37 In light of Executive Order
(E.O.) 13985 ‘‘Advancing Racial Equity
and Support for Underserved
Communities Through the Federal
Government,’’ 38 E.O. 13988 ‘‘Preventing
and Combating Discrimination on the
Basis of Gender Identity or Sexual
Orientation,’’ 39 and a comment received
in response to the 2023 Payment Notice
proposed rule, HHS is soliciting
comment on whether to consider adding
a new payment HCC for gender
dysphoria to the risk adjustment models
for future benefit years.
In considering the inclusion of a new
payment HCC for gender dysphoria, we
evaluated this potential payment HCC
against the 10 Principles of HHSOperated Risk Adjustment and
determined that a new payment HCC for
gender dysphoria would satisfy some
but not all of these principles (77 FR
73128).
To further consider whether we
should add a payment HCC for gender
dysphoria to the HHS-operated risk
adjustment models, we request feedback
on the following questions:
• The implications of using the
changing clinical concepts and labels
from the ICD–10–CM diagnosis of
‘‘gender identity disorder’’ compared to
the draft ICD–11–CM diagnosis of
‘‘gender incongruence’’ 40 for the
naming and inclusion of this diagnosis
or payment HCC in the HHS risk
adjustment models.
35 As detailed above, we propose to use 2018,
2019 and 2020 enrollee-level EDGE data for
recalibration of the 2024 benefit year HHS risk
adjustment models, with an exception to exclude
2020 data from recalibration of the age-sex factors
for the adult models. However, for purposes of
assessing whether this pricing adjustment was still
needed and, if so, if it should be modified, we also
assessed 2017 enrollee-level EDGE data in the event
one of the alternative proposals regarding use of
2020 enrollee-level EDGE data is adopted.
36 See Miligan, J, (2018). A perspective from our
CEO: Gilead Subsidiary to Launch Authorized
Generics to Treat HCV. Gilead. https://
www.gilead.com/news-and-press/company-
statements/authorized-generics-for-hcv. See also
AbbVie. (2017). AbbVie Receives U.S. FDA
Approval of MAVYRETTM (glecaprevir/
pibrentasvir) for the Treatment of Chronic Hepatitis
C in All Major Genotypes (GT 1–6) in as Short as
8 Weeks. Abbvie. https://news.abbvie.com/news/
abbvie-receives-us-fda-approval-mavyretglecaprevirpibrentasvir-for-treatment-chronichepatitis-c-in-all-major-genotypes-gt-1-6-in-asshort-as-8-weeks.htm.
37 See, for example, the 2019 White Paper. https://
www.cms.gov/CCIIO/Resources/Regulations-andGuidance/Downloads/Potential-Updates-to-HHSHCCs-HHS-operated-Risk-Adjustment-Program.pdf.
38 86 FR 7009.
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c. Request for Information: Payment
HCC for Gender Dysphoria
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78219
• Whether a gender dysphoria HCC
should be a separate and standalone
payment HCC, or if gender dysphoria
could be combined with any other
diagnoses to form a broader payment
HCC.41
• Any other factors HHS should
consider when determining whether to
add a gender dysphoria HCC to the HHS
risk adjustment models as a payment
HCC.
While we are not proposing to add a
payment HCC for gender dysphoria to
the HHS risk adjustment models at this
time, we solicit comments to inform our
continued consideration of potential
risk adjustment model updates for
future benefit years.
d. List of Factors To Be Employed in the
Risk Adjustment Models (§ 153.320)
The proposed 2024 benefit year risk
adjustment model factors resulting from
the equally weighted (averaged) blended
factors from separately solved models
using the 2018, 2019, and 2020 enrolleelevel EDGE data, with an exception to
exclude the 2020 data from recalibration
of the age-sex factors for the adult
models, are shown in Tables 1 through
6. The adult, child, and infant models
have been truncated to account for the
high-cost risk pool payment parameters
by removing 60 percent of costs above
the $1 million threshold.42 Table 2
contains factors for each adult model,
including the age-sex, HCCs, RXCs,
RXC–HCC interactions, interacted HCC
counts, and enrollment duration
coefficients. Table 3 contains the factors
for each child model, including the agesex, HCCs, and interacted HCC counts
coefficients. Table 4 lists the HHS–HCCs
selected for the interacted HCC counts
factors that apply to the adult and child
models. Table 5 contains the factors for
each infant model. Tables 6 and 7
contain the HCCs included in the infant
models’ maturity and severity
categories, respectively.
BILLING CODE 4120–01–P
39 86
FR 7023.
Health Organization. (n.d.). Gender
incongruence and transgender health in the ICD.
https://www.who.int/standards/classifications/
frequently-asked-questions/gender-incongruenceand-transgender-health-in-the-icd.
41 Gender dysphoria codes are currently mapped
to HCC 93 Other Psychiatric Disorders, a nonpayment HCC that is not currently included in the
HHS-operated risk adjustment models.
42 We are not proposing changes to the high-cost
risk pool parameters for the 2024 benefit year.
Therefore, we would maintain the $1 million
threshold and 60 percent coinsurance rate.
40 World
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Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
TABLE 2: Proposed Adult Risk Adjustment Model Factors for the 2024 Benefit Year
HCC or
Factor
Platinum
Gold
Sihcr
Bronze
Catastrophic
0.187
0.190
0.222
0.245
0.282
0.311
0.398
0.450
0.509
0.286
0.308
0.380
0.453
0.510
0.515
0.561
0.532
0.542
0.120
0.121
0.146
0.161
0.191
0.214
0.292
0.333
0.382
0.188
0.203
0.264
0.329
0.381
0.382
0.424
0.395
0.400
0.079
0.079
0.097
0.106
0.130
0.147
0.218
0.252
0.293
0.124
0.133
0.187
0.246
0.291
0.287
0.324
0.294
0.296
0.050
0.049
0.062
0.065
0.083
0.096
0.161
0.188
0.221
0.077
0.082
0.128
0.181
0.219
0.209
0.241
0.212
0.212
0.049
0.047
0.060
0.063
0.081
0.094
0.159
0.186
0.219
0.075
0.080
0.125
0.179
0.216
0.206
0.238
0.209
0.209
0.610
9.632
0.495
9.382
0.426
9.265
0.382
9.203
0.380
9.202
8.965
8.831
8.747
8.678
8.675
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
HCC00l
HCC002
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e 21-24
e 25-29
e 30-34
e 35-39
e 40-44
e 45-49
e 50-54
e 55-59
e 60-64
e 21-24
e 25-29
e 30-34
e 35-39
e 40-44
e 45-49
e 50-54
e 55-59
e 60-64
Male
Male
Male
Male
Male
Male
Male
Male
Male
Female
Female
Female
Female
Female
Female
Female
Female
Female
HIV/AIDS
Septicemia, Sepsis, Systemic
Inflammatory Response
S ndrome/Shock
Central Nervous System Infections,
Exce t Viral Menin ·tis
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RXC No.
78221
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
Metastatic Cancer
Lung, Brain, and Other Severe
Cancers, Including Pediatric Acute
L m hoid Leukemia
Non-Hodgkin Lymphomas and Other
Cancers and Tumors
Colorectal, Breast (Age< 50), Kidney,
and Other Cancers
Breast (Age 50+) and Prostate Cancer,
Benign/Uncertain Brain Tumors, and
Other Cancers and Tumors
Thyroid Cancer, Melanoma,
Neurofibromatosis, and Other Cancers
and Tumors
HCC009
HCC0lO
HCC0ll
HCC012
HCC013
HCC018
24.525
13.190
24.081
12.873
23.916
12.733
23.899
12.672
23.899
12.670
6.042
5.834
5.716
5.631
5.628
3.876
3.663
3.536
3.439
3.436
2.622
2.463
2.358
2.273
2.271
1.054
0.935
0.827
0.717
0.714
7.002
6.831
6.765
6.687
6.672
0.295
0.295
0.295
0.380
0.237
0.237
0.237
0.339
0.189
0.189
0.189
0.303
0.146
0.146
0.146
0.234
0.144
0.144
0.144
0.231
11.879
27.187
27.187
6.954
11.731
26.955
26.955
6.830
11.645
26.857
26.857
6.758
11.587
26.834
26.834
6.702
11.585
26.834
26.834
6.700
1.446
1.351
1.278
1.204
1.201
6.481
7.706
6.531
7.500
6.579
7.402
6.647
7.365
6.649
7.367
2.506
2.315
2.223
2.167
2.166
0.706
0.528
0.528
0.607
0.451
0.451
0.537
0.389
0.389
0.466
0.324
0.324
0.463
0.322
0.322
11.558
11.539
11.535
11.546
11.546
11.889
11.691
11.610
11.582
11.581
5.323
2.842
2.842
0.469
9.611
5.113
5.085
2.639
2.624
0.365
9.426
4.911
4.970
2.547
2.517
0.266
9.345
4.827
4.891
2.497
2.427
0.146
9.332
4.805
4.890
2.497
2.425
0.142
9.332
4.804
Diabetes without Com lication
Type 1 Diabetes Mellitus, add-on to
Diabetes HCCs 19-21
Protein-Calorie Malnutrition
HCC022
HCC023
HCC026
HCC027
HCC029
HCC030
HCC034
HCC035 1
44
HCC035 2
HCC036
HCC037 1
HCC037 2
HCC041
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HCC042
HCC045
HCC046
HCC047
HCC048
HCC054
HCC055
VerDate Sep<11>2014
Li idoses and Gl co enosis
Amyloidosis, Porphyria, and Other
Metabolic Disorders
Adrenal, Pituitary, and Other
Si
1cant Endocrine Disorders
Liver Trans lant Status/Com lications
Acute Liver Failure/Disease,
Includin Neonatal He atitis
Chronic Liver Failure/End-Stage
Liver Disorders
Cirrhosis of Liver
Chronic Viral He atitis C
Chronic Hepatitis, Except Chronic
Viral He atitis C
Intestine Transplant
Status/Com lications
Peritonitis/Gastrointestinal
Perforation/Necrotizin Enterocolitis
Intestinal Obstruction
Chronic Pancreatitis
Acute Pancreatitis
Inflammato Bowel Disease
Necrotizin Fasciitis
Bone/Joint/Muscle
Infections/Necrosis
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EP21DE22.002
43
HCC019
HCC020
HCC021
78222
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
HCC056
HCC057
HCC061
HCC062
HCC063
HCC066
HCC067
HCC068
HCC069
HCC070
HCC071
HCC073
HCC074
HCC075
HCC081
HCC082
HCC083
HCC084
HCC087 1
HCC087 2
HCC088
HCC090
HCC094
HCC096
HCC097
HCC102
HCC103
lotter on DSK11XQN23PROD with PROPOSALS2
HCC106
HCC107
HCC108
HCC109
HCCll0
VerDate Sep<11>2014
Factor
Rheumatoid Arthritis and Specified
Autoimmune Disorders
Systemic Lupus Erythematosus and
Other Autoimmune Disorders
Osteogenesis Imperfecta and Other
Osteodystrophies
Congenital/Developmental Skeletal
and Connective Tissue Disorders
Cleft Lio/Cleft Palaie
Hemophilia
Myelodysplastic Syndromes and
Myelofibrosis
Aplastic Anemia
Acquired Hemolytic Anemia,
Including Hemolytic Disease of
Newborn
Sickle Cell Anemia
HCC or
RXC No.
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
78223
HCClll
HCC112
HCC113
HCCl 14
HCCl15
HCC117
HCC118
HCC119
HCC120
HCC121
HCC122
HCC123
HCC125
HCC126
HCC127
HCC128
HCC129
HCC130
HCC131
HCC132
HCC135
HCC137
HCC138
HCC139
HCC142
HCC145
HCC146
lotter on DSK11XQN23PROD with PROPOSALS2
HCC149
HCC150
HCC151
HCC153
HCC154
VerDate Sep<11>2014
nterior Hom Cell Disease
· le ic Cereb
Cerebral Pals , Exce t uadri le ic
Spina Bifida and Other
Brain/Spinal/Nervous System
Con enital Anomalies
Myasthenia Gravis/Myoneural
Disorders and Guillain-Barre
Syndrome/Inflammatory and Toxic
Neuro ath
Muscular Dystro hy
Multi le Sclerosis
Parkinson's, Huntington's, and
Spinocerebellar Disease, and Other
Neurode enerative DisordeIS
Seizure Disorders and Convulsions
H droce halus
Coma, Brain Compression/Anoxic
Dama
Narco
exv
Respirator Dependence/Tracheostomy
Status
Res irato Arrest
Cardio-Respiratory Failure and Shock,
Including Respiratory Distress
S ·ndromes
Heart Assistive Device/Artificial
Heart
Heart Trans lant Status/Com lications
Heart Failure
Acute M ·ocardial Infarction
Unstable Angina and Other Acute
Ischcmic Heart Disease
Heart Infection/Inflammation, Except
Rheumatic
Hypoplastic Left Heart Syndrome and
Other Severe Congenital Heart
Disorders
Major Congenital Heart/Circulatory
Disorders
Atrial and Ventricular Septa! Defects,
Patent Ductus Arteriosus, and Other
Congenital Heart/Circulatory
Disorders
S ecified Hearl Arrh Uunias
Intracranial Hemorrha e
Ischemic or Uns ecified Stroke
Cerebral Aneurysm and Arteriovenous
Malfonnation
Hemi
aresis
Monoplegia, OU1er Paralytic
S ·ndromes
Atherosclerosis of the Extremities
with Ulceration or Gan rene
Vascular Disease with Com lications
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5.574
5.459
5.348
5.345
0.915
0.603
1.376
0.782
0.508
1.266
0.690
0.433
1.184
0.593
0.350
1.094
0.590
0.347
1.091
5.550
5.444
5.393
5.365
5.364
1.561
1.790
1.561
1.445
1.656
1.445
1.353
1.563
1.353
1.252
1.474
1.252
1.248
1.471
1.248
1.167
10.740
11.024
1.050
l0.618
10.847
0.963
10.534
10.738
0.871
10.464
10.657
0.868
10.461
10.654
4.582
21.711
4.419
21.476
4.310
21.356
4.218
21.292
4.215
21.293
8.925
8.925
8.681
8.681
8.560
8.560
8.492
8.492
8.491
8.491
19.352
19.182
19.086
19.034
19.039
19.352
2.114
5.710
4.333
19.182
2.006
5.437
4.076
19.086
1.943
5.334
3.969
19.034
1.890
5.318
3.906
19.039
1.889
5.319
3.906
9.550
9.428
9.336
9.245
9.241
2.354
2.242
2.159
2.087
2.085
2.354
2.242
2.159
2.087
2.085
2.354
2.242
2.159
2.087
2.085
2.068
11.501
1.589
2.506
1.940
11.303
1.449
2.361
1.846
11.199
1.381
2.270
1.747
11.134
1.325
2.182
1.749
11.132
1.324
2.178
3.702
2.759
3.558
2.625
3.501
2.548
3.483
2.482
3.483
2.481
8.513
8.338
8.287
8.310
8.312
5.876
5.705
5.617
5.563
5.561
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21DEP2
EP21DE22.004
Catastrn1lh ic
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
HCC156
HCC158
HCC159
HCC160
HCC161 1
HCC161 2
HCC162
HCC163
HCC174
HCC183
45
HCC184
HCC187
HCC188
HCC203
HCC204
HCC205
HCC207
HCC208
HCC209
HCC210
HCC211
HCC212
HCC217
HCC218
HCC219
HCC223
HCC226
HCC228
lotter on DSK11XQN23PROD with PROPOSALS2
HCC234
HCC251
HCC253
VerDate Sep<11>2014
t Status/Com lications
stic Fibrosis
Chronic Obstructive Pulmonary
Disease, Includin Bronchiectasis
Severe Asthma
Asthma, Exce t Severe
Fibrosis of Lung and Other Lung
Disorders
Aspiration and Specified Bacterial
Pneumonias and Other Severe Lung
Infections
Exudative Macular De eneration
Kidney Transplant
Status/Com lications
End Sta e Renal Disease
Chronic Kidne Disease, Sta e 5
Chronic Kidney Disease, Severe
Sta e 4
Mis
ns
Miscarriage with No or Minor
Com lications
Pregnancy with Delivery with Major
Com lications
Pregnancy with Delivery with
Com lications
Pregnancy with Delivery with No or
Minor Com lications
(Ongoing) Pregnancy without
Delive with Ma· or Com lications
(Ongoing) Pregnancy without
Delive with Com lications
(Ongoing) Pregnancy without
Delivery with No or Minor
Com lications
Chronic Ulcer of Skin, Except
Pressure
Extensive Third-De eBurns
Ma· or Skin Burn or Condition
Hi and Pelvic Fractures
Vertebral Fractures without Spinal
Cord In·
Traumatic Amputations and
Am utation Com lications
Stem Cell, Including Bone Marrow,
Trans lant Status/Com lications
Artificial Openings for Feeding or
Elimination
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11.241
4.651
0.708
11.061
4.456
0.610
10.970
4.346
0.518
10.928
4.270
0.424
10.928
4.268
0.420
0.708
0.708
1.669
0.610
0.610
1.555
0.518
0.518
1.476
0.424
0.424
1.396
0.420
0.420
1.394
6.800
6.776
6.772
6.785
6.786
1.410
7.002
1.250
6.831
1.133
6.765
1.006
6.687
1.002
6.672
22.616
0.754
0.754
22.143
0.654
0.654
22.091
0.624
0.624
22.024
0.599
0.599
21.952
0.588
0.588
2.101
0.735
0.735
1.869
0.627
0.627
1.688
0.487
0.487
1.453
0.297
0.297
1.446
0.289
0.289
4.112
3.743
3.511
3.184
3.177
4.112
3.743
3.511
3.184
3.177
2.959
2.685
2.452
2.035
2.021
0.925
0.787
0.614
0.411
0.403
0.602
0.498
0.349
0.200
0.194
0.045
0.011
0.000
0.000
0.000
1.673
1.557
1.495
1.449
1.448
24.045
3.002
19.211
8.717
4.629
23.796
2.852
19.023
8.433
4.430
23.670
2.759
18.906
8.321
4.311
23.616
2.688
18.816
8.299
4.209
23.615
2.686
18.812
8.299
4.206
5.579
5.388
5.310
5.282
5.280
19.317
19.299
19.253
19.203
19.204
6.278
6.141
6.079
6.051
6.051
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EP21DE22.005
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Severe illness, 1
Severe illness, 2
Severe illness, 3
Severe illness, 4
Severe illness, 5
Severe illness, 6
Severe illness, 7
Severe illness, 8
Severe illness, 9
Severe illness, 10 or more payment
HCCs
Transplant severe illness, 4 payment
HCCs
Transplant severe illness, 5 payment
HCCs
Transplant severe illness, 6 payment
HCCs
Transplant severe illness, 7 payment
HCCs
Transplant severe illness, 8 or more
a mentHCCs
entHCC
led for 2 months,
entHCC
led for 3 months,
entHCC
led for 4 months,
entHCC
led for 5 months,
entHCC
ed for 6 months,
lotter on DSK11XQN23PROD with PROPOSALS2
RXC0346
RXC04
RXC05
RXC06
RXC07
RXC08
VerDate Sep<11>2014
-6.481
-5.980
-4.874
-4.038
-3.255
-2.821
-2.043
-1.976
0.766
8.825
-6.531
-6.064
-4.919
-4.010
-3.127
-2.566
-1.611
-1.496
1.457
9.947
-6.579
-6.100
-4.880
-3.884
-2.917
-2.271
-1.209
-1.066
2.004
10.723
-6.647
-6.138
-4.800
-3.675
-2.600
-1.865
-0.711
-0.544
2.616
11.493
-6.649
-6.138
-4.797
-3.667
-2.589
-1.850
-0.695
-0.526
2.636
11.519
4.029
3.981
3.935
3.854
3.847
8.160
8.097
8.057
7.989
7.980
15.312
15.232
15.196
15.140
15.128
18.743
18.632
18.584
18.522
18.511
36.031
36.054
36.081
36.066
36.056
at least one
5.224
4.342
3.782
3.305
3.288
at least one
3.367
2.788
2.400
2.080
2.070
at least one
2.219
1.818
1.536
1.309
1.301
at least one
1.636
1.339
1.121
0.944
0.938
at least one
1.088
0.869
0.701
0.561
0.556
0.091
1.008
1.467
1.429
0.789
0.083
1.204
1.314
1.215
0.673
0.075
1.125
1.155
1.022
0.549
0.058
1.295
0.930
0.841
0.375
0.035
1.411
0.920
0.834
0.369
16.266
15.334
14.880
14.547
14.531
Anti-HIV A ents
Anti-Hepatitis C (HCV) Agents,
Direct Actin A ents
Antiarrhythmics
Inflammato Bowel Disease A ents
Insulin
Anti-Diabetic Agents, Except Insulin
and Metformin Onl
Multi le Sclerosis A ents
20:34 Dec 20, 2022
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21DEP2
EP21DE22.006
78225
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
lotter on DSK11XQN23PROD with PROPOSALS2
RXClO
RXC0l x
HCC00l
RXC02x
HCC037 1
, 036,
035_2,
035 1 034
RXC03 x
HCC142
RXC04x
HCC184,
183, 187,
188
RXC05 x
HCC048,
041
RXC06x
HCC018,
019, 020,
021
RXC07x
HCC018,
019, 020,
021
RXC08x
HCC118
RXC09x
HCC056or
057 and
048 or041
RXC09x
HCC056
RXC09x
HCC057
RXC09x
HCC048,
041
RXC lOx
HCC159,
158
VerDate Sep<11>2014
stic Fibrosis A ents
Additional effect for enrollees with
RXC 01 and HCC 001
Additional effect for enrollees with
RXC 02 and (HCC 037_ l or 036 or
035 2 or 035 1 or 034
Additional effect for enrollees with
RXC 03 and HCC 142
15.054
2.048
14.632
2.149
14.479
2.376
14.440
2.748
14.440
2.761
-0.528
-0.451
-0.389
-0.324
-0.322
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
-0.469
-0.365
-0.266
-0.146
-0.142
0.434
0.492
0.567
0.578
0.580
-0.295
-0.237
-0.189
-0.146
-0.144
0.947
1.380
1.709
2.146
2.168
0.287
0.347
0.387
0.425
0.426
-1.073
-0.964
-0.876
-0.795
-0.792
-0.467
-0.376
-0.280
-0.173
-0.168
2.454
2.573
2.695
2.872
2.877
41.353
41.406
41.472
41.618
41.623
Additional effect for enrollees with
RXC 04 and (HCC 184 or 183 or 187
or 188
Additional effect for enrollees with
RXC05and CC 048 or041
Additional effect for enrollees with
RXC 06 and (HCC 0 18 or 0 19 or 020
or021
Additional effect for enrollees with
RXC 07 and (HCC 0 18 or 0 19 or 020
or021
Additional effect for enrollees with
RXC 08 and HCC 118
Additional effect for enrollees with
RXC 09 and (HCC 048 or 041) and
HCC 056 or 057
Additional effect for enrollees with
RXC 09 and HCC 056
Additional effect for enrollees with
RXC 09 and HCC 057
Additional effect for enrollees with
RXC09and CC 048 or041
Additional effect for enrollees with
RXC lOand CC 159 or 158
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EP21DE22.007
78226
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
78227
TABLE 3: Proposed Child Risk Adjustment Model Factors for the 2024 Benefit Year
HN/AIDS
Septicemia, Sepsis, Systemic Inflammatory
Res onse S ,ruJrome/Shock
Central Nervous System Infections, Except
ViralMe . "tis
lotter on DSK11XQN23PROD with PROPOSALS2
ortunistic Infections
Metastatic Cancer
Lung, Brain, and Other Severe Cancers,
Including Pediatric Acute Lymphoid
Leukemia
Non-Hodgkin Lymphomas and Other Cancers
and Tumors
Colorectal, Breast (Age< 50), Kidney, and
Other Cancers
Breast (Age 50+) and Prostate Cancer,
Benign/Uncertain Brain Tumors, and Other
Cancers and Tumors
Thyroid Cancer, Melanoma,
Neurofibromatosis, and Other Cancers and
Tumors
Pancreas Trans lant Status
Protein-Calorie Malnutrition
Muco olvsaccharidosis
Li idoses and Gl co enosis
Congenital Metabolic Disorders, Not
Elsewhere Classified
Amyloidosis, Porphyria, and Other Metabolic
Disorders
Adrenal, Pituitary, and Other Significant
Endocrine Disorders
Liver Trans lant Status/Com lications
Acute Liver Failure/Disease, Including
Neonatal He atitis
Chronic Liver Failure/End-Stage Liver
Disorders
Cirrhosis of Liver
Chronic Viral He atitis C
Chronic Hepatitis, Except Chronic Viral
..
He
VerDate Sep<11>2014
20:34 Dec 20, 2022
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4.490
14.897
3.999
14.669
3.762
14.536
3.617
14.439
3.615
14.437
13.638
13.470
13.360
13.293
13.291
11.963
17.169
33.749
9.374
11.850
17.088
33.464
9.094
11.768
16.997
33.322
8.929
11.643
16.907
33.262
8.808
11.642
16.904
33.261
8.804
7.293
7.065
6.911
6.777
6.772
4.615
4.450
4.331
4.221
4.217
4.615
4.450
4.331
4.221
4.217
1.171
1.037
0.925
0.806
0.802
11.106
2.624
2.624
2.624
19.295
39.965
39.%5
4.830
11.020
2.312
2.312
2.312
19.163
39.679
39.679
4.698
10.974
2.075
2.075
2.075
19.078
39.551
39.551
4.609
10.939
1.754
1.754
1.754
19.037
39.501
39.501
4.541
10.937
1.745
1.745
1.745
19.035
39.500
39.500
4.538
4.830
4.698
4.609
4.541
4.538
5.553
5.285
5.146
5.079
5.078
11.106
9.767
11.020
9.619
10.974
9.551
10.939
9.525
10.937
9.524
9.286
9.131
9.047
8.983
8.980
4.128
1.186
0.197
3.990
1.046
0.169
3.907
0.961
0.142
3.848
0.917
0.111
3.849
0.917
0.110
13.858
13.756
13.667
13.582
13.579
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21DEP2
EP21DE22.008
-9. Female
male
78228
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
Peritonitis/Gastrointestinal
Perforation/Necrotizing Enterocolitis
Intestinal Obstruction
Chronic Pancreatitis
Acute Pancreatitis
Inflammatorv Bowel Disease
Necrotizing Fasciitis
Bone/Joint/Muscle Infections/Necrosis
Rheumatoid Arthritis and Specified
Autoimmune Disorders
Systemic Lupus Erythematosus and Other
Autoimmune Disorders
Osteogenesis Imperfecta and Other
Osteodvstrophies
Congenital/Developmental Skeletal and
Connective Tissue Disorders
Cleft Lip/Cleft Palate
Hemophilia
Myelodysplastic Syndromes and
Mvelofibrosis
Aolastic Anemia
Acquired Hemolytic Anemia, Including
Hemolvtic Disease of Newborn
Sickle Cell Anemia ffih-SS)
Beta Thalassemia Maior
Combined and Other Severe
Immunodeficiencies
Disorders of U1e IImnune Mechanism
Coagulation Defects and OU1er Specified
Hematological Disorders
Drug Use with Psvchotic Comolications
Drug Use Disorder, Moderate/Severe, or Drug
Use with Non-Psychotic Complications
Alcohol Use with Psvchotic Comolications
Alcohol Use Disorder, Moderate/Severe, or
Alcohol Use with Specified Non-Psychotic
Comolications
Schizophrenia
Delusional and OU1er Specified Psychotic
Disorders, Unspecified Psychosis
Major Depressive Disorder, Severe, and
Bioolar Disorders
Personality Disorders
Anorexia/Bulimia Nervosa
Prader-Willi, Patau, Edwards, and Autosomal
Deletion Syndromes
Down Syndrome, Fragile X, Other
Chromosomal Anomalies, and Congenital
Malformation Syndromes
Autistic Disorder
Peivasive Developmental Disorders, Except
Autistic Disorder
Traumatic Complete Lesion Cervical Spinal
Cord
Quadriplegia
Traumatic Complete Lesion Dorsal Spinal
Cord
VerDate Sep<11>2014
20:34 Dec 20, 2022
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17.886
17.459
17.325
17.276
17.275
4.767
11.778
5.360
9.915
3.684
3.684
4.733
4.582
11.601
5.102
9.478
3.449
3.449
4.456
4.446
11.522
4.953
9.266
3.308
3.308
4.296
4.332
11.476
4.826
9.139
3.207
3.207
4.195
4.329
11.476
4.823
9.135
3.204
3.204
4.192
0.746
0.619
0.500
0.376
0.372
1.389
1.262
1.168
1.085
1.082
1.389
1.262
1.168
1.085
1.082
1.174
67.994
13.130
1.006
67.478
12.957
0.881
67.248
12.863
0.756
67.166
12.801
0.752
67.164
12.800
13.130
13.130
12.957
12.957
12.863
12.863
12.801
12.801
12.800
12.800
3.851
3.851
4.918
3.643
3.643
4.760
3.511
3.511
4.660
3.411
3.411
4.582
3.408
3.408
4.580
4.918
4.218
4.760
4.082
4.660
3.982
4.582
3.897
4.580
3.894
2.517
2.517
2.331
2.331
2.202
2.202
2.065
2.065
2.061
2.061
1.203
1.203
1.031
1.031
0.894
0.894
0.740
0.740
0.734
0.734
3.991
3.395
3.694
3.122
3.511
2.941
3.350
2.760
3.346
2.755
2.638
2.413
2.243
2.082
2.077
0.378
2.453
11.637
0.270
2.277
11.535
0.155
2.147
11.450
0.042
2.034
11.378
0.038
2.030
11.376
0.982
0.842
0.742
0.642
0.638
2.638
0.404
2.413
0.314
2.243
0.222
2.082
0.146
2.077
0.144
11.137
10.900
10.779
10.704
10.702
11.137
11.047
10.900
10.807
10.779
10.695
10.704
10.627
10.702
10.625
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21DEP2
EP21DE22.009
lotter on DSK11XQN23PROD with PROPOSALS2
F,1rtor
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
78229
Paraplecia
Spinal Cord Disorders/Injuries
Amyotrophic Lateral Sclerosis and Other
Anterior Hom Cell Disease
Quadriplegic Cerebral Palsy
Cerebral Palsy, Except Quadriplecic
Spina Bifida and Other Brain/Spinal/Nervous
Svstem Comrenital Anomalies
Myasthenia Gravis/Myoneural Disorders and
Guillain-Barre Syndrome/Inflammatory and
Toxic Neurooathv
Muscular Dvstroohv
Multiple Sclerosis
Parkinson's, Huntington's, and Spinocerebellar
Disease, and Other Neurodegenerative
Disorders
Seizure Disorders and Convulsions
Hvdrocephalus
Coma Brain Compression/Anoxic Damage
Narcolepsv and Cataplexv
Respirator Dependencetrracheostomv Status
Respiratorv Arrest
Cardio-Respiratory Failure and Shock,
Including Resoiratorv Distress Svndromes
Heart Assistive Device/Artificial Heart
Heart Transolant Status/Comolications
Heart Failure
Acute Mvocardial Infarction
Unstable Angina and Other Acute Ischemic
Heart Disease
Heart Infection/Inflammation, Except
Rheumatic
Hypoplastic Left Heart Syndrome and Other
Severe Congenital Heart. Disorders
Maior Congenital Heart/Circulatorv Disorders
Atrial and Ventricular Septal Defects, Patent
Ductus Arteriosus, and Other Congenital
Heart/Circulatory Disorders
Specified Heart Arrhvthmias
lntracranial Hemorrhage
Ischemic or Unspecified Stroke
Cerebral Aneurysm and Arteriovenous
Malformation
He1niplelml1He1niparesis
Monoplecia, Other Paralytic Syndromes
Atherosclerosis of the Extremities with
Ulceration or Gane;rene
Vascular Disease with Complications
Pulmonary Embolism and Deep Vein
Thrombosis
Lung Transplant Status/Complications
Cvstic Fibrosis
Chronic Obstructive Pulmonary Disease,
Including Bronchiectasis
Severe Asthma
Asthma Exceot Severe
Fibrosis of Lung and Other Lung Disorders
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11.047
4.782
50.056
10.807
4.560
49.780
10.695
4.404
49.630
10.627
4.246
49.543
10.625
4.240
49.540
0.913
0.274
1.770
0.651
0.128
1.630
0.525
0.061
1.533
0.440
0.017
1.437
0.439
0.015
1.434
11.126
10.941
10.858
10.829
10.829
6.190
9.870
6.190
6.018
9.439
6.018
5.902
9.256
5.902
5.793
9.199
5.793
5.790
9.200
5.790
1.667
11.086
10.655
4.295
27.170
16.066
16.066
1.509
11.068
10.694
4.102
26.905
15.761
15.761
1.368
11.036
10.708
3.955
26.769
15.608
15.608
1.223
11.016
10.737
3.821
26.706
15.522
15.522
1.218
11.015
10.737
3.816
26.705
15.520
15.520
13.858
13.858
4.738
1.087
1.087
13.756
13.756
4.612
1.045
1.045
13.667
13.667
4.524
1.017
1.017
13.582
13.582
4.454
0.993
0.993
13.579
13.579
4.452
0.993
0.993
16.465
16.330
16.226
16.134
16.130
4.201
4.021
3.874
3.748
3.744
1.119
0.691
1.001
0.583
0.878
0.488
0.777
0.415
0.774
0.413
3.278
12.842
1.680
1.745
3.106
12.667
1.505
1.547
2.985
12.542
1.397
1.416
2.886
12.440
1.293
1.288
2.883
12.435
1.290
1.283
5.876
3.202
10.987
5.734
3.050
10.723
5.649
2.948
10.584
5.574
2.842
10.490
5.571
2.838
10.488
7.360
19.940
7.213
19.772
7.130
19.662
7.077
19.581
7.077
19.579
13.858
46.375
1.807
13.756
45.821
1.629
13.667
45.593
1.497
13.582
45.555
1.375
13.579
45.556
1.372
1.269
0.347
1.474
1.080
0.258
1.310
0.919
0.172
1.170
0.762
0.104
1.039
0.757
0.102
1.035
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lotter on DSK11XQN23PROD with PROPOSALS2
I< actor
78230
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
Factor
10.655
10.694
10.708
10.737
10.737
11.106
37.125
0.266
0.266
1.605
0.597
0.597
3.535
11.020
36.898
0.200
0.200
1.396
0.466
0.466
3.159
10.974
36.806
0.150
0.150
1.203
0.325
0.325
2.880
10.939
36.786
0.093
0.093
1.035
0.183
0.183
2.439
10.937
36.783
0.091
0.091
1.028
0.178
0.178
2.424
3.535
2.619
3.159
2.338
2.880
2.064
2.439
1.572
2.424
1.553
0.553
0.406
0.236
0.129
0.125
0.553
0.406
0.236
0.129
0.125
0.365
0.249
0.135
0.060
0.057
2.144
22.431
2.195
22.431
4.771
4.693
2.023
22.185
2.007
22.185
4.510
4.459
1.933
22.041
1.877
22.041
4.344
4.289
1.863
21.957
1.757
21.957
4.242
4.124
1.861
21.952
1.753
21.952
4.239
4.119
3.506
3.260
3.106
2.949
2.943
13.858
13.756
13.667
13.582
13.579
6.435
3.506
6.241
3.260
6.156
3.106
6.110
2.949
6.110
2.943
-10.655
-10.570
-8.365
-7.724
-4.948
-0.619
20.186
16.793
-10.694
-10.647
-8.447
-7.718
-4.829
-0.297
21.065
16.848
-10.737
-10.723
-8.359
-7.404
-4.291
0.521
22.505
16.897
-10.737
-10.724
-8.355
-7.396
-4.279
0.537
22.529
16.899
- "
'
'
lotter on DSK11XQN23PROD with PROPOSALS2
Severe illness 1 oavment HCC
Severe illness 2 payment HCCs
Severe illness 3 oavment HCCs
Severe illness 4 payment HCCs
Severe illness, 5 oayment HCCs
Severe illness, 6 or 7 payment HCCs
Severe illness, 8 or more oayment HCCs
Transplant severe illness, 4 or more payment
HCCs
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-10.708
-10.680
-8.418
-7.590
-4.600
0.075
21.786
16.877
E:\FR\FM\21DEP2.SGM
21DEP2
EP21DE22.011
Aspiration and Specified Bacterial
Pneumonias and Other Severe Lune: Infections
Kidney Transplant Status/Complications
End Sta_ge Renal Disease
Chronic Kidney Disease, Stage 5
Chronic Kidney Disease, Severe (Sta_ge 4)
Ectopic and Molar Pree:nancv
Miscarria_ge with Complications
Miscarriage with No or Minor Complications
Pregnancy with Delivery with Major
Complications
Pree:nancy with Delivery with Complications
Pregnancy with Delivery with No or Minor
Complications
(Ongoing) Pregnancy without Delivery with
Major Complications
(Ongoing) Pregnancy without Delivery with
Complications
(Ongoing) Pregnancy without Delivery with
No or Minor Comolications
Chronic Ulcer of Skin. Except Pressure
Extensive Third-Deirree Burns
Maior Skin Burn or Condition
Severe Head Iniurv
Hip and Pelvic Fractures
Vertebral Fractures without Spinal Cord
Iniurv
Traumatic Amputations and Amputation
Complications
Stem Cell, Including Bone Marrow,
Transolant Status/Comolications
Artificial Ooenin_gs for Feedin_g or Elimination
Amputation Status, Upper Limb or Lower
Limb
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
78231
TABLE 4: HCCs Selected for the Proposed HCC Interacted Counts Variables for the
Adult and Child Models for the 2024 Benefit Year
Sc, crit~ Illness
Indicator
lotter on DSK11XQN23PROD with PROPOSALS2
HCC 2 Septicemia, Sepsis, Systemic Inflammatory
Response Syndrome/Shock
HCC 3 Central Nervous System Infections, Except Viral
Menin.citis
HCC 4 Viral or Unspecified Meningitis
HCC 6 Opportunistic Infections
HCC 23 Protein-Calorie Malnutrition
HCC 34 Liver Transplant Status/Complications
HCC 41 Intestine Transplant Status/Complications
HCC 42 Peritonitis/Gastrointestinal Perforation/Necrotizing
Enterocolitis
HCC 96 Prader-Willi, Patau, Edwards, and Autosomal
Deletion Svndromes
HCC 121 Hydrocephalus
HCC 122 Coma. Brain Comoression/Anoxic Damage
HCC 125 Respirator Dependence/Tracheostomv Status
HCC 135 Heart Infection/lnflammation. Exceot Rheumatic
HCC 145 Intracranial Hemorrhage
HCC 156 Pulmonarv Embolism and Deeo Vein Thrombosis
HCC 158 Lune: Transplant Status/Complications
HCC 163 Aspiration and Specified Bacterial Pneumonias
and Other Severe Lung Infections
HCC 218 Extensive Third-Dee:ree Burns
HCC 223 Severe Head Iniurv
HCC 251 Stem Cell, Including Bone Marrow, Transplant
Status/Complications
G 13 (Includes HCC 126 Respiratory Arrest and HCC 127
Cardio-Respiratory Failure and Shock, Including Respiratory
Distress Svndromes)
G14 (Includes HCC 128 Heart Assistive Device/Artificial
Heart and HCC 129 Heart Transplant Status/Complications)
G24 (Includes HCC 18 Pancreas Transplant Status and HCC
183 Kidney Transplant Status/Complications)48
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Transplant Indicator
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
E:\FR\FM\21DEP2.SGM
21DEP2
EP21DE22.012
Pa~mcnt HCC
78232
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
TABLE 5: Pro osed Infant Risk Ad· ustment Model Factors for the 2024 Benefit Year
Level4
Level 3
Extremel Immature * Severi Level 2
Extremely Immature * Severity Level 1
owest
Immature * Severi
Immature * Severi
Immature * Severi
Immature * Severi
Immature * Severi
est
Premature/Multiples * Severity Level 5
162.909
36.950
36.950
36.950
161.046
35.414
35.414
35.414
160.171
34.671
34.671
34.671
159.788
34.338
34.338
34.338
159.782
34.330
34.330
34.330
127.417
75.684
36.950
36.950
28.369
115.509
125.708
73.973
35.414
35.414
26.894
114.050
124.964
73.203
34.671
34.671
26.146
113.404
124.729
72.924
34.338
34.338
25.745
113.199
124.726
72.919
34.330
34.330
25.734
113.198
Level 4
Level 3
Premature/M
Level 2
Premature/Multiples * Severity Level 1
32.082
15.009
8.402
6.306
30.557
13.884
7.557
5.569
29.821
13.202
6.909
4.951
29.460
12.641
6.201
4.366
29.453
12.623
6.175
4.346
A el* Severi
A e0Male
A e I Male
86.920
17.039
6.250
3.964
2.042
70.542
13.870
3.079
2.039
0.611
0.634
0.103
85.564
15.909
5.550
3.368
1.592
69.775
13.286
2.756
1.758
0.499
0.590
0.086
84.906
15.237
4.948
2.784
1.108
69.404
12.950
2.528
1.531
0.443
0.557
0.069
84.586
14.692
4.333
2.177
0.790
69.235
12.711
2.344
1.324
0.406
0.494
0.049
84.580
14.677
4.311
2.155
0.781
69.232
12.704
2.337
1.317
0.405
0.491
0.048
HHS HCCs Included in Infant Model Maturi
EP21DE22.014
500-749 Grams
750-999 Grams
Grams
1500-1999 Grams
2000-2499 Grams
·shed, or
Newborns
rn, Normal or Hi
ht
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lotter on DSK11XQN23PROD with PROPOSALS2
Immature
Premature/Multi les
Premature/Multi les
Term
A e1
ture Newbo
ture Newbo
Prema
ewborns, Inclu
Premature Newborns, Inclu
Premature Newborns, Inclu
Other Premature, Lo
Term or Post-Term S
All a e 1 infants
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
TABLE 7: HHS HCCs Included in Infant Model Severi
Severity Level 4
lotter on DSK11XQN23PROD with PROPOSALS2
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 4
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
VerDate Sep<11>2014
20:34 Dec 20, 2022
Cate ories
]
1 :Bti
I
Pancreas Transplant Status
Liver Transplant Status/Complications
Intestine Transplant Status/Complications
Peritonitis/Gastrointestinal Perforation/Necrotizing Enterocolitis
Respirator Denendence/Tracheostomy Status
Heart Assistive Device/Artificial Heart
Heart Transplant Status/Complications
Heart Failure
Hypoplastic Left Heart Syndrome and Other Severe Congenital Heart Disorders
Lung Transplant Status/Complications
Kidney Transplant Status/Complications
End Stage Renal Disease
Stem Cell, Including Bone Marrow, Transplant Status/Complications
Septicemia, Sepsis, Systeinic Inflammatory Response Syndrome/Shock
Lung, Brain. and Other Severe Cancers Including Pediatric Acute Lymphoid Leukeinia
Mucopolysaccharidosis
Adrenal, Pituitarv, and Other Si!!Ili:ficant Endocrine Disorders
Acute Liver Failure/Disease, Including Neonatal Hepatitis
Chronic Liver Failure/End-Stage Liver Disorders
Major Congenital Anomalies of Diaphragm Abdoininal Wall, and Esophagus, Age< 2
Myelodysplastic Syndromes and Myelofibrosis
Aplastic Anemia
Combined and Other Severe Immunodeficiencies
Traumatic Complete Lesion Cervical Spinal Cord
~ 1~rlrinlecia
Amvotrophic Lateral Sclerosis and Other Anterior Hom Cell Disease
~ 1~rlrinlecic Cerebral Palsv
Myasthenia Gravis/Myoneural Disorders and Guillain-Barre Syndrome/Inflammatory
and Toxic Neuropathy
Coma Brain Compression/Anoxic Damage
Respiratory Arrest
Cardio-Respiratorv Failure and Shock. Including Respiratorv Distress Syndromes
Acute Myocardial Infarction
Heart Infection/Inflammation.. Except Rheumatic
Major Congenital Heart/Circulatory Disorders
Intracranial Hemorrhage
lscheinic or Unspecified Stroke
Vascular Disease with Complications
Pulmonarv Embolism and Deep Vein Thrombosis
Aspiration and Specified Bacterial Pneumonias and Other Severe Lun!!: Infections
Chronic Kidney Disease Stage 5
Artificial Onenings for Feeding or Eliinination
HIV/AIDS
Central Nervous System Infections, Except Viral Meningitis
Opportunistic Infections
Non-Hod!!:kin Lymphomas and Other Cancers and Tumors
Colorectal, Breast (Age < 50), Kidney and Other Cancers
Breast (Age 50+) and Prostate Cancer, Benign/Uncertain Brain Tumors, and Other
Cancers and Tumors
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EP21DE22.015
rity I
1 2014
20:34 Dec 20, 2022
I
HCC/Dcscri1>tion
Lipidoses and Glycogenosis
Intestinal Obstruction
Necrotizing Fasciitis
Bone/Joint/Muscle Infections/Necrosis
Osteogenesis Imoerfecta and Other Osteodvstroohies
Cleft Lio/Cleft Palate
Hemophilia
Disorders of the Immune Mechanism
Coagulation Defects and Other Soecified Hematological Disorders
Drug Use with Psychotic Complications
Drug Use Disorder Moderate/Severe. or Drug Use with Non-Psvchotic Complications
Alcohol Use with Psychotic Complications
Alcohol Use Disorder, Moderate/Severe, or Alcohol Use with Specified Non-Psychotic
Complications
Prader-Willi Patau Edwards and Autosomal Deletion Syndromes
Traumatic Complete Lesion Dorsal Spinal Cord
Paraplegia
Soinal Cord Disorders/Iniuries
Cerebral Palsy Except Quadriplegic
Spina Bifida and Other Brain/Spinal/Nervous System Congenital Anomalies
Muscular Dvstroohv
Parkinson's, Huntington's, and Spinocerebellar Disease, and Other Neurodegenerative
Disorders
Hydrocephalus
Unstable Angina and Other Acute Ischemic Heart Disease
Atrial and Ventricular Septal Defects, Patent Ductus Arteriosus, and Other Congenital
Heart/Circulatorv Disorders
Specified Heart Arrhythmias
Cerebral Aneurvsm and Arteriovenous Malformation
Hemiplegia/Hemiparesis
Cystic Fibrosis
Extensive Third-Degree Bums
Severe Head Injury
Hip and Pelvic Fractures
Vertebral Fractures without Spinal Cord Iniurv
Viral or Unspecified Meningitis
Thyroid Cancer, Melanoma, Neurofibromatosis, and Other Cancers and Tumors
Diabetes with Acute Complications
Diabetes with Chronic Complications
Diabetes without Complication
Protein-Calorie Malnutrition
Congenital Metabolic Disorders, Not Elsewhere Classified
Amyloidosis, Porohyria, and Other Metabolic Disorders
Cirrhosis of Liver
Chronic Pancreatitis
Acute Pancreatitis
Inflammatory Bowel Disease
Rheumatoid Arthritis and Specified Autoimmune Disorders
Systemic Lupus Erythcmatosus and Other Autoimmune Disorders
Congenital/Developmental Skeletal and Connective Tissue Disorders
Acquired Hemolytic Anemia, Including Hemolytic Disease of Newborn
Sickle Cell Anemia (Hb-SS)
Down Syndrome, Fragile X, Other Chromosomal Anomalies, and Congenital
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EP21DE22.016
Sc, crit~ Catcgor~
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Severity Level 3
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
I
Severity Level 2
Severity Level 2
Severity Level 2
Severity Level 2
Severity Level 2
Severity Level 2
Severity Level 2
Severity Level 2
Severity Level 2
Severity Level 1 (1 owest)
Severity Level 1
Severity Level 1
Severity Level 1
Severity Level 1
Severity Level 1
Severity Level 1
Severity Level 1
Severity Level 1
HCC/Description
Malformation Svndromes
Seizure Disorders and Convulsions
Monoplegia, Other Paralvtic Svndromes
Atherosclerosis of the Extremities with Ulceration or Ganerene
Chronic Obstructive Pulmonarv Disease, Including Bronchiectasis
Severe Asthma
Fibrosis of Lung and Other Lung Disorders
Chronic Kidney Disease, Severe (Stage 4)
Chronic Ulcer of Skin, Except Pressure
Major Skin Burn or Condition
Chronic Viral Hepatitis C
Chronic Hepatitis, Except Chronic Viral Hepatitis C
Beta Thalassemia Maior
Autistic Disorder
Pervasive Developmental Disorders, Except Autistic Disorder
Multiple Sclerosis
Asthma, Except Severe
Traumatic Amputations and Amputation Complications
Amputation Status, Unner Limb or Lower Limb
BILLING CODE 4120–01–C
We propose to continue including an
adjustment for the receipt of CSRs in the
risk adjustment models in all 50 States
and the District of Columbia. While we
continue to study and explore a range of
options to update the CSR adjustments
to improve prediction for CSR enrollees
and whether changes are needed to the
risk adjustment transfer formula to
account for CSR plans,49 to maintain
stability and certainty for issuers for the
2024 benefit year, we are proposing to
maintain the CSR adjustment factors
finalized in the 2019, 2020, 2021, 2022,
and 2023 Payment Notices.50 See Table
8. We also propose to continue to use
a CSR adjustment factor of 1.12 for all
Massachusetts wrap-around plans in the
risk adjustment plan liability risk score
calculation, as all of Massachusetts’
cost-sharing plan variations have AVs
above 94 percent (81 FR 12228).
We seek comment on these proposals.
43 Starting with the 2024 risk adjustment adult
models, HHS will group HCC 18 Pancreas
Transplant Status and HCC 183 Kidney Transplant
Status/Complications to reflect that these
transplants frequently co-occur for clinical reasons
and to reduce volatility of coefficients across benefit
years due to the small sample size of HCC 18. This
change will also be reflected in the DIY Software
for the 2024 benefit year.
44 HCC numbers that appear with an underscore
in this document will appear without the
underscore in the DIY software. For example, HCC
35_1 in this table will appear as HCC 351 in the
DIY software.
45 Starting with the 2024 risk adjustment adult
models, HHS will group HCC 18 Pancreas
Transplant Status and HCC 183 Kidney Transplant
Status/Complications to reflect that these
transplants frequently co-occur for clinical reasons
and to reduce volatility of coefficients across benefit
years due to the small sample size of HCC 18. This
change will also be reflected in the DIY Software
for the 2024 benefit year.
46 As a note, we constrain RXC 03 to be equal to
average plan liability for RXC 03 drugs, RXC 04 to
be equal to the average plan liability for RXC 04
drugs, and we constrain RXC 03 x HCC142 and RXC
04 x HCC184, 183, 187, 188 to be equal to 0. See
CMS. (2016, March 24). March 2016 Risk
Adjustment Methodology Discussion Paper. https://
www.cms.gov/cciio/resources/forms-reports-andother-resources/downloads/ra-march-31-whitepaper-032416.pdf (where we previously discussed
the use of constraints in the risk adjustment
models).
47 Similar to recalibration of the 2023 risk
adjustment adult models and consistent with the
final policies adopted in the 2023 Payment Notice,
the draft factors in this rule reflect the removal of
the mapping of hydroxychloroquine sulfate to RXC
09 (Immune Suppressants and Immunomodulators)
and the related RXC 09 interactions (RXC 09 x
HCC056 or 057 and 048 or 041; RXC 09 x HCC056;
RXC 09 x HCC 057; RXC 09x HCC048, 041) from
the 2018 and 2019 benefit year enrollee-level EDGE
data sets for purposes of recalibrating the 2024
benefit year adult models. See 87 FR 27232 through
27235. Additionally, the draft factors for the adult
models reflect the use of the final, fourth quarter
(Q4) RXC mapping document that was applicable
for each benefit year of data included in the current
year’s model recalibration (except under
extenuating circumstances that can result in
targeted changes to RXC mappings), while
continuing to engage in annual and quarterly
review processes. See 87 FR 27231 through 27232.
48 Starting with the 2024 risk adjustment adult
models, HHS will group HCC 18 Pancreas
Transplant Status and HCC 183 Kidney Transplant
Status/Complications to reflect that these
transplants frequently co-occur for clinical reasons
and to reduce volatility of coefficients across benefit
years due to the small sample size of HCC 18. This
change will also be reflected in the DIY Software
for the 2024 benefit year and will be applied to the
adult models only. In the child models, HCC 18 and
HCC 183 are subject to an a priori constraint (S1)
with HCC 34, also for sample size reasons. See
Section 4.2.2 of the 2019 White Paper. (June 17,
2019.) https://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/Downloads/PotentialUpdates-to-HHS-HCCs-HHS-operated-RiskAdjustment-Program.pdf. Nevertheless, in both the
adult and child models, the presence of one of these
HCCs either alone or in a group will trigger a
severity illness indicator and/or a transplant
indicator for the interacted counts model
specification depending on the total number of
HCCs the enrollee has.
49 See CMS. (2021, October 26). HHS-Operated
Risk Adjustment Technical Paper on Possible
Model Changes. Appendix A. https://www.cms.gov/
files/document/2021-ra-technical-paper.pdf. We are
also considering a letter recently published by the
American Academy of Actuaries regarding
accounting for the receipt of CSRs in risk
adjustment and plan rating and are continuing to
monitor changes related to these issues. Bohl, J.,
Novak, D., & Karcher, J. (2022, September 8).
Comment Letter on Cost-Sharing Reduction
Premium Load Factors. American Academy of
Actuaries. https://www.actuary.org/sites/default/
files/202209/Academy_CSR_Load_Letter_
09.08.22.pdf.
50 See 83 FR 16930 at 16953; 84 FR 17478 through
17479; 85 FR 29190; 86 FR 24181; and 87 FR 27235
through 27236.
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TABLE 8: Cost-Sharin Reduction Ad"ustment Factors
Plan AV
100-150% of Federal
Pove Line PL
150-200% of FPL
200-250% of FPL
>250%ofFPL
1.12
Plan Variation 94%
Plan Variation 87%
Plan Variation 73%
Standard Plan 70%
1.12
1.00
1.00
>300%ofFPL
>300%ofFPL
>300%ofFPL
f. Model Performance Statistics
Each benefit year, to evaluate risk
adjustment model performance, we
examine each model’s R-squared
statistic and predictive ratios (PRs). The
R-squared statistic, which calculates the
percentage of individual variation
explained by a model, measures the
predictive accuracy of the model
overall. The PR for each of the HHS risk
adjustment model is the ratio of the
weighted mean predicted plan liability
for the model sample population to the
weighted mean actual plan liability for
the model sample population. The PR
represents how well the model does on
average at predicting plan liability for
that subpopulation.
A subpopulation that is predicted
perfectly would have a PR of 1.0. For
each of the current and proposed HHS
risk adjustment models, the R-squared
statistic and the PRs are in the range of
published estimates for concurrent risk
adjustment models.51 Because we
propose to blend the coefficients from
separately solved models based on the
2018, 2019, and 2020 benefit years’
enrollee-level EDGE data, with an
exception to exclude 2020 benefit year
data from the recalibration of the agesex factors for the adult models, we are
publishing the R-squared statistic for
each model separately to verify their
statistical validity. The R-squared
statistics for the proposed 2024 benefit
models are shown in Table 9.
..
TABLE9 RS
- iQuared StafISfIC tor th e Proposed HHS Ri skAd"11ustment M 0 dels
51 Hileman, G., & Steele, S. (2016). Accuracy of
Claims-Based Risk Scoring Models. Society of
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2019 EnrolleeLevel EDGE Data
0.4441
0.4379
0.4341
0.4309
0.4307
0.3569
0.3536
0.3510
0.3483
0.3482
0.3166
0.3130
0.3109
0.3094
0.3094
Actuaries. https://www.soa.org/4937b5/
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2020 EnrolleeLevel EDGE Data
0.4347
0.4278
0.4237
0.4204
0.4203
0.3420
0.3381
0.3352
0.3325
0.3323
0.2898
0.2858
0.2835
0.2817
0.2816
globalassets/assets/files/research/research-2016accuracy-claims-based-risk-scoring-models.pdf.
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Platinum Adult
Gold Adult
Silver Adult
Bronze Adult
Catastroohic Adult
Platinum Child
Gold Child
Silver Child
Bronze Child
Catastroohic Child
Platinum Infant
Gold Infant
Silver Infant
Bronze Infant
Catastrophic Infant
2018 EnrolleeLevel EDGE Data
0.4411
0.4348
0.4310
0.4277
0.4276
0.3614
0.3583
0.3558
0.3531
0.3530
0.3130
0.3093
0.3072
0.3055
0.3055
EP21DE22.018
Models
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
3. Overview of the HHS Risk
Adjustment Methodology (§ 153.320)
In part 2 of the 2022 Payment Notice
(86 FR 24183 through 24186), we
finalized the proposal to continue to use
the State payment transfer formula
finalized in the 2021 Payment Notice for
the 2022 benefit year and beyond,
unless changed through notice-andcomment rulemaking. We explained
that under this approach, we will no
longer republish these formulas in
future annual HHS notice of benefit and
payment parameter rules unless changes
are being proposed. We are not
proposing any changes to the formula in
this rule, and therefore, are not
republishing the formulas in this rule.
We would continue to apply the
formula as finalized in the 2021
Payment Notice (86 FR 24183 through
24186) 52 in the States where HHS
operates the risk adjustment program in
the 2024 benefit year. Additionally, as
finalized in the 2020 Payment Notice
(84 FR 17466 through 17468), we will
maintain the high-cost risk pool
parameters for the 2020 benefit year and
beyond, unless amended through
notice-and-comment rulemaking. We
are not proposing any changes to the
high-cost risk pool parameters for the
2024 benefit year; therefore, we would
maintain the $1 million threshold and
60 percent coinsurance rate.
4. Repeal of Risk Adjustment State
Flexibility To Request a Reduction in
Risk Adjustment State Transfers
(§ 153.320(d))
We propose to repeal the flexibility
under § 153.320(d) for States to request
reductions of risk adjustment State
transfers under the State payment
transfer formula in all State market risk
pools, including those prior participant
States that previously requested a
reduction,53 for the 2025 benefit year
and beyond. We also solicit comment on
Alabama’s requests to reduce risk
adjustment State transfers in the
individual (including the catastrophic
and non-catastrophic risk pools) and
small group markets for the 2024 benefit
year.
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a. Repeal of State Flexibility To Request
Transfer Reductions
We propose to amend § 153.320(d) to
repeal the ability for any State to request
a reduction in risk adjustment State
transfers beginning with the 2025
52 Discussion provided an illustration and further
details on the State payment transfer formula.
53 Alabama is the only State that has previously
requested a reduction in risk adjustment transfers
through this flexibility and therefore is the only
State considered a ‘‘prior participant State’’.
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benefit year. As part of this repeal, we
propose conforming amendments to the
introductory text of § 153.320(d), which
currently provides that prior participant
States may request to reduce risk
adjustment transfers in all State market
risk pools by up to 50 percent beginning
with the 2024 benefit year, to remove
this flexibility for the 2025 benefit year
and beyond and limit the timeframe
available for prior participants to
request reductions to the 2024 benefit
year only. Similarly, we propose
conforming amendments to paragraphs
(d)(1)(iv) and (d)(4)(i)(B), which
describe the conditions for a prior
participant State to request a reduction
beginning with the 2024 benefit year, to
also limit these requests to the 2024
benefit year only and to eliminate the
ability for prior participant States to
request a reduction for the 2025 benefit
year and beyond.
In the 2019 Payment Notice (83 FR
16955 through 16960), we amended
§ 153.320 to add paragraph (d) to
provide States the flexibility to request
a reduction to the applicable risk
adjustment State transfers calculated by
HHS using the State payment transfer
formula for the State’s individual
(catastrophic or non-catastrophic risk
pools), small group, or merged market
risk pool by up to 50 percent in States
where HHS operates the risk adjustment
program to more precisely account for
differences in actuarial risk in the
applicable State’s markets beginning
with the 2020 benefit year. We finalized
that any requests we received would be
published in the applicable benefit
year’s proposed HHS notice of benefit
and payment parameters, and the
supporting evidence provided by the
State in support of its request would be
made available for public comment.54
In the 2023 Payment Notice (87 FR
27236), HHS limited this flexibility by
finalizing amendments to § 153.320(d)
that repealed the State flexibility
framework for States to request
reductions in risk adjustment State
transfer payments for the 2024 benefit
year and beyond, with an exception for
prior participants.55 We also limited the
54 If the State requests that HHS not make
publicly available certain supporting evidence and
analysis because it contains trade secrets or
confidential commercial or financial information
within the meaning of HHS’ Freedom of
Information Act regulations at 45 CFR 5.31(d), HHS
will only make available on the CMS website the
supporting evidence submitted by the State that is
not a trade secret or confidential commercial or
financial information by posting a redacted version
of the State’s supporting evidence. See
§ 153.320(d)(3).
55 Section 153.320(d)(5) defines prior participants
as States that submitted a State reduction request
in the State’s individual catastrophic, individual
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options for prior participants to request
reductions by finalizing that beginning
with the 2024 benefit year, States
submitting reduction requests must
demonstrate that the requested
reduction satisfies the de minimis
standard—that is, the premium increase
necessary to cover the affected issuer’s
or issuers’ reduced risk adjustment
payments does not exceed 1 percent in
the relevant State market risk pool.56 In
the 2023 Payment Notice (87 FR 27239
through 27241), we also finalized the
conforming amendments to the HHS
approval framework in § 153.320(d)(4)
to reflect the changes to the applicable
criteria (that is, only retaining the de
minimis criterion) beginning with the
2024 benefit year, and we finalized the
proposed definition of ‘‘prior
participant’’ in § 153.320(d)(5). In
addition, HHS indicated our intention
to propose in future rulemaking to
repeal the exception for prior
participants beginning with the 2025
benefit year.57
Since finalizing the ability for States
to request a reduction of risk adjustment
transfers in the 2019 Payment Notice (83
FR 16955 through 16960), we received
public comments on subsequent
proposed rulemakings requesting that
HHS repeal this policy, with several
commenters noting that reducing risk
adjustment transfers to plans with
higher-risk enrollees could create
incentives for issuers to avoid enrolling
high-risk enrollees in the future by
distorting plan offerings and designs,
including by avoiding broad network
plans, not offering platinum plans at all,
and only offering limited gold plans.
Commenters further stated that issuers
could also distort plan designs by
excluding coverage or imposing high
cost-sharing for certain drugs or
services. For example, one commenter
stated that the risk adjustment State
payment transfer formula already
adjusts for differences in types of
individuals enrolled in different States
and aggregate differences in prices and
utilization by using the Statewide
average premium as a scaling factor, so
State flexibility to account for Statespecific factors is unnecessary.58 In
addition, since establishing this
framework, we have observed a lack of
non-catastrophic, small group, or merged market
risk pool in the 2020, 2021, 2022, or 2023 benefit
year.
56 87 FR 27239 through 27241. See also 83 FR
16957.
57 87 FR 27239 through 27241. See also 83 FR
16957.
58 See Fielder, M, & Layton, T. (2020, December
30). Comment Letter on 2022 Payment Notice
Proposed Rule. Brookings. https://
www.brookings.edu/wp-content/uploads/2020/12/
FiedlerLaytonCommentLetterNBPP2022.pdf.
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interest from States in using this policy.
Only one State (Alabama) has exercised
this flexibility and requested reductions
to transfers in its individual and/or
small group markets.59
HHS believes this proposal to
completely repeal the option for States
to request reductions in risk adjustment
State transfers would align HHS policy
with Section 1 of E.O. 14009 (86 FR
7793), which prioritizes protecting and
strengthening the ACA and making
high-quality health care accessible and
affordable for all individuals. Section 3
of E.O. 14009 directs HHS, and the
heads of all other executive departments
and agencies with authorities and
responsibilities related to Medicaid and
the ACA, to review all existing
regulations, orders, guidance
documents, policies, and any other
similar agency actions to determine
whether they are inconsistent with
policy priorities described in Section 1
of E.O. 14009. Consistent with this
directive, HHS reviewed the risk
adjustment State flexibility under
§ 153.320(d) and determined it is
inconsistent with policies described in
sections 1 and 3 of E.O. 14009. We
believe that a complete repeal of
§ 153.320(d) would prevent the
potential negative outcomes of risk
adjustment State flexibility identified
through public comment, including the
possibility of risk selection, market
destabilization, increased premiums,
smaller networks, and lesscomprehensive plan options, the
prevention of which would protect and
strengthen the ACA and make health
care more accessible and affordable. For
all of these reasons, we propose to
amend § 153.320(d) to fully repeal the
flexibility for States, including prior
participants, to request reductions of
risk adjustment State transfers
calculated by HHS under the State
payment transfer formula in all State
market risk pools beginning with the
2025 benefit year. If these amendments
are finalized, no State would be able to
request a reduction in risk adjustment
transfers calculated by HHS under the
59 For the 2020 and 2021 benefit years, Alabama
submitted a 50 percent risk adjustment transfer
reduction request for its small group market, which
HHS approved in the 2020 Payment Notice (84 FR
17454) and in the 2021 Payment Notice (85 FR
29164). For the 2022 and 2023 benefit years,
Alabama submitted 50 percent risk adjustment
transfer reduction requests for its individual and
small group markets. HHS approved the State’s
requests for the 2022 benefit year in part 2 of the
2022 Payment Notice final rule (86 FR 24140) and
approved a 25 percent reduction for Alabama’s
individual market State transfers (including the
catastrophic and non-catastrophic risk pools) and a
10 percent reduction for the State’s small group
market transfers for the 2023 benefit year in the
2023 Payment Notice (87 FR 27208).
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State payment transfer formula starting
with the 2025 benefit year.
We seek comment on this proposal.
b. Requests To Reduce Risk Adjustment
Transfers for the 2024 Benefit Year
In accordance with § 153.320(d)(2),
beginning with the 2020 benefit year,
States requesting a reduction in the
transfers calculated by HHS under the
State payment transfer formula must
submit their requests with the
supporting evidence and analysis
outlined under § 153.320(d)(1) by
August 1 of the calendar year that is 2
calendar years prior to the beginning of
the applicable benefit year. As finalized
in the 2023 Payment Notice (87 FR
27239 through 27241), under
§ 153.320(d)(1)(iv), State requests for a
reduction to transfers must include a
justification for the reduction requested
demonstrating the requested reduction
would have de minimis impact on the
necessary premium increase to cover the
transfers for issuers that would receive
reduced transfer payments beginning
with the 2024 benefit year. In
accordance with § 153.320(d)(4)(i)(B),
HHS will approve State reduction
requests if HHS determines, based on
the review of the information submitted
as part of the State’s request, along with
other relevant factors, including the
premium impact of the transfer
reduction for the State market risk pool,
and relevant public comments, that the
requested reduction would have de
minimis impact on the necessary
premium increase to cover the transfers
for issuers that would receive reduced
transfer payments beginning with the
2024 benefit year. In addition, pursuant
to § 153.320(d)(4)(ii), HHS may approve
a reduction amount that is lower than
the amount requested by the State if the
supporting evidence and analysis do not
fully support the requested reduction
amount. If approved by HHS, State
reduction requests are applied to the
plan PMPM payment or charge State
payment transfer amount (Ti in the State
payment transfer formula).
For the 2024 benefit year, HHS
received requests from Alabama to
reduce risk adjustment State transfers
for its individual 60 and small group
markets by 50 percent. As Alabama has
stated in previous years, Alabama
asserts that the HHS-operated risk
adjustment program does not work
precisely in the Alabama market,
clarifying that they do not assert that the
risk adjustment formula is flawed, only
60 Alabama’s individual market request is for a 50
percent reduction to risk adjustment transfers for its
individual market non-catastrophic and
catastrophic risk pools.
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that it produces imprecise results in
Alabama which has an ‘‘extremely
unbalanced market share.’’ The State
reports that its review of the issuers’
2021 financial data suggested that any
premium increase resulting from a
reduction of 50 percent to the 2024
benefit year risk adjustment payments
for the individual market would not
exceed one percent, the de minimis
premium increase threshold set forth in
§ 153.320(d)(1)(iv) and (d)(4)(i)(B).
Additionally, the State reports that its
review of the issuers’ 2021 financial
data also suggested that any premium
increase resulting from a 50 percent
reduction to risk adjustment payments
in the small group market for the 2024
benefit year would not exceed the de
minimis threshold of one percent.
At this time, to make HHS’s approval
determination under § 153.320(d)(4), we
seek comment on Alabama’s requests to
reduce risk adjustment State transfers in
their individual and small group
markets by 50 percent for the 2024
benefit year. The request and additional
documentation submitted by Alabama
are posted under the ‘‘State Flexibility
Requests’’ heading at https://
www.cms.gov/cciio/programs-andinitiatives/premium-stabilizationprograms.
5. Risk Adjustment Issuer Data
Requirements (§§ 153.610, 153.700, and
153.710)
We propose, beginning with the 2023
benefit year, to collect and extract from
issuers’ EDGE servers through issuers’
EDGE Server Enrollment Submission
(ESES) files and risk adjustment
recalibration enrollment files a new data
element, a QSEHRA indicator. We also
propose to extract plan ID and rating
area data elements issuers have
submitted to their EDGE servers from
certain benefit years prior to 2021.
45 CFR 153.610(a) requires that health
insurance issuers of risk adjustment
covered plans submit or make accessible
all required risk adjustment data in
accordance with the data collection
approach established by HHS 61 in
States where HHS operates the program
on behalf of a State.62 In the 2014
Payment Notice (78 FR 15497 through
15500; § 153.720), HHS established an
approach for obtaining the necessary
data for risk adjustment calculations in
States where HHS operates the program
61 Also
see 45 CFR 153.700–153.740.
full list of required data elements can be
found in Appendix A of OMB Control Number
0938–1155/CMS–10401. (2022, May 26). Standards
Related to Reinsurance, Risk Corridors, and Risk
Adjustment. https://www.cms.gov/Regulations-andGuidance/Legislation/PaperworkReductionActof
1995/PRA-Listing-Items/CMS-10401.
62 The
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through a distributed data collection
model that prevented the transfer of
individuals’ personally identifiable
information (PII). Then, in several
subsequent rulemakings,63 we finalized
policies for the extraction and use of
enrollee-level EDGE data. The purpose
of collecting and extracting enrolleelevel data is to provide HHS with more
granular data to use for recalibrating the
HHS risk adjustment models, informing
updates to the AV Calculator,
conducting policy analysis, and
calibrating HHS programs in the
individual and small group (including
merged) markets and the PHS Act
requirements enforced by HHS that are
applicable market-wide,64 as well as
informing policy and improving the
integrity of other HHS Federal healthrelated programs.65 The use of enrolleelevel data extracted from issuers’ EDGE
servers and summary level reports
produced from remote command and ad
hoc queries enhances HHS’ ability to
develop and set policy and limits the
need to pursue alternative burdensome
data collections from issuers. We also
previously finalized policies related to
creating on an annual basis an enrolleelevel EDGE Limited Data Set (LDS)
using masked enrollee-level data
submitted to EDGE servers by issuers of
risk adjustment covered plans in the
individual and small group (including
merged) markets and making this LDS
available to requestors who seek the
data for research purposes.66 67
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a. Collection and Extraction of the
QSEHRA Indicator
In the 2023 Payment Notice (87 FR
27241 through 27252), we finalized that
we will collect and extract an individual
coverage Health Reimbursement
63 See the 2018 Payment Notice, 81 FR 94101; the
2020 Payment Notice, 84 FR 17488; and the 2023
Payment Notice, 87 FR 27241.
64 See, for example, 42 U.S.C. 300gg–300gg–28.
65 As detailed in the 2023 Payment Notice, the
finalized policies related to the permitted uses of
EDGE data and reports make clear that HHS can use
this information to inform policy analyses and
improve the integrity of other HHS Federal healthrelated programs outside the commercial individual
and small group (including merged) markets, such
as the programs in certain States to provide wraparound QHP coverage through Exchanges to
Medicaid expansion populations and coverage
offered by non-Federal Governmental plans. See 87
FR 27243; 87 FR 630 through 631.
66 See the 2020 Payment Notice, 84 FR 17486
through 17490 and the 2023 Payment Notice, 87 FR
27243. Also see CMS. (2022, August 15). EnrolleeLevel External Data Gathering Environment (EDGE)
Limited Data Set (LDS). https://www.cms.gov/
research-statistics-data-systems/limited-data-setlds-files/enrollee-level-external-data-gatheringenvironment-edge-limited-data-set-lds.
67 As explained in the 2020 Payment Notice, we
do not currently make the EDGE LDS available to
requestors for public health or health care operation
activities. See 84 FR 17488.
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Arrangement (ICHRA) indicator and that
we will make this indicator available in
the enrollee-level EDGE LDS beginning
with the 2023 benefit year. The primary
purpose of collecting and extracting
ICHRA indicator data is to allow HHS
to conduct analyses to examine whether
there are any unique actuarial
characteristics of the ICHRA population
(such as the health status of enrollees
with ICHRAs), and to investigate what
impact (if any) ICHRA enrollment is
having on State individual and small
group (or merged) market risk pools.
The additional information collected
through the ICHRA indicator will be
used to further analyze if any
refinements to the HHS risk adjustment
methodology should be examined or
proposed through notice and comment
rulemaking, and similarly may also be
used to inform policy analysis and
potential updates to the AV Calculator,
other HHS individual or small group
(including merged) market programs, or
other HHS Federal health-related
programs.
Since finalizing the collection of the
ICHRA indicator as part of the enrolleelevel EDGE data extracted from issuers’
EDGE servers, we determined that also
collecting and extracting a QSEHRA
indicator would provide a more
thorough picture of the actuarial
characteristics of the Health
Reimbursement Arrangement (HRA)
population and how or whether HRA
enrollment is impacting State individual
and small group (including merged)
market risk pools. HHS needs QSEHRA
data in order to conduct a
comprehensive assessment of the HRA
markets. A QSEHRA indicator would
also allow HHS to investigate whether
the risk profile of enrollees in
QSEHRAs, which differ from ICHRAs
with respect to standards related to
employer eligibility, employee
eligibility, restrictions on allowance
amounts, and eligibility for PTCs, differ
from enrollees in ICHRAs.68 While we
acknowledge that FFEs, SBE–FPs, and
SBEs collect information about the
provision of QSEHRAs, we note that
adding a QSEHRA indicator to the
required risk adjustment EDGE data
submissions would provide more
uniform and comprehensive
information than what is submitted by
Exchange enrollees, as it would capture
information on both Exchange and nonExchange enrollment. It also would
provide HHS the ability to extract and
aggregate the QSEHRA indicator
68 Rosso, R. (2022, May 7). Health Reimbursement
Arrangements (HRAs): Overview and Related
History. Congressional Research Service. https://
crsreports.congress.gov/product/pdf/R/R47041.
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alongside other claims and enrollment
data accessible through issuers’ EDGE
servers, which would not be possible
with the data collection from consumers
through other processes since the EDGE
data is masked 69 and therefore cannot
be linked with other enrollment data
sources.70
We therefore propose that, beginning
with the 2023 benefit year, issuers
would be required to collect and submit
a QSEHRA indicator as part of the
required risk adjustment data that
issuers make accessible to HHS from
their respective EDGE servers in States
where HHS operates the risk adjustment
program. This new data element would
be included as part of the enrollee-level
EDGE data extracted from issuers’ EDGE
servers and summary level reports
produced from remote command and ad
hoc queries beginning with the 2023
benefit year.71 We also propose to
include this indicator in the enrolleelevel EDGE LDS made available to
qualified researchers upon request once
available (that is, beginning with 2023
benefit year data).
In the 2023 Payment Notice (87 FR at
27248), we acknowledged that ICHRA
information is collected by HHS from
FFE or SBE–FP enrollees through the
eligibility application process and from
SBE enrollees through the State
Exchange enrollment and payment files,
as well as collected directly by issuers
and their affiliated agents and brokers.
We also noted the ICHRA indicator was
intended to capture whether a particular
enrollee’s health care coverage involves
(or does not involve) an ICHRA and that
we would structure this data element for
EDGE data submissions similar to
current collections, where possible.
Additionally, we explained that the
collection and extraction of an ICHRA
indicator as part of the required risk
adjustment data submissions issuers
make accessible to HHS through their
respective EDGE servers provides more
uniform and comprehensive
information than what is submitted by
FFE and SBE–FP enrollees on a QHP
application and by SBE enrollees
through enrollment and payment files,
as it would capture both on and off
Exchange enrollees.
The same is also true for QSEHRA
information and we therefore propose to
apply the same approach for the
QSEHRA indicator. Currently, the FFEs
and SBE–FPs collect information about
69 45
CFR 153.720.
information on the challenges associated
with linking the extracted enrollee-level EDGE data
to other sources, see 87 FR 631 through 632.
71 The deadline for submission of 2023 benefit
year risk adjustment data is April 30, 2024. See 45
CFR 153.730.
70 For
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QSEHRA provision from all applicants
to determine whether they are eligible
for a special enrollment period (SEP), as
individuals and their dependents who
become newly eligible for a QSEHRA
may be eligible for a SEP. SBEs also
collect similar information from their
applicants to determine SEP eligibility.
This data may also be provided directly
to issuers by consumers who seek to
enroll in coverage directly with the
issuer. In addition, an issuer may
currently have or collect information
that could be used to populate the
QSEHRA indicator in situations where
the issuer is being paid directly by the
employer through the QSEHRA for the
individual market coverage. We
therefore propose to generally permit
issuers to populate the required
QSEHRA indicator with information
from the FFE or SBE–FP enrollees or
enrollees through SBEs, or from other
sources for collecting this information.
The QSEHRA indicator would be used
to capture whether a particular
enrollee’s health care coverage involves
(or does not involve) a QSEHRA, and we
propose to structure this data element
for EDGE data submissions similar to
current collections, where possible.
Beginning with the 2023 benefit year,
HHS would provide additional
operational and technical guidance on
how issuers should submit this new
data element to HHS through issuer
EDGE servers via the applicable benefit
year’s EDGE Server Business Rules and
the EDGE Server Interface Control
Document, as may be necessary.
We are also proposing, similar to the
transitional approach for the ICHRA
indicator finalized in the 2023 Payment
Notice (87 FR 27241 through 27252), a
transitional approach for the collection
and extraction of the QSEHRA
indicator. For the 2023 and 2024 benefit
years, issuers would be required to
populate the QSEHRA indicator using
only data they already collect or have
accessible regarding their enrollees. For
example, when an FFE enrollee is using
an SEP, information about QSEHRA
provision is collected by the FFE, and
the FFE may make these data available
to issuers. In addition, as noted above,
there may be situations where an issuer
has or collects information that could be
used to populate the QSEHRA indicator.
Then, beginning with the 2025 benefit
year, we propose that the transitional
approach would end, and issuers would
be required to populate the QSEHRA
field using available sources (for
example, information from Exchanges,
and requesting information directly
from enrollees) and, in the absence of an
existing source for particular enrollees,
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to make a good faith effort to ensure
collection and submission of the
QSEHRA indictor for these enrollees.
HHS would provide additional details
on what constitutes a good faith effort
to ensure collection and submission of
the QSEHRA indicator in the future.
HHS intends to seek input from issuers
and other interested parties to inform
development of the good faith standard
and determine the most feasible
methods for issuers to collect the
information used to populate this data
field.72
We believe this transitional approach
is necessary as the burden associated
with the collection of this data would be
similar to that of the collection of the
ICHRA indicator, as finalized in the
2023 Payment Notice (87 FR 27241
through 27252). Much like the ICHRA
indicator data, we believe that some
issuers already collect the relevant
QSEHRA data. However, we do not
believe the information to populate the
QSEHRA indicator is routinely collected
by all issuers at this time; therefore, we
anticipate that there may be
administrative burden for some issuers
in developing processes for collection,
validation, and submission of this new
data element. In recognition of the
burden that collection of this new data
element potentially would pose for
some issuers, we propose to adopt a
transitional approach for the 2023 and
2024 benefit years. This transitional
approach for the QSEHRA indicator
would be the same as the approach
finalized for the ICHRA indicator in the
2023 Payment Notice and is also similar
to how we have handled other new data
collection requirements.73 Further
details regarding the estimated burden
may be found below in the ICRs
Regarding Risk Adjustment Issuer Data
Submission Requirements (§§ 153.610,
153.700, and 153.710).
Consistent with the policy adopted in
the 2020 Payment Notice (84 FR 17488
through 17490) regarding HHS’ use of
data and reports extracted from issuers
EDGE servers (including data reports
and ad hoc query reports), and the
72 If the burden estimate for collection of
QSEHRA indicator changes beginning with the
2025 benefit year (after the transitional approach
ends), the information collection under OMB
control number 0938–1155 would be revised
accordingly and interested parties would be
provided the opportunity to comment through that
process.
73 For example, HHS did not penalize issuers for
temporarily submitting a default value for the in/
out-of-network indictor for the 2018 benefit year in
order to give issuers time to make the necessary
changes to their operations and systems to comply
with the new data collection requirement, but
required issuers to provide full and accurate
information for the in/out-of-network indicator
beginning with the 2019 benefit year.
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policy adopted in the 2023 Payment
Notice (87 FR 27243) to expand the
permissible uses of such data and
reports, beyond the risk adjustment
program, we would also use the
QSEHRA indicator once it is available to
conduct policy analysis; operationalize
and calibrate other HHS programs in the
individual and small group (including
merged) markets; and to inform policy
analysis and improve the integrity of
other HHS Federal health-related
programs to the extent such use is
otherwise authorized by, required
under, or not inconsistent with
applicable Federal law. We would not
use the QSEHRA indicator or any
analysis that relied upon the indictor to
pursue changes to our policies until we
conduct data quality checks and ensure
the response rate is adequate to support
any analytical conclusions. These data
quality and reliability checks would
generally be consistent with other data
standard checks that HHS performs
related to data collected through issuers’
EDGE servers.
In conjunction with the proposal to
collect and extract this new data
element, we also propose to include the
QSEHRA indicator in the LDS
containing enrollee-level EDGE data that
HHS makes available to qualified
researchers upon request once the
QSEHRA indicator is available,
beginning with the 2023 benefit year.
We propose to include the new
indicator as part of the LDS because it
would enhance the usefulness of the
data set for qualified researchers by
making available additional data to
increase understanding of these
markets, particularly the impact
QSEHRA provision may have on the
individual and small group (including
merged) markets, and contribute to
greater transparency. We further note
that similar to the ICHRA indicator, the
proposed QSEHRA indicator would not
be a direct identifier that must be
excluded from an LDS under the HIPAA
Privacy Rule and thus would not add to
the risk of enrollees being identified. As
noted in the 2023 Payment Notice (87
FR at 27245), only an LDS of certain
masked enrollee-level EDGE data
elements is made available and this LDS
is available only to qualified researchers
if they meet the requirements for access
to such file(s), including entering into a
data use agreement that establishes the
permitted uses or disclosures of the
information and prohibits the recipient
from identifying the information.74 75 In
74 See CMS. (2020, June). Data Use Agreement.
(Form CMS–R–0235L).https://www.cms.gov/
Medicare/CMS-Forms/CMS-Forms/Downloads/
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addition, consistent with how we
created the LDS in prior years, HHS will
continue to exclude data from the LDS
that could lead to identification of
certain enrollees.76
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b. Extracting Plan ID and Rating Area
Finally, in addition to collecting and
extracting a QSEHRA indicator, we
propose to extract the plan ID 77 and
rating area data elements from the 2017,
2018, 2019 and 2020 benefit year data
submissions that issuers already made
accessible to HHS. In the 2023 Payment
Notice (87 FR 27249), we finalized the
proposal to extract these data elements
beginning with the 2021 benefit year.
However, HHS has determined that to
aid in annual model recalibration, as
well as HHS’ analyses of risk adjustment
data, it would be beneficial to also
include these two data elements as part
of the enrollee-level EDGE data and
reports extracted from issuers’ EDGE
servers for the 2017, 2018, 2019 and
2020 benefit years. Inclusion of plan ID
and rating area in extractions of these
additional benefit year data sets would
also support analysis of other HHS
individual and small group (including
merged) market programs, as well as
other HHS Federal health-related
programs.
Moreover, since finalizing the 2023
Payment Notice, we have found that the
analysis of risk adjustment data would
be more valuable if we could compare
historical trends, and access to these
data elements for past years would
further our ability to analyze and
improve the risk adjustment program.
For example, in assessing the 2020
enrollee-level EDGE data set for
inclusion in the 2024 benefit year model
recalibration, having access to plan ID
and rating area would have allowed us
to consider the different patterns of
utilization and costs at a more granular
level (for example, the State market risk
pool level). Since issuers already
CMS-R-0235L.pdf. See also 84 FR 17486 through
17490.
75 CMS. (2020, June). Data Use Agreement. (Form
CMS–R–0235L). https://www.cms.gov/Medicare/
CMS-Forms/CMS-Forms/Downloads/CMS-R0235L.pdf.
76 See, for example, CMS. (2021, August 25).
Creation of the 2019 Benefit Year Enrollee-Level
EDGE Limited Data Sets: Methods, Decisions and
Notes on Data Use. https://www.cms.gov/files/
document/2019-data-use-guide.pdf.
77 For details on the plan ID and its components,
see p. 42 of the following: CMS. (2013, March 22).
CMS Standard Companion Guide Transaction
Information: Instructions related to the ASC X12
Benefit Enrollment and Maintenance (834)
transaction, based on the 005010X220
Implementation Guide and its associated
005010X220A1 addenda for the FFE. https://
www.cms.gov/cciio/resources/regulations-andguidance/downloads/companion-guide-for-ffeenrollment-transaction-v15.pdf.
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collected and made available these data
elements to HHS for the 2017, 2018,
2019 and 2020 benefit years,78 we do
not believe that this proposal would
increase burden on issuers. We are also
not proposing any changes to the
accompanying policies finalized in the
2023 Payment Notice with respect to
these data elements and the enrolleelevel EDGE LDS. Although we recognize
that including plan ID and rating area
would enhance the usefulness of the
LDS, we continue to believe it is
appropriate to exclude these data
elements from the LDS to mitigate the
risk that entities that receive the LDS
file could identify issuers based on
these identifiers, particularly in areas
with a small number of issuers. As such,
HHS would not include these data
elements (plan ID and rating area) in the
LDS files made available to qualified
researchers upon request.
We seek comment on these proposals.
6. Risk Adjustment User Fee for 2024
Benefit Year (§ 153.610(f))
We propose a risk adjustment user fee
for the 2024 benefit year of $0.21
PMPM. Under § 153.310, if a State is
not approved to operate, or chooses to
forgo operating, its own risk adjustment
program, HHS will operate risk
adjustment on its behalf. As noted
previously in this proposed rule, for the
2024 benefit year, HHS will operate the
risk adjustment program in every State
and the District of Columbia. As
described in the 2014 Payment Notice
(78 FR 15416 through 15417), HHS’
operation of risk adjustment on behalf of
States is funded through a risk
adjustment user fee. Section
153.610(f)(2) provides that, where HHS
operates a risk adjustment program on
behalf of a State, an issuer of a risk
adjustment covered plan must remit a
user fee to HHS equal to the product of
its monthly billable member enrollment
in the plan and the PMPM risk
adjustment user fee specified in the
annual HHS notice of benefit and
payment parameters for the applicable
benefit year.
OMB Circular No. A–25 established
Federal policy regarding user fees, and
specifies that a user charge will be
assessed against each identifiable
recipient for special benefits derived
from Federal activities beyond those
78 As detailed in the 2023 Payment Notice, issuers
have been required to submit these two data
elements as part of the required risk adjustment
data submissions to their respective EDGE servers
to support HHS’ calculation of risk adjustment
transfers since the 2014 benefit year. See 87 FR
27243.
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78241
received by the general public.79 The
HHS-operated risk adjustment program
provides special benefits as defined in
section 6(a)(1)(B) of OMB Circular No.
A–25 to issuers of risk adjustment
covered plans because it mitigates the
financial instability associated with
potential adverse risk selection.80 The
risk adjustment program also
contributes to consumer confidence in
the health insurance industry by
helping to stabilize premiums across the
individual, merged, and small group
markets.
In the 2023 Payment Notice (87 FR
27252), we calculated the Federal
administrative expenses of operating the
risk adjustment program for the 2023
benefit year to result in a risk
adjustment user fee rate of $0.22 PMPM
based on our estimated costs for risk
adjustment operations and estimated
BMM for individuals enrolled in risk
adjustment covered plans. For the 2024
benefit year, HHS proposes to use the
same methodology to estimate our
administrative expenses to operate the
risk adjustment program. These costs
cover development of the models and
methodology, collections, payments,
account management, data collection,
data validation, program integrity and
audit functions, operational and fraud
analytics, interested parties training,
operational support, and administrative
and personnel costs dedicated to risk
adjustment program activities. To
calculate the risk adjustment user fee,
we divided HHS’ projected total costs
for administering the risk adjustment
program on behalf of States by the
expected number of BMM in risk
adjustment covered plans in States
where the HHS-operated risk
adjustment program will apply in the
2024 benefit year.
We estimate that the total cost for
HHS to operate the risk adjustment
program on behalf of States for the 2024
benefit year will be approximately $60
million, which remains stable with the
approximately $60 million estimated for
the 2023 benefit year. We also project
higher enrollment than our prior
estimates in the individual and small
group (including merged) markets in the
2023 and 2024 benefit years based on
the increased enrollment between the
2020 and 2021 benefit years, likely due
to the increased PTC subsidies provided
for in the American Rescue Plan Act of
2021 (ARP).81 82 In light of the passage
79 OMB. (1993). OMB Circular No. A–25 Revised,
Transmittal Memorandum No. https://
www.whitehouse.gov/wp-content/uploads/2017/11/
Circular-025.pdf.
80 Ibid.
81 ARP. Public Law 117–2 (2021).
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of the Inflation Reduction Act of 2022
(IRA), in which Section 12001 extended
the enhanced PTC subsidies in section
9661 of the ARP through the 2025
benefit year, we project increased 2021
enrollment levels to remain steady
through the 2025 benefit year.83 Because
this provision of the IRA is expected to
continue higher enrollment, we propose
a slightly lower risk adjustment user fee
of $0.21 PMPM.
We seek comment on the proposed
risk adjustment user fee for the 2024
benefit year.
7. Risk Adjustment Data Validation
Requirements When HHS Operates Risk
Adjustment (HHS–RADV) (§§ 153.350
and 153.630)
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HHS will conduct risk adjustment
data validation under §§ 153.350
and 153.630 in any State where HHS is
operating risk adjustment on a State’s
behalf.84 The purpose of risk adjustment
data validation is to ensure issuers are
providing accurate high-quality
information to HHS, which is crucial for
the proper functioning of the HHSoperated risk adjustment program.
HHS–RADV also ensures that risk
adjustment transfers reflect verifiable
actuarial risk differences among issuers,
rather than risk score calculations that
are based on poor quality data, thereby
helping to ensure that the HHS-operated
risk adjustment program assesses
charges to issuers with plans with
lower-than-average actuarial risk while
making payments to issuers with plans
with higher-than-average actuarial risk.
HHS–RADV consists of an initial
validation audit (IVA) and a second
validation audit (SVA). Under
§ 153.630, each issuer of a risk
adjustment covered plan must engage an
independent initial validation audit
entity. The issuer provides
demographic, enrollment, and medical
record documentation for a sample of
enrollees selected by HHS to its initial
validation auditor for data validation.
Each issuer’s IVA is followed by an
SVA, which is conducted by an entity
HHS retains to verify the accuracy of the
findings of the IVA. Based on the
findings from the IVA, or SVA (as
applicable), HHS conducts error
estimation to calculate an HHS–RADV
error rate. The HHS–RADV error rate is
82 CMS. (2022, July 19). Summary Report on
Permanent Risk Adjustment Transfers for the 2021
Benefit Year. (p. 9). https://www.cms.gov/CCIIO/
Programs-and-Initiatives/Premium-StabilizationPrograms/Downloads/RA-Report-BY2021.pdf.
83 Inflation Reduction Act. Public Law 1217–169
(2022).
84 HHS has operated the risk adjustment program
in all 50 States the District of Columbia since the
2017 benefit year.
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then applied to adjust the plan liability
risk scores of outlier issuers, as well as
the risk adjustment transfers calculated
under the State payment transfer
formula for the applicable State market
risk pools, for the benefit year being
audited.
a. Materiality Threshold for Risk
Adjustment Data Validation
Beginning with 2022 benefit year
HHS–RADV, we propose to change the
HHS–RADV materiality threshold
definition, first implemented in the
2018 Payment Notice (81 FR 94104
through 94105), from $15 million in
total annual premiums Statewide to
30,000 total BMM Statewide, calculated
by combining an issuer’s enrollment in
a State’s individual non-catastrophic,
catastrophic, small group, and merged
markets, as applicable, in the benefit
year being audited.85 Consistent with
the application of the current
materiality threshold definition and
accompanying exemption under
§ 153.630(g)(2), issuers that fall below
the new proposed materiality threshold
would not be subject to the annual IVA
(and SVA) audit requirements, but may
be selected to participate in a given
benefit year of HHS–RADV based on
random sampling or targeted sampling
due to the identification of any riskbased triggers that warrant more
frequent audits.
In the 2020 Payment Notice (84 FR
17508 through 17511), HHS established
§ 153.630(g) to codify exemptions to
HHS–RADV requirements, including an
exemption for issuers that fell below a
materiality threshold, as defined by
HHS, to ease the burden of annual audit
requirements for smaller issuers of risk
adjustment covered plans that do not
materially impact risk adjustment
transfers.86 This materiality threshold
was first implemented and defined in
the 2018 Payment Notice (81 FR 94104
through 94105), where HHS finalized a
policy that issuers with total annual
premiums at or below $15 million
(calculated based on the Statewide
premiums of the benefit year being
85 Activities related to the 2022 benefit year of
HHS–RADV will generally begin in March 2023,
when issuers can start selecting their IVA entity,
and IVA entities can start electing to participate in
HHS–RADV for the 2022 benefit year. See, for
example, the 2021 Benefit Year HHS–RADV
Activities Timeline (May 3, 2022), available at:
https://regtap.cms.gov/uploads/library/HRADV_
2021Timeline_5CR_050322.pdf.
86 Additionally, in the 2019 Payment Notice (83
FR 16966), we finalized an exemption from HHS–
RADV for issuers with 500 or fewer BMM Statewide
in the benefit year being audited. This very small
issuer exemption is codified at 45 CFR
153.630(g)(1). Issuers with 500 or fewer BMM
Statewide are not subject to random or targeted
sampling.
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validated) would not be subject to
annual IVA requirements, but would
still be subject to random and targeted
sampling.87 Under this approach,
issuers below the materiality threshold
are subject to an IVA approximately
every 3 years, barring any risk-based
triggers that would warrant more
frequent audits.
We implemented the materiality
threshold based on an evaluation of the
burden associated with HHS–RADV,
particularly the fixed costs associated
with hiring an initial validation auditor
and submitting IVA results to HHS on
an annual basis, which may be a large
portion of some issuers’ administrative
costs.88 To ease the burden of annual
audit requirements for smaller issuers of
risk adjustment covered plans that do
not materially impact risk adjustment
transfers, we finalized a threshold of
$15 million in total annual premiums
Statewide—a threshold at which 1
percent of an issuer’s premiums would
cover the estimated $150,000 cost of the
IVA.89 When defining this threshold, we
also considered the impact of the
exemption on risk adjustment transfers
and data validation activities, and
estimated issuers above this threshold
represented approximately 98.5 percent
of enrollment in risk adjustment
covered plans nationally. As such, we
determined the annual audit of issuers
at or below the threshold of total annual
premiums Statewide of $15 million was
not material.90 We committed to
continue to monitor this threshold and
further noted we may propose
adjustments in the future to maintain
this balance.91
Since we established the materiality
threshold definition, the estimated costs
to complete the IVA have increased,
especially with the addition of
prescription drug categories to the adult
models starting with the 2018 benefit
year, and our current estimate of the
cost of the IVA is approximately
$170,000 per an issuer. To maintain the
same general framework and effectively
limit the proportion of an issuer’s
premiums that would be used to cover
IVA costs to 1 percent, we would need
to adjust the current materiality
threshold definition and increase it to
87 While the 2018 Payment Notice (81 FR 94104
through 94105) provided an applicability date for
the materiality threshold that began with the 2017
benefit year of HHS–RADV, we postponed the
application of the materiality threshold to the 2018
benefit year in the 2019 Payment Notice (83 FR
16966 through 16967).
88 See 81 FR 94104 through 94105. Also see 81
FR 61490.
89 See 81 FR 94104 through 94105.
90 See 81 FR 94104 through 94105. Also see 81
FR 61490.
91 See 81 FR 94105.
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$17 million in total annual premiums
Statewide. We estimate that 30,000
BMM Statewide translates to
approximately $17 million in total
annual premiums Statewide on average
across markets, and this proposed
threshold would maintain that issuers of
risk adjustment covered plans below
this threshold would represent no more
than 1.5 percent of enrollment in risk
adjustment covered plans nationally.
We therefore propose to change the HHS
definition of the materiality threshold
under § 153.630(g)(2) to 30,000 BMM
Statewide in the benefit year being
audited beginning with the 2022 benefit
year of HHS–RADV.
We propose shifting the exemption
from a dollar threshold to BMM
threshold because a BMM threshold
would continue to exempt small issuers
that face a disproportionally higher
burden even in situations where PMPM
premiums grow overtime. Shifting the
materiality threshold under
§ 153.630(g)(2) to a BMM basis would
also align with the threshold established
in § 153.630(g)(1), which exempts
issuers with 500 or fewer BMM
Statewide in the benefit year being
audited from HHS–RADV requirements,
including random and targeted
sampling. We do not anticipate that this
proposal would change the current
estimated burdens of the annual HHS–
RADV requirements on issuers as the
pool of issuers falling below a 30,000
BMM Statewide threshold does not
significantly differ from the pool of
issuers falling below a $15 million total
annual premiums Statewide threshold.
On average, between the 2017 and 2021
benefit years, there were 197 issuers of
risk adjustment covered plans with total
annual premiums Statewide below $15
million and 201 issuers of risk
adjustment covered plans with total
BMM Statewide below 30,000. The
proposed changes should also have a
minimal impact on data validation
activities as issuers of risk adjustment
covered plans below this proposed
threshold are estimated to represent no
more than 1.5 percent of enrollment in
risk adjustment covered plans
nationally. We continue to believe that
setting this 1.5 percent of enrollment
threshold promotes the goals of the
HHS–RADV process, while also
considering the burden of the process
on smaller plans, and therefore
represents the appropriate balance.
We are not proposing any changes to
the regulatory text at § 153.630(g)(2) or
to the other accompanying policies. As
such, beginning with the 2022 benefit
year of HHS–RADV, issuers below the
proposed 30,000 BMM Statewide
threshold would be exempt from
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participating in the annual HHS–RADV
IVA and SVA requirements if not
otherwise selected by HHS to
participate under random and targeted
sampling conducted approximately
every 3 years (barring any risk-based
triggers based on experience that would
warrant more frequent audits). To
determine whether an issuer falls under
the materiality threshold, its BMM
would be calculated Statewide, that is,
by combining an issuer’s enrollment in
a State’s individual non-catastrophic,
catastrophic, small group, and merged
markets, as applicable, in the benefit
year being audited. Issuers that qualify
for the exemption under § 153.630(g)(2)
from HHS–RADV requirements for a
particular benefit year must continue to
maintain their risk adjustment
documents and records consistent with
§ 153.620(b) and may be required to
make those documents and records
available for review or to comply with
an audit by the Federal Government.92
We further note that if an issuer of a risk
adjustment covered plan that falls
within the materiality threshold is not
exempt from HHS–RADV for a given
benefit year (that is, the issuer is
selected as part of random or targeted
sampling), and fails to engage an IVA or
submit IVA results to HHS, the issuer
would be subject to the default data
validation charge in accordance with
§ 153.630(b)(10) and may be subject to
other enforcement action. Lastly, we
affirm that an issuer that qualifies for an
exemption under § 153.630(g)(2) from
HHS–RADV requirements for a
particular benefit year would not have
its risk scores and State transfers
adjusted due to its own risk score error
rate(s), but its risk scores and State
transfers could be adjusted if other
issuers in the applicable State market
risk pools were outliers in that benefit
year of HHS–RADV.
We solicit comments on this proposal
as well as comments on whether we
should increase the materiality
threshold to $17 million in total annual
premiums Statewide instead of
switching to 30,000 BMM Statewide and
on the applicability date for when a new
HHS–RADV materiality threshold
should begin to apply.
b. HHS–RADV Adjustments for Issuers
That Have Exited the Market
Beginning with 2021 benefit year
HHS–RADV, we propose to remove the
policy to only apply an exiting issuer’s
HHS–RADV results if that issuer is a
positive error rate outlier.93 We are
92 See
45 CFR 153.620(b) and (c).
qualify as an exiting issuer, an issuer must
exit all of the market risk pools in the State (that
93 To
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78243
proposing to change this policy because
it is no longer necessary to treat exiting
issuers differently from non-exiting
issuers when they are negative error rate
outliers in the applicable benefit year’s
HHS–RADV given the transition to the
concurrent application of HHS–RADV
results for all issuers.
Consistent with 45 CFR 153.350(b)
and (c), adjustments are made to risk
scores and risk adjustment State
transfers based on the errors discovered
in HHS–RADV. In the 2015 Payment
Notice (79 FR 13768 through 13769),
HHS established a prospective approach
to adjust risk scores and risk adjustment
State transfers based on the results of
HHS–RADV. Under the prospective
approach, an issuer’s HHS–RADV error
rate for a given benefit year is applied
to the following benefit year’s risk
scores and risk adjustment State
transfers. However, an issuer that exits
all market risk pools in the State during
or at the end of the benefit year being
audited would not have risk scores and
State transfers to adjust in the next
applicable benefit year. As such, the
2019 Payment Notice (83 FR 16965
through 16966) created an exception to
the prospective approach for exiting
issuers that provides for the concurrent
application of HHS–RADV results for
exiting issuers identified as outliers.
Under this exception, the HHS–RADV
error rate of an outlier exiting issuer is
used to adjust the exiting issuer’s prior
year risk scores and State transfers for
the applicable State market risk pool(s).
Due to the budget neutral nature of the
HHS-operated risk adjustment program,
including HHS–RADV, the application
of an outlier exiting issuer’s HHS–RADV
error rate would also impact other
issuers in the applicable State market
risk pool(s). Recognizing the impact on
non-exiting issuers, we further refined
the exiting issuer HHS–RADV policies
in the 2020 Payment Notice (84 FR
17503 through 17504) to limit the reopening of risk pools to make HHS–
RADV adjustments to non-exiting
issuers’ risk adjustment State transfers
in certain situations. More specifically,
HHS finalized a policy to only make risk
score and risk adjustment State transfer
adjustments to reflect an exiting issuer’s
HHS–RADV results if that issuer is a
is, not selling or offering any new plans in the
State). If an issuer only exits some markets or risk
pools in the State, but continues to sell or offer new
plans in others, it is not considered an exiting
issuer. A small group market issuer with offcalendar year coverage who exits the market but has
only carry-over coverage that ends in the next
benefit year (that is, carry-over of run out claims for
individuals or groups enrolled in the previous
benefit year, with no new coverage being offered or
sold) is considered an exiting issuer. See the 2020
Payment Notice, 84 FR 17503 through 17504.
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positive error rate outlier in the benefit
year being audited, beginning with the
2018 benefit year.94 This policy makes
adjustments for positive error rate
outliers because those HHS–RADV
results indicate there was an
undercharge or overpayment in the
initial calculation of the exiting issuer’s
State transfer amount(s).95 Adjustments
were not made if an exiting issuer was
found to be a negative error rate
outlier.96 This policy was designed to
ensure that other issuers in a State
market risk pool are made whole when
an issuer with a positive error rate exits
the State and to remove the additional
burden of having transfers adjusted
(including the potential for additional
charges to be assessed to other issuers)
for a prior benefit year when a negative
error rate outlier exits the State.
Subsequently, in the 2020 HHS–
RADV Amendments Rule (85 FR 76979),
HHS finalized a transition to the
concurrent application of HHS–RADV
results for all issuers, including nonexiting issuers, beginning with the 2020
benefit year HHS–RADV, and has
continued the policy to only make risk
scores and risk adjustment State
transfers adjustments for exiting issuers
if they are positive error rate outliers.
However, in light of this shift to the
concurrent application of HHS–RADV
adjustments for all issuers, there is no
longer a reason to treat exiting issuers
differently than non-exiting issuers. We
therefore propose, beginning with 2021
HHS–RADV, to modify this policy and
apply HHS–RADV results to adjust the
plan liability risk scores of the benefit
year being audited for all positive and
negative error rate outlier issuers.97
We are not proposing any other
changes to the policies regarding HHS–
RADV adjustments for issuers that exit
94 In adjusting exiting issuers with positive error
rates, HHS collects funds (either increasing the
charge amount or reducing the payment amount)
from the exiting issuer and redistributes these funds
to the other issuers who participated in that State
market risk pool in the prior benefit year. See 84
FR 17503 through 17504.
95 A positive error rate generally has the effect of
decreasing an issuer’s risk score and thereby
decreasing its risk adjustment State transfer
payment amount or increasing its risk adjustment
State transfer charge amount.
96 A negative error rate generally has the effect of
increasing an issuer’s risk score and thereby
increasing its risk adjustment State transfer
payment amount or decreasing its risk adjustment
State transfer charge amount.
97 Due to the budget neutral nature of the HHSoperated risk adjustment program, including HHS–
RADV, the application of an outlier issuer’s HHS–
RADV error rate would also impact other issuers in
the applicable State market risk pool(s). As such,
non-outlier and exempt issuers may also see their
State transfers adjusted as a result of the application
of HHS–RADV results if there are one or more
outliers in the State market risk pool(s).
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the market and therefore would
maintain the existing framework for
determining whether an issuer is an
exiting issuer. As such, the issuer would
have to exit all of the market risk pools
in the State (that is, not selling or
offering any new plan in the State) to be
considered an exiting issuer. If an issuer
only exits some of the markets or risk
pools in the State, but continues to sell
or offer new plans in others, it would
not be considered an exiting issuer. We
also affirm that small group market
issuers with off-calendar year coverage
who exit the market and only have
carry-over coverage that ends in the next
benefit year (that is, carry-over of run
out claims for individuals enrolled in
the previous benefit year, with no new
coverage being offered or sold) would be
considered an exiting issuer and would
be exempt from HHS–RADV under
§ 153.630(g)(4). Individual market
issuers offering or selling any new
individual market coverage in the
subsequent benefit year would be
required to participate in HHS–RADV,
unless another exemption applies.
We solicit comments on this proposal.
c. Discontinue Lifelong Permanent
Conditions List and Use of Non-EDGE
Claims in HHS–RADV
We seek comment on discontinuing
the use of the Lifelong Permanent
Conditions (LLPC) list 98 and the use of
non-EDGE claims starting with the 2022
benefit year of HHS–RADV.
The LLPC list was developed for
HHS–RADV medical record abstraction
purposes beginning with the 2016
benefit year, when issuers were first
learning the HHS–RADV protocols and
still gaining experience with EDGE data
submissions.99 The intention of the
LLPC list was to balance the burdens
and costs of HHS–RADV with the
program integrity goals of validating the
actuarial risk of enrollees in risk
98 See, for example, Appendix C: Lifelong
Permanent Conditions in the 2021 Benefit Year
PPACA HHS Risk Adjustment Data Validation
(HHS–RADV) Protocols (November 9, 2022)
available at https://regtap.cms.gov/uploads/library/
HRADV_2021_Benefit_Year_Protocols_5CR_
110922.pdf. Also see, for example, Appendix E:
Lifelong Permanent Conditions in the 2018 Benefit
Year PPACA HHS Risk Adjustment Data Validation
(HHS–RADV) Protocols (June 24, 2019) available at
https://regtap.cms.gov/uploads/library/HRADV_
2018Protocols_070319_RETIRED_5CR_070519.pdf.
99 CMS first published the ‘‘Chronic Condition
HCCs’’ list in the 2016 Benefit Year PPACA HHS
Risk Adjustment Data Validation (HHS–RADV)
Protocols (October 20, 2017) available at https://
regtap.cms.gov/uploads/library/HRADV_
2016Protocols_v1_5CR_052218.pdf. Beginning with
2018 benefit year, CMS has provided the ‘‘Lifelong
Permanent Conditions’’ list, a simplified list of
health conditions which share similar
characteristics as those on the ‘‘Chronic Condition
HCCs’’ list. See supra note 93.
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adjustment covered plans to ensure that
the HHS-operated risk adjustment
program accurately assesses charges to
issuers with plans with lower-thanaverage actuarial risk while making
payments to issuers with plans with
higher-than-average actuarial risk. The
LLPC list was designed to ease the
burden of medical record retrieval for
lifelong conditions by simplifying and
standardizing coding abstraction for IVA
and SVA entities that may have
different interpretations of standard
coding guidelines. Conditions on the
LLPC list can be abstracted by IVA and
SVA entities and validated in HHS–
RADV if present anywhere on an
enrollee’s valid and authenticated
medical record, even if the associated
diagnosis is not present on a claim that
meets EDGE server data submission
requirements for the applicable benefit
year.100 The associated diagnoses for the
health conditions selected by HHS are
considered to be lifelong, permanent
conditions which last for multiple years,
require ongoing medical attention, and
are typically unresolved once
diagnosed.101
While the LLPC list was developed for
HHS–RADV medical record abstraction
purposes, the EDGE Server Business
Rules for risk adjustment EDGE data
submissions direct that EDGE server
data submissions are claim-based and
follow standard coding principles and
guidelines. EDGE Server Business Rules
require that diagnoses codes submitted
to the EDGE server be related to medical
services performed during the patient’s
visit, be performed by a State licensed
medical provider, be associated with a
paid claim submitted to the issuer’s
EDGE server, and be associated with an
active enrollment period with the issuer
for the applicable risk adjustment
benefit year.102 Some issuers have
raised concerns that the LLPC list may
incentivize issuers to submit EDGE
supplemental diagnosis files containing
LLPC diagnoses even though those
diagnoses may not have been addressed
in the claim submitted to the EDGE
server for that encounter. While we
allowed the use of the LLPC list for the
last several years of HHS–RADV, we
continued to consider these issues and
100 Ibid.
101 See, for example, Appendix C: Lifelong
Permanent Conditions in the 2021 Benefit Year
PPACA HHS Risk Adjustment Data Validation
(HHS–RADV) Protocols (August 17, 2022) available
at https://regtap.cms.gov/uploads/library/HRADV_
2021_Benefit_Year_Protocols_v1_5CR_081722.pdf.
102 See, for example, Section 8.1 Guidance on
Diagnosis Code(s) Derived from Health Assessments
of the EDGE Server Business Rules (ESBR)
(November 1, 2022) available at https://
regtap.cms.gov/uploads/library/DDC-ESBR-1101225CR-110122.pdf.
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are now soliciting comments on the
discontinuance of the use of the LLPC
list beginning with the 2022 benefit year
of HHS–RADV.
We believe that discontinuing the use
of the LLPC list in HHS–RADV,
beginning with the 2022 benefit year,
would better align HHS–RADV
guidance with the EDGE Server
Business Rules and would eliminate
some situations where an issuer may
receive risk score credit for conditions
that did not require treatment during an
active enrollment period with the issuer
for the applicable risk adjustment
benefit year. In addition, we also believe
that issuers have now gained sufficient
experience with the EDGE data
submission process and HHS–RADV
protocols that it may not be necessary to
continue use of the LLPC list. For
example, while nearly half the States
subject to the HHS-operated risk
adjustment program for the 2015 benefit
year 103 were not eligible to receive an
interim risk adjustment summary
report,104 this trend has not continued.
In fact, all States have received an
interim risk adjustment summary report
since the 2017 benefit year of the HHSoperated risk adjustment program 105
103 See the Interim Summary Report on Risk
Adjustment for the 2015 Benefit Year (March 18,
2016), available at: https://www.cms.gov/CCIIO/
Programs-and-Initiatives/Premium-StabilizationPrograms/Downloads/InterimRAReport_BY2015_
5CR_032816.pdf.
104 Since the 2015 benefit year of the HHSoperated risk adjustment program, in order for a
State to receive the interim risk adjustment
summary report, all issuers with 0.5 percent of
market share must successfully submit at least 90
percent of full year enrollment and 90 percent of
three quarters of medical claims to their EDGE
servers by the applicable deadline, as well as pass
EDGE quality checks. Details of EDGE quantity and
quality assessment can be found in the ‘‘Evaluation
of EDGE Data Submissions’’ guidance published
every year. See, for example, the Evaluation of
EDGE Data Submissions for 2015 Benefit Year
EDGE Server Data Bulletin (March 18, 2016),
available at: https://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/Downloads/Part-2EDGE-Q_Q-Guidance_03182016.pdf. Also see, for
example, the Evaluation of EDGE Data Submissions
for 2022 Benefit Year EDGE Server Data Bulletin
(October 25, 2022), available at: https://
www.cms.gov/cciio/resources/regulations-andguidance/downloads/edge_2022_qq_guidance.pdf.
105 See the Interim Summary Report on Risk
Adjustment for the 2017 Benefit Year (April 27,
2018), available at: https://www.cms.gov/CCIIO/
Programs-and-Initiatives/Premium-StabilizationPrograms/Downloads/Interim-RA-ReportBY2017.pdf. Also see, for example, the Interim
Summary Report on Risk Adjustment for the 2018
Benefit Year (March 22, 2019), available at: https://
www.cms.gov/CCIIO/Programs-and-Initiatives/
Premium-Stabilization-Programs/Downloads/
Interim-RA-Report-BY2018.pdf. Also see, for
example, the Interim Summary Report on Risk
Adjustment for the 2019 Benefit Year (March 25,
2020), available at: https://www.cms.gov/CCIIO/
Programs-and-Initiatives/Premium-StabilizationPrograms/Downloads/Interim-RA-ReportBY2019.pdf. Also see, for example, the Interim
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and only one State where HHS was
responsible for operating the risk
adjustment program failed to receive an
interim risk adjustment summary report
for the 2016 benefit year.106 Further,
after several pilot years of HHS–RADV,
issuers also have now gained several
years of experience with HHS–RADV
and HHS–RADV protocols.107
Therefore, we solicit comment on all
aspects of this potential change,
including the applicability date for the
discontinuance of the LLPC list. We also
request comment on the extent that
issuers and their IVA entities have
relied on the LLPC list to document
diagnoses when official coding guidance
was unclear or the medical record
lacked documentation to support
diagnosis of a lifelong, permanent
condition.
Similarly, we seek comments on
discontinuing the current policy that
permits the use of non-EDGE claims in
HHS–RADV beginning with the 2022
HHS–RADV benefit year. Under
§ 153.630(b)(6), issuers are required to
provide their IVA entity with all
relevant claims data and medical record
documentation for the enrollees selected
for audit. HHS currently allows issuers
to submit medical records to their IVA
entity for which no claim was accepted
into the EDGE server in certain
situations.108 Under the non-EDGE
Summary Report on Risk Adjustment for the 2020
Benefit Year (March 31, 2021), available at: https://
www.cms.gov/CCIIO/Programs-and-Initiatives/
Premium-Stabilization-Programs/Downloads/
Interim-RA-Report-BY2020.pdf. Also see, for
example, the Interim Summary Report on Risk
Adjustment for the 2021 Benefit Year (March 22,
2022), available at: https://www.cms.gov/files/
document/interim-ra-report-by2021.pdf.
106 See the Interim Summary Report on Risk
Adjustment for the 2016 Benefit Year (April 11,
2017), available at: https://www.cms.gov/CCIIO/
Programs-and-Initiatives/Premium-StabilizationPrograms/Downloads/InterimRAReport_BY2016_
5CR_033117.pdf.
107 CMS conducted two (2) pilot years for HHS–
RADV for the 2015 and 2016 benefit years. The
results of 2015 and 2016 benefit year HHS–RADV
were not applied to adjust plan liability risk scores
or risk adjustment transfers. In addition, 2017
benefit year HHS–RADV was a pilot year for
Massachusetts issuers; therefore, these issuers’ 2017
benefit year HHS–RADV results were not applied to
risk scores or transfers. Except for Massachusetts
issuers, the 2017 benefit year was the first non-pilot
year where HHS–RADV results were used to adjust
risk scores and risk adjustment transfers. See 84 FR
at 17508 (April 25, 2019). Also see the Summary
Report of 2017 Benefit Year HHS–RADV
Adjustments to Risk Adjustment Transfers (August
1, 2019), available at: https://www.cms.gov/CCIIO/
Programs-and-Initiatives/Premium-StabilizationPrograms/Downloads/BY2017-HHSRADVAdjustments-to-RA-Transfers-Summary-Report.pdf.
108 See, for example, Section 9.2.6.5:
Documentation of Claims Not Accepted in EDGE of
the 2021 Benefit Year PPACA HHS Risk Adjustment
Data Validation (HHS–RADV) Protocols (August 17,
2022) available at https://regtap.cms.gov/uploads/
library/HRADV_2021_Benefit_Year_Protocols_v1_
5CR_081722.pdf.
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78245
claims protocol, if issuers identify
medical records with no associated
EDGE server claim in HHS–RADV, they
must demonstrate that a non-EDGE
claim meets risk adjustment eligibility
criteria. Issuers must also allow the IVA
entity to view the associated non-EDGE
claim, and IVA entities must record
their validation results in their IVA
Entity Audit Results Submission.109
This protocol was also adopted during
the early years of HHS–RADV when
issuers were gaining experience with
HHS–RADV protocols and some may
have experienced challenges submitting
claims to the EDGE server. However, as
explained above, issuers have
consistently met data integrity criteria
for their EDGE data submissions for
multiple consecutive benefit years such
that we are now examining the nonEDGE claims protocol and considering
whether it should be discontinued.
Thus, as part of our ongoing effort to
examine ways to better align HHS–
RADV guidance and the EDGE Server
Business Rules, and in recognition of
the experience issuers have gained with
HHS–RADV and EDGE data
submissions, we solicit comments on
discontinuing this protocol. If this
change is adopted, beginning with the
2022 benefit year of HHS–RADV, issuers
would no longer be able to submit nonEDGE claims to their IVA entities to
supplement EDGE claims reviewed
during HHS–RADV. We solicit comment
on all aspects of this potential protocol
change, including the applicability date.
We also request comment on the extent
that issuers and their IVA entities have
relied on the current non-EDGE claims
protocol and on how this potential
change would impact issuers.
d. HHS–RADV Discrepancy and
Administrative Appeals Process
We propose to shorten the window to
confirm the findings of the SVA (if
applicable),110 or file a discrepancy
report, to within 15 calendar days of the
notification by HHS, beginning with the
2022 benefit year of HHS–RADV. Under
§ 153.630(d)(2), issuers currently have
30 calendar days to confirm the findings
109 The non-EDGE claim must be risk adjustment
eligible paid/positively adjudicated within the
benefit year for the specified sampled enrollee.
Although the non-EDGE claim would have been
accepted to EDGE had it met the EDGE submission
deadline, diagnoses associated with non-EDGE
claim s are not included in the risk adjustment risk
score calculations in the June 30th Summary Report
on Permanent Risk Adjustment Transfers.
Diagnoses associated with non-EDGE claims are
only used as an option for HCC validation purposes
in HHS–RADV when the applicable criteria are met.
110 Only those issuers who have insufficient
pairwise agreement between the IVA and SVA
receive SVA findings. See 84 FR 17495. Also see 86
FR 24201.
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of the SVA, or file a discrepancy report,
in the manner set forth by HHS, to
dispute those SVA findings. We propose
the shorter attestation and discrepancy
reporting window for SVA findings to
improve HHS’ ability to finalize SVA
findings results prior to release of the
applicable benefit year HHS Risk
Adjustment Data Validation (RADV)
Results Memo and the Summary Report
of Risk Adjustment Data Validation
Adjustments to Risk Adjustment
Transfers for the applicable benefit year,
which are time-sensitive publications
because information on HHS–RADV
adjustments is used by issuers for
medical loss ratio (MLR) reporting.111
We do not propose to shorten the 30calendar-day window set forth in
§ 153.630(d)(2) to confirm the risk score
error rate, or file a discrepancy, as the
same timing considerations do not
extend to the risk score error rate
attestation and discrepancy reporting
window. In addition, all issuers who
participate in HHS–RADV for the
applicable benefit year must complete
the risk score error rate attestation and
discrepancy reporting process, whereas
the SVA findings attestation and
discrepancy reporting process is limited
to the small number of issuers that have
insufficient pairwise agreement between
the IVA and SVA.
In prior rulemakings, we proposed
shortening the attestation and
discrepancy reporting window for the
SVA findings, but did not finalize these
proposals in response to comments
suggesting that we revisit this proposal
once issuers had more experience with
HHS–RADV after the first non-pilot
year.112 Since issuers now have more
than 4 years of experience with HHS–
RADV, including several non-pilot
years, HHS believes it is appropriate to
revisit the proposal to shorten the
reporting window to confirm the
findings of the SVA, or file a
discrepancy report, and that any
disadvantages of this shortened
reporting window would be outweighed
by the benefits of timely resolution of
any discrepancies before the release of
the applicable benefit year HHS Risk
Adjustment Data Validation (RADV)
Results Memo and the Summary Report
of Risk Adjustment Data Validation
Adjustments to Risk Adjustment
Transfers for the applicable benefit year.
Specifically, based on our experience,
we found that few issuers have
111 Section
2718 of the PHS Act, as added by the
ACA generally requires health insurance issuers to
submit an annual MLR report to HHS and provide
rebates to enrollees if the issuers do not achieve
specified MLR thresholds. See 42 U.S.C. 300gg–18
and 45 CFR part 158. Also see 45 CFR 153.710(h).
112 See 84 FR 17495 and 86 FR 24201.
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insufficient pairwise agreement between
the IVA and SVA that results in
receiving SVA findings, and therefore,
few issuers would even have the option
to file an SVA discrepancy.113 Of these
issuers, even fewer of them will actually
file a discrepancy, and therefore, based
on this experience, HHS believes only a
very small number of issuers will
receive SVA findings and file
discrepancies in future years of HHS–
RADV.
More importantly, without this timing
change, we are concerned about HHS’
continued ability to release the
applicable benefit year HHS Risk
Adjustment Data Validation (RADV)
Results Memo and Summary Report of
Risk Adjustment Data Validation
Adjustments to Risk Adjustment
Transfers on a timely basis. Specifically,
this proposal would improve our ability
to follow the HHS–RADV timeline as
described in part 2 of the 2022 Payment
Notice,114 which provides for release of
the Summary Report of Risk Adjustment
Data Validation Adjustments to Risk
Adjustment Transfers in early summer
of 2 calendar years after the applicable
benefit year. This schedule was
developed to support timely reporting of
HHS–RADV adjustment amounts in the
MLR reports 115 due by July 31st of the
same calendar year in which the results
are released.116 The SVA findings need
to be finalized to begin the HHS–RADV
error estimation process, publish the
HHS–RADV Results Memo (which is
released alongside issuer’s HHS–RADV
results reports), and prepare the
Summary Report of Risk Adjustment
Data Validation Adjustments to Risk
Adjustment Transfers for publication.
Shortening the current 30-calendar-day
attestation and discrepancy reporting
window for SVA findings (if applicable)
to 15 calendar days would better allow
HHS to finalize SVA findings results
and timely release the Summary Report
of Risk Adjustment Data Validation
Adjustments to Risk Adjustment
Transfers in summer, which would
support timely reporting of the HHS–
RADV adjustments to risk adjustment
State transfers in issuers’ MLR reports.
We further note that a 15-calendarday attestation and discrepancy
reporting window is consistent with the
IVA sample and EDGE attestation and
discrepancy reporting windows at
113 Only those issuers who have insufficient
pairwise agreement between the IVA and SVA
receive SVA findings. See, for example, 84 FR
17495 and 86 FR 24201.
114 86 FR 24198 through 24201.
115 Issuer MLRs are calculated using a 3-year
average. See 45 CFR 158.220(b).
116 See 45 CFR 158.110(b). Also see 45 CFR
153.710(h)(1)(v).
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§§ 153.630(d)(1) and 153.710(d),
respectively. At the conclusion of the
SVA for a given benefit year, we
distribute SVA findings to issuers that
have insufficient agreement between
their IVA and SVA results during the
pairwise means analysis, and use the
SVA findings for the risk score error rate
calculation.117 Under this proposal, a
15-calendar-day window to confirm the
findings or file a discrepancy, in the
manner set forth by HHS, would begin
when the SVA finding reports are
issued.
To effectuate this proposed
amendment, we propose the following
four revisions to § 153.630(d). First, we
propose to revise § 153.630(d)(2) to
remove the reference to the calculation
of the risk score error rate as a result of
HHS–RADV. Second, we propose to
revise § 153.630(d)(2) to establish that
the attestation and discrepancy
reporting window for the SVA findings
(if applicable) would be within 15
calendar days of the notification by HHS
of the SVA findings (if applicable),
rather than the current 30-calendar-day
reporting window. Third, we propose to
redesignate current paragraph (d)(3) as
paragraph (d)(4), to maintain the
existing provision which explains that
an issuer may appeal findings of an SVA
(if applicable) or the calculation of a risk
score error rate as a result HHS–RADV,
under the process set forth in
§ 156.1220. Fourth, we propose to add a
new § 153.630(d)(3) to maintain the
current attestation and discrepancy
reporting window for the calculation of
the risk score error rate. This new
regulatory subsection would provide
that within 30 calendar days of the
notification by HHS of the calculation of
the risk score error rate, in the manner
set forth by HHS, an issuer must either
confirm or file a discrepancy report to
dispute the calculation of the risk score
error rate as a result of HHS–RADV.
In addition, we propose to make
corresponding amendments to the crossreferences to § 153.630(d)(2) that appear
in §§ 153.710(h)(1) and
156.1220(a)(4)(ii). Section 153.630(d)(2)
currently sets forth the attestation and
discrepancy reporting window for both
SVA findings (if applicable) and the
calculation of the risk score error rate as
a result of HHS–RADV. Under this
proposal, the attestation and
discrepancy reporting window for SVA
117 If sufficient pairwise means agreement is
achieved, the IVA findings will be used for
purposes of the risk score error rate calculation.
Issuers with sufficient pairwise means agreement
are only permitted to file a discrepancy or appeal
the risk score error rate calculation. See 78 FR
72334 through 72337 and 79 FR 13761 through
13768.
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findings (if applicable) and the
calculation of the risk score error rate as
a result of HHS–RADV would be set
forth in separate paragraphs,
§ 153.630(d)(2) and (d)(3), respectively.
As such, we propose to amend the
existing cross-reference to
§ 153.630(d)(2) in §§ 153.710(h)(1) and
156.1220(a)(4)(ii) to add a reference to
paragraph (d)(3).
We seek comment on this proposal
and the accompanying conforming
amendments.
8. EDGE Discrepancy Materiality
Threshold (§ 153.710)
We propose to amend the EDGE
discrepancy materiality threshold set
forth at § 153.710(e) to align it with the
final policy adopted in preamble in part
2 of the 2022 Payment Notice.118 We
also propose a conforming amendment
to § 153.710(h)(1) to add a reference to
new proposed § 153.630(d)(3).
An issuer of a risk adjustment covered
plan must provide to HHS, through their
EDGE server,119 access to enrollee-level
plan enrollment data, enrollee claims
data, and enrollee encounter data as
specified by HHS for a benefit year.120
Consistent with § 153.730, to be
considered for risk adjustment
payments and charges, issuers of risk
adjustment covered plans must submit
their respective EDGE data by April
30th of the year following the applicable
benefit year or, if such date is not a
business day, the next applicable
business day. At the end of the EDGE
data submission process, HHS issues
final EDGE server reports 121 which
reflect an issuer’s data that was
successfully submitted by the data
submission deadline. Within 15
calendar days of the date of these final
EDGE server reports, the issuer must
confirm to HHS that the information in
118 See
86 FR 24194 through 24195.
is also known as the dedicated
distributed data collection environment.
120 45 CFR 153.710(a) through (c).
121 These reports are: Enrollee (Without) Claims
Summary (ECS), Enrollee (Without) Claims Detail
(ECD), Frequency Report by Data Element for
Medical Accepted Files (FDEMAF), Frequency
Report by Data Element for Pharmacy Accepted
Files (FDEPAF), Frequency Report by Data Element
for Supplemental Accepted Files (FDESAF),
Frequency Report by Data Element for Enrollment
Accepted Files (FDEEAF), Claim and Enrollee
Frequency Report (CEFR), High Cost Risk Pool
Summary (HCRPS), High Cost Risk Pool Detail
Enrollee (HCRPDE), Risk Adjustment Claims
Selection Summary (RACSS), Risk Adjustment
Claims Selection Detail (RACSD), Risk Adjustment
Transfer Elements Extract (RATEE), Risk
Adjustment Risk Score Summary (RARSS), Risk
Adjustment Risk Score Detail (RARSD), Risk
Adjustment Data Validation Population Summary
Statistics (RADVPS), Risk Adjustment Payment
Hierarchical Condition Category Enrollee
(RAPHCCER), Risk Adjustment User Fee (RAUF).
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119 This
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the final EDGE server reports accurately
reflect the data to which the issuer has
provided access to HHS through its
EDGE server for the applicable benefit
year by submitting an attestation; or the
issuer must describe to HHS any
discrepancies it identifies in the final
EDGE server reports.122
In part 2 of the 2022 Payment Notice
(86 FR 24194 through 24195), we
codified at § 153.710(e) a materiality
threshold for EDGE discrepancies
reported under § 153.710(d)(2) that the
amount in dispute must equal or exceed
$100,000 or one percent of the
applicable payment or charge payable to
or due from the issuer for the benefit
year, whichever is less. However, in
preamble, we explained the final policy
was intended to establish that the
amount in dispute must equal or exceed
$100,000 or one percent of the total
estimated transfer amount in the
applicable State market risk pool,
whichever is less.123 That is, the
preamble uses one percent of the total
estimated transfer amount in the
applicable State market risk pool while
the regulation uses one percent of the
applicable payment or charge payable to
or due from the issuer. As explained in
the preamble in part 2 of the 2022
Payment Notice, the intended threshold
is $100,000 or one percent of the total
estimated transfer amount in the
applicable State market risk pool
because HHS generally only takes action
on reported material EDGE
discrepancies that harm other issuers in
the same State market risk pool and,
based on HHS’ experience with prior
benefit years, EDGE discrepancies that
are less than a fraction of total State
market risk pool transfers are unlikely to
materially impact other issuers. We
therefore propose to amend § 153.710(e)
to revise the materiality threshold for
EDGE discrepancies to reflect that the
amount in dispute must equal or exceed
$100,000 or one percent of the total
estimated transfer amount in the
applicable State market risk pool,
whichever is less.
Finally, as discussed in section
III.A.7.d of this preamble (HHS–RADV
Discrepancy and Administrative
Appeals Process), we also propose
amendments to § 153.710(h)(1) to add a
reference to new proposed
§ 153.630(d)(3). As discussed in the
HHS–RADV Discrepancy and
Administrative Appeals Process section
of this proposed rule, under new
proposed § 153.630(d)(3), we would
retain the 30-calendar-day window to
122 45
CFR 153.710(d).
86 FR 24194 through 24195. Also see 85
FR 78604 through 78605.
123 See
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confirm, or file a discrepancy, regarding
the calculation of the risk score error
rate as a result of HHS–RADV. Under
this proposal, the cross-reference to
§ 153.630(d)(2) in § 153.710(h)(1) would
be maintained and would capture the
new proposed 15-calendar-day window
to confirm, or file a discrepancy, for
SVA findings (if applicable).
We seek comment on the proposed
amendment to § 153.710 and the
accompanying policies.
B. Part 155—Exchange Establishment
Standards and Other Related Standards
Under the Affordable Care Act
1. Exchange Blueprint Approval
Timelines (§ 155.106)
We propose a change to address the
Exchange Blueprint approval timelines
for States transitioning from either a
Federally-facilitated Exchange (FFE) to a
State-based Exchange on the Federal
Platform (SBE–FP) or to a State-based
Exchange (SBE), or from an SBE–FP to
an SBE. At § 155.106(a)(3) (for FFE or
SBE–FP to SBE transitions) and
§ 155.106(c)(3) (for FFE to SBE–FP
transitions), we propose to revise the
current timelines by which a State must
have an approved or conditionally
approved Exchange Blueprint to require
that States gain approval prior to the
date on which the Exchange proposes to
begin open enrollment either as an SBE
or SBE–FP. The current regulatory
timeline by which a State must have an
approved or conditionally approved
Exchange Blueprint was finalized in the
2017 Payment Notice (81 FR 12203,
12241 through 12242). Based on our
experience with Exchange transitions
since then, we believe the current
timeline by which a State must gain
Exchange Blueprint approval does not
sufficiently support States’ need to work
with HHS to finalize and submit an
approvable Exchange Blueprint.
Section 155.106 requires States to
have an approved or conditionally
approved Exchange Blueprint 14
months prior to an SBE–FP to SBE
transition in accordance with paragraph
(a)(3) and three months prior to a FFE
to SBE–FP transition in accordance with
paragraph (c)(3). The submission and
approval of Exchange Blueprints is an
iterative process that generally takes
place over the course of 15 months prior
to a State’s first open enrollment with
an SBE, or three to six months prior to
a State’s first open enrollment with an
SBE–FP. The Exchange Blueprint serves
as a vehicle for a State to document its
progress toward implementing its
intended Exchange operational model.
HHS’ review and approval of the
Exchange Blueprint involves providing
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substantial technical assistance to States
as they design, finalize, and implement
their Exchange operations. The
transition from a FFE or SBE–FP to SBE,
or SBE–FP to SBE, involves significant
collaboration between HHS and States
to develop plans and document
readiness for the State to transition from
one Exchange operational model and
information technology infrastructure to
another. These activities include the
State completing key milestones,
meeting established deadlines, and
implementing contingency measures.
Our proposal to require Exchange
Blueprint approval or conditional
approval prior to an Exchange’s first
open enrollment period would allow
States the additional time and flexibility
if needed, that, in HHS’ experience, is
necessary to support the development
and finalization of an approvable
Exchange Blueprint, as well as for
completion of the myriad activities
necessary to transition QHP enrollees in
the State to a new Exchange model and
operator. HHS is of the view that the
more generous proposed timeline is
appropriate and necessary to support a
State’s submission of an approvable
Exchange Blueprint. The proposed
timeline is more protective of the
significant investments of personnel
time and State tax dollars a State must
make to stand up a new Exchange, by
providing the State a more generous
timeline to develop an approvable
Exchange Blueprint that shows the
Exchange will be ready to support the
State’s current and future QHP enrollees
and applicants for QHP enrollment.
We seek comment on this proposal,
including comments related to how
transitioning SBEs could provide greater
transparency to consumers regarding the
Exchange Blueprint approval process.
2. Navigator, Non-Navigator Assistance
Personnel, and Certified Application
Counselor Program Standards
(§§ 155.210, 155.215, and 155.225)
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a. Repeal of Prohibitions on Door-toDoor and Other Direct Contacts
HHS proposes to repeal the provisions
that currently prohibit Navigators,
certified application counselors, nonNavigator assistance personnel in FFEs,
and non-Navigator assistance personnel
in certain State Exchanges funded with
section 1311(a) Exchange Establishment
grants (collectively, Assisters) from
going door-to-door or using other
unsolicited means of direct contact to
provide enrollment assistance to
consumers. This proposal would
eliminate barriers to coverage access by
maximizing pathways to enrollment.
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Sections 1311(d)(4)(K) and 1311(i) of
the ACA direct all Exchanges to
establish a Navigator program. Navigator
duties and requirements for all
Exchanges are set forth in section
1311(i) of the ACA and § 155.210.
Section 1321(a)(1) of the ACA directs
the Secretary to issue regulations that
set standards for meeting the
requirements of title I of the ACA, with
respect to, among other things, the
establishment and operation of
Exchanges. Pursuant to section
1321(a)(1) of the ACA, the Secretary
issued § 155.205(d) and (e), which
authorizes Exchanges to perform certain
consumer service functions in addition
to the Navigator program, such as the
establishment of a non-Navigator
assistance personnel program. Section
155.215 establishes standards for nonNavigator assistance personnel in FFEs
and in State Exchanges if they are
funded with section 1311(a) Exchange
Establishment grant funds.124 Section
155.225 establishes the certified
application counselor program as a
consumer assistance function of the
Exchange, separate from and in addition
to the functions described in
§§ 155.205(d) and (e), 155.210, and
155.215.
Assisters are certified and trusted
community partners who provide free
and impartial enrollment assistance to
consumers. They conduct outreach and
education to raise awareness about the
Exchanges and other coverage options.
Their mission focuses on assisting the
uninsured and other underserved
communities to prepare applications,
establish eligibility and enroll in
coverage through the Exchanges, among
many other things. The regulations
governing these Assisters prohibit
Assisters from soliciting any consumer
for application or enrollment assistance
by going door-to-door or through other
unsolicited means of direct contact,
including calling a consumer to provide
application or enrollment assistance
without the consumer initiating the
contact, unless the individual has a preexisting relationship with the individual
Assister or designated organization and
other applicable State and Federal laws
are otherwise complied with. HHS has
interpreted this prohibition in the 2015
Market Standards final rule (79 FR
30240, 30284 through 30285) as still
permitting door-to-door and other
unsolicited contacts to conduct for
general consumer education or
outreach, including to let the
community know that the Assister’s
124 At this time, no State Exchanges are funded
with section 1311(a) Exchange Establishment grant
funds.
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organization is available to provide
application and enrollment assistance
services to the public.
The existing regulations prohibiting
Navigators (at § 155.210(d)(8)), nonNavigator assistance personnel (through
the cross-reference to § 155.210(d) in
§ 155.215(a)(2)(i)), and certified
application counselors (at
§ 155.225(g)(5)) were initially finalized
in the 2015 Market Standards final rule
(79 FR 30240). At the time that HHS
proposed and finalized the 2015 Market
Standards rule in 2014, the Exchanges
were still in their infancy. At the time,
we believed that prohibiting door-todoor solicitation and other unsolicited
means of direct consumer contact by an
Assister for application or enrollment
assistance would ensure that Assisters’
practices were sufficiently protective of
the privacy and security interests of the
consumers they served. We also
believed that prohibiting unsolicited
means of direct contacts initiated by
Assisters was necessary to provide
important guidance and peace of mind
to consumers, especially when they
were faced with questions or concerns
about what to expect in their
interactions with individuals offering
Exchange assistance.125
However, under existing regulations,
Navigators and other non-Navigator
assistance personnel in FFE States are
permitted to conduct outreach to
consumers using consumer information
provided to them by an FFE. The Health
Insurance Exchanges (HIX) System of
Records Notice,126 Routine Use No. 1
provides that the FFEs may share
consumer information with CMS
grantees, including Navigators and other
non-Navigator assistance personnel in
FFE States, who have been engaged by
CMS to assist in an FFE authorized
function, which includes conducting
outreach to persons who have been
redetermined ineligible for Medicaid/
CHIP. In this limited circumstance, an
FFE may share with Navigators and
other non-Navigator assistance
personnel in FFE States consumer
information that the FFE receives from
Medicaid/CHIP agencies once a
consumer has been redetermined
ineligible for Medicaid/CHIP in order
for the Navigators and other nonNavigator assistance personnel to
conduct outreach to such consumers
regarding opportunities for coverage
through the FFEs.
Since finalizing the 2015 Market
Standards final rule, HHS has enacted a
number of measures designed to ensure
that Assisters are properly safeguarding
125 79
126 78
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FR 30240.
FR 63211, 63215.
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the personally identifiable information
of all consumers they assist. As part of
their annual certification training, HHS
requires Assisters to complete a course
on privacy, security, and fraud
prevention standards. Further, we
require Assisters to obtain a consumer’s
consent before discussing or accessing
their personal information (except in the
limited circumstance described above)
and to only create, collect, disclose,
access, maintain, store and/or use
consumer personally identifiable
information to perform the functions
that they are authorized to perform as
Assisters in accordance with
§§ 155.210(b)(2)(iv) and (c)(1)(v),
155.225(d)(3), and 155.215(b)(2), as
applicable. In addition, now that the
Exchanges and their Assister programs
have been in operation for almost 10
years, Assisters have more name
recognition and consumer trust within
the communities the Assisters serve.
Accordingly, HHS believes that its
previous concerns related to consumers’
privacy and security interests and
consumers not knowing what to expect
when interacting with Assisters have
been sufficiently mitigated with the
measures HHS has enacted such that a
blanket prohibition on unsolicited
direct contact of consumers by Assisters
for application or enrollment assistance
is no longer necessary.
The prohibition on door-to-door
enrollment places additional burden on
consumers and Assisters to make
subsequent appointments to facilitate
enrollment, which creates access
barriers for consumers to receive timely
and relevant enrollment assistance.
Additionally, this prohibition could
impede the Exchanges’ potential to
reach a broader consumer base in a
timely manner, reduce uninsured rates,
and increase access to health care. We
believe it is important to be able to
increase access to coverage for those
whose ability to travel is impeded due
to mobility, sensory or other disabilities,
who are immunocompromised, and who
are limited by a lack of transportation.
Consistent with the proposal to
remove the general prohibition on doorto-door and other direct outreach by
Navigators, we propose to delete
§ 155.210(d)(8). If finalized, the repeal of
§ 155.210(d)(8) would remove the
general prohibition on door-to-door and
other direct outreach by non-Navigator
assistance personnel in FFEs and in
State Exchanges if funded with section
1311(a) Exchange Establishment grants,
as § 155.215(a)(2)(i) requires such
entities to comply with the prohibitions
on Navigator conduct set forth at
§ 155.210(d). Likewise, we propose to
repeal § 155.225(g)(5), which currently
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imposes the general prohibition against
door-to-door and other direct contacts
on certified application counselors.
As we explained earlier in this
preamble, HHS is now of the view that
repealing restrictions on an Exchange’s
ability to allow Navigators, nonNavigator assistance personnel, and
certified application counselors to offer
application or enrollment assistance by
going door-to-door or through other
unsolicited means of direct contact is a
positive step that would enable
Assisters to reach a broader consumer
base in a timely manner—helping to
reduce uninsured rates and health
disparities by removing underlying
barriers to accessing health coverage.
We seek comment on this proposal.
3. Ability of States To Permit Agents
and Brokers and Web-Brokers To Assist
Qualified Individuals, Qualified
Employers, or Qualified Employees
Enrolling in QHPs (§ 155.220)
Section 1312(e) of the ACA directs the
Secretary to establish procedures under
which a State may permit agents and
brokers to enroll individuals and
employers in QHPs through an
Exchange and to assist individuals in
applying for financial assistance for
QHPs sold through an Exchange. In
addition, section 1313(a)(5)(A) of the
ACA directs the Secretary to provide for
the efficient and non-discriminatory
administration of Exchange activities
and to implement any measure or
procedure the Secretary determines is
appropriate to reduce fraud and abuse.
Under § 155.220, we established
procedures to support the State’s ability
to permit agents, brokers, and webbrokers to assist individuals, employers,
or employees with enrollment in QHPs
offered through an Exchange, subject to
applicable Federal and State
requirements. This includes processes
under § 155.220(g) and (h) for HHS to
suspend or terminate an agent’s,
broker’s, or web-broker’s Exchange
agreement(s) in circumstances that
involve fraud of abusive conduct or
where there are sufficiently severe
findings of non-compliance. We also
established FFE standards of conduct
under § 155.220(j) for agents and brokers
that assist consumers in enrolling in
coverage through the FFEs to protect
consumers and ensure the proper
administration of the FFEs. Consistent
with § 155.220(l), agents, brokers and
web-brokers that assist with or facilitate
enrollment in States with SBE–FPs must
comply with all applicable FFE
standards, including the requirements
in § 155.220. In this rule, we propose to
build on this foundation with new
proposed procedures and additional
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78249
consumer protection standards for
agents, brokers, and web-brokers that
assist consumers with enrollments
through FFEs and SBE–FPs.
a. Extension of Time To Review
Suspension Rebuttal Evidence and
Termination Reconsideration Requests
(§ 155.220(g) and (h))
We propose to allow HHS up to an
additional 15 or 30 calendar days to
review evidence submitted by agents,
brokers, or web-brokers to rebut
allegations that led to suspension of
their Exchange agreement(s) or to
request reconsideration of termination
of their Exchange agreement(s),
respectively. This proposal would
provide HHS a total of up to 45 or 60
calendar days to review such rebuttal
evidence or reconsideration request and
notify the submitting agents, brokers, or
web-brokers of HHS’ determination
regarding the suspension of their
Exchange agreement(s) or
reconsideration decision related to the
termination of their Exchange
agreement(s), respectively. In the 2017
Payment Notice, we added paragraph (5)
to § 155.220(g) to address the temporary
suspension or immediate termination of
an agent’s or broker’s agreements with
the FFEs in cases involving fraud or
abusive conduct.127 Consistent with
section 1313(a)(5)(A) of the ACA, we
added these procedures to give HHS
authority to act quickly in these
situations to prevent further harm to
consumers and to support the efficient
and effective administration of
Exchanges on the Federal platform.
Under § 155.220(g)(5)(i)(A), if HHS
reasonably suspects that an agent,
broker, or web-broker may have engaged
in fraud or abusive conduct using
personally identifiable information of
Exchange applicants or enrollees or in
connection with an Exchange
enrollment or application, HHS may
temporarily suspend the agent’s,
broker’s or web-broker’s Exchange
agreement(s) for up to 90 calendar days,
with the suspension effective as of the
date of the notice to the agent, broker,
or web-broker. This temporary
suspension is effective immediately and
prohibits the agent, broker, or webbroker from assisting with or facilitating
enrollment in coverage in a manner that
constitutes enrollment through the
Exchange, including participating in the
Classic DE and EDE Pathways, during
this 90-day period.128 129 As previously
127 See 81 FR at 12258–12264. Also see 80 FR at
75525–75526.
128 45 CFR 155.220(g)(5)(iii).
129 The agent, broker, or web-broker must
continue to protect any personally identifiable
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explained, immediate suspension is
critical in these circumstances to stop
additional potentially fraudulent
enrollments through the FFEs and SBE–
FPs.130 Consistent with
§ 155.220(g)(5)(i)(B), the agent, broker,
or web-broker can submit evidence to
HHS to rebut the allegations that they
have engaged in fraud or abusive
conduct that led to a temporary
suspension by HHS of their Exchange
agreement(s) at any time during 90-day
period. If such rebuttal evidence is
submitted, HHS will review it and make
a determination as to whether a
suspension should be lifted within 30
days of receipt of such evidence.131 If
HHS determines that the agent, broker,
or web-broker satisfactorily addresses
the concerns at issue, HHS will lift the
temporary suspension and notify the
agent, broker, or web-broker. If the
rebuttal evidence does not persuade
HHS to lift the suspension, HHS may
terminate the agent’s, broker’s, or webbroker’s Exchange agreement(s) for
cause.132 133
HHS also previously established a
framework for termination of an agent’s,
broker’s, or web-broker’s Exchange
agreement(s) for cause in situations
where, in HHS’ determination, a
specific finding of noncompliance or
pattern of noncompliance is sufficiently
severe.134 This framework provides
HHS the ability to terminate an agent’s,
broker’s, or web-broker’s Exchange
agreement(s) for cause to protect
consumers and the efficient and
effective operation of Exchanges in
cases of sufficiently severe violations or
patterns of violations. In these
situations, HHS provides the agent,
broker, or web-broker, an advance 30day notice and an opportunity to cure
and address the non-compliance
finding(s).135 136 More specifically, upon
identification of a sufficiently severe
information accessed during the term of their
Exchange agreements. See, e.g., 45 CFR
155.220(g)(5)(iii) and 155.260.
130 See, e.g., 81 FR at 12258–12264.
131 See 45 CFR 155.220(g)(5)(i)(B).
132 See 45 CFR 155.220(g)(5)(i)(B).
133 If the agent, broker, or web-broker fails to
submit rebuttal information during this 90-day
period, HHS may terminate their Exchange
agreement(s) for cause. 45 CFR 155.220(g)(5)(i)(B).
134 See 45 CFR 155.220(g)(1)–(4). Also see, e.g., 78
FR at 37047 through 37048 and 78 FR at 54076
through 54081.
135 See 45 CFR 155.220(g)(3)(i).
136 The one exception is for situations where the
agent, broker, or web-broker fails to maintain the
appropriate license under applicable State law(s).
See 45 CFR 155.220(g)(3)(ii). In these limited
situations, HHS may immediately terminate the
agent, broker, or web-broker’s Exchange
agreement(s) for cause without any further
opportunity to resolve the matter upon providing
notice to the agent, broker, or web-broker. Ibid.
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violation, HHS notifies the agent,
broker, or web-broker of the specific
finding(s) of noncompliance or pattern
of noncompliance. The agent, broker, or
web-broker then has a period of 30 days
from the date of the notice to correct the
noncompliance to HHS’ satisfaction. If
after 30 days the noncompliance is not
addressed to HHS’ satisfaction, HHS
may terminate the Exchange
agreement(s) for cause. Once their
Exchange agreement(s) are terminated
for cause under § 155.220(g)(3), the
agent, broker, or web-broker is no longer
registered with the FFE, is not permitted
to assist with or facilitate enrollment of
a qualified individual, qualified
employer, or qualified employee in
coverage in a manner that constitutes
enrollment through the Exchange, and is
not permitted to assist individuals in
applying for APTC and CSRs for
QHPs.137 138 Consistent with
§ 155.220(h)(1), an agent, broker, or
web-broker whose Exchange
agreement(s) are terminated can request
reconsideration of such action. Section
155.220(h)(2) provides the agent, broker,
or web-broker with 30 calendar days to
submit their request (including any
rebuttal evidence or information) and
§ 155.220(h)(3) requires HHS to provide
agents, brokers, or web-brokers with
written notice of HHS’ reconsideration
decision within 30 calendar days of
receipt of the request for
reconsideration.
Our experience reviewing evidence
and other information submitted by
agents, brokers, or web-brokers to rebut
allegations that led to the suspension of
their Exchange agreement(s) or to
request reconsideration of the
termination of their Exchange
agreement(s), found that the process,
especially in more complex situations,
often requires significant resources and
time. The review process can involve
parsing complex technical information
and data, as well as revisiting consumer
complaints or conducting outreach to
consumers. The amount of time it takes
for the review process is largely
dependent on the particular situation at
hand (for example, the number of
alleged violations and impacted
consumers, how much and what type of
information an agent, broker, or webbroker submits, the amount of time it
takes for consumers to locate and
provide documentation related to their
complaints, and the number of
concurrent submissions in need of
137 45
CFR 155.220(g)(4).
agent, broker, or web-broker must
continue to protect any PII accessed during the term
of their Exchange agreements. See, e.g., 45 CFR
155.220(g)(4) and 155.260.
138 The
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review). Given the large number of
factors involved, we believe that
allowing HHS additional time to
complete the review would be
beneficial.
We are cognizant that this additional
time could delay the ability of agents,
brokers, and web-brokers to conduct
business, which may be particularly
burdensome to those who have
compelling evidence to rebut allegations
of noncompliance. Given the critical
role that agents, brokers, and webbrokers serve in enrolling consumers in
plans on the Exchanges, it is our
intention to minimize the burden
imposed on agents, brokers, and webbrokers to the greatest extent possible
while also ensuring that HHS has
additional time (if necessary) to review
any submitted rebuttal evidence. As
stated above, this additional time is
warranted to accommodate particularly
complex situations that require
significant resources and time. We
expect that not all reviews are so
complex that they would require the use
of this additional time; in cases where
agents, brokers, and web-brokers present
compelling evidence to rebut allegations
of noncompliance, we expect to be able
to resolve the vast majority of those
reviews without the use of this
additional time.
We believe that the proposal to allow
HHS a total of up to 45 calendar days
to review rebuttal evidence is warranted
given that agents, brokers, and webbrokers have up to 90 days to submit
rebuttal evidence to HHS during their
suspension period, while HHS currently
only has 30 days to review, consider,
and make determinations based on that
evidence. It does not seem unreasonable
to increase this combined maximum
120-day time period 139 to 135 days.140
We believe that this is not an
unreasonable maximum timeframe,
139 As noted above, an agent, broker, or webbroker whose Exchange agreement(s) are
temporarily suspended can submit rebuttal
evidence at any time during the 90-day suspension
period, thus triggering the start of the HHS review
period and limiting the length of the suspension
period. For example, under this proposal, if an
agent were to submit rebuttal evidence within seven
days of receiving the suspension notice and HHS
were to respond on the last day of the proposed
new review period (day 45) and lift the suspension,
that would mean the agent’s Exchange agreement(s)
would have been suspended for only 52 days.
140 For example, under this proposal, if an agent
whose Exchange agreement(s) were temporarily
suspended were to submit rebuttal evidence to
rebut allegations that led to the suspension of their
Exchange agreement(s) on the final day of the
suspension period (day 90), pursuant to
§ 155.220(g)(5)(i)(B), and HHS were to respond on
the final day of the proposed new review period
(day 45) and lift the suspension, that agent’s
Exchange agreement(s) would be suspended for a
maximum of 135 days.
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particularly where HHS has a
reasonable suspicion the agent, broker,
or web-broker engaged in fraud or
abusive conduct that may cause
imminent or ongoing consumer harm
using personally identifiable
information of an Exchange enrollee or
applicant or in connection with an
Exchange enrollment or application. As
noted in the 2017 Payment Notice, there
is a similar requirement for Medicare
providers, as 42 CFR 405.371 provides
HHS with the authority to suspend
payment for at least 180 days if there is
reliable information that an
overpayment exists, or there is a
credible allegation of fraud (81 FR
12262 through 12263). Under
§ 155.220(g)(5)(i)(A), HHS temporarily
suspends an agent, broker or webbroker’s Exchange agreement(s) only in
situations in which there is sufficient
evidence or other information such that
HHS reasonably suspects the agent,
broker or web-broker engaged in fraud,
or in abusive conduct that may cause
imminent or ongoing consumer harm
using personally identifiable
information of an Exchange enrollee or
applicant or in connection with an
Exchange enrollment or application. As
such, HHS exercises this authority and
sends suspension notices only in the
limited situations where there may have
been fraud or abusive conduct to stop
further Exchange enrollment activity
when the misconduct may cause
imminent or ongoing harm to
consumers or the effective and efficient
administration of Exchanges. We also
further emphasize that the proposed
extension to allow for up to 45 days for
HHS to review rebuttal evidence in
these situations represents the
maximum timeframe.141 To the extent
the situation at hand does not, for
example, involve a large number of
alleged violations or impacted
consumers, HHS may not need the
maximum timeframe to complete the
review and notify the agent, broker, or
web-broker whether the suspension is
lifted.
Terminations of Exchange
agreement(s) by HHS are also limited,
but in a different way. As outlined
above, § 155.220(g)(1) allows HHS to
terminate an agent, broker, or webbrokers Exchange agreement for cause
only when, in HHS’ determination, a
specific finding of noncompliance or
pattern of noncompliance is sufficiently
severe. Examples of specific findings of
141 Further, as detailed above, the agent, broker,
or web-broker whose Exchange agreement(s) are
suspended has an opportunity to limit the overall
length of the suspension period with the timely
submission of rebuttal evidence.
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noncompliance that HHS might
determine to be sufficiently severe to
warrant termination of an agent’s,
broker’s, or web-broker’s Exchange
agreement for cause under section
§ 155.220(g)(1) include, but are not
limited to, violations of the Exchange
privacy and security standards.142
Patterns of noncompliance that HHS
might determine to be sufficiently
severe to warrant termination for cause
include, for example, repeated
violations of any of the applicable
standards in § 155.220 or § 155.260(b)
for which the agent or broker was
previously found to be noncompliant.143
As proposed, if HHS takes the total up
to 60 calendar days to review rebuttal
evidence submitted by the agent, broker,
or web-broker whose Exchange
agreement was terminated for cause, the
maximum timeframe for the
reconsideration process under
§ 155.220(h) would be 90 days. We
believe this approach strikes the
appropriate balance with respect to
reviewing information submitted with a
request to reconsider termination of
their Exchange agreement(s) because it
provides the agent, broker, or webbroker due process while also protecting
consumers from potential harm. We are
proposing a longer time period of 60
days for HHS review of information and
evidence submitted by an agent, broker,
or web-broker as part of their
reconsideration request (versus 45 days
for HHS review of rebuttal evidence and
information submitted in response to a
suspension determination) because the
HHS reviews under § 155.220(h)(2) are
part of the appeal process. As such, the
agent, broker, or web-broker had an
opportunity at an earlier stage of the
suspension or termination process to
rebut the allegations and/or findings, or
otherwise take remedial steps to address
the concerns identified by HHS, that led
to suspension or termination of their
Exchange agreement(s).144 145
142 As outlined in § 155.220(g)(2), an agent,
broker, or web-broker may be determined
noncompliant if HHS finds that the agent, broker,
or web-broker violated any standard specified in
§ 155.220; any term or condition of their Exchange
agreement(s); any State law applicable to agents,
brokers, or web-brokers; or any Federal law
applicable to agents, brokers, or web-brokers.
143 Ibid.
144 See 45 CFR 155.220(g)(5)(i)(B) (providing an
opportunity to rebut allegations of fraud or abusive
conduct) and 45 CFR 155.220(g)(3)(i) (providing
advance notice and an opportunity to correct the
noncompliance).
145 The one exception is for immediate
terminations for cause due to the lack of
appropriate State licensure under 45 CFR
155.220(g)(3)(ii). In these situations, however, the
maximum timeframe between the agent, broker, or
web-broker receiving the termination notice and the
issuance of the HHS reconsideration decision
would be 90 days.
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For these reasons, we propose to
amend § 155.220(g)(5)(i)(B) to provide
HHS with up to 45 calendar days to
review evidence and other information
submitted by agents, brokers, or webbrokers to rebut allegations that led to
suspension of their Exchange
agreement(s) and make a determination
of whether to lift the suspension. We
also propose to amend § 155.220(h)(3) to
provide HHS with up to 60 days to
review evidence and other information
submitted by agents, brokers, or webbrokers to rebut allegations that led to
termination of their Exchange
agreement(s) and provide written notice
of HHS’ reconsideration decision.
We seek comment on this proposal.
b. Providing Correct Information to the
FFEs (§ 155.220(j))
We propose to amend
§ 155.220(j)(2)(ii) to require agents,
brokers, or web-brokers assisting with
and facilitating enrollment through
FFEs and SBE–FPs or assisting an
individual with applying for APTC and
CSRs for QHPs to document that
eligibility application information has
been reviewed by and confirmed to be
accurate by the consumer or their
authorized representative designated in
compliance with § 155.227, prior to
application submission. We propose
that such documentation would be
created by the assisting agent, broker, or
web-broker and would require the
consumer or their authorized
representative to take an action, such as
providing a signature or a recorded
verbal confirmation, that produces a
record that can be maintained by the
agent, broker, or web-broker and
produced to confirm the submitted
eligibility application information was
reviewed and confirmed to be accurate
by the consumer or their authorized
representative. In addition, we propose
that the documentation must include
the date the information was reviewed,
the name of the consumer or their
authorized representative, an
explanation of the attestations at the end
of the eligibility application, and the
name of the agent, broker, or web-broker
providing assistance. Lastly, we propose
that the documentation must be
maintained by the agent, broker, or webbroker for a minimum of 10 years and
produced upon request in response to
monitoring, audit, and enforcement
activities conducted consistent with
§ 155.220(c)(5), (g), (h) and (k). These
proposed changes would require
amending § 155.220(j)(2)(ii), creating
new paragraph § 155.220(j)(2)(ii)(A), and
redesignating current
§ 155.220(j)(2)(ii)(A),
§ 155.220(j)(2)(ii)(B),
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§ 155.220(j)(2)(ii)(C) and
§ 155.220(j)(2)(ii)(D) without change as
§ 155.220(j)(2)(ii)(B),
§ 155.220(j)(2)(ii)(C),
§ 155.220(j)(2)(ii)(D), and
§ 155.220(j)(2)(ii)(E), respectively.
Agents, brokers and web-brokers are
among those who play a critical role in
educating consumers about Exchanges
and insurance affordability programs,
and in helping consumers complete and
submit applications for eligibility
determinations, compare plans, and
enroll in coverage. Consistent with
section 1312(e) of the ACA, § 155.220
establishes the minimum standards for
the process by which an agent, broker,
or web-broker may help enroll an
individual in a QHP in a manner that
constitutes enrollment through the
Exchange and to assist individuals in
applying for PTC and CSRs. This
process and minimum standards require
the applicant’s completion of an
eligibility verification and enrollment
application and the agent’s, broker’s, or
web-broker’s submission of the
eligibility application information
through the Exchange website or an
Exchange-approved web service.146
While agents, brokers, and web-brokers
can assist a consumer with completing
the Exchange application, the consumer
is the individual with the knowledge to
confirm the accuracy of the information
provided on the application.147
Section 155.220(j)(2) sets forth the
standards of conduct for agents, brokers,
or web-brokers that assist with or
facilitate enrollment of qualified
individuals, qualified employers, or
qualified employees in coverage in a
manner that constitutes enrollment
through an FFE or SBE–FP or that assist
individuals in applying for APTC and
CSRs for QHPs sold through an FFE or
SBE–FP. As explained in the 2017
Payment Notice proposed rule (81 FR
12258 through 12264), these standards
are designed to protect against agent,
broker, and web-broker conduct that is
harmful towards consumers or prevents
the efficient operation of the FFEs and
SBE–FPs. Under § 155.220(j)(2)(ii),
agents, brokers, or web-brokers must
provide the FFEs and SBE–FPs with
‘‘correct information under section
1411(b) of the Affordable Care Act.’’
Section 1411(h) of the ACA provides
for the imposition of civil penalties if
any person fails to provide correct
information under section 1411(b) to the
Exchange. Consistent with § 155.220(l),
146 45 CFR 155.220(c)(1). Also see, e.g., 77 FR at
18334–18336.
147 This is evidenced by the language in
§ 155.220(j)(1) that refers to agents, brokers, or webbrokers that assist or facilitate enrollment
(emphasis added).
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agents, brokers and web-brokers that
assist with or facilitate enrollment of
qualified individuals, qualified
employers, or qualified employees in
States with SBE–FPs must comply with
all applicable FFE standards. This
includes, but is not limited to,
compliance with the FFE standards of
conduct in § 155.220(j).
Currently, § 155.220(j)(2)(ii) requires
that agents, brokers, and web-brokers
provide the FFEs and SBE–FPs with
correct information under section
1411(b) of the ACA, but it does not
explicitly require agents, brokers, or
web-brokers assisting consumers with
completing eligibility applications
through the FFEs and SBE–FPs to
confirm with those consumers the
accuracy of the information entered on
their applications prior to application
submission or document the consumer
has reviewed and confirmed the
information to be accurate. HHS has
continued to observe applications
submitted to the FFEs and SBE–FPs that
contain incorrect consumer information.
We have also received consumer
complaints stating the information
provided on their eligibility
applications submitted by agents,
brokers, or web-brokers on their behalf
was incorrect. These complaints can be
difficult to investigate and adjudicate,
because the only evidence available is
often the word of one person against
another and the FFEs and SBE–FPs
generally do not have access to other
contextual information to help resolve
the matter. By requiring the creation and
maintenance of documentation that the
assisting agent, broker, or web-broker
confirmed with the consumer or their
authorized representative that the
entered information was reviewed and
accurate, the adjudication of such
complaints could be expedited and
more easily resolved. In addition, the
inclusion of incorrect consumer
information on eligibility applications
may result in consumers receiving
inaccurate eligibility determinations,
and may affect consumers’ tax liability,
or produce other potentially negative
results. If a consumer receives an
incorrect APTC determination or is
unaware they are enrolled in a QHP,
that consumer may owe money to the
IRS when they file their Federal income
tax return. Ensuring a consumer’s
income determination has been
reviewed and is accurate would help
avoid these situations. Incorrect
consumer information on eligibility
applications may also affect Exchange
operations or HHS’s analysis of
Exchange trends. For example, a high
volume of applications all containing
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the erroneous information, such as U.S.
citizens attesting to not having an SSN,
could hinder the efficient and effective
operation of the Exchanges on the
Federal platform by requiring HHS to
focus its time and efforts on addressing
these erroneous applications. This
proposal is consistent with the fact that
the consumer or their authorized
representative is the individual with the
knowledge to confirm the accuracy of
the information provided on the
application and would serve as an
additional safeguard and procedural
step to ensure the accuracy of the
application information submitted to
Exchanges. Thus, we propose to revise
§ 155.220(j)(2)(ii) to require agents,
brokers, and web-brokers to document
that the eligibility application
information was reviewed and
confirmed to be accurate by the
consumer or their authorized
representative before application
submission.
We also propose to establish in new
proposed § 155.220(j)(2)(ii)(A) standards
for what constitutes adequate
documentation that eligibility
application information has been
reviewed and confirmed to be accurate
by the consumer or their authorized
representative. First, we propose to
revise § 155.220(j)(2)(ii)(A) to establish
that documenting that eligibility
application information has been
reviewed and confirmed to be accurate
by the consumer or their authorized
representative would require the
consumer or their authorized
representative to take an action that
produces a record that can be
maintained and produced by the agent,
broker, or web-broker and produced to
confirm the consumer or their
authorized representative has reviewed
and confirmed the accuracy of the
eligibility application information.
We do not propose any specific
method for documenting that eligibility
application information has been
reviewed and confirmed to be accurate
by the consumer or their authorized
representative. To provide guidance to
agents, brokers, and web-brokers, we
propose to include in
§ 155.220(j)(2)(ii)(A) a non-exhaustive
list of acceptable methods to document
that eligibility application information
has been reviewed and confirmed to be
accurate, including obtaining the
signature of the consumer or their
authorized representative (electronically
or otherwise), verbal confirmation by
the consumer or their authorized
representative that is captured in an
audio recording, or a written response
(electronic or otherwise) from the
consumer or their authorized
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representative to a communication sent
by the agent, broker, or web-broker. We
also invite comment on whether there
may be other acceptable methods of
documentation that HHS should
consider specifying to be permissible for
purposes of documenting that eligibility
application information has been
reviewed and confirmed to be accurate
by the consumer or their authorized
representative. For example, we are
specifically interested in any current
best practices or approaches that agents,
brokers or web-brokers may use to
create records or otherwise document
that eligibility application information
was reviewed by the consumer or their
authorized representative prior to
submission to the Exchange.
We also propose that the consumer
would be able to review and confirm the
accuracy of application information on
behalf of other applicants (for example,
dependents or other household
members), and authorized
representatives would be able to provide
review and confirm the accuracy of
application information on behalf of the
people they are designated to represent,
as it may be difficult or impossible to
obtain confirmation from each
consumer whose information is
included on an application. This would
allow agents, brokers, and web-brokers
to continue assisting consumers as they
currently do (for example, often by
working with an individual representing
a household when submitting an
application for a family).
Next, we propose to require at new
proposed § 155.220(j)(2)(ii)(A)(1) that
the eligibility application information
documentation, which would be created
by the assisting agent, broker, or webbroker, must include an explanation of
the attestations at the end of the
eligibility application that the eligibility
application information has been
reviewed by and confirmed to be
accurate by the consumer or their
authorized representative. At the end of
the Exchange eligibility application, one
of the attestations the consumer must
currently agree to before submitting the
application is as follows: ‘‘I’m signing
this application under penalty of
perjury, which means I’ve provided true
answers to all of the questions to the
best of my knowledge. I know I may be
subject to penalties under Federal law if
I intentionally provide false
information.’’ The documentation the
agent, broker, or web-broker creates to
satisfy this proposed requirement would
be required to include this language for
awareness and to remind the consumer
that they are responsible for the
accuracy of the application information,
even if the information was entered into
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the application on their behalf by an
agent or broker assisting them. We
believe that this proposal would help
ensure that the consumer or their
authorized representative understands
the importance of confirming the
accuracy of the information contained
in the eligibility application and further
safeguard against the provision and
submission of incorrect eligibility
application information. We also believe
that that proposal would help safeguard
consumers from the negative
consequences of failing to understand
the attestations and potentially attesting
to conflicting information. For example,
one common error we see on
applications completed by agents,
brokers, or web-brokers is an attestation
that a consumer does not have an SSN
while also including an attestation that
the consumer is a U.S. citizen. These
conflicting attestations can generate
DMIs, which, if not resolved during the
allotted resolution window, could result
in the consumer’s coverage being
terminated. For these reasons, we
propose to add a requirement at new
§ 155.220(j)(2)(ii)(A)(1) that the
documentation include the date the
information was reviewed, the name of
the consumer or their authorized
representative, an explanation of the
attestations at the end of the eligibility
application, and the name of the
assisting agent, broker, or web-broker.
Lastly, at new proposed
§ 155.220(j)(2)(ii)(A)(2) we propose to
require agents, brokers, and web-brokers
to maintain the documentation
demonstrating that the eligibility
application information was reviewed
and confirmed as accurate by the
consumer or their authorized
representative for a minimum of 10
years. Section 155.220(c)(5) states HHS
or our designee may periodically
monitor and audit an agent, broker, or
web-broker to assess their compliance
with applicable requirements. However,
there is not currently a maintenance of
records requirement directly applicable
to all agents, brokers, and web-brokers
assisting consumers through the FFEs
and SBE–FPs.148 Capturing a broad148 Section 155.220(c)(3)(i)(E) requires webbrokers to maintain audit trails and records in an
electronic format for a minimum of 10 years and
cooperate with any audit under this section. Section
156.340(a)(2) places responsibility on QHP issuers
participating in Exchanges using the Federal
platform to ensure their downstream and delegated
entities (including agents and brokers) are
complying with certain requirements, including the
maintenance of records requirements in § 156.705.
In addition, under § 156.340(b), agents and brokers
that are downstream entities of QHP issuers in the
FFEs must be bound by their agreements with the
QHP issuer to comply with certain requirements,
including the records maintenance standards in
§ 156.705. Section 156.705(c) and (d) requires QHP
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78253
based requirement mandating that all
agents, brokers, and web-brokers
assisting consumers in the FFEs and
SBE–FPs maintain the records and
documentation demonstrating that
information captured in their
application has been reviewed and
confirmed to be accurate by the
consumer or their authorized
representative they are assisting would
provide a clear, uniform standard. It
also would ensure this documentation is
maintained for sufficient time to allow
for monitoring, audit, and enforcement
activities to take place.149 Therefore,
consistent with other Exchange
maintenance of records requirements,150
we propose to capture in new proposed
§ 155.220(j)(2)(iii)(A)(2) that agents,
brokers, and web-brokers must maintain
the documentation described in
proposed § 155.220(j)(2)(ii)(A) for a
minimum of 10 years, and produce the
documentation upon request in
response to monitoring, audit, and
enforcement activities conducted
consistent with § 155.220(c)(5), (g), (h),
and (k).
We seek comment on these proposals.
c. Documenting Receipt of Consumer
Consent (§ 155.220(j))
We propose to amend
§ 155.220(j)(2)(iii) to require agents,
brokers, or web-brokers assisting with
and facilitating enrollment through
FFEs and SBE–FPs or assisting an
individual with applying for APTC and
CSRs for QHPs to document the receipt
of consent from the consumer, or the
consumer’s authorized representative
designated in compliance with
§ 155.227, qualified employers, or
qualified employees they are assisting.
We propose that documentation of
receipt of consent would be created by
the assisting agent, broker, or webbroker and would require the consumer
seeking to receive assistance, or the
consumer’s authorized representative, to
take an action, such as providing a
signature or a recorded verbal
authorization, that produces a record
that can be maintained by the agent,
broker, or web-broker and produced to
confirm the consumer’s or their
authorized representative’s consent was
provided. With regard to the content of
issuers in the FFEs to maintain certain records for
10 years and to make all such records available to
HHS, the OIG, the Comptroller General, or their
designees, upon request.
149 While investigations consumer complaints are
an example of a more immediate, real-time
monitoring and oversight activity, market conduct
examinations, audits, and other types of
investigations (e.g., compliance reviews) may occur
several years after the applicable coverage year.
150 See, for example, 45 CFR 155.220(c)(3)(i)(E)
and 156.705(c).
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the documentation of consent, in
addition to the date consent was given,
name of the consumer or their
authorized representative, and the name
of the agent, broker, web-broker, or
agency being granted consent, we
propose the documentation would be
required to include a description of the
scope, purpose, and duration of the
consent provided by the consumer, or
their authorized representative, as well
as the process by which the consumer
or their authorized representative may
rescind such consent. Lastly, we
propose that documentation of the
consumer’s or their authorized
representative’s, consent be maintained
by the agent, broker, or web-broker for
a minimum of 10 years and produced
upon request in response to monitoring,
audit, and enforcement activities
conducted consistent with
§ 155.220(c)(5), (g), (h) and (k).
Currently, § 155.220(j)(2)(iii) requires
agents, brokers, or web-brokers assisting
with or facilitating enrollment through
the FFEs or SBE–FPs or assisting an
individual in applying for APTC and
CSRs for QHPs to obtain the consent of
the individual, employer, or employee
prior to providing such assistance.
However, § 155.220(j)(2)(iii) does not
currently require agents, brokers, or
web-brokers to document the receipt of
consent. We have observed several cases
in which there have been disputes
between agents, brokers, or web-brokers
and the individuals they are assisting, or
between two or more agents, brokers, or
web-brokers, about who has been
authorized to act on behalf of a
consumer or whether anyone has been
authorized to do so. We have also
received complaints alleging
enrollments by agents, brokers, and
web-brokers that occurred without the
consumer’s consent, and have
encountered agents, brokers, and webbrokers who attest they have obtained
consent and have acted in good faith,
but who do not have reliable records of
such consent to defend themselves from
allegations of misconduct. Thus, we are
proposing this standard because we
believe that it would be beneficial to
have reliable records of consent to help
with the resolution of such disputes or
complaints and to minimize the risk of
fraudulent activities such as
unauthorized enrollments. For these
reasons, we propose to revise
§ 155.220(j)(2)(iii) to require agents,
brokers, and web-brokers to document
the receipt of consent from the
consumer seeking to receive assistance
or the consumer’s authorized
representative, employer, or employee
prior to assisting with or facilitating
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enrollment through the FFEs and SBE–
FPs, making updates to an existing
application or enrollment, or assisting
the consumer in applying for APTC and
CSRs for QHPs.
We also propose to establish in
proposed new § 155.220(j)(2)(iii)(A)–(C)
standards for what constitutes obtaining
and documenting consent to provide
agents, brokers, and web-brokers with
further clarity regarding this proposed
requirement. First, we propose to add
new proposed § 155.220(j)(2)(iii)(A) to
establish that obtaining and
documenting the receipt of consent
would require the consumer seeking to
receive assistance, or the consumer’s
authorized representative designated in
compliance with § 155.227, to take an
action that produces a record that can be
maintained by the agent, broker, or webbroker and produced to confirm the
consumer’s or their authorized
representative’s consent has been
provided.
We do not intend to prescribe the
method to document receipt of
individual consent, so long as whatever
method is chosen requires the consumer
or their authorized representative to
take an action and results in a record
that can be maintained and produced by
the agent, broker, or web-broker.
Therefore, we propose to include in new
proposed § 155.220(j)(2)(iii)(A) a nonexhaustive list of acceptable means to
document receipt of consent, including
obtaining the signature of the consumer
or their authorized representative
(electronically or otherwise), verbal
confirmation by the consumer or their
authorized representative that is
captured in an audio recording, a
response from the consumer or their
authorized representative to an
electronic or other communication sent
by the agent, broker, or web-broker, or
other similar means or methods that
HHS specifies in guidance. Other
methods of documenting individual
consent may be acceptable, such as
requiring individuals to create user
accounts on an agent’s or agency’s
website where they designate or
indicate the agents, brokers, or webbrokers to whom they have provided
consent. Under this proposal, agents,
brokers, and web-brokers would also be
permitted to continue to utilize State
Department of Insurance forms, such as
agent or broker of record forms,
provided these forms cover the
minimum requirements set forth in this
proposed rule. If agents, brokers, and
web-brokers have already adopted
consent documentation processes
consistent with this proposed
framework, no changes would be
required if this proposed standard is
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finalized. We intend to allow for
documentation methods well-suited to
the full range of ways agents, brokers,
and web-brokers interact with
consumers they are assisting (for
example: in-person, via phone,
electronic communications, use of an
agent’s or agency’s website, etc.). We
also intend for the primary applicant to
be able to provide consent on behalf of
other applicants (for example,
dependents or other household
members), and authorized
representatives to be able to provide
consent on behalf of the people they are
designated represent (for example,
incapacitated persons), as it may be
difficult or impossible to obtain consent
from each individual whose information
is included on an application. This
would allow agents, brokers, and webbrokers to continue assisting individuals
as they currently do (for example, often
by working with an individual
representing a household when
submitting an application for a family).
Second, we propose to require at new
proposed § 155.220(j)(2)(iii)(B) that the
consent documentation must include
the date consent was given, name of the
consumer or their authorized
representative, name of the agent,
broker, web-broker, or agency being
granted consent, a description of the
scope, purpose, and duration of the
consent obtained by the individual, as
well as a process through which the
consumer or their authorized
representative may rescind consent.
Agents, brokers, and web-brokers may
work with individuals in numerous
capacities. For example, they may assist
individuals with applying for financial
assistance and enrolling in QHPs
through the FFEs and SBE–FPs, as well
as shopping for other non-Exchange
products. Similarly, agents, brokers, and
web-brokers may have different
business models such that individuals
may interact with specific individuals
consistently or numerous individuals
representing a business entity that may
vary upon each contact (for example,
call center representatives), and the
methods of interaction may vary as well
(for example: in-person, phone calls, use
of an agent’s or agency’s website etc.).
In addition, individuals may wish to
change the agents, brokers, or webbrokers they work with and provide
consent to over time. For these reasons,
the scope, purpose, and duration of the
consent agents, brokers, and webbrokers seek to obtain from individuals
can vary widely. Therefore, this
proposal is intended to ensure
individuals are making an informed
decision when providing their consent
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to the agents, brokers, or web-brokers
assisting them, that individuals can
make changes to their provision of
consent over time, and that the
documentation of consent at a minimum
captures who is providing and receiving
consent, for what purpose(s) the consent
is being provided, when consent was
provided, the intended duration of the
consent, and how specifically consent
may be rescinded. We expect that the
information in the consent
documentation would align with the
information in the corresponding
individuals’ applications (for example:
names, phone numbers, or email
addresses should align as applicable
depending on whether the consent is
obtained via email, text message, call
recording, or otherwise), except for in
instances in which consent is being
provided by an authorized
representative.
Lastly, at new proposed
§ 155.220(j)(2)(iii)(C), we propose to
require agents, brokers, and web-brokers
to maintain the documentation
described in proposed
§ 155.220(j)(2)(iii)(A) for a minimum of
10 years. Section 155.220(c)(5) states
HHS or our designee may periodically
monitor and audit an agent, broker, or
web-broker to assess their compliance
with applicable requirements. However,
there is not currently a maintenance of
records requirement directly applicable
to all agents, brokers, and web-brokers
assisting consumers through the FFEs
and SBE–FPs.151 Capturing a broadbased requirement mandating that all
agents, brokers, and web-brokers
assisting consumers in the FFEs and
SBE–FPs to maintain the records and
documentation demonstrating receipt of
consent from consumers or their
authorized representative would
provide a clear, uniform standard. It
would also ensure these records and
documentation are maintained for
sufficient time to allow for monitoring,
audit, and enforcement activities to take
place.152 Therefore, consistent with
other Exchange maintenance of records
151 Section 155.220(c)(3)(i)(E) requires webbrokers to maintain audit trails and records in an
electronic format for a minimum of 10 years and
cooperate with any audit under this section. Section
156.340(a)(2) places responsibility on QHP issuers
participating in Exchanges using the Federal
platform to ensure their downstream and delegated
entities (including agents and brokers) are
complying with certain requirements, including the
maintenance of records requirements in § 156.705.
Section 156.705(c) requires QHP issuers in the FFEs
to maintain certain records for 10 years.
152 While investigations consumer complaints are
an example of a more immediate, real-time
monitoring and oversight activity, market conduct
examinations, audits, and other types of
investigations (e.g., compliance reviews) may occur
several years after the applicable coverage year.
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requirements,153 we propose to capture
in new proposed § 155.220(j)(2)(iii)(C)
that agents, brokers, and web-brokers
must maintain the documentation
described in proposed
§ 155.220(j)(2)(iii)(A) for a minimum of
10 years, and produce the
documentation upon request in
response to monitoring, audit and
enforcement activities conducted
consistent with § 155.220(c)(5), (g), (h)
and (k).
We seek comment on these proposals,
including whether there are other means
or methods of documentation that HHS
should consider specifying are
permissible for purposes of
documenting the receipt of consent from
consumer or their, qualified employers,
or qualified employees.
4. Eligibility Standards (§ 155.305)
a. Failure to File and Reconcile Process
(§ 155.305(f)(4))
We are proposing to amend
§ 155.305(f)(4) which currently prohibits
an Exchange from determining a
taxpayer eligible for APTC if HHS
notifies the Exchange that a taxpayer (or
a taxpayer’s spouse, if married) has
failed to file a Federal income tax return
and reconcile their past APTC for a year
for which tax data would be utilized for
verification of household income and
family size in accordance with
§ 155.320(c)(1)(i).
As background, Exchange enrollees
whose taxpayer fails to comply with
current paragraph § 155.305(f)(4) are
referred to as having failed to ‘‘file and
reconcile’’. Since 2015, HHS has taken
regulatory and operational steps to help
increase taxpayer compliance with
filing and reconciliation requirements
under the Code as described at 26 CFR
1.36B–4(a)(1)(i) and (a)(1)(ii)(A) by tying
eligibility for future APTC to the
taxpayer’s reconciliation of past APTC
paid. However, since the finalization of
the requirement at § 155.305(f)(4), HHS
has determined that the costs of the
current policy outweigh the benefits for
a number of reasons. For one, Exchanges
have faced a longstanding operational
challenge, specifically that Exchanges
sometimes have to determine an
enrollee ineligible for APTC without
having up-to-date information on the tax
filing status of households while
Federal income tax returns are still
being processed by the IRS. Currently,
Exchanges determine an enrollee
ineligible for APTC if the IRS, through
data passed from the IRS to HHS, via the
Federal Data Services Hub (the Hub),
tells an Exchange that the taxpayer did
153 See, for example, 45 CFR 155.220(c)(3)(i)(E)
and 156.705(c).
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not comply with the requirement to file
a Federal income tax return and
reconcile APTC for one specific tax
year. To address the challenge of
receiving up-to-date information, and to
promote continuity of coverage in an
Exchange QHP, we are proposing a new
process for Exchanges to conduct FTR
while also ensuring that Exchanges
preserve program integrity by paying
APTC only to consumers who are
eligible to receive it. HHS believes that
any FTR process should encourage
compliance with the filing and
reconciling requirement under the Code,
minimize the potential for APTC
recipients to incur large tax liabilities
over time, and support eligible
enrollees’ continuous enrollment in
Exchange coverage with APTC by
avoiding situations where enrollees
become uninsured when their APTC is
terminated.
For Exchanges using the Federal
eligibility and enrollment platform,
which includes the FFEs and SBE–FPs,
taxpayers who have not met the
requirement of § 155.305(f)(4) are put
into the FTR process with the Exchange.
As part of the normal process used by
Exchanges using the Federal eligibility
and enrollment platform during Open
Enrollment, enrollees for whom IRS
data indicates an FTR status for their
taxpayer receive notices from the
Exchange alerting them that IRS data
shows that their taxpayer has not filed
a Federal income tax return for the
applicable tax year and reconciled
APTC for that year using IRS Form
8962. FTR Open Enrollment notices sent
directly to the taxpayer clearly state that
IRS data indicates the taxpayer failed to
file and reconcile, whereas FTR Open
Enrollment notices sent to the
applicant’s household contact, who may
or may not be the taxpayer, list a few
different reasons consumers may be at
risk of losing APTC, including the
possibility that IRS data indicates the
taxpayer failed to file and reconcile.
Notices to the applicant’s household
contact can be confusing because of the
multiple reasons listed. Both of these
Open Enrollment notices encourage
taxpayers identified as having an FTR
status to file their Federal income tax
return and reconcile their APTC for that
year using IRS Form 8962, or risk losing
APTC eligibility for the next coverage
year.
In late 2015, to allow consumers with
an FTR status to be determined eligible
for APTC temporarily (if otherwise
eligible), HHS added a question to the
single, streamlined application used by
the Exchanges using the Federal
eligibility and enrollment platform that
allows enrollees to attest on their
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application, under the penalty of
perjury, that they have filed and
reconciled their APTC by checking a
box that says, ‘‘Yes, I reconciled
premium tax credits for past years.’’ 154
Enrollees who check this attestation and
enroll in coverage during Open
Enrollment retain their APTC, even if
IRS data has not been updated to reflect
their most current Federal income tax
filing status or if the individual has not
actually reconciled their APTC.
Allowing enrollees to attest to filing and
reconciling even though IRS data
indicates that they did not, is a critical
step to safeguard enrollees from losing
APTC erroneously as the IRS typically
takes several weeks to process Federal
income tax returns, with additional time
required for returns or amendments that
are filed using a paper process.
After Open Enrollment, Exchanges
using the Federal platform then conduct
a second look at FTR data to follow up
and verify an enrollee(s)’ reconciliation
attestation by conducting a verification
of their taxpayer’s FTR status early in
the next coverage year, which includes
additional notices to enrollees and
taxpayers. This verification process
early in the next coverage year is
referred to as FTR Recheck. State
Exchanges that operate their own
eligibility and enrollment platform have
each implemented similar processes to
check the FTR status of their enrollees
annually based on data provided by the
IRS, to identify and notify enrollees who
are at risk of losing APTC eligibility,
and to allow enrollees to attest under
the penalty of perjury that they have
filed and reconciled their APTC.
There are many reasons we are
proposing the changes to § 155.305(f)(4)
described herein. First, HHS’ and State
Exchanges’ experiences with running
FTR operations have shown that
Exchange enrollees often do not
understand the requirement that their
taxpayer must file a Federal income tax
return and reconcile their APTC or that
they must also submit IRS Form 8962 to
properly reconcile their APTC, even
though the single, streamlined
application used by Exchanges on the
Federal platform and QHP enrollment
process require a consumer to attest to
understanding the requirement to file
and reconcile in two places. For
example, HHS is aware anecdotally that
many third-party tax preparers, such as
accountants, are not aware of the
requirement to file and reconcile, nor
prompt consumers to also include IRS
Form 8962 along with their Federal
154 We note that this question was removed from
the single streamlined application once the FTR
process was paused in 2020 for the 2021 PY.
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income tax return. Although enrollees
who rely on third party tax preparers
such as accountants or third-party tax
preparation software to prepare their
Federal income tax returns are still
required to file and reconcile even if
their tax preparer was unaware of the
requirement, consumers should have
the opportunity to receive additional
guidance from Exchanges on the
requirement to file and reconcile to
promote compliance and prevent
termination of APTC.
While annual FTR notices help with
this issue as the notices alert consumers
that they did not provide adequate
documentation to fulfill the requirement
to file and reconcile, the current process
that requires Exchanges to determine an
enrollee ineligible for APTC after 1 year
of having an FTR status is overly
punitive. Some consumers may have
their APTC ended due to delayed data,
in which case their only remedy is to
appeal to get their APTC reinstated.
Consumers also may be confused or may
have received inadequate education on
the requirement to file and reconcile, in
which case they must actually file,
reconcile, and appeal to get their APTC
reinstated. By requiring Exchanges to
determine an enrollee ineligible for
APTC only after having an FTR status
for two consecutive tax years
(specifically, years for which tax data
would be utilized for verification of
household income and family size),
Exchanges would have more
opportunity to conduct outreach to
consumers whom data indicate have
failed to file and reconcile to prevent
erroneous terminations of APTC and to
provide access to APTC for an
additional year even when APTC would
have been correctly terminated under
the original FTR process. Under the
proposed change, Exchanges on the
Federal platform would continue to
send notices to consumers for the year
in which they have failed to reconcile
APTC as an initial warning to inform
and educate consumers that they need
to file and reconcile or risk being
determined ineligible for APTC if they
fail to file and reconcile for a second
consecutive tax year. This change would
also alleviate burden on HHS hearing
officers by reducing the number of
appeals related to denial of APTC due
to FTR, and prevent consumers who did
reconcile, but for whom IRS data was
not updated quickly enough, from
having to go through an appeal process
to have their APTC rightfully reinstated.
HHS believes in ensuring consumers
have access to affordable coverage and
places high value on consumers
maintaining continuity of coverage in
the Exchange as HHS has found that
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FFE and SBE–FP enrollees who lose
APTC tend to end their Exchange
coverage and will experience coverage
gaps, as they cannot afford unsubsidized
coverage. In light of this, HHS believes
it is imperative that any change to the
current FTR operations be done
carefully and that HHS thoughtfully
balance how it enforces the requirement
to file and reconcile, since a
consequence of losing APTC effectively
means many consumers may lose access
to needed medical care.
Therefore, given these challenges that
both Exchanges and consumers have
faced with the requirement to file and
reconcile, we are proposing to revise
§ 155.305(f)(4) under which Exchanges
would not be required, or permitted, to
determine consumers ineligible for
APTC due to having an FTR status for
only 1 year. Given that HHS’s
experience running FTR shows
continued issues with compliance with
the requirement to file and reconcile, we
propose that beginning on January 1,
2024, Exchanges must find an applicant
ineligible for APTC only if the applicant
has an FTR delinquent status for two
consecutive years (specifically, two
consecutive years for which tax data
would be utilized for verification of
household income and family size).
Previously, CMS announced that
Exchanges on the Federal platform
would not act on data from the IRS for
enrollees who have failed to file Federal
income tax returns and reconcile a
previous year’s APTC with the PTC
allowed for the year. The guidance also
announced flexibility for State
Exchanges that operate their own
eligibility and enrollment platforms to
take similar action.155 Due to the
ongoing COVID–19 PHE in 2020, for
plan year 2021, CMS temporarily
paused ending APTC for enrollees with
an FTR status due to IRS processing
delays of 2019 Federal income tax
returns.156 CMS then extended this
pause for the 2023 plan year in July
2022.157 As a result of these changes, 55
percent of enrollees who were
automatically re-enrolled during 2021
open enrollment with an FTR status
155 See CMS. (2022, July 18). Failure to File and
Reconcile (FTR) Operations Flexibilities for Plan
Year 2023. https://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/FTR-flexibilities2023.pdf.
156 See CMS. (2021, July 23). Failure to File and
Reconcile (FTR) Operations Flexibilities for Plan
Years 2021 and 2022—Frequently Asked Questions
(FAQ). https://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/FTR-flexibilities-2021and-2022.pdf.
157 See CMS. (2022, July 18). Failure to File and
Reconcile (FTR) Operations Flexibilities for Plan
Year 2023. https://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/FTR-flexibilities2023.pdf.
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remained enrolled in Exchange coverage
as of March 2021. In contrast, only 12
percent of those enrollees with an FTR
status who were automatically reenrolled without APTC during the 2020
open enrollment were still enrolled in
coverage as of March 2020. These
results show the significant impact that
loss of APTC due to FTR status has on
whether enrollees continue to remain in
coverage offered through the Exchange
as these impacted enrollees must pay
the full cost of their Exchange plan,
which is often unaffordable without
APTC.
CMS proposes to continue to pause
FTR until the point in time that HHS
and the IRS will be able to implement
the new FTR policy, if finalized. That is
to say, until the IRS can update its
systems to implement the new FTR
policy, and HHS can notify the
Exchange of an enrollee’s consecutive 2year FTR status, the Exchange will not
determine enrollees ineligible for APTC
based on either the one-year or 2-year
FTR status. We believe that removing
APTC after 2 consecutive years of an
FTR status instead of one will help
consumers avoid gaps in coverage by
increasing retention in the Exchange
even if they have failed to reconcile for
1 year, and will reduce the punitive
nature of the current process which may
erroneously terminate APTC for
consumers who have filed and
reconciled. We also believe that these
proposed changes would help protect
consumers from accruing large tax
liabilities over multiple years by
notifying and ending APTC for
consumers with an FTR status for two
consecutive years. Finally, we believe
these proposed changes would allow
Exchanges to maintain program integrity
by denying APTC to consumers who
have, over the course of two years, been
given ample notification of their
obligation to file and reconcile and have
nevertheless failed to do so.
We seek comment on this proposal,
especially from States or other
interested parties regarding tax burdens
on consumers which would inform our
decision on this proposal.
5. Verification Process Related to
Eligibility for Insurance Affordability
Programs (§§ 155.315 and 155.320)
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a. Income Inconsistencies
We propose to amend § 155.320 to
require Exchanges to accept an
applicant’s or enrollee’s attestation of
projected annual household income
when the Exchange requests tax return
data from the IRS to verify attested
projected annual household income, but
the IRS confirms there is no such tax
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return data available. We further
propose to amend § 155.315(f) to add
that income inconsistencies must
receive an automatic 60-day extension
in addition to the 90 days provided by
§ 155.315(f)(2)(ii).
Section 155.320 sets forth the
verification process for household
income. The Exchange requires that an
applicant or enrollee applying for
financial assistance must attest to their
projected annual household income. See
§ 155.320(a)(1) and (c)(3)(ii)(b). The
regulation also requires that for any
individual in the applicant’s or
enrollee’s tax household (and for whom
the Exchange has a SSN), the Exchange
must request tax return data regarding
income and family size from the IRS.158
See § 155.320(c)(i)(A). When the
Exchange requests tax return data from
the IRS and the data indicates that
attested projected annual household
income represents an accurate
projection of the tax filer’s household
income for the benefit year for which
coverage is requested, the Exchange
must determine eligibility for APTC and
CSR based on the IRS tax data. See
§ 155.320(c)(3)(ii)(C).
When the Exchange requests tax
return data from the IRS and the IRS
returns data that reflects that the
attested projected annual household
income is not an accurate projection of
the tax filer’s household income for the
benefit year for which coverage is
requested, the applicant or enrollee is
considered to have experienced a
change in circumstances, which allows
HHS to establish procedures for
determining eligibility for APTC on
information other than IRS tax return
data, as described in § 155.320(c)(3)(iii)–
(vi). See ACA § 1412(b)(2).
The Exchange also considers an
applicant or enrollee to have
experienced a change in circumstances
when the Exchange requests tax return
data from the IRS to verify attested
projected household income, but the
IRS confirms such data is unavailable.
This is because tax data is usually
unavailable when an applicant or
enrollee has experienced a change in
family size, other household
circumstances (such as a birth or death),
filing status changes (such as a marriage
or divorce), or the applicant or enrollee
was not required to file a tax return for
the year involved. See § ACA 1412(b)(2).
When an applicant or enrollee has
experienced a change in circumstances
as described in ACA § 1412(b)(2), the
Exchange determines eligibility for
158 The Exchange must also request data regarding
Social Security Benefits from the Social Security
Administration.
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APTC and CSR using alternate
procedures designed to minimize
burden and protect program integrity,
described in § 155.320(c)(3)(iii)–(vi).
If an applicant or enrollee qualifies for
an alternate verification process as
described above, and the attested
projected annual household income is
greater than the income amount
returned by the IRS, the Exchange
accepts the applicant’s attestation
without further verification under
§ 155.320(c)(iii)(A). If an applicant
qualifies for an alternate verification
process, and the attested projected
annual household income is more than
a reasonable threshold less than the
income amount returned by the IRS, or
there is no IRS data available, the
Exchange generates an income
inconsistency (also referred to as a data
matching issue or DMI) and proceeds
with the process described in
§ 155.315(f)(1) through (4), unless a
different electronic data source returns
an amount within a reasonable
threshold of the projected annual
household income. See
§ 155.320(c)(3)(iv) and (c)(3)(vi)(D). This
process usually requires the applicant or
enrollee to present satisfactory
documentary evidence of projected
annual household income. If the
applicant fails to provide
documentation verifying their projected
annual household income attestation,
the Exchange determines the
consumer’s eligibility for APTC and
CSRs based on available IRS data, as
required in § 155.320(c)(3)(vi)(F).
However, if there is no IRS data
available, the Exchange must determine
the applicant ineligible for APTC and
CSRs as required in
§ 155.320(c)(3)(vi)(G). We propose to
make clarifying revisions to the current
regulations to ensure consistency
between the regulations and the current
operations of the Exchanges on the
Federal platform, as described here.
We propose to add § 155.320(c)(5)
which would require Exchanges to
accept an applicant’s or enrollee’s
attestation of projected annual
household income when the Exchange
requests IRS tax return data but IRS
confirms such data is not available. The
current process is overly punitive to
consumers and burdensome to
Exchanges; reasons for IRS not returning
consumer data can extend beyond the
consumer not filing tax returns, and can
be attributed to tax household
composition changes (such as birth,
marriage, and divorce), name changes,
or other demographic updates or
mismatches—all of which are legitimate
changes that currently prevent a
consumer from avoiding an income
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DMI. Additionally, the consequence of
receiving an income DMI and being
unable to provide sufficient
documentation to verify projected
household income outweighs the
intended programmatic benefits: under
§ 155.320(c)(3)(vi)(G) consumers are
determined completely ineligible for
APTC and CSRs. With respect to burden
on Exchanges, DMI verification by the
Exchange requires an outlay of
administrative hours to monitor and
facilitate the resolution of income
inconsistencies. Within the Federal
Platform, this administrative task
accounts for approximately 300,000
hours of labor annually, which we
believe is proportionally mirrored by
State Exchanges.
Accordingly, we propose to accept an
applicant’s or enrollee’s attestation of
projected annual household income
when IRS tax return data is requested
but is not available, and to determine
the applicant or enrollee eligible for
APTC or CSRs in accordance with the
applicant’s or enrollee’s attested
projected household income, to more
fairly determine eligibility for
consumers and to reduce unnecessary
burden on Exchanges. This proposal is
consistent with § 1412(b)(2) of the ACA,
which allows the Exchange to utilize
alternate verification procedures when a
consumer has experienced substantial
changes in income, family size or other
household circumstances, or filing
status, or when an applicant or enrollee
was not required to file a tax return for
the applicable year.159 It is also
consistent with the flexibility under
ACA § 1411(c)(4)(B) to modify methods
for verification of the information where
we determine such modifications would
reduce the administrative costs and
burdens on the applicant.
We clarify that the Exchange would
continue to generate income DMIs when
IRS tax data is available and the attested
projected household income amount is
more than a reasonable threshold below
the income amount returned by the IRS,
and other sources cannot provide
income data within the reasonable
threshold. Additionally, the Exchange
would continue to generate income
DMIs when IRS tax data cannot be
requested, because an applicant or
enrollee did not provide sufficient
information (namely, a social security
number), and other sources cannot
provide income data within the
reasonable threshold of the attested
projected household income. Under
§ 1411(c)(3) of the ACA, only data from
the IRS is required to be used to
determine if income is inconsistent.
159 42
U.S.C. 18081
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Currently, there are no reliable and
accurate income data sources legally
available to the Exchange that would
provide quality data for the purpose of
generating income DMIs. Income data
from other electronic data sources may
continue to be used by Exchanges to
verify income when the attested
projected household income amount is
more than a reasonable threshold below
the income amount returned by the IRS
or IRS data cannot be requested.
Lastly, we propose to revise
§ 155.315(f) to add new paragraph (f)(7)
to require that applicants must receive
an automatic 60-day extension in
addition to the 90 days currently
provided by § 155.315(f)(2)(ii) to allow
applicants sufficient time to provide
documentation to verify household
income. The extension would be
automatically granted when consumers
exceed the allotted 90 days without
resolving any active household income
DMIs. This proposal aligns with current
§ 155.315(f)(3), which provides
extensions to applicants beyond the
existing 90 days if the applicant
demonstrates that a good faith effort has
been made to obtain the required
documentation during the period. It is
also consistent with the flexibility under
ACA § 1411(c)(4)(B) to modify methods
for verification of the information where
we determine such modifications would
reduce the administrative costs and
burdens on the applicant.
We have found that 90 days is often
an insufficient amount of time for many
applicants to provide this income
documentation, since it can require
multiple documents from various
household members along with an
explanation of seasonal employment or
self-employment, including multiple
jobs. As applicants are asked to provide
a projection for their next year’s income,
they often submit documents that do not
fully explain their attestation due to the
complexities noted above, which
requires contact from the Exchange and
additional document submission, which
often pushes the verification timeline
past 90 days. An additional 60 days
would allow consumers more time to
gather multiple documents from
multiple sources, and also allows time
for back and forth review with the
Exchange. The majority of households
with income DMIs are low income and
consumers often have multiple sources
of employment that can change
frequently. Therefore, collecting and
submitting documentation to verify
projected household income is
extremely complicated and difficult.
The proposed extension would provide
consumers with necessary time to gather
and submit sufficient documentation to
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verify projected household income. The
current authority allowing for the
granting of extensions is applied on a
case by case basis and requires the
consumers to demonstrate difficulty
before the 90- day deadline, which does
not address the need for additional time
more broadly for households with
income DMIs.
A review of income DMI data
indicates that when consumers receive
additional time, they are more likely to
successfully provide documentation to
verify their projected household
income. Between 2018 and 2021, over
one third of consumers who resolved
their income DMIs on the Exchange did
so in more than 90 days. These
consumers were provided additional
time under § 155.315(f)(3), but the
extension under this existing provision
places the burden on the consumer to
obtain more time to submit
documentation. The proposed extension
would treat consumers more equitably
and would take into consideration the
complicated process of obtaining and
submitting income documents for these
households. We believe the proposed
extension would provide more
opportunity to work with consumers to
submit the correct documentation to
verify their projected annual household
income. Extensions enabled HHS to
determine eligibility for more
consumers truly eligible for coverage.
HHS continues to study consumer
behavior in resolving consistencies to
continue to support accurate eligibility
determination.
HHS has found that income DMIs
have a negative impact on access, health
equity, and the risk pool. Per a review
of PY 2022 data, the majority of income
DMIs disproportionately impacted
households with lower attested
household income. Among households
with an income DMI in PY 2022, more
than 60 percent attested to a household
income of less than $25,000; compared
to households without an income DMI,
where only about 40 percent attested to
household income less than $25,000.
Additionally, households with an
attested household income below
$25,000 successfully submitted
documentation to verify their income 25
percent less often than households with
higher household incomes.
Income DMIs also may pose a strain
on populations of color. A review of
available data indicates that income
DMI expirations are higher than
expected among Black or African
American consumers. Further, the
proposed changes would ensure that all
consumers are able to continue to have
access to more affordable coverage by
continuing to receive their APTC, which
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also supports HHS’ goal of consumers
maintaining continuous coverage.
Income DMIs also negatively impact
the risk pool. When households are
unable to submit documentation to
verify their household income and lose
eligibility for APTC, they are much
more likely to drop coverage since they
must pay the entire monthly premium,
which in many cases may be
significantly more than the premium
minus the APTC. We found that
consumers who were unable to submit
sufficient documentation to verify their
income and lost their eligibility for
APTC were half as likely as other
consumers to remain covered through
the end of the plan year. Consumers
aged 25–35 were the age group most
likely to lose their APTC eligibility due
to an income DMI, resulting in a loss of
a population that, on average, has a
lower health risk, thereby negatively
impacting the risk pool. This finding
underscores the importance of
consumers being provided ample time
to resolve their Income DMIs in order to
support HHS’ commitment to advancing
health equity for consumers
participating in the Exchange.
Given the information we have on the
negative and disproportionate impacts
of income DMIs, we are proposing to
adjust the household income
verification requirements in order to
treat consumers more equitably, help
ensure continuous coverage, and
strengthen the risk pool. If the proposed
changes are finalized, Exchanges would
utilize only data from the IRS to
determine if income is inconsistent and
would accept attestation when tax
return data is requested from IRS but
not returned. In cases where the IRS
returns tax data that reflects that the
attested projected annual household
income is not an accurate projection of
the tax filer’s household income,
Exchanges would continue existing
operations. Additionally, Exchanges
would utilize the additional time
provided to work with consumers to
submit documentation to verify their
projected annual household income.
While the increased protection for
consumers from loss of eligibility for
APTC could present a program integrity
risk, households are required to provide
true answers to application questions
under penalty of perjury. Additionally,
HHS does not believe that individuals
with a mismatch due to situations such
as family size change have a greater
incentive to misreport income than their
counterparts, given that changes in
family size and other changes in
circumstances are unlikely to be
correlated with income misreporting
incentives. HHS will continue to engage
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with partners to evaluate the impact of
this proposal on APTC accuracy.
We seek comment on these proposals.
6. Annual Eligibility Redetermination
(§ 155.335)
We propose amending § 155.335(j)(1)
and (2) to allow Exchanges, beginning
for PY 2024, to modify their reenrollment hierarchies such that
enrollees who are eligible for CSRs in
accordance with § 155.305(g) and who
would otherwise be automatically reenrolled in a bronze-level QHP without
CSRs, to instead be automatically reenrolled in a silver-level QHP (with
income-based CSRs) in the same
product with a lower or equivalent
premium (after APTC), provided that
certain conditions are met.160
Furthermore, we propose to amend the
Exchange re-enrollment hierarchy to
allow all Exchanges (Exchanges on the
Federal platform and SBEs) to ensure
enrollees whose QHPs are no longer
available to them and enrollees who
would be re-enrolled into a silver-level
QHP in order to receive income-based
CSRs are re-enrolled into plans with the
most similar network to the plan they
had in the previous year, provided that
certain conditions are met. To honor
other criteria the enrollee may have
used to make the original selection, we
propose to limit re-enrollment of such
enrollees into plans offered by the same
issuer and of the same product if the
enrollee’s plan and product remains
available through the Exchange for
renewal consistent with § 147.106. We
propose that Exchanges (including
Exchanges on the Federal platform and
SBEs) would implement this option
beginning with the open enrollment
period for plan year 2024 coverage, if
operationally feasible, and if not then
beginning with the open enrollment
period for plan year 2025 coverage.
The re-enrollment hierarchy
previously prioritized placing an
enrollee in a similar metal level;
however, HHS now believes other
factors, such as access to income-based
CSRs and net premium (that is,
premium minus the APTC), should also
be taken into account. As discussed
later, HHS is considering whether for
future years it would be appropriate to
modify the re-enrollment process to
incorporate both net premium and outof-pocket costs attributable to cost
sharing (referred to in this preamble as
160 Under § 144.103, a product is defined as a
discrete package of health insurance coverage
benefits that are offered using a particular product
network type (such as health maintenance
organization, preferred provider organization,
exclusive provider organization, point of service, or
indemnity) within a service area.
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78259
total out-of-pocket cost) when both
directing re-enrollment to a plan at the
same metal level as the enrollee’s
current QHP and directing reenrollment to a plan at a higher metal
level than the enrollee’s current QHP in
all Exchanges.161 162
In the 2014 Patient Protection and
Affordable Care Act; Annual Eligibility
Redeterminations for Exchange
Participation and Insurance
Affordability Programs; Health
Insurance Issuer Standards Under the
Affordable Care Act, Including
Standards Related to Exchanges (79 FR
52994, 52998 through 53001), we
established the Exchange re-enrollment
hierarchy at § 155.335(j) with the goal of
ensuring continuous coverage for
consumers who opt not to make an
active plan selection for the upcoming
year. In paragraph (j)(1), we finalized
that if an enrollee remains eligible for
enrollment in a QHP through the
Exchange upon annual redetermination,
and the product under which the QHP
in which the enrollee was enrolled
remains available for renewal,
consistent with § 147.106, such enrollee
will have his or her enrollment in a
QHP through the Exchange under the
product renewed unless he or she
terminates coverage, including
termination of coverage in connection
with voluntarily selecting a different
QHP, in accordance with § 155.430. We
further finalized that the QHP in which
the enrollee’s coverage will be renewed
will be selected according to the
following order of priority: (1) in the
same plan as the enrollee’s current QHP,
unless the current QHP is not available
through the Exchange; (2) if the
enrollee’s current QHP is not available,
the enrollee’s coverage will be renewed
in a QHP at the same metal level as the
enrollee’s current QHP within the same
product; (3) if the enrollee’s current
QHP is not available through the
Exchange and the enrollee’s product no
longer includes a QHP at the same metal
level as the enrollee’s current QHP, the
enrollee’s coverage will be renewed in
a plan that is one metal level higher or
lower than the enrollee’s current QHP
(with the exception of when the
enrollee’s current QHP is a silver level
161 As defined at § 155.20, cost sharing means any
expenditure required by or on behalf of an enrollee
with respect to essential health benefits; such term
includes deductibles, coinsurance, copayments, or
similar charges, but excludes premiums, balance
billing amounts for non-network providers, and
spending for non-covered services.
162 Total out-of-pocket costs could also include
balance billing amounts, but for purposes of this
preamble, we use the term total out-of-pocket costs
to refer to net premium and out-of-pocket costs
attributable to amounts such as coinsurance,
copayments, and deductibles.
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plan); or (4) if the enrollee’s current
QHP is not available through the
Exchange and the enrollee’s product no
longer includes a QHP that is at the
same metal level as, or one metal level
higher or lower, than the enrollee’s
current QHP, the enrollee’s coverage
will be renewed in any other QHP
offered under the product in which the
enrollee’s current QHP is offered in
which the enrollee is eligible to
enroll.163
Under paragraph (j)(2), we finalized
standards to address re-enrollment in
situations in which no plans under the
product under which an enrollee’s QHP
is offered are available through the
Exchange for renewal. In this situation,
the enrollee may be enrolled in a QHP
under a different product offered by the
same issuer, to the extent permitted by
applicable State law, unless the enrollee
terminates coverage including
termination of coverage in connection
with voluntarily selecting a different
QHP. In such cases, the re-enrollment
will occur according to the following
order of priority: (1) in a QHP through
the Exchange at the same metal level as
the enrollee’s current QHP in the
product offered by the same issuer that
is the most similar to the enrollee’s
current product; (2) if the issuer does
not offer another QHP through the
Exchange at the same metal level as the
enrollee’s current QHP, the enrollee will
be re-enrolled in a QHP through the
Exchange that is one metal level higher
or lower than the enrollee’s current QHP
in the product offered by the same
issuer through the Exchange that is the
most similar to the enrollee’s current
product; or (3) if the issuer does not
offer another QHP through the Exchange
at the same metal level as, or one metal
level higher or lower than the enrollee’s
current QHP, the enrollee will be reenrolled in any other QHP offered
through the Exchange by the same
issuer in which the enrollee is eligible
to enroll.
In the 2017 Payment Notice (81 FR
12203), we finalized the rule to provide
for automatic re-enrollment in a QHP
offered by another issuer through the
Exchange in order to maintain coverage
163 Under § 155.335(j)(1)(iii)(A), if the enrollee’s
current QHP is not available through the Exchange
and the enrollee’s product no longer includes a
QHP at the same metal level as the enrollee’s
current QHP and the enrollee’s current QHP is a
silver level plan, the enrollee will be re-enrolled in
a silver level QHP under a different product offered
by the same QHP issuer that is most similar to the
enrollee’s current product. If no such silver level
QHP is available for enrollment through the
Exchange, the enrollee’s coverage will be renewed
in a QHP that is one metal level higher or lower
than the enrollee’s current QHP under the same
product.
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with APTC and income-based CSRs for
the majority of Exchange enrollees who
are receiving these subsidies, as
opposed to permitting a QHP issuer that
no longer has a QHP available to an
enrollee through an Exchange to reenroll the enrollee outside the
Exchange. Specifically, we established
that, beginning in PY 2017, if no QHP
from the same issuer is available to
enrollees through the Exchange, the
Exchange could direct alternate
enrollments for such enrollees to the
extent permitted by applicable State law
into a QHP from a different issuer. In
such cases, the re-enrollment will occur
as directed by the applicable State
regulatory authority, or, if the applicable
State regulatory authority declines to
direct this activity, such alternate
enrollments would be directed by the
Exchange. This rule provides
considerable flexibility to Exchanges to
specify the logic that will be used to
assign enrollees in this situation to
specific plans.
In the 2023 Payment Notice (87 FR
27208, 27273), HHS announced it
would consider proposing amendments
to the Exchange re-enrollment hierarchy
in future rulemaking and would take
into account comments received. In the
preamble to the 2023 Payment Notice
proposed rule (87 FR 584, 652), we
solicited comments on incorporating the
net premium, maximum out-of-pocket
amount (MOOP), deductible, and total
out-of-pocket cost of a plan into the
Exchange re-enrollment hierarchy.164
We also solicited comments on
additional criteria or mechanisms HHS
could consider to ensure that the
Exchange hierarchy for re-enrollment
aligns with plan generosity and
consumer needs (87 FR at 652).
Additionally, we sought comment on
the following examples: (1) re-enrolling
a current bronze QHP enrollee into an
available silver QHP with a lower net
premium and higher plan generosity
(that is, a higher metal level) offered by
the same QHP issuer; and (2) reenrolling a current silver QHP enrollee
into another available silver QHP, under
the enrollee’s current product and with
a service area that is serving the enrollee
that is issued by the same QHP issuer,
which has lower total out-of-pocket cost
(87 FR at 652). As described in further
164 MOOP refers to the limit on cost sharing an
enrollee has to pay for covered services in a plan
year. After the enrollee spends this amount on cost
sharing for in-network essential health benefits, the
health plan pays 100 percent of the costs of covered
essential health benefits. For purposes of this
section of preamble, the term total out-of-pocket
costs refers to net premium and out-of-pocket costs
attributable to cost sharing and excludes any costs
attributable to balance billing.
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detail later, we propose to codify
example (1) described above by
amending § 155.335(j)(1) and (2) to
allow Exchanges, beginning for PY
2024, to modify their re-enrollment
hierarchies such that enrollees who are
eligible for CSRs in accordance with
§ 155.305(g) and who would otherwise
be automatically re-enrolled in a bronzelevel QHP without CSRs, would instead
be automatically re-enrolled in a silverlevel QHP (with income-based CSRs) in
the same product with a lower or
equivalent premium after APTC. We
believe initially limiting the scope to
only income-based CSR-eligible
enrollees who are currently in a bronze
QHP and have a lower cost silver CSR
QHP available would allow issuers and
Exchanges to incrementally update their
processes, as opposed to incorporating
net premium and out-of-pocket cost
(OOPC) throughout the hierarchy for PY
2024.
We received substantial comments
from diverse interested parties and have
carefully considered these comments.
Several commenters encouraged HHS to
take net premium or total out-of-pocket
cost into account for the re-enrollment
hierarchy. Many commenters supported
amending § 155.335(j)(1)(i) to allow the
enrollee to be re-enrolled into a different
plan with a lower net premium and
higher generosity if there is no change
in the issuer, product, service area, and
provider network. Some commenters
raised concerns with § 155.335(j)(1)(ii)
through (iv) and (j)(2)(iii), which outline
the re-enrollment rules when an
enrollee’s current QHP is no longer
available, since they allow consumers to
be re-enrolled in a plan with far higher
costs if the issuer and provider networks
types are prioritized. Commenters
explained that the current policy does
not provide flexibility for enrollees to be
re-enrolled into a different plan even if
a change in market conditions has
significantly raised the old plan’s cost to
the enrollees. Further, commenters
stated that the majority of enrollees who
do not shop at all during the Open
Enrollment Period (OEP) care more
about cost than the issuer or provider
network. More specifically, commenters
cited research on plans sold through
Covered California that showed, on
average, families in California were
charged an extra $466 a year in annual
premiums as a result of remaining with
a plan that no longer served their
interests. Commenters stated that
including total out-of-pocket cost and
plan generosity into re-enrollment rules
would be particularly beneficial for
situations when enrollees are eligible for
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cost-sharing reductions and are not
enrolled in a silver plan.
Commenters also recommended that
provider network considerations be
incorporated into any revised reenrollment hierarchy. Specifically,
commenters explained that a revised
hierarchy that does not incorporate
provider networks could result in
enrollees losing access to their
providers, increased out-of-network
costs, and/or being placed in narrower
network plan. Some commenters urged
the Exchange to provide accessible
notices and reasonable opportunities for
the consumer to return to their former
plan or drop coverage. Commenters also
mentioned the importance of enhancing
the consumer shopping experience and
decision support tools to improve
consumer understanding, particularly
around cost sharing. In the 2023
Payment Notice, HHS did not finalize
any changes to § 155.335(j).
HHS is aware of interested parties’
concerns that enrollees in the Exchanges
on the Federal platform may fail to
return to the Exchange to make an active
plan selection in situations in which
changing plans could be beneficial to
the enrollee, and that re-enrollment
rules may default enrollees into less
beneficial plans than other available
plans. Currently, the Federal hierarchy
for re-enrollment ensures an enrollee’s
coverage will be renewed in the same
plan as the enrollee’s current QHP,
unless the current QHP is not available
through the Exchange. If the enrollee’s
current QHP is no longer available
through the Exchange, the Federal
hierarchy prioritizes the same metal
level and product network type in order
to determine the most similar plans
within the same service area. However,
if that is not an option, an enrollee will
be re-enrolled in a QHP that is one
metal level lower or higher within the
same service area (with the exception of
silver plans). In the 2022 OEP, 28
percent of returning Exchange enrollees
using the HealthCare.gov platform were
auto re-enrolled.165
The current hierarchy assumes that
the same metal level would be least
disruptive to enrollees in terms of
premium and coverage. However, in
some instances it may be to the
enrollee’s advantage to move to a
different metal level. For example, for
PY 2022, approximately 110,000
consumers who were automatically reenrolled also had available to them a
plan at one metal level higher than their
165 CMS (2021, April 21). 2022 Marketplace Open
Enrollment Public Use Files. https://www.cms.gov/
research-statistics-data-systems/marketplaceproducts/2021-marketplace-open-enrollmentperiod-public-use-files.
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current plan in the same product from
the same issuer with the same network
that had a lower net premium 166 More
specifically, approximately 38,000
consumers who were automatically reenrolled into bronze plans also had
available a silver-level plan in the same
product from the same issuer with the
same network that had lower total costs.
Furthermore, the Federal hierarchy does
not consider the availability of lower
premium plans at the same metal level
under the same product as the enrollee’s
current QHP. Directing re-enrollment
into lower or same cost, higher metal
level plans would place enrollees in
more affordable plans with lower out-ofpocket costs, which would lower health
insurance costs for those lower-income
(CSR-eligible) individuals. Currently, a
large majority of Hispanic, Black, and
Asian enrollees using the
HealthCare.gov platform are in the 94 or
87 percent CSR-eligible populations (68,
66, and 62 percent, respectively).167 As
such, re-enrolling enrollees who would
otherwise be automatically re-enrolled
in a bronze-level QHP without CSRs,
into a silver-level QHP (with incomebased CSRs) may also improve coverage
and affordability for racial and ethnic
minorities. Interested parties have
emphasized the critical importance of
automatic re-enrollment policies for
immigrants and racial and ethnic
minorities who may face greater
challenges in understanding and
accessing the active re-enrollment
process, and who are disproportionately
impacted by cost increases due often to
lower wealth and discretionary income.
While the vast majority of re-enrollees
through HealthCare.gov actively select a
plan for the upcoming year during the
open enrollment period, some remain in
their auto re-enrollment plan.
We are aware that some number of
enrollees who are automatically reenrolled are eligible for income-based
CSRs (or become eligible for these CSRs
through the annual redetermination
process under this section), but remain
enrolled in a bronze-level QHP, under
which they cannot receive incomebased CSRs. Further, we know that in
some cases, a silver-level QHP in the
same product, with the same issuer and
network and lower or equivalent
premiums, is available. In order to assist
these enrollees in obtaining access to
income-based CSRs given their
eligibility, and without additional net
premium, we propose revisions at
§ 155.335(j). All of these considerations
166 CMS. (2022). Internal Eligibility and
Enrollment Data.
167 CMS. (2021, October). Internal Eligibility and
Enrollment Data.
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informed our decision to propose the
following revisions to the re-enrollment
hierarchy at § 155.335(j), as well as our
specific approach for implementing
these requirements.
We propose revising § 155.335(j)(1)(i)
and adding paragraphs (j)(1)(i)(A), (B),
and (C) to amend the Exchange reenrollment hierarchy for enrollment in
coverage beginning in PY 2024.
Specifically, we propose that, if the
enrollee’s current QHP is available and:
(1) the enrollee is not CSR-eligible, in
accordance with § 155.305(g), the
Exchange will re-enroll the enrollee in
the same plan as the enrollee’s current
QHP (paragraph (j)(1)(i)(A)); (2) the
enrollee is CSR-eligible, in accordance
with § 155.305(g), and the enrollee’s
current QHP is a bronze level plan, the
Exchange will re-enroll the enrollee
either in the same plan as the enrollee’s
current QHP, or, at the option of the
Exchange, in a silver level QHP within
the same product that has a lower or
equivalent premium after APTC and
that has the most similar network
compared to the enrollee’s current QHP
(paragraph (j)(1)(i)(B)); and (3) the
enrollee is CSR-eligible, in accordance
with § 155.305(g), and the enrollee’s
current QHP is not a bronze level plan,
the Exchange will re-enroll the enrollee
in the same plan as the enrollee’s
current QHP (paragraph (j)(1)(i)(C)).
With respect to current operations, the
only effective change to the reenrollment hierarchy would be the
change proposed in paragraph
(j)(1)(i)(B). HHS does not propose to
shift enrollment out of the enrollee’s
current product or issuer if the
enrollee’s current product and/or issuer
are available through the Exchange. We
believe retaining coverage in the
enrollee’s current product when
available is important in order to honor
the various criteria the enrollee may
have used to make the original selection
and ensure there is no disruption to the
enrollee’s benefit coverage, such as the
product network type (for example,
HMO, PPO, etc.) and covered items and
services. Furthermore, we believe it is of
particular importance to ensure the
enrollee’s specific provider coverage is
maintained beyond a product’s provider
network type when the enrollee is being
auto re-enrolled into a different QHP
than their current QHP.
We also propose amending
paragraphs (j)(1)(ii) through (iv), which
outline the steps for re-enrollment
determinations when the enrollee’s
current QHP is no longer available and
the enrollee’s current product is still
available through the Exchange for
renewal. Specifically, we propose
revising paragraph (j)(1)(ii) by adding
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paragraphs (j)(1)(ii)(A), (B), and (C) to
specify for enrollment in coverage
beginning in PY 2024, that if the
enrollee’s current QHP is not available
through the Exchange and: (1) the
enrollee is not CSR-eligible, in
accordance with § 155.305(g), the
Exchange will re-enroll the enrollee in
a QHP within the same product, at the
same metal level and that has the most
similar network compared to the
enrollee’s current QHP (paragraph
(j)(1)(ii)(A)); (2) the enrollee is CSReligible, in accordance with
§ 155.305(g), and the enrollee’s current
QHP is a bronze level plan, the
Exchange will re-enroll the enrollee in
a bronze level QHP within the same
product, or, at the option of Exchange,
in a silver level QHP within the same
product that has a lower or equivalent
premium after APTC and that has the
most similar network compared to the
enrollee’s current QHP (paragraph
(j)(1)(ii)(B)); and (3) the enrollee is CSReligible, in accordance with
§ 155.305(g), and the enrollee’s current
QHP is not a bronze level plan, the
Exchange will re-enroll the enrollee in
a QHP within the same product at the
same metal level and that has the most
similar network compared to the
enrollee’s current QHP (paragraph
(j)(1)(ii)(C)).
We also propose amending
paragraphs (j)(1)(iii)(A) through (B),
which outline the re-enrollment rules
when the enrollee’s current QHP is not
available through the Exchange and the
enrollee’s product no longer includes a
QHP at the same metal level as the
enrollee’s current QHP. Specifically, we
propose, beginning for PY 2024,
amending paragraphs (j)(1)(iii)(A) and
(B) to require if: (1) the enrollee’s
current QHP is a silver level plan, the
Exchange will re-enroll the enrollee in
a silver level QHP under a different
product offered by the same QHP issuer
that is most similar to and that has the
most similar network compared to the
enrollee’s current product; if no such
silver level QHP is available for
enrollment through the Exchange, the
Exchange will re-enroll the enrollee in
a QHP under the same product that is
one metal level higher or lower than the
enrollee’s current QHP and that has the
most similar network compared to the
enrollee’s current QHP (paragraph
(j)(1)(iii)(A)); and (2) the enrollee’s
current QHP is not a silver level plan,
the Exchange will re-enroll the enrollee
in a QHP under the same product that
is one metal level higher or lower than
the enrollee’s current QHP and that has
the most similar network compared to
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the enrollee’s current QHP (paragraph
(j)(1)(iii)(A)).
We propose amending paragraph
(j)(1)(iv), which outlines the reenrollment rules when the enrollee’s
current QHP is not available through the
Exchange and the enrollee’s product no
longer includes a QHP at the same metal
level as, or one metal level higher or
lower than, the enrollee’s current QHP.
We propose, adding to paragraph
(j)(1)(iv) which would provide,
beginning for PY 2024, if the enrollee’s
current QHP is not available through the
Exchange and the enrollee’s product no
longer includes a QHP that is at the
same metal level as, or one metal level
higher or lower than the enrollee’s
current QHP, the Exchange will reenroll the enrollee in any other QHP
offered under the product in which the
enrollee’s current QHP is offered in
which the enrollee is eligible to enroll
that has the most similar network
compared to the enrollee’s current QHP.
We propose amending paragraphs
(j)(2)(i) through (iii), which outlines the
re-enrollment rules when the enrollee’s
current product is no longer available
through the Exchange for renewal.
Specifically, we propose to amend
paragraph (j)(2)(i) to provide, beginning
for the PY 2024, that if the enrollee is
not CSR eligible, the Exchange will reenroll the enrollee in a QHP in the
product offered by the same issuer that
is the most similar to the enrollee’s
current product at the same metal level
as and with the most similar network
compared to the enrollee’s current QHP.
We propose revising and redesignating
paragraph (j)(2)(ii) as paragraph
(j)(2)(iv), which would require, if the
issuer does not offer another QHP at the
same metal level as the enrollee’s
current QHP, the Exchange will reenroll the enrollee in a QHP that is one
metal level higher or lower than the
enrollee’s current QHP and that has the
most similar network compared to the
enrollee’s current QHP in the product
offered by the same issuer through the
Exchange that is the most similar to the
enrollee’s current product. We propose
to add a new paragraph (j)(2)(ii) to
establish that if the enrollee is CSReligible, in accordance with
§ 155.305(g), and the enrollee’s current
QHP is a bronze level plan, the
Exchange will re-enroll the enrollee in
a bronze level QHP, or, at the option of
the Exchange, in a silver level QHP that
has a lower or equivalent premium after
APTC and that has the most similar
network compared to the enrollee’s
current QHP in the product offered by
the same issuer through the Exchange
that is most similar to the enrollee’s
current product.
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We also propose, beginning for PY
2024, revising and redesignating
paragraph (j)(2)(iii) as paragraph
(j)(2)(v), which would state that if the
issuer does not offer another QHP
through the Exchange at the same metal
level as, or one metal level higher or
lower than the enrollee’s current QHP,
the Exchange will re-enroll the enrollee
in any other QHP offered by the same
issuer in which the enrollee is eligible
to enroll in the product that is most
similar to the enrollee’s current product
and in a QHP within that product that
has the most similar network to the
enrollee’s current QHP. Lastly, we
propose to add a new paragraph
(j)(2)(iii) to establish that if the enrollee
is CSR-eligible, in accordance with
§ 155.305(g), and the enrollee’s current
QHP is not a bronze level plan, the
Exchange will re-enroll the enrollee in
a QHP at the same metal level that has
the most similar network compared to
the enrollee’s current QHP in the
product offered by the same issuer that
is the most similar to the enrollee’s
current product.
We believe that enrollees are best able
to make plan selections themselves, and
outreach from the Exchanges on the
Federal platform always encourages
enrollees to actively return, provide
their latest eligibility information, and
shop and compare Exchange plans to
make the selection that best meets their
needs. Income-based CSR-eligible
enrollees in Exchanges on the Federal
platform who are subject to the
proposed policy would receive a notice
from the Exchange advising them that
they will be re-enrolled into a silver
plan if they do not make an active
selection on or before December 15th,
and would also see the silver plan
highlighted in the online shopping
experience if they return on or before
December 15th to review their options.
The notice would also inform the
enrollee that if they prefer to keep their
bronze plan, they can actively select it
through December 15th, for an effective
date of January 1st. Enrollees in
Exchanges on the Federal platform who
do not make an active selection on or
before December 15th would receive an
additional communication from the
Exchange after December 15th
reminding them of their new plan
enrollment for January 1st, as well as
their ability to make a different plan
selection by January 15th that would be
effective starting February 1st.
This proposal is consistent with the
2014 Patient Protection and Affordable
Care Act; Annual Eligibility
Redeterminations for Exchange
Participation and Insurance
Affordability Programs; Health
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Insurance Issuer Standards Under the
Affordable Care Act, Including
Standards Related to Exchanges (79 FR
52994, 53001) explanation of the
guaranteed renewability provisions at
§ 147.106. If a product remains
available for renewal, including outside
the Exchange, the issuer must renew the
coverage within the product in which
the enrollee is currently enrolled at the
option of the enrollee, unless an
exception to the guaranteed
renewability requirements applies.
However, to the extent that the issuer is
subject to § 155.335(j) with regard to an
enrollee’s coverage through the
Exchange, the issuer must, subject to
applicable State law regarding
automatic re-enrollments, automatically
enroll the enrollee in accordance with
the re-enrollment hierarchy, even where
that results in re-enrollment in a plan
under a different product offered by the
same QHP issuer through the Exchange.
Enrollments completed pursuant to
§ 155.335(j) will be considered to be a
renewal of the enrollee’s coverage,
provided the enrollee also is given the
option to renew coverage within his or
her current product outside the
Exchange. This proposal is intended to
provide greater financial security to
bronze plan enrollees who do not
actively re-enroll and may not be aware
that a more generous silver plan at the
same or lesser cost may be available
with dramatically more costs covered by
the plan. Additionally, some of these
consumers may have been initially
enrolled before more generous APTC
became available with the passage of the
ARP,168 and may not have been initially
income-based CSR-eligible when they
first enrolled, or may have been helped
by an agent, broker or assister who did
not adequately explain the benefits of
silver enrollment for CSR-eligible
enrollees. This proposal would assist
bronze enrollees who may be less
engaged and are not aware that a more
generous version of their plan was
available at the same or lesser cost.
Additionally, we note that HHS is not
proposing any changes to SEP eligibility
or duration in connection with the
proposed changes at § 155.335(j).
Currently, under § 155.420(d)(1)(i), a
qualified individual is eligible for a SEP
to enroll in or change from one QHP to
another if the qualified individual loses
MEC, which includes when an
enrollee’s current product is no longer
available for renewal. As such, it is not
considered a loss of MEC when an
enrollee is re-enrolled from a bronze
168 With the passage of the IRA, these enhanced
subsidies have been extended for an additional
three years (through 2025).
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QHP to a silver QHP within the same
product and their current plan is still
available. We also note that consistent
with longtime binder payment policy
for Exchange enrollees, auto reenrollment into a different plan or
product with the same issuer that offers
their current plan would not require
enrollees with already effectuated
coverage to make a new binder
payment. This means, for example, that
a CSR-eligible bronze plan enrollee
receiving APTC who is auto re-enrolled
in a silver plan offered by the same
issuer as their current bronze plan
would enter the 3-month APTC grace
period if they were late on paying for
January coverage in the future year.169
We acknowledge the operational
complexities issuers and States may face
as a result of these proposed changes.
Issuers would continue to identify the
re-enrollment plan for all enrollees still
served by the issuer in the new plan
year, except that the Exchange would
identify the silver re-enrollment plan for
bronze enrollees if those enrollees were
redetermined CSR eligible in
accordance with § 155.305(g). In order
to ensure enrollees are auto re-enrolled
in a plan with the most similar network
to their current QHP, in the situations
where the enrollee would not be auto reenrolled into their current QHP, HHS
would place enrollees into a plan with
the same network ID as their current
QHP, if possible. Similar to the current
Plan ID Crosswalk process, issuers
would be able to submit justifications
for HHS review if they believed a
different network ID in the following
plan year had the most similar network
to the enrollee’s current QHP.170
Exchanges and State regulators would
have a more complicated analysis in
assuring that the issuer-identified reenrollment plan was consistent with the
proposed premium and network
requirements at § 155.335(j). However,
we believe incorporating net premium
and provider networks into reenrollment determinations would help
ensure the hierarchy for re-enrollment
in all Exchanges takes into account plan
generosity and consumer needs beyond
merely the retention of the most similar
plan available. The Exchanges would
need to develop new Exchange notices
to provide the enrollees advance and
169 Please refer to the following for further
explanation on binder payments and re-enrollment:
CMS. (2022, July 28). 2022 Federally-facilitated
Exchange (FFE) and Federally-facilitated Small
Business Health Options Program (FF–SHOP)
Enrollment Manual. (Exhibit 12, pp. 33–37, and p.
87). https://www.hhs.gov/guidance/document/2022enrollment-manual.
170 CMS (2022). Qualified Health Plan
Certification Website. https://www.qhpcertification.
cms.gov/s/Plan%20Crosswalk.
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sufficient notice that their plan will
change unless they return during open
enrollment, and would seek to improve
other existing notices, as applicable, to
improve transparency and enrollees’
understanding of their re-enrollment
options. We believe it is important to
ensure re-enrollment rules default
consumers into lower-cost or more
generous plans; promote consumer
access to affordable, high-quality
coverage; and increase consumer
understanding of their re-enrollment
options by developing additional
consumer notices and guidance.
We seek comment on this proposal.
We also seek comments on using
network IDs to determine the most
similar network. Consistent with the
definition of a product at § 144.103, the
product ID accounts for different
product network types (for example,
HMO, PPO, etc.) whereas network IDs
account for specific provider
differences. As discussed earlier, in
situations where the enrollee would not
be auto re-enrolled into their current
QHP, HHS intends to place enrollees
into a plan with the same network ID as
their current QHP to ensure enrollee are
being auto re-enrolled into plans with
the most similar network. We
particularly solicit comments on how
States review network IDs and the
criteria or thresholds States use to
determine whether a new network ID is
warranted, for example, whether States
require that an issuer create a new
network ID if there is a five percent
difference in the providers covered
under a network.
Additionally, HHS is considering
whether for future years it would be
appropriate to incorporate net premium
and total out-of-pocket cost throughout
the Exchange re-enrollment hierarchy.
We solicit comments on amending the
hierarchy at § 155.335(j), for future plan
years, to also allow the Exchange take
the following actions in the following
circumstances: (1) if the enrollee’s
current plan is not available, regardless
of income-based CSR eligibility, direct
re-enrollment to a plan at a higher metal
level than their current QHP, with a
lower or equivalent net premium and
total out-of-pocket cost, within the same
product, network, and QHP issuer; (2) if
the enrollee’s current plan is not
available and the enrollee does not have
a plan at a higher metal level than their
current QHP with a lower or equivalent
net premium and total out-of-pocket
cost, regardless of income-based CSR
eligibility, direct re-enrollment to a plan
at the same metal level as their current
QHP, with a lower or equivalent net
premium and total out-of-pocket cost,
within the same product, network, and
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QHP issuer; and (3) if a plan at the same
metal level as their current QHP is not
available and the enrollee is not incomebased CSR eligible, direct re-enrollment
to a QHP that is one metal level higher
or lower than the enrollee’s current
QHP, with a lower or equivalent net
premium and total out-of-pocket cost,
under the same product, network, and
issuer. For example, an Exchange could
consider re-enrolling a current gold
QHP enrollee into another available
gold QHP, within the enrollee’s service
area and current product that is issued
by the same QHP issuer that has a lower
or equivalent net premium and out-ofpocket cost. We also solicit comments
on re-enrolling consumers into the
lowest cost silver plan in the following
year if the consumer chose the lowest
cost silver plan in the current plan year.
Due to operational complexities, we
seek comment on whether the actuarial
value (AV) of a plan should be used as
a proxy for estimating the total costs
that an enrollee may be subject to under
a given plan.171 Specifically, we solicit
comments on whether the Exchange
should ensure that the net premium of
the higher AV plan is less than or equal
to the net premium of the default plan
or use net premium and total out-ofpocket cost calculations to determine if
enrollees should be upgraded to a
higher metal level in future plan years.
We also seek comments on whether
73 percent CSR plan variation-eligible
enrollees should be re-enrolled into
silver plan variations or gold level plans
since in some cases gold plans may be
more affordable than silver plan
variations for 73 percent CSR-eligible
enrollees. Additionally, we solicit
comments on the States’ process for
calculating total out-of-pocket cost to
understand if, and to what extent, the
States’ methodology for calculating total
out-of-pocket costs vary. Furthermore,
we solicit comment on whether the reenrollment hierarchy should also factor
in potential out-of-pocket costs, not
attributable to cost sharing, such as
balance billing, and if so, how.
HHS also seeks broad comment on
alternative auto-enrollment policies that
we should consider in future years.172
For example, we are curious about
interested parties’ thoughts on an auto171 Actuarial value refers to the percentage of total
average costs for covered benefits that a plan will
cover. However, the enrollee could be responsible
for a higher or lower percentage of the total costs
of covered services for the year, depending on their
actual health care needs and the terms of the
insurance policy.
172 HHS seeks comment on all auto-enrollment
policies that could better ensure consumer’s
continuous access to health coverage, including
policies that may require additional grants of
authority from Congress to HHS.
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enrollment policy under which
consumers who have entered
delinquency on their QHP premiums
would be auto-enrolled into QHPs with
no net premium after application of
APTC (referred to as zero-dollar plans).
In accordance with §§ 155.430(b)(2)(ii)
and 156.270, a QHP/SADP may
terminate an enrollee’s coverage for
non-payment of premiums, subject to
certain conditions. Specifically,
§ 156.270(d) requires issuers to observe
a three-consecutive-month grace period
before terminating coverage for those
enrollees who are eligible for, and have
elected to receive, APTC and who, upon
failing to timely pay their premiums, are
receiving APTC. Research suggests that
even small net premiums can
significantly decrease enrollment and
that this could be because paying even
a small premium requires enrollees to
take additional action.173 174 Enrollees
may experience life changes that make
it challenging to pay their monthly
premiums on an ongoing basis.
Currently, the Exchanges on the Federal
platform only track nonpayment once
the three-month APTC grace period has
expired, and do not know when the
enrollee first becomes delinquent on
payment of premiums. Since providers
are notified when an individual is in the
second and third month of the grace
period, they know that claims may not
be paid and may require that the
enrollee pay in full at the point of
service. A potential challenge with auto
enrolling enrollees into zero-dollar
premium plans, with retroactive
coverage, if they go into delinquency is
that re-processing any claims for those
enrollees able to self-pay during the
pended months would be difficult if the
zero-dollar premium auto-assignment
was to the original issuer and would be
especially burdensome if the new plan
was issued by another issuer. We solicit
comments on if auto enrolling enrollees
into zero-dollar premium plans if they
go into delinquency should be
prospective or retroactive. In order to
mitigate the barriers enrollees face to
enroll, effectuate, and maintain
coverage, HHS is considering enrolling
173 Fiedler, M., & McIntyre, A. (2022, September
13). Tweaking the marketplace enrollment process
could magnify effects of larger premium tax credits.
Brookings. https://www.brookings.edu/blog/uscbrookings-schaeffer-on-health-policy/2022/09/13/
tweaking-the-marketplace-enrollment-processcould-magnify-effects-of-larger-premium-taxcredits/.
174 Drake, C., Cai, S., Anderson, D., and Sacks, D.
(2021, October 22). Financial Transaction Costs
Reduce Benefit Take-Up: Evidence from ZeroPremium Health Plans in Colorado. SSRN. https://
papers.ssrn.com/sol3/papers.cfm?abstract_
id=3743009.
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consumers who enter delinquency into
zero-dollar plans.
We also solicit comments on enrolling
consumers into zero dollar plans if they
fail to make a binder payment.
Sometimes QHP applicants select plans,
but fail to make a binder payment to
effectuate coverage, and thus have their
coverage canceled by the issuer. As
mentioned previously in this proposed
rule, enrollees face non-financial
burdens that cause them to miss these
payments or in some cases fail to
complete the enrollment process. As
such, it is likely that by alleviating or
eliminating these non-financial burdens,
some enrollees would choose to enroll
in coverage. We request comments on
these proposals.
7. Special Enrollment Periods
(§ 155.420)
a. Use of Special Enrollment Periods by
Enrollees
We propose two technical corrections
to § 155.420(a)(4)(ii)(A) and (B) to align
the text with § 155.420(d)(6)(i) and (ii).
The proposed revisions would clarify
that only one person in a tax household
applying for coverage or financial
assistance through the Exchange must
qualify for a special enrollment period
under paragraphs (d)(6)(i) and (ii) in
order for the entire household to qualify
for the special enrollment period.
As discussed in previous rulemaking,
certain SEPs under § 155.420(d) are
available to an entire tax household
applying for coverage or financial
assistance through the Exchange when a
qualified individual or the qualified
individual’s dependent satisfies
specified requirements (rather than
when the qualified individual and the
qualified individual’s dependent satisfy
such requirements).175 In the 2022
Payment Notice (86 FR 24140), we
finalized revisions to
§ 155.420(a)(4)(ii)(C) to update the
language from ‘‘if an enrollee and his or
her dependents’’ to ‘‘if an enrollee or his
or her dependents’’ to align with the
regulatory text for triggering events
under § 155.420(d)(6)(i) and (ii), but we
neglected to propose and finalize
similar but necessary changes to the text
of § 155.420(a)(4)(ii)(A) and (B) and
noted that we intended to propose these
changes in future rulemaking.
Therefore, to align the text of
§ 155.420(a)(4)(ii)(A) and (B) with the
triggering event provisions under
§ 155.420(d)(6)(i) and (ii), we are
175 See 78 FR 42262. Also, the 2017 Market
Stabilization Rule used the phrase ‘‘if an enrollee
or his or her dependent’’ when describing the rule
that would be finalized at what is now paragraph
§ 155.420(a)(4)(ii)(A), See 82 FR 18359.
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proposing two technical corrections to
§ 155.420(a)(4)(ii)(A) and (B) by
updating the sentence at paragraph
(a)(4)(ii)(A) from ‘‘if an enrollee and his
or her dependents’’ to ‘‘if an enrollee or
his or her dependents’’ and by updating
the sentence at paragraph (a)(4)(ii)(B)
from ‘‘if an enrollee and his or her
dependents’’ to ‘‘if an enrollee or his or
her dependents.’’ Because these are two
technical changes, we do not anticipate
that it will impact Exchanges’
operations or messaging.
We seek comment on this proposal.
b. Effective Dates for Qualified
Individuals Losing Other Minimum
Essential Coverage (§ 155.420(b))
We are proposing amendments to the
coverage effective date rules at
§ 155.420(b)(2)(iv) to permit Exchanges
the option to offer earlier coverage
effective start dates for consumers
attesting to a future loss of MEC. Doing
so could mitigate coverage gaps when
consumers lose forms of MEC (other
than Exchange coverage) mid-month
and allow for more seamless transitions
from other coverage to Exchange
coverage. We are aware that consumers
may face gaps in coverage because
current coverage effective date rules do
not allow for retroactive or mid-month
coverage effective dates for consumers
whose other coverage ends mid-month.
Under current rules, the earliest start
date for Exchange coverage is the first
day of the month following the date of
loss of MEC. We are aware that in some
States, Medicaid or CHIP is regularly
terminated mid-month, so we are
soliciting input on whether the
proposed change would help
consumers, especially those impacted
by Medicaid/CHIP unwinding, to
seamlessly transition from another form
of MEC to Exchange coverage.
Consumers losing MEC, such as
coverage through an employer,
Medicaid, or CHIP, already qualify for a
special enrollment period under
§ 155.420(d)(1) and may report a loss of
MEC to Exchanges and select a QHP up
to 60 days before or 60 days after their
loss of MEC. Exchanges must generally
provide a regular coverage effective date
as described in § 155.420(b)(1): for a
QHP selection received by the Exchange
between the 1st and the 15th day of any
month, the Exchange must ensure a
coverage effective date of the 1st day of
the following month; and for a QHP
selection received by the Exchange
between the 16th and the last day of any
month, the Exchange must ensure a
coverage effective date of the 1st day of
the second following month. However,
Exchanges must provide special
coverage effective dates for certain
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special enrollment period types
including loss of MEC, as described in
§ 155.420(b)(2), and may elect to
provide coverage effective dates earlier
than those specified in § 155.420(b)(1)
and (2)(i), as described in
§ 155.420(b)(3). The loss of MEC
coverage effective dates are generally
governed by § 155.420(b)(2)(iv).
Currently, for all Exchanges, consumers
who report a future loss of MEC and
select a plan on or before the loss of
MEC are provided an Exchange coverage
effective date of the 1st of the month
after the date of loss of MEC, pursuant
to § 155.420(b)(2)(iv). For example, if a
consumer reports on June 1st that they
will lose MEC on July 15th and they
make a plan selection on or before July
15th, Exchange coverage will be
effective August 1st. The consumer in
this case cannot avoid a gap in coverage
of more than two weeks.
For consumers reporting a loss of
MEC that occurred up to 60 days in the
past, Exchanges must ensure that
coverage is effective in accordance with
§ 155.420(b)(1) (the regular coverage
effective dates described above) 176
through a cross reference from
§ 155.420(b)(2)(iv). Alternatively,
Exchanges can offer prospective
coverage effective dates so that coverage
is effective the first of the month
following plan selection, at the option of
the Exchange. See § 155.420(b)(2)(i). For
example, if a consumer reports on July
1st a past loss of MEC that occurred on
June 30th and selects a plan on July
15th, Exchange coverage is effective
August 1st.
Because current regulation at
§ 155.420(b)(2)(iv) does not allow for
retroactive or mid-month coverage
effective dates, consumers may
experience gaps in coverage, especially
those consumers who live in States that
allow mid-month terminations of
Medicaid or CHIP coverage. Further,
after the COVID–19 PHE comes to an
end, HHS expects to see a higher than
usual volume of individuals
transitioning from Medicaid and CHIP
coverage to the Exchange. This is
because States will be required to return
to normal eligibility and enrollment
operations after the expiration of the
continuous enrollment condition that
provided a temporary increase in
Federal Medicaid matching funds
authorized by the Families First
Coronavirus Response Act (FFCRA),177
176 For example, if a consumer selects a plan on
May 2nd, coverage will be effective June 1st, if a
consumer selects a plan on May 16th, coverage will
be effective July 1st.
177 FFCRA. Public Law 116–127 (2020). These
provisions enabled States to receive the temporary
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and we expect that many individuals
experienced changes in income or
household size since the continuous
enrollment condition took effect.
Consumers who become ineligible for
Medicaid are at risk of being uninsured
for a period of time and postponing use
of health care services, which can lead
to poorer health outcomes, if they are
not able to successfully transition
between coverage programs without
coverage gaps.
Therefore, to ensure that qualifying
individuals whose prior MEC ends midmonth are able to seamlessly transition
from non-Exchange MEC to Exchange
coverage as quickly as possible with no
coverage gaps, we are proposing to
revisions to paragraph (b)(2)(iv).
Specifically, we propose to add
additional language to paragraph
(b)(2)(iv) that if a qualified individual,
enrollee, or dependent, as applicable,
loses coverage as described in paragraph
(d)(1), experiences a change in
eligibility for APTC per paragraph
(d)(6)(iii), or experiences a loss of
government contribution or subsidy per
paragraph (d)(15), and if the plan
selection is made on or before the day
of the triggering event, the Exchange
must ensure that the coverage effective
date is the 1st day of the month
following the date of the triggering event
(as currently required under paragraph
(b)(2)(iv)) and, at the option of the
Exchange, if the plan selection is made
on or before the last day of the month
preceding the triggering event, the
Exchange must ensure that coverage is
effective on the first of the month in
which the triggering event occurs. For
example, if a consumer attests between
May 16th and June 30th that they will
lose MEC on July 15th and selects a plan
on or before June 30th, coverage would
be effective on August 1st (first of the
month after the last day of prior MEC),
or at the option of the Exchange, on July
1st (the first of the month in which the
triggering event occurs).
We acknowledge that this proposed
change may have a limited impact
because many types of coverage do not
typically have end dates in the middle
of the month. However, for those that it
does impact, the proposed change
would provide earlier access to coverage
and APTC and CSR. Under the current
rule at paragraph (b)(2)(iv), consumers
reporting a future loss of MEC may have
to wait weeks for their coverage to start,
even if they were proactive and attested
to a coverage loss as soon as they
became aware. We do not believe that
this proposed change introduces
Federal Medical Assistance Percentage increase
under that section.
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program integrity concerns because it
only applies to those consumers who
report a future loss of MEC and have
been determined eligible for an SEP and
found eligible for an Exchange QHP, fall
within their 60-day reporting window
for reporting a future loss of MEC, and
select a plan on or before the last day
of the month preceding the loss of MEC.
We believe this proposed change
would provide additional flexibilities
for Exchanges as the proposed changes
to paragraph (b)(2)(iv) would provide
Exchanges with the option to use the
current coverage effective dates
available under current paragraph
(b)(2)(iv) as well as the option to
provide earlier coverage effective dates
for some consumers who attest to a
future loss of MEC. We also
acknowledge that if Exchanges do elect
an earlier coverage effective date as we
propose, this would result in some
consumers paying for both an Exchange
QHP and their other MEC for a short
period of dual enrollment. However, we
do not believe the partial-month period
of dual enrollment should bar an
enrollee from APTC or CSR benefits for
the Exchange coverage if otherwise
eligible. Given that consumers impacted
by the proposed change to
§ 155.420(b)(2) will have other MEC for
only part of the first month of their QHP
coverage, Exchanges could look to the
definition of coverage month in 26 CFR
1.36B–3, which states that a consumer
may qualify when not eligible for the
full calendar month for minimum
essential coverage, to find a consumer
who receives an earlier effective date
under this rule as eligible for APTC and
CSRs for the first month of their QHP
coverage, despite the brief period of
overlapping coverage. In order to clarify
our interpretation that consumers may
be eligible for APTC and CSRs as of the
earlier SEP effective date proposed in
this rulemaking, we are considering
whether any corresponding
amendments to APTC eligibility rules
may be necessary and plan to codify
such changes in the final rule as needed.
For example, since Exchange
regulations regarding APTC eligibility
do not reference the statutory definition
of a coverage month, we seek comment
on whether Exchange regulations at
§ 155.305(f) should be revised to
correspond with the statutory definition
of a coverage month.
We believe the largest beneficiaries of
these proposed changes would be
consumers whose States permit midmonth terminations of Medicaid or
CHIP coverage. We seek comment from
interested parties on the frequency of
mid-month coverage end dates,
potential program integrity issues
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associated with earlier effective dates,
and on instances when the expedited
effective date would or would not
mitigate coverage gaps or introduce
coordination of benefits issues.
Under § 147.104(b)(5), applicable to
health insurance issuers that offer
health insurance coverage in the
individual, small group, or large group
market in a State, coverage elected
during limited open and special
enrollment periods described in
§ 147.104(b)(2) and (3) must become
effective consistent with the dates
described in § 155.420(b) (this excludes
the special enrollment period under
§ 155.420(d)(6) which is explicitly
excepted from § 147.104(b)(2)).
Therefore, with the exception of the
triggering event in § 155.420(d)(6),
which is limited to coverage purchased
through an Exchange, these proposed
changes to the effective date for future
loss of MEC would be effective for
individual market coverage purchased
off an Exchange, as well as for coverage
purchased through an Exchange, and
the proposed option of the Exchange to
specify the effective date would refer to
an option of the applicable State
authority with respect to individual
market coverage purchased off an
Exchange.
While we also considered proposing
retroactive coverage effective dates for
consumers reporting past loss of MEC,
we decided to limit these proposed
changes to future loss of MEC to avoid
adverse selection and reduce burden on
Exchanges, States, and issuers, as
allowing for retroactive coverage start
dates can be operationally complex for
Exchanges to implement and for issuers
to process. Also, we believe the
proposed changes would limit the
financial burden on consumers, as
consumers who report a loss of MEC in
the past 60 days may not want or be able
to afford to pay past premiums to
effectuate coverage retroactively. While
we also considered providing midmonth coverage effective dates for
consumers who lose MEC mid-month,
this would have been disadvantageous
to affording coverage given that IRS
regulations at 26 CFR 1.36B–3 generally
provide that PTC is only available for a
month when, as of the first day of the
month, the individual is enrolled in a
plan through the Exchange. We seek
comment on additional regulatory
changes that would improve transitions
to Exchange coverage and minimize
periods of uninsurance for consumers
who report a loss of MEC to the
Exchange.
We seek comment on these proposals.
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c. Special Rule for Loss of Medicaid or
CHIP Coverage (§ 155.420(c))
In order to mitigate coverage gaps
when consumers lose Medicaid or CHIP
coverage and to allow for a more
seamless transition into Exchange
coverage, we are proposing a new
special rule under § 155.420(c)(6) to
provide more time for consumers who
lose Medicaid or CHIP coverage that is
considered MEC as described in
§ 155.420(d)(1)(i) to report their loss of
coverage and enroll in Exchange
coverage. The proposed regulation
would align the special enrollment
period window following loss of
Medicaid or CHIP with the
reconsideration period available under
42 CFR 435.916(a).
Currently, qualified individuals or
their dependents who lose MEC, such as
coverage through an employer or most
kinds of Medicaid or CHIP, qualify for
a special enrollment period under
§ 155.420(d)(1)(i) and may report a loss
of MEC to Exchanges up to 60 days
before and up to 60 days after their loss
of MEC. 45 CFR 155.420(c)(2). When
these qualified individuals or their
dependents are disenrolled from
Medicaid or CHIP based on modified
adjusted gross income (MAGI) following
an eligibility redetermination, 42 CFR
435.916 requires that the State Medicaid
agency provide a 90-day reconsideration
window, which allows former
beneficiaries to provide the necessary
information to their State Medicaid
agency to re-establish their eligibility for
Medicaid or CHIP without having to
complete a new application. During the
90 days following a Medicaid or CHIP
denial or disenrollment, it would be
reasonable for a consumer who becomes
uninsured to proceed first by attempting
to regain coverage through Medicaid or
CHIP. However, because the special
enrollment period for loss of MEC at
§ 155.420(d)(1)(i) currently lasts only 60
days after the loss of Medicaid or CHIP
coverage, by the time that a consumer
exhausts their attempt to regain
coverage through Medicaid or CHIP
(which they must do within 90 days of
loss of Medicaid or CHIP), they may
have missed their window to enroll in
Exchange coverage through a special
enrollment period based on loss of MEC
(60 days after loss of Medicaid or CHIP).
In further support of this proposal, we
are aware that most consumers losing
Medicaid or CHIP may not transition to
Exchange coverage in a timely manner.
A recent report published by the
Medicaid and CHIP Payment and
Access Commission (MACPAC) 178
178 Medicaid and CHIP Payment Access
Commission. (2022, July). Transitions Between
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found that only about three percent of
beneficiaries who were disenrolled from
Medicaid or CHIP in 2018 enrolled in
Exchange coverage within 12 months.
The 2018 data also showed that more
than 70 percent of adults and children
moving from Medicaid to Exchange
coverage had gaps in coverage for an
average of about three months.179 While
there are likely several reasons that
consumers did not transition directly
from Medicaid or CHIP coverage to
Exchange coverage in 2018, the
proposed special rule at § 155.420(c)(6)
has the potential to mitigate an
administrative hurdle that may pose a
barrier to enrolling in Exchange
coverage in a timely manner and with
little to no coverage gaps.
Therefore, to ensure that qualifying
individuals are able to seamlessly
transition from Medicaid or CHIP
coverage to Exchange coverage as
quickly as possible to and mitigate the
risk of coverage gaps, we propose to
create new paragraph (c)(6) which
would add language stating that
effective January 1, 2024, Exchanges
will have the option to implement a
new special rule that consumers eligible
for an SEP under § 155.420(d)(1)(i) due
to loss of Medicaid or CHIP coverage
that is considered MEC will have up to
90 days after their loss of Medicaid or
CHIP coverage to enroll in an Exchange
QHP. This proposal would align the
special enrollment period window
following loss of Medicaid or CHIP with
the reconsideration period available
under 42 CFR 435.916(a). We also
propose adding language to paragraph
(c)(2) to clarify that a qualified
individual or his or her dependent who
is described in paragraph (d)(1)(i)
continues to have 60 days after the
triggering event to select a QHP unless
an Exchange exercises the option
proposed in new paragraph (c)(6). We
believe these proposed changes would
have a positive impact on consumers
while providing additional flexibilities
for Exchanges as they can choose
whether to offer this special rule or not,
depending on enrollment trends for
their respective populations.
We seek comment on this proposal.
d. Plan Display Error Special
Enrollment Periods (§ 155.420(d))
We propose amending
§ 155.420(d)(12) to align the policy of
the Exchanges for granting SEPs to
persons who are adversely affected by a
plan display error with current plan
Medicaid, CHIP, and Exchange Coverage. https://
www.macpac.gov/wp-content/uploads/2022/07/
Coverage-transitions-issue-brief.pdf.
179 Ibid.
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display error SEP operations. We
propose amending paragraph (d)(12) by
changing the subject of the regulation to
focus on the affected enrollment, not the
affected qualified individual or
enrollees.180
In accordance with § 155.420, SEPs
allow a qualified individual or enrollee
who experiences certain qualifying
events to enroll in, or change enrollment
in, a QHP through the Exchange outside
of the annual OEP. In 2016, CMS added
warnings on HealthCare.gov about
inappropriate use of SEPs, and
tightened certain eligibility rules.181 We
sought comment on these issues in the
Patient Protection and Affordable Care
Act; HHS Notice of Benefit and Payment
Parameters for 2018 proposed rule (81
FR 61456), especially on data that could
help distinguish misuse of SEPs from
low take-up of SEPs among healthier
eligible individuals; evidence on the
impact of eligibility verification
approaches, including pre-enrollment
verification, on health insurance
enrollment, continuity of coverage, and
risk pools (whether in the Exchange or
other contexts); and input on what SEPrelated policy or outreach changes could
help strengthen risk pools. We
examined attrition rates in our
enrollment data and have found that the
attrition rate for any particular cohort is
no different at the end of the year than
at points earlier in the year, suggesting
that any such gaming, if it is occurring,
does not appear to be occurring at
sufficient scale to produce statistically
measurable effects.
In the Patient Protection and
Affordable Care Act; HHS Notice of
Benefit and Payment Parameters for
2018; Amendments to Special
Enrollment Periods and the Consumer
Operated and Oriented Plan Program
(81 FR 94058, 94127 through 94129),
CMS codified the plan display error SEP
in § 155.420(d)(12) to reflect that plan
display error SEP may be triggered
when a qualified individual or enrollee,
or their dependent, adequately
demonstrates to the Exchange that a
material error related to plan benefits,
service area, or premium (hereinafter
‘‘plan display error’’) influenced the
qualified individual’s, enrollee’s, or
their dependents’ decision to purchase
a QHP through the Exchange. This
generally allowed consumers who
enrolled in a plan for which
180 In this section, ‘‘consumer’’ may be used as
shorthand for ‘‘qualified individual, enrollee, or
their dependents.’’
181 February 25, 2016. Fact Sheet: Special
Enrollment Confirmation Process. Available online
at https://www.cms.gov/Newsroom/
MediaReleaseDatabase/Fact-sheets/2016-Factsheets-items/2016-02-24.html.
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78267
HealthCare.gov displayed incorrect plan
benefits, service area, cost-sharing, or
premium, and who could demonstrate
that such incorrect information
influenced their decision to purchase a
QHP through the Exchange, to select a
new plan that better suited their needs.
In the same final rule, CMS also
finalized the policies at § 147.104(b)(2)
to make clear that the plan display error
SEP only creates an opportunity to
enroll in coverage through the
Exchange, and clarified that the special
enrollment period is limited to plan
display errors presented to the
consumer by the Exchange at the point
at which the consumer enrolls in a QHP
(81 FR at 94128 through 94129). By this
we meant that the consumer must have
already completed their Exchange
application, the Exchange must have
determined that the consumer is eligible
for QHP coverage and any applicable
APTC or CSRs, and the consumer must
have viewed the material error while
making a final selection to enroll in the
QHP.
Currently, § 155.420(d)(12) requires
the qualified individual, enrollee, or
their dependent, to adequately
demonstrate to the Exchange that a
material error related to plan benefits,
service area, or premium influenced the
qualified individual’s or enrollee’s
decision to purchase a QHP through the
Exchange. However, we have found that
consumers may benefit when other
interested parties, besides a qualified
individual, enrollee, or their
dependents, can demonstrate to the
Exchange that a material plan error
influenced the qualified individual’s,
enrollee’s, or their dependents’
enrollment decision to purchase a QHP
through the Exchange. In our
experience, plan display errors may not
be obvious or detectable to the
consumer and the Exchange until after
the enrollment has been impacted by
the error related to plan benefits, service
area, premiums, or even cost-sharing. In
majority of the plan display errors, the
issuer or State regulator has identified
the display error. For example, a plan
display error can influence a consumer’s
enrollment without the consumer’s
knowledge when a consumer enrolls in
a QHP, pays an incorrect premium
amount that was submitted to and
displayed on HealthCare.gov, and the
plan display error regarding the
premium amount is not known until the
enrollment is cancelled by the issuer for
non-payment of premiums. In this case,
the plan display error would not be
discovered until the issuer investigates
the reason for cancellation. The issuer is
the only party that can identify that the
plan display error was caused by
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incorrect premium amounts between the
issuer’s records and data submitted to
HealthCare.gov, and that can notify
CMS of the plan display error. CMS can
then work with the issuer to implement
its established data correction processes
to make the necessary corrections to the
Healthcare.gov. This process includes
CMS investigating the plan display error
to determine if it is reasonable to expect
that the material error has influenced
the enrollment or the consumer’s
purchasing decision. In this example,
CMS is likely to determine that the plan
display error impacted the consumer’s
purchasing decision because the
consumer was presented erroneous
information when purchasing the plan
and likely made an enrollment decision
based on the premium and cost-sharing
amount. Issuers that submit a data
change request that adversely impacts
the consumers’ enrollment on
HealthCare.gov are required to notify
consumers of the plan display error and
the remediation.
Since qualified individuals, enrollees,
and their dependents are not always the
parties best suited to demonstrate to the
Exchange that a material plan display
has influenced their enrollment, we
propose revising paragraph (d)(12) to
remove the burden solely from the
qualified individual, enrollee, and their
dependents. We propose adding costsharing to the list of plan display errors
which is displayed on HealthCare.gov
alongside plan benefits, service area,
and premiums, and equally influence
the consumer’s purchasing decision or
enrollment. Specifically, we propose
revising § 155.420(d)(12) to reflect that
an SEP is available when the enrollment
in a QHP through the Exchange was
influenced by a material error related to
plan benefits, cost-sharing, service area,
or premium. We propose to consider a
material error to be one that is likely to
have influenced a qualified individual’s,
enrollee’s, or their dependent’s
enrollment in a QHP.
It should be noted that an error
related to plan benefits, service area,
cost-sharing or premium does not trigger
an SEP when the error is not material,
such as when the error is honored as it
was displayed. Errors related to plan
benefits, service area, cost-sharing or
premium include situations where
coding on HealthCare.gov causes
benefits to display incorrectly, or where
CMS identifies incorrect QHP data
submission or discrepancy between an
issuer’s QHP data and its Stateapproved form filings.182 If the error
involves information that displays on
HealthCare.gov, CMS works with the
issuer and applicable State’s regulatory
authority to arrive at a solution that has
minimal impact on consumers and
affirms, to the extent possible, that they
are not negatively affected by the error.
Generally, the most straightforward and
consumer-friendly resolution is for
issuers to honor the benefit as it was
displayed incorrectly for affected
enrollees, if permitted by the applicable
State regulatory authority. If the issuer
chooses to honor the error and
administers the plan as it was
incorrectly displayed for the affected
consumers, CMS will not provide the
consumers with an SEP. The proposed
revision to the regulation would be
consistent with this approach, as the
issuer’s honoring of the error would
effectively eliminate the materiality of
the error.
Our proposal would have minimal
operational impact, as interested parties
currently have the infrastructure to
demonstrate to the Exchange that a plan
display error influenced a qualified
individual’s, enrollee’s, or their
dependents’ decision to purchase a QHP
through the Exchange. CMS currently
engages with partners and interested
parties throughout the plan display
error SEP process, ensuring that issuers
and States are notified of CMS decisions
as appropriate. States have access to the
status of all applicable plan display
error SEPs and can track the progress of
the plan display error SEPs until
remediation. In addition, under
§ 156.1256, issuers ‘‘must notify their
enrollees of material plan or benefit
display errors and the enrollees’
eligibility for an [SEP] . . . within 30
calendar days after being notified by the
[FFE] that the error has been fixed, if
directed to do so by the [FFE].’’ Thus,
impacted consumers are also currently
being notified and made aware of plan
display error SEPs policies if their plan
data had a significant, material error.
We expect that this experience is similar
on all Exchanges, and therefore are
proposing that this amendment to the
description of the SEP trigger would
apply for all Exchanges.
We request comment on this proposal.
Additionally, HHS is considering for
future years, whether consumers whose
providers leave their network mid-year
should be eligible for an SEP.
Significant network changes, whether it
is initiated by the QHP issuer or the
provider, can occur at any point during
the year. Under Medicare Advantage
182 See the following: CMS. (2022, July 28). 2022
Federally-facilitated Exchange (FFE) and Federallyfacilitated Small Business Health Options Program
(FF–SHOP) Enrollment Manual. (Section 6.8.1, p.
82). https://www.cms.gov/files/document/ffeffshopenrollment-manual-2022.pdf.
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regulation 42 CFR 422.62(b)(23),
individuals affected by a significant
change in their plan’s provider network
are eligible for an SEP that permits reenrollment into another Medicare
Advantage plan or to original Medicare.
CMS is seeking comments on whether
QHP consumers similarly affected by a
significant change in their plan’s
provider network should be eligible for
an SEP. We also solicit comment on
whether we should consider an enrollee
who is impacted by a provider contract
termination to be someone who is
experiencing an exceptional
circumstance, as specified in
§ 155.420(d)(9), or should be eligible for
a new SEP for provider contract
terminations, and what standards for
when termination of a provider from the
network should serve as a basis for SEP
eligibility.
8. Termination of Exchange Enrollment
or Coverage (§ 155.430)
a. Prohibition of Mid-Plan Year
Coverage Termination for Dependent
Children Who Reach the Maximum Age
We propose to add § 155.430(b)(3) to
explicitly prohibit QHP issuers
participating in Exchanges on the
Federal platform from terminating
coverage of dependent children before
the end of the coverage year because the
child has reached the maximum age at
which issuers are required to make
coverage available under Federal or
State law. The ACA amended the PHS
Act to require at section 2714
(implemented at § 147.120) that group
health plans and health insurance
issuers offering group or individual
health insurance coverage that offer
dependent child coverage must make
such coverage available for an adult
child until age 26. The ACA also adds
section 9815(a)(1) to the Code and
section 715(a)(1) to the Employee
Retirement Income Security Act to
incorporate the provisions of part A of
title XXVII of the PHS Act (including
section 2714) and make them applicable
to group health plans, and health
insurance issuers providing health
insurance coverage in connection with
group health plans. This proposal to
amend § 155.430 would not change the
requirements under § 147.120 nor
would it affect parallel provisions in 26
CFR 54.9815–2714 and 29 CFR
2590.715–2714. Some States have
established higher age limits, and some
issuers adopt higher than legally
required age limits as a business
decision.
In operationalizing this regulation on
the Federal eligibility and enrollment
platform, HHS has required issuers that
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cover dependent children to provide
coverage to dependent children until
the end of the plan year in which they
turn 26 (or the maximum age under
State law), although this is not
specifically required under § 147.120.
Nevertheless, interested parties have
requested that HHS’ policy be codified
in regulation for clarity. Doing so would
reduce uncertainty for Federallyfacilitated Exchange issuers regarding
their obligation under § 155.430 to
maintain coverage for a dependent child
who has turned 26 (or the maximum age
under State law) until the end of the
plan year (unless coverage is otherwise
permitted to be terminated). Likewise, it
would provide clarity for enrollees
themselves who may be uncertain about
the rules governing their ability to
remain enrolled as a dependent child
until the end of the plan year in which
they reach the maximum age (that is,
age 26 or the maximum age under State
law). This proposal would codify the
current implementation of the Federal
platform.
Payment of APTC on the Exchange, in
addition to the way the Federal
eligibility and enrollment platform has
operationalized Exchange eligibility
determinations, warrants a different
policy for issuers of individual market
QHPs on the Exchanges with regard to
child dependents turning age 26 (or the
maximum age under State law). This is
especially true when comparing
individual market Exchange coverage to
the employer market, where the
employer is typically contributing
toward the cost of child dependent
coverage, but only until the child
dependent attains the maximum
dependent age under the group health
plan; in the Exchange, the dependent
child can receive a portion of the
family’s APTC for the entire plan year.
Exchange eligibility determinations for
enrollment through the Exchange and
for APTC are based on the tax
household, and the determination is
made for the entire plan year unless it
is replaced by a new determination of
eligibility, such as when a change is
reported by the enrollee or identified by
the Exchange in accordance with
§ 155.330. The annual basis of Exchange
eligibility determinations, absent a new
determination, is made clear by the
annual eligibility redetermination
requirements in § 155.335. Eligibility
standards for enrollment through the
Exchange and for APTC make no
mention of an issuer’s business rules
regarding dependent relationships, or
otherwise regarding the specific
relationships between applicants.
Additionally, Exchange eligibility
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criteria do not prohibit allocation of
APTC to dependent children enrollees
over the age of 26. Every family member
who is part of the tax household must
be listed on the Exchange application
for coverage, and the IRS has no
maximum age cap for tax dependents.
Because eligibility determinations are
made for the entire plan year, the
Exchange will generally continue to pay
the issuer APTC, including the portion
attributable to the dependent child,
through the end of the plan year in
which the dependent child turns 26, or
through the end of the plan year in
which the dependent reaches the
maximum age required under State law.
In developing the Federal eligibility
and enrollment platform, HHS directed
QHP issuers on Exchanges that use the
Federal platform to honor the eligibility
determination made by the Exchange.
This requirement applies whether or not
the enrollees are determined eligible for
APTC. The situation for issuers on these
Exchanges thus differs from those in the
off-Exchange insurance market, where
enrollees do not receive APTC, and in
the group insurance market, where
contributions by employers may end on
the day in which the dependent child
turns 26 (or the maximum age under
State law).
To clarify, in Exchanges on the
Federal platform, during the annual reenrollment process, enrollees who,
during the plan year, have reached age
26 (or the maximum age under State
law) are, if otherwise eligible, reenrolled into a separate policy
(following the re-enrollment hierarchy
at § 155.335(j)) beginning January 1st of
the following plan year, with APTC, if
applicable.
Additionally, consistent with existing
policy, in circumstances in which a
household with an dependent child
who has reached age 26 (or the
maximum age under State law) reports
a change in circumstance to the
Exchanges on the Federal platform
during the plan year after having
reached that age and becomes eligible
for an SEP, the dependent child who
has exceeded age 26 (or the maximum
age under State law) will have their
eligibility redetermined in accordance
with § 155.330, the dependent child’s
coverage under that policy will be
terminated, and they will be enrolled
into their own policy, subject to
payment of a binder payment. If,
however, the household is not eligible
for an SEP as a result of the change, the
original eligibility determination from
the initial enrollment will remain in
place and the dependent child will
remain as a covered dependent on the
original policy.
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Therefore, we propose to add new
paragraph (b)(3) to § 155.430 to
expressly prohibit QHP issuers
participating in Exchanges on the
Federal platform from terminating
coverage until the end of the plan year
for dependent children because the
dependent child has reached age 26 (or
the maximum age under State law). This
change would provide clarity to issuers
participating in Exchanges on the
Federal platform regarding their
obligation to maintain coverage for
dependent children, as well as to
enrollees themselves regarding their
ability to maintain coverage. In
addition, we propose to make
implementation optional for State
Exchanges that wish to establish a
similar prohibition.
We request comments on this
proposal.
9. General Eligibility Appeals
Requirements (§ 155.505)
We propose revising § 155.505(g) to
acknowledge the ability of the CMS
Administrator to review Exchange
eligibility appeals decisions prior to
judicial review. Section 155.505
describes the general Exchange
eligibility appeals process, including
applicants’ and enrollees’ right to
appeal certain Exchange eligibility
determinations specified in
§ 155.505(b), and the obligation of the
HHS appeals entity and State Exchange
appeals entities to conduct certain
Exchange eligibility appeals as
described in § 155.505(c). In accordance
with § 155.505(g), appellants may seek
judicial review of an Exchange
eligibility appeal decision made by the
HHS appeals entity and State Exchange
appeals entities to the extent it is
available by law. Currently, the
regulation specifies no other
administrative opportunities for
appellants to appeal Exchange eligibility
appeal decisions made by the HHS
appeals entity. We propose revising this
regulation to acknowledge the ability of
the CMS Administrator to review
Exchange eligibility appeals decisions
prior to judicial review.
This proposed change would ensure
that accountability for the decisions of
the HHS appeals entity is vested in a
principal officer, as well as to bring
§ 155.505(g) of the appeals process to a
more similar posture as other CMS
appeals entities that provide
Administrator review.183 Revising the
183 Examples include: 42 CFR 405 subpart R
(Provider Reimbursement Review Board); 42 CFR
412 subpart L (Medicare Geographic Classification
Review Board); 42 CFR 430.60–430.104 (Medicaid
State Plan Materials/Compliance Determinations);
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regulation would also provide
appellants and other parties with
accurate information about the
availability of administrative review by
the CMS Administrator if they are
dissatisfied with their Exchange
eligibility appeal decision.
We seek comment on this proposal.
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10. Improper Payment Pre-Testing and
Assessment (IPPTA) for State Exchanges
(§§ 155.1500 Through 155.1515)
We propose the establishment of the
IPPTA, an improper payment
measurement program of APTC, that
will include State Exchanges. The
proposed IPPTA would prepare State
Exchanges for the planned measurement
of improper payments of APTC, would
test processes and procedures that
support HHS’ review of determinations
of APTC made by State Exchanges, and
would provide a mechanism for HHS
and State Exchanges to share
information that would aid in
developing an efficient measurement
process. To codify the IPPTA
requirements, we propose to establish
new subpart P under 45 CFR part 155.
The Payment Integrity Information
Act of 2019 (PIIA) 184 requires Federal
agencies to annually identify, review,
measure, and report on the programs
they administer that are considered
susceptible to significant improper
payments. HHS determined that APTC
are susceptible to significant improper
payments and are subject to additional
oversight. In accordance with 45 CFR
part 155, FFEs, SBE–FPs, and State
Exchanges that operate their own
eligibility and enrollment systems
determine the amount of APTC to be
paid to qualified applicants. Only
improper payments of APTC made by
FFEs and SBE–FPs will be measured
and reported in the Annual Financial
Report beginning in 2022 as part of the
Exchange Improper Payment
Measurement (EIPM) program. We
stated in the 2023 Payment Notice
proposed rule (87 FR 654 through 655)
that HHS was in the planning phase of
establishing an improper payment
measurement program that would
include State Exchanges—the SEIPM
program. We also stated in the 2023
Payment Notice proposed rule that HHS
had intended to implement the
proposed SEIPM program beginning
42 CFR 423.890 (Retiree Drug Subsidy (RDS)
Appeals); 42 CFR 411.120–124 (Group Health Plan
Non-conformance Appeals); 42 CFR 417.640,
417.492. 417.500, 417.494 (Health Maintenance
Organization Competitive Medical Plan (HMO/
CMP) Contract Related Appeals); 42 CFR 423.2345
(Termination of Discount Program Agreement
Appeals).
184 PIIA, 31 U.S.C. 3352 (2020).
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with the 2023 benefit year. In response
to that proposed rule, HHS received
several comments from State Exchanges
that indicated concerns with the
proposed requirements, particularly
with respect to the SEIPM program’s
implementation timeline and proposed
data collection processes. For example,
some State Exchanges commented that
they would need more time and
information from HHS to prepare for the
implementation of the SEIPM program.
We decided not to finalize the proposed
rule due to commenters’ concerns
surrounding the proposed
implementation timeline and other
burdens that would be imposed by the
proposed SEIPM program (87 FR
27281). HHS is now proposing the
IPPTA to provide State Exchanges with
more time to prepare for the planned
measurement of improper payments of
APTC, to test processes and procedures
that support HHS’ review of
determinations of APTC made by State
Exchanges, and to provide a mechanism
for HHS and State Exchanges to share
information that would aid in
developing an efficient measurement
process.
In 2019, HHS developed an initiative
to provide the State Exchanges with an
opportunity to voluntarily engage with
HHS to prepare for future measurement
of improper payments of APTC. HHS
provided three options to State
Exchanges—program analysis, program
design, and piloting—designed to
accommodate the State Exchanges’
schedules and availability to participate
in the initiative. Currently, of the 18
State Exchanges, 10 have participated in
various levels of engagement.
HHS proposes that the proposed
IPPTA would replace the current,
voluntary State engagement initiative.
HHS additionally proposes that
activities already completed by State
Exchanges as part of the current
voluntary engagement may be used to
satisfy elements of the proposed IPPTA.
HHS has determined that participation
from all State Exchanges is required in
order to test processes and procedures
that would prepare the State Exchanges
for the planned measurement of
improper payments of APTC.
Therefore, we propose to establish a
new subpart P under 45 CFR part 155
(containing §§ 155.1500 through
155.1515) to codify the proposed IPPTA
requirements. The proposed regulations
at subpart P would be applicable
beginning in 2024 with each State
Exchange being selected to participate
for a period of one calendar year which
would occur either in 2024 or 2025.
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a. Purpose and Scope (§ 155.1500)
We are proposing to add new subpart
P to part 155, which would address
various State Exchange and HHS
responsibilities. HHS may use Federal
contractors as needed to support the
performance of IPPTA.
We are proposing to add new
§ 155.1500 to convey the purpose and
scope of the IPPTA.
At paragraph (a), we are proposing the
purpose and scope of subpart P as
setting forth the requirements of the
IPPTA for State Exchanges. The
proposed IPPTA is an initiative between
HHS and State Exchanges. The
proposed requirements are intended to
prepare State Exchanges for the planned
measurement of improper payments,
test processes and procedures that
support HHS’ review of determinations
of APTC made by State Exchanges, and
provide a mechanism for HHS and State
Exchanges to share information that
would aid in developing an efficient
measurement process.
b. Definitions (§ 155.1505)
We are proposing to codify the
definitions that are specific to IPPTA
and key to understanding the processes
and procedures of IPPTA.
• We are proposing the definition of
‘‘business rules’’ to mean the State
Exchange’s internal directives defining,
guiding, or constraining the State
Exchange’s actions when making
eligibility determinations and related
APTC calculations. For example, the
internal directives, methodologies,
algorithms, or policies that a State
Exchange applies or executes on its own
data to determine whether an applicant
meets the eligibility requirements for a
QHP and any associated APTC would be
considered to be a business rule.
• We are proposing the definition of
‘‘entity relationship diagram’’ to mean a
graphical representation illustrating the
organization and relationship of the data
elements that are pertinent to
applications for QHP and associated
APTC payments.
• We are proposing the definition of
‘‘Pre-testing and assessment’’ to mean
the process that uses the procedures
specified in § 155.1515 to prepare State
Exchanges for the planned measurement
of improper payments of APTC.
• We are proposing the definition of
‘‘Pre-testing and assessment checklist’’
to mean the document that contains
criteria that HHS will use to review a
State Exchange’s completion of the
requirements of the IPPTA.
• We are proposing the definition of
‘‘Pre-testing and assessment data request
form’’ to mean the document that
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specifies the structure for the data
elements that HHS would require each
State Exchange to submit.
• We are proposing the definition of
‘‘Pre-testing and assessment period’’ to
mean the timespan during which HHS
will engage in the pre-testing and
assessment procedures with a State
Exchange. The pre-testing and
assessment period will cover one
calendar year.
• We are proposing the definition of
‘‘Pre-testing and assessment plan’’ to
mean the template developed by HHS in
collaboration with each State Exchange
enumerating the procedures, sequence,
and schedule to accomplish the pretesting and assessment.
• We are proposing the definition of
‘‘Pre-testing and assessment report’’ to
mean the summary report provided by
HHS to each State Exchange at the end
of the State Exchange’s pre-testing and
assessment period that will include, but
not be limited to, the State Exchange’s
status regarding completion of each of
the pre-testing and assessment
procedures specified in proposed
§ 155.1515, as well as observations and
recommendations that result from
processing and testing the data
submitted by the State Exchange to
HHS. At § 155.1515(g), we are proposing
that the pre-testing and assessment
report is intended to be used internally
by HHS and each State Exchange as a
reference document for performance
improvement. The pre-testing and
assessment report will not be released to
the public by HHS unless otherwise
required by law.
c. Data Submission (§ 155.1510)
We are proposing to add new
§ 155.1510 which would address the
data submission requirements to
support the IPPTA. Consistent with this,
we are proposing to establish a pretesting and assessment data request
form to collect and compile information
from each State Exchange. As explained
below in section IV., Collection of
Information Requirements, the pretesting and assessment data request
form has been submitted to OMB for
review and approval. As described
below, HHS proposes that each State
Exchange submit to HHS a sample of no
fewer than 10 tax household
identification numbers (that is, the
record of a tax household that applied
for and was determined eligible to
enroll in a QHP and was determined
eligible to receive APTC in an amount
greater than $0).
• At paragraph (a)(1), we are
proposing that a State Exchange would
be required to submit to HHS by the
deadline in the pre-testing and
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assessment plan the following
documentation for their data: (i) the
State Exchange’s data dictionary
including attribute name, data type,
allowable values, and description; (ii)
an entity relationship diagram, which
shall include the structure of the data
tables and the residing data elements
that identify the relationships between
the data tables; and (iii) business rules
and related calculations.
• At paragraph (a)(2), we are
proposing that the State Exchange must
use the pre-testing and assessment data
request form, or other method as
specified by HHS, to submit to HHS the
application data associated with no
fewer than 10 tax household
identification numbers and the
associated policy identification numbers
that address scenarios specified by HHS
to allow HHS to test all of the pretesting and assessment processes and
procedures. The proposed scenarios
would include various application
characteristics such as household
composition, data matching
inconsistencies (for example, SSN,
citizenship, lawful presence, annual
income) identified for the applications,
special enrollment period application
types (for example, relocation,
marriage), periodic data matching (for
example, Medicaid/CHIP, Medicare,
death), application status (for example,
policy terminated, policy canceled), and
application types (for example, initial
application). HHS understands that it is
unlikely that the application data
associated with a singular tax household
could address all of the characteristics
contained in all of the scenarios
specified. Therefore, HHS proposes that
while the application data for each tax
household does not need to address all
of the scenarios specified, the
application data submitted for no fewer
than 10 tax households should, when
taken together as a whole, address all of
the characteristics in all of the scenarios
specified. For example, the application
data for one tax household may address
lawful presence inconsistency
adjudication but not special enrollment
eligibility verification. Accordingly, the
application data for another tax
household should address special
enrollment eligibility verification. After
receiving the application data associated
with no fewer than 10 tax households
from the State Exchange, HHS would
test the data from each of the tax
households against its review
procedures to determine if the
respective policy applications fulfill the
scenarios. If the submitted application
data does not collectively fulfill the
scenarios, HHS would coordinate with
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78271
the State Exchange to select additional
tax households. For the data submitted,
HHS would also require the State
Exchange to provide digital copies such
as PDFs of supporting consumersubmitted documentation (for example,
proof of residency, proof of citizenship).
• In proposed § 155.1515(e)(2), HHS
proposes that for each of the tax
households, the State Exchange would
align and populate the data in the pretesting and assessment data request
form with the assistance of HHS. HHS
would require that the State Exchange
electronically transmit the completed
pre-testing and assessment data request
form to HHS within the deadline
specified in the pre-testing and
assessment plan. Once HHS receives the
transmission from the State Exchange,
HHS then would execute the pre-testing
and assessment processes and
procedures on the application data.
• At paragraph (b), we are proposing
the requirement that a State Exchange
must submit the data documentation as
specified in § 155.1510(a)(1) and the
application data associated with no
fewer than 10 tax households as
specified in § 155.1510(a)(2) within the
timelines in the pre-testing and
assessment plan specified in § 155.1515.
d. Pre-Testing and Assessment
Procedures (§ 155.1515)
We are proposing to add new
§ 155.1515 which would address the
requirements associated with the pretesting and assessment procedures that
underlie and support the IPPTA. The
pre-testing and assessment procedures
are the activities of the IPPTA that are,
in part, designed to test HHS’ review
processes and procedures that support
HHS’ review of determinations of the
APTC made by State Exchanges, to
improve the State Exchange’s
understanding of the IPPTA, to prepare
State Exchanges for the planned
measurement of improper payments,
and to provide HHS and the State
Exchanges with a mechanism to share
information that would aid in
developing an efficient measurement
process.
• At paragraph (a), we are proposing
the general requirement that the State
Exchange must participate in the IPPTA
for a period of one calendar year that
would occur in either 2024 or 2025, and
that the State Exchange and HHS would
work together to execute the IPPTA
procedures in accordance with
timelines in the pre-testing and
assessment plan.
• At paragraph (b), we are proposing
the requirements for the orientation and
planning processes.
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• At paragraph (b)(1), we are
proposing HHS would provide State
Exchanges with an overview of the pretesting and assessment procedures as
part of the orientation process. We are
also proposing that, during the
orientation process, HHS would identify
the documentation that a State
Exchange must provide to HHS for pretesting and assessment. For example, if
data use agreements or information
exchange agreements need to be
executed, HHS would inform State
Exchanges about that documentation
requirement.
• At paragraph (b)(2), we are
proposing that HHS, in collaboration
with each State Exchange, would
develop a pre-testing and assessment
plan as part of the orientation process.
The pre-testing and assessment plan
would be based on a template that
enumerates the procedures, sequence,
and schedule to accomplish pre-testing
and assessment. While HHS would need
to meet milestones specified in the
schedule and applicable deadlines due
to the time span allotted for this
proposed program, HHS would take into
account feedback from the State
Exchanges in an effort to minimize
burden. The pre-testing and assessment
plan would take into consideration
relevant activities, if any, that were
completed during a prior, voluntary,
State engagement. The pre-testing and
assessment plan would include the pretesting and assessment checklist.
• At paragraph (b)(3), we are
proposing that HHS will issue a pretesting and assessment plan specific to
a State Exchange at the conclusion of
the pre-testing and assessment planning
process. The pre-testing and assessment
plan would be for HHS and State
Exchange internal use only and would
not be made available to the public by
HHS unless otherwise required by law.
• At paragraph (c), we are proposing
the requirements associated with
notifications and updates.
• At paragraph (c)(1), we are
proposing the requirements associated
with HHS’ responsibility to notify State
Exchanges, as needed throughout the
pre-testing and assessment period,
concerning information related to the
pre-testing and assessment processes
and procedures.
• At paragraph (c)(2), we are
proposing the requirements associated
with information State Exchanges must
provide to HHS throughout the pretesting and assessment period regarding
any operational, policy, business rules
(for example, data elements and table
relationships), information technology,
or other changes that may impact the
ability of the State Exchange to satisfy
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the requirements of the IPPTA during
the pre-testing and assessment period.
For example, HHS would need to be
made aware of changes to the State
Exchange’s technical platform or
modifications to its policies or
procedures as these changes may impact
specific pre-testing and assessment
processes or procedures, the data to be
reviewed, and ultimately a State
Exchange’s determinations of an
applicant’s eligibility for APTC. We are
proposing that other decisions or
changes made by a State Exchange,
which could affect the pre-testing and
assessment including any changes
regarding items such as naming
conventions or definitions of specific
data elements used in the pre-testing
and assessment, must be submitted to
HHS. We propose this requirement
because any lack of clarity in how State
Exchanges make eligibility
determinations and payment
calculations could impact HHS’ ability
to assist the State Exchange in
understanding the pre-testing and
assessment processes and procedures
and could affect HHS’ recommendations
in the pre-testing and assessment report.
• At paragraph (d), we are proposing
the requirements regarding the
submission of required data and data
documentation by State Exchanges, and
we state that, as specified in
§ 155.1510(a) of this subpart, HHS will
inform State Exchanges about the form
and manner for State Exchanges to
submit required data and data
documentation to HHS in accordance
with the pre-testing and assessment
plan.
• At paragraph (e), we are proposing
the general requirements regarding
coordination between HHS and the
State Exchanges to facilitate HHS’
processing of data and data
documentation submitted by State
Exchanges.
• At paragraph (e)(1), we are
proposing the requirements associated
with HHS’ responsibility to coordinate
with each State Exchange to track and
manage the data and data
documentation submitted by a State
Exchange as specified in
§ 155.1510(a)(1) and (a)(2).
• At paragraph (e)(2), we are
proposing the requirements associated
with HHS’ responsibility to coordinate
with each State Exchange to provide
assistance in aligning the data specified
in § 155.1510(a)(2) from the State
Exchange’s existing data structure to
HHS’ standardized set of data elements.
• At paragraph (e)(3), we are
proposing the requirement that HHS
will coordinate with each State
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Exchange to interpret and validate the
data specified in § 155.1510(a)(2).
• At paragraph (e)(4), we are
proposing the requirement that HHS
would use the data and data
documentation submitted by the State
Exchange to execute the pre-testing and
assessment procedures.
• At paragraph (f), we are proposing
the requirements that HHS would issue
the pre-testing and assessment checklist
in conjunction with and as part of the
pre-testing and assessment plan. The
pre-testing and assessment checklist
criteria we are proposing would include
but would not be limited to:
++ At paragraph (f)(1), the State
Exchange’s submission of the data
documentation as specified in
§ 155.1510(a)(1);
++ At paragraph (f)(2), the State
Exchange’s submission of the data for
processing and testing as specified in
§ 155.1510(a)(2); and
++ At paragraph (f)(3), the State
Exchange’s completion of the pre-testing
and assessment processes and
procedures related to the IPPTA
program.
• At paragraph (g), we are proposing
that, subsequent to the completion of a
State Exchange’s pre-testing and
assessment period, HHS will prepare
and issue a pre-testing and assessment
report specific to that State Exchange.
The report would be for HHS and State
Exchange internal use only and would
not be made available to the public by
HHS unless otherwise required by law.
We seek comments on these
proposals.
C. Part 156—Health Insurance Issuer
Standards Under the Affordable Care
Act, Including Standards Related to
Exchanges
1. FFE and SBE–FP User Fee Rates for
the 2024 Benefit Year (§ 156.50)
For the 2024 benefit year, we propose
an FFE user fee rate of 2.5 percent of
total monthly premiums and an SBE–FP
user fee rate of 2.0 percent of the total
monthly premiums. Section
1311(d)(5)(A) of the ACA permits an
Exchange to charge assessments or user
fees on participating health insurance
issuers as a means of generating funding
to support its operations. If a State does
not elect to operate an Exchange or does
not have an approved Exchange, section
1321(c)(1) of the ACA directs HHS to
operate an Exchange within the State.
Accordingly, in § 156.50(c), we state
that a participating issuer offering a plan
through an FFE or SBE–FP must remit
a user fee to HHS each month that is
equal to the product of the annual user
fee rate specified in the annual HHS
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notice of benefit and payment
parameters for FFEs and SBE–FPs for
the applicable benefit year and the
monthly premium charged by the issuer
for each policy where enrollment is
through an FFE or SBE–FP. OMB
Circular A–25 established Federal
policy regarding user fees and what the
fees can be used for. In particular, it
specifies that a user fee charge will be
assessed against each identifiable
recipient of special benefits derived
from Federal activities beyond those
received by the general public.
a. FFE User Fee Rates for the 2024
Benefit Year
Based on estimated costs, enrollment
(including anticipated establishment of
State Exchanges in certain States in
which FFEs currently are operating),
and premiums for the 2023 plan year,
we propose a 2024 user fee rate for all
participating FFE issuers of 2.5 percent
of total monthly premiums.
In § 156.50(c)(1), to support the
functions of FFEs, an issuer offering a
plan through an FFE must remit a user
fee to HHS, in the timeframe and
manner established by HHS, equal to
the product of the monthly user fee rate
specified in the annual HHS notice of
benefit and payment parameters for the
applicable benefit year and the monthly
premium charged by the issuer for each
policy where enrollment is through an
FFE. As in benefit years 2014 through
2023, issuers seeking to participate in an
FFE in the 2024 benefit year will receive
two special benefits not available to the
general public: (1) the certification of
their plans as QHPs; and (2) the ability
to sell health insurance coverage
through an FFE to individuals
determined eligible for enrollment in a
QHP. For the 2024 benefit year, issuers
participating in an FFE will receive
special benefits from the following
Federal activities:
• Provision of consumer assistance
tools;
• Consumer outreach and education;
• Management of a Navigator
program;
• Regulation of agents and brokers;
• Eligibility determinations;
• Enrollment processes; and
• Certification processes for QHPs
(including ongoing compliance
verification, recertification, and
decertification).
Activities performed by the Federal
Government that do not provide issuers
participating in an FFE with a special
benefit are not covered by the FFE user
fee.
The proposed user fee rate reflects our
estimates for the 2024 benefit year of
costs for operating the Federal
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Exchanges, premiums, enrollment, and
transitions in Exchange models (from
the FFE and SBE–FP models to either
the SBE–FP or State Exchange models).
To develop the proposed 2024 benefit
year FFE user fee rates, we considered
a range of costs, premium and
enrollment projections.185 We estimated
stable contract costs on FFE user fee
eligible costs from the 2023 benefit year.
We took a number of factors into
consideration in choosing which
premium and enrollment projections
should inform the proposed 2024 FFE
user fee rates. The enhanced PTC
subsidies in section 9661 of the ARP
were extended in section 12001 of the
IRA through the 2025 benefit year. The
extension of enhanced PTC subsidies
significantly influenced our
development of the 2024 enrollment
and premium projections. We expect
this provision of the IRA to sustain the
higher enrollment levels observed in the
2021 benefit year after the ARP was
established and as a result, we expect
the projected total premiums where the
user fee applies to increase, thereby
increasing the amount of user fee that
will be collected. Our 2024 enrollment
estimates also account for the 2022
benefit year transition (and projected
transitions through the 2024 benefit
year) of States from FFEs or SBE–FPs to
State Exchanges, as well as the
enrollment impacts of section 1332
State innovation waivers. We project
that 2024 benefit year premiums will
generally increase at the rate of medical
inflation. After considering the range of
costs, premium and enrollment
projections, we propose a 2024 user fee
rate that will exert downward pressure
on consumer premiums when compared
to the user fee rate from prior years, and
that also ensures adequate funding for
Federal Exchange operations. The
proposed FFE user fee rates for 2024 are
slightly lower than the 2.75 percent FFE
user fee rate that we established for the
2023 benefit year. After accounting for
the impact of the lower user fee rate, we
estimate that we would have sufficient
funding available to fully fund user-fee
eligible Exchange activities.
We seek comment on the proposed
2024 FFE user fee rate.
b. SBE–FP User Fee Rates for the 2024
Benefit Year
We propose to charge issuers offering
QHPs through an SBE–FP a user fee rate
of 2.0 percent of the monthly premium
charged by the issuer for each policy
185 We used the most recent projections from the
Congressional Budget Office (https://www.cbo.gov/
publication/57962) and our own internal data.
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under plans offered through an SBE–FP
for the 2024 benefit year.
In § 156.50(c)(2), we specify that an
issuer offering a plan through an SBE–
FP must remit a user fee to HHS, in the
timeframe and manner established by
HHS, equal to the product of the
monthly user fee rate specified in the
annual HHS notice of benefit and
payment parameters for the applicable
benefit year and the monthly premium
charged by the issuer for each policy
where enrollment is through an SBE–
FP, unless the SBE–FP and HHS agree
on an alternative mechanism to collect
the funds from the SBE–FP or State
instead of direct collection from SBE–FP
issuers. SBE–FPs enter into a Federal
platform agreement with HHS to
leverage the systems established for the
FFEs to perform certain Exchange
functions, and to enhance efficiency and
coordination between State and Federal
programs. The benefits provided to
issuers in SBE–FPs by the Federal
Government include use of the Federal
Exchange information technology and
call center infrastructure used in
connection with eligibility
determinations for enrollment in QHPs
and other applicable State health
subsidy programs, as defined at section
1413(e) of the ACA, and QHP
enrollment functions under 45 CFR part
155, subpart E. The user fee rate for
SBE–FPs is calculated based on the
proportion of user fee eligible FFE costs
that are associated with the FFE
information technology infrastructure,
the consumer call center infrastructure,
and eligibility and enrollment services,
and allocating a share of those costs to
issuers in the relevant SBE–FPs.
To calculate the proposed SBE–FP
rates for the 2024 benefit year, we used
the same assumptions on contract costs,
enrollment, and premiums as the
proposed FFE user fee rates. The user
fee rate for SBE–FPs is calculated based
on the proportion of the total FFE costs
utilized by SBE–FPs, such as the costs
associated with the FFE information
technology infrastructure, the consumer
call center infrastructure, and eligibility
and enrollment services and other
applicable State health subsidy
programs, which we estimate to be
approximately 80 percent. Based on this
methodology, the proposed 2024 SBE–
FP user fee rate is lower than the user
fee rate of 2.25 percent of premiums that
we established for the 2023 benefit year.
The lower proposed user fee rate for
SBE–FP issuers for the 2024 benefit year
reflects our estimates of costs for
operating the Federal Exchanges,
premiums, enrollment, as well as State
Exchange transitions for the 2024
benefit year, and the costs associated
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with performing these services that
benefit SBE–FP issuers.
We seek comment on the proposed
2024 SBE–FP user fee rate.
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2. Publication of the 2024 Premium
Adjustment Percentage, Maximum
Annual Limitation on Cost Sharing,
Reduced Maximum Annual Limitation
on Cost Sharing, and Required
Contribution Percentage in Guidance
(§ 156.130)
As established in part 2 of the 2022
Payment Notice, HHS will publish the
premium adjustment percentage, the
required contribution percentage,
maximum annual limitations on costsharing, and reduced maximum annual
limitation on cost-sharing, in guidance
annually starting with the 2023 benefit
year. We note that these parameters are
not included in this rulemaking, as HHS
does not propose to change the
methodology for these parameters for
the 2024 benefit year, and therefore,
HHS is required to publish these
parameters in guidance no later than
January 2023.
3. Standardized Plan Options
(§ 156.201)
HHS proposes to exercise its authority
under sections 1311(c)(1) and
1321(a)(1)(B) of the ACA to make minor
updates to its approach with respect to
standardized plan options for PY 2024
and subsequent PYs. Section 1311(c)(1)
of the ACA directs the Secretary to
establish criteria for the certification of
health plans as QHPs. Section
1321(a)(1)(B) of the ACA directs the
Secretary to issue regulations that set
standards for meeting the requirements
of title I of the ACA with respect to,
among other things, the offering of
QHPs through such Exchanges.
Standardized plan options were first
introduced in the 2017 Payment Notice,
and defined at § 155.20. In the first
iteration of standardized plan options,
HHS finalized one set of standardized
plan options designed to be similar to
the most popular QHPs in the 2015
individual market FFEs at the bronze,
silver, and gold metal levels. Issuers
were not required to offer these
standardized plan options. To facilitate
plan shopping and to educate
consumers about the distinctive costsharing features of standardized plan
options, these plans were differentially
displayed on HealthCare.gov under the
authority at § 155.205(b)(1). Specifically,
consumers had the ability to filter plan
options to view only standardized plan
options and received an accompanying
message explaining how standardized
plan options differed from nonstandardized plan options.
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In the 2018 Payment Notice, HHS
finalized three new sets of standardized
plan options. The original standardized
plan options from the 2017 Payment
Notice were updated to reflect changes
in QHP enrollment data in 2016, to
include SBE–FP data, and to account for
State cost-sharing laws. Standardized
plan options were once more
differentially displayed, but this time,
they were also labeled ‘‘Simple Choice’’
plans to make them more easily
distinguishable from non-standardized
plan options. HHS also established
display requirements for approved webbrokers and QHP issuers using a direct
enrollment pathway to facilitate
enrollment through an FFE or SBE–FP—
including both the Classic DE and EDE
Pathways—at §§ 155.220(c)(3)(i)(H) and
156.265(b)(3)(iv), respectively (81 FR
94117 through 94118, 94148; 45 CFR
155.220(l) and 155.221(i)). Under these
requirements, these entities must
differentially display standardized plan
options in accordance with the
requirements under § 155.205(b)(1) in a
manner consistent with how
standardized plan options are displayed
on HealthCare.gov, unless HHS
approved a deviation.
Standardized plan options were then
discontinued in the 2019 Payment
Notice, but the discontinuance was
challenged in the United States District
Court for the District of Maryland. On
March 4, 2021, the court decided City of
Columbus, et al. v. Cochran.186 The
court reviewed nine separate policies
HHS had promulgated in the 2019
Payment Notice, vacating four of them.
The court specifically vacated the
portion of the 2019 Payment Notice that
ceased HHS’ practice of designating
some plans in the FFEs as ‘‘standardized
options,’’ a policy that the 2019
Payment Notice stated was seeking to
maximize innovation by issuers in
designing and offering a wide range of
plans to consumers (83 FR 16974 and
16975). Subsequently, HHS announced
its intent to engage in rulemaking under
which it would propose to resume
standardized plan options in time for
PY 2023.187 Relatedly, President Biden’s
Executive Order on Promoting
Competition in the American Economy
directed HHS to implement
standardized plan options in order to
186 523
F. Supp. 3d 731 (D. Md. 2021).
part 3 of the 2022 Payment Notice, we
explained that we would not be able to fully
implement those aspects of the court’s decision
regarding standardized plan options in time for
issuers to design plans and for Exchanges to be
prepared to certify such plans as QHPs for PY 2022,
and therefore, intended to address these issues in
time for plan design and certification for PY 2023.
See 86 FR 24140, 24264.
187 In
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facilitate the plan selection process for
consumers on the Exchanges.188
More recently, in the 2023 Payment
Notice, HHS finalized the requirement
for PY 2023 and beyond that issuers
offering QHPs through FFEs and SBE–
FPs must offer through the Exchange
standardized QHP options designed by
HHS at every product network type (as
described in the definition of ‘‘product’’
at § 144.103), at every metal level, and
throughout every service area that they
offer non-standardized QHP options in
the individual market. HHS did not
require issuers in the small group
market to offer these standardized plan
options. Furthermore, HHS did not
subject issuers in State Exchanges to
these requirements. HHS also exempted
issuers in FFEs and SBE–FPs that are
already required to offer standardized
plan options under State action taking
place on or before January 1, 2020, such
as issuers in the State of Oregon,189 from
the requirement to offer the
standardized plan options finalized in
the 2023 Payment Notice.
In the 2023 Payment Notice, HHS
finalized two sets of standardized plan
options for two different sets of States
at the following metal levels: one bronze
plan, one bronze plan that meets the
requirement to have an AV up to 5
points above the 60 percent standard, as
specified in § 156.140(c) (known as an
expanded bronze plan), one standard
silver plan, one version of each of the
three income-based silver CSR plan
variations, one gold plan, and one
platinum plan. HHS did not finalize
standardized plan option designs for the
Indian CSR plan variations as provided
for at § 156.420(b) given that the costsharing parameters for these plan
variations are already largely specified,
but HHS still required issuers to offer
these plan variations for standardized
plan options.190
In the 2023 Payment Notice, HHS also
elaborated upon the methodology it
utilized in creating the standardized
plan options designs. Specifically, HHS
explained that it designed these plans to
be similar to the most popular QHPs in
FFEs and SBE–FPs in PY 2021. This was
done based on an examination of the
proportion of consumers enrolled in
plans with different cost sharing types
(including copayment exempt from the
deductible, copayment subject to the
deductible, coinsurance exempt from
188 Executive Order 14036 on Promoting
Competition in the American Economy, July 9,
2021. See 86 FR 36987.
189 See Or. Admin. R. 836–053–0009.
190 See QHP Certification Standardized Plan
Options FAQs, https://www.qhpcertification.
cms.gov/s/Standardized%20Plan%20
Options%20FAQs.
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the deductible, and coinsurance subject
to the deductible) for every benefit
category in the actuarial value (AV)
calculator at each metal level.
HHS chose the cost-sharing type with
the majority or plurality of enrollees.
HHS then chose the enrollee-weighted
median values for this cost-sharing type
as the copayment amount or
coinsurance rate for each benefit
category before modifying these plans to
have an AV near the lower end of the
de minimis range for each metal level to
ensure the competitiveness of these
plans. HHS applied this methodology in
selecting the deductibles and MOOPs
for these plans, as well.
HHS also explained that it designed
two separate sets of standardized plan
options in order to accommodate
applicable cost-sharing laws in different
sets of FFE and SBE–FP States, similar
to the approach previously taken for
standardized plan options. Specifically,
in the 2018 Payment Notice, HHS
designed three sets of standardized plan
options tailored to unique cost-sharing
laws in different States. The second and
third sets of these standardized plan
options differed from the first set only
to the extent necessary to comply with
State cost sharing laws.
The second set of standardized plan
options in the 2018 Payment Notice was
designed to work in States that: (1)
require that cost sharing for physical
therapy, occupational therapy, and
speech therapy be no greater than the
cost sharing for primary care visits; (2)
limit the cost-sharing amount that can
be charged for a 30-day supply of
prescription drugs by tier; or (3) require
that all drug tiers carry a copayment
rather than coinsurance. The second set
of standardized plan options applied to
Arkansas, Delaware, Iowa, Kentucky,
Louisiana, Missouri, Montana, and New
Hampshire. The third set was designed
to work in a State with maximum
deductible requirements and other cost
sharing standards. The third set of
standardized plan options was designed
to work in the Exchange in New Jersey,
which has since transitioned to become
a State Exchange and was thus outside
the scope of this particular rulemaking.
HHS explained that it included
several of the defining features of the
second set of standardized plan options
from the 2018 Payment Notice in the
first set of standardized plan options in
the 2023 Payment Notice. As a result, in
the first set of standardized plan
options, there was cost sharing parity
between the primary care visit, the
speech therapy, and the occupational
and physical therapy benefit categories.
There were also copayments for all
prescription drug tiers, including the
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non-preferred brand and specialty tiers,
instead of coinsurance rates. Finally, the
copayment for the mental health/
substance use disorder in-network
outpatient office visit sub-classification
was equal to the least restrictive level
for copayments for medical/surgical
benefits in the in-network, outpatient
office visit sub-classification (and
copayments applied to substantially all
medical/surgical benefits in this subclassification), to ensure issuers were
able to design plans that comply with
the Paul Wellstone and Pete Domenici
Mental Health Parity and Addiction
Equity Act of 2008 (MHPAEA) and its
implementing regulations.191 This first
set of standardized plan options applied
to all FFE and SBE–FP issuers,
excluding those in Delaware and
Louisiana.
HHS further explained that it
included all of the defining features of
the second set of standardized plan
options from the 2018 Payment Notice
in the second set of standardized plan
options in the 2023 Payment Notice. As
a result, in this set of standardized plan
options, similar to the first set of
standardized plan options, there was
cost-sharing parity between the primary
care visit, the speech therapy, and the
occupational and physical therapy
benefit categories, and there were
copayments for all prescription drug
tiers, including the non-preferred brand
and specialty tiers, instead of
coinsurance rates. Additionally, the
copayment for the mental health/
substance use disorder in-network
outpatient office visit sub-classification
was equal to the least restrictive level
for copayments for medical/surgical
benefits in the in-network, outpatient
office visit sub-classification (and
copayments applied to substantially all
medical/surgical benefits in this subclassification), to ensure issuers were
able to design plans that comply with
MHPAEA and its implementing
regulations.
The feature that distinguished the first
set of standardized plan options from
the second is that the second set of
standardized plan options had
copayments of $150 or less for the
specialty drug tiers of standardized plan
options at all metal levels. This feature
was included in the second set of
standardized plan options in order to
accommodate relevant specialty tier
191 In general, MHPAEA requires that the
financial requirements (such as coinsurance and
copays) and treatment limitations (such as visit
limits) imposed on mental health or substance use
disorder benefits cannot be more restrictive than the
predominant financial requirements and treatment
limitations that apply to substantially all medical/
surgical benefits in a classification.
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prescription drug cost sharing laws in
Delaware and Louisiana (87 FR 674
through 676; 87 FR 27311 through
27313).192
In the 2023 Payment Notice, HHS also
exercised the authority under
§ 155.205(b)(1) to resume the differential
display of standardized plan options,
including those standardized plan
options required under State action
taking place on or before January 1,
2020, on HealthCare.gov beginning with
the PY 2023 open enrollment period.
Similarly, also beginning with the PY
2023 open enrollment period, HHS
resumed enforcement of the existing
standardized plan options display
requirements under
§§ 155.220(c)(3)(i)(H) and
156.265(b)(3)(iv) for approved webbrokers and QHP issuers using a direct
enrollment pathway to facilitate
enrollment through an FFE or SBE–FP—
including those using the Classic DE
and EDE Pathways—meaning these
entities were required to differentially
display standardized plan options in a
manner consistent with how
standardized plan options were
displayed on HealthCare.gov, unless
HHS approved a deviation, beginning
with the PY 2023 open enrollment
period.
Most recently, after publishing the
2023 Payment Notice, HHS conducted
extensive interested party engagement
with a range of participants, including
issuers, agents, brokers, web-brokers,
States, State Exchanges, researchers,
disease advocacy groups, and consumer
support groups (87 FR 27318). HHS
discussed a range of topics related to
standardized plan options in these
engagement sessions, including plan
designs, cost sharing, pre-deductible
coverage of particular benefits,
formulary tiering, enhancing choice
architecture, plan display on
HealthCare.gov, reducing the risk of
plan choice overload (either through
direct limits on the number of nonstandardized plan options or a revised
version of the meaningful difference
standard), and advancing health equity.
For PY 2024 and subsequent PYs, we
would maintain a large degree of
continuity with our approach to
standardized plan options in the 2023
Payment Notice, except for minor
updates as proposed in this section.
First, in contrast to the policy finalized
in the 2023 Payment Notice, we
propose, for PY 2024 and subsequent
PYs, to no longer include a standardized
192 See 87 FR 674 through 676 and 87 FR 27311
through 27313 for a more detailed discussion on the
methodology HHS used to create the standardized
plan options in the 2023 Payment Notice.
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plan option for the non-expanded
bronze metal level. Accordingly, we
propose at new § 156.201(b) that for PY
2024 and subsequent PYs, FFE and
SBE–FP issuers offering QHPs through
the Exchanges must offer standardized
QHP options designed by HHS at every
product network type (as described in
the definition of ‘‘product’’ at
§ 144.103), at every metal level except
the non-expanded bronze level, and
throughout every service area that they
offer non-standardized QHP options. We
propose to re-designate the current
regulation text at § 156.201 as paragraph
(a) and revise it to apply only to PY
2023.
Thus, for PY 2024 and subsequent
PYs, we propose standardized plan
options for the following metal levels:
one bronze plan that meets the
requirement to have an AV up to 5
points above the 60 percent standard, as
specified in § 156.140(c) (known as an
expanded bronze plan), one standard
silver plan, one version of each of the
three income-based silver CSR plan
variations, one gold plan, and one
platinum plan. Consistent with our
approach in the 2023 Payment Notice,
we are not proposing standardized plan
options for the Indian CSR plan
variations as provided for at
§ 156.420(b) given that the cost-sharing
parameters for these plan variations are
already largely specified. We would
continue to require issuers to offer these
plan variations for all standardized plan
options offered, and we propose to
remove the regulation text language
stating that standardized plan options
for these plan variations are not
required to clarify that while issuers
must, under § 156.420(b), continue to
offer such plan variations based on
standardized plan options, those plan
variations will themselves not be
standardized plan options based on
designs we will specify in this
rulemaking.193
We propose to discontinue
standardized plan options for the nonexpanded bronze metal level mainly
due to AV constraints. Specifically, it is
not feasible to design a non-expanded
bronze plan that includes any predeductible coverage while maintaining
an AV within the permissible AV de
minimis range for the non-expanded
bronze metal level. Furthermore, few
issuers chose to offer non-expanded
bronze standardized plan options in PY
2023, with the majority of issuers
offering bronze plans instead choosing
193 See QHP Certification Standardized Plan
Options FAQs, https://
www.qhpcertification.cms.gov/s/Standardized%20
Plan%20Options%20FAQs.
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to offer only expanded bronze
standardized plan options. Thus, we
believe discontinuing non-expanded
bronze standardized plan options would
minimize burden without any
deleterious consequences. We also
clarify that issuers would still be
permitted to offer non-standardized
plan options at the non-expanded
bronze metal level, meaning consumers
would still have the ability to choose
these plan options if they so choose. We
also clarify that if an issuer offers a nonstandardized plan option at the bronze
metal level, whether expanded or nonexpanded, it would need to also offer an
expanded bronze standardized plan
option.
Similar to the approach taken in the
2023 Payment Notice, we propose to
create standardized plan options that
resemble the most popular QHP
offerings that millions are already
enrolled in by selecting the most
popular cost-sharing type for each
benefit category; selecting enrolleeweighted median values for each of
these benefit categories based on
refreshed PY 2022 cost-sharing and
enrollment data; modifying these plans
to be able accommodate State costsharing laws; and decreasing the AVs
for these plan designs to be at the floor
of each AV de minimis range primarily
by increasing deductibles.
Furthermore, consistent with the
approach taken in the 2023 Payment
Notice, we propose to create two sets of
standardized plan options at the
previously proposed metal levels, with
the same sets of designs applying to the
same sets of States as in the 2023
Payment Notice. Specifically, the first
set of standardized plan options would
continue to apply to FFE and SBE–FP
issuers in all FFE and SBE–FP States,
excluding those in Delaware, Louisiana,
and Oregon, and the second set of
standardized plan options would
continue to apply to Exchange issuers
specifically in Delaware and Louisiana.
See Table 10 and Table 11 for the two
sets of standardized plan options we
propose for PY 2024.
In addition, since SBE–FPs use the
same platform as the FFEs, we would
continue to apply the standardized plan
option requirements equally on FFEs
and SBE–FPs. We continue to believe
that proposing a distinction between
FFEs and SBE–FPs for purposes of these
requirements would create a substantial
financial and operational burden that
we believe outweighs the benefit of
permitting such a distinction.
Also, consistent with our policy in PY
2023, we would continue to apply these
requirements to applicable issuers in the
individual market but not in the small
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group market. We also would continue
to exempt issuers offering QHPs through
FFEs and SBE–FPs that are already
required to offer standardized plan
options under State action taking place
on or before January 1, 2020, such as
issuers in the State of Oregon,194 from
the requirement to offer the
standardized plan options included in
this rule. In addition, we would
continue to exempt issuers in State
Exchanges from these requirements for
several reasons. First, we do not wish to
impose duplicative standardized plan
option requirements on issuers in the
eight State Exchanges that already have
standardized plan option requirements.
Additionally, we continue to believe
that State Exchanges are best positioned
to understand both the nuances of their
respective markets and consumer needs
within those markets. Finally, we
continue to believe that States that have
invested the necessary time and
resources to become State Exchanges
have done so in order to implement
innovative policies that differ from
those on the FFEs, and we do not wish
to impede these innovative policies so
long as they comply with existing legal
requirements.
Furthermore, consistent with the
policy finalized in the 2023 Payment
Notice, we would continue to
differentially display standardized plan
options, including those standardized
plan options required under State action
taking place on or before January 1,
2020, on HealthCare.gov under the
authority at § 155.205(b)(1). We would
also continue enforcement of the
standardized plan options display
requirements for approved web-brokers
and QHP issuers using a direct
enrollment pathway to facilitate
enrollment through an FFE or SBE–FP—
including both the Classic DE and EDE
Pathways—at §§ 155.220(c)(3)(i)(H) and
156.265(b)(3)(iv), respectively. This
means that these entities would be
required to differentially display the
2024 benefit year standardized plan
options in accordance with the
requirements under § 155.205(b)(1) in a
manner consistent with how
standardized plan options are displayed
on HealthCare.gov, unless HHS
approves a deviation, beginning with
the 2024 benefit year open enrollment
period. Consistent with our PY 2023
policy, any requests from web-brokers
and QHP issuers seeking approval for an
alternate differentiation format would
continue to be reviewed based on
whether the same or similar level of
differentiation and clarity is being
194 See
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provided under the requested deviation
as is provided on HealthCare.gov.
Consistent with the approach to plan
designs in the 2023 Payment Notice, we
would also continue to use the
following four tiers of prescription drug
cost sharing in the proposed
standardized plan options: generic
drugs, preferred brand drugs, nonpreferred brand drugs, and specialty
drugs. We believe the use of four tiers
of prescription drug cost-sharing in the
standardized plan options will continue
to allow for predictable and
understandable drug coverage. We
believe the use of four tiers of
prescription drug cost-sharing will also
play an important role in facilitating the
consumer decision-making process by
allowing consumers to more easily
compare formularies between plans, and
allow for easier year-to-year
comparisons with their current plan.
The continued use of four tiers will also
minimize issuer burden since, for PY
2023, issuers have already created
standardized plan options with
formularies that include only four tiers
of prescription drug cost-sharing. We
will consider including additional drug
tiers for future years, and invite
comment on the appropriate number of
drug tiers to use in standardized plan
options in the future. However, we
would continue to use four tiers of
prescription drug cost-sharing in
standardized plan options for PY 2024
and subsequent PYs to maintain
continuity with our approach to
standardized plan options in PY 2023.
We are aware of concerns that issuers
may not be including specific drugs at
appropriate cost-sharing tiers for the
standardized plan options; for example,
some issuers may be including brand
name drugs in the generic drug costsharing tier, while others include
generic drugs in the preferred or nonpreferred brand drug cost-sharing tiers.
We believe that consumers understand
the difference between generic and
brand name drugs, and that it is
reasonable to assume that consumers
expect that only generic drugs are
covered at the cost-sharing amount in
the generic drug cost-sharing tier, and
that only brand name drugs are covered
at the cost-sharing amount in the
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20:34 Dec 20, 2022
Jkt 259001
preferred or non-preferred brand drug
cost-sharing tiers.
Accordingly, we propose to revise
§ 156.201 to add a new paragraph (c)
specifying that issuers of standardized
plan options must (1) place all covered
generic drugs in the standardized plan
options’ generic drug cost-sharing tier,
or the specialty drug tier if there is an
appropriate and non-discriminatory
basis in accordance with § 156.125 for
doing so, and (2) place brand name
drugs in either the standardized plan
options’ preferred brand or nonpreferred brand tiers, or specialty drug
tier if there is an appropriate and nondiscriminatory basis in accordance with
§ 156.125 for doing so. For purposes of
this proposal, ‘‘non-discriminatory
basis’’ means there must be a clinical
basis for placing a particular
prescription drug in the specialty drug
tier in accordance with § 156.125.
We also specify that within the
Prescription Drug Template, for
standardized plan options, issuers
should enter zero cost preventive drugs
for tier one, generic drugs for tier two,
preferred brand drugs for tier three, nonpreferred drugs for tier four, specialty
drugs for tier five, and medical services
drugs for tier six, if applicable.
We propose the approach described in
this section for PY 2024 and subsequent
PYs for several reasons. To begin, we are
continuing to require FFE and SBE–FP
issuers to offer standardized plan
options in large part due to continued
plan proliferation, which has only
increased since the standardized plan
option requirements were finalized in
the 2023 Payment Notice. With this
continued plan proliferation, it is
increasingly important to continue to
attempt to streamline and simplify the
plan selection process for consumers on
the Exchanges. We believe these
standardized plan options can continue
to play a meaningful role in that
simplification by reducing the number
of variables that consumers have to
consider when selecting a plan option,
thus allowing consumers to more easily
compare available plan options. More
specifically, with these standardized
plan options, consumers will continue
to be able to take other meaningful
factors into account, such as networks,
PO 00000
Frm 00073
Fmt 4701
Sfmt 4702
78277
formularies, and premiums, when
selecting a plan option. We further
believe these standardized plan options
include several distinctive features,
such as enhanced pre-deductible
coverage for several benefit categories,
that will continue to play an important
role in reducing barriers to access,
combatting discriminatory benefit
designs, and advancing health equity.
Including enhanced pre-deductible
coverage for these benefit categories will
ensure consumers are more easily able
to access these services without first
meeting their deductibles. Furthermore,
including copayments instead of
coinsurance rates for a greater number
of benefit categories will enhance
consumer certainty and reduce the risk
of unexpected financial harm sometimes
associated with high coinsurance rates.
Additionally, given that insufficient
time has passed to assess all the impacts
of the standardized plan option
requirements finalized in the 2023
Payment Notice, we propose to maintain
a high degree of continuity with respect
to many of the standardized plan option
policies previously finalized to reduce
the risk of disruption for all involved
interested parties, including issuers,
agents, brokers, States, and enrollees.
We believe making major departures
from the methodology used to create the
standardized plan options as finalized
in the 2023 Payment Notice could result
in drastic changes in these plan designs
that could potentially create undue
burden for these interested parties.
Furthermore, if the standardized plan
options that HHS creates vary
significantly from year to year, those
enrolled in these plans could experience
unexpected financial harm if the costsharing for services they rely upon
differs substantially from the previous
year. Ultimately, we believe consistency
in standardized plan options is
important to allow both issuers and
enrollees to become accustomed to these
plan designs.
We seek comment on our proposed
approach to standardized plan options
for PY 2024 and subsequent PYs. We
also seek comment on the specific
approach to tiering for these
standardized plan options within the
Prescription Drug Template.
E:\FR\FM\21DEP2.SGM
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Expanded
Bronze
64.39%
$7,500
$9,400
lotter on DSK11XQN23PROD with PROPOSALS2
Actuarial V aloe
Deductible
Annual Limitation on Cost
Sharin2
50%
Emer2:encv Room Services
Inpatient Hospital Services
50%
(Including Mental Health &
Substance Use Disorder)
Primarv Care Visit
$50*
$75*
Ur2ent Care
$100*
Suecialist Visit
Mental Health & Substance
$50*
Use Disorder Outpatient
Office Visit
Imaging (CT/PET Scans,
50%
MRls)
Speech Therapy
$50*
Occupational, Physical
$50*
Theranv
Laboratory Services
50%
X-ravs/DiaITTiostic lma2:in2:
50%
Skilled Nursin2 Facility
50%
Outpatient Facility Fee
50%
(Ambulatory Surgery
Center)
Outpatient Surgery
50%
Physician & Services
Generic Dru!!s
$25*
Preferred Brand Dru2s
$50
Non-Preferred Brand
$100
Dru2:s
Specialty Dru2s
$500
*Benefit category not subject to the deductible.
VerDate Sep<11>2014
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Jkt 259001
PO 00000
Standard
Silver
70.00%
$6,000
$9,100
Silver
73CSR
73.00%
$5,700
$7,200
Silver
87CSR
87.03%
$700
$3,000
Silver
94CSR
94.06%
$0
$1,800
Gold
Platinum
78.02%
$1,500
$8,700
88.10%
$0
$3,200
40%
40%
40%
40%
30%
30%
25%*
25%*
25%
25%
$100*
$350*
$40*
$60*
$80*
$40*
$40*
$60*
$80*
$40*
$20*
$30*
$40*
$20*
$0*
$5*
$10*
$0*
$30*
$45*
$60*
$30*
$10*
$15*
$20*
$10*
40%
40%
30%
25%*
25%
$100*
$40*
$40*
$40*
$40*
$20*
$20*
$0*
$0*
$30*
$30*
$10*
$10*
40%
40%
40%
40%
40%
40%
40%
40%
30%
30%
30%
30%
25%*
25%*
25%*
25%*
25%
25%
25%
25%
$30*
$30*
$150*
$150*
40%
40%
30%
25%*
25%
$150*
$20*
$40*
$80
$20*
$40*
$80
$10*
$20*
$60
$0*
$15*
$50*
$15*
$30*
$60*
$5*
$10*
$50*
$350
$350
$250
$150*
$250*
$150*
Frm 00074
Fmt 4701
Sfmt 4725
E:\FR\FM\21DEP2.SGM
21DEP2
EP21DE22.020
TABLE 10: 2024 Proposed Standardized Plan Options Set One (For All FFE and SBE-FP
Issuers, Excludin2 Issuers in Delaware, Louisiana, and Ore2on)
78279
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
Expanded
Bronze
64.39%
$7,500
$9,400
lotter on DSK11XQN23PROD with PROPOSALS2
Actuarial V aloe
Deductible
Annual Limitation on Cost
Sharin2
50%
Emer2:encv Room Services
Inpatient Hospital Services
50%
(Including Mental Health &
Substance Use Disorder)
Primarv Care Visit
$50*
$75*
Ur2ent Care
$100*
Suecialist Visit
Mental Health & Substance
$50*
Use Disorder Outpatient
Office Visit
Imaging (CT/PET Scans,
50%
MRls)
Speech Therapy
$50*
Occupational, Physical
$50*
Theranv
Laboratory Services
50%
X-ravs/DiaITTiostic lma2:in2:
50%
Skilled Nursin2 Facility
50%
Outpatient Facility Fee
50%
(Ambulatory Surgery
Center)
Outpatient Surgery
50%
Physician & Services
Generic Dru!!s
$25*
Preferred Brand Dru2s
$50
Non-Preferred Brand
$100
Dru2:s
Specialty Dru2s
$150
*Benefit category not subject to the deductible.
4. Non-Standardized Plan Option
Limits (§ 156.202)
At § 156.202, HHS proposes to
exercise the authority under sections
1311(c)(1) and 1321(a)(1)(B) of the ACA
to limit the number of non-standardized
plan options that issuers of QHPs can
offer through Exchanges on the Federal
platform (including State-based
Exchanges on the Federal Platform) to
two non-standardized plan options per
product network type (as described in
the definition of ‘‘product’’ at § 144.103)
and metal level (excluding catastrophic
plans), in any service area, for PY 2024
and beyond, as a condition of QHP
certification. Section 1311(c)(1) of the
ACA directs the Secretary to establish
criteria for the certification of health
plans as QHPs. Section 1321(a)(1)(B) of
the ACA directs the Secretary to issue
regulations that set standards for
VerDate Sep<11>2014
20:34 Dec 20, 2022
Jkt 259001
Standard
Silver
70.00%
$6,000
$9,100
Silver
73CSR
73.00%
$5,700
$7,200
Silver
87CSR
87.04%
$700
$3,000
Silver
94CSR
94.08%
$0
$1,900
Gold
Platinum
78.04%
$1,500
$8,700
88.11%
$0
$3,200
40%
40%
40%
40%
30%
30%
25%*
25%*
25%
25%
$100*
$350*
$40*
$60*
$80*
$40*
$40*
$60*
$80*
$40*
$20*
$30*
$40*
$20*
$0*
$5*
$10*
$0*
$30*
$45*
$60*
$30*
$10*
$15*
$20*
$10*
40%
40%
30%
25%*
25%
$100*
$40*
$40*
$40*
$40*
$20*
$20*
$0*
$0*
$30*
$30*
$10*
$10*
40%
40%
40%
40%
40%
40%
40%
40%
30%
30%
30%
30%
25%*
25%*
25%*
25%*
25%
25%
25%
25%
$30*
$30*
$150*
$150*
40%
40%
30%
25%*
25%
$150*
$20*
$40*
$80
$20*
$40*
$80
$10*
$20*
$60
$0*
$5*
$10*
$15*
$30*
$60*
$5*
$10*
$50*
$125
$125
$100
$20*
$100*
$75*
meeting the requirements of title I of the
ACA with respect to, among other
things, the offering of QHPs through
such Exchanges.
Under this proposed requirement, an
issuer would, for example, be limited to
offering through an Exchange two gold
HMO and two gold PPO nonstandardized plan options in any service
area in PY 2024 or any subsequent PY.
As an additional clarifying example, if
an issuer wanted to offer two Statewide
bronze HMO non-standardized plan
options as well as two additional bronze
HMO non-standardized plan options in
one particular service area that covers
less than the entire State, in the service
areas that all four plans would cover,
the issuer could choose to offer through
the Exchange either the two bronze
HMO non-standardized plan options
offered Statewide or the two bronze
PO 00000
Frm 00075
Fmt 4701
Sfmt 4702
HMO non-standardized plan options
offered in that particular service area (or
any combination thereof, so long as the
total number of non-standardized plan
options does not exceed the limit of two
per issuer, product network type, and
metal level in the service area).
Similar to the approach taken with
respect to standardized plan options in
the 2023 Payment Notice and in this
proposed rule, HHS proposes to not
apply this requirement to issuers in
State Exchanges for several reasons.
First, HHS does not wish to impose
duplicative requirements on issuers in
the State Exchanges that already limit
the number of non-standardized plan
options. Additionally, HHS believes that
State Exchanges are best positioned to
understand both the nuances of their
respective markets and consumer needs
within those markets. Finally, HHS
E:\FR\FM\21DEP2.SGM
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TABLE 11: 2024 Proposed Standardized Plan Options Set Two (For Exchange Issuers in
Delaware and Louisiana)
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Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
believes that States that have invested
the necessary time and resources to
become State Exchanges have done so in
order to implement innovative policies
that differ from those on the FFEs, and
HHS does not wish to impede these
innovative policies, so long as they
comply with existing legal
requirements.
However, consistent with the
approach taken with respect to
standardized plan options in the 2023
Payment Notice and in this this
proposed rule, since SBE–FPs use the
same platform as the FFEs, HHS
proposes to apply this requirement
equally on FFEs and SBE–FPs. HHS
believes that proposing a distinction
between FFEs and SBE–FPs for
purposes of this requirement would
create a substantial financial and
operational burden that HHS believes
outweighs the benefit of permitting such
a distinction.
Finally, also in alignment with the
approach taken with standardized plan
options in the 2023 Payment Notice as
well as the approach taken in this
proposed rule, HHS proposes that this
proposed requirement would not apply
to plans offered through the SHOPs or
to SADPs, given that the nature of these
markets differ substantially from the
individual medical QHP market, in
terms of issuer participation, plan
offerings, plan enrollment, and services
covered. For example, the degree of plan
proliferation observed in individual
market medical QHPs over the last
several plan years is not evident to the
same degree for QHPs offered through
the SHOPs or for SADPs offered in the
individual market. For these reasons,
HHS does not believe the same
requirements should be applied to these
other markets.
HHS believes that given the large
number of plan offerings that would
continue to exist on the Exchanges, a
sufficiently diverse range of plan
offerings would still exist for consumers
to continue to select innovative plans
that meet their unique health needs,
even if HHS did ultimately choose to
limit the number of non-standardized
plan options that issuers can offer.
Thus, even if consumers believe that
their health needs may not be best met
with the standardized plan options
included in this current rulemaking,
they would still have the option to
select from a sufficient number of other
non-standardized plan options.
Under this proposed limit, we
estimate that the weighted average
number of non-standardized plan
options (which does not take into
consideration standardized plan
options) available to each consumer
VerDate Sep<11>2014
20:34 Dec 20, 2022
Jkt 259001
would be reduced from approximately
107.8 in PY 2022 to 37.2 in PY 2024,
which we believe still provides
consumers with a sufficient number of
plan offerings.195 Additionally, we
estimate that of a total of 106,037 nonstandardized plan option plan-county
combinations offered in PY 2022,
approximately 60,949 (57.5 percent) of
these plan-county combinations would
no longer be permitted to be offered, a
number we believe would still provide
consumers with a sufficient degree of
choice during the plan selection
process.196
Finally, if this limit were adopted, we
estimate that of the approximately 10.21
million enrollees in the FFEs and SBE–
FPs in PY 2022, approximately 2.72
million (26.6 percent) of these enrollees
would have their current plan offerings
affected, and issuers would therefore be
required to select another QHP to
crosswalk these enrollees into for PY
2024.197 CMS would utilize the existing
discontinuation notices and process as
well as the current re-enrollment
hierarchy at § 155.335(j) to ensure a
seamless transition and continuity of
coverage for affected enrollees. In
addition, CMS would ensure that the
necessary consumer assistance would be
made available to affected enrollees as
part of the expanded funding for
Navigator programs.
In the 2023 Payment Notice, HHS
solicited comment on enhancing choice
architecture and on preventing plan
choice overload for consumers on
HealthCare.gov (87 FR 689 through 691
and 87 FR 27345 through 27347). In this
comment solicitation, HHS noted that
although it continues to prioritize
competition and choice on the
Exchanges, it was concerned about plan
195 Utilizing weighted as opposed to unweighted
averages takes into consideration the number of
enrollees in a particular service area when
calculating the average number of plans available to
enrollees. As a result of weighting by enrollment,
service areas with a higher number of enrollees
have a greater impact on the overall average than
service areas with a lower number of enrollees.
Weighting averages allows a more representative
metric to be calculated that more closely resembles
the actual experience of enrollees.
196 Plan-county combinations are the count of
unique plan ID and FIPS code combinations. This
measure is used because a single plan may be
available in multiple counties, and specific limits
on non-standardized plan options may have
different impacts on one county where there are
four plans of the same product network type and
metal level versus another county where there are
only two plans of the same product network type
and service area, for example.
197 These calculations assume that the nonstandardized plan options removed due to the
proposed limit would be those with the fewest
enrollees based on PY 2022 data, which includes
individual market medical QHPs for Exchanges
using the HealthCare.gov eligibility and enrollment
platform, including SBE–FPs.
PO 00000
Frm 00076
Fmt 4701
Sfmt 4702
choice overload, which can result when
consumers have too many choices in
plan options on an Exchange. HHS
referred to a 2016 report by the RAND
Corporation reviewing over 100 studies
which concluded that having too many
health plan choices can lead to poor
enrollment decisions due to the
difficulty consumers face in processing
complex health insurance
information.198 HHS also referred to a
study of consumer behavior in Medicare
Part D, Medicare Advantage, and
Medigap that demonstrated that a
choice of 15 or fewer plans was
associated with higher enrollment rates,
while a choice of 30 or more plans led
to a decline in enrollment rates.199
With this concern in mind, HHS
explained in the 2023 Payment Notice
that it was interested in exploring
possible methods of improving choice
architecture and preventing plan choice
overload. HHS expressed interest in
exploring the feasibility and utility of
limiting the number of nonstandardized plan options that FFE and
SBE–FP issuers can offer through the
Exchanges in future plan years as one
option to reduce the risk of plan choice
overload and to further streamline and
optimize the plan selection process for
consumers on the Exchanges.
Accordingly, HHS sought comment on
the impact of limiting the number of
non-standardized plan options that
issuers can offer through the Exchanges,
on effective methods to achieve this
goal, the advantages and disadvantages
of these methods, and if there were
alternative methods not considered.
In response to this comment
solicitation, many commenters agreed
that the number of plan options that
consumers can choose from on the
Exchanges has increased beyond a point
that is productive for consumers. Many
of these commenters further explained
that consumers do not have the time,
resources, our health literacy to be able
to meaningfully compare all available
plan options. These commenters also
agreed that when consumers are faced
with an overwhelming number of plan
options, many of which are similar with
only minor differences between them,
the risk of plan choice overload is
significantly exacerbated.
Similarly, during the standardized
plan option interested party engagement
198 Taylor EA, Carman KG, Lopez A, Muchow
AN, Roshan P, and Eibner C. Consumer
Decisionmaking in the Health Care Marketplace.
RAND Corporation. 2016.
199 Chao Zhou and Yuting Zhang, ‘‘The Vast
Majority of Medicare Part D Beneficiaries Still Don’t
Choose the Cheapest Plans That Meet Their
Medication Needs.’’ Health Affairs, 31, no.10
(2012): 2259–2265.
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Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
sessions HHS conducted after
publishing the 2023 Payment Notice,
many participants agreed that the
number of plan options was far too high
and supported taking additional action
to prevent plan choice overload. In
short, many 2023 Payment Notice
commenters and interested party
engagement participants supported
limiting the number of nonstandardized plan options that issuers
can offer to streamline the plan
selection process for consumers on the
Exchanges.
In addition, current QHP submission
data provide support for the argument
that enacting such a limit would be
beneficial for consumers. For example,
it is estimated that there will be a
weighted average of 113.6 plans
available per enrollee on HealthCare.gov
in PY 2023 compared to a weighted
average of 107.8 plans available per
enrollee in PY 2022 and a weighted
average of 25.9 plans available per
enrollee in PY 2019.200 Similarly, it is
expected that there will be a weighted
average of 18.3 plan offerings per issuer
in PY 2023 compared to 17.1 plan
offerings per issuer in PY 2022 and 9.7
plan offerings per issuer in PY 2019.201
With this continued plan proliferation
for both enrollees and issuers, HHS
believes that limiting the number of
non-standardized plan options that FFE
and SBE–FP issuers of QHPs can offer
through the Exchanges beginning in PY
2024 could greatly enhance the
consumer experience on
HealthCare.gov.
To reduce the risk of plan choice
overload, HHS also considered solely
focusing on enhancing choice
architecture on HealthCare.gov, instead
of enhancing choice architecture in
conjunction with limiting the number of
non-standardized plan options that
issuers can offer, an approach
recommended by several commenters in
the 2023 Payment Notice. HHS agrees
that enhancements to the consumer
experience on HealthCare.gov are
critical in ensuring that consumers are
able to more meaningfully compare plan
choices and more easily select a health
plan that meets their unique health
needs. As such, HHS made several
enhancements to HealthCare.gov for the
open enrollment period for PY 2023.
HHS also intends to continue
conducting research to inform further
enhancements to the consumer
200 Weighted averages were calculated by
accounting for the number of enrollees in particular
service areas, with service areas with a higher
number of enrollees having a more significant
impact on the overall average than service areas
with a lower number of enrollees.
201 Ibid.
VerDate Sep<11>2014
20:34 Dec 20, 2022
Jkt 259001
experience on HealthCare.gov for PY
2024 and subsequent plan years.
That said, HHS believes that
enhancing choice architecture on
HealthCare.gov is necessary but, alone,
insufficient to reduce the risk of plan
choice overload for several reasons.
First, HealthCare.gov is not the only
pathway for consumers to search for,
compare, select, and enroll in a QHP,
and it is not the only information
resource consumers seek when
considering Exchange coverage. Instead,
consumers shop through a multitude of
channels, sometimes utilizing a mix of
customer service channels including the
Marketplace Call Center; online on
HealthCare.gov; through assisters,
agents, and brokers; and through
certified enrollment partners (such as
Classic DE and EDE web brokers and
issuers). Thus, HHS believes that
consumers enrolling in QHPs through
these alternative pathways would not
benefit to the same degree as those
enrolling through HealthCare.gov if
HHS focused on reducing plan choice
overload solely by making
enhancements to HealthCare.gov.
Moreover, considering that an
increasingly greater portion of QHP
enrollment is occurring through these
alternative enrollment pathways, HHS
believes that a more comprehensive
approach to reducing plan choice
overload that would also benefit those
utilizing these alternative enrollment
pathways is required.
Furthermore, while enhancements to
choice architecture and the plan
comparison experience can play a
critical role in streamlining the plan
selection process and reducing the risk
of plan choice overload, the number of
plans available per enrollee has
increased beyond a number that is
beneficial for consumers, and this high
number of plan choices makes it
increasingly difficult to meaningfully
manage choice architecture on
HealthCare.gov and through other
Exchange customer service channels.
Relatedly, HHS believes that lowincome consumers would particularly
benefit from a policy that limits the
number of plans. This is because silver
plans deliver the most value to lowincome consumers, but it is exactly
these consumers—who often have the
lowest health insurance literacy—who
now face choosing among the highest
number of near-duplicate silver plans,
which will continue unless limits on the
number of these plans are set. Nearduplicate plans are the most difficult to
filter and sort out by interface
improvements.
As such, HHS believes that having an
excessive number of plans (particularly
PO 00000
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Sfmt 4702
78281
those at the silver metal level) places an
inequitable burden on those who need
insurance the most, those who face the
greatest challenges in selecting the most
suitable health plan, and those who can
least withstand the consequences of
choosing a plan that costs too much and
delivers too little. For this reason, HHS
believes that reducing the number of
available plans (particularly silver
plans) by limiting the number of nonstandardized plan options that issuers
can offer, can play an important role in
advancing the agency’s commitments to
health equity.
In short, HHS believes that limiting
the number of non-standardized plan
options that issuers can offer in
conjunction with enhancing the plan
comparison experience on
HealthCare.gov is the most effective
method to streamline the plan selection
process and to reduce the risk of plan
choice overload for consumers on the
HealthCare.gov Exchanges.
As an alternative to limiting the
number of non-standardized plan
options that issuers in FFEs and SBE–
FPs can offer through the Exchanges to
reduce the risk of plan choice overload,
HHS could also apply a meaningful
difference standard. Such a standard
was previously codified at § 156.298.
The original meaningful difference
standard was introduced in the 2015
Payment Notice, revised in the 2017
Payment Notice, and discontinued and
removed from regulation in the 2019
Payment Notice. The meaningful
difference standard was originally
intended to enhance the consumer
experience on the Exchanges by
preventing duplicative plan offerings.
The decision to discontinue the
meaningful difference standard in the
2019 Payment Notice was made largely
due to the decreased number of plan
offerings on the Exchanges (that is, there
was a weighted average of 25.9 plans
available per enrollee in PY 2019), as
well as the low number of plans flagged
under the prior review.
Under the original meaningful
difference standard introduced in the
2015 Payment Notice, a plan was
considered to be ‘‘meaningfully
different’’ from another plan in the same
service area and metal tier (including
catastrophic plans) if a reasonable
consumer would be able to identify one
or more material differences among the
following characteristics between the
plan and other plan offerings: (1) cost
sharing; (2) provider networks; (3)
covered benefits; (4) plan type; (5)
Health Savings Account eligibility; or
(6) self-only, non-self-only, or child only
plan offerings (79 FR 13813, 13840).
Additionally, CMS believed that a
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reasonable consumer would be likely to
identify a difference in MOOP of $100
or more or a difference in deductible of
$50 for purposes of the meaningful
difference standard.202 The 2017
Payment Notice eliminated the Health
Savings Account eligibility element, and
revised the self-only, non-self-only, or
child-only plan offerings element (87 FR
27208, 27345). In the 2017 Letter to
Issuers, the MOOP and deductible
dollar difference thresholds were
increased to $500 and $250,
respectively.203
In the 2023 Payment Notice comment
solicitation on enhancing choice
architecture and preventing plan choice
overload (87 FR 27208, 27345), in
addition to soliciting comment on
limiting the number of nonstandardized plan options that issuers
can offer, HHS also solicited comment
on resuming the meaningful difference
standard as one potential method it
could use to reduce the risk of plan
choice overload. In response to this
comment solicitation, many
commenters and standardized plan
option interested party engagement
participants supported resuming the
meaningful difference standard, with
the caveat that the standard should be
strengthened since the original version
of the standard from the 2015 Payment
Notice as well as the updated version of
the standard from the 2017 Payment
Notice both failed to meaningfully
reduce duplicative plan offerings.
These commenters and workgroup
participants further explained that
earlier versions of the meaningful
difference standard relied on several
criteria and difference thresholds (that
is, only having one difference among the
following attributes: cost sharing,
provider networks, covered benefits,
plan type, Health Savings Account
eligibility, or self-only, non-self-only, or
child only plan offerings) which
allowed issuers to more easily meet the
standard. Several of these commenters
and workgroup participants noted that
no State Exchange currently utilizes the
meaningful difference standard to
reduce the risk of plan choice overload.
As such, HHS proposes, as an
alternative to our proposal to limit the
number of non-standardized plan
options that an FFE or SBE–FP issuer
202 2015
Letter to Issuers in the Federallyfacilitated Marketplaces, chapter 3, section 3.
Available at https://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/Downloads/2015-finalissuer-letter-3-14-2014.pdf.
203 2017 Letter to Issuers in the Federallyfacilitated Marketplaces, chapter 2, section 12.
Available at https://www.cms.gov/cciio/resources/
regulations-and-guidance/downloads/final-2017letter-to-issuers-2-29-16.pdf.
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may offer on the Exchange, to impose a
new meaningful difference standard,
which would be more stringent than the
previous standard, for PY 2024 and
subsequent PYs. Specifically, instead of
including all of the criteria from the
original standard from the 2015
Payment Notice (that is, cost sharing,
provider networks, covered benefits,
plan type, Health Savings Account
eligibility, or self-only, non-self-only, or
child only plan offerings), HHS
proposes grouping plans by issuer ID,
county, metal level, product network
type, and deductible integration type,
and then evaluating whether plans
within each group are ‘‘meaningfully
different’’ based on differences in
deductible amounts.
With this proposed approach, two
plans would need to have deductibles
that differ by more than $1,000 to satisfy
the new proposed meaningful difference
standard. We believe that adopting this
approach for a new meaningful
difference standard would more
effectively reduce the risk of plan choice
overload and streamline the plan
selection process for consumers on the
Exchanges. With a dollar deductible
difference threshold of $1,000, we
estimate that the weighted average
number of non-standardized plan
options (which does not take into
consideration standardized plan
options) available to each consumer
would be reduced from approximately
107.8 in PY 2022 to 53.2 in PY 2024,
which we believe still provides
consumers with a sufficient number of
plan offerings. In addition, we estimate
that of a total of 106,037 nonstandardized plan option plan-county
combinations offered in PY 2022,
approximately 49,629 (46.8 percent) of
these plan-county combinations would
no longer be permitted to be offered, a
number we believe would still provide
consumers with a sufficient degree of
choice during the plan selection
process.204 If this dollar deductible
difference threshold were adopted, we
estimate that of the approximately 10.21
million enrollees in the FFEs and SBE–
FPs in PY 2022, approximately 2.64
million (25.9 percent) of these enrollees
204 Plan-county combinations are the count of
unique plan ID and FIPS code combinations. This
measure is used because a single plan may be
available in multiple counties, and specific limits
on non-standardized plan options or specific dollar
deductible difference thresholds may have different
impacts on one county where there are four plans
of the same product network type and metal level
versus another county where there are only two
plans of the same product network type and metal
level, for example.
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would have their current plan offerings
affected.205
We seek comment on the feasibility
and utility of limiting the number of
non-standardized plan options that FFE
and SBE–FP issuers can offer through
the Exchanges beginning in PY 2024.
We also seek comment on whether the
limit of two non-standardized plan
options per issuer, product network
type, and metal level in any service area
is the most appropriate approach, or if
a stricter or more relaxed limit should
be adopted instead. In addition, we seek
comment on the advantages and
disadvantages of utilizing a phased
approached of limiting the number of
non-standardized plan options (for
example, if there were a limit of three
non-standardized plan options per
issuer, product network type, metal
level, and service area for PY 2024, two
for PY 2025, and one for PY 2026). We
also seek comment on the effect that
adopting such a limit would have on
particular product network types, and
whether this limit would cause a
proliferation of product network types
that are not actually differentiated for
consumers.
Furthermore, we seek comment on
whether we should consider additional
factors, such as variations of products or
networks, when limiting the number of
non-standardized plan options—which
would mean that issuers would be
limited to offering two non-standardized
plan options per product network type,
metal level, product, and network
variation (for example, by network ID)
in any service area (or some
combination thereof). If we were to
adopt such an approach, issuers would
be permitted to offer two nonstandardized gold HMOs within one
product as well as an additional two
non-standardized gold HMOs within a
second product in a particular service
area, for example. This would also mean
that issuers would be permitted to offer
two non-standardized gold HMOs with
one particular network ID as well as two
additional non-standardized gold HMOs
with a different network ID in a
particular service area, for example.
We also seek comment on whether
permitting additional variation only for
specific benefits, such as adult dental
and adult vision benefits, instead of
permitting any variation in a product
(for example, by product ID) would be
more appropriate—which would mean,
205 These calculations assume that the nonstandardized plan options removed due to the
proposed limit would be those with the fewest
enrollees based on PY 2022 data, which includes
individual market medical QHPs for Exchanges
using the HealthCare.gov eligibility and enrollment
platform, including SBE–FPs.
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for example, that issuers could offer two
gold HMO non-standardized plan
options without adult vision and dental
benefits and two gold HMO nonstandardized plan options with adult
vision and dental benefits in the same
service area.
In addition, we seek comment on
imposing a new meaningful difference
standard in place of limiting the number
of non-standardized plan options that
issuers can offer. We also seek comment
on additional or alternative specific
criteria that would be appropriate to
include in the meaningful difference
standard to determine whether plans are
‘‘meaningfully different’’ from one
another, including whether the same
criteria and difference thresholds from
the original standard from the 2015
Payment Notice or the updated
difference thresholds from the 2017
Payment Notice should be instituted, or
some combination thereof. Finally, we
seek comment on the specific
deductible dollar difference thresholds
that would be appropriate to determine
whether plans are considered to be
‘‘meaningfully different’’ from other
plans in the same grouping, and
whether a deductible threshold of
$1,000 would be most appropriate and
effective, or if a stricter or more relaxed
threshold should be adopted instead.
5. QHP Rate and Benefit Information
(§ 156.210)
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a. Age on Effective Date for SADPs
We propose at new § 156.210(d)(1) to
require issuers of stand-alone dental
plans (SADPs), as a condition of
Exchange certification, to use an
enrollee’s age at the time of policy
issuance or renewal (referred to as age
on effective date) as the sole method to
calculate an enrollee’s age for rating and
eligibility purposes, beginning with
Exchange certification for PY 2024. We
propose that this requirement apply to
Exchange-certified SADPs, whether sold
on- or off-Exchange.
Since PY 2014, the process the FFEs
use in QHP certification allows SADP
issuers seeking certification of their
SADPs to enter multiple options to
explain how age is determined for rating
and eligibility purposes. Because the
Federal eligibility and enrollment
platform operationalizes the rating and
eligibility standards when an applicant
seeks SADP coverage through an SBE–
FP, issuers in SBE–FPs have also been
required to comply with this part of the
process. While market rules at
§ 147.102(a)(1)(iii) require medical QHP
issuers to enter age on effective date as
the method to calculate an enrollee’s age
for rating and eligibility purposes, SADP
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issuers have been able to enter any of
the following four options in the
Business Rules Template: (1) Age on
effective date; (2) Age on January 1st of
the effective date year; (3) Age on
insurance date (age on birthday nearest
the effective date); or (4) Age on January
1st or July 1st.206
Despite the availability of these other
options for SADPs, age on effective date
is the most commonly used age rating
methodology; the vast majority of
individual market SADP issuers have
used the age on effective date method
since PY 2014. Not only is it the most
commonly used method, but it is also
the most straightforward methodology
for consumers to understand. For
example, under the age on effective date
method, if an enrollee is age 30 at the
time of a plan’s effective date, the
enrollee is rated at age 30 for the rest of
the plan year. The less commonly used
options are likely more confusing for
consumers, who may experience a
mismatch between their age on the date
on which they enrolled into an SADP
versus the age on which the rate charged
to them is based, due to the alternate age
calculation methodologies. Thus,
consumers can more easily understand
the premium rate they are charged when
the age on effective date method is used
instead of the other methods, reducing
consumers confusion.
Allowing Exchange-certified SADPs
to rate by other methods imposes
unnecessary complexity, not only to
CMS as operator of the FFEs and the
Federal eligibility and enrollment
platform, but also to enrollment partners
and consumers in the Exchanges on the
Federal platform. For example, the
added complexity results in occasional
inability to effectuate enrollment due to
the unclear logic used to support the
uncommon and alternative Exchangecertified SADP rating methods, which
require expensive manual workarounds
for the Exchanges on the Federal
platform and Exchange-certified SADP
issuers. Using the other methods also
affects the efficiency of Classic DE and
EDE partners, who rely more on
Application Programming Interfaces
(APIs) and must account for these
alternate Exchange-certified SADP age
calculation methods. It is more
challenging for the Classic DE and EDE
partners to replicate the logic needed for
enrolling consumers into Exchangecertified SADPs using methods other
than the conventional age on effective
date method. Additionally, the more
206 See, for example, Qualified Health Plan Issuer
Application Instructions, Plan Year 2023, Extracted
section: Section 3B: Business Rules. https://
www.qhpcertification.cms.gov/s/
Business%20Rules.
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complicated alternative age calculation
methods currently in use make it more
difficult for consumers to understand
the premium rate they are charged.
Thus, requiring Exchange-certified
SADPs to use the age on effective date
methodology to calculate an enrollee’s
age as a condition of QHP certification,
and consequently removing the less
commonly used and more complex age
calculation methods, will reduce
consumer confusion and promote
operational efficiency.
By helping to reduce consumer
confusion and promote operational
efficiency during the QHP certification
process, this proposed policy would
help facilitate more informed
enrollment decisions and enrollment
satisfaction. Accordingly, we believe it
is appropriate to extend this proposed
certification requirement to SADPs
seeking certification on the FFEs as well
as the SBE–FPs and SBEs. We seek
comment on any anticipated challenges
that this proposal could present for
SBEs using their own platform, and
whether and to what extent we should,
if this proposal is finalized, limit or
delay this proposed certification
requirement for those SBEs.
We acknowledge the potential that
Exchange-certified SADPs whose issuers
use the alternative age calculation
methods could withdraw from the
Exchanges rather than comply with this
new requirement. However, we do not
anticipate that any such issuers would
choose to withdraw from the Exchanges
because of this proposal; and even if an
issuer were to withdraw, we would
expect that any such withdrawal would
cause minimal disruption to consumers
and other Exchange-certified plans.
Given that a large majority of Exchangecertified SADP issuers are already using
the age on effective date method, and
based on the current availability of such
plans in all service areas, we do not
anticipate that consumers or other
Exchange-certified plans would be
materially affected.207
We seek comment on this proposal to
require Exchange-certified SADPs,
whether sold on- or off-Exchange, to use
age on effective date as the sole method
207 In the EHB Rule (78 FR at 12853), we
operationalized section 1302(b)(4)(F) of the ACA to
permit QHP issuers to omit coverage of the
pediatric dental EHB if an Exchange-certified SADP
exists in the same service area in which they intend
to offer coverage. As a corollary, if no such SADP
is offered through an Exchange in that service area,
then all health plans offered through the Exchange
in that service area would be required to provide
coverage of the pediatric dental EHB, as section
2707(a) of the PHS Act requires all nongrandfathered plans in the individual and small
group markets to provide coverage of the EHB
package described at section 1302(a) of the ACA.
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to calculate an enrollee’s age for rating
and eligibility purposes, beginning with
PY 2024.
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b. Guaranteed Rates for SADPs
We propose at new § 156.210(d)(2) to
require issuers of SADPs, as a condition
of Exchange certification, to submit
guaranteed rates beginning with
Exchange certification for PY 2024. We
propose that this requirement apply to
Exchange-certified SADPs, whether they
are sold on- or off-Exchange.
SADPs are excepted benefits, as
defined by section 2791(c)(2)(A) of the
PHS Act and HHS implementing
regulations at §§ 146.145(b)(3)(iii)(A)
and 148.220(b)(1), and are not subject to
the PHS Act insurance market reform
provisions that generally apply to nongrandfathered health plans in the
individual and group markets inside
and outside the Exchange.208 In
particular, because SADP issuers are not
required to comply with the premium
rating requirement under section 2701
of the PHS Act applicable to nongrandfathered individual and small
group health insurance coverage, we
have permitted SADP issuers in the
FFEs and SBE–FPs to comply with the
rate information submission
requirements at § 156.210 under a
modified standard.209 Specifically, CMS
has historically granted SADP issuers
the flexibility to offer guaranteed or
estimated rates. By indicating the rate is
a guaranteed rate, the SADP issuer
commits to charging the consumer the
approved premium rate, which has been
calculated using consumers’ geographic
location, age, and other permissible
rating factors. Estimated rates require
enrollees to contact the issuer to
determine a final rate.
This flexibility for SADPs to offer
estimated rates was effective for SADP
issuers beginning with PY 2014. It was
necessary because the relevant
certification template was originally
designed to support medical QHPs,
which forced operational limits that
prevented the accurate collection of
rating rules for SADPs. Since PY 2014,
we have improved the certification
templates to allow SADPs to set the
208 See 42 U.S.C. 300gg–21(b) and (c) and 42
U.S.C. 300gg–63(b). Examples of PHS Act insurance
market reforms added by the ACA that do not apply
to stand-alone dental plans include but are not
limited to section 2702 guaranteed availability
standards, section 2703 guaranteed renewability
standards, and section 2718 medical loss ratio
standards.
209 See, for example, the 2014 Final Letter to
Issuers on Federally-facilitated and State
Partnership Exchanges for more information on
how SADPs in the FFEs and SBE–FPs have
flexibility to comply with the rate information
submission requirements at § 156.210.
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maximum age for dependents to 18, and
to rate all such dependents. Thus, the
FFEs and SBE–FPs can now
accommodate dental rating rules
properly in most reasonable
circumstances.
We believe this proposal would
significantly benefit enrollees.
Consistent with §§ 156.440(b) and
156.470, APTC may be applied to the
pediatric dental EHB portion of SADP
premiums. If SADP issuers submit
estimated rates and subsequently
modify their actual rates, the Exchanges,
including State Exchanges (including
State Exchanges on the Federal
platform) and FFEs, could incorrectly
calculate APTC for the pediatric dental
EHB portion of a consumer’s premium,
which could potentially cause consumer
harm. Thus, since low-income
individuals may qualify for APTC 210
and are disproportionately impacted by
limited access to affordable health
care,211 we believe this proposed policy
change would help advance health
equity by helping ensure that lowincome individuals who qualify for
APTC are charged the correct premium
amount when enrolling in SADPs on the
Exchange.
We acknowledge that requiring
guaranteed rates presents a small risk
that SADP issuers that offer estimated
rates could cease offering SADPs on the
Exchanges. While we recognize this
risk, we strongly believe that the
benefits of this proposal far exceed the
disadvantages. Specifically, as
discussed previously, we believe this
proposed policy change would
significantly reduce the risk of
consumer harm by reducing the risk of
210 The PTC is generally available to people who
buy Marketplace coverage and who have a
household income that equals or exceeds the
Federal poverty level, and who meet other
eligibility criteria.
211 Research and policy analysis has shown that
low-income individuals are disproportionately
impacted by lack of access to affordable health care.
According to a 2018 Health Affairs Health Policy
Brief, compared to higher-income Americans, lowincome individuals face greater barriers to accessing
medical care. More specifically, low-income
individuals are less likely to have health insurance,
receive new drugs and technologies, and have ready
access to primary and specialty care. See Khullar,
D., & Chokshi, D. A. (2018). Health, Income, And
Poverty: Where We Are And What Could Help.
Health Affairs. https://doi.org/10.1377/
hpb20180817.901935. Additionally, a 2007 study
found that barriers to health care can be
insurmountable for low-income families, even those
with insurance coverage. In particular, this study
found that families reported three major barriers to
health care: lack of insurance coverage, poor access
to services, and unaffordable costs. See DeVoe, J. E.,
Baez, A., Angier, H., Krois, L., Edlund, C., Carney,
P. A. (2007). Insurance + Access ≠ Health Care:
Typology of Barriers to Health Care Access for LowIncome Families. Annals of Family Medicine, 5(6),
511–518. https://doi.org/10.1370/afm.748.
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incorrect APTC calculation for the
pediatric dental EHB portion of
premiums. Thus, we believe this
proposed policy would have a positive
financial impact by ensuring that SADP
enrollees receive the correct APTC
calculation for the pediatric dental EHB
portion of premiums, and therefore, are
charged the correct premium rate.
We also note that although the FFEs
and SBE–FP issuers currently allow
SADP issuers to submit estimated rates,
the vast majority elect to submit
guaranteed rates. The vast majority of
SADP issuers offering on-Exchange and
off-Exchange Exchange-certified SADPs
also elect to submit guaranteed rates.
Given that most SADP issuers already
submit guaranteed rates, the majority of
SADP issuers are unlikely to be
impacted by this proposal.
Because we believe this proposed
policy would significantly benefit
enrollees by ensuring that SADP
enrollees receive the correct APTC
calculation for the pediatric dental EHB
portion of premiums, and therefore, are
charged the correct premium rate, we
believe it is appropriate to apply this
proposed certification requirement to
SADPs seeking certification on the FFEs
as well as the SBE–FPs and SBEs. We
seek comment on any anticipated
challenges that this proposal could
present for SBEs using their own
platform, and whether and to what
extent we should, if this proposal is
finalized, limit or delay this proposed
certification requirement for those SBEs.
We seek comment on this proposal to
require Exchange-certified SADP issuers
to submit guaranteed rates as a
condition of Exchange certification
beginning with Exchange certification
for PY 2024.
6. Plan and Plan Variation Marketing
Name Requirements for QHPs
(§ 156.225)
We propose to add a new paragraph
(c) to § 156.225 to require that QHP plan
and plan variation 212 marketing names
include correct information, without
omission of material fact, and do not
include content that is misleading. If
finalized as proposed, CMS would
review plan and plan variation
marketing names during the annual
212 In practice, CMS and interested parties often
use the term ‘‘plan variants’’ to refer to ‘‘plan
variations.’’ Per § 156.400, plan variation means a
zero-cost sharing plan variation, a limited cost
sharing plan variation, or a silver plan variation.
Issuers may choose to vary plan marketing name by
the plan variant—for example, use one plan
marketing name for a silver plan that meets the
actuarial value (AV) requirements at § 156.140(b)(2),
and a different name for that plan’s equivalent that
meets the AV requirements at § 156.420(a)(1), (2), or
(3).
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QHP certification process in close
collaboration with State regulators in
States with Exchanges on the Federal
platform.
Section 1311(c)(1)(A) of the ACA
states that the Secretary shall establish
QHP certification criteria, which must
include, at a minimum, that a QHP meet
marketing requirements and not employ
marketing practices or benefit designs
that have the effect of discouraging
enrollment by individuals with
significant health needs. CMS, States,
and QHP issuers work together to
ensure that consumers can make
informed decisions when selecting a
health insurance plan based on factors
such as QHP benefit design, cost-sharing
requirements, and available financial
assistance. In PY 2022, Exchanges on
the Federal platform saw a significant
increase in the number of plan and plan
variation marketing names that included
cost-sharing information and other
benefit details. Following Open
Enrollment for PY 2022, CMS received
complaints from consumers in multiple
States who misunderstood cost-sharing
information in their QHP’s marketing
name.
Upon further investigation, CMS and
State regulators determined that this
language was often incorrect or could be
reasonably interpreted by consumers as
misleading based on information in
corresponding plan benefit
documentation submitted as part of the
QHP certification process.213 CMS’s
review of QHP data for PY 2023
indicates continued use of cost-sharing
information in plan and plan variation
marketing names.
This proposed policy would require
all information included in plan and
plan variation marketing names that
relates to plan attributes to correspond
to and match information that issuers
submit for the plan in the Plans &
Benefits Template, and in other
materials submitted as part of the QHP
certification process, such as any
content that is part of the Summary of
Benefits and Coverage. If necessary, this
information can be included in the
‘‘Benefit Explanation’’ field of the Plans
& Benefits Template. Consumers
applying for coverage should be able to
understand references to benefit
information in plan and plan variation
marketing names, and they should be
able to confirm any information from a
plan or plan variation marketing name
213 For example, in some cases a plan marketing
name described a limited benefit in a way that
could be understood as being unlimited, such as a
‘‘$5 co-pay’’ when the $5 co-pay was only available
for an initial visit. Consumers were concerned upon
learning the full extent of the cost-sharing for which
they would be responsible during the plan year.
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in the plan’s publicly available benefit
descriptions. Also, plan benefit or cost
sharing information in a plan or plan
variation marketing name should not
conflict with plan or plan variation
information displayed on
HealthCare.gov during the plan
selection process in terms of dollar
amount and, where applicable,
terminology.
Under this proposal, as an example,
CMS would flag plan and plan variation
marketing names for revision to help
consumers understand the cost-sharing
and coverage implications. The
following are examples of information
that should be validated to ensure
accuracy and consistency across the
plan or plan variation marketing name,
Plans & Benefits Template,
HealthCare.gov plan selection
information, and other applicable QHP
certification materials. These examples
are not all-inclusive, but they illustrate
the kinds of information in plan and
plan variation marketing names that
could mislead consumers through
inaccurate information or omission of
material facts.
• Cost-sharing amounts that do not
specify limitations the plan or plan
variation includes, such as whether the
cost-sharing amount is only available for
drugs in a certain prescription drug
category/tier, providers in a specific
network or tier, or for a certain number
of provider visits following which a
higher cost-sharing amount will apply;
• Dollar amounts that do not specify
what they refer to (for example,
deductible, maximum out-of-pocket, or
something else), whether they apply
only to medical, drug, or another type
of benefit, or whether, in cases of
deductible or maximum out-of-pocket
amounts, they apply to an individual or
a family;
• Benefits, such as adult dental care,
that are listed in a plan or plan variation
marketing name to indicate that they are
covered, but that plan documents
indicate are not covered; and
• Reference(s) to health savings
accounts (HSAs) in marketing names of
plans or plan variations that do not
permit enrollees to set up an HSA.214
We seek comment on this proposal
and whether there are additional
methods of preventing consumer
confusion and market disruption related
to this issue. In particular, we seek
comment on the potential to identify
components of plan and plan variation
marketing names that could be
uniformly structured and defined across
QHPs, so as to consistently
communicate information and ensure
that plan and plan variation marketing
names complement and do not
contradict other sources of plan detail,
such as cost-sharing and benefit
information, displayed during the plan
selection process on HealthCare.gov and
other enrollment platforms. For
example, we seek comment on whether,
to address this, CMS should establish a
required format for plan and plan
variation marketing names that specifies
elements such as name of issuer, metal
level, and limited cost-sharing
information.
214 An HSA is a tax-exempt trust or custodial
account that a taxpayer may set up with a qualified
HSA trustee to pay or reimburse certain medical
expenses they incur. (See IRS Publication 969
(2021), Health Savings Accounts and Other TaxFavored Health Plans: https://www.irs.gov/
publications/p969#en_US_2021_
publink1000204030.) Taxpayers must meet certain
requirements to qualify for an HSA, including being
enrolled in a High Deductible Health Plan (HDHP)
as defined in Section 223(c)(2) of the U.S. Tax Code.
HDHP requirements include minimum levels for
family and individual deductible amounts—for
example, for calendar year 2022, an HDHP was
defined as a health plan with an annual deductible
not less than $1,400 for self-only coverage or $2,800
for family coverage, with annual out-of-pocket
expenses not more than $7,050 for self-only
coverage or $14,100 for family coverage. (See IRS
Rev. Proc. 2021–25: https://www.irs.gov/pub/irsdrop/rp-21-25.pdf.) Plan variants with limited or no
cost sharing, such as those described at
§ 156.420(a)(1) and (b)(1), by definition do not meet
the requirements to be HDHPs, and enrollees in
these plans therefore cannot set up an HSA. CMS
will consider references to HSAs in the names of
plans that do not qualify as HDHPs to be incorrect
and misleading.
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7. Plans That Do Not Use a Provider
Network: Network Adequacy (§ 156.230)
and Essential Community Providers
(§ 156.235)
We propose to revise the network
adequacy and ECP standards at
§§ 156.230 and 156.235 to state that all
individual market QHPs and SADPs and
all SHOP QHPs across all Exchanges
must use a network of providers that
complies with the standards described
in those sections, and to remove the
exception that these sections do not
apply to plans that do not use a provider
network.
In the Exchange Establishment Rule,
we established the minimum network
adequacy criteria that health and dental
plans must meet to be certified as QHPs
at § 156.230. In the 2016 Payment
Notice, we modified § 156.230(a), in
part, to specify that network adequacy
requirements apply only to QHPs that
use a provider network to deliver
services to enrollees and that a provider
network includes only providers that
are contracted as in-network. We also
revised § 156.235(a) to state that the ECP
criteria apply only to QHPs that use a
provider network. In Part 1 of the 2022
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Payment Notice (86 FR 6138), we added
section (f) to § 156.230 to state that a
plan for which an issuer seeks QHP
certification or any certified QHP that
does not use a provider network
(meaning that the plan or QHP does not
condition or differentiate benefits based
on whether the issuer has a network
participation agreement with a provider
that furnishes covered services) is not
required to comply with the network
adequacy standards at paragraphs (a)
through (e) of § 156.230 to qualify for
certification as a QHP. In that rule, we
also stated that plans that do not utilize
a provider network must still comply
with all applicable QHP certification
requirements to obtain QHP
certification, which ensures that any
plan that does not comply with
applicable QHP certification
requirements will be denied QHP
certification (86 FR 6138).
Since 2016, only a single issuer has
sought a certification on an FFE for a
plan that does not use a network.
Despite lengthy negotiations with this
issuer, our experience with this plan
convinced us that commenters to Part 1
of the 2022 Payment Notice who raised
concerns about the burden plans
without networks place on enrollees
appear to have been correct, and so, for
that reason and the other reasons
explained below, we are proposing to
revisit this policy.
Section 1311(c)(1)(B) and (C) of the
ACA directs HHS to establish by
regulation certification criteria for
QHPs, including criteria that require
QHPs to ensure a sufficient choice of
providers (in a manner consistent with
applicable provisions under section
2702(c) of the PHS Act, which governs
insured health plans that include a
provider network), provide information
to enrollees and prospective enrollees
on the availability of in-network and
out-of-network providers, and to
include within health insurance plan
provider networks those ECPs that serve
predominantly low income, medically
underserved individuals. HHS carries
out this directive through establishing
network adequacy and ECP
requirements and reviewing QHP
compliance with such requirements.
When we added section (f) to
§ 156.230 in Part 1 of the 2022 Payment
Notice to except plans that do not use
a provider network from meeting the
network adequacy standards described
at § 156.230(a) through (e), we did not
intend to allow a plan to ignore the
minimum statutory criteria for QHP
certification. Plans without provider
networks still are required by section
1311(c)(1)(B) of the ACA to ensure
sufficient choice of providers and
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provide information to enrollees and
prospective enrollees on the availability
of in-network and out-of-network
providers to obtain certification, even
though they are not currently subject to
§§ 156.230 and 156.235. Whether a plan
that does not use a network provides
sufficient a choice of providers is a more
nuanced inquiry than a simple assertion
that an enrollee can receive benefits for
any provider. For a prospective enrollee,
a ‘‘sufficient choice of providers’’ likely
involves factors like the burden of
accessing those providers, including
whether there are providers nearby that
they can see without unreasonable delay
that would accept such a plan’s benefit
amount as payment in full, or whether
they are able to receive all of the care
for a specific health condition from a
single provider without incurring
additional out-of-pocket costs. These are
among the factors involved in
determining whether a network plan is
in compliance with the network
adequacy and ECP standards at
§§ 156.230 and 156.235; a plan’s
compliance with these regulatory
standards is one way that HHS can
verify that plans meet the statutory
criteria that QHPs ensure a sufficient
choice of providers, including ECPs.
To more effectively ensure that all
plans provide sufficient choice of
providers and to provide for consistent
standards across all QHPs, we believe it
would be appropriate to revise the
network adequacy and ECP standards at
§§ 156.230 and 156.235 to state that all
QHPs, including SADPs, must use a
network of providers that complies with
the standards described in those
sections and to remove the exception at
§ 156.230(f). Consistent standards also
would allow for easier comparability
across all QHPs in a more
comprehensible manner for prospective
enrollees. The benefits of easier
comparability between plans and other
challenges posed by plan choice
overload are discussed in more detail in
the preamble sections about
Standardized Plan Options and NonStandardized Plan Option Limits.
We have previously stated that
‘‘nothing in [the ACA] requires a QHP
issuer to use a provider network,’’ (84
FR at 6154) and it is true that the ACA
includes no standalone network
requirement. However, after revisiting
the statute, we now doubt that a plan
without a network can comply with the
statutory requirement at section
1311(c)(1)(C) of the ACA that ‘‘a plan
shall, at a minimum . . . include within
health insurance plan networks those
essential community providers, where
available, that serve predominately lowincome, medically-underserved
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individuals.’’ We have always
understood Section 1311(c)(1)(C) of the
ACA to require all plans to provide
sufficient access to ECPs, where
available, whether or not the plan
included a provider network. But we
have not previously considered whether
this specific statutory text is consistent
with a policy exempting plans without
a network from network adequacy
regulations. We now understand the
statute’s text to best support a reading
that access to ECPs will be provided
‘‘within health insurance networks.’’
Additionally, under section
1311(e)(1)(B) of the ACA and
§ 155.1000(c)(2), an Exchange may
certify plans only if it determines that
making the plans available through the
Exchange is in the interests of qualified
individuals. Section 155.1000 provides
Exchanges with broad discretion to
certify health plans that may otherwise
meet the QHP certification standards
specified in part 156. When we
implemented section 1311(e)(1)(B) of
the ACA at § 155.1000(c)(2) in the
Exchange Establishment Rule, we noted
that ‘‘an Exchange could adopt an ‘any
qualified plan’ certification, engage in
selective certification, or negotiate with
plans on a case-by-case basis’’ (77 FR
18405). Under this authority, we believe
that requiring QHPs to use a provider
network would be in the interests of
qualified individuals and would better
protect consumers from potential harms
that could arise in cases where QHPs do
not use provider networks. For example,
the implementation of a provider
network can help mitigate against risks
of substantial out-of-pocket costs,
ensure access without out-of-pocket
costs to preventive services that must be
covered without cost sharing, and, in
the individual market, facilitate
comparability of standardized plan
options. Furthermore, studies have
found that provider networks allow for
insurer-negotiated prices and controlled
(that is, reduced) costs in the form of
reduced patient cost sharing, premiums,
and service price, as compared with
such services obtained out of
network.215 216
This proposed revision would assure
HHS that all plans certified as QHPs
215 Benson NM, Song Z. Prices And Cost Sharing
For Psychotherapy In Network Versus Out Of
Network In The United States. Health Aff
(Millwood). 2020 Jul;39(7):1210–1218. https://
www.healthaffairs.org/doi/10.1377/hlthaff.
2019.01468.
216 Song, Z., Johnson, W., Kennedy, K., Biniek, J.
F., & Wallace, J. Out-of-network spending mostly
declined in privately insured populations with a
few notable exceptions from 2008 to 2016. Health
Aff. 2020;39(6), 1032–1041. https://
www.healthaffairs.org/doi/full/10.1377/
hlthaff.2019.01776.
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offer sufficient choice of providers in
compliance with a consistent set of
criteria for easier comparability across
all QHPs and better ensure substantive
consumer protections afforded by the
ACA without undue barriers to access
those protections. This consistency
would be valuable to consumers as it
ensures all consumers will have access
to a set of providers with whom their
plan has contracted in accordance with
our established network adequacy and
ECP requirements and allows for easier
comparison between plans for
prospective enrollees. This will also
allow consumers to seek care from
providers with whom their plan has
negotiated a rate, limiting their potential
exposure to out-of-pocket costs under
the plan.
Accordingly, pursuant to the
authority delegated to HHS to establish
criteria for the certification of health
plans as QHPs, we propose to remove
the exception at § 156.230(f) and to
revise §§ 156.230 and 156.235 to state
that all individual market QHPs and
SADPs and all SHOP plan QHPs across
all Exchanges-types must use a network
of providers that complies with the
standards described in those sections,
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beginning with PY 2024. Under this
proposal, an Exchange could not certify
as a QHP a health plan that does not use
a network of providers. However, we
solicit comment on whether it is
possible to design a plan that does not
use a network in a way that would
address our concerns about the plan’s
ability to offer a sufficient choice of
providers without excessive burden on
consumers, or what regulatory standards
such a plan could meet to ensure a
sufficient choice of providers without
excessive burden on consumers.
This proposal would also generally
apply to SADPs. Since 2014, the FFEs
have received, and approved, QHP
certification applications for SADPs that
do not use a provider network in every
plan year. However, the number of
SADPs that do not use a provider
network has never accounted for a
significant number of SADPs approved
as QHPs on the FFEs. At their most
prevalent in PY 2014, only 50 of the
1,521 SADPs certified as QHPs on the
FFEs were plans that do not use a
provider network. In PY 2022, only 8 of
the 672 SADPs certified as QHPs on the
FFEs were plans that do not use a
provider network.
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Further, the number of SADPs on the
FFEs that do not use a provider network
appears to be limited since 2017 to
fewer and fewer States; while 9 FFE
States had SADPs that do not use a
provider network certified as QHPs in
PY 2014, only 2 FFE States still had
SADPs that do not use a provider
network certified in PY 2022. Since PY
2021, only 85 counties in Alaska and
Montana still have SADPs that do not
use a provider network certified as
QHPs. We assume that the few SADP
issuers that still offer SADPs that do not
use a provider network on the FFEs in
Alaska and Montana only do so because
of difficulty in maintaining a sufficient
provider network in those States. We
believe it is reasonable to assume that
consumers increasingly gravitate
towards SADPs that use a network,
given this overall decrease in the
availability of SADPs that do not use a
provider network. We invite comment
to confirm these understandings, as well
as comment on the prevalence of SADPs
that do not use a provider network
offered outside of the FFEs in the nongrandfathered individual and small
group markets.
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TABLE 12: Prevalence of SADPs that Do Not Use a Provider Network on the FFEs, Plan
Years 2014-2023 •
Plan
Year
SADPs
Without
Provider
Networks
SADPsWith
Provider
Networks
FFE States with
SADPs Without
Provider Networks
2023
15
684
2; Alaska and Montana
Counties (#)
with SADPs
Without
Provider
Networks
85
2022
8
672
2; Alaska and Montana
85
2021
17
688
85
2020
17
736
4; Alaska, Montana,
North Dakota,
Wyoming
4; Alaska, Montana,
North Dakota,
Wyoming
2019
38
893
5; Alaska, Montana,
Nebraska, North
Dakota, Wyoming
162
2018
40
932
6; Alaska, Montana,
Nebraska, North
Dakota, Utah,
Wyoming
163
2017
41
1,053
197
2016
15
1,045
5; Alaska, Montana,
Nebraska, North
Dakota, Oregon,
Wvoming
5; Alaska, Montana,
Oregon, South Dakota,
Wyoming
2015
17
1,128
4; Montana, Ohio,
South Dakota,
Wyoming
233
2014
50
1,521
9; Alaska, Iowa, Idaho,
Missouri, Montana,
Nebraska, South
Carolina, South Dakota,
Wyoming
571
161
210
% Counties in Affected
FFE States with Only
SADPs Without Provider
Networks
AK:90%,Mf:0%(every
county had plans with
provider network options)
AK:90%,Mf:0%(every
county had plans with
provider network options)
0% in all affected FFE
States
100% in all affected FFE
States (the only SADP
options in affected counties
were plans without
provider networks)
100% in all affected FFE
States (the only SADP
options in affected counties
were plans without
provider networks)
100% in all affected FFE
States (the only SADP
options in affected counties
were plans without
provider networks)
0% in all affected FFE
States (every county had
plans with provider
network options)
0% in all affected FFE
States (every county had
plans with provider
network options)
0% in all affected FFE
States (every county had
plans with provider
network options)
0% in all affected FFE
States (every county had
plans with provider
network options)
Given the overall lack of popularity of
SADPs that do not use a provider
network, we believe that consumers find
that such plans do not offer the same
levels of protections against out-ofpocket costs as network plans. Thus, we
believe it would be appropriate to revise
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§§ 156.230 and 156.235 so that all
SADPs must use a network of providers
that complies with the standards
described in those sections as a
condition of QHP certification,
beginning with PY 2024.
However, we are cognizant that it can
be more challenging for SADPs to
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establish a network of dental providers
based on the availability of nearby
dental providers, and we are aware this
proposal could result in no SADPs
offered through Exchanges in States like
Alaska and Montana, which have
historically offered SADPs without
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provider networks (see Table 12).
Further, we are aware that having no
Exchange-certified SADPs offered
through an Exchange in an area would
impact all non-grandfathered individual
and small group plans in such areas.
Without an SADP available on the
respective Exchange, all nongrandfathered individual and small
group health plans in impacted areas
would be required to cover the pediatric
dental EHB. We note that section
1302(b)(4)(F) of the ACA states that if
such an SADP is offered through an
Exchange, another health plan offered
through such Exchange shall not fail to
be treated as a QHP solely because the
plan does not offer coverage of pediatric
dental benefits offered through the
SADP.
In the EHB Rule (78 FR at 12853), we
operationalized this provision at section
1302(b)(4)(F) of the ACA to permit QHP
issuers to omit coverage of the pediatric
dental EHB if an Exchange-certified
SADP exists in the same service area in
which they intend to offer coverage. As
a corollary, if no such SADP is offered
through an Exchange in that service
area, then all health plans offered
through the Exchange in that service
area would be required to provide
coverage of the pediatric dental EHB, as
section 2707(a) of the ACA requires all
non-grandfathered plans in the
individual and small group markets to
provide coverage of the EHB package
described at section 1302(a) of the ACA.
However, to our knowledge, at least one
Exchange-certified SADP has been
offered in all service areas nationwide
since implementation of this
requirement in 2014, and no Exchange
has required a medical QHP to provide
coverage of the pediatric dental EHB in
this manner. We solicit comment to
confirm this understanding.
To prevent a situation where this
proposal would require health plans in
those areas to cover the pediatric dental
EHB, we solicit comment on the extent
to which we should finalize a limited
exception to this proposal only for
SADPs that sell plans in areas where it
is prohibitively difficult for the issuer to
establish a network of dental providers;
this exception would not be applicable
to health plans. Under such an
exception, we could consider an area to
be ‘‘prohibitively difficult’’ for the
SADP issuer to establish a network of
dental providers on a case-by-case basis,
taking into account a number of nonexhaustive factors, such as the
availability of other SADPs that use a
provider network in the service area,
and prior years’ network adequacy data
to identify counties in which SADP
issuers have struggled to meet standards
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due to a shortage of dental providers.
Other factors could include an
attestation from the issuer about
extreme difficulties in developing a
dental provider network, or data
provided in the ECP/NA template or
justification forms during the QHP
application submission process that
reflect such extreme difficulties. We
seek comment on whether it would be
appropriate to finalize such an
exception in this rule, other factors that
we might consider in evaluating
whether an exception is appropriate, as
well as alternative approaches to such
an exception.
We seek comment on this proposal, as
well as on other topics included in this
section.
Compliance With Appointment Wait
Time Standards
In the 2023 Payment Notice, HHS
finalized the requirement that issuers
demonstrate compliance with
appointment wait time standards via
attestation, beginning in PY 2024.
Issuers must work with their network
providers to collect the necessary data
to assess appointment wait times and
determine if their provider network
meets the wait time standards detailed
in the 2023 Letter to Issuers, as CMS
will begin conducting such reviews of
issuer attestations for PY 2024.
8. Essential Community Providers
(§ 156.235)
We propose to expand access to care
for low-income and medically
underserved consumers by
strengthening ECP standards for QHP
certification, as discussed in this
section. First, HHS proposes to establish
two additional stand-alone ECP
categories at § 156.235(a)(2)(ii)(B) for PY
2024 and beyond: Mental Health
Facilities and Substance Use Disorder
(SUD) Treatment Centers. In doing so,
two provider types currently categorized
as ‘‘Other ECP Providers’’ (Community
Mental Health Centers and Substance
Use Disorder (SUD) Treatment Centers)
would be recategorized within these
new proposed stand-alone ECP
categories. We propose to crosswalk the
Community Mental Health Centers
provider type into the newly created
stand-alone Mental Health Facilities
category and the SUD Treatment Centers
provider type into the newly created
stand-alone SUD Treatment Centers
category. Additionally, we propose to
add Rural Emergency Hospitals (REHs)
as a provider type in the Other ECP
Providers ECP category. This addition
reflects the fact that on or after January
1, 2023, REHs may begin participating
in the Medicare program. As CMS noted
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in July of this year, ‘‘[t]he REH
designation provides an opportunity for
Critical Access Hospitals (CAHs) and
certain rural hospitals to avert potential
closure and continue to provide
essential services for the communities
they serve.’’ 217 HHS believes that the
inclusion of REHs on the ECP List may
increase access to needed care for lowincome and medically underserved
consumers in rural communities.
ECPs include providers that serve
predominantly low-income and
medically underserved individuals, and
specifically include providers described
in section 340B(a)(4) of the PHS Act and
section 1927(c)(1)(D)(i)(IV) of the Social
Security Act (the Act). Section 156.235
establishes the requirements for the
inclusion of ECPs in QHP provider
networks. Section 156.235(a) requires
QHP issuers to include a sufficient
number and geographic distribution of
ECPs in their networks, where available.
Each plan year, HHS releases a final list
of ECPs to assist issuers with identifying
providers that qualify for inclusion in a
QHP issuer’s plan network toward
satisfaction of the ECP standard under
§ 156.235. The list is not exhaustive and
does not include every provider that
participates or is eligible to participate
in the 340B drug program, every
provider that is described under section
1927(c)(1)(D)(i)(IV) of the Act, or every
provider that may otherwise qualify
under § 156.235. CMS endeavors to
continue improving the ECP list for
future years. These efforts include direct
provider outreach to ECPs themselves,
as well as reviewing the provider data
with Federal partners.
Section 156.235(b) establishes an
Alternate ECP Standard for QHP issuers
that provide a majority of their covered
professional services through physicians
employed directly by the issuer or a
single contracted medical group. We
note that the above proposal
establishing two additional ECP
categories and the proposed threshold
requirements discussed later in this
section would affect all QHP issuers,
regardless of whether they are subject to
the General ECP Standard under
§ 156.235(a) or Alternate ECP Standard
under § 156.235(b). However, SADP
issuers would only be subject to such
requirements as applied to provider
types that offer dental services, as
reflected in § 156.235(a)(2)(ii)(B).
Currently, QHPs that utilize provider
networks are required to contract with
at least 35 percent of available ECPs in
each plan’s service area to participate in
the plan’s provider network. In
217 https://www.cms.gov/newsroom/fact-sheets/
rural-emergency-hospitals-proposed-rulemaking.
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that medical QHP issuers offer a
contract in good faith to at least one
SUD Treatment Center and at least one
Mental Health Facility that qualify as
ECPs in each county in the plan’s
service area, as opposed to being
blended with other provider types in the
existing ‘‘Other ECP Provider’’ category;
and (2) by decreasing the number of
provider types remaining in the ‘‘Other
ECP Provider’’ category, thereby
increasing the likelihood that remaining
provider types included in the ‘‘Other
ECP Provider’’ category will receive a
contract offer from a medical QHP
issuer to satisfy the requirement that
they must offer a contract in good faith
to at least one provider in each ECP
category in each county in the plan’s
service area.
Given that the ECP standard is
facility-based, if finalized as proposed,
the inclusion of SUD Treatment Centers
and Mental Health Facilities on the HHS
ECP List would be limited to those
facilities identified by the Substance
Abuse and Mental Health Services
Administration (SAMHSA) and/or CMS
as providing such services, in addition
to fulfilling other ECP qualification
requirements as specified at
§ 156.235(c).
If finalized as proposed, the eight
available stand-alone ECP categories
would consist of the following: (1)
Federally Qualified Health Centers; (2)
Ryan White Program Providers; (3)
Family Planning Providers; (4) Indian
Health Care Providers; (5) Inpatient
Hospitals, (6) Mental Health Facilities;
(7) SUD Treatment Centers, and (8)
Other ECP Providers, to include Rural
Health Clinics, Black Lung Clinics,
Hemophilia Treatment Centers,
Sexually Transmitted Disease Clinics,
and Tuberculosis Clinics. The proposed
ECP categories and ECP provider types
within those categories in the FFEs for
PY 2024 and beyond are set forth in
Table 13.
TABLE 13: ECP Categories and Provider Types in FFEs, as proposed for PY 2024 and
beyon d
ECP provider types
Major ECP cate2ory
Federally Qualified Health Centers (FQHC)
FQHC and FQHC "Look-Alike" Clinics
Ryan White Program Providers
Ryan White HIV/AIDS Providers
Family Planning Providers
State-owned family planning service sites,
governmental family planning service sites,
including Title X Family Planning Clinics and
Title X "Look-Alike" Family Planning
Clinics, Not-for-profit family planning service
sites that do not receive Federal funding under
special programs, including under Title X of
the PHS Act or other 340B-qualifiying
funding
Indian Health Care Providers
Tribes, Tribal Organization and Urban Indian
Organization Providers, Indian Health Service
Facilities
Inpatient Hospitals
Disproportionate Share Hospital (DSH),
Children's Hospitals, Rural Referral Centers,
Sole Community Hospitals, Free-standing
Cancer Centers, Critical Access Hospitals,
Substance Use Disorder Treatment Centers
Substance Use Disorder Treatment Providers
Mental Health Facilities
Community Mental Health Centers, Other
Mental Health Providers
Other ECP Providers
Black Lung Clinics, Hemophilia Treatment
Centers, Rural Health Clinics, Sexually
Transmitted Disease Clinics, Tuberculosis
Clinics, Rural Emergency Hospitals
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addition, under § 156.235(a)(2)(ii)(B),
medical QHPs must offer a contract in
good faith to at least one ECP in each
of the available ECP categories in each
county in the plan’s service area and
offer a contract in good faith to all
available Indian health care providers in
the plan’s service area. Under
§ 156.235(a)(2)(ii)(B), the six ECP
categories currently include Federally
Qualified Health Centers, Ryan White
Program Providers, Family Planning
Providers, Indian Health Care Providers,
Inpatient Hospitals, and Other ECP
Providers (currently defined to include
Substance Use Disorder Treatment
Centers, Community Mental Health
Centers, Rural Health Clinics, Black
Lung Clinics, Hemophilia Treatment
Centers, Sexually Transmitted Disease
Clinics, and Tuberculosis Clinics).
The proposed establishment of two
new stand-alone ECP categories (Mental
Health Facilities and SUD Treatment
Centers) would strengthen the ECP
standard in two ways: (1) by requiring
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In addition, HHS proposes to revise
§ 156.235(a)(2)(i) to require QHPs to
contract with at least a minimum
percentage of available ECPs in each
plan’s service area within certain ECP
categories, as specified by HHS.
Specifically, HHS proposes to require
QHPs to contract with at least 35
percent of available FQHCs that qualify
as ECPs in the plan’s service area and
at least 35 percent of available Family
Planning Providers that qualify as ECPs
in the plan’s service area. Furthermore,
HHS proposes to revise
§ 156.235(a)(2)(i) to clarify that these
proposed requirements would be in
addition to the existing provision that
QHPs must satisfy the overall 35 percent
ECP threshold requirement in the plan’s
service area. We note that HHS would
retain its current overall ECP provider
participation standard of 35 percent of
available ECPs based on the applicable
PY HHS ECP list, including approved
ECP write-ins that would also count
toward a QHP issuer’s satisfaction of the
35 percent threshold.
HHS is proposing that only two ECP
categories, FQHCs and Family Planning
Providers, be subject to the additional
35 percent threshold in PY 2024 and
beyond. These two categories were
selected, in part, because they represent
the two largest ECP categories; together,
these two categories comprise roughly
62 percent of all facilities on the ECP
List. Applying an additional 35 percent
threshold to these two categories could
increase consumer access in low-income
areas that could benefit from the
additional access to the broad range of
health care services that these particular
providers offer. HHS may consider
applying a specified threshold to other
ECP categories in future rulemaking, if
HHS finds that additional ECP
categories contain a sufficient number
and geographic distribution of providers
to allow for application of the threshold
without inflicting undue burden on
issuers by effectively forcing them to
contract with a few specific providers.
Based on data from PY 2023, it is
likely that a majority of issuers would
be able to meet or exceed the threshold
requirements for FQHCs and Family
Planning Providers without needing to
contract with additional providers in
these categories. To illustrate, if these
requirements had been in place for PY
2023, out of 137 QHP issuers on the
FFEs, 76 percent would have been able
to meet or exceed the 35 percent FQHC
threshold, while 61 percent would have
been able to meet or exceed the 35
percent Family Planning Provider
threshold without contracting with
additional providers. For SADP issuers,
84 percent would have been able to
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meet the 35 percent threshold
requirement for FQHCs offering dental
services without contracting with
additional providers. In PY 2023, for
medical QHPs, the mean and median
percentages of contracted ECPs for the
FQHC category were 74 and 83 percent,
respectively. For the Family Planning
Providers category, the mean and
median percentages of contracted ECPs
were 66 and 71 percent, respectively.
For SADPs, the mean and median
percentages of contracted ECPs for the
FQHC category were 61 and 64 percent,
respectively.
We acknowledge challenges
associated with a general shortage and
uneven distribution of SUD Treatment
Centers and Mental Health Facilities.
However, the ACA requires that a QHP’s
network include ECPs where available.
As such, the proposal to require QHPs
to offer a contract to at least one
available SUD Treatment Center and
one available Mental Health Facility in
every county in the plan’s service area
does not unduly penalize issuers facing
a lack of certain types of ECPs within a
service area, meaning that if there are no
provider types that map to a specified
ECP category available within the
respective county, the issuer is not
penalized. Further, as outlined in prior
Letters to Issuers, HHS prepares the
applicable PY HHS ECP list that
potential QHPs use to identify eligible
ECP facilities. The HHS ECP list reflects
eligible providers (that is, the
denominator) from which an issuer may
select for contracting to count toward
satisfying the ECP standard. As a result,
issuers are not disadvantaged if their
service areas contain fewer ECPs. HHS
anticipates that any QHP issuers falling
short of the 35 percent threshold for PY
2024 and beyond could satisfy the
standard by using ECP write-ins and
justifications. As in previous years, if an
issuer’s application does not satisfy the
ECP standard, the issuer would be
required to include as part of its
application for QHP certification a
satisfactory justification.
We seek comment on these proposals.
9. Termination of Coverage or
Enrollment for Qualified Individuals
(§ 156.270)
a. Establishing a Timeliness Standard
for Notices of Payment Delinquency
We propose to amend § 156.270(f) by
adding a timeliness standard to the
requirement for QHP issuers to send
enrollees notice of payment
delinquency. Specifically, we propose
to revise § 156.270(f) to require issuers
to send notice of payment delinquency
promptly and without undue delay.
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HHS has long required issuers to send
notices of non-payment of premium (77
FR 18469), so that enrollees who
become delinquent on premium
payments are aware and have a chance
to avoid termination of coverage. In
accordance with § 156.270(a), issuers
may terminate coverage for the reasons
specified in § 155.430(b), which under
paragraph (2)(ii) includes termination of
coverage due to non-payment of
premiums. Enrollees who are receiving
APTC and who fail to timely pay their
premiums are entitled to a 3-month
grace period, described at § 156.270(d),
during which they may return to good
standing by paying all outstanding
premium before the end of the 3
months. Enrollees who are not receiving
APTC may also be entitled to a grace
period under State law, if applicable.
HHS has an interest in helping
enrollees maintain coverage by
establishing basic standards of
communication between the QHP issuer
and enrollee regarding premium
payment status, especially at the start of
an enrollment and when an enrollment
has entered delinquency for failure to
timely pay premium and is at risk for
termination. For example, before
Exchange coverage is effectuated, the
Exchanges on the Federal platform
generally require that the enrollee make
a binder payment (first month’s
premium) by prescribed due dates.218 At
§ 156.270(f), HHS has also regulated on
communicating to an enrollee when
they have become delinquent on
premium payment and when their
coverage has been terminated. But while
the regulation at § 156.270(f) requires
that issuers notify enrollees when they
become delinquent on premium
payments, CMS currently sets no
timeliness requirements for issuers. In
conducting oversight of issuers, HHS is
aware that in some instances, issuers
have delayed notifying enrollees of
delinquency. HHS is concerned that
there may be situations in which
enrollees are not timely informed that
they have become delinquent on
premium payments, thus limiting the
amount of time they have available to
rectify the delinquency and avoid
termination of coverage. In extreme
cases, an enrollee may not become
aware that they have become delinquent
until termination of coverage has
already occurred. For example, if an
enrollee (who was not receiving APTC)
failed to pay August’s premium but was
not informed by the issuer they had
become delinquent until September,
they would have already lost coverage
and would not have an opportunity to
218 See
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restore it. There may also be uncertainty
among issuers regarding their
requirement to send notices of
delinquency, since HHS has not
provided guidance on when this notice
must be sent.
Modifying § 156.270(f) to require
issuers to send notices of payment
delinquency promptly and without
undue delay would ensure that issuers
are promptly sending these notices
when enrollees fail to make premium
payments, so that enrollees are aware
they are at risk of losing coverage,
including when they are entering a
grace period (either the 3-month grace
period for enrollees who are receiving
APTC, or a State grace period if
applicable). It would also provide
clarity to issuers regarding their
obligation to send a notice when an
enrollee becomes delinquent on
premium payment. Finally, updating
this regulation would serve HHS’ goal of
promoting continuity of coverage by
ensuring enrollees are aware they have
become delinquent on premium
payment and have a chance to pay their
outstanding premium to avoid losing
coverage. To further help ensure that
notices are sent in a timely and uniform
manner, HHS also believes it would be
important to specify the number of days
within which the issuer must send
notice from the time an enrollee
becomes delinquent on payment.
However, we also recognize that issuers
have a variety of practices for sending
delinquency notices, and thus we
request comment on what a reasonable
timeframe would be for sending notices
of delinquency to enrollees.
We seek comments on this proposal.
10. Final Deadline for Reporting
Enrollment and Payment Inaccuracies
Discovered After the Initial 90-Day
Reporting Window (§ 156.1210(c))
We propose to amend § 156.1210(c) to
remove the alternate deadline at
§ 156.1210(c)(2) that allows an issuer to
describe all data inaccuracies identified
in a payment and collection report by
the date HHS notifies issuers that the
HHS audit process with respect to the
plan year to which such inaccuracy
relates has been completed, in order for
these data inaccuracies to be eligible for
resolution.
In prior rulemakings (78 FR 65080
through 65081, 85 FR 29254, and 86 FR
24256 through 24258), we established
provisions at § 156.1210 related to the
review and identification of
inaccuracies in the monthly payment
and collection reports provided by HHS
for Exchange coverage. These reports
currently include information on APTC
the Federal Government is paying to the
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issuer for each policy listed on the
report, any amounts owed by the issuer
for FFE and SBE–FP user fees, as well
as any adjustments from previous
payments under those programs. This
process is intended to confirm that
accurate payments are made and to
facilitate adjustments where
inaccuracies are identified. The policies
and standards governing this process
have evolved over time as HHS, State
Exchanges, and issuers have gained
experience with handling payment
errors and enrollment reconciliation
activities for Exchange coverage. Issuers
are generally required to review these
detailed monthly reports against the
payments they expect for each policy
based on the eligibility and enrollment
information transmitted by the
Exchange, and any amounts it expects
the Federal Government to collect for
FFE and SBE–FP user fees. If an issuer
identifies an inaccuracy in these
amounts (including incorrect payment
amounts, or extra or missing policies in
the report), it must notify HHS or the
State Exchange (as applicable) within
certain timeframes. HHS works with
issuers and State Exchanges (as
applicable) to resolve any discrepancies
between the amounts listed in the
payment and collections report and the
amounts the issuer believes it should
receive for the time period(s) specified
on the report. The prompt identification
and correction of payment and
enrollment errors protects enrollees
from unanticipated tax liability that
could result if the APTC is greater than
the amount authorized by the Exchange
and accepted by the enrollee. It also
supports the efficient operation of
Exchanges by aligning the Exchange’s
enrollment and eligibility data,
payments provided by and collected by
HHS for Exchange coverage, and the
issuer’s own records of payments due.
Section 156.1210(c) currently
establishes the final deadline to report
inaccuracies identified in a payment
and collections report for discovered
underpayments 219 as before the later of
(1) the end of the 3-year period
beginning at the end of the plan year to
which the inaccuracy relates or (2) the
date by which HHS notifies issuers that
the HHS audit process with respect to
the plan year to which such inaccuracy
relates has been completed. The final 3year or end of the HHS audit process
deadline set forth in § 156.1210(c)(1)
and (2) is significant because HHS will
only provide payment to the issuer for
219 Underpayment refers to both APTC
underpayments to the issuer and user fee
overpayments to HHS, for which an issuer would
be entitled to additional payment from HHS.
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identified data inaccuracies related to
discovered underpayments reported
before this deadline.220 As we explained
in part 2 of the 2022 Payment Notice (86
FR 24257), under section 1313(a)(6) of
the ACA, ‘‘payments made by, through,
or in connection with an Exchange are
subject to the False Claims Act (31
U.S.C. 3729, et. seq.) if those payments
include any Federal funds.’’ As such, if
any issuer has an obligation to pay back
APTC or pay additional user fees, the
issuer could be liable under the False
Claims Act for knowingly and
improperly avoiding the obligation to
pay. Section 156.1210(c)(3) therefore
states that if a payment error is
discovered after the 3-year or end of
audit reporting deadline as set forth at
§ 156.1210(c)(1) and (2), the issuer is
obligated to notify HHS and the State
Exchange (as applicable) and repay any
overpayment.
After further consideration of the final
deadline for reporting identified data
inaccuracies for discovered
underpayments, we propose, beginning
with adjustments to APTC and user fee
payments and collections for 2015 plan
year coverage,221 to remove the alternate
deadline currently set forth at
§ 156.1210(c)(2) to ensure HHS and
Exchange processes for handling
payment and enrollment disputes
related to discovered underpayments
are completed before the existing IRS
limitation on filing corrected tax
returns. We further propose to revise
§ 156.1210(c) to generally include the
final 3-year deadline to identify and
report data inaccuracies for discovered
underpayments.222 As such, the first
sentence in proposed new § 156.1210(c)
would provide that to be eligible for
resolution under § 156.1210(b), the
issuer must describe all inaccuracies
identified in a payment and collections
report before the end of the 3-year
period beginning at the end of the plan
220 HHS will work with the issuer or the State
Exchange (as applicable) to resolve the inaccuracy
in these situations as long as the issuer meets other
applicable requirements. For example, the issuer
must demonstrate that failure to identify the
inaccuracy and submit it to HHS or the State
Exchange (as applicable) in a timely manner (within
the 90-day reporting window under § 156.1210(a))
was not unreasonable or due to the issuer’s
misconduct or negligence. See 45 CFR
156.1210(b)(2). In addition, once identified, the
issuer must notify HHS or the State Exchange (as
applicable) within 15 days of identifying the
inaccuracy. See 45 CFR 156.1210(b)(1).
221 The 2014 plan year is excluded because the
alternative deadline for reporting inaccuracies
closed upon completion of the 2014 audits. See
CMS. (2019, April 1). CMS Issuer Audits of the
Advanced Payments of the Premium Tax Credit.
www.cms.gov/CCIIO/Resources/Forms-Reports-andOther-Resources/Downloads/2014-CMS-APTCAudits.PDF.
222 See 45 CFR 156.1210(c)(1).
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year to which the inaccuracy relates. By
requiring all issuers in all Exchanges 223
to adhere to the final 3-year deadline for
identifying and reporting discovered
underpayments, HHS would be
balancing the desire to continue to
provide issuers flexibility to identify
and report discovered underpayments
after the initial 90-day reporting
window at § 156.1210(a), to encourage
the prompt reporting and timely
resolution of data inaccuracies, and to
establish a more consistent, predictable,
and less operationally burdensome
process for the identification and
resolution of such inaccuracies for
enrollees, issuers, HHS, and State
Exchanges.
Under this proposal, and consistent
with the deadline currently set forth in
§ 156.1210(c)(1), for 3 years after the end
of the applicable plan year, HHS would
accept and work with the issuer (or
State Exchange, as applicable) to resolve
the identified data inaccuracies for
discovered underpayments, and would
process resulting payment corrections
through policy-level data, which would
generate new Forms 1095–A for
impacted enrollees’, if other applicable
requirements are met.224 Establishing a
firm 3-year timeframe to resolve data
inaccuracies and make subsequent
adjustments for discovered APTC
underpayments ensures that new Forms
1095–A are generated and sent to
enrollees and filed with the IRS with
sufficient time for the enrollee to
potentially amend their tax filing with
the IRS. This change would therefore
provide greater consistency and
predictably for enrollees and reduce
potential confusion caused by the
receipt of Forms 1095–A outside of the
allowable re-filing window with the
IRS. In addition to reducing enrollee
confusion, requiring adherence to a firm
3-year final deadline to report data
inaccuracies for discovered APTC
underpayments (or user fee
overpayments) would also benefit
issuers by ensuring a more consistent
and predictable timeline for resolution
of these data inaccuracies. Aligning the
payment and enrollment final dispute
timeline with the 3-year Form 1095–A
223 The requirements captured in 45 CFR
156.1210 apply to all issuers who receive APTC,
including issuers in State Exchanges. See part 2 of
the 2022 Payment Notice, 86 FR at 24258.
224 For example, the issuer must demonstrate the
failure to identify and promptly report the data
inaccuracies and discovered underpayments within
the initial 90-day reporting window, under
§ 156.1210(a), was not unreasonable or due to the
issuer’s misconduct or negligence. See
§ 156.1210(b)(2). In addition, once identified, the
issuer must notify HHS or the State Exchange (as
applicable) within 15 days of identifying the
inaccuracy. See § 156.1210(b)(1).
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timeline would limit administrative
burden on issuers, State Exchanges, and
HHS by standardizing these related
processes for resolving errors and
generating new Forms 1095–A for
enrollees.
Under this proposal, beginning with
the 2020 plan year coverage, HHS
would not pay additional APTC
payments or reimburse user fee
payments for FFE, SBE–FP, and SBE
issuers for data inaccuracies reported
after the 3-year deadline. HHS would
require issuers to adhere to the 3-year
deadline to submit all disputes and
address all errors, instead of utilizing
the end of the audit process as an
alternative timeframe to receive
additional APTC or reimbursement of
user fee payments beyond the 3-year
deadline. Thus, HHS would not accept
or take action that results in an outgoing
payment on data inaccuracies or
payment errors for 2020 plan year
coverage that are reported after
December 31, 2023. Similarly, HHS
would not accept or take action that
results in an outgoing payment on data
inaccuracies or payment errors for 2021
plan year coverage that are reported
after December 31, 2024, and so on.
Additionally, we propose that HHS
would not accept or take action that
results in an outgoing payment on data
inaccuracies or payment errors for the
2015 through 2019 plan year coverage
that are reported after December 31,
2023. If finalized, this proposal would
grant issuers some additional time after
this rule is finalized to submit any
inaccuracies for the 2015 through 2019
plan year coverage, for which
submission would no longer be
permitted if this proposal was effective
upon finalization.
We are not proposing any changes to
the general framework outlined in
§ 156.1210(c)(3), which currently states
that if a payment error is discovered
after the final deadline set forth in
§ 156.1210(c)(1) and (2), the issuer must
notify HHS, the State Exchange, or SBE–
FP (as applicable) and repay any
overpayments to HHS. We propose to
retain this language as the last sentence
of new proposed § 156.1210(c), except
for the reference to the alternative
deadline at § 156.1210(c)(2).
With regard to issuers in State
Exchanges, we further affirm that this
proposal would not change the
requirement that issuers promptly
identify and report data inaccuracies to
the State Exchange.225 Under the
225 As previously noted, the requirements
captured in 45 CFR 156.1210 apply to all issuers
who receive APTC, including issuers in State
Exchanges. Also see part 2 of the 2022 Payment
Notice, 86 FR at 24258.
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proposed revisions to § 156.1210(c),
issuers in State Exchanges would be
subject to the same final 3-year deadline
to work with the State Exchange to
resolve any enrollment or payment
inaccuracies identified after the initial
90-day reporting window for discovered
underpayments. Similarly, we also
propose that HHS would not make any
payments to issuers in State Exchanges
on data inaccuracies or payment errors
for 2015 through 2019 plan year
coverage that are reported after
December 31, 2023. Issuers in State
Exchanges would also remain subject to
the existing requirement to report data
inaccuracies identified at any time
when related to overpayments. We note
that when HHS initially proposed the
deadline of 3 years or the date by which
the HHS audit process is completed, as
currently described at § 156.1210(c), we
requested comment on the ability of
State Exchanges to resolve data
inaccuracies and report payment
adjustments to HHS under the 3-year
deadline framework currently captured
in § 156.1210(c)(1). We did not receive
any comments objecting to this
timeframe based on the ability of State
Exchanges to resolve such disputes, and
therefore, believe that the current
proposal to set the final deadline to
identify and report data inaccuracies for
discovered underpayments at 3 years is
reasonable and will not pose a challenge
to State Exchanges or issuers.
We seek comment on this proposal.
11. Administrative Appeals (§ 156.1220)
As discussed in section III.A.7.d. of
this preamble (HHS–RADV Discrepancy
and Administrative Appeals Process),
we propose amendments to
§ 156.1220(a)(4)(ii) to add a reference to
new proposed § 153.630(d)(3). As
discussed in section III.A.7.d of this
preamble, under new proposed
§ 153.630(d)(3), we would retain the 30calendar-day window to confirm, or file
a discrepancy, regarding the calculation
of the risk score error rate as a result of
HHS–RADV. Under this proposal, the
cross-reference to § 153.630(d)(2) in
§ 156.1220(a)(4)(ii) would be maintained
and would capture the new proposed
15-calendar-day window to confirm, or
file a discrepancy, for SVA findings (if
applicable).
In addition, we propose to amend
§ 156.1220(b)(1) to address situations
when the last day of the period to
request an informal hearing does not fall
on a business day. In these cases, we
propose that the deadline to request an
informal hearing would be extended to
the next applicable business day. This
proposal is consistent with our policy
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for other risk adjustment deadlines that
do not fall on a business day.226
We solicit comment on these
proposed amendments.
IV. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995, we are required to provide 60day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
and Budget (OMB) for review and
approval. In order to fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we
solicit comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of the agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
We are soliciting public comment on
each of these issues for the following
sections of this document that contain
information collection requirements
(ICRs).
A. Wage Estimates
To derive wage estimates, we
generally used data from the Bureau of
Labor Statistics to derive average labor
costs (including a 100 percent increase
for the cost of fringe benefits and
overhead) for estimating the burden
associated with the ICRs.227 Table 14 in
this proposed rule presents the mean
hourly wage, the cost of fringe benefits
and overhead, and the adjusted hourly
wage.
As indicated, employee hourly wage
estimates have been adjusted by a factor
of 100 percent. This is necessarily a
rough adjustment, both because fringe
benefits and overhead costs vary
significantly across employers, and
because methods of estimating these
costs vary widely across studies.
Nonetheless, there is no practical
alternative, and we believe that
doubling the hourly wage to estimate
total cost is a reasonably accurate
estimation method.
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B. ICRs Regarding Repeal of Risk
Adjustment State Flexibility To Request
a Reduction in Risk Adjustment State
Transfers (§ 153.320(d))
We propose to repeal the flexibility
for any State, including prior participant
States, to request a reduction in risk
adjustment State transfers in all State
market risk pools beginning with the
2025 benefit year. As such, we propose
several amendments to § 153.320(d).
The burden currently associated with
this requirement is the time and effort
for the State regulator to submit its
request and supporting evidence and
analysis to HHS. In the Standards
Related to Reinsurance, Risk Corridors,
and Risk Adjustment information
collection (OMB control number: 0938–
1155), we estimated that submitting the
request and supporting evidence and
analysis would take a business
operations specialist 40 hours (at a rate
of $76.20 per hour) to prepare the
226 See,
for example, 45 CFR 153.730.
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$78.33
$78.33
$156.66
43-6014
$19.75
$19.75
$39.50
request and 20 hours for a senior
operations manager (at a rate of $110.82
per hour) to review the request and
transmit it electronically to HHS. We
estimated that each State seeking a
reduction would incur a burden of 60
hours at a cost of approximately
$5,264.40 per State to comply with this
reporting requirement (40 hours for the
operations specialist and 20 hours for
the operations manager).
Since this proposal would eliminate
the ability of the one prior participating
State (Alabama) to request this
flexibility beginning with benefit year
2025, we similarly propose to rescind
this information collection beginning
with the 2025 benefit year. The burden
associated with this information
collection estimated above would be
removed if this proposal is finalized,
since no State would have the
opportunity to request this flexibility
moving forward. This information
collection is approved under OMB
control number 0938–1155, and if this
proposal is finalized, HHS would
rescind the information collection under
OMB control number 0938–1155
accordingly and provide the applicable
comment periods once the policy is no
longer in effect.
We seek comment on this proposed
rescission.
227 See May 2021 Bureau of Labor Statistics,
Occupational Employment Statistics, National
Occupational Employment and Wage Estimates.
Available at https://www.bls.gov/oes/current/oes_
stru.htm.
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C. ICRs Regarding Risk Adjustment
Issuer Data Submission Requirements
(§§ 153.610, 153.700, and 153.710)
We propose to require issuers to
collect and make available for HHS’
extraction from issuers’ EDGE servers a
new data element, a QSEHRA indicator.
We propose to adopt the same
transitional approach and schedule for
the population of the QSEHRA indicator
as was finalized for the ICHRA indicator
in the 2023 Payment Notice. Under this
proposal, for the 2023 and 2024 benefit
years, issuers would be required to
populate the QSEHRA indicator using
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data they already collect or have
accessible regarding their enrollees.
Then, beginning with the 2025 benefit
year, issuers that do not have an existing
source to populate this field for
particular enrollees would be required
to make a good faith effort to collect and
submit the QSEHRA indicator for these
enrollees. We propose to extract this
data element beginning with the 2023
benefit year and also propose to include
the QSEHRA indicator in the enrolleelevel EDGE limited data sets available to
qualified researchers upon request, once
available.
We propose to begin collection of the
QSEHRA indicator with the 2023
benefit year, and estimate that
approximately 650 issuers of risk
adjustment covered plans would be
subject to this data collection. We
propose to collect a QSEHRA indicator
from issuers’ ESES files and risk
adjustment recalibration enrollment
files. We believe the burden associated
with the collection of this data would be
similar to that of the collection of
ICHRA indicator finalized in the 2023
Payment Notice. Much like the ICHRA
indicator data, we believe that some
issuers already collect or have access to
the relevant information to populate the
QSEHRA indicator. However, we do not
believe the information to populate the
QSEHRA indicator is routinely collected
by all issuers at this time; therefore, we
anticipate that there may be
administrative burden for some issuers
in developing processes for collection,
validation, and submission of this new
data element. In recognition of the
burden that collection of this new data
element potentially would pose for
some issuers, we propose to adopt a
transitional approach for the QSEHRA
indicator that mirrors the approach
finalized for the ICHRA indicator in the
2023 Payment Notice and is similar to
how we have handled other new data
collection requirements.228 For
successful EDGE server data
submission, each issuer would need to
update their file creation process to
include the new data element, which
would require a one-time administrative
cost. After incorporating the most
recently updated wage estimate data, we
estimate this one-time administrative
cost at $579.96 per issuer (reflecting 6
hours of work by a management analyst
228 For example, HHS did not penalize issuers for
temporarily submitting a default value for the in/
out-of-network indictor for the 2018 benefit year to
give issuers time to make the necessary changes to
their operations and systems to comply with the
new data collection requirement, but required
issuers to provide full and accurate information for
the in/out-of-network indicator beginning with the
2019 benefit year.
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at an average hourly rate of $96.66 per
hour). Based on this, we estimate the
cumulative one-time cost to update
issuers’ file creation process to be
$376,974 for 650 issuers (3,900 total
hours for all issuers). We also estimate
a cost of $96.66 in total annual labor
costs for each issuer which reflects 1
hour of work by a management analyst
per issuer at an average hourly rate of
$96.66 per hour. Based on this, we
estimate $62,829 in total annual labor
costs for 650 issuers (650 total hours per
year for all issuers). We believe that this
proposed data collection should not
pose significant additional operational
burden to issuers given that the
operational burden associated with
populating the QSEHRA indicator
should be aided by the requirement
finalized in the 2023 Payment Notice
mandating the collection of the ICHRA
indicator in the same fashion. The
proposed extraction of the new
proposed QSEHRA indicator should
also not pose additional burden to
issuers since the creation and storage of
the extract—which issuers do not
receive—are mainly handled by HHS. If
finalized, HHS would revise the
information collection request to
account for the burden associated with
this policy, and would provide the
applicable comment periods.229
We also propose to amend the
applicability date for the extraction of
the plan ID and rating area data
elements to extend the extraction of
these two data elements to the 2017,
2018, 2019 and 2020 benefit year data
sets. As detailed earlier and in prior
rulemakings, issuers have been required
to collect and submit these two data
elements as part of the required risk
adjustment data since the 2014 benefit
year. Therefore, HHS estimates that the
proposal to extract these data elements
would not pose additional operational
burden to the majority of issuers, since
the creation and storage of the extract—
which issuers do not receive—is mainly
handled by HHS. However, some issuers
may not have benefit year 2017, 2018,
2019, or 2020 data readily available for
extraction from their EDGE servers, and
therefore, there may be some burden
associated with restoring past years’
data to their respective EDGE servers
should this be the case. Our intention
with this policy proposal is to limit the
burden on issuers for us to collect and
extract the plan ID and rating area data
elements from additional prior benefit
year data. Therefore, while we broadly
solicit comment on these data collection
229 Standards Related to Reinsurance, Risk
Corridors, and Risk Adjustment (OMB control
number 0938–1155).
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proposals, we specifically solicit
comments on this burden estimate and
ways that we can further limit the
burden on extracting these two data
elements from the 2017, 2018, 2019 and
2020 benefit year data sets.
D. ICRs Regarding Risk Adjustment Data
Validation Requirements When HHS
Operates Risk Adjustment (HHS–RADV)
(§ 153.630)
Under § 153.630(g)(2), issuers below a
materiality threshold, as defined by
HHS, are exempt from the annual HHS–
RADV audit requirements in
§ 153.630(b). While these issuers are
exempt from the annual HHS–RADV
audit process, they are subject to
random and targeted sampling such that
they undergo HHS–RADV
approximately every 3 years (barring
any risk-based triggers based on
experience that would warrant more
frequent audits). We propose, beginning
with 2022 benefit year HHS–RADV, to
change the materiality threshold from
$15 million in total annual premiums
Statewide in the benefit year being
audited to 30,000 BMM Statewide in the
benefit year being audited.
We estimate that this proposal will
not significantly impact issuer burden
relative to previous estimates for HHS–
RADV and the current materiality
threshold. In particular, the proposed
threshold will not significantly alter the
anticipated number of issuers that
would fall under the materiality
threshold and be subject to random and
targeted sampling rather than the annual
audit requirements. We estimate that
each year, on average, there are 197
issuers of risk adjustment covered plans
with total annual Statewide premiums
below $15 million and 201 issuers of
risk adjustment covered plans below
30,000 BMM Statewide. If we assume
one-third of issuers below the
materiality threshold would be subject
to HHS–RADV each year, we estimate
that the total number of issuers selected
for HHS–RADV that fall under the
materiality threshold would remain
fairly constant. We believe that the
number of issuers participating in HHS–
RADV for any given benefit year under
the proposed 30,000 BMM Statewide
threshold will not be significantly
different than the number of issuers
participating under the current $15
million total annual premium Statewide
threshold and reflected in our current
HHS–RADV burden estimates, and
therefore, we believe that there will not
be an overall increase or decrease in
burden. If finalized, we would revise the
information collection currently
approved under OMB control number
0938–1155 to account for the changes to
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the HHS definition for the materiality
threshold in § 153.630(g)(2).
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E. ICRs Regarding Navigator, NonNavigator Assistance Personnel, and
Certified Application Counselor
Program Standards (§§ 155.210 and
155.225)
This proposal would not impose any
new information collection
requirements, that is, reporting,
recordkeeping or third-party disclosure
requirements. Though CMS requires
Navigator grantees to track enrollment
numbers on weekly, monthly, and
quarterly progress reports, this is
already accounted for in an existing
PRA package (OMB control number
0938–1205, Exchange Functions:
Standards for Navigators and NonNavigator Assistance Personnel—CAC),
and they are not required to specifically
track enrollments completed for door-todoor enrollments.
F. ICRs Regarding Providing Correct
Information to the FFEs (§ 155.220(j))
As discussed in the preamble of this
proposed rule, we are proposing
amendments to § 155.220(j)(2)(ii) to
require agents, brokers, and web-brokers
to document that eligibility application
information has been reviewed by and
confirmed to be accurate by the
consumer or their authorized
representative prior to application
submission. This proposal would
require the consumer or their authorized
representative to take an action that
produces a record that they reviewed
and confirmed the information on the
eligibility application to be accurate
prior to application submission. This
documentation would be required to be
maintained by agents, brokers, and webbrokers for a minimum of 10 years and
produced upon request in response to
monitoring, audit, and enforcement
activities.
We estimate costs will be associated
with this proposal, including those
related to documenting, maintaining,
and producing the documentation. Our
proposal, if finalized, would not
mandate any method or prescribe a
template for documenting that a
consumer or their authorized
representative reviewed and confirmed
the accuracy of their eligibility
application information. It would be up
to the agents, brokers, and web-brokers
to determine the best way to meet these
proposed regulatory requirements.
Costs related to requiring the
consumer take some affirmative action
to memorialize the review of application
information are as follows. We estimate
it would take an additional 5 minutes
for an enrolling agent, broker, or web-
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broker to obtain documentation from a
consumer or their authorized
representative that they have reviewed
and confirmed the accuracy of their
application information. Billing at
$66.68 per hour using the Insurance
Sales Agent occupation code, each
enrollment will have approximately
$5.33 additional cost associated with it
based on extra time commitment. In PY
2021, agents submitted 3,630,849
policies. This makes the yearly total cost
associated with the extra time per
enrollment approximately
$19,352,425.17 (3,630,849 × $5.33).
Costs associated with maintaining
consumer or their authorized
representative’s documentation would
depend on the method selected by the
agent, broker, or web-broker to meet the
regulatory requirements. For those
agents, brokers, or web-brokers
currently meeting the requirements, no
additional costs would be incurred. If an
enrolling entity opts to use paper for
documentation, they would bear the
costs of paper, ink and filing cabinets to
store the paperwork.
HHS would only require an agent,
broker, or web-broker to produce
retained records in limited
circumstances related to monitoring,
audit, and enforcement activities. In
instances of fraud investigation, HHS
typically asks for documentation
associated with approximately 10
different applications, generally from
the past 2 to 3 years. We estimate it
would take an agent approximately 2
hours to gather consumer
documentation for 10 applications. Each
year, HHS generally investigates
approximately 50 agents, brokers, or
web-brokers. Therefore, we estimate the
yearly cost of producing documentation
for HHS to be approximately $6,668
(($66.68 hourly rate × 2 hours) × 50).
The documentation would be able to be
mailed electronically, so there would be
no cost associated with printing or
mailing the documentation. Agencywide audits are not completed often by
HHS but may become more widespread.
In those instances, HHS would ask the
agency to produce a certain number of
records from the past 10 years.
We seek comment on these burden
estimates.
G. ICRs Regarding Documenting Receipt
of Consumer Consent (§ 155.220(j))
As discussed earlier in the preamble
of this proposed rule, we are proposing
amendments to § 155.220(j)(iii) to
require agents, brokers, and web-brokers
to document the receipt of consumer
consent. This proposal would require
the consumer or their authorized
representative to take an action that
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produces a record that they provided
consent. Agents, brokers, and webbrokers would be required to maintain
the records for a minimum of 10 years
and produce the records upon request in
response to monitoring, audit, and
enforcement activities.
We estimate costs will be associated
with this proposal, including those
related to documenting, maintaining,
and producing the records of consumer
consent. Our proposal, if finalized,
would not mandate any method or
prescribe a template for documenting
receipt of consumer consent. It would
be up to the agents, brokers, and webbrokers to determine the best way to
meet these proposed regulatory
requirements. As agents, brokers, and
web-brokers are currently required to
obtain consumer consent prior to
assisting them, the requirement to
obtain consent would not add any costs
to the enrolling agent, broker, or webbroker.
Costs related to requiring that the
consumer or their authorized
representative take some affirmative
action to memorialize that consent was
provided are as follows. We estimate it
would take about 5 minutes for an
enrolling agent, broker or web-broker to
obtain consumer, or their authorized
representative, affirmation of their
consent. Using the adjusted hourly wage
rate of $66.68 for an Insurance Sales
Agent, each enrollment will have
approximately $5.33 in additional cost
associated with it based on the extra
time commitment from these proposed
policy changes. In PY 2021, agents
submitted 3,630,849 policies. Based on
this number of enrollments, the total
annual burden is 290,468 hours with a
total annual cost of $19,352,425.17.
HHS would only require an agent,
broker, or web-broker to produce
retained records in limited
circumstances related to fraud
investigation or agency audits. In
instances of fraud investigation, HHS
typically asks for consent records of
approximately 10 different applications,
generally from the past 2 to 3 years. We
estimate it would take an agent
approximately 2 hours to gather consent
documentation for 10 applications. Each
year, HHS generally investigates
approximately 50 agents, brokers, or
web-brokers. Therefore, we estimate the
yearly cost of producing consumer
consent documentation to HHS to be
approximately $6,668 (($66.68 hourly
rate × 2 hours) × 50). These records are
able to be mailed electronically, so there
would be no cost associated with
printing or mailing the records. Agencywide audits are not completed often by
HHS but may become more widespread.
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In those instances, HHS would ask the
agency to produce a certain number of
records from the past 10 years.
The estimated total annual cost of
memorializing the documentation of
consumer consent is $19,352,425.17,
and the estimated total cost of
producing the retained eligibility and
consent records is $6,668.00. Combined,
the total annual cost of the proposed
information collection requirements is
$19,359,093.17.
We seek comment on these burden
estimates.
lotter on DSK11XQN23PROD with PROPOSALS2
H. ICRs Regarding Failure To File and
Reconcile Process (§ 155.305(f))
We are proposing to amend current
regulation at § 155.305(f)(4) under
which an Exchange may not find a
consumer eligible for APTC where a
consumer has failed to file a tax return
reconciling their APTC for a previous
year to provide more flexibility to
Exchanges to ensure that consumers are
complying with the requirement to file
their Federal income tax returns and
reconcile past year’s APTC, while
ensuring continuity of coverage in
Exchange QHPs. We are proposing to
provide Exchanges the option to end
APTC after 1 year of a taxpayer’s (or
taxpayer’s spouse, if married) failure to
file and reconcile APTC, or only after
two consecutive years of a taxpayer’s
failure to file and reconcile APTC.
On Exchanges on the Federal
platform, FTR would otherwise be
conducted in the same as manner it had
previously been conducted, with
minimal changes to the language of the
Exchange application questions
necessary to obtain relevant
information; as such, we anticipate that
the proposed amendment will not
impact the information collection (OMB
control number 0938–1191) burden for
consumers.
I. ICRs Regarding Income
Inconsistencies (§§ 155.315 and
155.320)
Section 155.320 requires the
Exchange to generate an income DMI
and proceed with the process in
§ 155.315(f)(1) through (4) when there is
no IRS data available to verify attested
projected annual household income or
when such IRS data available but it is
inconsistent with the projected annual
household income attestation. In order
to verify an applicant or enrollee’s
attested projected annual household
income to determinate eligibility for
APTC and CSRs, an applicant generally
must mail or upload documentation
which must then be reviewed by an
HHS eligibility support staffer. We
propose to amend § 155.320 to require
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Exchanges to accept attestation when
the Exchange requests tax return data
from the IRS to verify attested projected
annual household income, but the IRS
confirms there is no such tax return data
available.
Based on historical DMI data, we
estimate that HHS would conduct
document verification for 1.2 million
fewer households per year. Once
households have submitted the required
verification documents, we estimate that
it takes approximately 12 minutes for an
eligibility support staff person
(occupation No. 43–4061), at an hourly
cost of $46.70, to review and verify
submitted verification documents. The
proposed revisions to § 155.320 would
result in a decrease in annual burden for
the Federal Government of 240,000
hours at a cost of $11,208,000.
In addition to the reduced
administrative burden for HHS
eligibility support staff, the proposed
change would reduce the time
consumers spend submitting
documentation to verify their income.
We estimate that consumers each spend
1 hour to submit documentation and
that the proposed change would
decrease burden on consumers by 1.2
million hours per year.
We would revise the information
collection currently approved under
OMB control number 0938–1207
(Medicaid and Children’s Health
Insurance Programs: Essential Health
Benefits in Alternative Benefit Plans,
Eligibility Notices, Fair Hearing and
Appeal Processes, and Premiums and
Cost Sharing; Exchanges: Eligibility and
Enrollment) to account for this
decreased burden. Given that this
change entails a reduction in consumer
burden, the 30-day notice soliciting
public comment will be published in
the Federal Register at a future date.
J. ICRs Regarding the Improper Payment
Pre-Testing and Assessment (IPPTA) for
State Exchanges (§§ 155.1500–155.1515)
As described in the preamble to
§ 155.1510, the IPPTA is proposed to
replace the existing voluntary State
engagement initiative with mandatory
participation and related requirements.
The IPPTA is designed to test processes
and procedures that support HHS’s
review of determinations of APTC made
by State Exchanges and to prepare State
Exchanges for the planned measurement
of improper payments.
In the preamble to § 155.1510(a)(1),
we propose that State Exchanges
provide to HHS: (1) the State Exchange’s
data dictionary including attribute
name, data type, allowable values, and
description; (2) an entity relationship
diagram; and (3) business rules and
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related calculations. This data
documentation is currently retained by
State Exchanges in a digital format and
can be electronically transmitted to
HHS. We estimate that the burden
associated with this data transfer would
be no more than 22 hours.
In the preamble to § 155.1510(a)(2),
we propose that HHS will provide State
Exchanges with the pre-testing and
assessment data request form. HHS
proposes to review the form and its
instructions with each State Exchange
prior to the State Exchange completing
and returning the form and required
data to HHS. Both the pre-testing and
assessment data request form and the
requested source data are in an
electronic format. The burden
associated with completion and return
of the pre-testing and assessment data
request form and required data would
be the time it would take each State
Exchange to meet with HHS to review
the form and its requirements, analyze
and design the database queries based
on the data elements identified in the
form, electronically transmit the data to
HHS, and meet with HHS to verify and
validate the data.
We expect respondent costs will not
substantially vary since the data being
collected is largely in a digitized format
and that each State Exchange will be
providing the application data and
consumer submitted documents for
approximately 10 tax households. We
seek comment on these assumptions.
We estimate that gathering and
transmitting the data documentation as
specified in § 155.1510(a)(1) and
completion of the pre-testing and
assessment data request form as
specified in § 155.1510(a)(2) would take
530 hours per respondent at an
estimated cost of $56,986.48 per
respondent. To compile our estimates,
we referenced our experience collecting
data in our FFE pilot initiative and in
working with State Exchanges in the
existing voluntary State engagement
initiative. We identified specific
personnel and the number of hours that
would be involved in collecting the data
broken down by specific area (for
example, eligibility verification, auto-reenrollment, periodic data matching,
enrollment reconciliation, plan
management, and manual reviews
including document retrieval).
Hourly wage rates vary from $92.92
for a Computer Programmer to $156.66
for a Computer and Information Systems
Manager depending on occupation code
and function. With a mean hourly rate
of $111.07 for the respective occupation
codes, the burden across the 18 State
Exchanges equals 9,540 hours for a total
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cost of up to $1,025,756. We seek
comment on these burden estimates.
K. ICRs Regarding QHP Rate and Benefit
Information (§ 156.210)
In this proposed rule, we propose to
require issuers of Exchange-certified
stand-alone dental plans (SADPs),
whether they are sold on- or offExchange, to use the age on effective
date methodology as the sole method to
calculate an enrollee’s age for rating and
eligibility purposes, as a condition of
QHP certification, beginning with
Exchange certification for PY 2024. This
rule does not propose to alter any of the
information collection requirements
related to age determination for rating
and eligibility purposes during the QHP
certification process in a way that
would create any additional costs or
§ 155.220(j)
§ 155.320
§ 155.1510
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20:34 Dec 20, 2022
M. Summary of Annual Burden
Estimates for Proposed Requirements
-1
-1
-60
650
1
-60
650
-$5,264.40
$62,829
-$5,264.40
$62,829
50
50
2
100
$6,668
$6,668
3,630,849
3,630,849
0.08
290,467.92
$19,352,425.17
$19,352,425.17
-1,200,000
18
-1,200,000
18
-0.2
530
-240,000
9,540
-$11,208,000
$1,025,756
-$11,208,000
$1,025,756
2,431,566
2,431,566
60,697.92
$9,234,413.77
$9,234,413.77
This proposed rule includes one
proposal—repealing risk adjustment
State flexibility to request a reduction in
risk adjustment State transfers
(§ 153.320(d))—with information
collection requests which seeks to use
this rulemaking as the Federal Register
notice through which to receive
comment on its proposed revisions to
the associated PRA package.
The following proposals with
associated information collection
requests will be submitted for PRA
approval outside of this rulemaking,
through separate Federal Register
notices: risk adjustment issuer data
submission requirements (§§ 153.610,
153,700, and 153.710); and income
inconsistencies (§ 155.320).
The HHS–RADV, Navigator, FTR,
application to SADPs, and QHP rate and
benefit information proposals contain
VerDate Sep<11>2014
The proposal to require issuers of
Exchange-certified SADPs, whether they
are sold on- or off-Exchange, to submit
guaranteed rates, as a condition of
Exchange certification beginning with
Exchange certification for PY 2024, will
not impose an additional burden on
issuers. Exchange-certified SADP
issuers already submit either guaranteed
or estimated rates during QHP
certification, and are therefore, familiar
with the QHP certification rate
submission process. This information
collection is currently approved under
OMB control number 0938–1187.
The proposal to add a timeliness
standard to the requirement for QHP
issuers to send enrollees notice of
payment delinquency would not impose
an additional information burden on
issuers. Per § 156.270(f), issuers are
already required to send notices to
enrollees when they become delinquent
on premium payments, and this
proposal would not require any
additional information collection. We
are merely proposing to add a
requirement that issuers send these
notices promptly and without undue
delay. This information collection is
currently approved under OMB control
number 0938–1341 (CMS–10592).
650
0938-1155
0938-1155
0938NEW
0938NEW
0938-1207
0938NEW
L. ICRs Regarding Establishing a
Timeliness Standard for Notices of
Payment Delinquency (§ 156.270)
b. Guaranteed Rates for SADPs
a. Age on Effective Date for SADPs
§ 153.320(d)
§§ 153.610,
153.700, and
153.710
§ 155.220(j)
burdens for issuers seeking QHP
certification. This information
collection is currently approved under
OMB control number 0938–1187.
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information collections which are
covered by the following PRA packages:
Standards Related to Reinsurance, Risk
Corridors, and Risk Adjustment, OMB
control number: 0938–1155;
Cooperative Agreement to Support
Navigators in Federally-facilitated and
State Partnership Exchanges, OMB
control number: 0938–1215; Data
Collection to Support Eligibility
Determinations for Insurance
Affordability Programs and Enrollment
through Health Benefits Exchanges,
Medicaid and CHIP Agencies, OMB
control number: 0938–1191; Initial Plan
Data Collection to Support QHP
Certification and other Financial
Management and Exchange Operations,
OMB control number: OMB 0938–1187;
and Establishment of Qualified Health
Plans and American Health Benefit
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Exchanges, OMB control number: 0938–
1156.
N. Submission of PRA-Related
Comments
We have submitted a copy of this
proposed rule to OMB for its review of
the rule’s information collection and
recordkeeping requirements. These
requirements are not effective until they
have been approved by the OMB. To
obtain copies of the supporting
statement and any related forms for the
proposed collections discussed above,
please access the CMS PRA website by
copying and pasting the following web
address into your web browser: https://
www.cms.gov/Regulations-andGuidance/Legislation/
PaperworkReductionActof1995/PRAListing, or call the Reports Clearance
Office at 410–786–1326.
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Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 / Proposed Rules
We invite public comments on these
potential information collection
requirements. If you wish to comment,
please submit your comments
electronically as specified in the
ADDRESSES section of this proposed rule
and identify the rule (CMS–9899–P), the
ICR’s CFR citation, CMS ID number, and
OMB control number.
Comments must be received on/by
February 13, 2023.
V. Regulatory Impact Analysis
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A. Statement of Need
This rule proposes to improve risk
adjustment and HHS–RADV policies to
use the most recent data to recalibrate
the risk adjustment models and reduce
operational burden for HHS–RADV, and
to update Navigator standards to permit
door-to-door and other unsolicited
means of direct contact. The rule also
proposes to require agents, brokers, and
web-brokers to provide correct
consumer information and document
consumer consent; and require
Exchanges on the Federal platform to
accept an applicant’s or enrollee’s
attestation of projected annual
household income when IRS data is not
available and determine the applicant or
enrollee eligible for APTC or CSRs in
accordance with the applicant’s or
enrollee’s attested projected household
income. In addition, the rule proposes
to implement the IPPTA, reduce 2024
user fee rates to 2.5 percent of premiums
for FFE issuers and 2.0 percent of
premiums for SBE–FP issuers, and make
minor updates to standardized plan
options and limit the number of nonstandardized plan options issuers can
offer. Finally, the rule proposes to
require that QHP plan marketing names
include correct information, without
omission of material fact, and do not
include content that is misleading;
revise the network adequacy and ECP
standards §§ 156.230 and 156.235 to
state that all QHP issuers, including
SADPs, must use a network of providers
that complies with the standards
described in those sections; expand
access to care for low-income and
medically underserved consumers by
strengthening ECP standards for QHP
certification; and add a timeliness
standard to the requirement for QHP
issuers to send enrollees notice of
payment delinquency.
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B. Overall Impact
We have examined the impacts of this
rule as required by Executive Order
12866 on Regulatory Planning and
Review (September 30, 1993), Executive
Order 13563 on Improving Regulation
and Regulatory Review (January 18,
2011), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96–
354), section 1102(b) of the Act, section
202 of the Unfunded Mandates Reform
Act of 1995 (March 22, 1995; Pub. L.
104–4), Executive Order 13132 on
Federalism (August 4, 1999).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule: (1) having an annual
effect on the economy of $100 million
or more in any 1 year, or adversely and
materially affecting a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or State, local or tribal
governments or communities (also
referred to as ‘‘economically
significant’’); (2) creating a serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
significant regulatory action/s and/or
with economically significant effects
($100 million or more in any 1 year).
Based on our estimates, OMB’s Office of
Information and Regulatory Affairs has
determined this rulemaking is
‘‘economically significant’’ as measured
by the $100 million threshold.
Accordingly, we have prepared an RIA
that to the best of our ability presents
the costs and benefits of the rulemaking.
Therefore, OMB has reviewed these
proposed regulations, and the
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Departments have provided the
following assessment of their impact.
C. Impact Estimates of the Payment
Notice Provisions and Accounting Table
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/wp-content/
uploads/legacy_drupal_files/omb/
circulars/A4/a-4.pdf), we have prepared
an accounting statement in Table 16
showing the classification of the impact
associated with the provisions of this
proposed rule.
This proposed rule proposes
standards for programs that will have
numerous effects, including providing
consumers with access to affordable
health insurance coverage, reducing the
impact of adverse selection, and
stabilizing premiums in the individual
and small group health insurance
markets and in an Exchange. We are
unable to quantify all benefits and costs
of this proposed rule. The effects in
Table 16 reflect qualitative assessment
of impacts and estimated direct
monetary costs and transfers resulting
from the provisions of this proposed
rule for health insurance issuers and
consumers. The annual monetized
transfers described in Table 16 include
changes to costs associated with the risk
adjustment user fee paid to HHS by
issuers.
We are proposing the risk adjustment
user fee of $0.21 PMPM for the 2024
benefit year to operate the risk
adjustment program on behalf of
States,230 which we estimate to cost
approximately $60 million in benefit
year 2024. This estimated total cost
remains stable with the approximately
$60 million estimated for the 2023
benefit year.
Additionally, for 2024, we are
proposing an FFE and SBE–FP user fee
rate of 2.5 and 2.0 percent of premiums,
respectively. These user fee rates are
lower than the 2023 FFE and SBE–FP
user fee rates of 2.75 and 2.25 percent
of premiums, respectively.
For our proposed implementation of
the IPPTA program, we estimate record
keeping costs for data submission to be
approximately $1,025,756 beginning in
PY 2024.
BILLING CODE 4120–01–P
230 As noted previously in this proposed rule, no
State has elected to operate the risk adjustment
program for the 2024 benefit year; therefore, HHS
will operate the risk adjustment program for all 50
States and the District of Columbia.
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Tabl
Estimate
Annualized Moneti,r.ed ($/year)
$79.52 Million
$81.16 Million
Year
Dollar
Discount
Rate
2022
2022
Period Covered
7 percent I 2023-2027
3 percent I 2023-2027
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Quantitative:
• Reduction of $5,264.40 in reporting costs associated with repealing the ability of prior participant States to request a reduction in risk adjustment State transfers starting with
the 2025 benefit year.
• Annual cost savings of approximately $66 million to the Federal Government and $37 million to State Exchanges as a result of the proposed revisions to income DMls
beginning in 2024.
Qualitative:
Improved review of rebuttal evidence and reconsideration requests based on the proposal to increase the review period for agent, broker, or web-broker suspensions or
terminations to 60 days .
Requiring a consent recordation will reduce the number of unauthorized enrollments and help resolve disputes between enrolling entities and consumers, as well as
between enrolling entities.
Requiring enrolling entities to confirm information prior to submitting an application will help reduce the number of incorrect DMis.
• Improved consumer experience by amending the hierarchy for re-enrolhnent lo facilitate enrolhnenl into lower cost, higher generosity plans .
• Improved continuity of care by including provider networks in re-enrollment determinations when the enrollee's current plan is no longer available .
• Improved consumer experience as a result of reduced choice overload due to the proposal to limit the number of non-standardized plan offerings.
Increased access to continuous health insumnce coverage for individuals who qualify for a special enrollment period due to attesting to a future loss of MEC, associated
with the proposal to allow earlier effective dates for individuals qualifying for such special enrollment periods.
Increased access to continuous health insurance coverage for individuals losing Medicaid or CHIP who qualify for a special enrollment period with 60 days before or 90
days after to report such loss ofMEC to an Exchange.
Potential direct benefit of reducing improper payments, with secondary effects including a boost of issuer confidence in State Exchanges, through implementation of the
proposed IPPTA.
Reduced burden on consumers and assisters due to the proposal to require QHP plan marketing names to include correct information without omission of material fact
and to not include misleading content.
Potential increased access to covemge associated with the proposal to add a timeliness standard for payment delinquency notices for enrollees who become delinquent
on premium payments by ensuring they are properly informed of their delinquency in time to avoid losing coverage .
Increased access to more comprehensive provider networks due to the network adequacy and ECP proposals, which would better ensure that individuals have
reasonable. timelv access to an adeauate number tvpe and distribution of oroviders and facilities to manae;e their health care needs.
Estimate
Year
Discount
Period Covered
Costs:
Dollar
Rate
Annualized Monetized ($/year)
$710.84 Million
7 percent
2023-2027
2022
3 percent
$721.71 Million
2022
2023-2027
Qmmtitativc:
• Cumulative additional cost estimate for the collection of one new data element for risk adjustment estimated to be approximately $62,829 annually for 650 issuers beginning
in 2024, plus a one-time cost of $376,974 in 2024 to update their data collection processes to begin collecting this new data element.
• Increased APTC expenditures of $373 million per coverage year beginning in benefit year 2024 due to FTR proposal to not determine an enrollee ineligible for APTC until
after two consecutive years.
• One-time costs of approximately $6.6 million in benefit year 2024 to five State Exchanges that have not fully implemented the infrastructure to run FTR operations, with
annual costs to maintain FTR operations of approximately $10 million beginning in 2024.
• Recordkeeping costs incurred by State Exchanges related to IPPTA, estimated to be a total, one-time cost of approximately $1.025 million across all 18 State Exchanges
during calendar years 2024 and 2025 .
•
•
•
•
•
•
•
•
•
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20:34 Dec 20, 2022
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TABLE16:A
Benefits:
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the Congressional Budget Office’s (CBO)
analysis of the ACA’s impact on Federal
E:\FR\FM\21DEP2.SGM
This RIA expands upon the impact
analyses of previous rules and utilizes
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One-time cost of $500,000 in 2023 for HHS to implement a 60-day extension for households with income DMls for Exchanges on the Federal platform and $9 million for
State Exchanges to implement 60-day extension
• One-time cost of $500,000 in 2023 for HHS to accept attestation for households without IRS data for Exchanges on the Federal platform and $9 million for State Exchanges
to implement accepting attestation for households without IRS data.
• Increased costs of $175 million per year starting in 2024 associated with increased APTC expenditures due to the income DMI proposals .
• Increased costs of $161 million per coverage year beginning in 2023 associated with increased APTC expenditures due to the proposal to modify current coverage effective
date rules for qualifying individuals who qualify for a special emollment period due to a future loss ofMEC for Exchanges on the Federal platform.
• Increased costs of $98 million per coverage year beginning in 2024 associated with increased APTC expenditures due to the proposal to add a new special rule permitting
Exchanges on the Federal platform to allow consumers up to 60 days before and up to 90 days after to report a loss of Medicaid or CHIP.
• Increased costs of $48 million per year beginning in 2024 with increased APTC spending due to the proposal to amend the re-emolhnent hierarchy to allow Exchanges to
direct re-emollment for enrollees who are eligible for CSR in accordance with § 155 .305(g) from a bronze QHP to a silver QHP with a lower or equivalent premium after
APTC provided certain conditions arc met.
Qualitative:
• Under the proposed limits to the number of non-standardized plan options that issuers of QHPs can offer through the FFEs and SBE-FPs, we estimate that approximately
60,949 of a total of 106,037 non-standardiT.ed plan option plan-county combinations (57 percent) would be discontinued in PY 2024. Relatedly, we estimate that
approximately 2.72 million of the 10.21 million total emollees on the FFEs and SBE-FPs (26.6 percent of total emollees) would be affected by these discontinuations.
• Increase in administrative burden to State Exchanges that choose to adopt the proposal to prohibit issuers from terminating coverage for policy dependent emollees because
they reached the maximum allowable age mid-plan year.
• Potential administrative burden on issuers to comply with new plan marketing name standards and on SBE-FPs to support and enforce these new standards.
• Increased burden for plans that do not currently use a provider network and wish to remain in the Exchanges to comply with the proposal to require all QHPs and SADPs to
use a network and comply with the network adequacy standards at§ 156.235 beginning with plan year 2024.
• Increased burden to consumers, agent/brokers, and assisters to change enrollment to another plan if a consumer's current plan does not use a provider network and exits the
Exchanges due to the proposal that all QHPs and SADPs use provider networks becinnir g with plan vear 2024.
Year
Discount
Period Covered
Transfers:
Estimate
Dollar
Rate
2023-2027
-$142.09 Million
7oercent
2022
Annualized Monetiz.ed ($/year)
3 percent
-$147.35 Million
2022
2023-2027
Quantitative:
• Reduction in FFE and SBE-FP user fee transfers from issuers to the Federal Government of $74 million for benefit year 2024 compared to the prior benefit year. We estimate
additional reductions in FFE and SBE-FP user fee transfers from issuers to the Federal Government of $147 million in 2025, $317 million in 2026, and $219 million in 2027
if this user fee level were maintained in subsequent years .
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20:34 Dec 20, 2022
BILLING CODE 4120–01–C
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•
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spending, revenue collections, and
insurance enrollment. Table 17
summarizes the effects of the risk
adjustment program on the Federal
budget from fiscal years 2024 through
2028, with the additional, societal
effects of this proposed rule discussed
in this RIA. We do not expect the
provisions of this proposed rule to
significantly alter CBO’s estimates of the
budget impact of the premium
stabilization programs that are described
in Table 17.231
TABLE 17: Estimated Federal Government Outlays and Receipts for the Risk Adjustment
and Reinsurance Pro rams from Fiscal Year 2024-2028, in billions of dollars231
Risk Adjustment and Reinsurance
6
7
7
8
8
36
Pa ments
Pro
Risk Adjustment and Reinsurance
6
7
7
8
8
36
Pro
Collections
Note: Risk adjustment program payments and receipts lag by one quarter. Receipt will fully offset payments over
time. Source: Congressional Budget Office. Federal Subsidies for Health Insurance Coverage for People Under Age
65: 2022 to 2032. Table A-2. June 30, 2022. https://www.cbo.gov/system/files/2022-06/57962-health-insurancesubsidies. pdf.
We propose to use the 2018, 2019,
and 2020 benefit year enrollee-level
EDGE data to recalibrate the 2024
benefit year risk adjustment models
with an exception for the use of the
2020 benefit year to recalibrate the agesex coefficients for the adult models.
Specifically, we propose to use only
2018 and 2019 benefit year enrolleelevel EDGE data to recalibrate the agesex coefficients in the adult models to
account for the observed anomalous
decreases in the unconstrained
coefficients for the 2020 benefit year
enrollee-level EDGE data for older adult
enrollees, especially older female adult
enrollees. Consistent with the approach
outlined in the 2020 Payment Notice to
no longer rely upon MarketScan® data
for recalibrating the risk adjustment
models, under this proposal, we would
continue to recalibrate the risk
adjustment models for the 2024 benefit
year using only enrollee-level EDGE
data, and would continue to use
blended, or averaged, coefficients from
the 3 years of separately solved models
for the 2024 benefit year model
recalibration, with the noted exception
for recalibration of the adult models’
age-sex factors. This approach seeks to
maintain stability in the markets, and
therefore, we anticipate that this
proposal would have minimal impact
on risk scores and transfers for issuers
in the individual and small group
(including merged) markets.
2. Repeal of Risk Adjustment State
Flexibility To Request a Reduction in
Risk Adjustment State Transfers
(§ 153.320(d))
We propose to eliminate the
flexibility for any State, including prior
participant States, to request reductions
of risk adjustment State transfers
calculated by HHS under the State
payment transfer formula beginning
with the 2025 benefit year. We
anticipate that this change would have
a minimal impact as only one State,
Alabama, is considered a prior
participant and would no longer be able
to request reductions in risk adjustment
transfers if this policy is finalized.
3. Risk Adjustment Issuer Data
Requirements (§§ 153.610, 153.700, and
153.710)
We are also proposing the collection
and extraction of a new data element,
the QSEHRA indicator, as part of the
required risk adjustment data
submissions issuers make accessible to
HHS through their respective EDGE
servers. For the 2023 and 2024 benefit
years, similar to the transitional
approach finalized for the ICHRA
indicator, issuers would be required to
populate the field for the QSEHRA
indicator using only data they already
collect or have accessible regarding their
enrollees. Then, beginning with the
2025 benefit year, the transitional
approach would end, and issuers would
be required to populate the field using
available sources (for example,
information from Exchanges, and
requesting information directly from
enrollees) and, in the absence of an
existing source for particular enrollees,
to make a good faith effort to ensure
collection and submission of the
QSEHRA indicator for these enrollees.
HHS would provide additional details
on what constitutes a good faith effort
to ensure collection and submission of
the QSEHRA indicator beginning with
2025 benefit year data submissions in
the future. An updated burden estimate
associated with this policy may be
found in section IV of this proposed
rule, in the ICRs Regarding Risk
Adjustment Issuer Data Submission
Requirements (§§ 153.610, 153.700, and
153.710) section earlier in this rule.
In addition, we propose to extract the
plan ID and rating area data elements
from issuers’ EDGE servers that issuers
already make accessible to HHS as part
of the required risk adjustment data for
additional prior benefit years of data.
Specifically, we propose to amend the
applicability date for the extraction of
these two data elements from issuers’
enrollee-level EDGE data as finalized in
the 2023 Payment Notice to also allow
extraction of these data elements from
the 2017, 2018, 2019 and 2020 benefit
year data.
4. Risk Adjustment User Fee for 2024
Benefit Year (§ 153.610(f))
For the 2024 benefit year, HHS will
operate a risk adjustment program in
every State and the District of Columbia.
As described in the 2014 Payment
Notice (78 FR 15416 through 15417),
HHS’ operation of risk adjustment on
behalf of States is funded through a risk
adjustment user fee. For the 2024
benefit year, we propose to use the same
methodology to estimate our
231 Reinsurance collections ended in FY 2018 and
outlays in subsequent years reflect remaining
payments, refunds, and allowable activities.
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1. Data for Risk Adjustment Model
Recalibration for 2024 Benefit Year
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administrative expenses to operate the
risk adjustment program as was used in
the 2023 Payment Notice. Risk
adjustment user fee costs for the 2024
benefit year are expected to remain
stable from the prior 2023 benefit year
estimates. However, we project higher
enrollment than our prior estimates in
the individual and small group
(including merged) markets in the 2023
and 2024 benefit years due to the
enactment of the ARP,232 and section
12001 of the IRA, which extended the
enhanced PTC subsidies in section 9661
of ARP through the 2025 benefit year.
We estimate that the total cost for HHS
to operate the risk adjustment program
on behalf of States and the District of
Columbia for 2024 will be
approximately $60 million, and
therefore, the proposed risk adjustment
user fee would be $0.21 PMPM. Because
enrollment projections have increased
for the 2023 and 2024 benefit year due
to the IRA and the proposed 2024 risk
adjustment user fee is $0.01 PMPM
lower than the 2023 user fee, we expect
the proposed risk adjustment user fee
for the 2024 benefit year to reduce the
transfer amounts collected or paid by
issuers of risk adjustment covered plans.
5. Risk Adjustment Data Validation
Requirements When HHS Operates Risk
Adjustment (HHS–RADV) (§ 153.630)
We propose, beginning with 2022
benefit year HHS–RADV, to change the
HHS definition for the materiality
threshold for the HHS–RADV
exemption under § 153.630(g)(2) from
$15 million total annual premiums
Statewide to 30,000 BMM Statewide in
the benefit year being audited. The
purpose of this policy is to address the
estimated increase in costs to complete
the IVA over the years and to ensure the
materiality threshold is not eroded as
costs increase. We quantify this increase
in IVA cost in the Standards Related to
Reinsurance, Risk Corridors, Risk
Adjustment, and Payment Appeal of the
PRA (OMB Control Number 0938–1155),
which was updated in 2022.233 We
believe that the number of issuers
exempt from HHS–RADV for any given
benefit year under the proposed 30,000
BMM threshold will not be significantly
different than the number of issuers
exempt under the current $15 million
total annual premium Statewide
threshold, and therefore, we believe that
there will not be an overall reduction in
burden. However, those issuers that are
exempted from HHS–RADV will have
less burden and administrative costs
232 Public
Law 117–2.
at https://www.reginfo.gov/public/
do/PRAViewICR?ref_nbr=202207-0938-001.
233 Available
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20:34 Dec 20, 2022
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than an issuer subject to these
requirements.
We propose, beginning with 2021
benefit year HHS–RADV, to remove the
policy to only make adjustments to
reflect exiting outlier issuers HHS–
RADV results when the issuer is a
positive error rate outlier in the
applicable benefit year’s HHS–RADV.
Under the proposal to remove this
policy, exiting and non-exiting outlier
issuers would be treated the same, and
HHS would apply HHS–RADV
adjustments to risk scores and risk
adjustment State transfers for both
positive and negative error rate outlier
exiting and non-exiting issuers. Based
on our experience, we estimate that the
number of negative error rate outlier
exiting issuers in any given benefit year
would be very small, and therefore, we
believe that changing this policy would
not significantly increase burden.
We also propose to change the
attestation and discrepancy reporting
window to file a discrepancy report or
confirm SVA findings from 30 calendar
days to within 15 calendar days of the
notification by HHS, beginning with the
2022 benefit year HHS–RADV.
Shortening this attestation and
discrepancy reporting window would
improve HHS’ ability to finalize SVA
findings results prior to release of the
HHS Risk Adjustment Data Validation
(RADV) Results Memo and the
Summary Report of Risk Adjustment
Data Validation Adjustments to Risk
Adjustment Transfers for the applicable
benefit year in a timely fashion, which
would support timely reporting of
information on HHS–RADV adjustments
to risk adjustment State transfers in
issuers’ MLR reports.
Based on our experience operating
HHS–RADV, few issuers have
insufficient pairwise agreement and
receive SVA findings, and the 15calendar-day attestation and
discrepancy reporting window is
consistent with the IVA sample and
EDGE discrepancy reporting windows
under §§ 153.630(d)(1) and
153.710(d)(1). Further, HHS believes
that this shortened reporting window
would not be overly burdensome to the
few impacted issuers, and that any
disadvantages of this shortened
reporting window would be outweighed
by the benefits of timely resolution of
any discrepancies before the release of
the applicable benefit year HHS Risk
Adjustment Data Validation (RADV)
Results Memo and the Summary Report
of Risk Adjustment Data Validation
Adjustments to Risk Adjustment
Transfers for the applicable benefit year.
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6. EDGE Discrepancy Materiality
Threshold (§ 153.710)
We propose to amend the materiality
threshold for EDGE discrepancies at
§ 153.710(e) to align with the materiality
threshold as described in the preamble
of part 2 of the 2022 Payment Notice
final rule (86 FR 24194 through 24195)
to reflect that the amount in dispute
must equal to or exceeds $100,000 or 1
percent of the total estimated transfer
amount in the applicable State market
risk pool, whichever is less. HHS
generally only takes action on reported
material EDGE discrepancies when an
issuer’s submission of incorrect EDGE
server premium data has the effect of
increasing or decreasing the magnitude
of the risk adjustment transfers to other
issuers in the market (83 FR 16970
through 16971). We do not believe that
the proposal related to the materiality
threshold for EDGE discrepancies would
impose additional administrative
burden on issuers beyond the effort
already required to submit data to HHS
for the purposes of operating State
market risk pool transfers, as previously
estimated in part 2 of the 2022 Payment
Notice (86 FR 24273 through 24274).
7. Exchange Blueprint Approval
Timelines (§ 155.106)
As discussed in the preamble of this
proposed rule, the proposed regulatory
amendments would not eliminate the
requirement for States seeking to
transition to a different Exchange
operational model (FFE to SBE–FP or
SBE, or SBE–FP to SBE) to submit an
Exchange Blueprint or for HHS to
approve, or conditionally approve, a
State’s Exchange Blueprint. It would
only impact the timeline, by providing
additional time, for HHS to provide
approval, or conditional approval.
We do not estimate any burden
associated with this proposal as States
are currently required to submit an
Exchange Blueprint to HHS for
approval, or conditional approval, and
HHS is currently required to approve, or
conditionally approve, a State’s
Exchange Blueprint.
We seek comment on this estimate.
8. Navigator, Non-Navigator Assistance
Personnel, and Certified Application
Counselor Program Standards
(§§ 155.210 and 155.225)
As discussed in the preamble, this
new language would permit enrollment
assistance on initial door-to-door
outreach. Currently, Assisters are
permitted to go door-to-door to engage
in outreach and education activities,
just not enrollment assistance.
Therefore, this proposed change would
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not impose any new or additional
opportunity costs on Navigators, nonNavigator assistance personnel, or
CACs, and we do not anticipate any
estimated burden associated with this
proposal. The benefits of this proposal
would be eliminating barriers to
coverage access by maximizing
pathways to enrollment. We believe it is
important to be able to increase access
to coverage for those whose ability to
travel is impeded due to mobility,
sensory or other disabilities, who are
immunocompromised, and who are
limited by a lack of transportation. We
anticipate that this proposal would be a
positive step toward enabling Assisters
to reach a broader consumer base in a
timely manner—helping to reduce
uninsured rates and health disparities
by removing underlying barriers to
accessing health coverage.
We seek comment on these
assumptions, specifically about any
reduction in costs, benefits, or burdens
on Navigators, non-Navigator assistance
personnel, CACs, and consumers as
related to this proposal.
9. Extension of Time To Review
Suspension Rebuttal Evidence and
Termination Reconsideration Requests
(§§ 155.220(g) and 155.220(h))
As discussed in the preamble of this
proposed rule, the proposed regulatory
amendments would provide HHS with
up to an additional 15 calendar days to
review evidence submitted by agents,
brokers, or web-brokers to rebut
allegations that led to the suspension of
their Exchange agreement(s) and up to
an additional 30 calendar days to review
evidence submitted by agents, brokers,
or web-brokers to request
reconsideration of termination of their
Exchange agreement(s).
We do not estimate much burden
associated with this proposal, as there is
no requirement for HHS to utilize the
additional 15 or 30 calendar days and
this will only impact a very small
percentage of enrolling agents, brokers,
or web-brokers. Only those agents,
brokers, or web-brokers that are
reasonably suspected to have engaged in
fraud or abusive conduct, or those with
a specific finding of non-compliance
against them or who have exhibited a
pattern of non-compliance or abuse that
may pose imminent consumer harm
would be impacted.
As discussed in the preamble, this
proposal would not impose any new
requirements on agents, brokers, or webbrokers. At present, agents, brokers, or
web-brokers whose Exchange
agreement(s) are suspended or
terminated may submit rebuttal
evidence or reconsideration requests for
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HHS to consider. During this review, the
submitting agent, broker, or web-broker
remains unable to enroll consumers on
the FFEs. This process would not
change. While we would be increasing
the amount of potential time the review
process would take, which could lead to
slightly longer periods during which
agents, brokers, or web-brokers cannot
enroll consumers through the FFEs and
SBE–FPs, we would not be mandating
HHS utilize the additional 15 or 30
calendars days for its reviews. For this
reason, we do not expect any impact on
agents, brokers, or web-brokers based on
this proposal. We seek comment on this
assumption.
10. Providing Correct Information to the
FFEs and Documenting Receipt of
Consumer Consent (§ 155.220(j))
As discussed in the preamble of this
proposed rule, the proposed regulatory
amendments would require agents,
brokers, and web-brokers assisting with
and facilitating enrollment through
FFEs and SBE–FPs or assisting an
individual with applying for APTC and
CSRs for QHPs to document that
eligibility application information has
been reviewed by and confirmed to be
accurate by the consumer or their
authorized representative prior to
application submission. The proposal
would require the consumer or their
authorized representative taking an
action that produces a record showing
the consumer or their authorized
representative reviewed and confirmed
the accuracy of their application
information that must be maintained by
the assisting agent, broker, or webbroker and produced to confirm the
submitted eligibility application
information was reviewed and
confirmed to be accurate by the
consumer or their authorized
representative.
Also discussed in the preamble of this
proposed rule, the proposed regulatory
amendments would require agents,
brokers, and web-brokers assisting with
and facilitating enrollment through
FFEs and SBE–FPs or assisting an
individual with applying for APTC and
CSRs for QHPs to document the receipt
of consent from the consumer or their
authorized representative, designated in
compliance with § 155.227, qualified
employers, or qualified employees they
are assisting. The proposal would
require the consumer or their authorized
representative taking an action that
produces a record of consent that must
be maintained by the assisting agent,
broker, or web-broker and produced to
confirm the consumer or their
authorized representative’s consent was
provided. As these two documentation
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processes would likely be occurring as
part of the same consumer
interaction,234 the two proposals are
discussed below together.
A potential cost to consider is the
additional time it would take to process
and submit each consumer’s
application. It currently takes
approximately 30 minutes for an
assisting agent, broker, or web-broker to
submit a consumer’s application. These
proposed requirements may add
approximately five minutes additional
time, per proposal, to each application,
making each application submission
take 40 minutes under the new
proposed policies. This means that for
every six policies submitted under the
proposed regulatory requirements, there
would have been two additional
applications that could have been
submitted under the former regulatory
requirements (10 extra minutes per
application × 3 applications = 30
minutes, which is the estimated
completion time for applications at
present). If we assume agents, brokers,
and web-brokers work traditional 8-hour
days, they would have been able to
enroll approximately 4 more consumers
per day (1 application per 30 minutes =
16 per day; 1 application per 40 minutes
= 12 per day). An approximation of
commission for each submitted policy is
$16.67.235 Therefore, the proposed
regulatory text may result in $66.68 lost
per day per agent, broker, or web-broker.
($16.67 × 4 less applications submitted).
However, there would only be a
potential loss of income if an agent,
broker, or web-broker were constantly
enrolling consumers and running out of
time during the workday. It is unlikely
agents, brokers, and web-brokers are
constantly enrolling consumers nonstop throughout an 8-hour workday.
During PY 2021, agents submitted
3,630,849 policies. The top 1 percent of
agents 236 submitted 1,159,608 policies
during PY 2021, which equals
approximately 7 submitted policies per
day.237 As it was determined under the
234 We note that obtaining documentation of
consumer consent must occur before an application
is completed. In contrast, obtaining documentation
that a consumer has reviewed and confirmed the
accuracy of their application information must
necessarily take place during or after the
application is completed. However, we expect
generally that application completion, including the
documentation we are proposing to require before
and after the completion of the application, would
occur as part of a single interaction in most cases.
235 This was derived using the Insurance Sales
Agent mean hourly wage from the above wage
estimate table of $33.34 and dividing in-half.
236 The current number of agents registered with
the Exchange is 66,893. We looked at data from the
668 top-selling agents.
237 This assumed an agent worked 250 days per
year (50 weeks at 5 days per week).
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new proposed policies that an agent
could submit approximately 12
applications per day, there is no clear
impact associated with this proposal as
far as the number of applications being
submitted. However, this could be
different during Open Enrollment
Period (OEP) as that generally has more
activity than regular business days.
During PY 2022 Open Enrollment,
agents submitted 2,572,341
applications, which translates to 38 per
agent. The top selling 1 percent of
agents submitted 689,146 applications
during Open Enrollment, which is
approximately 18 applications per
day.238 Under the proposed regulatory
amendments, a top-selling agent could
lose approximately 6 applications per
day due to time constraints. OEP runs
from November 1 through January 15,
which is 76 days. Under the assumption
an agent is working 5 days per work for
eight hours per day, an agent would
submit 330 fewer applications during
OEP (55 days working × 6 fewer
applications per day). Using the above
reference of $16.67 commission gained
per submitted policy, a top-selling agent
may lose $5,501.10 in commissions
during OEP (330 applications × $16.67).
It is likely these agents are working
more hours than we accounted for,
meaning the 330 fewer applications is
an estimate such that the actual loss of
commission would be less than we
estimated. We seek comment on these
burden estimates.
11. Failure To File and Reconcile
Process (§ 155.305)
We propose to require that Exchanges
instead determine an enrollee as
ineligible for APTC if their taxpayer did
not file a Federal income tax return and
reconcile their APTC for two
consecutive tax years, rather than one
tax year as currently outlined at
§ 155.305(f)(4). We believe this proposal
would benefit both Exchanges and
consumers as it provides Exchanges
with additional flexibility with their
FTR operations and procedures, while
ensuring continuity of coverage for
consumers, that would otherwise go
uninsured after losing ATPC to help pay
for their Exchange QHPs.
We anticipate that this proposal
would increase APTC expenditures by
promoting continuous enrollment of
consumers with APTC, who, absent this
proposal, would likely choose to
terminate their coverage altogether after
losing their APTC eligibility due to
having an FTR status. Based on HHS’
238 This assumed an agent worked 5 days per
week at 8 hours per day, which is likely a low
estimate.
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own analysis, for Open Enrollment
2020, about 116,000 enrollees with an
FTR status were automatically reenrolled into an Exchange QHP without
APTC; by March 2020, approximately
14,000 (12 percent) of those enrollees
were still enrolled in an Exchange QHP.
With the new 2-year FTR proposal, if
those enrollees that ended their QHP
coverage after losing APTC were given
another year of APTC eligibility to come
into compliance with the requirement to
file and reconcile, we estimate that
about 102,000 enrollees would have
retained coverage with APTC for
another coverage year; however, based
on HHS’ experience running FTR since
2015, we anticipate that about 20,400
(20 percent) of these enrollees are likely
to receive a second FTR flag. Therefore,
we estimate that this 2-year FTR
proposal is likely to increase APTC
expenditures by approximately $373
million per year beginning in benefit
year 2024.
HHS is also aware of five States that
have only recently transitioned to
operating their own State Exchange and
have not yet fully implemented the
infrastructure to run FTR operations for
plan years through 2023 due to the
flexibility the Exchanges were given to
temporarily pause FTR operations
between 2021 and 2023 due to the
COVID–19 public health emergency. We
estimate the one-time costs for these five
States to fully implement the
functionality and infrastructure to
conduct FTR operations to be
approximately $6.6 million and estimate
that the annual costs to maintain FTR
operations to be approximately $10
million.
We invite comments from interested
parties on this proposal, including
regarding additional costs, burdens, and
benefits to issuers, consumers, and
Exchanges as a result of this proposal.
12. Income Inconsistencies (§§ 155.315
and 155.320)
We anticipate that proposed revision
to § 155.315 would impose a minimal
regulatory and cost burden on
Exchanges using the Federal platform
and State Exchanges in order to grant
the 60-day extension for income DMIs.
We estimate that the proposed change to
grant a 60-day extension to applicants
with income DMIs would result in a
$500,000 one-time cost to Exchanges on
the Federal platform and to each of the
State Exchanges using their own
platform. Therefore, we estimate that
the total cost for State Exchanges would
be $9 million to comply with the
requirement to grant the 60-day
extension, and the total cost to the
Federal Government would be $500,000.
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78305
We anticipate that the proposed
revisions to § 155.320 would impose a
minimal regulatory burden and a onetime cost burden on the Exchanges
using the Federal platform and State
Exchanges using their own platform. We
estimate that the proposed change to
accept the income attestation for
households for which the Exchange
requests tax return data from the IRS to
verify attested projected annual
household income but for whom the IRS
confirms there is no such tax return data
available would result in a $500,000
one-time cost to the Federal
Government and a one-time cost of
$500,000 to each of the State Exchanges
using their own platform. We also
anticipate $175 million in increased
APTC costs annually as a result of this
proposal, due to applicants remaining
enrolled through the end of the plan
year instead of losing eligibility for
APTC due to not providing sufficient
documentation to verify their projected
household income.
However, we do anticipate that the
proposed revisions to § 155.320 would
also result in some decreases in ongoing
administrative costs for the Exchanges
using the Federal platform and State
Exchanges. The proposed change would
eliminate the requirement to generate
income DMIs when the Exchange
requests tax return data from the IRS for
an applicant or enrollee and the IRS
confirms no such data is available. For
Exchanges on the Federal platform, we
anticipate that this will result in 1.2
million fewer households receiving an
income DMI, which would result in $66
million in annual cost savings to the
Federal Government. Additionally, State
Exchanges using their own platform
would also experience annual cost
savings of $37 million due to this
proposed change.
We do not anticipate that these
proposed changes would impose a cost
or regulatory burden on issuers.
However, the proposed changes would
have a financial impact on issuers via
the continued enrollment of consumers
who otherwise would have experienced
APTC adjustment and are thus likely to
disenroll.
13. Annual Eligibility Redetermination
(§ 155.335(j))
We propose revising § 155.335(j) to
allow the Exchange, beginning in PY
2024, to direct re-enrollment for
enrollees who are eligible for CSR in
accordance with § 155.305(g) from a
bronze QHP to a silver QHP with a
lower or equivalent premium after
APTC within the same product and
QHP issuer, regardless of whether their
current plan is available or not. We also
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propose to amend the Exchange reenrollment hierarchy to allow all
Exchanges (Exchanges on the Federal
platform and SBEs) to ensure enrollees
whose QHPs are no longer available to
them and enrollees who would be reenrolled into a silver-level QHP in order
to receive income-based CSRs are reenrolled into plans with the most
similar network to the plan they had in
the previous year, provided that certain
conditions are met.
We propose revising paragraph
(j)(2)(i) to state that if the enrollee is not
CSR eligible, the Exchange will re-enroll
the enrollee in a QHP at the same metal
level as and with the most similar
network compared to the enrollee’s
current QHP. We propose amending and
redesignating paragraphs (j)(2)(ii) and
(iii) as paragraphs (j)(2)(iv) and (v),
respectively, to specify that the
enrollee’s provider network must also
be considered in re-enrollment
determinations. We also propose adding
a new paragraph (j)(2)(ii) to establish
that if the enrollee is CSR-eligible, in
accordance with § 155.305(g), and the
enrollee’s current QHP is a bronze level
plan, the Exchange will re-enroll the
enrollee either in a bronze level QHP,
or, at the option of the Exchange, in a
silver level QHP that has a lower or
equivalent premium after APTC and has
the most similar network compared to
the enrollee’s current QHP in the
product offered by the same issuer
through the Exchange that is most
similar to the enrollee’s current product.
Lastly, we propose to add a new
paragraph (j)(2)(iii) to establish that if
the enrollee is CSR-eligible, in
accordance with § 155.305(g), and the
enrollee’s current QHP is not a bronze
level plan, the enrollee will be reenrolled in a QHP at the same metal
level that has the most similar network
compared to the enrollee’s current QHP
in the product offered by the same
issuer that is the most similar to the
enrollee’s current product.
We anticipate that the inclusion of
additional criteria in the Federal
hierarchy for re-enrollment would
increase costs and burden for issuer and
Exchanges, although we are unable to
quantify this increase. However, we
believe initially limiting the scope to
only CSR-eligible enrollees who are
currently in a bronze QHP and have a
lower cost silver CSR QHP available
would allow issuers and Exchanges to
incrementally update their processes, as
opposed to incorporating both premium
(after APTC) and out-of-pocket cost
(OOPC) throughout the hierarchy in PY
2024. Additionally, we believe that
allowing the Exchange to direct reenrollment for CSR-eligible enrollees
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from bronze plans to silver CSR plans
with lower or equivalent premium after
APTC would facilitate enrollment into
silver CSR plans and help reduce CSR
forfeiture. We believe these proposed
changes to the re-enrollment process, in
combination with improved consumer
notification, would further streamline
the consumer shopping experience,
enhance consumer understanding of
plan options, and help move enrollment
into more affordable, higher generosity
plans, especially in cases where market
conditions have substantially increased
the old plan’s cost. By amending the
current Federal hierarchy for reenrollment to incorporate provider
networks and facilitate enrollment into
lower cost, higher generosity plans, we
believe we would be promoting
consumer access to affordable, highquality coverage.
We seek comment on the estimated
costs and benefits described in this
section, as well as any additional
impacts on consumers, issuers, and
Exchanges as a result of this proposal.
14. Coverage Effective Dates for
Qualified Individuals Losing Other
Minimum Essential Coverage
(§ 155.420(b))
We propose to add paragraph
(b)(2)(iv) to § 155.420(b) to provide
earlier SEP coverage effective dates for
qualifying individuals who attest to a
future loss of MEC, such as coverage
offered through an employer, Medicaid,
CHIP, or Medicare., within 60 days
before such loss of MEC s. Currently, the
earliest start date for Exchange coverage
when a qualifying individual attests to
a future loss of MEC is the first day of
the month following the date of loss of
MEC, which may result in coverage gaps
when consumers lose forms of MEC
(other than Exchange coverage) midmonth. We believe that this proposed
change is necessary to ensure that
qualifying individuals are able to
seamlessly transition from other nonExchange MEC to Exchange coverage as
quickly as possible with minimal
coverage gaps. As discussed earlier in
preamble, ensuring smooth and quick
transitions into Exchange coverage will
be especially critical once the COVID–
19 PHE comes to an end and higher
numbers of consumers lose their
Medicaid or CHIP coverage and
transition to Exchange coverage, as
applicable.
Based on HHS’ own analysis, for plan
years 2019 through 2021, approximately
214,000 households seeking coverage on
Exchanges using the Federal platform
reported a future mid-month loss of
MEC date and ultimately did not enroll
in a QHP. In PY 2021, about 45,000
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households attested to a future midmonth loss of coverage MEC date and
did not enroll in QHP coverage. If these
consumers had been given the
opportunity for Exchange coverage to
begin the first of the month in which
their prior mid-month loss of MEC
coverage end date occurred, rather than
having to wait weeks for their coverage
to start, these consumers could have
avoided a gap in coverage and could
have received an additional month of
APTC, given our interpretation of IRS’
definition of a coverage month, which
we plan to codify in the final rule.
Therefore, for consumers who report a
future loss of MEC, especially those who
reside in States that allow mid-month
terminations for Medicaid or CHIP, we
estimate that this proposed change
could increase APTC expenditures by
approximately $161 million dollars per
coverage year by allowing Exchange
coverage to start the first of the month
in which the mid-month loss of MEC or
COBRA occurs and assuming that
similar volume of consumers would
choose enroll in an Exchange QHP,
however, this number could be slightly
lower but we are unable to estimate
what proportion of consumers would
still elect to not enroll in an Exchange
QHP. We also anticipate additional
costs to certain consumers as some
consumers would be required to pay for
an additional month of Exchange
coverage for which they would not have
previously been eligible while also still
possibly paying for one last month of
their prior MEC coverage. However, in
order to mitigate adverse selection
concerns, we are not proposing that
Exchanges permit consumers to select a
different, prospective coverage start
date, such as the first of the month
following plan selection. We also seek
comment from issuers regarding any
additional or remaining risk regarding
mid-month coverage effective dates.
We seek comment on this proposal,
specifically about any additional costs,
benefits, or burdens on State Exchanges,
issuers, and consumers as related to this
proposal.
15. Special Rule for Loss of Medicaid or
CHIP Coverage (§ 155.420(c))
We propose to add paragraph (c)(6) to
§ 155.420(c) to provide qualifying
individuals losing Medicaid or CHIP
that is considered MEC in accordance
with § 155.420(d)(1)(i), and who qualify
for a special enrollment period, with up
to 60 days before and up to 90 days after
their loss of coverage to enroll in QHP
coverage. We believe that this proposed
change is necessary to ensure that
qualifying individuals are able to
seamlessly transition from Medicaid or
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CHIP into Exchange coverage as quickly
as possible with little to no coverage
gaps. As discussed earlier in preamble,
ensuring smooth and quick transitions
into Exchange coverage will be
especially critical once the COVID–19
PHE comes to an end and higher
numbers of consumers lose their
Medicaid or CHIP coverage and
transition to Exchange coverage, as
applicable.
Based on HHS’s own analysis, in plan
year 2019, about 60,000 consumers
seeking coverage on Exchanges using
the Federal platform attested to a
Medicaid/CHIP loss or denial between
60 to 90 days prior on their
HealthCare.gov application. We
estimate that this proposed change to
permit Exchanges to use a special rule
to provide consumers losing Medicaid
or CHIP with 90 days after their loss of
Medicaid or CHIP to enroll in QHP
coverage would increase APTC
expenditures by approximately $98
million per year.
We seek comment on this proposal,
specifically about any additional costs,
benefits, or burdens on States, issuers,
and consumers as related to this
proposal.
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16. Plan Display Error Special
Enrollment Periods (§ 155.420(d))
We anticipate that revisions to
§ 155.420(d)(12) would maintain current
regulatory burden and cost on issuers.
As discussed earlier in preamble, our
proposal to make necessary changes to
the text of § 155.420(d)(12) is to align
the policy for granting SEPs to persons
who are adversely affected by a plan
display error with current plan display
error SEP operations. Our proposal
would have minimal operational
impact, as interested parties such as
issuers, States, and the Exchanges on
the Federal platform currently have the
infrastructure to demonstrate that a
material plan display error influenced a
qualified individual’s, enrollee’s, or
their dependents’ enrollment and, or
decision to purchase a QHP through the
Exchange. This does not impose
additional regulatory burden or costs
because the revisions do not require the
consumers, HHS, or issuers to conduct
new or additional processes to existing
data change requirements.
17. Termination of Exchange Enrollment
or Coverage (§ 155.430)
We anticipate that the proposal to
expressly prohibit issuers from
terminating coverage for policy
dependent children because they
reached the maximum allowable age
mid-plan year would benefit affected
enrollees by providing clarity regarding
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their ability to maintain coverage.
Because this prohibition has already
been in place on the Exchanges on the
Federal platform, we do not anticipate
a financial impact to issuers or HHS.
There may be some minor costs for State
Exchanges that choose to implement
this prohibition and have not previously
done so, but we do not have adequate
data to estimate these costs. We seek
comment on these benefit and burden
assumptions.
18. Improper Payment Pre-Testing and
Assessment for State Exchanges
(§ 155.1500)
This proposal would prepare HHS to
implement the Payment Integrity
Information Act of 2019 (PIIA)
requirements for State Exchanges. As
described in the preamble earlier in this
proposed rule, the PIIA requires that
agencies measure the improper
payments rate for programs susceptible
to significant improper payments. HHS
already undertakes annual
measurements for Medicare, Medicaid,
FFEs, and SBE–FPs. This proposed rule
would lay the groundwork to complete
the Exchanges’ measurement program
by including State Exchanges and to
enable HHS to estimate improper
payment rates as mandated by statute.
This proposal tests State Exchanges’
readiness to provide the information
necessary to measure the rate of
improper payments. Even slight
decreases in this rate would accrue large
taxpayer savings. The IPPTA incurs
approximately $57,000 in costs per
respondent. Nevertheless, HHS believes
that the potential benefits of this
regulatory action justify the present
costs.
This proposal would prepare HHS to
implement the statutory requirement for
measurement of improper payments for
programs susceptible to significant
improper payments. We have quantified
the costs for this proposal. Neither this
IPPTA nor any follow-on program
should affect transfers between parties.
19. FFE and SBE–FP User Fee Rates for
the 2024 Benefit Year (§ 156.50)
We are proposing an FFE user fee rate
of 2.5 percent of monthly premiums for
the 2024 benefit year, which is a
decrease from the 2.75 percent FFE user
fee rate finalized in the 2023 Payment
Notice (87 FR 27289). We also propose
an SBE–FP user fee rate of 2.0 percent
for the 2024 benefit year, which is a
decrease from the 2.25 percent SBE–FP
user fee rate finalized in the 2023
Payment Notice. Based on our estimated
costs, enrollment (including anticipated
transitions of States from the FFE and
SBE–FP models to either the SBE–FP or
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State Exchange model), premiums for
the 2024 benefit year, and proposed user
fee rates, we are estimating that FFE and
SBE–FP user fee transfers from issuers
to the Federal Government would be
$170 million lower compared to those
estimated for the prior benefit year. We
also anticipate that the lower user fee
rates may exert downward pressure on
premiums.
20. Standardized Plans
a. Standardized Plan Options
(§ 156.201)
At § 156.201, we propose minor
updates to our approach to standardized
plan options for PY 2024 and
subsequent PYs. In particular, in
contrast to the policy finalized in the
2023 Payment Notice, HHS proposes,
for PY 2024 and subsequent PYs, to no
longer include a standardized plan
option for the non-expanded bronze
metal level. Accordingly, HHS proposes
at new § 156.201(b) that for PY 2024 and
subsequent PYs, FFE and SBE–FP
issuers offering QHPs through the
Exchanges must offer standardized QHP
options designed by HHS at every
product network type (as described in
the definition of ‘‘product’’ at
§ 144.103), at every metal level except
the non-expanded bronze level, and
throughout every service area that they
offer non-standardized QHP options.
HHS believes that maintaining the
highest degree of continuity possible in
the approach to standardized plan
options minimizes the risk of disruption
for a range of interested parties,
including issuers, agents, brokers,
States, and enrollees. HHS believes that
making major departures from the
approach to standardized plan options
in the 2023 Payment Notice could result
in drastic changes in these plan designs
that could potentially cause undue
burden for these interested parties.
Furthermore, if the standardized plan
options HHS creates vary significantly
from year to year, those enrolled in
these plans could experience
unexpected financial harm if the costsharing for services they rely upon
differs substantially from the previous
year. Ultimately, HHS believes
consistency in standardized plan
options is important to allow both
issuers and enrollees to become
accustomed to these plan designs.
Thus, similar to the approach taken in
the 2023 Payment Notice, HHS proposes
to create standardized plan options that
would continue to resemble the most
popular QHP offerings that millions of
consumers are already enrolled in. As
such, these proposed standardized plan
options are based on refreshed PY 2022
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cost-sharing and enrollment data to
ensure that these plans continue to
reflect the most popular offerings in the
Exchanges.
With HHS proposing to maintain a
similar approach to standardized plan
options to that taken in the 2023
Payment Notice, issuers would continue
to be able to utilize many existing
benefit packages, networks, and
formularies, including those paired with
standardized plan options for PY 2023.
Furthermore, since HHS is proposing to
require QHP issuers to offer
standardized plan options at every
product network type, at every metal
level except the non-expanded bronze
metal level, and throughout every
service area they also offer nonstandardized plan options (but not for
different product network types, metal
levels, and service areas where they do
not also offer non-standardized plan
options), issuers would continue to not
be required to extend plan offerings
beyond their existing service areas.
Furthermore, as discussed earlier in
the preamble, HHS noted that it would
continue to differentially display
standardized plan options on
HealthCare.gov per the existing
authority at § 155.205(b)(1). Since HHS
would continue to assume the burden
for differentially displaying
standardized plan options on
HealthCare.gov, FFE and SBE–FP
issuers would continue to not be subject
to this burden.
In addition, as noted in the preamble,
HHS would continue enforcement of the
standardized plan option display
requirements for approved web-brokers
and QHP issuers using a direct
enrollment pathway to facilitate
enrollment through an FFE or SBE–FP—
including both the Classic DE and EDE
Pathways—at §§ 155.220(c)(3)(i)(H) and
156.265(b)(3)(iv), respectively. HHS
believes that continuing the
enforcement of these differential display
requirements would not require
significant modification of these
entities’ platforms and non-Exchange
websites, especially since the majority
of this burden already occurred when
the standardized plan option differential
display requirements were first finalized
in the 2018 Payment Notice 239 or when
enforcement of these requirements
resumed beginning with the PY 2023
open enrollment period.
Finally, since HHS would continue to
allow these entities to submit requests
to deviate from the manner in which
standardized plan options are
239 These differential display requirements were
first effective and enforced beginning with PY 2018.
See 81 FR 94117 through 94118, 94148.
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differentially displayed on
HealthCare.gov, the burden for these
entities would continue to be
minimized. HHS intends to continue
providing access to information on
standardized plan options to webbrokers through the Health Insurance
Marketplace Public Use Files (PUFs)
and QHP Landscape file to further
minimize burden. Specific burden
estimates for these requirements can be
found in the corresponding ICR sections
for §§ 155.220 and 156.265 of the 2023
Payment Notice (87 FR 698 and 699 and
87 FR 27360 and 27361).
b. Non-Standardized Plan Option Limits
(§ 156.202)
At § 156.202, we propose to limit the
number of non-standardized plan
options that issuers of individual market
medical QHPs can offer through the
FFEs and SBE–FPs to two per product
network type, metal level, and service
area. If such a limit were adopted in PY
2024, it is estimated that the weighted
average number of non-standardized
plan options (which does not take into
consideration standardized plan
options) available to each consumer
would be reduced from approximately
107.8 in PY 2022 to 37.2 in PY 2024.
Furthermore, it is estimated that
approximately 60,949 of a total 106,037
non-standardized plan option plancounty combinations (amounting to 57.5
percent of non-standardized plan option
plan-county combinations) would be
discontinued.240 Finally, it is estimated
that approximately 2.72 million of the
approximate 10.21 million enrollees on
the FFEs and SBE–FPs (amounting to
26.6 percent of enrollees) would be
affected by these discontinuations.241
The total number of QHPs that would
have to undergo QHP certification each
year would be reduced as a result of
limiting the number of nonstandardized plan options. Relatedly,
although issuers would be required to
select another QHP to which to
crosswalk affected enrollees from
discontinued non-standardized plan
options, the existing discontinuation
240 Plan-county combinations are the count of
unique plan ID and FIPS code combinations. This
measure is used because a single plan may be
available in multiple counties, and specific limits
on non-standardized plan options may have
different impacts on one county where there are
four plans of the same product network type and
metal level versus another county where there are
only two plans of the same product network type
and service area, for example.
241 These calculations assume that the nonstandardized plan options removed due to the
proposed limit would be those with the fewest
enrollees based on PY 2022 data, which includes
individual market medical QHPs for Exchanges
using the HealthCare.gov eligibility and enrollment
platform, including SBE–FPs.
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notices and process as well as the
current re-enrollment hierarchy and
corresponding crosswalk process
outlined at § 155.335(j) could
accommodate crosswalking these
affected enrollees, and no additional
modification to these processes or to
this re-enrollment hierarchy would be
required. Finally, no additional action
would be required from consumers to
complete this crosswalking process.
We do not have sufficient data to
estimate the costs associated with these
proposed changes, so we seek comment
from interested parties regarding cost
estimates and data sources.
21. QHP Rate and Benefit Information
(§ 156.210)
a. Age on Effective Date for SADPs
This rule proposes standards related
to the rate submission process for
Exchange-certified SADPs during QHP
certification. This rule proposes to
modify the rate submission process to
require issuers of Exchange-certified
SADPs, whether they are sold on- or offExchange, to use age on effective date as
the sole method to calculate an
enrollee’s age for rating and eligibility
purposes beginning with Exchange
certification in PY 2024. Requiring these
issuers to use the age on effective date
methodology for calculating an
enrollee’s age, and consequently
removing the less common and more
complex age calculation methods, will
reduce potential consumer confusion
and the burden placed on Exchange
interested parties (including issuers, as
well as DE and EDE partners) by
promoting operational efficiency.
This proposed policy change reduces
the risk of consumer harm and
confusion since the age on effective date
method allows consumers to more
easily understand the rate they are
charged. This proposed policy also
helps reduce enrollment blockers,
which will improve the efficiency of the
enrollment process and reduce the
burden placed on Exchange interested
parties (including issuers, as well as DE
and EDE partners). Therefore, this
proposed policy helps facilitate more
informed enrollment decisions and
enrollment satisfaction.
We also do not anticipate any
negative financial impact as a result of
this proposed policy, given that it
would be a small operational change. If
anything, this proposed policy has the
potential to reduce financial burden on
issuers and CMS, as removing the other
age rating methods would reduce the
added expense and slower development
times that must account for test cases in
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the rating engine for the less commonly
used and more complex methods.
Additionally, this proposed policy
change would not create any additional
information submission burden, as it
would apply to information that
Exchange issuers already submit as part
of the QHP certification process.
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b. Guaranteed Rates for SADPs
This rule proposes standards related
to the rate submission process for
Exchange-certified SADPs during QHP
certification. This rule proposes to
modify the rate submission process to
require issuers of Exchange-certified
SADPs, whether they are sold on- or offExchange, to submit guaranteed rates
beginning with Exchange certification in
PY 2024. Requiring guaranteed rates
would reduce potential consumer harm
and burden associated with incorrect
APTC calculation for the pediatric
dental EHB portion of premiums, and
the need for consumers to contact
issuers who post estimated rates for
final rates.
Requiring guaranteed rates would
reduce the risk of consumer harm by
reducing the risk of incorrect APTC
calculation for the pediatric dental EHB
portion of premiums. Therefore, we
believe that this proposed policy change
would support health equity by helping
to ensure that low-income enrollees
who qualify for APTC are charged the
correct premium amount. Beyond
reducing the potential for consumer
financial harm, this proposed policy
would also reduce the burden placed on
consumers because it would allow them
to rely on the information they see on
the issuer’s website and not have to
contact issuers for final rates after the
QHP certification process.
22. Plan and Plan Variation Marketing
Name Requirements for QHPs
(§ 156.225)
We propose at § 156.225 to require
that QHP plan and plan variation
marketing names include correct
information, without omission of
material fact, and do not include
content that is misleading. CMS, States,
and QHP issuers work together to
ensure that consumers can make
informed decisions when selecting a
health insurance plan based on factors
such as QHP benefit design, cost-sharing
requirements, and available financial
assistance. In PY 2022, Exchanges on
the Federal platform saw a significant
increase in the number of plan and plan
variation marketing names using costsharing information and other benefit
details. Following Open Enrollment for
PY 2022, CMS received complaints from
consumers in multiple States who
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misunderstood cost-sharing information
in their QHP’s marketing name. We
believe that clear policy can result in
plan and plan variation marketing
names that reduce consumer confusion.
By providing standards that help
ensure plan and plan variation
marketing names are clear and accurate,
we anticipate the proposed policy will
reduce burden on consumers and on
those who help consumers to enroll in
Exchange coverage because it will allow
them to rely on information they see
during the plan selection process. In
addition, we believe that the proposed
standards for plan and plan variation
marketing names would have an overall
positive impact on other Exchange
interested parties as well, by ensuring
that the consumer education that plans
use to compete in the individual health
insurance market is clear and accurate.
This proposed policy may require
additional effort during the QHP
certification process on the part of
Exchange issuers to comply with new
plan marketing name standards.
However, we would work to streamline
this process by incorporating education
about plan and plan variation marketing
name standards into the annual QHP
certification process, and proactively
addressing issuer and State questions
through existing outreach and education
vehicles including webinars, email
blasts, and regularly scheduled meetings
on individual health insurance market
policy and operations.
The proposed policy would not create
any new information submission
burden, because it would apply to
information that Exchange issuers
already submit as part of the QHP
certification process. Additionally,
while requiring increased effort
initially, we believe this proposed
policy would ultimately decrease issuer
and State effort following QHP
certification, and during and after the
annual Open Enrollment Period, by
reducing the number of plan and plan
variation marketing name-related
consumer complaints to triage and, in
some cases, special enrollment periods
to be provided.
We seek comment on the burden that
this proposed policy would impose, and
on the burden reduction it could
provide. We also seek comment on how
CMS can further alleviate any burden
associated with this proposed policy,
such as through technical assistance to
Exchange interested parties, including
issuers and enrollment assisters.
Finally, we also believe that the
proposed policy would promote health
equity by reducing the likelihood of
QHP benefit misunderstanding and
confusion that leads to less informed
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enrollment decisions, especially for
consumers with low health literacy,
which is disproportionately experienced
among underserved communities and
other vulnerable populations. For
example, a 2022 study found higher
self-reported low health literacy among
people who are Hispanic, non-U.S.
citizens, unemployed, or who have less
than a high school education.242 A 2019
study that tested participants’
knowledge of health insurance
terminology found statistically
significant disparities based on race,
ethnicity, and language preference.243
We seek comment on this proposal and
on whether this proposal would
promote health equity, and on
additional ways that CMS can support
health insurance literacy through plan
marketing guidance and technical
assistance.
23. Network Adequacy (§ 156.230)
Regarding HHS’s proposal to require
all QHP issuers, including SADP
issuers, to utilize a contracted network
of providers and comply with network
adequacy standards at § 156.230 and
ECP standards at § 156.235, we
acknowledge that SADP issuers that
only offer plans that do not use a
provider network and that want to be
certified may initially face increased
costs associated with developing
contractual relationships with providers
or leveraging pre-existing networks
associated with their other plans.
However, studies have found that
provider networks allow for insurernegotiated prices and controlled (that is,
reduced) costs in the form of reduced
patient cost-sharing, premiums, and
service price, as compared with such
services obtained out of network.244 245
We expect any initial increased issuer
costs to differ from the costs
experienced once such provider
242 Edward J, Wiggins A, Young MH, Rayens MK.
Significant Disparities Exist in Consumer Health
Insurance Literacy: Implications for Health Care
Reform. Health Lit Res Pract. 2019 Nov 5;3(4):e250–
e258. doi: 10.3928/24748307–20190923–01. PMID:
31768496; PMCID: PMC6831506.
243 Villagra VG, Bhuva B, Coman E, Smith DO,
Fifield J. Health insurance literacy: disparities by
race, ethnicity, and language preference. Am J
Manag Care. 2019 Mar 1;25(3):e71–e75. PMID:
30875174.
244 Benson NM, Song Z. Prices And Cost Sharing
For Psychotherapy In Network Versus Out Of
Network In The United States. Health Aff
(Millwood). 2020 Jul;39(7):1210–1218. https://
www.healthaffairs.org/doi/10.1377/
hlthaff.2019.01468.
245 Song, Z., Johnson, W., Kennedy, K., Biniek, J.
F., & Wallace, J. Out-of-network spending mostly
declined in privately insured populations with a
few notable exceptions from 2008 to 2016. Health
Aff. 2020;39(6), 1032–1041. https://
www.healthaffairs.org/doi/full/10.1377/hlthaff.
2019.01776.
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contractual relationships have been
established or pre-existing networks
associated with their other plans have
been leveraged. We request comment on
whether and how to extrapolate from
literature on voluntary network
formation for purposes of assessing
impacts of this regulatory provision.
For SADPs that do not use a provider
network, this proposal would require
these issuers to contract with providers
in accordance with our existing network
adequacy requirements or withdraw
from the Exchange. The latter may
create a burden for enrollees and QHP
plans in the service area if no SADPs
remain. However, we expect this burden
to only affect a small number of
consumers, given the overall small
number of Exchange-certified SADPs
that do not use a provider network on
the FFEs. As discussed further in Table
12 in the preamble for part 156, over the
last few years, fewer than 100 counties
have had SADPs without provider
networks, and most of these counties
had SADPs with provider network
options available. For PY 2022, there
were only 8 Exchange-certified SADPs
without provider networks in the FFEs.
Similarly, the number of States with
these types of plans has decreased over
time. At its highest, in 2014, 9 FFE
States had Exchange-certified SADPs
without provider networks. Since PY
2020, this number has dropped to 4 or
fewer FFE States, with only 2 FFE States
having this plan type in PYs 2022 and
2023. Additionally, Exchange-certified
SADPs with provider networks are
becoming more available in counties
that previously only had no-network
SADP options: for PYs 2022 and 2023,
only 2 FFE States (Alaska and Montana)
offer Exchange-certified SADPs without
provider networks. For Montana, all
counties offering this plan type also
offer Exchange-certified SADPs with
provider networks. For Alaska in PYs
2022 and 2023, 90 percent of counties
with Exchange-certified SADPs without
provider networks have no Exchangecertified SADPs with provider networks.
We anticipate approximately 2,200
enrollees will be affected by this
proposal. Enrollees in SADPs that
choose not to comply with this
requirement would need to select a
different plan for coverage, which may
cause hardship if the enrollee cannot
access assistance, requires culturally
and linguistically appropriate support,
and/or does not have an understanding
of health insurance design and benefits.
In the event service areas are left
without SADPs due to the provider
network requirement, health plans will
have to amend their benefits to include
the pediatric dental benefit EHB. This
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change may require costs for issuers to
build the benefit and contract with
providers.
These impacts may be mitigated if we
finalize a limited exception to allow
SADPs to not use a provider network in
areas where it is prohibitively difficult
for the SADP issuer to establish a
network of dental providers that
complies with §§ 156.230 and 156.235.
Finally, we do not anticipate any
impact as a result of this proposal on
health plans that do not use a network,
given our understanding that no such
plan is currently certified as a QHP by
an Exchange, but solicit comment to
inform that understanding.
24. Essential Community Providers
(§§ 156.235(a)(2)(i) and
156.235(a)(2)(ii)(B))
Regarding HHS’s proposal to
strengthen the ECP standards under
§ 156.235(a)(2)(i) by requiring QHPs to
contract with at least 35 percent of
available FQHCs that qualify as ECPs in
the plan’s service area and at least 35
percent of available Family Planning
Providers that qualify as ECPs in the
plan’s service area, we acknowledge that
issuers whose provider networks do not
currently include such a percentage of
these provider types that qualify as
ECPs may face increased costs
associated with complying with the
proposed policies. However, we do not
expect this increase to be prohibitive.
Based on data from PY 2023, it is likely
that a majority of issuers would be able
to meet or exceed the threshold
requirements for FQHCs and Family
Planning Providers without needing to
contract with additional providers in
these categories.
To illustrate, if these requirements
had been in place for PY 2023, out of
137 QHP issuers on the FFEs, 76 percent
would have been able to meet or exceed
the 35 percent FQHC threshold, while
61 percent would have been able to
meet or exceed the 35 percent Family
Planning Provider threshold without
contracting with additional providers.
For SADP issuers, 84 percent would
have been able to meet the 35 percent
threshold requirement for FQHCs
offering dental services without
contracting with additional providers.
In PY 2023, for medical QHPs, the mean
and median ECP percentages for the
FQHC category were 74 and 83 percent,
respectively. For the Family Planning
Providers category, the mean and
median ECP percentages were 66 and 71
percent, respectively. For SADPs, the
mean and median ECP percentages for
the FQHC category were 61 and 64
percent, respectively.
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Regarding HHS’s proposal to
strengthen the ECP standards under
§ 156.235(a)(2)(ii)(B) by establishing two
additional stand-alone ECP categories to
include SUD Treatment Centers and
Mental Health Facilities, we
acknowledge challenges associated with
a general shortage and uneven
distribution of SUD Treatment Centers
and mental health providers. However,
the ACA requires that a QHP’s network
include ECPs where available. As such,
the proposal to require QHPs to offer a
contract to at least one available SUD
Treatment Center and one available
Mental Health Facility in every county
in the plan’s service area does not
unduly penalize issuers facing a lack of
certain types of ECPs within a service
area, meaning that if there are no
provider types that map to a specified
ECP category available within the
respective county, the issuer is not
penalized. Further, as outlined in prior
Letters to Issuers, HHS prepares the
applicable PY HHS ECP list that
potential QHPs use to identify eligible
ECP facilities. The HHS ECP list reflects
the total supply of eligible providers
(that is, the denominator) from which an
issuer may select for contracting to
count toward satisfying the ECP
standard. As a result, issuers are not
disadvantaged if their service areas
contain fewer ECPs. HHS anticipates
that any QHP issuers falling short of the
35 percent threshold for PY 2024 could
satisfy the standard by using ECP writeins and justifications. As in previous
years, if an issuer’s application does not
satisfy the ECP standard, the issuer
would be required to include as part of
its application for QHP certification a
satisfactory justification.
25. Termination of Coverage or
Enrollment for Qualified Individuals
(§ 156.270)
We propose to amend § 156.270(f) by
adding a timeliness standard to the
requirement for QHP issuers to send
enrollees notice of payment
delinquency. Specifically, we propose
to revise § 156.270(f) to require issuers
to send notice of payment delinquency
promptly and without undue delay. We
anticipate that this proposal would be
beneficial to enrollees who become
delinquent on premium payments by
ensuring they are properly informed of
their delinquency in time to avoid
losing coverage. It may be especially
beneficial to enrollees who are low
income, who would be especially
negatively impacted by disruptions in
coverage. We expect some minimal
costs to issuers associated with updating
their internal processes to ensure
compliance with the finalized
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timeliness standard, but do not have
adequate data to estimate these costs.
We seek comment on the benefit and
cost assumptions of this proposal.
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26. Final Deadline for Reporting
Enrollment and Payment Inaccuracies
Discovered After the Initial 90-Day
Reporting Window (§ 156.1210(c))
We propose to amend § 156.1210(c) to
remove the alternate deadline at
§ 156.1210(c)(2), which requires an
issuer to describe all data inaccuracies
identified in a payment and collection
report by the date HHS notifies issuers
that the HHS audit process with respect
to the plan year to which such
inaccuracy relates has been completed,
in order for these data inaccuracies to be
eligible for resolution. Under this
proposal, we would retain only the
deadline at § 156.1210(c)(1), which
requires that issuers describe all
inaccuracies identified in a payment
and collections report within 3 years of
the end of the applicable plan year to
which the inaccuracy relates to be
eligible to receive an adjustment to
correct an underpayment. Under this
proposal, beginning with the 2020 plan
year coverage, HHS would not pay
additional APTC payments or reimburse
user fee payments for FFE, SBE–FP, and
SBE issuers for data inaccuracies
reported after the 3-year deadline.
Further, we propose that HHS would
not accept or take action that results in
an outgoing payment on data
inaccuracies or payment errors for the
2015 through 2019 plan year coverage
that are reported after December 31,
2023. We anticipate that this proposed
change would result in a less
operationally burdensome process for
the identification and resolution of
these data inaccuracies for issuers, State
Exchanges, and HHS, and a slight
reduction in associated burdens, such as
resolution of data inaccuracies for
discovered underpayments. However,
we anticipate the impact would be
minimal, if any, and result in no
significant financial impact.
27. Regulatory Review Cost Estimation
If regulations impose administrative
costs on private entities, such as the
time needed to read and interpret this
proposed or final rule, we should
estimate the cost associated with
regulatory review. Due to the
uncertainty involved with accurately
quantifying the number of entities that
will review the rule, we assume that the
total number of unique commenters on
last year’s proposed rule (465) will be
the number of reviewers of this
proposed rule. We acknowledge that
this assumption may understate or
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overstate the costs of reviewing this
rule. It is possible that not all
commenters reviewed last year’s rule in
detail, and it is also possible that some
reviewers chose not to comment on the
proposed rule. For these reasons, we
thought that the number of past
commenters would be a fair estimate of
the number of reviewers of this rule. We
welcome any comments on the
approach in estimating the number of
entities which will review this proposed
rule.
We also recognize that different types
of entities are in many cases affected by
mutually exclusive sections of this
proposed rule, and therefore, for the
purposes of our estimate we assume that
each reviewer reads approximately 50
percent of the rule. We seek comments
on this assumption.
Using the wage information from the
BLS for medical and health service
managers (Code 11–9111), we estimate
that the cost of reviewing this rule is
$115.22 per hour, including overhead
and fringe benefits.246 Assuming an
average reading speed, we estimate that
it would take approximately 1 hour for
the staff to review half of this proposed
or final rule. For each entity that
reviews the rule, the estimated cost is
$115.22 (1-hour × $115.22). Therefore,
we estimate that the total cost of
reviewing this regulation is $53,577.30
($115.22 × 465).
D. Regulatory Alternatives Considered
With respect to the inclusion or
exclusion of the 2020 benefit year
enrollee-level EDGE data in the
recalibration of 2024 benefit year risk
adjustment models, we considered a
variety of alternative options to our
proposal to use 2018, 2019, and 2020
enrollee-level EDGE data with an
exception to exclude 2020 benefit year
data from recalibration of the age-sex
coefficients for the adult models, which
is the fourth option outlined above. The
first option considered was to maintain
current policy, recalibrating the risk
adjustment models using 2018, 2019,
and 2020 enrollee-level EDGE data
(without any adjustment). The second
option involved using 2018, 2019, and
2020 enrollee-level EDGE data, but
assigning a lower weight to the 2020
data. The third option we considered
would utilize 4 years of enrollee-level
EDGE data, instead of three, to
recalibrate the risk adjustment models
using 2017, 2018, 2019, and 2020 data.
The fifth option would exclude the 2020
enrollee-level EDGE data and use the
2017, 2018, and 2019 enrollee-level
EDGE data in recalibration for the 2024
246 https://www.bls.gov/oes/current/oes_nat.htm.
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benefit year or to use the final 2023
models as the 2024 risk adjustment
models. The sixth and final option we
considered would use 2 years of
enrollee-level EDGE data for 2024
benefit year recalibration—only 2018
and 2019 data.
Our analyses found that the 2019 and
2020 benefit year enrollee-level EDGE
recalibration data were largely
comparable, however, there were
observed anomalous decreases in the
unconstrained coefficients for the 2020
benefit year enrollee-level EDGE
recalibration data for older adult
enrollees, especially older female
enrollees. Option 1 therefore would not
address the identified anomalous trend
that is not expected to continue in
future benefit years.
The second option would represent a
compromise between those who wish to
include 2020 data in model
recalibration and those who wish to
exclude 2020 data, by capturing the
utilization and spending patterns
underlying the 2020 data while
dampening its effects in the model.
However, we were concerned this
approach would require finding an
appropriate weighting methodology,
and we are further concerned that
broadly dampening the effect of the
2020 benefit year data in the models
defeats the purpose of adding the next
available benefit year of data as part of
model recalibration because doing so
would prevent the models from
reflecting changes in utilization and cost
of care that are unrelated to the impact
of the COVID–19 PHE. There are similar
concerns with option 3 and the
inclusion of an additional prior benefit
year (that is, 2017) to recalibrate the
2024 benefit year models to dampen the
impact of the 2020 benefit year data. We
do not believe that such a broad
dampening is necessary because the
anomalous coefficient changes
identified from the 2020 benefit year
data were largely limited to the adult
model age-sex coefficients, and
incorporating an additional prior benefit
year of data would dampen the impact
of the 2020 benefit year data on other
factors and would prevent the models
from reflecting changes in utilization
and cost of care that are unrelated to the
impact of the COVID–19 PHE.
We are similarly concerned about
options 5 and 6, which would involve
the complete exclusion of 2020 benefit
year data, because both of these options
would result in reliance on data that
may not be the most reflective data set
of the utilization and spending trends.
Furthermore, there are questions about
whether there is a sufficient justification
to completely exclude 2020 benefit year
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enrollee-level EDGE recalibration data
in the recalibration of the risk
adjustment models. The sixth option
has the same limitations and would also
have the additional drawback of
decreasing the stabilizing effect of using
multiple years of data in model
recalibration. More specifically, because
this option would reduce the number of
years of data used, a change in a
coefficient occurring in just 1 year of the
data that is actually included in
recalibration (that is, the 2018 or 2019
benefit years of enrollee-level EDGE
recalibration data) would have a greater
impact on the risk adjustment model
coefficients due to the increase in the
reliance of the blended coefficients on
the remaining 2 years of data.
We solicit comment on all of these
alternatives for the use of the 2020
enrollee-level EDGE data in the 2024
benefit year risk adjustment model
recalibration.
In developing the updated materiality
threshold for HHS–RADV proposed in
this rule, we sought to ensure the
materiality threshold would ease the
burden of annual audit requirements for
smaller issuers of risk adjustment
covered plans that do not materially
impact risk. To do this, we considered
the costs associated with hiring an
initial validation auditor and submitting
IVA results and the relative growth of
issuers’ total annual premiums
Statewide and total BMM. We also
evaluated the benefits of shifting to a
threshold based on BMM rather than
annual premiums, and we are proposing
changing the materiality threshold from
$15 million in total annual premiums
Statewide to 30,000 BMM Statewide. As
an alternative option, we considered
increasing the threshold to $17 million
in total annual premiums Statewide and
maintaining a cutoff based on premium
dollars (instead of BMMs). However, we
were concerned that a premium
threshold would fail to capture small
issuers overtime as PMPM premiums
grow and would require more regular
updates to the materiality threshold to
maintain the current balance. The use of
a BMM threshold avoids this issue. We
invite comment on our proposed
materiality threshold and on the
potential alternative option to update
the threshold to $17 million annual
premiums Statewide for the benefit year
being audited, and we also invite
comment on the applicability date for
when the new materiality threshold
should begin to apply.
Regarding our proposal to require
Exchanges to determine an enrollee as
ineligible for APTC after having failed to
file and reconcile for two consecutive
tax years rather than after one tax year,
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we considered multiple alternatives.
One alternative we considered was
extending the current pause on FTR
operations through plan year 2024,
while HHS continued to examine the
current FTR process, and explore ways
in which the FTR process could
promote continuity of coverage, while
maintaining its critical program
integrity function to ensure that only
enrollees eligible for APTC continue to
do so. Another alternative we
considered was repealing the
requirement under 45 CFR 155.305(f)(4)
that a taxpayer(s) must file a Federal
income tax return and reconcile their
APTC for any tax year in which they or
their tax household received APTC in
order to continue their eligibility for
APTC. However, we wanted to maintain
the program integrity benefits of the
FTR process, and believe there is still
value in ensuring that only people who
are filing and reconciling remain
eligible to receive APTC. Because of
this, we have amended our proposal and
are instead proposing requiring that
Exchanges end APTC only after two
consecutive years of FTR status rather
than ending APTC after a single year.
We considered two alternatives to
accepting attestation to determine
household income for households for
which IRS does not return any data and
expanding the amount of time to resolve
income DMIs to meet the goal of
increased consumer service and
advancing health equity. We considered
establishing a threshold when adjusting
APTC following an income
inconsistency period. Under this
alternative, HHS would continue
current operations but would not
eliminate APTC eligibility completely if
consumers are unable to provide
sufficient documentation. While this
alternative would require fewer changes
to implement, our current proposal
would create better outcomes for more
consumers and decrease administrative
burden. Additionally, we considered
eliminating income DMIs for all
consumers, including those for whom
the Exchanges have IRS data, due to the
large burden the income verification
process places on consumers, but we
found that the verification process was
required for consumers with IRS data,
and that consumers with other IRS data
would have their household income
adjusted based on that data as opposed
to those without IRS data who would
instead lose all of their APTC.
In developing the proposal for reenrollment hierarchy, we considered a
variety of alternatives, including making
no modifications. We also considered
revising the policy, beginning in PY
2024, such that the Exchange could
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direct re-enrollment for income-based
CSR-eligible enrollees from a bronze
QHP to a silver QHP with a $0 net
premium within the same product and
QHP issuer, regardless if the enrollee’s
current plan is available. Under this
alternative we considered revising the
policy to allow the Exchange to ensure
the enrollee’s coverage retained a
similar provider network throughout the
Federal hierarchy for re-enrollment.
While we believe this may slightly
reduce operational complexity, we
believe income-based CSR-eligible
enrollees who have a de minimis or
non-zero-dollar premium would still
greatly benefit from having their
coverage renewed into a silver CSR QHP
with a lower or equivalent net premium
and OOPC, by saving thousands in care
costs.
We also considered revising the
policy, beginning in PY 2024, such that
the Exchange could: (1) direct reenrollment, for income-based CSReligible enrollees, from a bronze QHP to
a silver QHP with a lower or equivalent
net premium and total OOPC within the
same product and QHP issuer regardless
if their current plan is available; (2) if
their current plan is available and the
enrollee is not income-based CSR
eligible, re-enroll the enrollee’s coverage
in the enrollee’s same plan; (3) if their
current plan is not available and the
enrollee is not income-based CSR
eligible, direct re-enrollment to a plan at
the same metal level that has a lower or
equivalent net premium and total outof-pocket cost compared to the
enrollee’s current QHP within the same
product and QHP issuer; and (4) if a
plan at the same metal level as their
current QHP is not available and the
enrollee is not income-based CSR
eligible, direct re-enrollment to a QHP
that is one metal level higher or lower
than the enrollee’s current QHP and has
a lower or equivalent net premium and
total OOPC compared to the enrollee’s
current QHP within the same product
and issuer. Under this alternative, we
considered revising the policy to allow
the Exchange to ensure the enrollee’s
coverage retained a similar provider
network throughout the Federal
hierarchy for re-enrollment. While we
believe this alternative would be
beneficial for all enrollees, we
understand this would pose a
substantial operational burden and
complexities for issuers and Exchanges
to shift from the current policy to this
revised alternative. We believe an
incremental change would help issuers
and Exchanges diligently and
appropriately adjust their re-enrollment
operations. We solicit comment on all
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aspects of the re-enrollment proposal at
§ 155.335(j).
HHS considered taking no action
related to the two technical corrections
to the regulatory text at
§ 155.420(a)(4)(ii)(A) and (B). However,
HHS felt these changes were necessary
to make it explicitly clear that when a
qualified individual or enrollee, or his
or her dependent, experiences the
special enrollment period triggering
event, all members of a household may
enroll in or change plans together in
response to the event experienced by
one member of the household. These
proposed technical corrections should
eliminate any confusion surrounding
special enrollment period triggering
events and may help Exchanges and
other interested parties more effectively
communicate and message rules that
determine eligibility for special
enrollment periods and how plan
category limitations may apply for
certain special enrollment periods as
outlined under § 155.420(a).
We considered taking no action
related to our proposal to revise
paragraph § 155.420(b)(2)(iv), to provide
Exchanges with more flexibility by
allowing Exchanges the option to
provide consumers with earlier coverage
effective dates so that consumers are
able to seamlessly transition from one
form of coverage to Exchange coverage
as quickly as possible with no coverage
gaps. However, we believe that many
consumers would benefit from this
proposed change, especially those
consumers whose States allow for midmonth terminations for Medicaid/CHIP
or those consumers whose COBRA
coverage ends mid-month and who
report their coverage loss to the
Exchange before it happens. We also
considered allowing consumers the
option to request a prospective coverage
start date rather than the day following
loss of MEC or COBRA coverage but we
determined that this could introduce
adverse selection as consumers could
choose to delay enrolling in Exchange
coverage and paying premiums until
coverage was necessary. Finally, we also
considered for consumers attesting to a
past loss of MEC and who also report a
mid-month coverage loss that Exchange
coverage would be effective
retroactively back to the first day after
the prior coverage loss date. For
example, if a consumer lost coverage on
July 15, coverage would be effective
retroactively back to July 16. We
decided against this option as it would
require a statutory change to allow for
mid-month PTC for consumers losing
MEC mid-month, in addition to being
too operationally complex for both
Exchanges and issuers to implement.
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We considered taking no action
related to our proposal to add new
paragraph § 155.420(c)(6), to ensure that
qualifying individuals losing Medicaid
or CHIP coverage are able to seamlessly
transition to Exchange coverage as
quickly as possible with little to no
coverage gaps. However, we believe that
many consumers will benefit from this
proposed change, especially during the
PHE unwinding period, where many
consumers will need to seamlessly
transition off Medicaid or CHIP and into
Exchange coverage. We also considered
whether this proposed change should be
broadened to include consumers in
other disadvantaged groups such as
those impacted by natural disasters or
other exceptional circumstances,
consumers losing Medicaid or CHIP that
is not considered MEC, and consumers
who are denied Medicaid or CHIP
coverage. We decided not to include
other groups, such as those residing in
a Federal Emergency Management
Agency (FEMA) declared disaster area,
as current CMS guidance requires that
an SEP be made available for an
additional 60 days after the end of a
FEMA declaration.247 Additionally, for
other exceptional circumstances, there
is flexibility under § 155.420(d)(9) that
CMS may offer impacted consumers
more time to enroll under an SEP
depending on the type of exceptional
circumstance, like a national PHE such
as COVID–19. Finally, regarding the
population that is denied Medicaid or
CHIP coverage, we also considered
whether to extend the SEP window
length from 60 days to 90 days for the
population that is denied Medicaid or
CHIP, however, we chose not to extend
the SEP window length for this
population as there is no 90 day
reconsideration period that needs
alignment for consumers denied
Medicaid or CHIP as there is for
consumers who have lost eligibility for
Medicaid or CHIP as described earlier in
preamble.
We considered taking no action
regarding our proposal to modify
§ 155.430(b) to expressly prohibit
issuers from terminating coverage for
policy dependent enrollees because they
reached the maximum allowable age
mid-Plan Year. However, we believe it
is important to provide clarity to issuers
and consumers regarding this policy so
that coverage is not prematurely
disrupted.
In developing the IPPTA policies
contained in this proposed rule
(§ 155.1500), we requested to meet
247 https://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/Downloads/8-9-naturaldisaster-SEP.pdf.
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individually with each State Exchange
currently participating in the voluntary
State engagement initiative in order to
gather State-specific information
regarding options for data collection
that would impose the least burden on
State Exchanges. Based on information
provided by those State Exchanges that
were able to participate in the meetings,
we considered several data collection
options but chose the option that
provides State Exchanges with the
greatest amount of control in aligning
their source data to the requested data
elements. In addition, the proposed data
collection option requests that the State
Exchange provide no fewer than 10
sampled tax households that we
propose the State Exchange would
identify based upon fulfilling the
scenarios described in the preamble. An
alternative option consisted of allowing
the State Exchange to provide to HHS
all of the source data in an unstructured
format for the respective, sampled tax
households. HHS using its own
resources would then map the State
Exchange source data to the required
data elements that are necessary for
performing the pre-testing and
assessment. The mapping process
would require consultative sessions
with each State Exchange and a
validation process to ensure the
accurate mapping of the data. While the
proposed pre-testing and assessment
data request form also entails a process
to validate the data with the State
Exchanges, the consultative process
associated with this alternative data
collection mechanism would entail
more frequency and a higher level of
intensity.
We invite comment on this proposed
data collection option and invite
comment on potential alternative data
collection options.
With respect to standardized plan
options, we considered a range of
options for the proposed policy
approach at § 156.201, such as
modifying the methodology used to
create the standardized plan options for
PY 2024 and subsequent PYs.
Specifically, we considered including
more than four tiers of prescription drug
cost-sharing in the standardized plan
option formularies. We also considered
lowering the deductibles in these plan
designs and offsetting this increase in
plan generosity by increasing costsharing amounts for several benefit
categories. We also considered
simultaneously maintaining the current
cost-sharing structures and decreasing
the deductibles for these plan designs,
which would have increased the AVs of
these plans to be at the ceiling of each
AV de minimis range. Ultimately, we
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decided to maintain the AVs of these
plans near the floor of each de minimis
range by largely maintaining the costsharing structures and deductible values
from the standardized plan options from
PY 2023, as well as by increasing the
MOOP values for these plan designs. We
believe this proposed approach would
strike the greatest balance in providing
enhanced pre-deductible coverage while
ensuring competitive premiums for
these standardized plan options.
We invite comment on this proposed
approach.
With respect to non-standardized plan
option limits, we considered a range of
options for the proposed policy
approach at § 156.202. Specifically, we
considered limiting the number of nonstandardized plan options to three, two,
or one per issuer, product network type,
metal level, and service area
combination. We also considered no
longer permitting non-standardized plan
options to be offered through the
Exchanges.
We also considered redeploying the
meaningful difference standard, which
was previously codified at § 156.298,
either in place of or in conjunction with
imposing limits on the number of nonstandardized plan options that issuers
can offer through the Exchanges. In this
scenario, we considered selecting from
among several combinations of the
criteria in the original version of the
meaningful difference standard to
determine whether plans are
‘‘meaningfully different’’ from one
another.248 Specifically, we considered
using only a difference in deductible
type (that is, integrated or separate
medical and drug deductible), as well as
a $1,000 difference in deductible to
determine whether plans are
‘‘meaningfully different’’ from one
another.
We believe the proposed approach of
limiting the number of nonstandardized plan options to two per
issuer, product network type, service
area, and metal level would most
significantly reduce the risk of plan
choice overload, streamlining the plan
selection process and enhancing choice
architecture for consumers on the
Exchanges.
248 Under the original meaningful difference
standard, a plan was considered to be
‘‘meaningfully different’’ from other plans in the
same product network type, metal level, and service
area combination if the plan had at least one of the
following characteristics: difference in network ID,
difference in formulary ID, difference in MOOP
type, difference in deductible, multiple in-network
provider tiers rather than only one, a difference of
$500 or more in MOOP, a difference of $250 or
more in deductible, or any difference in covered
benefits.
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We invite comment on this proposed
approach.
With respect to plan and plan
variation marketing names, we
considered issuing sub-regulatory
guidance in lieu of proposed rulemaking
to require that marketing names include
correct information, without omission of
material fact, and not include content
that is misleading. However, given the
important role that plan and plan
variation marketing names play in
facilitating plan competition through
consumer education on Exchanges, we
are proposing this requirement in
regulation to allow interested parties the
opportunity to comment.
We considered leaving the ECP
provider participation threshold and
major ECP categories unchanged from
PY 2023, but elected to propose these
changes to ECP policy in an effort to
increase access to care, particularly
mental health care and SUD treatment,
for low-income and medically
underserved consumers. We invite
comment on these proposals.
We considered not introducing a
proposal to require all QHP issuers,
including stand-alone dental plans, to
utilize a contracted network of
providers, but elected to propose this
change to network adequacy policy in
an effort to ensure that consumers have
access to insurer-negotiated prices and
reduced costs in the form of reduced
cost-sharing, premiums, and service
price, as compared with cost-sharing,
premiums, and service prices obtained
from plans with no network of
contracted providers. We invite
comment on this proposal.
We considered not proposing an
amendment to § 156.270(f) to add a
timeliness standard to the requirement
for QHP issuers to send enrollees
notices of payment delinquency.
However, because there is currently no
timeliness standard for delinquency
notices, we are concerned that there is
a risk that enrollees may not receive
sufficient notice of their delinquency in
order to avoid termination of coverage.
We also considered proposing
requirements on how much advance
notice issuers must provide on premium
bills after coverage is effectuated, but
have declined to propose regulation
here, determining that our focus on
delinquency notice timeliness will have
the desired impact without creating
potential conflicts with the existing
pattern of State rules and issuer
practices that have long applied in the
individual market.
entities, if a rule has a significant impact
on a substantial number of small
entities. For purposes of the RFA, we
estimate that small businesses,
nonprofit organizations, and small
governmental jurisdictions are small
entities as that term is used in the RFA.
The great majority of hospitals and most
other health care providers and
suppliers are small entities, either by
being nonprofit organizations or by
meeting the SBA definition of a small
business (having revenues of less than
$8.0 million to $41.5 million in any 1
year). Individuals and States are not
included in the definition of a small
entity.
For purposes of the RFA, we believe
that health insurance issuers and group
health plans would be classified under
the North American Industry
Classification System (NAICS) code
524114 (Direct Health and Medical
Insurance Carriers). According to SBA
size standards, entities with average
annual receipts of $41.5 million or less
would be considered small entities for
these NAICS codes. Issuers could
possibly be classified in 621491 (HMO
Medical Centers) and, if this is the case,
the SBA size standard would be $35
million or less.249 We believe that few,
if any, insurance companies
underwriting comprehensive health
insurance policies (in contrast, for
example, to travel insurance policies or
dental discount policies) fall below
these size thresholds. Based on data
from MLR annual report submissions for
the 2020 MLR reporting year,
approximately 78 out of 480 issuers of
health insurance coverage nationwide
had total premium revenue of $41.5
million or less.250 This estimate may
overstate the actual number of small
health insurance issuers that may be
affected, since over 76 percent of these
small issuers belong to larger holding
groups, and many, if not all, of these
small companies are likely to have nonhealth lines of business that will result
in their revenues exceeding $41.5
million.
In this proposed rule, we propose
standards for the risk adjustment and
HHS–RADV programs, which are
intended to stabilize premiums and
reduce incentives for issuers to avoid
higher-risk enrollees. Because we
believe that insurance firms offering
comprehensive health insurance
policies generally exceed the size
thresholds for ‘‘small entities’’
established by the SBA, we do not
E. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze
options for regulatory relief of small
249 https://www.sba.gov/document/support-table-size-standards.
250 Available at https://www.cms.gov/CCIIO/
Resources/Data-Resources/mlr.html.
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believe that an initial regulatory
flexibility analysis is required for such
firms. Furthermore, the proposals
related to IPPTA at §§ 155.1500–
155.1515 will affect only State
Exchanges. As State governments do not
constitute small entities under the
statutory definition, and as all State
Exchanges have revenues exceeding $5
million, an impact analysis for these
provisions is not required under the
RFA.
As its measure of significant
economic impact on a substantial
number of small entities, HHS uses a
change in revenue of more than 3 to 5
percent. We do not believe that this
threshold will be reached by the
requirements in this proposed rule.
Therefore, the Secretary has certified
that this proposed rule will not have a
significant economic impact on a
substantial number of small entities.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
impact analysis if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 603 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a metropolitan statistical area and has
fewer than 100 beds. While this rule is
not subject to section 1102 of the Act,
we have determined that this proposed
rule would not affect small rural
hospitals. Therefore, the Secretary has
certified that this proposed rule will not
have a significant impact on the
operations of a substantial number of
small rural hospitals.
F. Unfunded Mandates Reform Act
(UMRA)
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2022, that
threshold is approximately $165
million. Although we have not been
able to quantify all costs, we expect the
combined impact on State, local, or
Tribal governments and the private
sector does not meet the UMRA
definition of unfunded mandate.
G. Federalism
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on State and local
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governments, preempts State law, or
otherwise has Federalism implications.
In compliance with the requirement
of E.O. 13132 that agencies examine
closely any policies that may have
Federalism implications or limit the
policy making discretion of the States,
we have engaged in efforts to consult
with and work cooperatively with
affected States, including participating
in conference calls with and attending
conferences of the NAIC, and consulting
with State insurance officials on an
individual basis.
While developing this rule, we
attempted to balance the States’
interests in regulating health insurance
issuers with the need to ensure market
stability. By doing so, we complied with
the requirements of E.O. 13132.
Because States have flexibility in
designing their Exchange and Exchangerelated programs, State decisions will
ultimately influence both administrative
expenses and overall premiums. States
are not required to establish an
Exchange or risk adjustment program.
For States that elected previously to
operate an Exchange, those States had
the opportunity to use funds under
Exchange Planning and Establishment
Grants to fund the development of data.
Accordingly, some of the initial cost of
creating programs was funded by
Exchange Planning and Establishment
Grants. After establishment, Exchanges
must be financially self-sustaining, with
revenue sources at the discretion of the
State. Current State Exchanges charge
user fees to issuers.
In our view, while this proposed rule
would not impose substantial direct
requirement costs on State and local
governments, this regulation has
Federalism implications due to
potential direct effects on the
distribution of power and
responsibilities among the State and
Federal Governments relating to
determining standards relating to health
insurance that is offered in the
individual and small group markets. For
example, the repeal of the risk
adjustment State flexibility policy may
have Federalism implications, but they
are mitigated because States have the
option to operate their own Exchange
and risk adjustment program if they
believe the HHS risk adjustment
methodology does not account for Statespecific factors unique to the State’s
markets.
As previously noted, the proposals in
this rule related to IPPTA would impose
a minimal unfunded mandate on State
Exchanges to supply data for the
improper payment calculation.
Accordingly, E.O. 13132 does not apply
to this section of the proposed rule. In
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addition, statute requires HHS to
determine the amount and rate of
improper payments. Finally, States have
the option to choose an FFE or SBE–FP,
each of which place different Federal
burdens on the State. As the IPPTA
section of the proposed rule should not
conflict with State law, HHS does not
anticipate any preemption of State law.
We invite State Exchanges to submit
comments on this section of the
proposed rule if they believe it would
conflict with State law.
In addition, we believe this proposed
regulation does have Federalism
implications due to our proposal that
Exchanges offer earlier effective dates
for consumers attesting to future midmonth loss of MEC or COBRA coverage.
However, the Federalism implications
are mitigated as Exchanges would have
the flexibility to continue offering the
current coverage effective dates as
described at § 155.420(b)(2)(iv) or the
new proposed earlier effective dates for
consumers attesting to a future loss of
MEC as described earlier in preamble. In
addition, through the cross-references in
§ 147.104(b)(5), the new proposed
earlier coverage effective dates for
consumers attesting to a future loss of
MEC would be applicable market-wide
at the option of the applicable State
authority.
Additionally, we believe this
proposed regulation does have
Federalism implications due to our
proposal that Exchanges provide
consumers losing Medicaid or CHIP
with a 90-day special enrollment period
window to enroll in an Exchange QHP
rather than the current 60-day window.
However, the Federalism implications
are mitigated as Exchanges will have the
flexibility to decide whether to continue
providing 60 days before or 60 days
after for consumers losing Medicaid or
CHIP to enroll in a QHP plan as
described at § 155.420(c)(1) or to
implement the proposed new special
rule providing consumers with 60 days
before or 90 days after their loss of
Medicaid or CHIP to enroll in QHP
coverage.
List of Subjects
45 CFR Part 153
Administrative practice and
procedure, Health care, Health
insurance, Health records,
Intergovernmental relations,
Organization and functions
(Government agencies), Reporting and
recordkeeping requirements.
45 CFR Part 155
Administrative practice and
procedure, Advertising, Brokers,
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Conflict of interests, Consumer
protection, Grants administration, Grant
programs-health, Health care, Health
insurance, Health maintenance
organizations (HMO), Health records,
Hospitals, Indians, Individuals with
disabilities, Intergovernmental relations,
Loan programs-health, Medicaid,
Organization and functions
(Government agencies), Public
assistance programs, Reporting and
recordkeeping requirements, Technical
assistance, Women and youth.
45 CFR Part 156
Administrative practice and
procedure, Advertising, Advisory
committees, Brokers, Conflict of
interests, Consumer protection, Grant
programs-health, Grants administration,
Health care, Health insurance, Health
maintenance organization (HMO),
Health records, Hospitals, Indians,
Individuals with disabilities, Loan
programs-health, Medicaid,
Organization and functions
(Government agencies), Public
assistance programs, Reporting and
recordkeeping requirements, State and
local governments, Sunshine Act,
Technical assistance, Women, and
Youth.
For the reasons set forth in the
preamble, under the authority at 5
U.S.C. 301, the Department of Health
and Human Services proposes to amend
45 CFR subtitle A, subchapter B, as set
forth below.
PART 153—STANDARDS RELATED TO
REINSURANCE, RISK CORRIDORS,
AND RISK ADJUSTMENT UNDER THE
AFFORDABLE CARE ACT
1. The authority citation for part 153
continues to read as follows:
■
Authority: 42 U.S.C. 18031, 18041, and
18061 through 18063.
2. Amend § 153.320 by revising
paragraphs (d) introductory text,
(d)(1)(iv), and (d)(4)(i)(B) to read as
follows:
■
§ 153.320 Federally certified risk
adjustment methodology
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(d) State flexibility to request
reductions to transfers. For the 2020
through 2023 benefit years, States can
request to reduce risk adjustment
transfers in the State’s individual
catastrophic, individual noncatastrophic, small group, or merged
market risk pool by up to 50 percent in
States where HHS operates the risk
adjustment program. For the 2024
benefit year, only prior participants, as
defined in paragraph (d)(5) of this
section, may request to reduce risk
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adjustment transfers in the State’s
individual catastrophic, individual noncatastrophic, small group, or merged
market risk pool by up to 50 percent in
States where HHS operates the risk
adjustment program.
(1) * * *
(i) * * *
(iv) For the 2024 benefit year only, a
justification for the requested reduction
demonstrating the requested reduction
would have de minimis impact on the
necessary premium increase to cover the
transfers for issuers that would receive
reduced transfer payments.
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(4) * * *
(B) For the 2024 benefit year only,
that the requested reduction would have
de minimis impact on the necessary
premium increase to cover the transfers
for issuers that would receive reduced
transfer payments.
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■ 3. Section 153.630 is amended by—
■ a. Revising paragraph (d)(2);
■ b. Redesignating paragraph (d)(3) as
paragraph (d)(4); and
■ c. Adding new paragraph (d)(3).
The revision and addition read as
follows:
§ 153.630 Data validation requirements
when HHS operates risk adjustment.
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(d) * * *
(2) Within 15 calendar days of the
notification of the findings of a second
validation audit (if applicable) by HHS,
in the manner set forth by HHS, an
issuer must confirm the findings of the
second validation audit (if applicable),
or file a discrepancy report to dispute
the findings of a second validation audit
(if applicable).
(3) Within 30 calendar days of the
notification by HHS of the calculation of
a risk score error rate, in the manner set
forth by HHS, an issuer must confirm
the calculation of the risk score error
rate as a result of risk adjustment data
validation, or file a discrepancy report
to dispute the calculation of a risk score
error rate as a result of risk adjustment
data validation.
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■ 4. Section 153.710 is amended by
revising paragraphs (e) and (h)(1)
introductory text to read as follows:
§ 153.710
Data requirements.
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(e) Materiality threshold. HHS will
consider a discrepancy reported under
paragraph (d)(2) of this section to be
material if the amount in dispute is
equal to or exceeds $100,000 or 1
percent of the total estimated transfer
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amount in the applicable State market
risk pool, whichever is less.
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(h) * * *
(1) Notwithstanding any discrepancy
report made under paragraph (d)(2) of
this section, any discrepancy filed
under § 153.630(d)(2) or (3), or any
request for reconsideration under
§ 156.1220(a) of this subchapter with
respect to any risk adjustment payment
or charge, including an assessment of
risk adjustment user fees and risk
adjustment data validation adjustments;
reinsurance payment; cost-sharing
reduction payment or charge; or risk
corridors payment or charge, unless the
dispute has been resolved, an issuer
must report, for purposes of the risk
corridors and MLR programs:
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PART 155—EXCHANGE
ESTABLISHMENT STANDARDS AND
OTHER RELATED STANDARDS
UNDER THE AFFORDABLE CARE ACT
5. The authority citation for part 155
continues to read as follows:
■
Authority: 42 U.S.C. 18021–18024, 18031–
18033, 18041–18042, 18051, 18054, 18071,
and 18081–18083.
6. Section 155.106 is amended by
revising paragraphs (a)(3) and (c)(3) to
read as follows:
■
§ 155.106 Election to operate an Exchange
after 2014.
(a) * * *
(3) Have in effect an approved, or
conditionally approved, Exchange
Blueprint and operational readiness
assessment prior to the date on which
the Exchange would begin open
enrollment as a State Exchange;
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(c) * * *
(3) Have in effect an approved, or
conditionally approved, Exchange
Blueprint and operational readiness
assessment prior to the date on which
the Exchange proposes to begin open
enrollment as an SBE–FP, in accordance
with HHS rules, as a State Exchange
utilizing the Federal platform;
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§ 155.210
[Amended]
7. Section 155.210 is amended by
removing and reserving paragraph
(d)(8).
■ 8. Section 155.220 is amended by—
■ a. Revising paragraphs (g)(5)(i)(B),
(h)(3), and (j)(2)(ii) introductory text;
■ b. Redesignating paragraphs
(j)(2)(ii)(A) through (D) as paragraphs
(j)(2)(ii)(B), through (E), respectively;
■ c. Adding new paragraph ((j)(2)(ii)(A);
and
■
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d. Revising paragraph (j)(2)(iii).
The revisions and additions read as
follows:
■
§ 155.220 Ability of States to permit agents
and brokers and web-brokers to assist
qualified individuals, qualified employers,
or qualified employees enrolling QHPs.
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(g) * * *
(5) * * *
(i) * * *
(B) The agent, broker, or web-broker
may submit evidence in a form and
manner to be specified by HHS, to rebut
the allegation during this 90-day period.
If the agent, broker, or web-broker
submits such evidence during the
suspension period, HHS will review the
evidence and make a determination
whether to lift the suspension within 45
calendar days of receipt of such
evidence. If the rebuttal evidence does
not persuade HHS to lift the suspension,
or if the agent, broker, or web-broker
fails to submit rebuttal evidence during
the suspension period, HHS may
terminate the agent’s, broker’s, or webbroker’s agreements required under
paragraph (d) of this section and under
§ 155.260(b) for cause under paragraph
(g)(5)(ii) of this section.
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(h) * * *
(3) Notice of reconsideration decision.
The HHS reconsideration entity will
provide the agent, broker, or web-broker
with a written notice of the
reconsideration decision within 60
calendar days of the date it receives the
request for reconsideration. This
decision will constitute HHS’ final
determination.
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(j) * * *
(2) * * *
(ii) Provide the Federally-facilitated
Exchanges with correct information, and
document that eligibility application
information has been reviewed by and
confirmed to be accurate by the
consumer, or the consumer’s authorized
representative designated in compliance
with § 155.227, prior to the submission
of information under section 1411(b) of
the Affordable Care Act, including but
not limited to:
(A) Documenting that eligibility
application information has been
reviewed by and confirmed to be
accurate by the consumer or the
consumer’s authorized representative
must require the consumer or their
authorized representative to take an
action that produces a record that can be
maintained by the individual or entity
described in paragraph (j)(1) of this
section and produced to confirm the
consumer or their authorized
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representative has reviewed and
confirmed the accuracy of the eligibility
application information. Nonexhaustive examples of acceptable
documentation include obtaining the
signature of the consumer or their
authorized representative (electronically
or otherwise), verbal confirmation by
the consumer or their authorized
representative that is captured in an
audio recording, a written response
(electronic or otherwise) from the
consumer or their authorized
representative to a communication sent
by the agent, broker, or web-broker, or
other similar means or methods
specified by HHS in guidance.
(1) The documentation required under
paragraph (j)(2)(ii)(A) of this section
must include the date the information
was reviewed, the name of the
consumer or their authorized
representative, an explanation of the
attestations at the end of the eligibility
application, and the name of the
assisting agent, broker, or web-broker.
(2) An individual or entity described
in paragraph (j)(1) of this section must
maintain the documentation described
in paragraph (j)(2)(ii)(A) of this section
for a minimum of ten years, and
produce the documentation upon
request in response to monitoring, audit,
and enforcement activities conducted
consistent with paragraphs (c)(5), (g),
(h), and (k) of this section.
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(iii) Obtain and document the receipt
of consent of the consumer or their
authorized representative designated in
compliance with § 155.227, employer,
or employee prior to assisting with or
facilitating enrollment through a
Federally-facilitated Exchange or
assisting the individual in applying for
advance payments of the premium tax
credit and cost-sharing reductions for
QHPs;
(A) Obtaining and documenting the
receipt of consent must require the
consumer, or the consumer’s authorized
representative designated in compliance
with § 155.227, to take an action that
produces a record that can be
maintained and produced by an
individual or entity described in
paragraph (j)(1) of this section to
confirm the consumer’s or their
authorized representative’s consent has
been provided. Non-exhaustive
examples of acceptable documentation
of consent include obtaining the
signature of the consumer or their
authorized representative (electronically
or otherwise), verbal confirmation by
the consumer or their authorized
representative that is captured in an
audio recording, a response from the
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78317
consumer or their authorized
representative to an electronic or other
communication sent by the agent,
broker, or web-broker.
(B) The documentation required
under paragraph (j)(2)(iii)(A) of this
section must include a description of
the scope, purpose, and duration of the
consent provided by the consumer or
their authorized representative
designated in compliance with
§ 155.227, the date consent was given,
name of the consumer or their
authorized representative, and the name
of the agent, broker, web-broker, or
agency being granted consent, as well as
a process through which the consumer
or their authorized representative may
rescind the consent.
(C) An individual or entity described
in paragraph (j)(1) of this section must
maintain the documentation described
in paragraph (j)(2)(iii)(A) of this section
for a minimum of 10 years, and produce
the documentation upon request in
response to monitoring, audit, and
enforcement activities conducted
consistent with paragraphs (c)(5), (g),
(h), and (k) of this section.
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§ 155.225
[Amended]
9. Section 155.225 is amended by
removing and reserving paragraph (g)(5).
■ 10. Section 155.305 is amended by
revising paragraph (f)(4) to read as
follows.
■
§ 155.305
Eligibility standards.
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(f) * * *
(4) Compliance with filing
requirement. Beginning January 1, 2024,
the Exchange may not determine a tax
filer eligible for APTC if the IRS notifies
HHS and HHS notifies the Exchange as
part of the process described in
§ 155.320(c)(3) that APTC payments
were made on behalf of the tax filer or
either spouse if the tax filer is a married
couple for two consecutive years for
which tax data would be utilized for
verification of household income and
family size in accordance with
§ 155.320(c)(1)(i), and the tax filer or his
or her spouse did not comply with the
requirement to file an income tax return
for that year and for the previous year
as required by 26 U.S.C. 6011, 6012, and
their implementing regulations and
reconcile APTC for that period.
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■ 11. Section 155.315 is amended by
adding paragraph (f)(7) to read as
follows:
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§ 155.315 Verification process related to
eligibility for enrollment in a QHP through
the Exchange.
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(f) * * *
(7) Must extend the period described
in paragraph (f)(2)(ii) of this section by
a period of 60 days for an applicant if
the applicant is required to present
satisfactory documentary evidence to
verify household income.
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■ 12. Section 155.320 is amended by
adding paragraph (c)(5) to read as
follows:
§ 155.320 Verification process related to
eligibility for insurance affordability
programs.
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(c) * * *
(5) Notwithstanding any other
requirement described in this paragraph
(c) to the contrary, when the Exchange
requests tax return data and family size
from the Secretary of Treasury as
described in § 155.320(c)(1)(i)(A) but no
such data is returned for an applicant,
the Exchange will accept that
applicant’s attestation of income and
family size without further verification.
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■ 13. Section 155.335 is amended by
revising paragraphs (j)(1)(i), (j)(1)(ii),
(j)(1)(iii)(A) and (B), (j)(1)(iv), (j)(2)(i)
through (iii) and adding paragraphs
(j)(2)(iv) and (v) to read as follows:
§ 155.335 Annual eligibility
redetermination.
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(j) * * *
(1) * * *
(i) If the enrollee’s current QHP is
available through the Exchange and –
(A) The enrollee is not CSR-eligible,
in accordance with § 155.305(g), the
Exchange will re-enroll the enrollee in
the same plan as the enrollee’s current
QHP.
(B) The enrollee is CSR-eligible, in
accordance with § 155.305(g), and the
enrollee’s current QHP is a bronze level
plan, the Exchange will re-enroll the
enrollee either in the same plan as the
enrollee’s current QHP, or, at the option
of the Exchange, in a silver level QHP
within the same product that has a
lower or equivalent premium after
APTC and that has the most similar
network compared to the enrollee’s
current QHP;
(C) The enrollee is CSR-eligible, in
accordance with § 155.305(g), and the
enrollee’s current QHP is not a bronze
level plan, the Exchange will re-enroll
the enrollee in the same plan as the
enrollee’s current QHP.
(ii) If the enrollee’s current QHP is not
available through the Exchange and –
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(A) The enrollee is not CSR-eligible,
in accordance with § 155.305(g), the
Exchange will re-enroll the enrollee in
a QHP within the same product, at the
same metal level and that has the most
similar network compared to the
enrollee’s current QHP.
(B) The enrollee is CSR-eligible, in
accordance with § 155.305(g), and the
enrollee’s current QHP is a bronze level
plan, the Exchange will re-enroll the
enrollee either in a bronze level QHP
within the same product, or, at the
option of Exchange, in a silver level
QHP within the same product that has
a lower or equivalent premium after
APTC and that has the most similar
network compared to the enrollee’s
current QHP;
(C) The enrollee is CSR-eligible, in
accordance with § 155.305(g), and the
enrollee’s current QHP is not a bronze
level plan, the Exchange will re-enroll
the enrollee in a QHP within the same
product at the same metal level and that
has the most similar network compared
to the enrollee’s current QHP;
(iii) * * *
(A) The enrollee’s current QHP is a
silver level plan, the Exchange will reenroll the enrollee in a silver level QHP
under a different product offered by the
same QHP issuer that is most similar to
and that has the most similar network
compared to the enrollee’s current
product. If no such silver level QHP is
available for enrollment through the
Exchange, the Exchange will re-enroll
the enrollee in a QHP under the same
product that is one metal level higher or
lower than the enrollee’s current QHP
and that has the most similar network
compared to the enrollee’s current QHP;
(B) The enrollee’s current QHP is not
a silver level plan, the Exchange will reenroll the enrollee under the same
product that is one metal level higher or
lower than the enrollee’s current QHP
and that has the most similar network
compared to the enrollee’s current QHP
and ; or
(iv) If the enrollee’s current QHP is
not available through the Exchange and
the enrollee’s product no longer
includes a QHP that is at the same metal
level as, or one metal level higher or
lower than the enrollee’s current QHP,
the Exchange will re-enroll the enrollee
in any other QHP offered under the
product in which the enrollee’s current
QHP is offered in which the enrollee is
eligible to enroll that has the most
similar network compared to the
enrollee’s current QHP.
(2) * * *
(i) If the enrollee is not CSR eligible,
the Exchange will re-enroll the enrollee
in a QHP in the product offered by the
same issuer that is the most similar to
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the enrollee’s current product at the
same metal level as and with the most
similar network compared to the
enrollee’s current QHP;
(ii) If the enrollee is CSR-eligible, in
accordance with § 155.305(g), and the
enrollee’s current QHP is a bronze level
plan, the Exchange will re-enroll the
enrollee either in a bronze level QHP,
or, at the option of the Exchange, in a
silver level QHP that has a lower or
equivalent premium after APTC and
that has the most similar network
compared to the enrollee’s current QHP
in the product offered by the same
issuer through the Exchange that is most
similar to the enrollee’s current product;
(iii) If the enrollee is CSR-eligible, in
accordance with § 155.305(g), and the
enrollee’s current QHP is not a bronze
level plan, the Exchange will re-enroll
the enrollee in a QHP at the same metal
level that has the most similar network
compared to the enrollee’s current QHP
in the product offered by the same
issuer that is the most similar to the
enrollee’s current product;
(iv) If the issuer does not offer another
QHP at the same metal level as the
enrollee’s current QHP, the Exchange
will re-enroll the enrollee in a QHP that
is one metal level higher or lower than
the enrollee’s current QHP and that has
the most similar network compared to
the enrollee’s current QHP in the
product offered by the same issuer
through the Exchange that is the most
similar to the enrollee’s current product;
or
(v) If the issuer does not offer another
QHP through the Exchange at the same
metal level as, or one metal level higher
or lower than the enrollee’s current
QHP, the Exchange will re-enroll the
enrollee in any other QHP offered by the
same issuer in which the enrollee is
eligible to enroll in the product that is
most similar to the enrollee’s current
product and in a QHP within that
product that has the most similar
network to the enrollee’s current QHP.
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■ 14. Section 155.420 is amended by—
■ a. Revising paragraphs (a)(4)(ii)(A)
and (B), (b)(2)(iv), and (c)(2);
■ b. Adding paragraph (c)(6); and
■ c. Revising paragraph (d)(12).
The revisions and addition read as
follows:
§ 155.420
Special enrollment periods.
(a) * * *
(4) * * *
(ii) * * *
(A) If an enrollee or his or her
dependents become newly eligible for
cost-sharing reductions in accordance
with paragraph (d)(6)(i) or (ii) of this
section and the enrollee or his or her
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dependents are not enrolled in a silverlevel QHP, the Exchange must allow the
enrollee and his or her dependents to
change to a silver-level QHP if they elect
to change their QHP enrollment; or
(B) Beginning January 2022, if an
enrollee or his or her dependents
become newly ineligible for cost-sharing
reductions in accordance with
paragraph (d)(6)(i) or (ii) of this section
and the enrollee or his or her
dependents are enrolled in a silver-level
QHP, the Exchange must allow the
enrollee and his or her dependents to
change to a QHP one metal level higher
or lower if they elect to change their
QHP enrollment;
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(b) * * *
(2) * * *
(iv) If a qualified individual, enrollee,
or dependent, as applicable, loses
coverage as described in paragraphs
(d)(1) or (d)(6)(iii) of this section, or is
enrolled in COBRA continuation
coverage for which an employer is
paying all or part of the premiums, or
for which a government entity is
providing subsidies, and the employer
contributions or government subsidies
completely cease as described in
paragraph (d)(15) of this section, gains
access to a new QHP as described in
paragraph (d)(7) of this section, becomes
newly eligible for enrollment in a QHP
through the Exchange in accordance
with § 155.305(a)(2) as described in
paragraph (d)(3) of this section, becomes
newly eligible for advance payments of
the premium tax credit in conjunction
with a permanent move as described in
paragraph (d)(6)(iv) of this section, and
if the plan selection is made on or
before the day of the triggering event,
the Exchange must ensure that the
coverage effective date is the first day of
the month following the date of the
triggering event. If the plan selection is
made after the date of the triggering
event, the Exchange must ensure that
coverage is effective in accordance with
paragraph (b)(1) of this section or on the
first day of the following month, at the
option of the Exchange.
Notwithstanding the requirements of
this paragraph (b)(2)(iv), and at the
option of the Exchange, if the plan
selection is made on or before the last
day of the month preceding the
triggering event, the Exchange must
ensure that the coverage effective date is
the first of the month in which the
triggering event occurs for losses of
coverage as described in paragraphs
(d)(1), (d)(6)(iii), and (d)(15) of this
section.
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(c) * * *
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(2) Advanced availability. A qualified
individual or his or her dependent who
is described in paragraph (d)(1),
(d)(6)(iii), or (d)(15) of this section has
60 days before and, unless the Exchange
exercises the option in paragraph (c)(6)
of this section, 60 days after the
triggering event to select a QHP. At the
option of the Exchange, a qualified
individual or his or her dependent who
is described in paragraph (d)(7) of this
section; who is described in paragraph
(d)(6)(iv) of this section becomes newly
eligible for advance payments of the
premium tax credit as a result of a
permanent move to a new State; or who
is described in paragraph (d)(3) of this
section and becomes newly eligible for
enrollment in a QHP through the
Exchange because he or she newly
satisfies the requirements under
§ 155.305(a)(2), has 60 days before or
after the triggering event to select a
QHP.
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(6) Special rule for individuals losing
Medicaid or CHIP. Beginning January 1,
2024, at the option of the Exchange, a
qualified individual or his or her
dependent(s) who is described in
paragraph (d)(1)(i) of this section and
whose loss of coverage is a loss of
Medicaid or CHIP coverage shall have
90 days after the triggering event to
select a QHP.
*
*
*
*
*
(d) * * *
(12) The enrollment in a QHP through
the Exchange was influenced by a
material error related to plan benefits,
service area, cost-sharing, or premium.
A material error is one that is likely to
have influenced a qualified individual’s,
enrollee’s, or their dependent’s
enrollment in a QHP.
*
*
*
*
*
■ 15. Section 155.430 is amended by
adding paragraph (b)(3) to read as
follows:
§ 155.430 Termination of Exchange
enrollment or coverage.
*
*
*
*
*
(b) * * *
(3) Prohibition of issuer-initiated
terminations due to aging-off.
Exchanges on the Federal platform
must, and State Exchanges using their
own platform may, prohibit QHP issuers
from terminating dependent coverage of
a child before the end of the plan year
in which the child attains age 26, or
before the end of the plan year in which
the child attains the maximum age a
QHP issuer is required to make available
dependent coverage of children under
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78319
applicable State law, on the basis of the
child’s age, unless otherwise permitted.
*
*
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*
■ 16. Section 155.505 is amended by
revising paragraph (g) to read as follows:
§ 155.505 General eligibility appeals
requirements.
*
*
*
*
*
(g) Review of Exchange Eligibility
Appeal Decisions. An appellant may
seek review of Exchange eligibility
appeal decisions issued under
paragraph (b) of this section as follows:
(1) Administrative Review. The
Administrator may review an Exchange
eligibility appeal decision as follows:
(i) Request by a party to the appeal.
(A) Within 14 calendar days of the date
of the Exchange eligibility appeal
decision issued by an impartial official
as described in § 155.535(c)(4), a party
to the appeal may request review of the
Exchange eligibility appeal decision by
the CMS Administrator. Such a request
may be made even if the CMS
Administrator has already at their
initiative declined review as described
in paragraph (g)(1)(ii)(B) of this section.
If the CMS Administrator accepts that
party’s request for a review after having
declined review, then the CMS
Administrator’s initial declination to
review the eligibility appeal decision is
void.
(B) Within 30 days of the date of the
party’s request for administrative
review, the CMS Administrator may:
(1) Decline to review the Exchange
eligibility appeal decision;
(2) Render a final decision as
described in § 155.545 (a)(1) based on
their review of the eligibility appeal
decision; or
(3) Choose to take no action on the
request for review.
(C) The Exchange eligibility appeal
decision of the impartial official as
described in § 155.535(c)(4) is final as of
the date of the Exchange eligibility
appeal decision if the CMS
Administrator declines the party’s
request for review or if the CMS
Administrator does not take any action
on the party’s request for review by the
end of the 30-day period described in
paragraph (a)(ii).
(ii) Review at the discretion of the
CMS Administrator. (A) Within 14
calendar days of the date of the
Exchange eligibility appeal decision
issued by an impartial official as
described in § 155.535(c)(4), the CMS
Administrator may initiate a review of
an eligibility appeal decision at their
discretion.
(B) Within 30 days of the date the
CMS Administrator initiates a review,
the CMS Administrator may:
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(1) Decline to review the Exchange
eligibility appeal decision;
(2) Render a final decision as
described in § 155.545 (a)(1) based on
their review of the eligibility appeal
decision; or
(3) Choose to take no action on the
Exchange eligibility appeal decision.
(C) The eligibility Exchange appeal
decision of the impartial official as
described in § 155.535(c)(4) is final as of
the date of the Exchange eligibility
appeal decision if the CMS
Administrator declines to review the
eligibility appeal decision or chooses to
take no action by the end of the 30-day
period described in paragraph
(g)(1)(i)(B) of this section.
(iii) Effective dates. If a party requests
a review of an Exchange eligibility
appeal decision by the CMS
Administrator or the CMS
Administrator initiates a review of an
Exchange eligibility appeal decision at
their own discretion, the eligibility
appeal decision is effective as follows:
(A) If an Exchange eligibility appeal
decision is final pursuant to paragraphs
(g)(1)(ii)(B) of this section and
(g)(1)(ii)(C) in this section, the Exchange
eligibility appeal decision of the
impartial official as described in
§ 155.535(c)(4) is effective as of the date
of the official’s decision.
(B) If the CMS Administrator renders
a final decision after reviewing an
Exchange eligibility appeal decision as
described in paragraphs (g)(1)(i)(B)(2)
and (1)(ii)(B)(2) of this section, the CMS
Administrator may choose to change the
effective date of the Exchange eligibility
appeal decision as described in
§ 155.545 (a)(5).
(iv) Informal resolution decisions as
described in § 155.535(a)(4) are not
subject to administrative review by the
CMS Administrator.
(2) Judicial Review. To the extent it is
available by law, an appellant may seek
judicial review of a final Exchange
eligibility appeal decision.
*
*
*
*
*
■ 17. Add subpart P to read as follows:
Subpart P—Improper Payment Pre-Testing
and Assessment (IPPTA) for State
Exchanges
Sec.
155.1500 Purpose and scope.
155.1505 Definitions.
155.1510 Data submission.
155.1515 Pre-testing and assessment
procedures.
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Subpart P—Improper Payment PreTesting and Assessment (IPPTA) for
State Exchanges
§ 155.1500
Purpose and scope.
(a) This subpart sets forth the
requirements of the IPPTA. The IPPTA
is an initiative between HHS and the
State Exchanges. These requirements are
intended to:
(1) Prepare State Exchanges for the
planned measurement of improper
payments.
(2) Test processes and procedures that
support HHS’s review of determinations
of APTC made by State Exchanges.
(3) Provide a mechanism for HHS and
State Exchanges to share information
that will aid in developing an efficient
measurement process.
(b) [Reserved]
§ 155.1505
Definitions.
As used in this subpart—
Business rules means the State
Exchange’s internal directives defining,
guiding, or constraining the State
Exchange’s actions when making
eligibility determinations and related
APTC calculations.
Entity relationship diagram means a
graphical representation illustrating the
organization and relationship of the data
elements that are pertinent to
applications for QHP and associated
APTC payments.
Pre-testing and assessment means the
process that uses the procedures
specified in § 155.1515 to prepare State
Exchanges for the planned measurement
of improper payments of APTC.
Pre-testing and assessment checklist
means the document that contains
criteria that HHS will use to review a
State Exchange’s ability to accomplish
the requirements of the IPPTA.
Pre-testing and assessment data
request form means the document that
specifies the structure for the data
elements that HHS will require each
State Exchange to submit.
Pre-testing and assessment period
means the one calendar year timespan
during which HHS will engage in pretesting and assessment procedures with
a State Exchange.
Pre-testing and assessment plan
means the template developed by HHS
in collaboration with each State
Exchange enumerating the procedures,
sequence, and schedule to accomplish
pre-testing and assessment.
Pre-testing and assessment report
means the summary report provided by
HHS to each State Exchange at the end
of the State Exchange’s pre-testing and
assessment period that will include, but
not be limited to, the State Exchange’s
status regarding completion of each of
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the pre-testing and assessment
procedures specified in § 155.1515, as
well as observations and
recommendations that result from
processing and reviewing the data
submitted by the State Exchange to
HHS.
§ 155.1510
Data submission.
(a) Requirements. For purposes of the
IPPTA, a State Exchange must submit
the following information in a form and
manner specified by HHS:
(1) Data documentation. The State
Exchange must provide to HHS the
following data documentation:
(i) The State Exchange’s data
dictionary including attribute name,
data type, allowable values, and
description;
(ii) An entity relationship diagram,
which shall include the structure of the
data tables and the residing data
elements that identify the relationships
between the data tables; and
(iii) Business rules and related
calculations.
(2) Data for processing and testing.
The State Exchange must use the pretesting and assessment data request
form, or other method as specified by
HHS, to submit to HHS the application
data associated with no fewer than 10
tax household identification numbers
and the associated policy identification
numbers that address scenarios
specified by HHS to allow HHS to test
all of the pre-testing and assessment
processes and procedures.
(b) Timing. The State Exchange must
submit the information specified in
paragraph (a) of this section within the
timelines in the pre-testing and
assessment plan specified in § 155.1515.
§ 155.1515 Pre-testing and assessment
procedures.
(a) General requirement. The State
Exchanges are required to participate in
the IPPTA for a period of one calendar
year. The State Exchange and HHS will
execute the pre-testing and assessment
procedures in this section within the
timelines in the pre-testing and
assessment plan.
(b) Orientation and planning
processes. (1) As a part of the
orientation process, HHS will provide
State Exchanges with an overview of the
pre-testing and assessment procedures
and identify documentation that a State
Exchange must provide to HHS for pretesting and assessment.
(2) As a part of the planning process,
HHS, in collaboration with each State
Exchange, will develop a pre-testing and
assessment plan that takes into
consideration relevant activities, if any,
that were completed during a prior,
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voluntary State engagement. The pretesting and assessment plan will include
the pre-testing and assessment checklist.
(3) At the conclusion of the pretesting and assessment planning
process, HHS will issue the pre-testing
and assessment plan specific to that
State Exchange. The pre-testing and
assessment plan will be for HHS and
State Exchange internal use only and
will not be made available to the public
by HHS unless otherwise required by
law.
(c) Notifications and updates. (1)
Notifications. As needed throughout the
pre-testing and assessment period, HHS
will issue notifications to State
Exchanges concerning information
related to the pre-testing and assessment
processes and procedures.
(2) Updates regarding changes.
Throughout the pre-testing and
assessment period, the State Exchange
must provide HHS with information
regarding any operational, policy,
business rules, information technology,
or other changes that may impact the
ability of the State Exchange to satisfy
the requirements of the pre-testing and
assessment.
(d) Submission of required data and
data documentation. As specified in
§ 155.1510, HHS will inform State
Exchanges about the form and manner
for State Exchanges to submit required
data and data documentation to HHS in
accordance with the pre-testing and
assessment plan.
(e) Data processing. (1) HHS will
coordinate with each State Exchange to
track and manage the data and data
documentation submitted by a State
Exchange as specified in
§ 155.1510(a)(1) and (2).
(2) HHS will coordinate with each
State Exchange to provide assistance in
aligning the data specified in
§ 155.1510(a)(2) from the State
Exchange’s existing data structure to the
standardized set of data elements.
(3) HHS will coordinate with each
State Exchange to interpret and validate
the data specified in § 155.1510(a)(2).
(4) HHS will use the data and data
documentation submitted by the State
Exchange to execute the pre-testing and
assessment procedures.
(f) Pre-testing and assessment
checklist. HHS will issue the pre-testing
and assessment checklist as part of the
pre-testing and assessment plan. The
pre-testing and assessment checklist
criteria will include but are not limited
to:
(1) A State Exchange’s submission of
the data documentation as specified in
§ 155.1510(a)(1).
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(2) A State Exchange’s submission of
the data for processing and testing as
specified in § 155.1510(a)(2); and
(3) A State Exchange’s completion of
the pre-testing and assessment processes
and procedures related to the IPPTA
program.
(g) Pre-testing and assessment report.
Subsequent to the completion of a State
Exchange’s pre-testing and assessment
period, HHS will issue a pre-testing and
assessment report specific to that State
Exchange. The pre-testing and
assessment report will be for HHS and
State Exchange internal use only and
will not be made available to the public
by HHS unless otherwise required by
law.
PART 156—HEALTH INSURANCE
ISSUER STANDARDS UNDER THE
AFFORDABLE CARE ACT, INCLUDING
STANDARDS RELATED TO
EXCHANGES
The authority citation for part 156
continues to read as follows:
■
Authority: 42 U.S.C. 18021–18024, 18031–
18032, 18041–18042, 18044, 18054, 18061,
18063, 18071, 18082, and 26 U.S.C. 36B.
18. Section 156.201 is revised to read
as follows:
■
§ 156.201
Standardized plan options.
A QHP issuer in a Federallyfacilitated Exchange or a State-based
Exchange on the Federal platform, other
than an issuer that is already required
to offer standardized plan options under
State action taking place on or before
January 1, 2020, must:
(a) For the plan year 2023, offer in the
individual market at least one
standardized QHP option, defined at
§ 155.20 of this subchapter, at every
product network type, as the term is
described in the definition of ‘‘product’’
at § 144.103 of this subchapter, at every
metal level, and throughout every
service area that it also offers nonstandardized QHP options, including,
for silver plans, for the income-based
cost-sharing reduction plan variations,
as provided for at § 156.420(a); and
(b) For plan year 2024 and subsequent
plan years, offer in the individual
market at least one standardized QHP
option, defined at § 155.20 of this
subchapter, at every product network
type, as the term is described in the
definition of ‘‘product’’ at § 144.103 of
this subchapter, at every metal level
except the non-expanded bronze metal
level, and throughout every service area
that it also offers non-standardized QHP
options, including, for silver plans, for
the income-based cost-sharing reduction
plan variations, as provided for at
§ 156.420(a)
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78321
(c) With respect to covered drugs:
(1) Place all covered generic drugs in
the standardized plan options’ generic
drug cost-sharing tier, or the specialty
drug tier if there is an appropriate and
non-discriminatory basis in accordance
with § 156.125 for doing so; and
(2) Place all covered brand drugs in
either the standardized plan options’
preferred brand or non-preferred brand
drug cost-sharing tier, or the specialty
drug cost-sharing tier if there is an
appropriate and non-discriminatory
basis in accordance with § 156.125 for
doing so.
■ 19. Section 156.202 is added to read
as follows:
§ 156.202
limits.
Non-standardized plan option
For the plan year 2024 and
subsequent plan years, a QHP issuer in
a Federally-facilitated Exchange or a
State-based Exchange on the Federal
platform is limited to offering two nonstandardized plan options per product
network type, as the term is described
in the definition of ‘‘product’’ at
§ 144.103 of this subchapter, and metal
level (excluding catastrophic plans), in
any service area.
■ 20. Section 156.210 is amended by
adding paragraph (d) to read as follows:
The addition reads as follows:
§ 156.210 QHP rate and benefit
information.
(d) Rate requirements for stand-alone
dental plans. For benefit and plan years
beginning on or after January 1, 2024:
(1) Age on effective date. The
premium rate charged by an issuer of
stand-alone dental plans may vary with
respect to the particular plan or
coverage involved by determining the
enrollee’s age. Any age calculation for
rating and eligibility purposes must be
based on the age as of the time of policy
issuance or renewal.
(2) Guaranteed rates. An issuer of
stand-alone dental plans must set
guaranteed rates.
■ 21. Section 156.225 is amended by —
■ a. In paragraph (a) removing ‘‘and’’
from the end of the paragraph; and
■ b. In paragraph (b) removing ‘‘.’’ from
the end of the paragraph and replacing
it with ‘‘; and’’; and
■ c. By adding paragraph (c).
The addition reads as follows:
§ 156.225
QHPs.
Marketing and Benefit Design of
*
*
*
*
*
(c) Plan marketing names. Offer plans
and plan variations with marketing
names that include correct information,
without omission of material fact, and
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do not include content that is
misleading.
*
*
*
*
*
■ 22. Section 156.230 is amended by—
■ a. Revising paragraphs (a)(1)
introductory text and (e) introductory
text; and
■ b. Removing and reserving paragraph
(f).
The revisions read as follows:
§ 156.230
Network adequacy standards.
(a) General requirement. (1) Each QHP
issuer must use a provider network and
ensure that the provider network
consisting of in-network providers, as
available to all enrollees, meets the
following standards:
*
*
*
*
*
(e) Out-of-network cost-sharing.
Beginning for the 2018 and later benefit
years, for a network to be deemed
adequate, each QHP must:
*
*
*
*
*
■ 23. Section 156.235 is amended by
revising paragraphs (a)(1), (a)(2)(i) and
(a)(2)(ii)(B) to read as follows:
§ 156.235
Essential community providers.
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(a) * * *
(1) A QHP issuer must include in its
provider network a sufficient number
and geographic distribution of essential
community providers (ECPs), where
available, to ensure reasonable and
timely access to a broad range of such
providers for low-income individuals or
individuals residing in Health
Professional Shortage Areas within the
QHP’s service area, in accordance with
the Exchange’s network adequacy
standards.
(2) * * *
(i) The QHP issuer’s provider network
includes as participating providers at
least a minimum percentage, as
specified by HHS, of available ECPs in
each plan’s service area collectively
across all ECP categories defined under
paragraph (ii)(B) of this section, and at
least a minimum percentage of available
ECPs in each plan’s service area within
certain individual ECP categories, as
specified by HHS. Multiple providers at
a single location will count as a single
ECP toward both the available ECPs in
the plan’s service area and the issuer’s
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satisfaction of the ECP participation
standard. For plans that use tiered
networks, to count toward the issuer’s
satisfaction of the ECP standards,
providers must be contracted within the
network tier that results in the lowest
cost-sharing obligation. For plans with
two network tiers (for example,
participating providers and preferred
providers), such as many PPOs, where
cost-sharing is lower for preferred
providers, only preferred providers will
be counted towards ECP standards.; and
(ii) * * *
(B) At least one ECP in each of the
eight (8) ECP categories in each county
in the service area, where an ECP in that
category is available and provides
medical or dental services that are
covered by the issuer plan type. The
ECP categories are: Federally Qualified
Health Centers, Ryan White Program
Providers, Family Planning Providers,
Indian Health Care Providers, Inpatient
Hospitals, Mental Health Facilities,
Substance Use Disorder Treatment
Centers, and Other ECP Providers. The
Other ECP Providers category includes
the following types of providers: Rural
Health Clinics, Black Lung Clinics,
Hemophilia Treatment Centers,
Sexually Transmitted Disease Clinics,
Tuberculosis Clinics, and Rural
Emergency Hospitals
*
*
*
*
*
■ 24. Section 156.270 is amended by
revising paragraph (f) to read as follows:
§ 156.270 Termination of coverage or
enrollment for qualified individuals
*
*
*
*
*
(f) Notice of non-payment of
premiums. If an enrollee is delinquent
on premium payment, the QHP issuer
must provide the enrollee with notice of
such payment delinquency promptly
and without undue delay.
*
*
*
*
*
■ 25. Section 156.1210 is amended by
revising paragraph (c) to read as follows:
§ 156.1210
Dispute submission.
*
*
*
*
*
(c) Deadline for describing
inaccuracies. To be eligible for
resolution under paragraph (b) of this
section, an issuer must describe all
inaccuracies identified in a payment
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and collections report before the end of
the 3-year period beginning at the end
of the plan year to which the inaccuracy
relates. For plan years 2015 through
2019, to be eligible for resolution under
paragraph (b) of this section, an issuer
must describe all inaccuracies identified
in a payment and collections report
before January 1, 2024. If a payment
error is discovered after the timeframe
set forth in this paragraph, the issuer
must notify HHS, the State Exchange, or
SBE–FP (as applicable) and repay any
overpayments to HHS.
■ 26. Section 156.1220 is amended by
revising paragraphs (a)(4)(ii) and (b)(1)
to read as follows:
§ 156.1220
Administrative appeals.
(a) * * *
(4) * * *
(ii) Notwithstanding paragraph (a)(1)
of this section, a reconsideration with
respect to a processing error by HHS,
HHS’s incorrect application of the
relevant methodology, or HHS’s
mathematical error may be requested
only if, to the extent the issue could
have been previously identified, the
issuer notified HHS of the dispute
through the applicable process for
reporting a discrepancy set forth in
§§ 153.630(d)(2) and (3), 153.710(d)(2),
and 156.430(h)(1) of this subchapter, it
was so identified and remains
unresolved.
*
*
*
*
*
(b) * * *
(1) Manner and timing for request. A
request for an informal hearing must be
made in writing and filed with HHS
within 30 calendar days of the date of
the reconsideration decision under
paragraph (a)(5) of this section. If the
last day of this period is not a business
day, the request for an informal hearing
must be made in writing and filed by
the next applicable business day.
*
*
*
*
*
Dated: December 12, 2022.
Xavier Becerra,
Secretary, Department of Health and Human
Services.
[FR Doc. 2022–27206 Filed 12–14–22; 4:15 pm]
BILLING CODE 4120–01–P
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Agencies
[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Proposed Rules]
[Pages 78206-78322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27206]
[[Page 78205]]
Vol. 87
Wednesday,
No. 244
December 21, 2022
Part II
Department of Health and Human Services
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45 CFR Parts 153, 155, and 156
Patient Protection and Affordable Care Act, HHS Notice of Benefit and
Payment Parameters for 2024; Proposed Rule
Federal Register / Vol. 87, No. 244 / Wednesday, December 21, 2022 /
Proposed Rules
[[Page 78206]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 153, 155, and 156
[CMS-9899-P]
RIN 0938-AU97
Patient Protection and Affordable Care Act, HHS Notice of Benefit
and Payment Parameters for 2024
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule includes proposed payment parameters and
provisions related to the HHS-operated risk adjustment and risk
adjustment data validation programs, as well as proposed 2024 user fee
rates for issuers offering qualified health plans (QHPs) through
Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the
Federal platform (SBE-FPs). This proposed rule also proposes
requirements related to updating standardized plan options and reducing
plan choice overload; re-enrollment hierarchy; plan and plan variation
marketing name requirements for QHPs; essential community providers
(ECPs) and network adequacy; failure to file and reconcile; special
enrollment periods (SEPs); the annual household income verification;
the deadline for QHP issuers to report enrollment and payment
inaccuracies; requirements related to the State Exchange improper
payment measurement program; and requirements for agents, brokers, and
web-brokers assisting FFE and SBE-FP consumers.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by no later than 5 p.m. on January 30,
2023.
ADDRESSES: In commenting, please refer to file code CMS-9899-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-9899-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY:
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS-9899-P, Mail Stop C4-26-05, 7500
Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Jeff Wu, (301) 492-4305, Rogelyn McLean, (301) 492-4229, Grace
Bristol, (410) 786-8437, for general information.
Jacquelyn Rudich, (301) 492-5211, Bryan Kirk, (443) 745-8999, or
Joshua Paul, (301) 492-4347, for matters related to HHS-operated risk
adjustment.
Leanne Klock, (410) 786-1045, or Joshua Paul, (301) 492-4347, for
matters related to risk adjustment data validation (HHS-RADV).
Aaron Franz, (410) 786-8027, or Leanne Klock, (410) 786-1045, for
matters related to FFE and SBE-FP user fees.
Jacob LaGrand, (301) 492-4400, for matters related to actuarial
value (AV).
Brian Gubin, (401) 786-1659, for matters related to agent, broker,
and web-broker guidelines.
Claire Curtin, (301) 492-4400 or Marisa Beatley, (301) 492-4307,
for matters related to failure to file and reconcile.
Grace Bridges, (301) 492-5228, or Natalie Myren, (667) 290-8511,
for matters related to the verification process related to eligibility
for insurance affordability programs.
Zarah Ghiasuddin, (301) 356-3598, for matters related to re-
enrollment in the Exchanges.
Nicholas Eckart, (301) 492-4452, for matters related to enrollment
of qualified individuals into QHPs and termination of Exchange
enrollment or coverage.
Marisa Beatley, (301) 492-4307, or Dena Nelson, (240) 401-3535, for
matters related to qualified individuals losing MEC and qualifying for
SEPs.
Samantha Nguyen Kella, (816) 426-6339, for matters related to plan
display error SEPs.
Eva LaManna, (301) 492-5565, or Ellen Kuhn, (410) 786-1695, for
matters related to the eligibility appeals requirements.
Linus Bicker, (803) 931-6185, for matters related to State Exchange
improper payment measurement.
Alexandra Gribbin, (667) 290-9977, for matters related to stand-
alone dental plans.
Nikolas Berkobien, (667) 290-9903, for matters related to
standardized plan options.
Carolyn Kraemer, (301) 492-4197, for matters related to plan and
plan variation marketing name requirements for QHPs.
Emily Martin, (301) 492-4423, or Deborah Hunter, (443) 386-3651,
for matters related to network adequacy and ECPs.
Zarin Ahmed, (301) 492-4400, for matters related to termination of
coverage or enrollment for qualified individuals.
Nora Simmons, (410) 786-1981 for matters related to reporting
enrollment and payment inaccuracies.
Jenny Chen, (301) 492-5156, or Shilpa Gogna, (301) 492-4257, for
matters related to State Exchange Blueprint approval timelines.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post comments received
before the close of the comment period on the following website as soon
as possible after they have been received: https://www.regulations.gov.
Follow the search instructions on that website to view public comments.
CMS will not post on Regulations.gov public comments that make threats
to individuals or institutions or suggest that the individual will take
actions to harm the individual. CMS continues to encourage individuals
not to submit duplicative comments. We will post acceptable comments
from multiple unique commenters even if the content is identical or
nearly identical to other comments.
Table of Contents
I. Executive Summary
II. Background
A. Legislative and Regulatory Overview
B. Summary of Major Provisions
III. Provisions of the Proposed Regulations
A. Part 153--Standards Related to Reinsurance, Risk Corridors,
and Risk Adjustment
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
C. Part 156--Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges
IV. Collection of Information Requirements
A. Wage Estimates
B. ICRs Regarding Repeal of Risk Adjustment State Flexibility To
Request a Reduction in Risk Adjustment State Transfers (Sec.
153.320(d))
C. ICRs Regarding Risk Adjustment Issuer Data Submission
Requirements (Sec. Sec. 153.610, 153.700, and 153.710)
[[Page 78207]]
D. ICRs Regarding Risk Adjustment Data Validation Requirements
When HHS Operates Risk Adjustment (HHS-RADV) (Sec. 153.630)
E. ICRs Regarding Navigator, Non-Navigator Assistance Personnel,
and Certified Application Counselor Program Standards (Sec. Sec.
155.210 and 155.225)
F. ICRs Regarding Providing Correct Information to the FFEs
(Sec. 155.220(j))
G. ICRs Regarding Documenting Receipt of Consumer Consent (Sec.
155.220(j))
H. ICRs Regarding Failure To File and Reconcile Process (Sec.
155.305(f))
I. ICRs Regarding Income Inconsistencies (Sec. Sec. 155.315 and
155.320)
J. ICRs Regarding the Improper Payment Pre-Testing and
Assessment (IPPTA) for State Exchanges (Sec. Sec. 155.1500-
155.1515)
K. ICRs Regarding QHP Rate and Benefit Information (Sec.
156.210)
L. ICRs Regarding Establishing a Timeliness Standard for Notices
of Payment Delinquency (Sec. 156.270)
M. Summary of Annual Burden Estimates for Proposed Requirements
N. Submission of PRA-Related Comments
V. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Impact Estimates of the Payment Notice Provisions and
Accounting Table
D. Regulatory Alternatives Considered
E. Regulatory Flexibility Act (RFA)
F. Unfunded Mandates Reform Act (UMRA)
G. Federalism
I. Executive Summary
We are proposing changes to the provisions and parameters
implemented through prior rulemaking to implement the Patient
Protection and Affordable Care Act (ACA).\1\ These proposals are
published under the authority granted to the Secretary by the ACA and
the Public Health Service (PHS) Act.\2\ In this proposed rule, we
propose changes related to some of these ACA provisions and parameters
we previously implemented and propose to implement new provisions. Our
goal with the proposals is providing quality, affordable coverage to
consumers while minimizing administrative burden and ensuring program
integrity. The changes proposed in this rule are also intended to help
advance health equity and mitigate health disparities.
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\1\ The Patient Protection and Affordable Care Act (Pub. L. 111-
148) was enacted on March 23, 2010. The Healthcare and Education
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and
revised several provisions of the Patient Protection and Affordable
Care Act, was enacted on March 30, 2010. In this rulemaking, the two
statutes are referred to collectively as the ``Patient Protection
and Affordable Care Act,'' ``Affordable Care Act,'' or ``ACA.''
\2\ See sections 1311, 1312, 1313, 1321, and 1343 of the ACA and
section 2792 of the PHS Act.
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II. Background
A. Legislative and Regulatory Overview
Title I of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) added a new title XXVII to the PHS Act to establish
various reforms to the group and individual health insurance markets.
These provisions of the PHS Act were later augmented by other laws,
including the ACA. Subtitles A and C of title I of the ACA reorganized,
amended, and added to the provisions of part A of title XXVII of the
PHS Act relating to group health plans and health insurance issuers in
the group and individual markets. The term ``group health plan''
includes both insured and self-insured group health plans.
Section 2702 of the PHS Act, as added by the ACA, establishes
requirements for guaranteed availability of coverage in the group and
individual markets.
Section 1301(a)(1)(B) of the ACA directs all issuers of QHPs to
cover the essential health benefit (EHB) package described in section
1302(a) of the ACA, including coverage of the services described in
section 1302(b) of the ACA, adherence to the cost-sharing limits
described in section 1302(c) of the ACA, and meeting the AV levels
established in section 1302(d) of the ACA. Section 2707(a) of the PHS
Act, which is effective for plan or policy years beginning on or after
January 1, 2014, extends the requirement to cover the EHB package to
non-grandfathered individual and small group health insurance coverage,
irrespective of whether such coverage is offered through an Exchange.
In addition, section 2707(b) of the PHS Act directs non-grandfathered
group health plans to ensure that cost-sharing under the plan does not
exceed the limitations described in section 1302(c)(1) of the ACA.
Section 1302 of the ACA provides for the establishment of an EHB
package that includes coverage of EHBs (as defined by the Secretary of
HHS), cost-sharing limits, and AV requirements. The law directs that
EHBs be equal in scope to the benefits provided under a typical
employer plan, and that they cover at least the following 10 general
categories: ambulatory patient services; emergency services;
hospitalization; maternity and newborn care; mental health and
substance use disorder services, including behavioral health treatment;
prescription drugs; rehabilitative and habilitative services and
devices; laboratory services; preventive and wellness services and
chronic disease management; and pediatric services, including oral and
vision care. Section 1302(d) of the ACA describes the various levels of
coverage based on their AV. Consistent with section 1302(d)(2)(A) of
the ACA, AV is calculated based on the provision of EHB to a standard
population. Section 1302(d)(3) of the ACA directs the Secretary of HHS
to develop guidelines that allow for de minimis variation in AV
calculations. Sections 1302(b)(4)(A) through (D) of the ACA establish
that the Secretary must define EHB in a manner that: (1) Reflects
appropriate balance among the 10 categories; (2) is not designed in
such a way as to discriminate based on age, disability, or expected
length of life; (3) takes into account the health care needs of diverse
segments of the population; and (4) does not allow denials of EHBs
based on age, life expectancy, disability, degree of medical
dependency, or quality of life.
Section 1311(c) of the ACA provides the Secretary the authority to
issue regulations to establish criteria for the certification of QHPs.
Section 1311(c)(1)(B) of the ACA requires, among the criteria for
certification that the Secretary must establish by regulation that QHPs
ensure a sufficient choice of providers. Section 1311(e)(1) of the ACA
grants the Exchange the authority to certify a health plan as a QHP if
the health plan meets the Secretary's requirements for certification
issued under section 1311(c) of the ACA, and the Exchange determines
that making the plan available through the Exchange is in the interests
of qualified individuals and qualified employers in the State. Section
1311(c)(6)(C) of the ACA directs the Secretary of HHS to require an
Exchange to provide for special enrollment periods and section
1311(c)(6)(D) of the ACA directs the Secretary of HHS to require an
Exchange to provide for a monthly enrollment period for Indians, as
defined by section 4 of the Indian Health Care Improvement Act.
Section 1311(d)(3)(B) of the ACA permits a State, at its option, to
require QHPs to cover benefits in addition to EHB. This section also
requires a State to make payments, either to the individual enrollee or
to the issuer on behalf of the enrollee, to defray the cost of these
additional State-required benefits.
Section 1312(c) of the ACA generally requires a health insurance
issuer to consider all enrollees in all health plans (except
grandfathered health plans) offered by such issuer to be members of a
single risk pool for each of its individual and small group markets.
States have the option to merge the individual and small group market
risk
[[Page 78208]]
pools under section 1312(c)(3) of the ACA.
Section 1312(e) of the ACA provides the Secretary with the
authority to establish procedures under which a State may allow agents
or brokers to (1) enroll qualified individuals and qualified employers
in QHPs offered through Exchanges and (2) assist individuals in
applying for premium tax credits (PTC) and cost-sharing reductions
(CSRs) for QHPs sold through an Exchange.
Sections 1313 and 1321 of the ACA provide the Secretary with the
authority to oversee the financial integrity of State Exchanges, their
compliance with HHS standards, and the efficient and non-discriminatory
administration of State Exchange activities. Section 1313(a)(5)(A) of
the ACA provides the Secretary with the authority to implement any
measure or procedure that the Secretary determines is appropriate to
reduce fraud and abuse in the administration of the Exchanges. Section
1321 of the ACA provides for State flexibility in the operation and
enforcement of Exchanges and related requirements.
Section 1321(a) of the ACA provides broad authority for the
Secretary to establish standards and regulations to implement the
statutory requirements related to Exchanges, QHPs and other components
of title I of the ACA, including such other requirements as the
Secretary determines appropriate. When operating an FFE under section
1321(c)(1) of the ACA, HHS has the authority under sections 1321(c)(1)
and 1311(d)(5)(A) of the ACA to collect and spend user fees. Office of
Management and Budget (OMB) Circular A-25 Revised establishes Federal
policy regarding user fees and specifies that a user charge will be
assessed against each identifiable recipient for special benefits
derived from Federal activities beyond those received by the general
public.
Section 1321(d) of the ACA provides that nothing in title I of the
ACA must be construed to preempt any State law that does not prevent
the application of title I of the ACA. Section 1311(k) of the ACA
specifies that Exchanges may not establish rules that conflict with or
prevent the application of regulations issued by the Secretary.
Section 1343 of the ACA establishes a permanent risk adjustment
program to provide payments to health insurance issuers that attract
higher-than-average risk populations, such as those with chronic
conditions, funded by payments from those that attract lower-than-
average risk populations, thereby reducing incentives for issuers to
avoid higher-risk enrollees. Section 1343(b) of the ACA provides that
the Secretary, in consultation with States, shall establish criteria
and methods to be used in carrying out the risk adjustment activities
under this section. Consistent with section 1321(c) of the ACA, the
Secretary is responsible for operating the risk adjustment program in
any State the fails to do so.\3\
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\3\ In the 2014 through 2016 benefit years, HHS operated the
risk adjustment program in every State and the District of Columbia,
except Massachusetts. Beginning with the 2017 benefit year, HHS has
operated the risk adjustment program in all 50 States and the
District of Columbia.
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Section 1401(a) of the ACA added section 36B to the Internal
Revenue Code (the Code), which, among other things, requires that a
taxpayer reconcile APTC for a year of coverage with the amount of the
PTC the taxpayer is allowed for the year.
Section 1402 of the ACA provides for, among other things,
reductions in cost-sharing for EHB for qualified low- and moderate-
income enrollees in silver level QHPs offered through the individual
market Exchanges. This section also provides for reductions in cost-
sharing for Indians enrolled in QHPs at any metal level.
Section 1411(c) of the ACA requires the Secretary to submit certain
information provided by applicants under section 1411(b) of the ACA to
other Federal officials for verification, including income and family
size information to the Secretary of the Treasury. Section 1411(d) of
the ACA provides that the Secretary must verify the accuracy of
information provided by applicants under section 1411(b) of the ACA,
for which section 1411(c) of the ACA does not prescribe a specific
verification procedure, in such manner as the Secretary determines
appropriate.
Section 1411(f) of the ACA requires the Secretary, in consultation
with the Treasury and Homeland Security Department Secretaries and the
Commissioner of Social Security, to establish procedures for hearing
and making decisions governing appeals of Exchange eligibility
determinations. Section 1411(f)(1)(B) of the ACA requires the Secretary
to establish procedures to redetermine eligibility on a periodic basis,
in appropriate circumstances, including eligibility to purchase a QHP
through the Exchange and for advance payments of the premium tax credit
(APTC) and CSRs.
Section 1411(g) of the ACA allows the use of applicant information
only for the limited purposes of, and to the extent necessary to,
ensure the efficient operation of the Exchange, including by verifying
eligibility to enroll through the Exchange and for APTC and CSRs, and
limits the disclosure of such information.
Section 5000A of the Code, as added by section 1501(b) of the ACA,
requires individuals to have minimum essential coverage (MEC) for each
month, qualify for an exemption, or make an individual shared
responsibility payment. Under the Tax Cuts and Jobs Act, which was
enacted on December 22, 2017, the individual shared responsibility
payment is reduced to $0, effective for months beginning after December
31, 2018. Notwithstanding that reduction, certain exemptions are still
relevant to determine whether individuals age 30 and above qualify to
enroll in catastrophic coverage under Sec. Sec. 155.305(h) and
156.155(a)(5).
1. Premium Stabilization Programs
The premium stabilization programs refer to the risk adjustment,
risk corridors, and reinsurance programs established by the ACA.\4\ For
past rulemaking, we refer readers to the following rules:
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\4\ See ACA section 1341 (transitional reinsurance program), ACA
section 1342 (risk corridors program), and ACA section 1343 (risk
adjustment program).
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In the March 23, 2012 Federal Register (77 FR 17219)
(Premium Stabilization Rule), we implemented the premium stabilization
programs.
In the March 11, 2013 Federal Register (78 FR 15409) (2014
Payment Notice), we finalized the benefit and payment parameters for
the 2014 benefit year to expand the provisions related to the premium
stabilization programs and set forth payment parameters in those
programs.
In the October 30, 2013 Federal Register (78 FR 65046), we
finalized the modification to the HHS-operated methodology related to
community rating States.
In the November 6, 2013 Federal Register (78 FR 66653), we
published a correcting amendment to the 2014 Payment Notice final rule
to address how an enrollee's age for the risk score calculation would
be determined under the HHS-operated risk adjustment methodology.
In the March 11, 2014 Federal Register (79 FR 13743) (2015
Payment Notice), we finalized the benefit and payment parameters for
the 2015 benefit year to expand the provisions related to the premium
stabilization programs, set forth certain oversight provisions, and
established payment parameters in those programs.
In the May 27, 2014 Federal Register (79 FR 30240), we
announced
[[Page 78209]]
the 2015 fiscal year sequestration rate for the risk adjustment
program.
In the February 27, 2015 Federal Register (80 FR 10749)
(2016 Payment Notice), we finalized the benefit and payment parameters
for the 2016 benefit year to expand the provisions related to the
premium stabilization programs, set forth certain oversight provisions,
and established the payment parameters in those programs.
In the March 8, 2016 Federal Register (81 FR 12203) (2017
Payment Notice), we finalized the benefit and payment parameters for
the 2017 benefit year to expand the provisions related to the premium
stabilization programs, set forth certain oversight provisions, and
established the payment parameters in those programs.
In the December 22, 2016 Federal Register (81 FR 94058)
(2018 Payment Notice), we finalized the benefit and payment parameters
for the 2018 benefit year, added the high-cost risk pool parameters to
the HHS risk adjustment methodology, incorporated prescription drug
factors in the adult models, established enrollment duration factors
for the adult models, and finalized policies related to the collection
and use of enrollee-level External Data Gathering Environment (EDGE)
data.
In the April 17, 2018 Federal Register (83 FR 16930) (2019
Payment Notice), we finalized the benefit and payment parameters for
2019 benefit year, created the State flexibility framework permitting
States to request a reduction in risk adjustment State transfers
calculated by HHS, and adopted a new methodology for HHS-RADV
adjustments to transfers.
In the May 11, 2018 Federal Register (83 FR 21925), we
published a correction to the 2019 risk adjustment coefficients in the
2019 Payment Notice final rule.
On July 27, 2018, consistent with 45 CFR 153.320(b)(1)(i),
we updated the 2019 benefit year final risk adjustment model
coefficients to reflect an additional recalibration related to an
update to the 2016 enrollee-level EDGE dataset.\5\
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\5\ CMS. (2018, July 27). Updated 2019 Benefit Year Final HHS
Risk Adjustment Model Coefficients. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2019-Updtd-Final-HHS-RA-Model-Coefficients.pdf.
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In the July 30, 2018 Federal Register (83 FR 36456), we
adopted the 2017 benefit year risk adjustment methodology as
established in the final rules published in the March 23, 2012 (77 FR
17220 through 17252) and March 8, 2016 editions of the Federal Register
(81 FR 12204 through 12352). The final rule set forth an additional
explanation of the rationale supporting the use of Statewide average
premium in the HHS-operated risk adjustment State payment transfer
formula for the 2017 benefit year, including the reasons why the
program is operated in a budget-neutral manner. The final rule also
permitted HHS to resume 2017 benefit year risk adjustment payments and
charges. HHS also provided guidance as to the operation of the HHS-
operated risk adjustment program for the 2017 benefit year in light of
the publication of the final rule.
In the December 10, 2018 Federal Register (83 FR 63419),
we adopted the 2018 benefit year HHS-operated risk adjustment
methodology as established in the final rules published in the March
23, 2012 (77 FR 17219) and the December 22, 2016 (81 FR 94058) editions
of the Federal Register. In the rule, we set forth an additional
explanation of the rationale supporting the use of Statewide average
premium in the HHS-operated risk adjustment State payment transfer
formula for the 2018 benefit year, including the reasons why the
program is operated in a budget-neutral manner.
In the April 25, 2019 Federal Register (84 FR 17454) (2020
Payment Notice), we finalized the benefit and payment parameters for
2020 benefit year, as well as the policies related to making the
enrollee-level EDGE data available as a limited data set for research
purposes and expanding the HHS uses of the enrollee-level EDGE data,
approval of the request from Alabama to reduce risk adjustment
transfers by 50 percent in the small group market for the 2020 benefit
year, and updates to HHS-RADV program requirements.
On May 12, 2020, consistent with 153.320(b)(1)(i), we
published the 2021 Benefit Year Final HHS Risk Adjustment Model
Coefficients on the CCIIO website.\6\
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\6\ CMS. (2020, May 12). Final 2021 Benefit Year Final HHS Risk
Adjustment Model Coefficients. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2021-Benefit-Year-Final-HHS-Risk-Adjustment-Model-Coefficients.pdf.
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In the May 14, 2020 Federal Register (85 FR 29164) (2021
Payment Notice), we finalized the benefit and payment parameters for
2021 benefit year, as well as adopted updates to the risk adjustment
models' hierarchical condition categories (HCCs) to transition to ICD-
10 codes, approved the request from Alabama to reduce risk adjustment
transfers by 50 percent in small group market for the 2021 benefit
year, and modified the outlier identification process under the HHS-
RADV program.
In the December 1, 2020 Federal Register (85 FR 76979)
(Amendments to the HHS-Operated Risk Adjustment Data Validation Under
the Patient Protection and Affordable Care Act's HHS-Operated Risk
Adjustment Program (2020 HHS-RADV Amendments Rule)), we adopted the
creation and application of Super HCCs in the sorting step that assigns
HCCs to failure rate groups, finalized a sliding scale adjustment in
HHS-RADV error rate calculation, and added a constraint for negative
error rate outliers with a negative error rate. We also established a
transition from the prospective application of HHS-RADV adjustments to
apply HHS-RADV results to risk scores from the same benefit year as
that being audited.
In the September 2, 2020 Federal Register (85 FR 54820),
we issued an interim final rule containing certain policy and
regulatory revisions in response to the COVID-19 public health
emergency (PHE), wherein we set forth risk adjustment reporting
requirements for issuers offering temporary premium credits in the 2020
benefit year.
In the May 5, 2021 Federal Register (86 FR 24140), we
issued part 2 of the 2022 Payment Notice final rule (2022 Payment
Notice) finalizing a subset of proposals from the 2022 Payment Notice
proposed rule, including policy and regulatory revisions related to the
risk adjustment program, finalization of the benefit and payment
parameters for the 2022 benefit year, and approval of the request from
Alabama to reduce risk adjustment transfers by 50 percent in the
individual and small group markets for the 2022 benefit year. In
addition, this final rule established a revised schedule of collections
for HHS-RADV and updated the provisions regulating second validation
audit (SVA) and initial validation audit (IVA) entities.
On July 19, 2021, consistent with Sec. 153.320(b)(1)(i),
we released Updated 2022 Benefit Year Final HHS Risk Adjustment Model
Coefficients on the CCIIO website, announcing some minor revisions to
the 2022 benefit year final risk adjustment adult model
coefficients.\7\
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\7\ See CMS. (2021, July 19). 2022 Benefit Year Final HHS Risk
Adjustment Model Coefficients. https://www.cms.gov/files/document/updated-2022-benefit-year-final-hhs-risk-adjustment-model-coefficients-clean-version-508.pdf.
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In the May 6, 2022 Federal Register (87 FR 27208) (2023
Payment Notice), we finalized revisions related to the risk adjustment
program, including the benefit and payment parameters for the 2023
benefit year, risk adjustment model recalibration, and collection and
extraction of enrollee-level EDGE data.
[[Page 78210]]
We also finalized the adoption of the interacted HCC count
specification for the adult and child models, along with modified
enrollment duration factors for the adult model models, beginning with
the 2023 benefit year.\8\ We also repealed the ability for States,
other than prior participants, to request a reduction in risk
adjustment State transfers starting with the 2024 benefit year. In
addition, we approved a 25 percent reduction to 2023 benefit year
transfers in Alabama's individual market and a 10 percent reduction to
2023 benefit year transfers in Alabama's small group market. We also
finalized further refinements to the HHS-RADV error rate calculation
methodology beginning with the 2021 benefit year and beyond.
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\8\ On May 6, 2022, we also published the 2023 Benefit Year
Final HHS Risk Adjustment Model Coefficients at https://www.cms.gov/files/document/2023-benefit-year-final-hhs-risk-adjustment-model-coefficients.pdf.
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2. Program Integrity
We have finalized program integrity standards related to the
Exchanges and premium stabilization programs in two rules: the ``first
Program Integrity Rule'' published in the August 30, 2013 Federal
Register (78 FR 54069), and the ``second Program Integrity Rule''
published in the October 30, 2013 Federal Register (78 FR 65045). We
also refer readers to the 2019 Patient Protection and Affordable Care
Act; Exchange Program Integrity rule published in the December 27, 2019
Federal Register (84 FR 71674).
3. Market Rules
For past rulemaking related to the market rules, we refer readers
to the following rules:
In the April 8, 1997 Federal Register (62 FR 16894), HHS,
with the Department of Labor and Department of the Treasury, published
an interim final rule relating to the HIPAA health insurance reforms.
In the February 27, 2013 Federal Register (78 FR 13406) (2014 Market
Rules), we published the health insurance market rules.
In the May 27, 2014 Federal Register (79 FR 30240) (2015
Market Standards Rule), we published the Exchange and Insurance Market
Standards for 2015 and Beyond.
In the December 22, 2016 Federal Register (81 FR 94058),
we provided additional guidance on guaranteed availability and
guaranteed renewability.
In the April 18, 2017 Federal Register (82 FR 18346)
(Market Stabilization final rule), we further interpreted the
guaranteed availability provision.
In the April 17, 2018 Federal Register (83 FR 17058) (2019
Payment Notice final rule), we clarified that certain exceptions to the
special enrollment periods only apply to coverage offered outside of
the Exchange in the individual market.
In the June 19, 2020 Federal Register (85 FR 37160) (2020
section 1557 final rule), in which HHS discussed section 1557 of the
ACA, HHS removed nondiscrimination protections based on gender identity
and sexual orientation from the guaranteed availability regulation.
In part 2 of the 2022 Payment Notice final rule in the May
5, 2021 Federal Register (86 FR 24140), we made additional amendments
to the guaranteed availability regulation regarding special enrollment
periods and finalized new special enrollment periods related to
untimely notice of triggering events, cessation of employer
contributions or government subsidies to COBRA continuation coverage,
and loss of APTC eligibility.
In the September 27, 2021 Federal Register (86 FR 53412)
(part 3 of the 2022 Payment Notice final rule), which was published by
HHS and the Department of the Treasury, we finalized additional
amendments to the guaranteed availability regulations regarding special
enrollment periods.
In the May 6, 2022 Federal Register (87 FR 27208), we
finalized a revision to our interpretation of the guaranteed
availability requirement to prohibit issuers from applying a premium
payment to an individual's or employer's past debt owed for coverage
and refusing to effectuate enrollment in new coverage.
4. Exchanges
We published a request for comment relating to Exchanges in the
August 3, 2010 Federal Register (75 FR 45584). We issued initial
guidance to States on Exchanges on November 18, 2010. In the March 27,
2012 Federal Register (77 FR 18309) (Exchange Establishment Rule), we
implemented the Affordable Insurance Exchanges (``Exchanges''),
consistent with title I of the ACA, to provide competitive marketplaces
for individuals and small employers to directly compare available
private health insurance options on the basis of price, quality, and
other factors. This included implementation of components of the
Exchanges and standards for eligibility for Exchanges, as well as
network adequacy and ECP certification standards.
In the 2014 Payment Notice and the Amendments to the HHS Notice of
Benefit and Payment Parameters for 2014 interim final rule, published
in the March 11, 2013 Federal Register (78 FR 15541), we set forth
standards related to Exchange user fees. We established an adjustment
to the FFE user fee in the Coverage of Certain Preventive Services
under the Affordable Care Act final rule, published in the July 2, 2013
Federal Register (78 FR 39869) (Preventive Services Rule).
In the 2016 Payment Notice, we also set forth the ECP certification
standard at Sec. 156.235, with revisions in the 2017 Payment Notice in
the March 8, 2016 Federal Register (81 FR 12203) and the 2018 Payment
Notice in the December 22, 2016 Federal Register (81 FR 94058).
In an interim final rule, published in the May 11, 2016 Federal
Register (81 FR 29146), we made amendments to the parameters of certain
special enrollment periods (2016 Interim Final Rule). We finalized
these in the 2018 Payment Notice final rule, published in the December
22, 2016 Federal Register (81 FR 94058).
In the April 18, 2017 Market Stabilization final rule Federal
Register (82 FR 18346), we amended standards relating to special
enrollment periods and QHP certification. In the 2019 Payment Notice
final rule, published in the April 17, 2018 Federal Register (83 FR
16930), we modified parameters around certain special enrollment
periods. In the April 25, 2019 Federal Register (84 FR 17454), the
final 2020 Payment Notice established a new special enrollment period.
We published the final rule in the May 14, 2020 Federal Register
(85 FR 29164) (2021 Payment Notice).
In the January 19, 2021 Federal Register (86 FR 6138), we finalized
part 1 of the 2022 Payment Notice final rule that finalized only a
subset of the proposals in the 2022 Payment Notice proposed rule. In
the May 5, 2021 Federal Register (86 FR 24140), we published part 2 of
the 2022 Payment Notice final rule. In the September 27, 2021 Federal
Register (86 FR 53412) part 3 of the 2022 Payment Notice final rule, in
conjunction with the Department of the Treasury, we finalized
amendments to certain policies in part 1 of the 2022 Payment Notice
final rule.
In the May 6, 2022 Federal Register (87 FR 27208), we finalized
changes to maintain the user fee rate for issuers offering plans
through the FFEs and maintain the user fee rate for issuers offering
plans through the SBE-FPs. We also finalized various policies to
address certain agent, broker, and web-broker practices and conduct. We
also finalized updates to the requirement that all
[[Page 78211]]
Exchanges conduct special enrollment period verifications.
5. Essential Health Benefits
On December 16, 2011, HHS released a bulletin that outlined an
intended regulatory approach for defining EHB, including a benchmark-
based framework. We established requirements relating to EHBs in the
Standards Related to Essential Health Benefits, Actuarial Value, and
Accreditation Final Rule, which was published in the February 25, 2013
Federal Register (78 FR 12833) (EHB Rule). In the 2019 Payment Notice,
published in the April 17, 2018 Federal Register (83 FR 16930), we
added Sec. 156.111 to provide States with additional options from
which to select an EHB-benchmark plan for plan years (PYs) 2020 and
beyond.
B. Summary of Major Provisions
The regulations outlined in this proposed rule would be codified in
45 CFR parts 153, 155, and 156.
1. 45 CFR Part 153
In accordance with the OMB Report to Congress on the Joint
Committee Reductions for Fiscal Year 2023, the permanent risk
adjustment program is subject to the fiscal year 2023 sequestration.\9\
Therefore, the risk adjustment program will be sequestered at a rate of
5.7 percent for payments made from fiscal year 2023 resources (that is,
funds collected during the 2023 fiscal year). The funds that are
sequestered in fiscal year 2023 from the risk adjustment program will
become available for payment to issuers in fiscal year 2024 without
further Congressional action. HHS did not receive any requests from
States to operate risk adjustment for the 2024 benefit year; therefore,
HHS will operate risk adjustment in every State and the District of
Columbia for the 2024 benefit year.
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\9\ OMB. (2022, March 28). OMB Report to the Congress on the
BBEDCA 251A Sequestration for Fiscal Year 2023. https://www.whitehouse.gov/wpcontent/uploads/2022/03/BBEDCA_251A_Sequestration_Report_FY2023.pdf.
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We propose to recalibrate the 2024 benefit year risk adjustment
models using the 2018, 2019, and 2020 benefit year enrollee-level EDGE
data, with an exception for the use of the 2020 benefit year to
recalibrate the adult model age-sex coefficients. We propose to use
only 2018 and 2019 benefit year enrollee-level EDGE data in the
recalibration of the adult age-sex coefficients to account for the
observed anomalies in the 2020 benefit year enrollee-level EDGE data
for older adult enrollees, especially older adult female enrollees.
For the 2024 benefit year, we propose to continue applying a market
pricing adjustment to the plan liability associated with Hepatitis C
drugs in the risk adjustment models (see, for example, 84 FR 17463
through 17466). In addition, we are soliciting comment on whether to
consider adding a new payment HCC for gender dysphoria to the risk
adjustment models for future years.
We propose under Sec. 153.320(d) to repeal the flexibility for
States to request reductions of risk adjustment State transfers
calculated by HHS under the State payment transfer formula in all State
market risk pools, including prior participant States that previously
requested a reduction, for the 2025 benefit year and beyond. We also
seek comment on the requests from Alabama to reduce risk adjustment
State transfers in its individual and small group markets by 50 percent
for the 2024 benefit year.
Additionally, we propose, beginning with the 2023 benefit year, to
collect and extract from issuers' EDGE servers through issuers' EDGE
Server Enrollment Submission (ESES) files and risk adjustment
recalibration enrollment files a new data element, a Qualified Small
Employer Health Reimbursement Arrangement (QSEHRA) indicator. In
addition, we propose to extract the plan identifier and rating area
data elements from issuers' EDGE servers for benefit years prior to the
2021 benefit year. We also propose a risk adjustment user fee for the
2024 benefit year of $0.21 per member per month (PMPM).
Beginning with the 2022 benefit year HHS-RADV, we propose to change
the materiality threshold established under Sec. 153.630(g)(2) for
random and targeted sampling from $15 million in total annual premiums
Statewide to 30,000 total billable member months (BMM) Statewide,
calculated by combining an issuer's enrollment in a State's individual
non-catastrophic, catastrophic, small group, and merged markets, as
applicable, in the benefit year being audited.
Beginning with the 2021 benefit year HHS-RADV, we propose to no
longer exempt exiting issuers from adjustments to risk scores and risk
adjustment transfers when they are negative error rate outliers in the
applicable benefit year's HHS-RADV. Thus, HHS would apply HHS-RADV
results to adjust the plan liability risk scores and State transfers of
all issuers. We also solicit comments on discontinuing the use of the
lifelong permanent condition list and the use of Non-EDGE Claims in
HHS-RADV.
We propose to shorten the window to confirm the findings of the
second validation audit (SVA) (if applicable),\10\ or file a
discrepancy report to dispute the SVA findings, to within 15 calendar
days of the notification by HHS, beginning with the 2022 benefit year
HHS-RADV.
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\10\ Only those issuers who have insufficient pairwise agreement
between the Initial Validation Audit (IVA) and SVA receive SVA
findings. See 84 FR 17495; 86 FR 24201.
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We propose to amend the EDGE discrepancy materiality threshold set
forth at Sec. 153.710(e) to align with and mirror the policy finalized
in preamble in part 2 of the 2022 Payment Notice (86 FR 24194 through
24195). That is, the materiality threshold at Sec. 153.710(e) would be
revised to provide that the amount in dispute must equal or exceed
$100,000 or one percent of the total estimated transfer amount in the
applicable State market risk pool, whichever is less.
2. 45 CFR Part 155
In part 155, we propose to revise the Exchange Blueprint approval
timelines for States transitioning from either a FFE to a SBE-FP or to
a State-based Exchange (SBE), or from a SBE-FP to a SBE. We propose to
remove the deadlines for when HHS provides approval, or conditional
approval, on an Exchange Blueprint, and instead propose to require that
such approval is provided at some point prior to the date on which the
Exchange proposes to begin open enrollment either as an SBE or SBE-FP.
We propose a change to address the standards applicable to
Navigators and other assisters and their consumer service functions. At
Sec. 155.210(d)(8), we propose to remove the prohibition on Navigators
from going door-to-door or using other unsolicited means of direct
contact to help provide consumers with enrollment assistance. The
proposal would also apply to non-Navigator assistance personnel in FFEs
and in State Exchanges if funded with section 1311(a) Exchange
Establishment grants, through the reference to Sec. 155.210(d) in
Sec. 155.215(a)(2)(i). In Sec. 155.225(g)(5), we propose to remove
the prohibition on certified application counselors from going door-to-
door or using unsolicited means of direct contact to help consumers
fill out applications or enroll in health coverage. We believe that
these proposals would allow Navigators and other assisters in the FFEs
to help more consumers.
In part 155, we propose changes to address certain agent, broker,
and web-
[[Page 78212]]
broker practices. We propose to allow HHS up to an additional 15
calendar days to review evidence submitted by agents, brokers, or web-
brokers to rebut allegations that led to suspension of their Exchange
agreement(s). We also propose to allow HHS up to an additional 30
calendar days to review evidence submitted by agents, brokers, or web-
brokers that led to termination of their Exchange agreement(s). The
proposal would provide HHS with up to 45 or 60 calendar days to review
and respond to such evidence or requests for reconsideration submitted
by agents, brokers, or web-brokers stemming from the suspension or
termination of their Exchange agreement(s), respectively.
Further, we propose to require agents, brokers, or web-brokers
assisting consumers with completing eligibility applications through
the FFEs and SBE-FPs or assisting an individual with applying for APTC
and CSRs for QHPs to document that eligibility application information
has been reviewed by and confirmed to be accurate by the consumer or
their authorized representative prior to application submission. We
propose that the documentation would be required to include: the date
the information was reviewed; the name of the consumer or their
authorized representative; an explanation of the attestations at the
end of the eligibility application; and the name of the assisting
agent, broker, or web-broker. Furthermore, the documentation would be
required to be maintained by the agent, broker, or web-broker for a
minimum of 10 years and produced upon request in response to
monitoring, audit, and enforcement activities.
We also propose to require agents, brokers, or web-brokers
assisting consumers with applying and enrolling through FFEs and SBE-
FPs, making updates to an existing application, or assisting an
individual with applying for APTC and CSRs for QHPs to document the
receipt of consent from the consumer or their authorized representative
seeking assistance prior to providing assistance, which would include
the consumer taking an action that produces a record of consent and the
maintenance of that record by the agent, broker, or web-broker. We also
propose standards for the content of the documentation of consent,
including that it would be required to include a description of the
scope, purpose, and duration of the consent provided by the consumer or
their authorized representative, the date consent was given, name of
the consumer or their authorized representative, and the name of the
agent, broker, web-broker, or agency being granted consent, as well as
the process by which the consumer or their authorized representative
may rescind consent. Further, we propose that agents, brokers, or web-
brokers would be required to maintain the consent documentation for a
minimum of 10 years and produced upon request in response to
monitoring, audit, and enforcement activities.
We propose to revise the failure to file and reconcile (FTR)
process at Sec. 155.305(f)(4). First, we are proposing codify CMS's
guidance that, for plan year 2023 coverage, the Exchanges on the
Federal platform would not act on data from the IRS for consumers who
have failed to file tax returns and reconcile a previous year's APTC
with the PTC allowed for the year. Second, we propose to provide that,
beginning on January 1, 2024, Exchanges must once again determine
enrollees ineligible for APTC when HHS notifies the Exchange that a
taxpayer (or a taxpayer's spouse, if married) has failed to file a
Federal income tax return and reconcile their past APTC. However, we
propose that an Exchange may only determine enrollees ineligible for
APTC after a taxpayer (or a taxpayer's spouse, if married) has failed
to file a Federal income tax return and reconcile their past APTC for
two consecutive years. We also propose a technical correction to Sec.
155.305(f)(4) to clarify that HHS receives data from the IRS for
consumers who have failed to file tax returns and reconcile a previous
year's APTC.
We propose to amend Sec. 155.320 to require Exchanges to accept an
applicant's attestation of projected annual household income when the
Exchange requests tax return data from the IRS to verify attested
projected annual household income, but the IRS confirms there is no
such tax return data available. Further, we propose to revise Sec.
155.315 to add that an enrollee with income inconsistencies must
receive a 60-day extension in addition to the 90 days currently
provided in Sec. 155.315(f)(2)(ii). These changes would ensure
consumers are treated equitably, ensure continuous coverage, and
strengthen the risk pool.
In the 2023 Payment Notice proposed rule (87 FR 584, 652), we
solicited comments on revising the re-enrollment hierarchy at Sec.
155.335(j) at a later date, and, after considering comments, we now
propose amending and adding several provisions to this regulation to
provide Exchanges (including Exchanges on the Federal platform and
SBEs) with the option to make certain changes to the re-enrollment
hierarchy beginning for PY 2024. Specifically, we propose to allow
Exchanges to direct re-enrollment for CSR-eligible enrollees from a
bronze QHP to a silver QHP with a lower or equivalent net premium under
the same product and QHP issuer, regardless of whether the enrollee's
current plan is available. We believe directing re-enrollment into
lower or same cost, high generosity plans would place enrollees in more
affordable plans with lower out-of-pocket costs, which would lower
health insurance costs for those lower-income (CSR-eligible)
individuals. We also propose to allow the Exchange to incorporate
provider network considerations into the Exchange re-enrollment
hierarchy.
We are proposing changes related to SEPs at Sec. 155.420. First,
we propose two technical corrections to Sec. 155.420(a)(4)(ii)(A) and
(B) to align the text with Sec. 155.420(a)(d)(6)(i) and (ii). The
proposed revisions would clarify that only one person in a tax
household applying for coverage or financial assistance through the
Exchange must qualify for an SEP in order for the entire tax household
to qualify for the SEP. Second, we propose to change the current
coverage effective date requirements at Sec. 155.420(b)(2)(iv) to
permit Exchanges to offer earlier coverage effective start dates for
consumers attesting to a future loss of MEC. These changes would ensure
qualifying individuals are able to seamlessly transition from other
forms of coverage to Exchange coverage as quickly as possible with
minimal coverage gaps.
Third, to mitigate coverage gaps, we are proposing to add Sec.
155.420(c)(6) in which Exchanges would have the option to implement a
new special rule for consumers eligible for a SEP under Sec.
155.420(d)(1) due to loss of Medicaid or CHIP coverage which would give
consumers up to 90 days after their loss of Medicaid or CHIP coverage
to select a plan for Exchange coverage. Fourth, we are proposing to
revise Sec. 155.420(d)(12) to align the policy of the Exchanges on the
Federal platform for granting SEPs to persons who are adversely
affected by a plan display error with current plan display error SEP
operations. The proposal would remove the burden from the consumer to
solely demonstrate to the Exchange that a material plan display error
has influenced the consumer's decision to purchase a QHP through the
Exchange.
We propose to add Sec. 155.430(b)(3) to explicitly prohibit
issuers participating in Exchanges on the Federal platform from
terminating coverage for a dependent child prior to the end of the plan
year because the dependent child has reached the applicable maximum
[[Page 78213]]
age. This change would provide clarity to issuers participating in
Exchanges on the Federal platform regarding their obligation to
maintain coverage for dependent children, as well as to enrollees
regarding their ability to maintain coverage for dependent children.
This proposal would be optional for State Exchanges.
We propose to revise Sec. 155.505(g) to acknowledge the ability of
the CMS Administrator to review Exchange eligibility appeals decisions
prior to judicial review. This change would provide appellants and
other parties with accurate information about the availability of
administrative review by the CMS Administrator if they are dissatisfied
with their eligibility appeal decision.
HHS proposes to implement a new Improper Payment Pre-Testing and
Assessment (IPPTA) program under which State Exchanges will be required
to participate in pre-audit activities that will prepare State
Exchanges for complying with audits required under the Payment
Integrity Information Act of 2019 (PIIA). Activities under the proposed
IPPTA program would provide State Exchanges experience helpful to
preparing for future PIIA audits and will help HHS design and refine
appropriate requirements for future PIIA audits of State Exchanges.
3. 45 CFR Part 156
In part 156, we propose user fee rates for the 2024 benefit year
for all issuers participating on the Exchanges using the Federal
platform. For the 2024 benefit year, we propose an FFE user fee rate of
2.5 percent of total monthly premiums and an SBE-FP user fee rate of
2.0 percent of total monthly premiums. HHS will issue the 2024 benefit
year premium adjustment percentage index and related payment parameters
in guidance, consistent with the policy finalized in part 2 of the 2022
Payment Notice.
For PY 2024 and subsequent PYs, HHS would maintain a large degree
of continuity with the approach to standardized plan options finalized
in the 2023 Payment Notice and proposes only minor updates in this
proposed rule. In particular, in contrast to the policy finalized in
the 2023 Payment Notice, we are proposing to no longer include a
standardized plan option for the non-expanded bronze metal level,
mainly due to AV constraints. Thus, for PY 2024 and subsequent PYs, we
propose standardized plan options for the following metal levels: one
bronze plan that meets the requirement to have an AV up to five
percentage points above the 60 percent standard, as specified in Sec.
156.140(c) (known as an expanded bronze plan); one standard silver
plan; one version of each of the three income-based silver CSR plan
variations; one gold plan; and one platinum plan. We would continue to
differentially display standardized plan options, including those
standardized plan options required under State action that took place
on or before January 1, 2020, on HealthCare.gov, and would continue
enforcement of the standardized plan options display requirements for
approved web-brokers and QHP issuers using a direct enrollment pathway
to facilitate enrollment through an FFE or SBE-FP-- including both the
Classic Direct Enrollment (DE) and Enhanced Direct Enrollment (EDE)
Pathways.
To mitigate the risk of choice overload, HHS proposes to limit the
number of non-standardized plan options that QHP issuers may offer
through the Exchanges using the Federal platform to two non-
standardized plan options per product network type and metal level
(excluding catastrophic plans), in any service area for PY 2024 and
beyond. In addition, HHS proposes, as an alternative to the proposal to
limit the number of non-standardized plan options that an FFE or SBE-FP
issuer may offer on the Exchange, to apply a meaningful difference
standard which would be more stringent than the previous standard. HHS
proposes to strengthen the standard by modifying the criteria and
difference thresholds used to determine whether plans are
``meaningfully different'' from one another.
We propose to require stand-alone dental plan (SADP) issuers to use
age on effective date as the sole method to calculate an enrollee's age
for rating and eligibility purposes beginning with Exchange
certification for PY 2024. Requiring SADPs to use the age on effective
date methodology to calculate an enrollee's age as a condition of QHP
certification, and consequently removing the less commonly used and
more complex age calculation methods, would reduce consumer confusion
and promote operational efficiency. We propose that this policy would
apply to Exchange-certified SADPs as a requirement of certification,
whether they are sold on- or off-Exchange.
In addition, we propose to require Exchange-certified SADP issuers
to submit guaranteed rates as a condition of QHP certification
beginning with Exchange certification for PY 2024. This change would
help reduce the risk of incorrect APTC calculation for the pediatric
dental EHB portion of premiums, thereby reducing the risk of consumer
harm. We propose that this policy would apply to Exchange-certified
SADPs as a requirement of certification, whether they are sold on- or
off-Exchange.
We propose at Sec. 156.225 to require that plan and plan variation
marketing names for QHPs offered through Exchanges on the Federal
platform include correct information, without omission of material
fact, and not include content that is misleading. If finalized as
proposed, CMS would review plan and plan variation marketing names
during the annual QHP certification process in close collaboration with
State regulators.
We propose to revise the network adequacy and ECP standards at
Sec. Sec. 156.230 and 156.235 to provide that all individual market
QHPs and SADPs and all Small Business Health Options Program (SHOP)
QHPs across all Exchanges must use a network of providers that complies
with the network adequacy and ECP standards in those sections, and to
remove the exception that these sections do not apply to plans that do
not use a provider network.
To expand access to care for low-income and medically underserved
consumers, we propose to establish two additional stand-alone ECP
categories at Sec. 156.235(a)(2)(ii)(B) for PY 2024 and subsequent
PYs, Mental Health Facilities and Substance Use Disorder Treatment
Centers. HHS also proposes to require QHP issuers to contract with at
least 35 percent of available FQHCs and at least 35 percent of
available Family Planning Providers that qualify as an ECP in the
plan's service area, in addition to meeting the current overall 35
percent ECP threshold requirement in the plan's service area.
We propose to add a timeliness standard to the requirement at Sec.
156.270(f) for QHP issuers to send enrollees a notice of payment
delinquency. Specifically, we propose to require issuers to send
notices of payment delinquency promptly and without undue delay. This
proposed revision will help ensure that enrollees are aware they are at
risk of losing coverage and can avoid losing coverage by paying any
outstanding premium amounts promptly.
We propose to revise the final deadline in Sec. 156.1210(c) for
issuers to report data inaccuracies identified in payment and
collections reports for discovered underpayments of APTC to the issuer
and user fee overpayments to HHS. Specifically, we propose to remove
the deadline set forth at Sec. 156.1210(c)(2). Under this proposal, we
would retain only the deadline at
[[Page 78214]]
Sec. 156.1210(c)(1), which requires that issuers describe all
inaccuracies identified in a payment and collections report within
three years of the end of the applicable plan year to which the
inaccuracy relates to be eligible to receive an adjustment to correct
an underpayment of APTC to the issuer and user fee overpayments to HHS.
Under this proposal, beginning with the 2020 plan year coverage, HHS
would not pay additional APTC payments or reimburse user fee payments
for FFE, SBE-FP, and SBE issuers for data inaccuracies reported after
the 3-year deadline. Further, we propose that HHS would not accept or
take action that results in an outgoing payment on data inaccuracies or
payment errors (except those identifying an overpayment by HHS) for the
2015 through 2019 plan year coverage that are reported after December
31, 2023. This proposal would better align with the existing IRS
limitation on filing corrected Federal tax returns and reduce
administrative and operational burden on issuers, State Exchanges, and
HHS when handling payment and enrollment dispute.
III. Provisions of the Proposed Regulations
A. Part 153--Standards Related to Reinsurance, Risk Corridors, and Risk
Adjustment
In subparts A, D, G, and H of part 153, we established standards
for the administration of the risk adjustment program. The risk
adjustment program is a permanent program created by section 1343 of
the ACA that transfers funds from lower-than-average risk, risk
adjustment covered plans to higher-than-average risk, risk adjustment
covered plans in the individual, small group markets, or merged
markets, inside and outside the Exchanges. In accordance with Sec.
153.310(a), a State that is approved or conditionally approved by the
Secretary to operate an Exchange may establish a risk adjustment
program, or have HHS do so on its behalf.\11\ HHS did not receive any
requests from States to operate risk adjustment for the 2024 benefit
year. Therefore, HHS will operate risk adjustment in every State and
the District of Columbia for the 2024 benefit year.
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\11\ See also 42 U.S.C. 18041(c)(1).
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1. Sequestration
In accordance with the OMB Report to Congress on the Joint
Committee Reductions for Fiscal Year 2023, the permanent risk
adjustment program is subject to the fiscal year 2023
sequestration.\12\ The Federal Government's 2023 fiscal year began on
October 1, 2022. Therefore, the risk adjustment program will be
sequestered at a rate of 5.7 percent for payments made from fiscal year
2023 resources (that is, funds collected during the 2023 fiscal year).
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\12\ OMB. (2022, March 28). OMB Report to the Congress on the
BBEDCA 251A Sequestration for Fiscal Year 2023. https://www.whitehouse.gov/wp-content/uploads/2022/03/BBEDCA_251A_Sequestration_Report_FY2023.pdf.
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HHS, in coordination with OMB, has determined that, under section
256(k)(6) of the Balanced Budget and Emergency Deficit Control Act of
1985,\13\ as amended, and the underlying authority for the risk
adjustment program, the funds that are sequestered in fiscal year 2023
from the risk adjustment program will become available for payment to
issuers in fiscal year 2024 without further Congressional action. If
Congress does not enact deficit reduction provisions that replace the
Joint Committee reductions, the program would be sequestered in future
fiscal years, and any sequestered funding would become available in the
fiscal year following that in which it was sequestered.
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\13\ Public Law 99-177 (1985).
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Additionally, we note that the Infrastructure Investment and Jobs
Act \14\ amended section 251A(6) of the Balanced Budget and Emergency
Deficit Control Act of 1985 and extended sequestration for the risk
adjustment program through fiscal year 2031 at a rate of 5.7 percent
per fiscal year.15 16
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\14\ Public Law 117-58, 135 Stat. 429 (2021).
\15\ 2 U.S.C. 901a.
\16\ The Coronavirus Aid, Relief, and Economic Security (CARES)
Act previously amended section 251A(6) of the Balanced Budget and
Emergency Deficit Control Act of 1985 and extended sequestration for
the risk adjustment program through fiscal year 2023 at a rate of
5.7 percent per fiscal year. Section 4408 of the CARES Act, Public
Law 116-136, 134 Stat. 281 (2020).
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2. HHS Risk Adjustment (Sec. 153.320)
The HHS risk adjustment models predict plan liability for an
average enrollee based on that person's age, sex, and diagnoses (also
referred to as hierarchical condition categories (HCCs)), producing a
risk score. The HHS risk adjustment methodology utilizes separate
models for adults, children, and infants to account for clinical and
cost differences in each age group. In the adult and child models, the
relative risk assigned to an individual's age, sex, and diagnoses are
added together to produce an individual risk score. Additionally, to
calculate enrollee risk scores in the adult models, we added enrollment
duration factors beginning with the 2017 benefit year,\17\ and
prescription drug categories (RXCs) beginning with the 2018 benefit
year.\18\ Infant risk scores are determined by inclusion in one of 25
mutually exclusive groups, based on the infant's maturity and the
severity of diagnoses. If applicable, the risk score for adults,
children, or infants is multiplied by a cost-sharing reduction (CSR)
factor. The enrollment-weighted average risk score of all enrollees in
a particular risk adjustment covered plan (also referred to as the plan
liability risk score (PLRS)) within a geographic rating area is one of
the inputs into the risk adjustment State payment transfer formula,\19\
which determines the State transfer payment or charge that an issuer
will receive or be required to pay for that plan for the applicable
State market risk pool. Thus, the HHS risk adjustment models predict
average group costs to account for risk across plans, in keeping with
the Actuarial Standards Board's Actuarial Standards of Practice for
risk classification.
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\17\ For the 2017 through 2022 benefit years, there is a set of
11 binary enrollment duration factors in the adult models that
decrease monotonically from one to 11 months, reflecting the
increased annualized costs associated with fewer months of
enrollments. See, for example, 81 FR 94071 through 94074. These
enrollment duration factors were replaced beginning with the 2023
benefit year with HCC-contingent enrollment duration factors for up
to 6 months in the adult models. See, for example, 87 FR 27228
through 27230.
\18\ For the 2018 benefit year, there were 12 RXCs, but starting
with the 2019 benefit year, the two severity-only RXCs were removed
from the adult risk adjustment models. See, for example, 83 FR
16941.
\19\ The State payment transfer formula refers to the part of
the HHS risk adjustment methodology that calculates payments and
charges at the State market risk pool level prior to the calculation
of the high-cost risk pool payment and charge terms that apply
beginning with the 2018 BY. See, for example, 81 FR 94080.
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a. Data for Risk Adjustment Model Recalibration for 2024 Benefit Year
We propose to use 2018, 2019 and 2020 benefit year enrollee-level
EDGE data to recalibrate the 2024 benefit year risk adjustment models
with an exception to exclude the 2020 benefit year data from the
blending of the age-sex coefficients for the adult models.
In accordance with Sec. 153.320, HHS develops and publishes the
risk adjustment methodology applicable in States where HHS operates the
program, including the draft factors to be employed in the models for
the benefit year. This includes information related to the annual
recalibration of the risk adjustment models using data from the most
recent available prior benefit years trended forwarded to reflect the
[[Page 78215]]
applicable benefit year of risk adjustment.
Our proposed approach for 2024 recalibration aligns with the
approach finalized in the 2022 Payment Notice (86 FR 24151 through
24155) and reiterated in the 2023 Payment Notice (87 FR 27220 through
27221), that involves use of the 3 most recent consecutive years of
enrollee-level EDGE data that are available at the time we incorporate
the data in the draft recalibrated coefficients published in the
proposed rule for the applicable benefit year, and not updating the
coefficients between the proposed and final rules if an additional year
of enrollee-level EDGE data becomes available for incorporation. We
continue to believe this approach promotes stability, better meets the
goal of the risk adjustment program, and allows issuers more time to
incorporate this information when pricing their plans for the upcoming
benefit year than the previous approach which allowed for updates to
the data used for recalibration if more data became available between
the proposed and final rules.
As such, we propose to determine coefficients for the 2024 benefit
year based on a blend of separately solved coefficients from the 2018,
2019, and 2020 benefit years of enrollee-level EDGE data, with an
exception to exclude the 2020 benefit year data from the blending of
the age-sex coefficients for the adult models. For all adult model age-
sex coefficients, we propose to use only 2018 and 2019 benefit year
enrollee-level EDGE data in recalibration to account for the observed
anomalous decreases in the unconstrained coefficients \20\ for the 2020
benefit year enrollee-level EDGE data for older adult enrollees,
especially older adult female enrollees.
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\20\ HHS constrains the risk adjustment models in multiple
distinct ways during model recalibration. These include (1)
coefficient estimation groups, also referred to as G-Groups in the
Risk Adjustment Do It Yourself (DIY) Software, (2) a priori
stability constraints, and (3) hierarchy violation constraints. Of
these, coefficient estimation groups and a priori stability
constraints are applied prior to model fitting. The hierarchy
violation constraints are applied after the initial estimates of
coefficients are produced. We refer to the models and coefficients
prior to the application of hierarchy violation constraints as the
``unconstrained models'' and ``unconstrained coefficients,''
respectively. For a description of the various constraints we apply
to the risk adjustment models, see, CMS' ``Potential Updates to HHS-
HCCs for the HHS-operated Risk Adjustment Program'' (the ``2019
White Paper'') (June 17, 2019). https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Potential-Updates-to-HHS-HCCs-HHS-operated-Risk-Adjustment-Program.pdf.
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To further explain, due to the potential impact of the COVID-19 PHE
on costs and utilization of services in 2020, HHS considered whether
the 2020 enrollee-level EDGE data was appropriate for use in the annual
model recalibration for the HHS-operated risk adjustment program
applicable to the individual and small group (including merged)
markets. As part of this analysis, we considered comments received in
response to the 2023 Payment Notice proposed rule (87 FR 598), wherein
we sought comments on the future use of the 2020 enrollee-level EDGE
data due to the potential impact of the COVID-19 PHE. The current
policy that involves using the 3 most recent years of EDGE data
available as of the proposed rule for the annual risk adjustment model
recalibration promotes stability and ensures the models reflect the
year-over-year changes to the markets' patterns of utilization and
spending without over-relying on any factors unique to one particular
year. This approach was put in place based on feedback from issuers and
other interested parties and our experience operating the program since
the 2014 benefit year. Furthermore, we know from our experience that
every year of data can be unique and therefore some level of deviation
from year to year is expected.\21\ These general considerations all
weigh in favor of including the 2020 benefit year data in the
recalibration of the risk adjustment models.
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\21\ Every year we expect some shifting in treatment and cost
patterns, for example as new drugs come to market. Our goal in using
multiple years of data for model calibration is to capture some
degree of year-to-year cost shifting without over-relying on any
factors unique to one particular year.
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However, we recognize that if a benefit year has significant
changes that differentially impact certain conditions or populations
relative to others, or is sufficiently anomalous relative to expected
future patterns of care, we should carefully consider what impact that
benefit year of data could have if it is used in the annual model
recalibration for the HHS-operated risk adjustment program. This
includes consideration of whether to exclude or adjust that benefit
year of data to increase the models' predictive validity or otherwise
limit the impact of anomalous trends. The situation presented by the
COVID-19 PHE and its potential impact on utilization and costs in the
2020 benefit year is an example \22\ of a situation that requires this
additional consideration. Thus, to help further inform HHS' decision on
whether it is appropriate to use 2020 enrollee-level EDGE data to
calibrate the risk adjustment coefficients, HHS analyzed the 2020
benefit year enrollee-level EDGE recalibration data to assess how it
compares to 2019 benefit year enrollee-level EDGE recalibration data.
Our results found:
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\22\ In the 10 years since the start of HHS model calibration
for benefit year 2014, the COVID-19 PHE has been the only such
situation to date. Other events and policy changes have not risen to
the same level of uniqueness or impact.
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The total sample size in the recalibration data set was
similar between the 2019 and 2020 benefit years, with the individual
market at the national level seeing an increase in enrollment in the
2020 benefit year and the small group market at the national level
seeing a slight decrease in enrollment in the 2020 benefit year.
In the 2020 EDGE enrollee-level recalibration data set,
even though PMPM spending dropped substantially between March and April
2020, the total PMPM spending in the 2020 benefit year was similar to
the 2019 benefit year, with the institutional and professional services
PMPM slightly decreasing, preventive services PMPM notably decreasing,
and the drug PMPM increasing. This represents a departure from
historical medical costs trends, which have generally seen increases
year-over-year in all cost categories.
Across all data submitted through issuer's EDGE servers
for the 2020 benefit year, we observed a large increase in telehealth
paid claims amounts when compared to all data submitted through
issuer's EDGE servers for the 2019 benefit year.
The number of enrollees with one or more HCC was
relatively stable between the 2019 and 2020 benefit year enrollee-level
EDGE recalibration data sets in both the recalibration and full data
sets.\23\
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\23\ CMS. (2021, June 30). Summary Report on Permanent Risk
Adjustment Transfers for the 2020 Benefit Year. https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/RA-Report-BY2020.pdf.
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Individual HCC frequencies and costs generally remained
constant between the 2019 and 2020 benefit year enrollee-level EDGE
recalibration data sets, even for the HCCs related to the severe
manifestations of COVID-19. An exception was a notable increase in
frequency for HCC 127 Cardio-Respiratory Failure and Shock, Including
Respiratory Distress Syndromes, which was likely coded for cases in
which acute respiratory distress syndrome (ARDS) was a manifestation of
COVID-19, but relative allowed charges, and therefore, risk adjustment
model coefficients, for HCC 127 remained similar in 2020 compared to
2019.
[[Page 78216]]
RXC frequencies and costs were generally stable between
the 2019 and 2020 benefit year enrollee-level EDGE recalibration data
sets, with the exception of RXC 10 Cystic Fibrosis Agents, for which a
new drug was introduced that increased costs in the 2020 data compared
to the 2019 data.
The unconstrained coefficients for the 2020 benefit year
enrollee-level EDGE recalibration data are similar to the 2019 benefit
year's unconstrainted coefficients with one exception. The exception
exists within the age-sex coefficients in the adult models where we
found decreases among coefficients for older enrollees, especially
female enrollees, which are likely due to decreases in discretionary
spending among this age group in the 2020 benefit year.
In short, on many key dimensions, HHS found that the 2019 benefit
year and 2020 benefit year enrollee-level EDGE data recalibration were
largely comparable.
With this analysis in mind, and based on the comments received in
response to the 2023 Payment Notice proposed rule,\24\ HHS considered
six different options for handling the 2020 benefit year enrollee-level
EDGE recalibration data for purposes of the annual recalibration of the
HHS risk adjustment models for the 2024 benefit year.\25\ Four options
involve the use of 2020 benefit year enrollee-level EDGE recalibration
data in the risk adjustment model recalibration, and two involve the
exclusion of the 2020 benefit year data. These six options are as
follows:
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\24\ These comments offered a variety of perspectives with some
commenters stating that 2020 enrollee-level EDGE data should be used
for model recalibration as normal, a few commenters suggesting that
2020 enrollee-level EDGE data should be excluded entirely, one
commenter recommending that 2020 enrollee-level EDGE data should be
used with a different weight assigned, and several commenters
suggesting HHS release a technical paper on the use of 2020
enrollee-level EDGE data, with several suggesting HHS do a
comparison of coefficients with and without the 2020 enrollee-level
EDGE data to review relative changes in coefficients, and evaluate
changes for clinical reasonability and consistency with 2018 and
2019 enrollee-level EDGE data. See 87 FR 27220 through 27221.
\25\ The proposals related to the use of 2020 benefit year
enrollee-level EDGE data in this rule for model recalibration
purposes are focused on the 2024 benefit year models. Consistent
with the approach finalized in part 2 of the 2022 Payment Notice (86
FR 24151 through 24155), any changes to the use of the 3 most recent
consecutive years of enrollee-level EDGE data, including proposals
related to the use of 2020 benefit year data, for recalibration of
the 2025 and 2026 benefit year HHS risk adjustment models would be
addressed and proposed in a future rulemaking.
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Option 1: Maintain the current policy, recalibrating the
2024 benefit year risk adjustment models using 2018, 2019, and 2020
enrollee-level EDGE data with no exceptions or modifications.
Option 2: Maintain the current policy, recalibrating the
2024 benefit year risk adjustment models using 2018, 2019, and 2020
benefit year enrollee-level EDGE recalibration data, but assign a lower
weight to 2020 data. Assigning a lower weight to the 2020 data would
dampen its impact on the models while continuing to capture in part the
utilization and spending patterns underlying the data.
Option 3: Utilize 4 years of enrollee-level EDGE data,
instead of three, to recalibrate the 2024 benefit year risk adjustment
models using 2017, 2018, 2019, and 2020 benefit year data. This would
serve the purpose of dampening the effect of the 2020 data on the
models by incorporating an extra year of data from a prior benefit year
that was not impacted by the COVID-19 PHE.
Option 4: Maintain the current policy, recalibrating the
2024 benefit year risk adjustment models using 2018, 2019, and 2020
enrollee-level EDGE recalibration data with an exception to exclude the
2020 benefit year data from the blending of the age-sex coefficients
for the adult models. Under this option, we would determine
coefficients for the 2024 benefit year based on a blend of separately
solved coefficients from the 2018, 2019, and 2020 benefit years of
enrollee-level EDGE recalibration data and would exclude the 2020
benefit year from the recalibration of the adult models' age-sex
coefficients. Instead, only 2018 and 2019 benefit year enrollee-level
EDGE recalibration data would be used to recalibrate the adult risk
adjustment models age-sex coefficients.\26\
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\26\ This is a similar approach to that taken in part 2 of the
2022 Payment Notice, where we only used 2016 and 2017 enrollee-level
EDGE data for the limited purpose of developing the RXC 09
coefficients, RXC 09 HCC related coefficients, and RXC 09
interaction term coefficients for the 2022 benefit year adult
models, given concerns regarding unrepresentative expenditures and
off-label prescribing of hydroxychloroquine during the COVID-19 PHE
relative to drugs that enrollees with HCC 048, 056, or 057 may take.
See 86 FR 24180.
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Option 5: Exclude the 2020 benefit year enrollee-level
EDGE recalibration data and instead use the 2017, 2018, and 2019
benefit year enrollee-level EDGE recalibration data, trended forward to
the 2024 benefit year, in recalibration of the risk adjustment models
for the 2024 benefit year, or use the final 2023 risk adjustment model
coefficients for the 2024 benefit year without trending the data to
account for inflation and changes in costs and utilization between the
2023 and 2024 benefit years.
Option 6: Exclude the 2020 benefit year enrollee-level
EDGE recalibration data and instead use only 2 years of enrollee-level
EDGE data for recalibration--that is, use only 2018 and 2019 benefit
year data to recalibrate the 2024 risk adjustment models.
Although it is true our analyses found that the 2019 and 2020
benefit year enrollee-level EDGE recalibration data were largely
comparable, there were observed anomalous decreases in the
unconstrained age-sex coefficients for the 2020 benefit year enrollee-
level EDGE recalibration data for older adult enrollees, especially
older female enrollees. We are therefore concerned that not making any
adjustments with respect to the use of 2020 enrollee-level EDGE
recalibration data could have an undue impact on the risk captured by
the age-sex factors in the adult models such that these factors would
less accurately reflect the expected spending patterns for the 2024
benefit year. Option 1 would not address the identified anomalous trend
that is not expected to continue in future benefit years. Option 2
represents a middle ground between those commenters who expressed
support for including 2020 benefit year data in model recalibration and
those who expressed support for excluding the data, by capturing the
utilization and spending patterns underlying the 2020 data while
dampening its effects in the models. However, we are concerned this
approach would require identifying an appropriate weighting methodology
other than the equal weighting that we generally use to blend the
factors from the 3 data years, and we do not believe there is a self-
evident method of weighting 2020 data differently for this purpose.
Furthermore, we are concerned that dampening the effect of the 2020
benefit year data in all of the models for all factors (as opposed to
just the age-sex factors in the adult models) defeats the purpose of
using the next available benefit year of data to recalibrate the
models, because doing so would prevent the models from reflecting
changes in utilization and cost of care that are unrelated to the
impact of the COVID-19 PHE. There are similar concerns with option 3
and the inclusion of an additional prior benefit year (that is, 2017)
to recalibrate the 2024 benefit year models to dampen the impact of the
2020 benefit year data. We do not believe that such a broad dampening
is necessary since the anomalous coefficient changes identified from
the 2020 benefit year data were largely limited to the adult model age-
sex coefficients and incorporating an
[[Page 78217]]
additional prior benefit year of data would dampen the impact of the
2020 benefit year data on other factors (for example, HCCs, RXCs, and
interaction factors) and would prevent the models from reflecting
changes in utilization and cost of care that are unrelated to the
impact of the COVID-19 PHE. Furthermore, option 3 would use older data
to fit the 2024 benefit year risk adjustment models than options 1 and
2 (that is, 2017 benefit year data), which may impact the risk
adjustment models such that they reflect older cost and utilization
trends than would be desirable.
We are similarly concerned about options 5 and 6, which would
involve the complete exclusion of 2020 benefit year data. With respect
to option 5, although using the same data years for 2024 benefit year
model recalibration as 2023 benefit year model recalibration or using
the 2023 benefit year models for the 2024 benefit year would likely
yield the same or similar coefficients \27\ to those published for the
2023 benefit year, thereby providing stability that issuers may find
desirable, we are concerned this approach would also involve the use of
older data as with option 3, which may not be the data set that would
best reflect current utilization and spending trends including changes
in drug prescribing patterns. In addition, our analyses of the 2020
benefit year enrollee-level EDGE recalibration data found that it was
largely comparable with the 2019 benefit year data set and we did not
identify other major anomalous trends in our comparison of the
unconstrained HCC coefficients in the 2019 and 2020 enrollee-level EDGE
recalibration data sets, which raises the question about whether there
is a sufficient justification to completely exclude 2020 benefit year
enrollee-level EDGE recalibration data in the recalibration of the risk
adjustment models.
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\27\ We expect that the trending of the prior benefit year data
to reflect the anticipated costs and spending trends in the
applicable future benefit year of risk adjustment that occurs as
part of the annual model recalibration effort would impact the 2024
risk adjustment model coefficients.
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Option 6 has the same drawbacks as option 5--that is, it would not
use the most recently available data for the applicable benefit year
model recalibration, which may be the data set that would best reflect
current utilization and spending trends, and raises the same question
about whether there is a sufficient justification to completely exclude
the 2020 benefit year data for model recalibration purposes. This
option has the additional drawback of decreasing the stabilizing effect
of using multiple years of data, as our goal in using multiple years of
data for model calibration is to capture some degree of year-to-year
cost shifting without over-relying on any factors unique to one
particular year. When using 2 years of data, each year is weighted at
50 percent, but with 3 years of data, each year is weighted at 33.3
percent. As such, a change in a coefficient occurring in 1 year of the
data that is actually included in recalibration would have a greater
impact on the risk adjustment model coefficients if only using 2 years
of data rather than 3 years, due to the increase in the reliance of the
blended coefficients on the remaining 2 years of data.\28\
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\28\ We do not have the same concerns with respect to using only
2 years of data for recalibration of the adult model age-sex
coefficients because age-sex coefficients tend to contribute less to
enrollees' risk scores than HCC, RXC, and interaction coefficients,
so changes in a single age-sex coefficient in one of the remaining
years of data is less likely to have an undue impact. Additionally,
the age-sex coefficients are derived from substantially larger
samples of enrollees and are therefore theoretically more stable
than HCC, RXC, enrollment duration and interaction coefficients.
Furthermore, the anomalies seen in the age-sex coefficients fit with
the 2020 EDGE data systematically impact a wide range of enrollees.
As such, we believe the risks of including 2020 EDGE data in
blending of the age-sex coefficients outweighs the risks of only
using the 2018 and 2019 benefit years of EDGE data to blend the age-
sex coefficients for the 2024 benefit year adult models.
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After consideration of these different options, we propose option
4--that is, maintain the current policy of using the 3 most recent
consecutive benefit year data sets that are available at the time of
publication of this proposed rule, with a narrowly tailored exception
to exclude the 2020 benefit year data from the blending of the age-sex
coefficients for the adult models. Under this proposal, we would
determine coefficients for the 2024 benefit year based on a blend of
separately solved coefficients from the 2018, 2019, and 2020 benefit
years of enrollee-level EDGE recalibration data except for the
coefficients for the adult age-sex factors, which would instead be
based on a blend of separately solved coefficients from only the 2018
and 2019 benefit year enrollee-level EDGE recalibration. This approach
preserves the current policy and use of the 3 most recent consecutive
years of data available for the majority of the risk adjustment model
coefficients, allowing for the use of the next available benefit year
of data to recalibrate models that appears to be largely comparable
with 2019 benefit year data to reflect changes in cost and utilization
patterns for payment HCCs, RXCs, enrollment duration factors and
interaction factors. At the same time, it includes an exception
narrowly tailored to account for the observed anomalous decreases in
the unconstrainted coefficients for the 2020 benefit year enrollee-
level EDGE recalibration data for older adult enrollees, especially
female enrollees. Thus, we believe that this offers a balanced approach
to the use of 2020 benefit year enrollee-level EDGE recalibration data
for model recalibration purposes while also addressing the limited
observed anomalous trends in the 2020 benefit year enrollee-level EDGE
recalibration data.
Our proposal to adopt option 4 is narrowly tailored to only address
the observed trend in the unconstrained age-sex coefficients for the
2020 benefit year enrollee-level EDGE recalibration data for older
adult enrollees, especially older adult female enrollees, which are
likely due to decreases in discretionary spending among this age group
in the 2020 benefit year. We are not proposing adjustments in response
to the other trends observed in the 2020 benefit year enrollee-level
EDGE recalibration data, such as the decrease in PMPM spending that
occurred in March and April 2020,\29\ because we generally found that
the 2020 benefit year data and trends were otherwise largely comparable
with the 2019 benefit year data and we did not identify other anomalous
trends in our comparison of the unconstrained HCC coefficients in the
2019 and 2020 benefit year enrollee-level EDGE recalibration data sets.
We further note that the coefficients fit by the risk adjustment models
reflect the cost of treatment rather than the number of enrollees
accessing treatment or when during the year the treatment is accessed.
Therefore, even though there was some observed decreased utilization in
the 2020 benefit year enrollee-level EDGE recalibration data, the lack
of change in diagnosis-related coefficients between the models fit with
prior years of enrollee-level EDGE recalibration data and the models
fit with 2020 enrollee-level EDGE recalibration data indicates that
when an enrollee was able to access care and a diagnosis was recorded
on EDGE for the benefit year, the cost of treatment of their diagnosed
conditions was similar to that experienced in previous benefit years.
As such, we believe the 2020 enrollee-level EDGE recalibration data is
sufficiently similar to prior years of enrollee level EDGE
recalibration data to
[[Page 78218]]
use in the fitting of coefficients for HCCs, RXCs, their interactions,
and enrollment duration factors. We also do not believe that any 2020
enrollee-level EDGE recalibration data exceptions are needed for the
child or infant risk adjustment models because among those models we
did not observe anomalous trends between age-sex groups analogous to
those trends observed that differentially impacted age-sex factors in
the adult models. The draft coefficients listed in Tables 2 through 7
of this proposed rule reflect the use of 2018, 2019, and 2020 benefit
year enrollee-level EDGE recalibration data, with an exception to
exclude the 2020 benefit year data from the blending of the age-sex
coefficients for the adult models, as well as the other risk adjustment
model updates proposed in this proposed rule.\30\
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\29\ As noted above, even though PMPM spending dropped
substantially between March and April 2020, our analysis found that
total PMPM spending in the 2020 benefit year was generally similar
to the 2019 benefit year.
\30\ Similar to recalibration of the 2023 risk adjustment adult
models and consistent with the policies adopted in the 2023 Payment
Notice, the draft factors in this rule also reflect the removal of
the mapping of hydroxychloroquine sulfate to RXC 09 (Immune
Suppressants and Immunomodulators) and the related RXC 09
interactions (RXC 09 x HCC056 or 057 and 048 or 041; RXC 09 x
HCC056; RXC 09 x HCC 057; RXC 09 x HCC048, 041) from the 2018 and
2019 benefit year enrollee-level EDGE data sets for purposes of
recalibrating the 2024 benefit year adult models. See 87 FR 27232
through 27235. Additionally, the draft factors for the adult models
reflect the use of the final, fourth quarter (Q4) RXC mapping
document that was applicable for each benefit year of data included
in the current year's model recalibration (except under extenuating
circumstances that can result in targeted changes to RXC mappings).
See 87 FR at 27231 through 27232.
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To aid interested parties in their consideration of the proposed
option, we are providing in Table 1 the values for the adult age-sex
coefficients under option 1, which blends the age-sex coefficients
using all three benefit years (2018, 2019 and 2020). Interested parties
may compare the coefficients in Table 1 (reflecting option 1) to those
in Table 2 (reflecting proposed option 4) to understand the impact of
the 2020 enrollee-level EDGE data on the blended age-sex coefficients
for the 2024 benefit year.
[GRAPHIC] [TIFF OMITTED] TP21DE22.000
In addition to considering alternative options to recalibration in
this section, we note that the coefficients could change if we identify
an error after publication of this rule or if some or all of the
proposed model changes are not finalized or are modified in response to
comments. In addition, consistent with Sec. 153.320(b)(1)(i), if we
are unable to finalize the final coefficients in time for publication
in the final rule, we would publish the final coefficients for the 2024
benefit year in guidance soon after the publication of the final rule.
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\31\ All coefficients in Table 2 except for the adult age-sex
factors are blended using all three benefit years of enrollee-level
EDGE data (2018, 2019, and 2020). Option 1 and proposed option 4
only differ in the values of the adult age-sex coefficients. As
such, in Table 1, we only provide the adult age-sex coefficients for
option 1.
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We seek comment on the proposal to determine 2024 benefit year
coefficients based on a blend of separately solved coefficients from
the 2018, 2019, and 2020 enrollee-level EDGE recalibration data, with
an exception to exclude the 2020 benefit year data from the blending of
the age-sex coefficients for the adult models. We also seek comment on
all of the alternative approaches outlined above.
b. Pricing Adjustment for the Hepatitis C Drugs
For the 2024 benefit year, we propose to continue applying a market
pricing adjustment to the plan liability associated with Hepatitis C
drugs in the risk adjustment models.\32\ Since the 2020 benefit year
risk adjustment models, we have been making a market pricing adjustment
to the plan liability associated with Hepatitis C drugs to reflect
future market pricing prior to solving for coefficients for the
models.\33\ The purpose of this market pricing adjustment is to account
for significant pricing changes associated with the introduction of new
and generic Hepatitis C drugs between the data years used for
recalibrating the models and the applicable recalibration benefit
year.\34\
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\32\ See for example, 84 FR 17463 through 17466.
\33\ The Hepatitis C drugs market pricing adjustment to plan
liability is applied for all enrollees taking Hepatitis C drugs in
the data used for recalibration.
\34\ Silseth, S., & Shaw, H. (2021). Analysis of prescription
drugs for the treatment of hepatitis C in the United States.
Milliman White Paper. https://www.milliman.com/-/media/milliman/pdfs/2021-articles/6-11-21-analysis-prescription-drugs-treatment-hepatitis-c-us.ashx.
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We have committed to reassessing this pricing adjustment with
additional years of enrollee-level EDGE data, as data become available.
As part of the 2024 benefit year model recalibration, we reassessed the
cost trend for Hepatitis C drugs using available
[[Page 78219]]
enrollee-level EDGE data (including 2020 benefit year data) to consider
whether the adjustment was still needed and if it is still needed,
whether it should be modified. We found that the data for the Hepatitis
C RXC that would be used for the 2024 benefit year recalibration \35\
still do not account for the significant pricing changes due to the
introduction of new Hepatitis C drugs, and therefore, do not precisely
reflect the average cost of Hepatitis C treatments applicable to the
benefit year in question.
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\35\ As detailed above, we propose to use 2018, 2019 and 2020
enrollee-level EDGE data for recalibration of the 2024 benefit year
HHS risk adjustment models, with an exception to exclude 2020 data
from recalibration of the age-sex factors for the adult models.
However, for purposes of assessing whether this pricing adjustment
was still needed and, if so, if it should be modified, we also
assessed 2017 enrollee-level EDGE data in the event one of the
alternative proposals regarding use of 2020 enrollee-level EDGE data
is adopted.
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Specifically, generic Hepatitis C drugs did not become available on
the market until 2019, and we propose to use 2018 benefit year EDGE
data in the 2024 benefit year model recalibration.\36\ Due to the lag
between the data years used to recalibrate the risk adjustment models
and the applicable benefit year of risk adjustment, as well as the
expectation that the costs for Hepatitis C drugs will not increase at
the same rate as other drug costs between the data year and the
applicable benefit year of risk adjustment, we do not believe that the
trends used to reflect growth in the cost of prescription drugs due to
inflation and related factors for recalibrating the models will
appropriately reflect the average cost of Hepatitis C treatments
expected in the 2024 benefit year. Therefore, we continue to believe a
market pricing adjustment specific to Hepatitis C drugs in our models
for the 2024 benefit year is necessary to account for the significant
pricing changes associated with the introduction of new and generic
Hepatitis C drugs between the data years used for recalibrating the
models and the applicable recalibration benefit year. We intend to
continue to assess this pricing adjustment in future benefit year
recalibrations using additional years of enrollee-level EDGE data.
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\36\ See Miligan, J, (2018). A perspective from our CEO: Gilead
Subsidiary to Launch Authorized Generics to Treat HCV. Gilead.
https://www.gilead.com/news-and-press/company-statements/authorized-generics-for-hcv. See also AbbVie. (2017). AbbVie Receives U.S. FDA
Approval of MAVYRETTM (glecaprevir/pibrentasvir) for the
Treatment of Chronic Hepatitis C in All Major Genotypes (GT 1-6) in
as Short as 8 Weeks. Abbvie. https://news.abbvie.com/news/abbvie-receives-us-fda-approval-mavyret-glecaprevirpibrentasvir-for-treatment-chronic-hepatitis-c-in-all-major-genotypes-gt-1-6-in-as-short-as-8-weeks.htm.
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We seek comment on our proposal to continue applying a market
pricing adjustment to the plan liability associated with Hepatitis C
drugs for the 2024 benefit year.
c. Request for Information: Payment HCC for Gender Dysphoria
HHS requests information on adding a payment HCC for gender
dysphoria to the HHS-operated risk adjustment models for future benefit
years. As part of the ongoing assessment of improvements to the HHS-
operated risk adjustment program, HHS considers whether adjustments are
needed to the payment HCCs in the risk adjustment models.\37\ In light
of Executive Order (E.O.) 13985 ``Advancing Racial Equity and Support
for Underserved Communities Through the Federal Government,'' \38\ E.O.
13988 ``Preventing and Combating Discrimination on the Basis of Gender
Identity or Sexual Orientation,'' \39\ and a comment received in
response to the 2023 Payment Notice proposed rule, HHS is soliciting
comment on whether to consider adding a new payment HCC for gender
dysphoria to the risk adjustment models for future benefit years.
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\37\ See, for example, the 2019 White Paper. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Potential-Updates-to-HHS-HCCs-HHS-operated-Risk-Adjustment-Program.pdf.
\38\ 86 FR 7009.
\39\ 86 FR 7023.
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In considering the inclusion of a new payment HCC for gender
dysphoria, we evaluated this potential payment HCC against the 10
Principles of HHS-Operated Risk Adjustment and determined that a new
payment HCC for gender dysphoria would satisfy some but not all of
these principles (77 FR 73128).
To further consider whether we should add a payment HCC for gender
dysphoria to the HHS-operated risk adjustment models, we request
feedback on the following questions:
The implications of using the changing clinical concepts
and labels from the ICD-10-CM diagnosis of ``gender identity disorder''
compared to the draft ICD-11-CM diagnosis of ``gender incongruence''
\40\ for the naming and inclusion of this diagnosis or payment HCC in
the HHS risk adjustment models.
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\40\ World Health Organization. (n.d.). Gender incongruence and
transgender health in the ICD. https://www.who.int/standards/classifications/frequently-asked-questions/gender-incongruence-and-transgender-health-in-the-icd.
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Whether a gender dysphoria HCC should be a separate and
standalone payment HCC, or if gender dysphoria could be combined with
any other diagnoses to form a broader payment HCC.\41\
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\41\ Gender dysphoria codes are currently mapped to HCC 93 Other
Psychiatric Disorders, a non-payment HCC that is not currently
included in the HHS-operated risk adjustment models.
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Any other factors HHS should consider when determining
whether to add a gender dysphoria HCC to the HHS risk adjustment models
as a payment HCC.
While we are not proposing to add a payment HCC for gender
dysphoria to the HHS risk adjustment models at this time, we solicit
comments to inform our continued consideration of potential risk
adjustment model updates for future benefit years.
d. List of Factors To Be Employed in the Risk Adjustment Models (Sec.
153.320)
The proposed 2024 benefit year risk adjustment model factors
resulting from the equally weighted (averaged) blended factors from
separately solved models using the 2018, 2019, and 2020 enrollee-level
EDGE data, with an exception to exclude the 2020 data from
recalibration of the age-sex factors for the adult models, are shown in
Tables 1 through 6. The adult, child, and infant models have been
truncated to account for the high-cost risk pool payment parameters by
removing 60 percent of costs above the $1 million threshold.\42\ Table
2 contains factors for each adult model, including the age-sex, HCCs,
RXCs, RXC-HCC interactions, interacted HCC counts, and enrollment
duration coefficients. Table 3 contains the factors for each child
model, including the age-sex, HCCs, and interacted HCC counts
coefficients. Table 4 lists the HHS-HCCs selected for the interacted
HCC counts factors that apply to the adult and child models. Table 5
contains the factors for each infant model. Tables 6 and 7 contain the
HCCs included in the infant models' maturity and severity categories,
respectively.
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\42\ We are not proposing changes to the high-cost risk pool
parameters for the 2024 benefit year. Therefore, we would maintain
the $1 million threshold and 60 percent coinsurance rate.
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e. CSR Adjustments43 44 45
46 4748
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\43\ Starting with the 2024 risk adjustment adult models, HHS
will group HCC 18 Pancreas Transplant Status and HCC 183 Kidney
Transplant Status/Complications to reflect that these transplants
frequently co-occur for clinical reasons and to reduce volatility of
coefficients across benefit years due to the small sample size of
HCC 18. This change will also be reflected in the DIY Software for
the 2024 benefit year.
\44\ HCC numbers that appear with an underscore in this document
will appear without the underscore in the DIY software. For example,
HCC 35_1 in this table will appear as HCC 351 in the DIY software.
\45\ Starting with the 2024 risk adjustment adult models, HHS
will group HCC 18 Pancreas Transplant Status and HCC 183 Kidney
Transplant Status/Complications to reflect that these transplants
frequently co-occur for clinical reasons and to reduce volatility of
coefficients across benefit years due to the small sample size of
HCC 18. This change will also be reflected in the DIY Software for
the 2024 benefit year.
\46\ As a note, we constrain RXC 03 to be equal to average plan
liability for RXC 03 drugs, RXC 04 to be equal to the average plan
liability for RXC 04 drugs, and we constrain RXC 03 x HCC142 and RXC
04 x HCC184, 183, 187, 188 to be equal to 0. See CMS. (2016, March
24). March 2016 Risk Adjustment Methodology Discussion Paper.
https://www.cms.gov/cciio/resources/forms-reports-and-other-resources/downloads/ra-march-31-white-paper-032416.pdf (where we
previously discussed the use of constraints in the risk adjustment
models).
\47\ Similar to recalibration of the 2023 risk adjustment adult
models and consistent with the final policies adopted in the 2023
Payment Notice, the draft factors in this rule reflect the removal
of the mapping of hydroxychloroquine sulfate to RXC 09 (Immune
Suppressants and Immunomodulators) and the related RXC 09
interactions (RXC 09 x HCC056 or 057 and 048 or 041; RXC 09 x
HCC056; RXC 09 x HCC 057; RXC 09x HCC048, 041) from the 2018 and
2019 benefit year enrollee-level EDGE data sets for purposes of
recalibrating the 2024 benefit year adult models. See 87 FR 27232
through 27235. Additionally, the draft factors for the adult models
reflect the use of the final, fourth quarter (Q4) RXC mapping
document that was applicable for each benefit year of data included
in the current year's model recalibration (except under extenuating
circumstances that can result in targeted changes to RXC mappings),
while continuing to engage in annual and quarterly review processes.
See 87 FR 27231 through 27232.
\48\ Starting with the 2024 risk adjustment adult models, HHS
will group HCC 18 Pancreas Transplant Status and HCC 183 Kidney
Transplant Status/Complications to reflect that these transplants
frequently co-occur for clinical reasons and to reduce volatility of
coefficients across benefit years due to the small sample size of
HCC 18. This change will also be reflected in the DIY Software for
the 2024 benefit year and will be applied to the adult models only.
In the child models, HCC 18 and HCC 183 are subject to an a priori
constraint (S1) with HCC 34, also for sample size reasons. See
Section 4.2.2 of the 2019 White Paper. (June 17, 2019.) https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Potential-Updates-to-HHS-HCCs-HHS-operated-Risk-Adjustment-Program.pdf. Nevertheless, in both the adult and child models, the
presence of one of these HCCs either alone or in a group will
trigger a severity illness indicator and/or a transplant indicator
for the interacted counts model specification depending on the total
number of HCCs the enrollee has.
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We propose to continue including an adjustment for the receipt of
CSRs in the risk adjustment models in all 50 States and the District of
Columbia. While we continue to study and explore a range of options to
update the CSR adjustments to improve prediction for CSR enrollees and
whether changes are needed to the risk adjustment transfer formula to
account for CSR plans,\49\ to maintain stability and certainty for
issuers for the 2024 benefit year, we are proposing to maintain the CSR
adjustment factors finalized in the 2019, 2020, 2021, 2022, and 2023
Payment Notices.\50\ See Table 8. We also propose to continue to use a
CSR adjustment factor of 1.12 for all Massachusetts wrap-around plans
in the risk adjustment plan liability risk score calculation, as all of
Massachusetts' cost-sharing plan variations have AVs above 94 percent
(81 FR 12228).
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\49\ See CMS. (2021, October 26). HHS-Operated Risk Adjustment
Technical Paper on Possible Model Changes. Appendix A. https://www.cms.gov/files/document/2021-ra-technical-paper.pdf. We are also
considering a letter recently published by the American Academy of
Actuaries regarding accounting for the receipt of CSRs in risk
adjustment and plan rating and are continuing to monitor changes
related to these issues. Bohl, J., Novak, D., & Karcher, J. (2022,
September 8). Comment Letter on Cost-Sharing Reduction Premium Load
Factors. American Academy of Actuaries. https://www.actuary.org/sites/default/files/202209/Academy_CSR_Load_Letter_09.08.22.pdf.
\50\ See 83 FR 16930 at 16953; 84 FR 17478 through 17479; 85 FR
29190; 86 FR 24181; and 87 FR 27235 through 27236.
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We seek comment on these proposals.
[[Page 78236]]
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f. Model Performance Statistics
Each benefit year, to evaluate risk adjustment model performance,
we examine each model's R-squared statistic and predictive ratios
(PRs). The R-squared statistic, which calculates the percentage of
individual variation explained by a model, measures the predictive
accuracy of the model overall. The PR for each of the HHS risk
adjustment model is the ratio of the weighted mean predicted plan
liability for the model sample population to the weighted mean actual
plan liability for the model sample population. The PR represents how
well the model does on average at predicting plan liability for that
subpopulation.
A subpopulation that is predicted perfectly would have a PR of 1.0.
For each of the current and proposed HHS risk adjustment models, the R-
squared statistic and the PRs are in the range of published estimates
for concurrent risk adjustment models.\51\ Because we propose to blend
the coefficients from separately solved models based on the 2018, 2019,
and 2020 benefit years' enrollee-level EDGE data, with an exception to
exclude 2020 benefit year data from the recalibration of the age-sex
factors for the adult models, we are publishing the R-squared statistic
for each model separately to verify their statistical validity. The R-
squared statistics for the proposed 2024 benefit models are shown in
Table 9.
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\51\ Hileman, G., & Steele, S. (2016). Accuracy of Claims-Based
Risk Scoring Models. Society of Actuaries. https://www.soa.org/4937b5/globalassets/assets/files/research/research-2016-accuracy-claims-based-risk-scoring-models.pdf.
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3. Overview of the HHS Risk Adjustment Methodology (Sec. 153.320)
In part 2 of the 2022 Payment Notice (86 FR 24183 through 24186),
we finalized the proposal to continue to use the State payment transfer
formula finalized in the 2021 Payment Notice for the 2022 benefit year
and beyond, unless changed through notice-and-comment rulemaking. We
explained that under this approach, we will no longer republish these
formulas in future annual HHS notice of benefit and payment parameter
rules unless changes are being proposed. We are not proposing any
changes to the formula in this rule, and therefore, are not
republishing the formulas in this rule. We would continue to apply the
formula as finalized in the 2021 Payment Notice (86 FR 24183 through
24186) \52\ in the States where HHS operates the risk adjustment
program in the 2024 benefit year. Additionally, as finalized in the
2020 Payment Notice (84 FR 17466 through 17468), we will maintain the
high-cost risk pool parameters for the 2020 benefit year and beyond,
unless amended through notice-and-comment rulemaking. We are not
proposing any changes to the high-cost risk pool parameters for the
2024 benefit year; therefore, we would maintain the $1 million
threshold and 60 percent coinsurance rate.
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\52\ Discussion provided an illustration and further details on
the State payment transfer formula.
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4. Repeal of Risk Adjustment State Flexibility To Request a Reduction
in Risk Adjustment State Transfers (Sec. 153.320(d))
We propose to repeal the flexibility under Sec. 153.320(d) for
States to request reductions of risk adjustment State transfers under
the State payment transfer formula in all State market risk pools,
including those prior participant States that previously requested a
reduction,\53\ for the 2025 benefit year and beyond. We also solicit
comment on Alabama's requests to reduce risk adjustment State transfers
in the individual (including the catastrophic and non-catastrophic risk
pools) and small group markets for the 2024 benefit year.
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\53\ Alabama is the only State that has previously requested a
reduction in risk adjustment transfers through this flexibility and
therefore is the only State considered a ``prior participant
State''.
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a. Repeal of State Flexibility To Request Transfer Reductions
We propose to amend Sec. 153.320(d) to repeal the ability for any
State to request a reduction in risk adjustment State transfers
beginning with the 2025 benefit year. As part of this repeal, we
propose conforming amendments to the introductory text of Sec.
153.320(d), which currently provides that prior participant States may
request to reduce risk adjustment transfers in all State market risk
pools by up to 50 percent beginning with the 2024 benefit year, to
remove this flexibility for the 2025 benefit year and beyond and limit
the timeframe available for prior participants to request reductions to
the 2024 benefit year only. Similarly, we propose conforming amendments
to paragraphs (d)(1)(iv) and (d)(4)(i)(B), which describe the
conditions for a prior participant State to request a reduction
beginning with the 2024 benefit year, to also limit these requests to
the 2024 benefit year only and to eliminate the ability for prior
participant States to request a reduction for the 2025 benefit year and
beyond.
In the 2019 Payment Notice (83 FR 16955 through 16960), we amended
Sec. 153.320 to add paragraph (d) to provide States the flexibility to
request a reduction to the applicable risk adjustment State transfers
calculated by HHS using the State payment transfer formula for the
State's individual (catastrophic or non-catastrophic risk pools), small
group, or merged market risk pool by up to 50 percent in States where
HHS operates the risk adjustment program to more precisely account for
differences in actuarial risk in the applicable State's markets
beginning with the 2020 benefit year. We finalized that any requests we
received would be published in the applicable benefit year's proposed
HHS notice of benefit and payment parameters, and the supporting
evidence provided by the State in support of its request would be made
available for public comment.\54\
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\54\ If the State requests that HHS not make publicly available
certain supporting evidence and analysis because it contains trade
secrets or confidential commercial or financial information within
the meaning of HHS' Freedom of Information Act regulations at 45 CFR
5.31(d), HHS will only make available on the CMS website the
supporting evidence submitted by the State that is not a trade
secret or confidential commercial or financial information by
posting a redacted version of the State's supporting evidence. See
Sec. 153.320(d)(3).
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In the 2023 Payment Notice (87 FR 27236), HHS limited this
flexibility by finalizing amendments to Sec. 153.320(d) that repealed
the State flexibility framework for States to request reductions in
risk adjustment State transfer payments for the 2024 benefit year and
beyond, with an exception for prior participants.\55\ We also limited
the options for prior participants to request reductions by finalizing
that beginning with the 2024 benefit year, States submitting reduction
requests must demonstrate that the requested reduction satisfies the de
minimis standard--that is, the premium increase necessary to cover the
affected issuer's or issuers' reduced risk adjustment payments does not
exceed 1 percent in the relevant State market risk pool.\56\ In the
2023 Payment Notice (87 FR 27239 through 27241), we also finalized the
conforming amendments to the HHS approval framework in Sec.
153.320(d)(4) to reflect the changes to the applicable criteria (that
is, only retaining the de minimis criterion) beginning with the 2024
benefit year, and we finalized the proposed definition of ``prior
participant'' in Sec. 153.320(d)(5). In addition, HHS indicated our
intention to propose in future rulemaking to repeal the exception for
prior participants beginning with the 2025 benefit year.\57\
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\55\ Section 153.320(d)(5) defines prior participants as States
that submitted a State reduction request in the State's individual
catastrophic, individual non-catastrophic, small group, or merged
market risk pool in the 2020, 2021, 2022, or 2023 benefit year.
\56\ 87 FR 27239 through 27241. See also 83 FR 16957.
\57\ 87 FR 27239 through 27241. See also 83 FR 16957.
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Since finalizing the ability for States to request a reduction of
risk adjustment transfers in the 2019 Payment Notice (83 FR 16955
through 16960), we received public comments on subsequent proposed
rulemakings requesting that HHS repeal this policy, with several
commenters noting that reducing risk adjustment transfers to plans with
higher-risk enrollees could create incentives for issuers to avoid
enrolling high-risk enrollees in the future by distorting plan
offerings and designs, including by avoiding broad network plans, not
offering platinum plans at all, and only offering limited gold plans.
Commenters further stated that issuers could also distort plan designs
by excluding coverage or imposing high cost-sharing for certain drugs
or services. For example, one commenter stated that the risk adjustment
State payment transfer formula already adjusts for differences in types
of individuals enrolled in different States and aggregate differences
in prices and utilization by using the Statewide average premium as a
scaling factor, so State flexibility to account for State-specific
factors is unnecessary.\58\ In addition, since establishing this
framework, we have observed a lack of
[[Page 78238]]
interest from States in using this policy. Only one State (Alabama) has
exercised this flexibility and requested reductions to transfers in its
individual and/or small group markets.\59\
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\58\ See Fielder, M, & Layton, T. (2020, December 30). Comment
Letter on 2022 Payment Notice Proposed Rule. Brookings. https://www.brookings.edu/wp-content/uploads/2020/12/FiedlerLaytonCommentLetterNBPP2022.pdf.
\59\ For the 2020 and 2021 benefit years, Alabama submitted a 50
percent risk adjustment transfer reduction request for its small
group market, which HHS approved in the 2020 Payment Notice (84 FR
17454) and in the 2021 Payment Notice (85 FR 29164). For the 2022
and 2023 benefit years, Alabama submitted 50 percent risk adjustment
transfer reduction requests for its individual and small group
markets. HHS approved the State's requests for the 2022 benefit year
in part 2 of the 2022 Payment Notice final rule (86 FR 24140) and
approved a 25 percent reduction for Alabama's individual market
State transfers (including the catastrophic and non-catastrophic
risk pools) and a 10 percent reduction for the State's small group
market transfers for the 2023 benefit year in the 2023 Payment
Notice (87 FR 27208).
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HHS believes this proposal to completely repeal the option for
States to request reductions in risk adjustment State transfers would
align HHS policy with Section 1 of E.O. 14009 (86 FR 7793), which
prioritizes protecting and strengthening the ACA and making high-
quality health care accessible and affordable for all individuals.
Section 3 of E.O. 14009 directs HHS, and the heads of all other
executive departments and agencies with authorities and
responsibilities related to Medicaid and the ACA, to review all
existing regulations, orders, guidance documents, policies, and any
other similar agency actions to determine whether they are inconsistent
with policy priorities described in Section 1 of E.O. 14009. Consistent
with this directive, HHS reviewed the risk adjustment State flexibility
under Sec. 153.320(d) and determined it is inconsistent with policies
described in sections 1 and 3 of E.O. 14009. We believe that a complete
repeal of Sec. 153.320(d) would prevent the potential negative
outcomes of risk adjustment State flexibility identified through public
comment, including the possibility of risk selection, market
destabilization, increased premiums, smaller networks, and less-
comprehensive plan options, the prevention of which would protect and
strengthen the ACA and make health care more accessible and affordable.
For all of these reasons, we propose to amend Sec. 153.320(d) to fully
repeal the flexibility for States, including prior participants, to
request reductions of risk adjustment State transfers calculated by HHS
under the State payment transfer formula in all State market risk pools
beginning with the 2025 benefit year. If these amendments are
finalized, no State would be able to request a reduction in risk
adjustment transfers calculated by HHS under the State payment transfer
formula starting with the 2025 benefit year.
We seek comment on this proposal.
b. Requests To Reduce Risk Adjustment Transfers for the 2024 Benefit
Year
In accordance with Sec. 153.320(d)(2), beginning with the 2020
benefit year, States requesting a reduction in the transfers calculated
by HHS under the State payment transfer formula must submit their
requests with the supporting evidence and analysis outlined under Sec.
153.320(d)(1) by August 1 of the calendar year that is 2 calendar years
prior to the beginning of the applicable benefit year. As finalized in
the 2023 Payment Notice (87 FR 27239 through 27241), under Sec.
153.320(d)(1)(iv), State requests for a reduction to transfers must
include a justification for the reduction requested demonstrating the
requested reduction would have de minimis impact on the necessary
premium increase to cover the transfers for issuers that would receive
reduced transfer payments beginning with the 2024 benefit year. In
accordance with Sec. 153.320(d)(4)(i)(B), HHS will approve State
reduction requests if HHS determines, based on the review of the
information submitted as part of the State's request, along with other
relevant factors, including the premium impact of the transfer
reduction for the State market risk pool, and relevant public comments,
that the requested reduction would have de minimis impact on the
necessary premium increase to cover the transfers for issuers that
would receive reduced transfer payments beginning with the 2024 benefit
year. In addition, pursuant to Sec. 153.320(d)(4)(ii), HHS may approve
a reduction amount that is lower than the amount requested by the State
if the supporting evidence and analysis do not fully support the
requested reduction amount. If approved by HHS, State reduction
requests are applied to the plan PMPM payment or charge State payment
transfer amount (Ti in the State payment transfer formula).
For the 2024 benefit year, HHS received requests from Alabama to
reduce risk adjustment State transfers for its individual \60\ and
small group markets by 50 percent. As Alabama has stated in previous
years, Alabama asserts that the HHS-operated risk adjustment program
does not work precisely in the Alabama market, clarifying that they do
not assert that the risk adjustment formula is flawed, only that it
produces imprecise results in Alabama which has an ``extremely
unbalanced market share.'' The State reports that its review of the
issuers' 2021 financial data suggested that any premium increase
resulting from a reduction of 50 percent to the 2024 benefit year risk
adjustment payments for the individual market would not exceed one
percent, the de minimis premium increase threshold set forth in Sec.
153.320(d)(1)(iv) and (d)(4)(i)(B). Additionally, the State reports
that its review of the issuers' 2021 financial data also suggested that
any premium increase resulting from a 50 percent reduction to risk
adjustment payments in the small group market for the 2024 benefit year
would not exceed the de minimis threshold of one percent.
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\60\ Alabama's individual market request is for a 50 percent
reduction to risk adjustment transfers for its individual market
non-catastrophic and catastrophic risk pools.
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At this time, to make HHS's approval determination under Sec.
153.320(d)(4), we seek comment on Alabama's requests to reduce risk
adjustment State transfers in their individual and small group markets
by 50 percent for the 2024 benefit year. The request and additional
documentation submitted by Alabama are posted under the ``State
Flexibility Requests'' heading at https://www.cms.gov/cciio/programs-and-initiatives/premium-stabilization-programs.
5. Risk Adjustment Issuer Data Requirements (Sec. Sec. 153.610,
153.700, and 153.710)
We propose, beginning with the 2023 benefit year, to collect and
extract from issuers' EDGE servers through issuers' EDGE Server
Enrollment Submission (ESES) files and risk adjustment recalibration
enrollment files a new data element, a QSEHRA indicator. We also
propose to extract plan ID and rating area data elements issuers have
submitted to their EDGE servers from certain benefit years prior to
2021.
45 CFR 153.610(a) requires that health insurance issuers of risk
adjustment covered plans submit or make accessible all required risk
adjustment data in accordance with the data collection approach
established by HHS \61\ in States where HHS operates the program on
behalf of a State.\62\ In the 2014 Payment Notice (78 FR 15497 through
15500; Sec. 153.720), HHS established an approach for obtaining the
necessary data for risk adjustment calculations in States where HHS
operates the program
[[Page 78239]]
through a distributed data collection model that prevented the transfer
of individuals' personally identifiable information (PII). Then, in
several subsequent rulemakings,\63\ we finalized policies for the
extraction and use of enrollee-level EDGE data. The purpose of
collecting and extracting enrollee-level data is to provide HHS with
more granular data to use for recalibrating the HHS risk adjustment
models, informing updates to the AV Calculator, conducting policy
analysis, and calibrating HHS programs in the individual and small
group (including merged) markets and the PHS Act requirements enforced
by HHS that are applicable market-wide,\64\ as well as informing policy
and improving the integrity of other HHS Federal health-related
programs.\65\ The use of enrollee-level data extracted from issuers'
EDGE servers and summary level reports produced from remote command and
ad hoc queries enhances HHS' ability to develop and set policy and
limits the need to pursue alternative burdensome data collections from
issuers. We also previously finalized policies related to creating on
an annual basis an enrollee-level EDGE Limited Data Set (LDS) using
masked enrollee-level data submitted to EDGE servers by issuers of risk
adjustment covered plans in the individual and small group (including
merged) markets and making this LDS available to requestors who seek
the data for research purposes.66 67
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\61\ Also see 45 CFR 153.700-153.740.
\62\ The full list of required data elements can be found in
Appendix A of OMB Control Number 0938-1155/CMS-10401. (2022, May
26). Standards Related to Reinsurance, Risk Corridors, and Risk
Adjustment. https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10401.
\63\ See the 2018 Payment Notice, 81 FR 94101; the 2020 Payment
Notice, 84 FR 17488; and the 2023 Payment Notice, 87 FR 27241.
\64\ See, for example, 42 U.S.C. 300gg-300gg-28.
\65\ As detailed in the 2023 Payment Notice, the finalized
policies related to the permitted uses of EDGE data and reports make
clear that HHS can use this information to inform policy analyses
and improve the integrity of other HHS Federal health-related
programs outside the commercial individual and small group
(including merged) markets, such as the programs in certain States
to provide wrap-around QHP coverage through Exchanges to Medicaid
expansion populations and coverage offered by non-Federal
Governmental plans. See 87 FR 27243; 87 FR 630 through 631.
\66\ See the 2020 Payment Notice, 84 FR 17486 through 17490 and
the 2023 Payment Notice, 87 FR 27243. Also see CMS. (2022, August
15). Enrollee-Level External Data Gathering Environment (EDGE)
Limited Data Set (LDS). https://www.cms.gov/research-statistics-data-systems/limited-data-set-lds-files/enrollee-level-external-data-gathering-environment-edge-limited-data-set-lds.
\67\ As explained in the 2020 Payment Notice, we do not
currently make the EDGE LDS available to requestors for public
health or health care operation activities. See 84 FR 17488.
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a. Collection and Extraction of the QSEHRA Indicator
In the 2023 Payment Notice (87 FR 27241 through 27252), we
finalized that we will collect and extract an individual coverage
Health Reimbursement Arrangement (ICHRA) indicator and that we will
make this indicator available in the enrollee-level EDGE LDS beginning
with the 2023 benefit year. The primary purpose of collecting and
extracting ICHRA indicator data is to allow HHS to conduct analyses to
examine whether there are any unique actuarial characteristics of the
ICHRA population (such as the health status of enrollees with ICHRAs),
and to investigate what impact (if any) ICHRA enrollment is having on
State individual and small group (or merged) market risk pools. The
additional information collected through the ICHRA indicator will be
used to further analyze if any refinements to the HHS risk adjustment
methodology should be examined or proposed through notice and comment
rulemaking, and similarly may also be used to inform policy analysis
and potential updates to the AV Calculator, other HHS individual or
small group (including merged) market programs, or other HHS Federal
health-related programs.
Since finalizing the collection of the ICHRA indicator as part of
the enrollee-level EDGE data extracted from issuers' EDGE servers, we
determined that also collecting and extracting a QSEHRA indicator would
provide a more thorough picture of the actuarial characteristics of the
Health Reimbursement Arrangement (HRA) population and how or whether
HRA enrollment is impacting State individual and small group (including
merged) market risk pools. HHS needs QSEHRA data in order to conduct a
comprehensive assessment of the HRA markets. A QSEHRA indicator would
also allow HHS to investigate whether the risk profile of enrollees in
QSEHRAs, which differ from ICHRAs with respect to standards related to
employer eligibility, employee eligibility, restrictions on allowance
amounts, and eligibility for PTCs, differ from enrollees in ICHRAs.\68\
While we acknowledge that FFEs, SBE-FPs, and SBEs collect information
about the provision of QSEHRAs, we note that adding a QSEHRA indicator
to the required risk adjustment EDGE data submissions would provide
more uniform and comprehensive information than what is submitted by
Exchange enrollees, as it would capture information on both Exchange
and non-Exchange enrollment. It also would provide HHS the ability to
extract and aggregate the QSEHRA indicator alongside other claims and
enrollment data accessible through issuers' EDGE servers, which would
not be possible with the data collection from consumers through other
processes since the EDGE data is masked \69\ and therefore cannot be
linked with other enrollment data sources.\70\
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\68\ Rosso, R. (2022, May 7). Health Reimbursement Arrangements
(HRAs): Overview and Related History. Congressional Research
Service. https://crsreports.congress.gov/product/pdf/R/R47041.
\69\ 45 CFR 153.720.
\70\ For information on the challenges associated with linking
the extracted enrollee-level EDGE data to other sources, see 87 FR
631 through 632.
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We therefore propose that, beginning with the 2023 benefit year,
issuers would be required to collect and submit a QSEHRA indicator as
part of the required risk adjustment data that issuers make accessible
to HHS from their respective EDGE servers in States where HHS operates
the risk adjustment program. This new data element would be included as
part of the enrollee-level EDGE data extracted from issuers' EDGE
servers and summary level reports produced from remote command and ad
hoc queries beginning with the 2023 benefit year.\71\ We also propose
to include this indicator in the enrollee-level EDGE LDS made available
to qualified researchers upon request once available (that is,
beginning with 2023 benefit year data).
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\71\ The deadline for submission of 2023 benefit year risk
adjustment data is April 30, 2024. See 45 CFR 153.730.
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In the 2023 Payment Notice (87 FR at 27248), we acknowledged that
ICHRA information is collected by HHS from FFE or SBE-FP enrollees
through the eligibility application process and from SBE enrollees
through the State Exchange enrollment and payment files, as well as
collected directly by issuers and their affiliated agents and brokers.
We also noted the ICHRA indicator was intended to capture whether a
particular enrollee's health care coverage involves (or does not
involve) an ICHRA and that we would structure this data element for
EDGE data submissions similar to current collections, where possible.
Additionally, we explained that the collection and extraction of an
ICHRA indicator as part of the required risk adjustment data
submissions issuers make accessible to HHS through their respective
EDGE servers provides more uniform and comprehensive information than
what is submitted by FFE and SBE-FP enrollees on a QHP application and
by SBE enrollees through enrollment and payment files, as it would
capture both on and off Exchange enrollees.
The same is also true for QSEHRA information and we therefore
propose to apply the same approach for the QSEHRA indicator. Currently,
the FFEs and SBE-FPs collect information about
[[Page 78240]]
QSEHRA provision from all applicants to determine whether they are
eligible for a special enrollment period (SEP), as individuals and
their dependents who become newly eligible for a QSEHRA may be eligible
for a SEP. SBEs also collect similar information from their applicants
to determine SEP eligibility. This data may also be provided directly
to issuers by consumers who seek to enroll in coverage directly with
the issuer. In addition, an issuer may currently have or collect
information that could be used to populate the QSEHRA indicator in
situations where the issuer is being paid directly by the employer
through the QSEHRA for the individual market coverage. We therefore
propose to generally permit issuers to populate the required QSEHRA
indicator with information from the FFE or SBE-FP enrollees or
enrollees through SBEs, or from other sources for collecting this
information. The QSEHRA indicator would be used to capture whether a
particular enrollee's health care coverage involves (or does not
involve) a QSEHRA, and we propose to structure this data element for
EDGE data submissions similar to current collections, where possible.
Beginning with the 2023 benefit year, HHS would provide additional
operational and technical guidance on how issuers should submit this
new data element to HHS through issuer EDGE servers via the applicable
benefit year's EDGE Server Business Rules and the EDGE Server Interface
Control Document, as may be necessary.
We are also proposing, similar to the transitional approach for the
ICHRA indicator finalized in the 2023 Payment Notice (87 FR 27241
through 27252), a transitional approach for the collection and
extraction of the QSEHRA indicator. For the 2023 and 2024 benefit
years, issuers would be required to populate the QSEHRA indicator using
only data they already collect or have accessible regarding their
enrollees. For example, when an FFE enrollee is using an SEP,
information about QSEHRA provision is collected by the FFE, and the FFE
may make these data available to issuers. In addition, as noted above,
there may be situations where an issuer has or collects information
that could be used to populate the QSEHRA indicator. Then, beginning
with the 2025 benefit year, we propose that the transitional approach
would end, and issuers would be required to populate the QSEHRA field
using available sources (for example, information from Exchanges, and
requesting information directly from enrollees) and, in the absence of
an existing source for particular enrollees, to make a good faith
effort to ensure collection and submission of the QSEHRA indictor for
these enrollees. HHS would provide additional details on what
constitutes a good faith effort to ensure collection and submission of
the QSEHRA indicator in the future. HHS intends to seek input from
issuers and other interested parties to inform development of the good
faith standard and determine the most feasible methods for issuers to
collect the information used to populate this data field.\72\
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\72\ If the burden estimate for collection of QSEHRA indicator
changes beginning with the 2025 benefit year (after the transitional
approach ends), the information collection under OMB control number
0938-1155 would be revised accordingly and interested parties would
be provided the opportunity to comment through that process.
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We believe this transitional approach is necessary as the burden
associated with the collection of this data would be similar to that of
the collection of the ICHRA indicator, as finalized in the 2023 Payment
Notice (87 FR 27241 through 27252). Much like the ICHRA indicator data,
we believe that some issuers already collect the relevant QSEHRA data.
However, we do not believe the information to populate the QSEHRA
indicator is routinely collected by all issuers at this time;
therefore, we anticipate that there may be administrative burden for
some issuers in developing processes for collection, validation, and
submission of this new data element. In recognition of the burden that
collection of this new data element potentially would pose for some
issuers, we propose to adopt a transitional approach for the 2023 and
2024 benefit years. This transitional approach for the QSEHRA indicator
would be the same as the approach finalized for the ICHRA indicator in
the 2023 Payment Notice and is also similar to how we have handled
other new data collection requirements.\73\ Further details regarding
the estimated burden may be found below in the ICRs Regarding Risk
Adjustment Issuer Data Submission Requirements (Sec. Sec. 153.610,
153.700, and 153.710).
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\73\ For example, HHS did not penalize issuers for temporarily
submitting a default value for the in/out-of-network indictor for
the 2018 benefit year in order to give issuers time to make the
necessary changes to their operations and systems to comply with the
new data collection requirement, but required issuers to provide
full and accurate information for the in/out-of-network indicator
beginning with the 2019 benefit year.
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Consistent with the policy adopted in the 2020 Payment Notice (84
FR 17488 through 17490) regarding HHS' use of data and reports
extracted from issuers EDGE servers (including data reports and ad hoc
query reports), and the policy adopted in the 2023 Payment Notice (87
FR 27243) to expand the permissible uses of such data and reports,
beyond the risk adjustment program, we would also use the QSEHRA
indicator once it is available to conduct policy analysis;
operationalize and calibrate other HHS programs in the individual and
small group (including merged) markets; and to inform policy analysis
and improve the integrity of other HHS Federal health-related programs
to the extent such use is otherwise authorized by, required under, or
not inconsistent with applicable Federal law. We would not use the
QSEHRA indicator or any analysis that relied upon the indictor to
pursue changes to our policies until we conduct data quality checks and
ensure the response rate is adequate to support any analytical
conclusions. These data quality and reliability checks would generally
be consistent with other data standard checks that HHS performs related
to data collected through issuers' EDGE servers.
In conjunction with the proposal to collect and extract this new
data element, we also propose to include the QSEHRA indicator in the
LDS containing enrollee-level EDGE data that HHS makes available to
qualified researchers upon request once the QSEHRA indicator is
available, beginning with the 2023 benefit year. We propose to include
the new indicator as part of the LDS because it would enhance the
usefulness of the data set for qualified researchers by making
available additional data to increase understanding of these markets,
particularly the impact QSEHRA provision may have on the individual and
small group (including merged) markets, and contribute to greater
transparency. We further note that similar to the ICHRA indicator, the
proposed QSEHRA indicator would not be a direct identifier that must be
excluded from an LDS under the HIPAA Privacy Rule and thus would not
add to the risk of enrollees being identified. As noted in the 2023
Payment Notice (87 FR at 27245), only an LDS of certain masked
enrollee-level EDGE data elements is made available and this LDS is
available only to qualified researchers if they meet the requirements
for access to such file(s), including entering into a data use
agreement that establishes the permitted uses or disclosures of the
information and prohibits the recipient from identifying the
information.74 75 In
[[Page 78241]]
addition, consistent with how we created the LDS in prior years, HHS
will continue to exclude data from the LDS that could lead to
identification of certain enrollees.\76\
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\74\ See CMS. (2020, June). Data Use Agreement. (Form CMS-R-
0235L).https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS-R-0235L.pdf. See also 84 FR 17486 through 17490.
\75\ CMS. (2020, June). Data Use Agreement. (Form CMS-R-0235L).
https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS-R-0235L.pdf.
\76\ See, for example, CMS. (2021, August 25). Creation of the
2019 Benefit Year Enrollee-Level EDGE Limited Data Sets: Methods,
Decisions and Notes on Data Use. https://www.cms.gov/files/document/2019-data-use-guide.pdf.
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b. Extracting Plan ID and Rating Area
Finally, in addition to collecting and extracting a QSEHRA
indicator, we propose to extract the plan ID \77\ and rating area data
elements from the 2017, 2018, 2019 and 2020 benefit year data
submissions that issuers already made accessible to HHS. In the 2023
Payment Notice (87 FR 27249), we finalized the proposal to extract
these data elements beginning with the 2021 benefit year. However, HHS
has determined that to aid in annual model recalibration, as well as
HHS' analyses of risk adjustment data, it would be beneficial to also
include these two data elements as part of the enrollee-level EDGE data
and reports extracted from issuers' EDGE servers for the 2017, 2018,
2019 and 2020 benefit years. Inclusion of plan ID and rating area in
extractions of these additional benefit year data sets would also
support analysis of other HHS individual and small group (including
merged) market programs, as well as other HHS Federal health-related
programs.
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\77\ For details on the plan ID and its components, see p. 42 of
the following: CMS. (2013, March 22). CMS Standard Companion Guide
Transaction Information: Instructions related to the ASC X12 Benefit
Enrollment and Maintenance (834) transaction, based on the
005010X220 Implementation Guide and its associated 005010X220A1
addenda for the FFE. https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/companion-guide-for-ffe-enrollment-transaction-v15.pdf.
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Moreover, since finalizing the 2023 Payment Notice, we have found
that the analysis of risk adjustment data would be more valuable if we
could compare historical trends, and access to these data elements for
past years would further our ability to analyze and improve the risk
adjustment program. For example, in assessing the 2020 enrollee-level
EDGE data set for inclusion in the 2024 benefit year model
recalibration, having access to plan ID and rating area would have
allowed us to consider the different patterns of utilization and costs
at a more granular level (for example, the State market risk pool
level). Since issuers already collected and made available these data
elements to HHS for the 2017, 2018, 2019 and 2020 benefit years,\78\ we
do not believe that this proposal would increase burden on issuers. We
are also not proposing any changes to the accompanying policies
finalized in the 2023 Payment Notice with respect to these data
elements and the enrollee-level EDGE LDS. Although we recognize that
including plan ID and rating area would enhance the usefulness of the
LDS, we continue to believe it is appropriate to exclude these data
elements from the LDS to mitigate the risk that entities that receive
the LDS file could identify issuers based on these identifiers,
particularly in areas with a small number of issuers. As such, HHS
would not include these data elements (plan ID and rating area) in the
LDS files made available to qualified researchers upon request.
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\78\ As detailed in the 2023 Payment Notice, issuers have been
required to submit these two data elements as part of the required
risk adjustment data submissions to their respective EDGE servers to
support HHS' calculation of risk adjustment transfers since the 2014
benefit year. See 87 FR 27243.
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We seek comment on these proposals.
6. Risk Adjustment User Fee for 2024 Benefit Year (Sec. 153.610(f))
We propose a risk adjustment user fee for the 2024 benefit year of
$0.21 PMPM. Under Sec. 153.310, if a State is not approved to operate,
or chooses to forgo operating, its own risk adjustment program, HHS
will operate risk adjustment on its behalf. As noted previously in this
proposed rule, for the 2024 benefit year, HHS will operate the risk
adjustment program in every State and the District of Columbia. As
described in the 2014 Payment Notice (78 FR 15416 through 15417), HHS'
operation of risk adjustment on behalf of States is funded through a
risk adjustment user fee. Section 153.610(f)(2) provides that, where
HHS operates a risk adjustment program on behalf of a State, an issuer
of a risk adjustment covered plan must remit a user fee to HHS equal to
the product of its monthly billable member enrollment in the plan and
the PMPM risk adjustment user fee specified in the annual HHS notice of
benefit and payment parameters for the applicable benefit year.
OMB Circular No. A-25 established Federal policy regarding user
fees, and specifies that a user charge will be assessed against each
identifiable recipient for special benefits derived from Federal
activities beyond those received by the general public.\79\ The HHS-
operated risk adjustment program provides special benefits as defined
in section 6(a)(1)(B) of OMB Circular No. A-25 to issuers of risk
adjustment covered plans because it mitigates the financial instability
associated with potential adverse risk selection.\80\ The risk
adjustment program also contributes to consumer confidence in the
health insurance industry by helping to stabilize premiums across the
individual, merged, and small group markets.
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\79\ OMB. (1993). OMB Circular No. A-25 Revised, Transmittal
Memorandum No. https://www.whitehouse.gov/wp-content/uploads/2017/11/Circular-025.pdf.
\80\ Ibid.
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In the 2023 Payment Notice (87 FR 27252), we calculated the Federal
administrative expenses of operating the risk adjustment program for
the 2023 benefit year to result in a risk adjustment user fee rate of
$0.22 PMPM based on our estimated costs for risk adjustment operations
and estimated BMM for individuals enrolled in risk adjustment covered
plans. For the 2024 benefit year, HHS proposes to use the same
methodology to estimate our administrative expenses to operate the risk
adjustment program. These costs cover development of the models and
methodology, collections, payments, account management, data
collection, data validation, program integrity and audit functions,
operational and fraud analytics, interested parties training,
operational support, and administrative and personnel costs dedicated
to risk adjustment program activities. To calculate the risk adjustment
user fee, we divided HHS' projected total costs for administering the
risk adjustment program on behalf of States by the expected number of
BMM in risk adjustment covered plans in States where the HHS-operated
risk adjustment program will apply in the 2024 benefit year.
We estimate that the total cost for HHS to operate the risk
adjustment program on behalf of States for the 2024 benefit year will
be approximately $60 million, which remains stable with the
approximately $60 million estimated for the 2023 benefit year. We also
project higher enrollment than our prior estimates in the individual
and small group (including merged) markets in the 2023 and 2024 benefit
years based on the increased enrollment between the 2020 and 2021
benefit years, likely due to the increased PTC subsidies provided for
in the American Rescue Plan Act of 2021 (ARP).81 82 In light
of the passage
[[Page 78242]]
of the Inflation Reduction Act of 2022 (IRA), in which Section 12001
extended the enhanced PTC subsidies in section 9661 of the ARP through
the 2025 benefit year, we project increased 2021 enrollment levels to
remain steady through the 2025 benefit year.\83\ Because this provision
of the IRA is expected to continue higher enrollment, we propose a
slightly lower risk adjustment user fee of $0.21 PMPM.
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\81\ ARP. Public Law 117-2 (2021).
\82\ CMS. (2022, July 19). Summary Report on Permanent Risk
Adjustment Transfers for the 2021 Benefit Year. (p. 9). https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/RA-Report-BY2021.pdf.
\83\ Inflation Reduction Act. Public Law 1217-169 (2022).
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We seek comment on the proposed risk adjustment user fee for the
2024 benefit year.
7. Risk Adjustment Data Validation Requirements When HHS Operates Risk
Adjustment (HHS-RADV) (Sec. Sec. 153.350 and 153.630)
HHS will conduct risk adjustment data validation under Sec. Sec.
153.350 and 153.630 in any State where HHS is operating risk adjustment
on a State's behalf.\84\ The purpose of risk adjustment data validation
is to ensure issuers are providing accurate high-quality information to
HHS, which is crucial for the proper functioning of the HHS-operated
risk adjustment program. HHS-RADV also ensures that risk adjustment
transfers reflect verifiable actuarial risk differences among issuers,
rather than risk score calculations that are based on poor quality
data, thereby helping to ensure that the HHS-operated risk adjustment
program assesses charges to issuers with plans with lower-than-average
actuarial risk while making payments to issuers with plans with higher-
than-average actuarial risk. HHS-RADV consists of an initial validation
audit (IVA) and a second validation audit (SVA). Under Sec. 153.630,
each issuer of a risk adjustment covered plan must engage an
independent initial validation audit entity. The issuer provides
demographic, enrollment, and medical record documentation for a sample
of enrollees selected by HHS to its initial validation auditor for data
validation. Each issuer's IVA is followed by an SVA, which is conducted
by an entity HHS retains to verify the accuracy of the findings of the
IVA. Based on the findings from the IVA, or SVA (as applicable), HHS
conducts error estimation to calculate an HHS-RADV error rate. The HHS-
RADV error rate is then applied to adjust the plan liability risk
scores of outlier issuers, as well as the risk adjustment transfers
calculated under the State payment transfer formula for the applicable
State market risk pools, for the benefit year being audited.
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\84\ HHS has operated the risk adjustment program in all 50
States the District of Columbia since the 2017 benefit year.
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a. Materiality Threshold for Risk Adjustment Data Validation
Beginning with 2022 benefit year HHS-RADV, we propose to change the
HHS-RADV materiality threshold definition, first implemented in the
2018 Payment Notice (81 FR 94104 through 94105), from $15 million in
total annual premiums Statewide to 30,000 total BMM Statewide,
calculated by combining an issuer's enrollment in a State's individual
non-catastrophic, catastrophic, small group, and merged markets, as
applicable, in the benefit year being audited.\85\ Consistent with the
application of the current materiality threshold definition and
accompanying exemption under Sec. 153.630(g)(2), issuers that fall
below the new proposed materiality threshold would not be subject to
the annual IVA (and SVA) audit requirements, but may be selected to
participate in a given benefit year of HHS-RADV based on random
sampling or targeted sampling due to the identification of any risk-
based triggers that warrant more frequent audits.
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\85\ Activities related to the 2022 benefit year of HHS-RADV
will generally begin in March 2023, when issuers can start selecting
their IVA entity, and IVA entities can start electing to participate
in HHS-RADV for the 2022 benefit year. See, for example, the 2021
Benefit Year HHS-RADV Activities Timeline (May 3, 2022), available
at: https://regtap.cms.gov/uploads/library/HRADV_2021Timeline_5CR_050322.pdf.
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In the 2020 Payment Notice (84 FR 17508 through 17511), HHS
established Sec. 153.630(g) to codify exemptions to HHS-RADV
requirements, including an exemption for issuers that fell below a
materiality threshold, as defined by HHS, to ease the burden of annual
audit requirements for smaller issuers of risk adjustment covered plans
that do not materially impact risk adjustment transfers.\86\ This
materiality threshold was first implemented and defined in the 2018
Payment Notice (81 FR 94104 through 94105), where HHS finalized a
policy that issuers with total annual premiums at or below $15 million
(calculated based on the Statewide premiums of the benefit year being
validated) would not be subject to annual IVA requirements, but would
still be subject to random and targeted sampling.\87\ Under this
approach, issuers below the materiality threshold are subject to an IVA
approximately every 3 years, barring any risk-based triggers that would
warrant more frequent audits.
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\86\ Additionally, in the 2019 Payment Notice (83 FR 16966), we
finalized an exemption from HHS-RADV for issuers with 500 or fewer
BMM Statewide in the benefit year being audited. This very small
issuer exemption is codified at 45 CFR 153.630(g)(1). Issuers with
500 or fewer BMM Statewide are not subject to random or targeted
sampling.
\87\ While the 2018 Payment Notice (81 FR 94104 through 94105)
provided an applicability date for the materiality threshold that
began with the 2017 benefit year of HHS-RADV, we postponed the
application of the materiality threshold to the 2018 benefit year in
the 2019 Payment Notice (83 FR 16966 through 16967).
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We implemented the materiality threshold based on an evaluation of
the burden associated with HHS-RADV, particularly the fixed costs
associated with hiring an initial validation auditor and submitting IVA
results to HHS on an annual basis, which may be a large portion of some
issuers' administrative costs.\88\ To ease the burden of annual audit
requirements for smaller issuers of risk adjustment covered plans that
do not materially impact risk adjustment transfers, we finalized a
threshold of $15 million in total annual premiums Statewide--a
threshold at which 1 percent of an issuer's premiums would cover the
estimated $150,000 cost of the IVA.\89\ When defining this threshold,
we also considered the impact of the exemption on risk adjustment
transfers and data validation activities, and estimated issuers above
this threshold represented approximately 98.5 percent of enrollment in
risk adjustment covered plans nationally. As such, we determined the
annual audit of issuers at or below the threshold of total annual
premiums Statewide of $15 million was not material.\90\ We committed to
continue to monitor this threshold and further noted we may propose
adjustments in the future to maintain this balance.\91\
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\88\ See 81 FR 94104 through 94105. Also see 81 FR 61490.
\89\ See 81 FR 94104 through 94105.
\90\ See 81 FR 94104 through 94105. Also see 81 FR 61490.
\91\ See 81 FR 94105.
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Since we established the materiality threshold definition, the
estimated costs to complete the IVA have increased, especially with the
addition of prescription drug categories to the adult models starting
with the 2018 benefit year, and our current estimate of the cost of the
IVA is approximately $170,000 per an issuer. To maintain the same
general framework and effectively limit the proportion of an issuer's
premiums that would be used to cover IVA costs to 1 percent, we would
need to adjust the current materiality threshold definition and
increase it to
[[Page 78243]]
$17 million in total annual premiums Statewide. We estimate that 30,000
BMM Statewide translates to approximately $17 million in total annual
premiums Statewide on average across markets, and this proposed
threshold would maintain that issuers of risk adjustment covered plans
below this threshold would represent no more than 1.5 percent of
enrollment in risk adjustment covered plans nationally. We therefore
propose to change the HHS definition of the materiality threshold under
Sec. 153.630(g)(2) to 30,000 BMM Statewide in the benefit year being
audited beginning with the 2022 benefit year of HHS-RADV.
We propose shifting the exemption from a dollar threshold to BMM
threshold because a BMM threshold would continue to exempt small
issuers that face a disproportionally higher burden even in situations
where PMPM premiums grow overtime. Shifting the materiality threshold
under Sec. 153.630(g)(2) to a BMM basis would also align with the
threshold established in Sec. 153.630(g)(1), which exempts issuers
with 500 or fewer BMM Statewide in the benefit year being audited from
HHS-RADV requirements, including random and targeted sampling. We do
not anticipate that this proposal would change the current estimated
burdens of the annual HHS-RADV requirements on issuers as the pool of
issuers falling below a 30,000 BMM Statewide threshold does not
significantly differ from the pool of issuers falling below a $15
million total annual premiums Statewide threshold. On average, between
the 2017 and 2021 benefit years, there were 197 issuers of risk
adjustment covered plans with total annual premiums Statewide below $15
million and 201 issuers of risk adjustment covered plans with total BMM
Statewide below 30,000. The proposed changes should also have a minimal
impact on data validation activities as issuers of risk adjustment
covered plans below this proposed threshold are estimated to represent
no more than 1.5 percent of enrollment in risk adjustment covered plans
nationally. We continue to believe that setting this 1.5 percent of
enrollment threshold promotes the goals of the HHS-RADV process, while
also considering the burden of the process on smaller plans, and
therefore represents the appropriate balance.
We are not proposing any changes to the regulatory text at Sec.
153.630(g)(2) or to the other accompanying policies. As such, beginning
with the 2022 benefit year of HHS-RADV, issuers below the proposed
30,000 BMM Statewide threshold would be exempt from participating in
the annual HHS-RADV IVA and SVA requirements if not otherwise selected
by HHS to participate under random and targeted sampling conducted
approximately every 3 years (barring any risk-based triggers based on
experience that would warrant more frequent audits). To determine
whether an issuer falls under the materiality threshold, its BMM would
be calculated Statewide, that is, by combining an issuer's enrollment
in a State's individual non-catastrophic, catastrophic, small group,
and merged markets, as applicable, in the benefit year being audited.
Issuers that qualify for the exemption under Sec. 153.630(g)(2) from
HHS-RADV requirements for a particular benefit year must continue to
maintain their risk adjustment documents and records consistent with
Sec. 153.620(b) and may be required to make those documents and
records available for review or to comply with an audit by the Federal
Government.\92\ We further note that if an issuer of a risk adjustment
covered plan that falls within the materiality threshold is not exempt
from HHS-RADV for a given benefit year (that is, the issuer is selected
as part of random or targeted sampling), and fails to engage an IVA or
submit IVA results to HHS, the issuer would be subject to the default
data validation charge in accordance with Sec. 153.630(b)(10) and may
be subject to other enforcement action. Lastly, we affirm that an
issuer that qualifies for an exemption under Sec. 153.630(g)(2) from
HHS-RADV requirements for a particular benefit year would not have its
risk scores and State transfers adjusted due to its own risk score
error rate(s), but its risk scores and State transfers could be
adjusted if other issuers in the applicable State market risk pools
were outliers in that benefit year of HHS-RADV.
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\92\ See 45 CFR 153.620(b) and (c).
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We solicit comments on this proposal as well as comments on whether
we should increase the materiality threshold to $17 million in total
annual premiums Statewide instead of switching to 30,000 BMM Statewide
and on the applicability date for when a new HHS-RADV materiality
threshold should begin to apply.
b. HHS-RADV Adjustments for Issuers That Have Exited the Market
Beginning with 2021 benefit year HHS-RADV, we propose to remove the
policy to only apply an exiting issuer's HHS-RADV results if that
issuer is a positive error rate outlier.\93\ We are proposing to change
this policy because it is no longer necessary to treat exiting issuers
differently from non-exiting issuers when they are negative error rate
outliers in the applicable benefit year's HHS-RADV given the transition
to the concurrent application of HHS-RADV results for all issuers.
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\93\ To qualify as an exiting issuer, an issuer must exit all of
the market risk pools in the State (that is, not selling or offering
any new plans in the State). If an issuer only exits some markets or
risk pools in the State, but continues to sell or offer new plans in
others, it is not considered an exiting issuer. A small group market
issuer with off-calendar year coverage who exits the market but has
only carry-over coverage that ends in the next benefit year (that
is, carry-over of run out claims for individuals or groups enrolled
in the previous benefit year, with no new coverage being offered or
sold) is considered an exiting issuer. See the 2020 Payment Notice,
84 FR 17503 through 17504.
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Consistent with 45 CFR 153.350(b) and (c), adjustments are made to
risk scores and risk adjustment State transfers based on the errors
discovered in HHS-RADV. In the 2015 Payment Notice (79 FR 13768 through
13769), HHS established a prospective approach to adjust risk scores
and risk adjustment State transfers based on the results of HHS-RADV.
Under the prospective approach, an issuer's HHS-RADV error rate for a
given benefit year is applied to the following benefit year's risk
scores and risk adjustment State transfers. However, an issuer that
exits all market risk pools in the State during or at the end of the
benefit year being audited would not have risk scores and State
transfers to adjust in the next applicable benefit year. As such, the
2019 Payment Notice (83 FR 16965 through 16966) created an exception to
the prospective approach for exiting issuers that provides for the
concurrent application of HHS-RADV results for exiting issuers
identified as outliers. Under this exception, the HHS-RADV error rate
of an outlier exiting issuer is used to adjust the exiting issuer's
prior year risk scores and State transfers for the applicable State
market risk pool(s). Due to the budget neutral nature of the HHS-
operated risk adjustment program, including HHS-RADV, the application
of an outlier exiting issuer's HHS-RADV error rate would also impact
other issuers in the applicable State market risk pool(s). Recognizing
the impact on non-exiting issuers, we further refined the exiting
issuer HHS-RADV policies in the 2020 Payment Notice (84 FR 17503
through 17504) to limit the re-opening of risk pools to make HHS-RADV
adjustments to non-exiting issuers' risk adjustment State transfers in
certain situations. More specifically, HHS finalized a policy to only
make risk score and risk adjustment State transfer adjustments to
reflect an exiting issuer's HHS-RADV results if that issuer is a
[[Page 78244]]
positive error rate outlier in the benefit year being audited,
beginning with the 2018 benefit year.\94\ This policy makes adjustments
for positive error rate outliers because those HHS-RADV results
indicate there was an undercharge or overpayment in the initial
calculation of the exiting issuer's State transfer amount(s).\95\
Adjustments were not made if an exiting issuer was found to be a
negative error rate outlier.\96\ This policy was designed to ensure
that other issuers in a State market risk pool are made whole when an
issuer with a positive error rate exits the State and to remove the
additional burden of having transfers adjusted (including the potential
for additional charges to be assessed to other issuers) for a prior
benefit year when a negative error rate outlier exits the State.
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\94\ In adjusting exiting issuers with positive error rates, HHS
collects funds (either increasing the charge amount or reducing the
payment amount) from the exiting issuer and redistributes these
funds to the other issuers who participated in that State market
risk pool in the prior benefit year. See 84 FR 17503 through 17504.
\95\ A positive error rate generally has the effect of
decreasing an issuer's risk score and thereby decreasing its risk
adjustment State transfer payment amount or increasing its risk
adjustment State transfer charge amount.
\96\ A negative error rate generally has the effect of
increasing an issuer's risk score and thereby increasing its risk
adjustment State transfer payment amount or decreasing its risk
adjustment State transfer charge amount.
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Subsequently, in the 2020 HHS-RADV Amendments Rule (85 FR 76979),
HHS finalized a transition to the concurrent application of HHS-RADV
results for all issuers, including non-exiting issuers, beginning with
the 2020 benefit year HHS-RADV, and has continued the policy to only
make risk scores and risk adjustment State transfers adjustments for
exiting issuers if they are positive error rate outliers. However, in
light of this shift to the concurrent application of HHS-RADV
adjustments for all issuers, there is no longer a reason to treat
exiting issuers differently than non-exiting issuers. We therefore
propose, beginning with 2021 HHS-RADV, to modify this policy and apply
HHS-RADV results to adjust the plan liability risk scores of the
benefit year being audited for all positive and negative error rate
outlier issuers.\97\
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\97\ Due to the budget neutral nature of the HHS-operated risk
adjustment program, including HHS-RADV, the application of an
outlier issuer's HHS-RADV error rate would also impact other issuers
in the applicable State market risk pool(s). As such, non-outlier
and exempt issuers may also see their State transfers adjusted as a
result of the application of HHS-RADV results if there are one or
more outliers in the State market risk pool(s).
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We are not proposing any other changes to the policies regarding
HHS-RADV adjustments for issuers that exit the market and therefore
would maintain the existing framework for determining whether an issuer
is an exiting issuer. As such, the issuer would have to exit all of the
market risk pools in the State (that is, not selling or offering any
new plan in the State) to be considered an exiting issuer. If an issuer
only exits some of the markets or risk pools in the State, but
continues to sell or offer new plans in others, it would not be
considered an exiting issuer. We also affirm that small group market
issuers with off-calendar year coverage who exit the market and only
have carry-over coverage that ends in the next benefit year (that is,
carry-over of run out claims for individuals enrolled in the previous
benefit year, with no new coverage being offered or sold) would be
considered an exiting issuer and would be exempt from HHS-RADV under
Sec. 153.630(g)(4). Individual market issuers offering or selling any
new individual market coverage in the subsequent benefit year would be
required to participate in HHS-RADV, unless another exemption applies.
We solicit comments on this proposal.
c. Discontinue Lifelong Permanent Conditions List and Use of Non-EDGE
Claims in HHS-RADV
We seek comment on discontinuing the use of the Lifelong Permanent
Conditions (LLPC) list \98\ and the use of non-EDGE claims starting
with the 2022 benefit year of HHS-RADV.
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\98\ See, for example, Appendix C: Lifelong Permanent Conditions
in the 2021 Benefit Year PPACA HHS Risk Adjustment Data Validation
(HHS-RADV) Protocols (November 9, 2022) available at https://regtap.cms.gov/uploads/library/HRADV_2021_Benefit_Year_Protocols_5CR_110922.pdf. Also see, for
example, Appendix E: Lifelong Permanent Conditions in the 2018
Benefit Year PPACA HHS Risk Adjustment Data Validation (HHS-RADV)
Protocols (June 24, 2019) available at https://regtap.cms.gov/uploads/library/HRADV_2018Protocols_070319_RETIRED_5CR_070519.pdf.
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The LLPC list was developed for HHS-RADV medical record abstraction
purposes beginning with the 2016 benefit year, when issuers were first
learning the HHS-RADV protocols and still gaining experience with EDGE
data submissions.\99\ The intention of the LLPC list was to balance the
burdens and costs of HHS-RADV with the program integrity goals of
validating the actuarial risk of enrollees in risk adjustment covered
plans to ensure that the HHS-operated risk adjustment program
accurately assesses charges to issuers with plans with lower-than-
average actuarial risk while making payments to issuers with plans with
higher-than-average actuarial risk. The LLPC list was designed to ease
the burden of medical record retrieval for lifelong conditions by
simplifying and standardizing coding abstraction for IVA and SVA
entities that may have different interpretations of standard coding
guidelines. Conditions on the LLPC list can be abstracted by IVA and
SVA entities and validated in HHS-RADV if present anywhere on an
enrollee's valid and authenticated medical record, even if the
associated diagnosis is not present on a claim that meets EDGE server
data submission requirements for the applicable benefit year.\100\ The
associated diagnoses for the health conditions selected by HHS are
considered to be lifelong, permanent conditions which last for multiple
years, require ongoing medical attention, and are typically unresolved
once diagnosed.\101\
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\99\ CMS first published the ``Chronic Condition HCCs'' list in
the 2016 Benefit Year PPACA HHS Risk Adjustment Data Validation
(HHS-RADV) Protocols (October 20, 2017) available at https://regtap.cms.gov/uploads/library/HRADV_2016Protocols_v1_5CR_052218.pdf. Beginning with 2018 benefit
year, CMS has provided the ``Lifelong Permanent Conditions'' list, a
simplified list of health conditions which share similar
characteristics as those on the ``Chronic Condition HCCs'' list. See
supra note 93.
\100\ Ibid.
\101\ See, for example, Appendix C: Lifelong Permanent
Conditions in the 2021 Benefit Year PPACA HHS Risk Adjustment Data
Validation (HHS-RADV) Protocols (August 17, 2022) available at
https://regtap.cms.gov/uploads/library/HRADV_2021_Benefit_Year_Protocols_v1_5CR_081722.pdf.
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While the LLPC list was developed for HHS-RADV medical record
abstraction purposes, the EDGE Server Business Rules for risk
adjustment EDGE data submissions direct that EDGE server data
submissions are claim-based and follow standard coding principles and
guidelines. EDGE Server Business Rules require that diagnoses codes
submitted to the EDGE server be related to medical services performed
during the patient's visit, be performed by a State licensed medical
provider, be associated with a paid claim submitted to the issuer's
EDGE server, and be associated with an active enrollment period with
the issuer for the applicable risk adjustment benefit year.\102\ Some
issuers have raised concerns that the LLPC list may incentivize issuers
to submit EDGE supplemental diagnosis files containing LLPC diagnoses
even though those diagnoses may not have been addressed in the claim
submitted to the EDGE server for that encounter. While we allowed the
use of the LLPC list for the last several years of HHS-RADV, we
continued to consider these issues and
[[Page 78245]]
are now soliciting comments on the discontinuance of the use of the
LLPC list beginning with the 2022 benefit year of HHS-RADV.
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\102\ See, for example, Section 8.1 Guidance on Diagnosis
Code(s) Derived from Health Assessments of the EDGE Server Business
Rules (ESBR) (November 1, 2022) available at https://regtap.cms.gov/uploads/library/DDC-ESBR-110122-5CR-110122.pdf.
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We believe that discontinuing the use of the LLPC list in HHS-RADV,
beginning with the 2022 benefit year, would better align HHS-RADV
guidance with the EDGE Server Business Rules and would eliminate some
situations where an issuer may receive risk score credit for conditions
that did not require treatment during an active enrollment period with
the issuer for the applicable risk adjustment benefit year. In
addition, we also believe that issuers have now gained sufficient
experience with the EDGE data submission process and HHS-RADV protocols
that it may not be necessary to continue use of the LLPC list. For
example, while nearly half the States subject to the HHS-operated risk
adjustment program for the 2015 benefit year \103\ were not eligible to
receive an interim risk adjustment summary report,\104\ this trend has
not continued. In fact, all States have received an interim risk
adjustment summary report since the 2017 benefit year of the HHS-
operated risk adjustment program \105\ and only one State where HHS was
responsible for operating the risk adjustment program failed to receive
an interim risk adjustment summary report for the 2016 benefit
year.\106\ Further, after several pilot years of HHS-RADV, issuers also
have now gained several years of experience with HHS-RADV and HHS-RADV
protocols.\107\ Therefore, we solicit comment on all aspects of this
potential change, including the applicability date for the
discontinuance of the LLPC list. We also request comment on the extent
that issuers and their IVA entities have relied on the LLPC list to
document diagnoses when official coding guidance was unclear or the
medical record lacked documentation to support diagnosis of a lifelong,
permanent condition.
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\103\ See the Interim Summary Report on Risk Adjustment for the
2015 Benefit Year (March 18, 2016), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/InterimRAReport_BY2015_5CR_032816.pdf.
\104\ Since the 2015 benefit year of the HHS-operated risk
adjustment program, in order for a State to receive the interim risk
adjustment summary report, all issuers with 0.5 percent of market
share must successfully submit at least 90 percent of full year
enrollment and 90 percent of three quarters of medical claims to
their EDGE servers by the applicable deadline, as well as pass EDGE
quality checks. Details of EDGE quantity and quality assessment can
be found in the ``Evaluation of EDGE Data Submissions'' guidance
published every year. See, for example, the Evaluation of EDGE Data
Submissions for 2015 Benefit Year EDGE Server Data Bulletin (March
18, 2016), available at: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Part-2-EDGE-Q_Q-Guidance_03182016.pdf. Also see, for example, the Evaluation of EDGE
Data Submissions for 2022 Benefit Year EDGE Server Data Bulletin
(October 25, 2022), available at: https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/edge_2022_qq_guidance.pdf.
\105\ See the Interim Summary Report on Risk Adjustment for the
2017 Benefit Year (April 27, 2018), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Interim-RA-Report-BY2017.pdf. Also see, for
example, the Interim Summary Report on Risk Adjustment for the 2018
Benefit Year (March 22, 2019), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Interim-RA-Report-BY2018.pdf. Also see, for example, the
Interim Summary Report on Risk Adjustment for the 2019 Benefit Year
(March 25, 2020), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Interim-RA-Report-BY2019.pdf. Also see, for example, the Interim Summary Report
on Risk Adjustment for the 2020 Benefit Year (March 31, 2021),
available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Interim-RA-Report-BY2020.pdf. Also see, for example, the Interim Summary Report on
Risk Adjustment for the 2021 Benefit Year (March 22, 2022),
available at: https://www.cms.gov/files/document/interim-ra-report-by2021.pdf.
\106\ See the Interim Summary Report on Risk Adjustment for the
2016 Benefit Year (April 11, 2017), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/InterimRAReport_BY2016_5CR_033117.pdf.
\107\ CMS conducted two (2) pilot years for HHS-RADV for the
2015 and 2016 benefit years. The results of 2015 and 2016 benefit
year HHS-RADV were not applied to adjust plan liability risk scores
or risk adjustment transfers. In addition, 2017 benefit year HHS-
RADV was a pilot year for Massachusetts issuers; therefore, these
issuers' 2017 benefit year HHS-RADV results were not applied to risk
scores or transfers. Except for Massachusetts issuers, the 2017
benefit year was the first non-pilot year where HHS-RADV results
were used to adjust risk scores and risk adjustment transfers. See
84 FR at 17508 (April 25, 2019). Also see the Summary Report of 2017
Benefit Year HHS-RADV Adjustments to Risk Adjustment Transfers
(August 1, 2019), available at: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/BY2017-HHSRADV-Adjustments-to-RA-Transfers-Summary-Report.pdf.
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Similarly, we seek comments on discontinuing the current policy
that permits the use of non-EDGE claims in HHS-RADV beginning with the
2022 HHS-RADV benefit year. Under Sec. 153.630(b)(6), issuers are
required to provide their IVA entity with all relevant claims data and
medical record documentation for the enrollees selected for audit. HHS
currently allows issuers to submit medical records to their IVA entity
for which no claim was accepted into the EDGE server in certain
situations.\108\ Under the non-EDGE claims protocol, if issuers
identify medical records with no associated EDGE server claim in HHS-
RADV, they must demonstrate that a non-EDGE claim meets risk adjustment
eligibility criteria. Issuers must also allow the IVA entity to view
the associated non-EDGE claim, and IVA entities must record their
validation results in their IVA Entity Audit Results Submission.\109\
This protocol was also adopted during the early years of HHS-RADV when
issuers were gaining experience with HHS-RADV protocols and some may
have experienced challenges submitting claims to the EDGE server.
However, as explained above, issuers have consistently met data
integrity criteria for their EDGE data submissions for multiple
consecutive benefit years such that we are now examining the non-EDGE
claims protocol and considering whether it should be discontinued.
Thus, as part of our ongoing effort to examine ways to better align
HHS-RADV guidance and the EDGE Server Business Rules, and in
recognition of the experience issuers have gained with HHS-RADV and
EDGE data submissions, we solicit comments on discontinuing this
protocol. If this change is adopted, beginning with the 2022 benefit
year of HHS-RADV, issuers would no longer be able to submit non-EDGE
claims to their IVA entities to supplement EDGE claims reviewed during
HHS-RADV. We solicit comment on all aspects of this potential protocol
change, including the applicability date. We also request comment on
the extent that issuers and their IVA entities have relied on the
current non-EDGE claims protocol and on how this potential change would
impact issuers.
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\108\ See, for example, Section 9.2.6.5: Documentation of Claims
Not Accepted in EDGE of the 2021 Benefit Year PPACA HHS Risk
Adjustment Data Validation (HHS-RADV) Protocols (August 17, 2022)
available at https://regtap.cms.gov/uploads/library/HRADV_2021_Benefit_Year_Protocols_v1_5CR_081722.pdf.
\109\ The non-EDGE claim must be risk adjustment eligible paid/
positively adjudicated within the benefit year for the specified
sampled enrollee. Although the non-EDGE claim would have been
accepted to EDGE had it met the EDGE submission deadline, diagnoses
associated with non-EDGE claim s are not included in the risk
adjustment risk score calculations in the June 30th Summary Report
on Permanent Risk Adjustment Transfers. Diagnoses associated with
non-EDGE claims are only used as an option for HCC validation
purposes in HHS-RADV when the applicable criteria are met.
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d. HHS-RADV Discrepancy and Administrative Appeals Process
We propose to shorten the window to confirm the findings of the SVA
(if applicable),\110\ or file a discrepancy report, to within 15
calendar days of the notification by HHS, beginning with the 2022
benefit year of HHS-RADV. Under Sec. 153.630(d)(2), issuers currently
have 30 calendar days to confirm the findings
[[Page 78246]]
of the SVA, or file a discrepancy report, in the manner set forth by
HHS, to dispute those SVA findings. We propose the shorter attestation
and discrepancy reporting window for SVA findings to improve HHS'
ability to finalize SVA findings results prior to release of the
applicable benefit year HHS Risk Adjustment Data Validation (RADV)
Results Memo and the Summary Report of Risk Adjustment Data Validation
Adjustments to Risk Adjustment Transfers for the applicable benefit
year, which are time-sensitive publications because information on HHS-
RADV adjustments is used by issuers for medical loss ratio (MLR)
reporting.\111\
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\110\ Only those issuers who have insufficient pairwise
agreement between the IVA and SVA receive SVA findings. See 84 FR
17495. Also see 86 FR 24201.
\111\ Section 2718 of the PHS Act, as added by the ACA generally
requires health insurance issuers to submit an annual MLR report to
HHS and provide rebates to enrollees if the issuers do not achieve
specified MLR thresholds. See 42 U.S.C. 300gg-18 and 45 CFR part
158. Also see 45 CFR 153.710(h).
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We do not propose to shorten the 30-calendar-day window set forth
in Sec. 153.630(d)(2) to confirm the risk score error rate, or file a
discrepancy, as the same timing considerations do not extend to the
risk score error rate attestation and discrepancy reporting window. In
addition, all issuers who participate in HHS-RADV for the applicable
benefit year must complete the risk score error rate attestation and
discrepancy reporting process, whereas the SVA findings attestation and
discrepancy reporting process is limited to the small number of issuers
that have insufficient pairwise agreement between the IVA and SVA.
In prior rulemakings, we proposed shortening the attestation and
discrepancy reporting window for the SVA findings, but did not finalize
these proposals in response to comments suggesting that we revisit this
proposal once issuers had more experience with HHS-RADV after the first
non-pilot year.\112\ Since issuers now have more than 4 years of
experience with HHS-RADV, including several non-pilot years, HHS
believes it is appropriate to revisit the proposal to shorten the
reporting window to confirm the findings of the SVA, or file a
discrepancy report, and that any disadvantages of this shortened
reporting window would be outweighed by the benefits of timely
resolution of any discrepancies before the release of the applicable
benefit year HHS Risk Adjustment Data Validation (RADV) Results Memo
and the Summary Report of Risk Adjustment Data Validation Adjustments
to Risk Adjustment Transfers for the applicable benefit year.
Specifically, based on our experience, we found that few issuers have
insufficient pairwise agreement between the IVA and SVA that results in
receiving SVA findings, and therefore, few issuers would even have the
option to file an SVA discrepancy.\113\ Of these issuers, even fewer of
them will actually file a discrepancy, and therefore, based on this
experience, HHS believes only a very small number of issuers will
receive SVA findings and file discrepancies in future years of HHS-
RADV.
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\112\ See 84 FR 17495 and 86 FR 24201.
\113\ Only those issuers who have insufficient pairwise
agreement between the IVA and SVA receive SVA findings. See, for
example, 84 FR 17495 and 86 FR 24201.
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More importantly, without this timing change, we are concerned
about HHS' continued ability to release the applicable benefit year HHS
Risk Adjustment Data Validation (RADV) Results Memo and Summary Report
of Risk Adjustment Data Validation Adjustments to Risk Adjustment
Transfers on a timely basis. Specifically, this proposal would improve
our ability to follow the HHS-RADV timeline as described in part 2 of
the 2022 Payment Notice,\114\ which provides for release of the Summary
Report of Risk Adjustment Data Validation Adjustments to Risk
Adjustment Transfers in early summer of 2 calendar years after the
applicable benefit year. This schedule was developed to support timely
reporting of HHS-RADV adjustment amounts in the MLR reports \115\ due
by July 31st of the same calendar year in which the results are
released.\116\ The SVA findings need to be finalized to begin the HHS-
RADV error estimation process, publish the HHS-RADV Results Memo (which
is released alongside issuer's HHS-RADV results reports), and prepare
the Summary Report of Risk Adjustment Data Validation Adjustments to
Risk Adjustment Transfers for publication. Shortening the current 30-
calendar-day attestation and discrepancy reporting window for SVA
findings (if applicable) to 15 calendar days would better allow HHS to
finalize SVA findings results and timely release the Summary Report of
Risk Adjustment Data Validation Adjustments to Risk Adjustment
Transfers in summer, which would support timely reporting of the HHS-
RADV adjustments to risk adjustment State transfers in issuers' MLR
reports.
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\114\ 86 FR 24198 through 24201.
\115\ Issuer MLRs are calculated using a 3-year average. See 45
CFR 158.220(b).
\116\ See 45 CFR 158.110(b). Also see 45 CFR 153.710(h)(1)(v).
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We further note that a 15-calendar-day attestation and discrepancy
reporting window is consistent with the IVA sample and EDGE attestation
and discrepancy reporting windows at Sec. Sec. 153.630(d)(1) and
153.710(d), respectively. At the conclusion of the SVA for a given
benefit year, we distribute SVA findings to issuers that have
insufficient agreement between their IVA and SVA results during the
pairwise means analysis, and use the SVA findings for the risk score
error rate calculation.\117\ Under this proposal, a 15-calendar-day
window to confirm the findings or file a discrepancy, in the manner set
forth by HHS, would begin when the SVA finding reports are issued.
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\117\ If sufficient pairwise means agreement is achieved, the
IVA findings will be used for purposes of the risk score error rate
calculation. Issuers with sufficient pairwise means agreement are
only permitted to file a discrepancy or appeal the risk score error
rate calculation. See 78 FR 72334 through 72337 and 79 FR 13761
through 13768.
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To effectuate this proposed amendment, we propose the following
four revisions to Sec. 153.630(d). First, we propose to revise Sec.
153.630(d)(2) to remove the reference to the calculation of the risk
score error rate as a result of HHS-RADV. Second, we propose to revise
Sec. 153.630(d)(2) to establish that the attestation and discrepancy
reporting window for the SVA findings (if applicable) would be within
15 calendar days of the notification by HHS of the SVA findings (if
applicable), rather than the current 30-calendar-day reporting window.
Third, we propose to redesignate current paragraph (d)(3) as paragraph
(d)(4), to maintain the existing provision which explains that an
issuer may appeal findings of an SVA (if applicable) or the calculation
of a risk score error rate as a result HHS-RADV, under the process set
forth in Sec. 156.1220. Fourth, we propose to add a new Sec.
153.630(d)(3) to maintain the current attestation and discrepancy
reporting window for the calculation of the risk score error rate. This
new regulatory subsection would provide that within 30 calendar days of
the notification by HHS of the calculation of the risk score error
rate, in the manner set forth by HHS, an issuer must either confirm or
file a discrepancy report to dispute the calculation of the risk score
error rate as a result of HHS-RADV.
In addition, we propose to make corresponding amendments to the
cross-references to Sec. 153.630(d)(2) that appear in Sec. Sec.
153.710(h)(1) and 156.1220(a)(4)(ii). Section 153.630(d)(2) currently
sets forth the attestation and discrepancy reporting window for both
SVA findings (if applicable) and the calculation of the risk score
error rate as a result of HHS-RADV. Under this proposal, the
attestation and discrepancy reporting window for SVA
[[Page 78247]]
findings (if applicable) and the calculation of the risk score error
rate as a result of HHS-RADV would be set forth in separate paragraphs,
Sec. 153.630(d)(2) and (d)(3), respectively. As such, we propose to
amend the existing cross-reference to Sec. 153.630(d)(2) in Sec. Sec.
153.710(h)(1) and 156.1220(a)(4)(ii) to add a reference to paragraph
(d)(3).
We seek comment on this proposal and the accompanying conforming
amendments.
8. EDGE Discrepancy Materiality Threshold (Sec. 153.710)
We propose to amend the EDGE discrepancy materiality threshold set
forth at Sec. 153.710(e) to align it with the final policy adopted in
preamble in part 2 of the 2022 Payment Notice.\118\ We also propose a
conforming amendment to Sec. 153.710(h)(1) to add a reference to new
proposed Sec. 153.630(d)(3).
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\118\ See 86 FR 24194 through 24195.
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An issuer of a risk adjustment covered plan must provide to HHS,
through their EDGE server,\119\ access to enrollee-level plan
enrollment data, enrollee claims data, and enrollee encounter data as
specified by HHS for a benefit year.\120\ Consistent with Sec.
153.730, to be considered for risk adjustment payments and charges,
issuers of risk adjustment covered plans must submit their respective
EDGE data by April 30th of the year following the applicable benefit
year or, if such date is not a business day, the next applicable
business day. At the end of the EDGE data submission process, HHS
issues final EDGE server reports \121\ which reflect an issuer's data
that was successfully submitted by the data submission deadline. Within
15 calendar days of the date of these final EDGE server reports, the
issuer must confirm to HHS that the information in the final EDGE
server reports accurately reflect the data to which the issuer has
provided access to HHS through its EDGE server for the applicable
benefit year by submitting an attestation; or the issuer must describe
to HHS any discrepancies it identifies in the final EDGE server
reports.\122\
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\119\ This is also known as the dedicated distributed data
collection environment.
\120\ 45 CFR 153.710(a) through (c).
\121\ These reports are: Enrollee (Without) Claims Summary
(ECS), Enrollee (Without) Claims Detail (ECD), Frequency Report by
Data Element for Medical Accepted Files (FDEMAF), Frequency Report
by Data Element for Pharmacy Accepted Files (FDEPAF), Frequency
Report by Data Element for Supplemental Accepted Files (FDESAF),
Frequency Report by Data Element for Enrollment Accepted Files
(FDEEAF), Claim and Enrollee Frequency Report (CEFR), High Cost Risk
Pool Summary (HCRPS), High Cost Risk Pool Detail Enrollee (HCRPDE),
Risk Adjustment Claims Selection Summary (RACSS), Risk Adjustment
Claims Selection Detail (RACSD), Risk Adjustment Transfer Elements
Extract (RATEE), Risk Adjustment Risk Score Summary (RARSS), Risk
Adjustment Risk Score Detail (RARSD), Risk Adjustment Data
Validation Population Summary Statistics (RADVPS), Risk Adjustment
Payment Hierarchical Condition Category Enrollee (RAPHCCER), Risk
Adjustment User Fee (RAUF).
\122\ 45 CFR 153.710(d).
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In part 2 of the 2022 Payment Notice (86 FR 24194 through 24195),
we codified at Sec. 153.710(e) a materiality threshold for EDGE
discrepancies reported under Sec. 153.710(d)(2) that the amount in
dispute must equal or exceed $100,000 or one percent of the applicable
payment or charge payable to or due from the issuer for the benefit
year, whichever is less. However, in preamble, we explained the final
policy was intended to establish that the amount in dispute must equal
or exceed $100,000 or one percent of the total estimated transfer
amount in the applicable State market risk pool, whichever is
less.\123\ That is, the preamble uses one percent of the total
estimated transfer amount in the applicable State market risk pool
while the regulation uses one percent of the applicable payment or
charge payable to or due from the issuer. As explained in the preamble
in part 2 of the 2022 Payment Notice, the intended threshold is
$100,000 or one percent of the total estimated transfer amount in the
applicable State market risk pool because HHS generally only takes
action on reported material EDGE discrepancies that harm other issuers
in the same State market risk pool and, based on HHS' experience with
prior benefit years, EDGE discrepancies that are less than a fraction
of total State market risk pool transfers are unlikely to materially
impact other issuers. We therefore propose to amend Sec. 153.710(e) to
revise the materiality threshold for EDGE discrepancies to reflect that
the amount in dispute must equal or exceed $100,000 or one percent of
the total estimated transfer amount in the applicable State market risk
pool, whichever is less.
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\123\ See 86 FR 24194 through 24195. Also see 85 FR 78604
through 78605.
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Finally, as discussed in section III.A.7.d of this preamble (HHS-
RADV Discrepancy and Administrative Appeals Process), we also propose
amendments to Sec. 153.710(h)(1) to add a reference to new proposed
Sec. 153.630(d)(3). As discussed in the HHS-RADV Discrepancy and
Administrative Appeals Process section of this proposed rule, under new
proposed Sec. 153.630(d)(3), we would retain the 30-calendar-day
window to confirm, or file a discrepancy, regarding the calculation of
the risk score error rate as a result of HHS-RADV. Under this proposal,
the cross-reference to Sec. 153.630(d)(2) in Sec. 153.710(h)(1) would
be maintained and would capture the new proposed 15-calendar-day window
to confirm, or file a discrepancy, for SVA findings (if applicable).
We seek comment on the proposed amendment to Sec. 153.710 and the
accompanying policies.
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
1. Exchange Blueprint Approval Timelines (Sec. 155.106)
We propose a change to address the Exchange Blueprint approval
timelines for States transitioning from either a Federally-facilitated
Exchange (FFE) to a State-based Exchange on the Federal Platform (SBE-
FP) or to a State-based Exchange (SBE), or from an SBE-FP to an SBE. At
Sec. 155.106(a)(3) (for FFE or SBE-FP to SBE transitions) and Sec.
155.106(c)(3) (for FFE to SBE-FP transitions), we propose to revise the
current timelines by which a State must have an approved or
conditionally approved Exchange Blueprint to require that States gain
approval prior to the date on which the Exchange proposes to begin open
enrollment either as an SBE or SBE-FP. The current regulatory timeline
by which a State must have an approved or conditionally approved
Exchange Blueprint was finalized in the 2017 Payment Notice (81 FR
12203, 12241 through 12242). Based on our experience with Exchange
transitions since then, we believe the current timeline by which a
State must gain Exchange Blueprint approval does not sufficiently
support States' need to work with HHS to finalize and submit an
approvable Exchange Blueprint.
Section 155.106 requires States to have an approved or
conditionally approved Exchange Blueprint 14 months prior to an SBE-FP
to SBE transition in accordance with paragraph (a)(3) and three months
prior to a FFE to SBE-FP transition in accordance with paragraph
(c)(3). The submission and approval of Exchange Blueprints is an
iterative process that generally takes place over the course of 15
months prior to a State's first open enrollment with an SBE, or three
to six months prior to a State's first open enrollment with an SBE-FP.
The Exchange Blueprint serves as a vehicle for a State to document its
progress toward implementing its intended Exchange operational model.
HHS' review and approval of the Exchange Blueprint involves providing
[[Page 78248]]
substantial technical assistance to States as they design, finalize,
and implement their Exchange operations. The transition from a FFE or
SBE-FP to SBE, or SBE-FP to SBE, involves significant collaboration
between HHS and States to develop plans and document readiness for the
State to transition from one Exchange operational model and information
technology infrastructure to another. These activities include the
State completing key milestones, meeting established deadlines, and
implementing contingency measures.
Our proposal to require Exchange Blueprint approval or conditional
approval prior to an Exchange's first open enrollment period would
allow States the additional time and flexibility if needed, that, in
HHS' experience, is necessary to support the development and
finalization of an approvable Exchange Blueprint, as well as for
completion of the myriad activities necessary to transition QHP
enrollees in the State to a new Exchange model and operator. HHS is of
the view that the more generous proposed timeline is appropriate and
necessary to support a State's submission of an approvable Exchange
Blueprint. The proposed timeline is more protective of the significant
investments of personnel time and State tax dollars a State must make
to stand up a new Exchange, by providing the State a more generous
timeline to develop an approvable Exchange Blueprint that shows the
Exchange will be ready to support the State's current and future QHP
enrollees and applicants for QHP enrollment.
We seek comment on this proposal, including comments related to how
transitioning SBEs could provide greater transparency to consumers
regarding the Exchange Blueprint approval process.
2. Navigator, Non-Navigator Assistance Personnel, and Certified
Application Counselor Program Standards (Sec. Sec. 155.210, 155.215,
and 155.225)
a. Repeal of Prohibitions on Door-to-Door and Other Direct Contacts
HHS proposes to repeal the provisions that currently prohibit
Navigators, certified application counselors, non-Navigator assistance
personnel in FFEs, and non-Navigator assistance personnel in certain
State Exchanges funded with section 1311(a) Exchange Establishment
grants (collectively, Assisters) from going door-to-door or using other
unsolicited means of direct contact to provide enrollment assistance to
consumers. This proposal would eliminate barriers to coverage access by
maximizing pathways to enrollment.
Sections 1311(d)(4)(K) and 1311(i) of the ACA direct all Exchanges
to establish a Navigator program. Navigator duties and requirements for
all Exchanges are set forth in section 1311(i) of the ACA and Sec.
155.210. Section 1321(a)(1) of the ACA directs the Secretary to issue
regulations that set standards for meeting the requirements of title I
of the ACA, with respect to, among other things, the establishment and
operation of Exchanges. Pursuant to section 1321(a)(1) of the ACA, the
Secretary issued Sec. 155.205(d) and (e), which authorizes Exchanges
to perform certain consumer service functions in addition to the
Navigator program, such as the establishment of a non-Navigator
assistance personnel program. Section 155.215 establishes standards for
non-Navigator assistance personnel in FFEs and in State Exchanges if
they are funded with section 1311(a) Exchange Establishment grant
funds.\124\ Section 155.225 establishes the certified application
counselor program as a consumer assistance function of the Exchange,
separate from and in addition to the functions described in Sec. Sec.
155.205(d) and (e), 155.210, and 155.215.
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\124\ At this time, no State Exchanges are funded with section
1311(a) Exchange Establishment grant funds.
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Assisters are certified and trusted community partners who provide
free and impartial enrollment assistance to consumers. They conduct
outreach and education to raise awareness about the Exchanges and other
coverage options. Their mission focuses on assisting the uninsured and
other underserved communities to prepare applications, establish
eligibility and enroll in coverage through the Exchanges, among many
other things. The regulations governing these Assisters prohibit
Assisters from soliciting any consumer for application or enrollment
assistance by going door-to-door or through other unsolicited means of
direct contact, including calling a consumer to provide application or
enrollment assistance without the consumer initiating the contact,
unless the individual has a pre-existing relationship with the
individual Assister or designated organization and other applicable
State and Federal laws are otherwise complied with. HHS has interpreted
this prohibition in the 2015 Market Standards final rule (79 FR 30240,
30284 through 30285) as still permitting door-to-door and other
unsolicited contacts to conduct for general consumer education or
outreach, including to let the community know that the Assister's
organization is available to provide application and enrollment
assistance services to the public.
The existing regulations prohibiting Navigators (at Sec.
155.210(d)(8)), non-Navigator assistance personnel (through the cross-
reference to Sec. 155.210(d) in Sec. 155.215(a)(2)(i)), and certified
application counselors (at Sec. 155.225(g)(5)) were initially
finalized in the 2015 Market Standards final rule (79 FR 30240). At the
time that HHS proposed and finalized the 2015 Market Standards rule in
2014, the Exchanges were still in their infancy. At the time, we
believed that prohibiting door-to-door solicitation and other
unsolicited means of direct consumer contact by an Assister for
application or enrollment assistance would ensure that Assisters'
practices were sufficiently protective of the privacy and security
interests of the consumers they served. We also believed that
prohibiting unsolicited means of direct contacts initiated by Assisters
was necessary to provide important guidance and peace of mind to
consumers, especially when they were faced with questions or concerns
about what to expect in their interactions with individuals offering
Exchange assistance.\125\
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\125\ 79 FR 30240.
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However, under existing regulations, Navigators and other non-
Navigator assistance personnel in FFE States are permitted to conduct
outreach to consumers using consumer information provided to them by an
FFE. The Health Insurance Exchanges (HIX) System of Records
Notice,\126\ Routine Use No. 1 provides that the FFEs may share
consumer information with CMS grantees, including Navigators and other
non-Navigator assistance personnel in FFE States, who have been engaged
by CMS to assist in an FFE authorized function, which includes
conducting outreach to persons who have been redetermined ineligible
for Medicaid/CHIP. In this limited circumstance, an FFE may share with
Navigators and other non-Navigator assistance personnel in FFE States
consumer information that the FFE receives from Medicaid/CHIP agencies
once a consumer has been redetermined ineligible for Medicaid/CHIP in
order for the Navigators and other non-Navigator assistance personnel
to conduct outreach to such consumers regarding opportunities for
coverage through the FFEs.
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\126\ 78 FR 63211, 63215.
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Since finalizing the 2015 Market Standards final rule, HHS has
enacted a number of measures designed to ensure that Assisters are
properly safeguarding
[[Page 78249]]
the personally identifiable information of all consumers they assist.
As part of their annual certification training, HHS requires Assisters
to complete a course on privacy, security, and fraud prevention
standards. Further, we require Assisters to obtain a consumer's consent
before discussing or accessing their personal information (except in
the limited circumstance described above) and to only create, collect,
disclose, access, maintain, store and/or use consumer personally
identifiable information to perform the functions that they are
authorized to perform as Assisters in accordance with Sec. Sec.
155.210(b)(2)(iv) and (c)(1)(v), 155.225(d)(3), and 155.215(b)(2), as
applicable. In addition, now that the Exchanges and their Assister
programs have been in operation for almost 10 years, Assisters have
more name recognition and consumer trust within the communities the
Assisters serve. Accordingly, HHS believes that its previous concerns
related to consumers' privacy and security interests and consumers not
knowing what to expect when interacting with Assisters have been
sufficiently mitigated with the measures HHS has enacted such that a
blanket prohibition on unsolicited direct contact of consumers by
Assisters for application or enrollment assistance is no longer
necessary.
The prohibition on door-to-door enrollment places additional burden
on consumers and Assisters to make subsequent appointments to
facilitate enrollment, which creates access barriers for consumers to
receive timely and relevant enrollment assistance. Additionally, this
prohibition could impede the Exchanges' potential to reach a broader
consumer base in a timely manner, reduce uninsured rates, and increase
access to health care. We believe it is important to be able to
increase access to coverage for those whose ability to travel is
impeded due to mobility, sensory or other disabilities, who are
immunocompromised, and who are limited by a lack of transportation.
Consistent with the proposal to remove the general prohibition on
door-to-door and other direct outreach by Navigators, we propose to
delete Sec. 155.210(d)(8). If finalized, the repeal of Sec.
155.210(d)(8) would remove the general prohibition on door-to-door and
other direct outreach by non-Navigator assistance personnel in FFEs and
in State Exchanges if funded with section 1311(a) Exchange
Establishment grants, as Sec. 155.215(a)(2)(i) requires such entities
to comply with the prohibitions on Navigator conduct set forth at Sec.
155.210(d). Likewise, we propose to repeal Sec. 155.225(g)(5), which
currently imposes the general prohibition against door-to-door and
other direct contacts on certified application counselors.
As we explained earlier in this preamble, HHS is now of the view
that repealing restrictions on an Exchange's ability to allow
Navigators, non-Navigator assistance personnel, and certified
application counselors to offer application or enrollment assistance by
going door-to-door or through other unsolicited means of direct contact
is a positive step that would enable Assisters to reach a broader
consumer base in a timely manner--helping to reduce uninsured rates and
health disparities by removing underlying barriers to accessing health
coverage.
We seek comment on this proposal.
3. Ability of States To Permit Agents and Brokers and Web-Brokers To
Assist Qualified Individuals, Qualified Employers, or Qualified
Employees Enrolling in QHPs (Sec. 155.220)
Section 1312(e) of the ACA directs the Secretary to establish
procedures under which a State may permit agents and brokers to enroll
individuals and employers in QHPs through an Exchange and to assist
individuals in applying for financial assistance for QHPs sold through
an Exchange. In addition, section 1313(a)(5)(A) of the ACA directs the
Secretary to provide for the efficient and non-discriminatory
administration of Exchange activities and to implement any measure or
procedure the Secretary determines is appropriate to reduce fraud and
abuse. Under Sec. 155.220, we established procedures to support the
State's ability to permit agents, brokers, and web-brokers to assist
individuals, employers, or employees with enrollment in QHPs offered
through an Exchange, subject to applicable Federal and State
requirements. This includes processes under Sec. 155.220(g) and (h)
for HHS to suspend or terminate an agent's, broker's, or web-broker's
Exchange agreement(s) in circumstances that involve fraud of abusive
conduct or where there are sufficiently severe findings of non-
compliance. We also established FFE standards of conduct under Sec.
155.220(j) for agents and brokers that assist consumers in enrolling in
coverage through the FFEs to protect consumers and ensure the proper
administration of the FFEs. Consistent with Sec. 155.220(l), agents,
brokers and web-brokers that assist with or facilitate enrollment in
States with SBE-FPs must comply with all applicable FFE standards,
including the requirements in Sec. 155.220. In this rule, we propose
to build on this foundation with new proposed procedures and additional
consumer protection standards for agents, brokers, and web-brokers that
assist consumers with enrollments through FFEs and SBE-FPs.
a. Extension of Time To Review Suspension Rebuttal Evidence and
Termination Reconsideration Requests (Sec. 155.220(g) and (h))
We propose to allow HHS up to an additional 15 or 30 calendar days
to review evidence submitted by agents, brokers, or web-brokers to
rebut allegations that led to suspension of their Exchange agreement(s)
or to request reconsideration of termination of their Exchange
agreement(s), respectively. This proposal would provide HHS a total of
up to 45 or 60 calendar days to review such rebuttal evidence or
reconsideration request and notify the submitting agents, brokers, or
web-brokers of HHS' determination regarding the suspension of their
Exchange agreement(s) or reconsideration decision related to the
termination of their Exchange agreement(s), respectively. In the 2017
Payment Notice, we added paragraph (5) to Sec. 155.220(g) to address
the temporary suspension or immediate termination of an agent's or
broker's agreements with the FFEs in cases involving fraud or abusive
conduct.\127\ Consistent with section 1313(a)(5)(A) of the ACA, we
added these procedures to give HHS authority to act quickly in these
situations to prevent further harm to consumers and to support the
efficient and effective administration of Exchanges on the Federal
platform. Under Sec. 155.220(g)(5)(i)(A), if HHS reasonably suspects
that an agent, broker, or web-broker may have engaged in fraud or
abusive conduct using personally identifiable information of Exchange
applicants or enrollees or in connection with an Exchange enrollment or
application, HHS may temporarily suspend the agent's, broker's or web-
broker's Exchange agreement(s) for up to 90 calendar days, with the
suspension effective as of the date of the notice to the agent, broker,
or web-broker. This temporary suspension is effective immediately and
prohibits the agent, broker, or web-broker from assisting with or
facilitating enrollment in coverage in a manner that constitutes
enrollment through the Exchange, including participating in the Classic
DE and EDE Pathways, during this 90-day period.128 129 As
previously
[[Page 78250]]
explained, immediate suspension is critical in these circumstances to
stop additional potentially fraudulent enrollments through the FFEs and
SBE-FPs.\130\ Consistent with Sec. 155.220(g)(5)(i)(B), the agent,
broker, or web-broker can submit evidence to HHS to rebut the
allegations that they have engaged in fraud or abusive conduct that led
to a temporary suspension by HHS of their Exchange agreement(s) at any
time during 90-day period. If such rebuttal evidence is submitted, HHS
will review it and make a determination as to whether a suspension
should be lifted within 30 days of receipt of such evidence.\131\ If
HHS determines that the agent, broker, or web-broker satisfactorily
addresses the concerns at issue, HHS will lift the temporary suspension
and notify the agent, broker, or web-broker. If the rebuttal evidence
does not persuade HHS to lift the suspension, HHS may terminate the
agent's, broker's, or web-broker's Exchange agreement(s) for
cause.132 133
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\127\ See 81 FR at 12258-12264. Also see 80 FR at 75525-75526.
\128\ 45 CFR 155.220(g)(5)(iii).
\129\ The agent, broker, or web-broker must continue to protect
any personally identifiable information accessed during the term of
their Exchange agreements. See, e.g., 45 CFR 155.220(g)(5)(iii) and
155.260.
\130\ See, e.g., 81 FR at 12258-12264.
\131\ See 45 CFR 155.220(g)(5)(i)(B).
\132\ See 45 CFR 155.220(g)(5)(i)(B).
\133\ If the agent, broker, or web-broker fails to submit
rebuttal information during this 90-day period, HHS may terminate
their Exchange agreement(s) for cause. 45 CFR 155.220(g)(5)(i)(B).
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HHS also previously established a framework for termination of an
agent's, broker's, or web-broker's Exchange agreement(s) for cause in
situations where, in HHS' determination, a specific finding of
noncompliance or pattern of noncompliance is sufficiently severe.\134\
This framework provides HHS the ability to terminate an agent's,
broker's, or web-broker's Exchange agreement(s) for cause to protect
consumers and the efficient and effective operation of Exchanges in
cases of sufficiently severe violations or patterns of violations. In
these situations, HHS provides the agent, broker, or web-broker, an
advance 30-day notice and an opportunity to cure and address the non-
compliance finding(s).135 136 More specifically, upon
identification of a sufficiently severe violation, HHS notifies the
agent, broker, or web-broker of the specific finding(s) of
noncompliance or pattern of noncompliance. The agent, broker, or web-
broker then has a period of 30 days from the date of the notice to
correct the noncompliance to HHS' satisfaction. If after 30 days the
noncompliance is not addressed to HHS' satisfaction, HHS may terminate
the Exchange agreement(s) for cause. Once their Exchange agreement(s)
are terminated for cause under Sec. 155.220(g)(3), the agent, broker,
or web-broker is no longer registered with the FFE, is not permitted to
assist with or facilitate enrollment of a qualified individual,
qualified employer, or qualified employee in coverage in a manner that
constitutes enrollment through the Exchange, and is not permitted to
assist individuals in applying for APTC and CSRs for
QHPs.137 138 Consistent with Sec. 155.220(h)(1), an agent,
broker, or web-broker whose Exchange agreement(s) are terminated can
request reconsideration of such action. Section 155.220(h)(2) provides
the agent, broker, or web-broker with 30 calendar days to submit their
request (including any rebuttal evidence or information) and Sec.
155.220(h)(3) requires HHS to provide agents, brokers, or web-brokers
with written notice of HHS' reconsideration decision within 30 calendar
days of receipt of the request for reconsideration.
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\134\ See 45 CFR 155.220(g)(1)-(4). Also see, e.g., 78 FR at
37047 through 37048 and 78 FR at 54076 through 54081.
\135\ See 45 CFR 155.220(g)(3)(i).
\136\ The one exception is for situations where the agent,
broker, or web-broker fails to maintain the appropriate license
under applicable State law(s). See 45 CFR 155.220(g)(3)(ii). In
these limited situations, HHS may immediately terminate the agent,
broker, or web-broker's Exchange agreement(s) for cause without any
further opportunity to resolve the matter upon providing notice to
the agent, broker, or web-broker. Ibid.
\137\ 45 CFR 155.220(g)(4).
\138\ The agent, broker, or web-broker must continue to protect
any PII accessed during the term of their Exchange agreements. See,
e.g., 45 CFR 155.220(g)(4) and 155.260.
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Our experience reviewing evidence and other information submitted
by agents, brokers, or web-brokers to rebut allegations that led to the
suspension of their Exchange agreement(s) or to request reconsideration
of the termination of their Exchange agreement(s), found that the
process, especially in more complex situations, often requires
significant resources and time. The review process can involve parsing
complex technical information and data, as well as revisiting consumer
complaints or conducting outreach to consumers. The amount of time it
takes for the review process is largely dependent on the particular
situation at hand (for example, the number of alleged violations and
impacted consumers, how much and what type of information an agent,
broker, or web-broker submits, the amount of time it takes for
consumers to locate and provide documentation related to their
complaints, and the number of concurrent submissions in need of
review). Given the large number of factors involved, we believe that
allowing HHS additional time to complete the review would be
beneficial.
We are cognizant that this additional time could delay the ability
of agents, brokers, and web-brokers to conduct business, which may be
particularly burdensome to those who have compelling evidence to rebut
allegations of noncompliance. Given the critical role that agents,
brokers, and web-brokers serve in enrolling consumers in plans on the
Exchanges, it is our intention to minimize the burden imposed on
agents, brokers, and web-brokers to the greatest extent possible while
also ensuring that HHS has additional time (if necessary) to review any
submitted rebuttal evidence. As stated above, this additional time is
warranted to accommodate particularly complex situations that require
significant resources and time. We expect that not all reviews are so
complex that they would require the use of this additional time; in
cases where agents, brokers, and web-brokers present compelling
evidence to rebut allegations of noncompliance, we expect to be able to
resolve the vast majority of those reviews without the use of this
additional time.
We believe that the proposal to allow HHS a total of up to 45
calendar days to review rebuttal evidence is warranted given that
agents, brokers, and web-brokers have up to 90 days to submit rebuttal
evidence to HHS during their suspension period, while HHS currently
only has 30 days to review, consider, and make determinations based on
that evidence. It does not seem unreasonable to increase this combined
maximum 120-day time period \139\ to 135 days.\140\
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\139\ As noted above, an agent, broker, or web-broker whose
Exchange agreement(s) are temporarily suspended can submit rebuttal
evidence at any time during the 90-day suspension period, thus
triggering the start of the HHS review period and limiting the
length of the suspension period. For example, under this proposal,
if an agent were to submit rebuttal evidence within seven days of
receiving the suspension notice and HHS were to respond on the last
day of the proposed new review period (day 45) and lift the
suspension, that would mean the agent's Exchange agreement(s) would
have been suspended for only 52 days.
\140\ For example, under this proposal, if an agent whose
Exchange agreement(s) were temporarily suspended were to submit
rebuttal evidence to rebut allegations that led to the suspension of
their Exchange agreement(s) on the final day of the suspension
period (day 90), pursuant to Sec. 155.220(g)(5)(i)(B), and HHS were
to respond on the final day of the proposed new review period (day
45) and lift the suspension, that agent's Exchange agreement(s)
would be suspended for a maximum of 135 days.
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We believe that this is not an unreasonable maximum timeframe,
[[Page 78251]]
particularly where HHS has a reasonable suspicion the agent, broker, or
web-broker engaged in fraud or abusive conduct that may cause imminent
or ongoing consumer harm using personally identifiable information of
an Exchange enrollee or applicant or in connection with an Exchange
enrollment or application. As noted in the 2017 Payment Notice, there
is a similar requirement for Medicare providers, as 42 CFR 405.371
provides HHS with the authority to suspend payment for at least 180
days if there is reliable information that an overpayment exists, or
there is a credible allegation of fraud (81 FR 12262 through 12263).
Under Sec. 155.220(g)(5)(i)(A), HHS temporarily suspends an agent,
broker or web-broker's Exchange agreement(s) only in situations in
which there is sufficient evidence or other information such that HHS
reasonably suspects the agent, broker or web-broker engaged in fraud,
or in abusive conduct that may cause imminent or ongoing consumer harm
using personally identifiable information of an Exchange enrollee or
applicant or in connection with an Exchange enrollment or application.
As such, HHS exercises this authority and sends suspension notices only
in the limited situations where there may have been fraud or abusive
conduct to stop further Exchange enrollment activity when the
misconduct may cause imminent or ongoing harm to consumers or the
effective and efficient administration of Exchanges. We also further
emphasize that the proposed extension to allow for up to 45 days for
HHS to review rebuttal evidence in these situations represents the
maximum timeframe.\141\ To the extent the situation at hand does not,
for example, involve a large number of alleged violations or impacted
consumers, HHS may not need the maximum timeframe to complete the
review and notify the agent, broker, or web-broker whether the
suspension is lifted.
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\141\ Further, as detailed above, the agent, broker, or web-
broker whose Exchange agreement(s) are suspended has an opportunity
to limit the overall length of the suspension period with the timely
submission of rebuttal evidence.
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Terminations of Exchange agreement(s) by HHS are also limited, but
in a different way. As outlined above, Sec. 155.220(g)(1) allows HHS
to terminate an agent, broker, or web-brokers Exchange agreement for
cause only when, in HHS' determination, a specific finding of
noncompliance or pattern of noncompliance is sufficiently severe.
Examples of specific findings of noncompliance that HHS might determine
to be sufficiently severe to warrant termination of an agent's,
broker's, or web-broker's Exchange agreement for cause under section
Sec. 155.220(g)(1) include, but are not limited to, violations of the
Exchange privacy and security standards.\142\ Patterns of noncompliance
that HHS might determine to be sufficiently severe to warrant
termination for cause include, for example, repeated violations of any
of the applicable standards in Sec. 155.220 or Sec. 155.260(b) for
which the agent or broker was previously found to be noncompliant.\143\
As proposed, if HHS takes the total up to 60 calendar days to review
rebuttal evidence submitted by the agent, broker, or web-broker whose
Exchange agreement was terminated for cause, the maximum timeframe for
the reconsideration process under Sec. 155.220(h) would be 90 days. We
believe this approach strikes the appropriate balance with respect to
reviewing information submitted with a request to reconsider
termination of their Exchange agreement(s) because it provides the
agent, broker, or web-broker due process while also protecting
consumers from potential harm. We are proposing a longer time period of
60 days for HHS review of information and evidence submitted by an
agent, broker, or web-broker as part of their reconsideration request
(versus 45 days for HHS review of rebuttal evidence and information
submitted in response to a suspension determination) because the HHS
reviews under Sec. 155.220(h)(2) are part of the appeal process. As
such, the agent, broker, or web-broker had an opportunity at an earlier
stage of the suspension or termination process to rebut the allegations
and/or findings, or otherwise take remedial steps to address the
concerns identified by HHS, that led to suspension or termination of
their Exchange agreement(s).144 145
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\142\ As outlined in Sec. 155.220(g)(2), an agent, broker, or
web-broker may be determined noncompliant if HHS finds that the
agent, broker, or web-broker violated any standard specified in
Sec. 155.220; any term or condition of their Exchange agreement(s);
any State law applicable to agents, brokers, or web-brokers; or any
Federal law applicable to agents, brokers, or web-brokers.
\143\ Ibid.
\144\ See 45 CFR 155.220(g)(5)(i)(B) (providing an opportunity
to rebut allegations of fraud or abusive conduct) and 45 CFR
155.220(g)(3)(i) (providing advance notice and an opportunity to
correct the noncompliance).
\145\ The one exception is for immediate terminations for cause
due to the lack of appropriate State licensure under 45 CFR
155.220(g)(3)(ii). In these situations, however, the maximum
timeframe between the agent, broker, or web-broker receiving the
termination notice and the issuance of the HHS reconsideration
decision would be 90 days.
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For these reasons, we propose to amend Sec. 155.220(g)(5)(i)(B) to
provide HHS with up to 45 calendar days to review evidence and other
information submitted by agents, brokers, or web-brokers to rebut
allegations that led to suspension of their Exchange agreement(s) and
make a determination of whether to lift the suspension. We also propose
to amend Sec. 155.220(h)(3) to provide HHS with up to 60 days to
review evidence and other information submitted by agents, brokers, or
web-brokers to rebut allegations that led to termination of their
Exchange agreement(s) and provide written notice of HHS'
reconsideration decision.
We seek comment on this proposal.
b. Providing Correct Information to the FFEs (Sec. 155.220(j))
We propose to amend Sec. 155.220(j)(2)(ii) to require agents,
brokers, or web-brokers assisting with and facilitating enrollment
through FFEs and SBE-FPs or assisting an individual with applying for
APTC and CSRs for QHPs to document that eligibility application
information has been reviewed by and confirmed to be accurate by the
consumer or their authorized representative designated in compliance
with Sec. 155.227, prior to application submission. We propose that
such documentation would be created by the assisting agent, broker, or
web-broker and would require the consumer or their authorized
representative to take an action, such as providing a signature or a
recorded verbal confirmation, that produces a record that can be
maintained by the agent, broker, or web-broker and produced to confirm
the submitted eligibility application information was reviewed and
confirmed to be accurate by the consumer or their authorized
representative. In addition, we propose that the documentation must
include the date the information was reviewed, the name of the consumer
or their authorized representative, an explanation of the attestations
at the end of the eligibility application, and the name of the agent,
broker, or web-broker providing assistance. Lastly, we propose that the
documentation must be maintained by the agent, broker, or web-broker
for a minimum of 10 years and produced upon request in response to
monitoring, audit, and enforcement activities conducted consistent with
Sec. 155.220(c)(5), (g), (h) and (k). These proposed changes would
require amending Sec. 155.220(j)(2)(ii), creating new paragraph Sec.
155.220(j)(2)(ii)(A), and redesignating current Sec.
155.220(j)(2)(ii)(A), Sec. 155.220(j)(2)(ii)(B),
[[Page 78252]]
Sec. 155.220(j)(2)(ii)(C) and Sec. 155.220(j)(2)(ii)(D) without
change as Sec. 155.220(j)(2)(ii)(B), Sec. 155.220(j)(2)(ii)(C), Sec.
155.220(j)(2)(ii)(D), and Sec. 155.220(j)(2)(ii)(E), respectively.
Agents, brokers and web-brokers are among those who play a critical
role in educating consumers about Exchanges and insurance affordability
programs, and in helping consumers complete and submit applications for
eligibility determinations, compare plans, and enroll in coverage.
Consistent with section 1312(e) of the ACA, Sec. 155.220 establishes
the minimum standards for the process by which an agent, broker, or
web-broker may help enroll an individual in a QHP in a manner that
constitutes enrollment through the Exchange and to assist individuals
in applying for PTC and CSRs. This process and minimum standards
require the applicant's completion of an eligibility verification and
enrollment application and the agent's, broker's, or web-broker's
submission of the eligibility application information through the
Exchange website or an Exchange-approved web service.\146\ While
agents, brokers, and web-brokers can assist a consumer with completing
the Exchange application, the consumer is the individual with the
knowledge to confirm the accuracy of the information provided on the
application.\147\
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\146\ 45 CFR 155.220(c)(1). Also see, e.g., 77 FR at 18334-
18336.
\147\ This is evidenced by the language in Sec. 155.220(j)(1)
that refers to agents, brokers, or web-brokers that assist or
facilitate enrollment (emphasis added).
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Section 155.220(j)(2) sets forth the standards of conduct for
agents, brokers, or web-brokers that assist with or facilitate
enrollment of qualified individuals, qualified employers, or qualified
employees in coverage in a manner that constitutes enrollment through
an FFE or SBE-FP or that assist individuals in applying for APTC and
CSRs for QHPs sold through an FFE or SBE-FP. As explained in the 2017
Payment Notice proposed rule (81 FR 12258 through 12264), these
standards are designed to protect against agent, broker, and web-broker
conduct that is harmful towards consumers or prevents the efficient
operation of the FFEs and SBE-FPs. Under Sec. 155.220(j)(2)(ii),
agents, brokers, or web-brokers must provide the FFEs and SBE-FPs with
``correct information under section 1411(b) of the Affordable Care
Act.''
Section 1411(h) of the ACA provides for the imposition of civil
penalties if any person fails to provide correct information under
section 1411(b) to the Exchange. Consistent with Sec. 155.220(l),
agents, brokers and web-brokers that assist with or facilitate
enrollment of qualified individuals, qualified employers, or qualified
employees in States with SBE-FPs must comply with all applicable FFE
standards. This includes, but is not limited to, compliance with the
FFE standards of conduct in Sec. 155.220(j).
Currently, Sec. 155.220(j)(2)(ii) requires that agents, brokers,
and web-brokers provide the FFEs and SBE-FPs with correct information
under section 1411(b) of the ACA, but it does not explicitly require
agents, brokers, or web-brokers assisting consumers with completing
eligibility applications through the FFEs and SBE-FPs to confirm with
those consumers the accuracy of the information entered on their
applications prior to application submission or document the consumer
has reviewed and confirmed the information to be accurate. HHS has
continued to observe applications submitted to the FFEs and SBE-FPs
that contain incorrect consumer information. We have also received
consumer complaints stating the information provided on their
eligibility applications submitted by agents, brokers, or web-brokers
on their behalf was incorrect. These complaints can be difficult to
investigate and adjudicate, because the only evidence available is
often the word of one person against another and the FFEs and SBE-FPs
generally do not have access to other contextual information to help
resolve the matter. By requiring the creation and maintenance of
documentation that the assisting agent, broker, or web-broker confirmed
with the consumer or their authorized representative that the entered
information was reviewed and accurate, the adjudication of such
complaints could be expedited and more easily resolved. In addition,
the inclusion of incorrect consumer information on eligibility
applications may result in consumers receiving inaccurate eligibility
determinations, and may affect consumers' tax liability, or produce
other potentially negative results. If a consumer receives an incorrect
APTC determination or is unaware they are enrolled in a QHP, that
consumer may owe money to the IRS when they file their Federal income
tax return. Ensuring a consumer's income determination has been
reviewed and is accurate would help avoid these situations. Incorrect
consumer information on eligibility applications may also affect
Exchange operations or HHS's analysis of Exchange trends. For example,
a high volume of applications all containing the erroneous information,
such as U.S. citizens attesting to not having an SSN, could hinder the
efficient and effective operation of the Exchanges on the Federal
platform by requiring HHS to focus its time and efforts on addressing
these erroneous applications. This proposal is consistent with the fact
that the consumer or their authorized representative is the individual
with the knowledge to confirm the accuracy of the information provided
on the application and would serve as an additional safeguard and
procedural step to ensure the accuracy of the application information
submitted to Exchanges. Thus, we propose to revise Sec.
155.220(j)(2)(ii) to require agents, brokers, and web-brokers to
document that the eligibility application information was reviewed and
confirmed to be accurate by the consumer or their authorized
representative before application submission.
We also propose to establish in new proposed Sec.
155.220(j)(2)(ii)(A) standards for what constitutes adequate
documentation that eligibility application information has been
reviewed and confirmed to be accurate by the consumer or their
authorized representative. First, we propose to revise Sec.
155.220(j)(2)(ii)(A) to establish that documenting that eligibility
application information has been reviewed and confirmed to be accurate
by the consumer or their authorized representative would require the
consumer or their authorized representative to take an action that
produces a record that can be maintained and produced by the agent,
broker, or web-broker and produced to confirm the consumer or their
authorized representative has reviewed and confirmed the accuracy of
the eligibility application information.
We do not propose any specific method for documenting that
eligibility application information has been reviewed and confirmed to
be accurate by the consumer or their authorized representative. To
provide guidance to agents, brokers, and web-brokers, we propose to
include in Sec. 155.220(j)(2)(ii)(A) a non-exhaustive list of
acceptable methods to document that eligibility application information
has been reviewed and confirmed to be accurate, including obtaining the
signature of the consumer or their authorized representative
(electronically or otherwise), verbal confirmation by the consumer or
their authorized representative that is captured in an audio recording,
or a written response (electronic or otherwise) from the consumer or
their authorized
[[Page 78253]]
representative to a communication sent by the agent, broker, or web-
broker. We also invite comment on whether there may be other acceptable
methods of documentation that HHS should consider specifying to be
permissible for purposes of documenting that eligibility application
information has been reviewed and confirmed to be accurate by the
consumer or their authorized representative. For example, we are
specifically interested in any current best practices or approaches
that agents, brokers or web-brokers may use to create records or
otherwise document that eligibility application information was
reviewed by the consumer or their authorized representative prior to
submission to the Exchange.
We also propose that the consumer would be able to review and
confirm the accuracy of application information on behalf of other
applicants (for example, dependents or other household members), and
authorized representatives would be able to provide review and confirm
the accuracy of application information on behalf of the people they
are designated to represent, as it may be difficult or impossible to
obtain confirmation from each consumer whose information is included on
an application. This would allow agents, brokers, and web-brokers to
continue assisting consumers as they currently do (for example, often
by working with an individual representing a household when submitting
an application for a family).
Next, we propose to require at new proposed Sec.
155.220(j)(2)(ii)(A)(1) that the eligibility application information
documentation, which would be created by the assisting agent, broker,
or web-broker, must include an explanation of the attestations at the
end of the eligibility application that the eligibility application
information has been reviewed by and confirmed to be accurate by the
consumer or their authorized representative. At the end of the Exchange
eligibility application, one of the attestations the consumer must
currently agree to before submitting the application is as follows:
``I'm signing this application under penalty of perjury, which means
I've provided true answers to all of the questions to the best of my
knowledge. I know I may be subject to penalties under Federal law if I
intentionally provide false information.'' The documentation the agent,
broker, or web-broker creates to satisfy this proposed requirement
would be required to include this language for awareness and to remind
the consumer that they are responsible for the accuracy of the
application information, even if the information was entered into the
application on their behalf by an agent or broker assisting them. We
believe that this proposal would help ensure that the consumer or their
authorized representative understands the importance of confirming the
accuracy of the information contained in the eligibility application
and further safeguard against the provision and submission of incorrect
eligibility application information. We also believe that that proposal
would help safeguard consumers from the negative consequences of
failing to understand the attestations and potentially attesting to
conflicting information. For example, one common error we see on
applications completed by agents, brokers, or web-brokers is an
attestation that a consumer does not have an SSN while also including
an attestation that the consumer is a U.S. citizen. These conflicting
attestations can generate DMIs, which, if not resolved during the
allotted resolution window, could result in the consumer's coverage
being terminated. For these reasons, we propose to add a requirement at
new Sec. 155.220(j)(2)(ii)(A)(1) that the documentation include the
date the information was reviewed, the name of the consumer or their
authorized representative, an explanation of the attestations at the
end of the eligibility application, and the name of the assisting
agent, broker, or web-broker.
Lastly, at new proposed Sec. 155.220(j)(2)(ii)(A)(2) we propose to
require agents, brokers, and web-brokers to maintain the documentation
demonstrating that the eligibility application information was reviewed
and confirmed as accurate by the consumer or their authorized
representative for a minimum of 10 years. Section 155.220(c)(5) states
HHS or our designee may periodically monitor and audit an agent,
broker, or web-broker to assess their compliance with applicable
requirements. However, there is not currently a maintenance of records
requirement directly applicable to all agents, brokers, and web-brokers
assisting consumers through the FFEs and SBE-FPs.\148\ Capturing a
broad-based requirement mandating that all agents, brokers, and web-
brokers assisting consumers in the FFEs and SBE-FPs maintain the
records and documentation demonstrating that information captured in
their application has been reviewed and confirmed to be accurate by the
consumer or their authorized representative they are assisting would
provide a clear, uniform standard. It also would ensure this
documentation is maintained for sufficient time to allow for
monitoring, audit, and enforcement activities to take place.\149\
Therefore, consistent with other Exchange maintenance of records
requirements,\150\ we propose to capture in new proposed Sec.
155.220(j)(2)(iii)(A)(2) that agents, brokers, and web-brokers must
maintain the documentation described in proposed Sec.
155.220(j)(2)(ii)(A) for a minimum of 10 years, and produce the
documentation upon request in response to monitoring, audit, and
enforcement activities conducted consistent with Sec. 155.220(c)(5),
(g), (h), and (k).
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\148\ Section 155.220(c)(3)(i)(E) requires web-brokers to
maintain audit trails and records in an electronic format for a
minimum of 10 years and cooperate with any audit under this section.
Section 156.340(a)(2) places responsibility on QHP issuers
participating in Exchanges using the Federal platform to ensure
their downstream and delegated entities (including agents and
brokers) are complying with certain requirements, including the
maintenance of records requirements in Sec. 156.705. In addition,
under Sec. 156.340(b), agents and brokers that are downstream
entities of QHP issuers in the FFEs must be bound by their
agreements with the QHP issuer to comply with certain requirements,
including the records maintenance standards in Sec. 156.705.
Section 156.705(c) and (d) requires QHP issuers in the FFEs to
maintain certain records for 10 years and to make all such records
available to HHS, the OIG, the Comptroller General, or their
designees, upon request.
\149\ While investigations consumer complaints are an example of
a more immediate, real-time monitoring and oversight activity,
market conduct examinations, audits, and other types of
investigations (e.g., compliance reviews) may occur several years
after the applicable coverage year.
\150\ See, for example, 45 CFR 155.220(c)(3)(i)(E) and
156.705(c).
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We seek comment on these proposals.
c. Documenting Receipt of Consumer Consent (Sec. 155.220(j))
We propose to amend Sec. 155.220(j)(2)(iii) to require agents,
brokers, or web-brokers assisting with and facilitating enrollment
through FFEs and SBE-FPs or assisting an individual with applying for
APTC and CSRs for QHPs to document the receipt of consent from the
consumer, or the consumer's authorized representative designated in
compliance with Sec. 155.227, qualified employers, or qualified
employees they are assisting. We propose that documentation of receipt
of consent would be created by the assisting agent, broker, or web-
broker and would require the consumer seeking to receive assistance, or
the consumer's authorized representative, to take an action, such as
providing a signature or a recorded verbal authorization, that produces
a record that can be maintained by the agent, broker, or web-broker and
produced to confirm the consumer's or their authorized representative's
consent was provided. With regard to the content of
[[Page 78254]]
the documentation of consent, in addition to the date consent was
given, name of the consumer or their authorized representative, and the
name of the agent, broker, web-broker, or agency being granted consent,
we propose the documentation would be required to include a description
of the scope, purpose, and duration of the consent provided by the
consumer, or their authorized representative, as well as the process by
which the consumer or their authorized representative may rescind such
consent. Lastly, we propose that documentation of the consumer's or
their authorized representative's, consent be maintained by the agent,
broker, or web-broker for a minimum of 10 years and produced upon
request in response to monitoring, audit, and enforcement activities
conducted consistent with Sec. 155.220(c)(5), (g), (h) and (k).
Currently, Sec. 155.220(j)(2)(iii) requires agents, brokers, or
web-brokers assisting with or facilitating enrollment through the FFEs
or SBE-FPs or assisting an individual in applying for APTC and CSRs for
QHPs to obtain the consent of the individual, employer, or employee
prior to providing such assistance. However, Sec. 155.220(j)(2)(iii)
does not currently require agents, brokers, or web-brokers to document
the receipt of consent. We have observed several cases in which there
have been disputes between agents, brokers, or web-brokers and the
individuals they are assisting, or between two or more agents, brokers,
or web-brokers, about who has been authorized to act on behalf of a
consumer or whether anyone has been authorized to do so. We have also
received complaints alleging enrollments by agents, brokers, and web-
brokers that occurred without the consumer's consent, and have
encountered agents, brokers, and web-brokers who attest they have
obtained consent and have acted in good faith, but who do not have
reliable records of such consent to defend themselves from allegations
of misconduct. Thus, we are proposing this standard because we believe
that it would be beneficial to have reliable records of consent to help
with the resolution of such disputes or complaints and to minimize the
risk of fraudulent activities such as unauthorized enrollments. For
these reasons, we propose to revise Sec. 155.220(j)(2)(iii) to require
agents, brokers, and web-brokers to document the receipt of consent
from the consumer seeking to receive assistance or the consumer's
authorized representative, employer, or employee prior to assisting
with or facilitating enrollment through the FFEs and SBE-FPs, making
updates to an existing application or enrollment, or assisting the
consumer in applying for APTC and CSRs for QHPs.
We also propose to establish in proposed new Sec.
155.220(j)(2)(iii)(A)-(C) standards for what constitutes obtaining and
documenting consent to provide agents, brokers, and web-brokers with
further clarity regarding this proposed requirement. First, we propose
to add new proposed Sec. 155.220(j)(2)(iii)(A) to establish that
obtaining and documenting the receipt of consent would require the
consumer seeking to receive assistance, or the consumer's authorized
representative designated in compliance with Sec. 155.227, to take an
action that produces a record that can be maintained by the agent,
broker, or web-broker and produced to confirm the consumer's or their
authorized representative's consent has been provided.
We do not intend to prescribe the method to document receipt of
individual consent, so long as whatever method is chosen requires the
consumer or their authorized representative to take an action and
results in a record that can be maintained and produced by the agent,
broker, or web-broker. Therefore, we propose to include in new proposed
Sec. 155.220(j)(2)(iii)(A) a non-exhaustive list of acceptable means
to document receipt of consent, including obtaining the signature of
the consumer or their authorized representative (electronically or
otherwise), verbal confirmation by the consumer or their authorized
representative that is captured in an audio recording, a response from
the consumer or their authorized representative to an electronic or
other communication sent by the agent, broker, or web-broker, or other
similar means or methods that HHS specifies in guidance. Other methods
of documenting individual consent may be acceptable, such as requiring
individuals to create user accounts on an agent's or agency's website
where they designate or indicate the agents, brokers, or web-brokers to
whom they have provided consent. Under this proposal, agents, brokers,
and web-brokers would also be permitted to continue to utilize State
Department of Insurance forms, such as agent or broker of record forms,
provided these forms cover the minimum requirements set forth in this
proposed rule. If agents, brokers, and web-brokers have already adopted
consent documentation processes consistent with this proposed
framework, no changes would be required if this proposed standard is
finalized. We intend to allow for documentation methods well-suited to
the full range of ways agents, brokers, and web-brokers interact with
consumers they are assisting (for example: in-person, via phone,
electronic communications, use of an agent's or agency's website,
etc.). We also intend for the primary applicant to be able to provide
consent on behalf of other applicants (for example, dependents or other
household members), and authorized representatives to be able to
provide consent on behalf of the people they are designated represent
(for example, incapacitated persons), as it may be difficult or
impossible to obtain consent from each individual whose information is
included on an application. This would allow agents, brokers, and web-
brokers to continue assisting individuals as they currently do (for
example, often by working with an individual representing a household
when submitting an application for a family).
Second, we propose to require at new proposed Sec.
155.220(j)(2)(iii)(B) that the consent documentation must include the
date consent was given, name of the consumer or their authorized
representative, name of the agent, broker, web-broker, or agency being
granted consent, a description of the scope, purpose, and duration of
the consent obtained by the individual, as well as a process through
which the consumer or their authorized representative may rescind
consent. Agents, brokers, and web-brokers may work with individuals in
numerous capacities. For example, they may assist individuals with
applying for financial assistance and enrolling in QHPs through the
FFEs and SBE-FPs, as well as shopping for other non-Exchange products.
Similarly, agents, brokers, and web-brokers may have different business
models such that individuals may interact with specific individuals
consistently or numerous individuals representing a business entity
that may vary upon each contact (for example, call center
representatives), and the methods of interaction may vary as well (for
example: in-person, phone calls, use of an agent's or agency's website
etc.). In addition, individuals may wish to change the agents, brokers,
or web-brokers they work with and provide consent to over time. For
these reasons, the scope, purpose, and duration of the consent agents,
brokers, and web-brokers seek to obtain from individuals can vary
widely. Therefore, this proposal is intended to ensure individuals are
making an informed decision when providing their consent
[[Page 78255]]
to the agents, brokers, or web-brokers assisting them, that individuals
can make changes to their provision of consent over time, and that the
documentation of consent at a minimum captures who is providing and
receiving consent, for what purpose(s) the consent is being provided,
when consent was provided, the intended duration of the consent, and
how specifically consent may be rescinded. We expect that the
information in the consent documentation would align with the
information in the corresponding individuals' applications (for
example: names, phone numbers, or email addresses should align as
applicable depending on whether the consent is obtained via email, text
message, call recording, or otherwise), except for in instances in
which consent is being provided by an authorized representative.
Lastly, at new proposed Sec. 155.220(j)(2)(iii)(C), we propose to
require agents, brokers, and web-brokers to maintain the documentation
described in proposed Sec. 155.220(j)(2)(iii)(A) for a minimum of 10
years. Section 155.220(c)(5) states HHS or our designee may
periodically monitor and audit an agent, broker, or web-broker to
assess their compliance with applicable requirements. However, there is
not currently a maintenance of records requirement directly applicable
to all agents, brokers, and web-brokers assisting consumers through the
FFEs and SBE-FPs.\151\ Capturing a broad-based requirement mandating
that all agents, brokers, and web-brokers assisting consumers in the
FFEs and SBE-FPs to maintain the records and documentation
demonstrating receipt of consent from consumers or their authorized
representative would provide a clear, uniform standard. It would also
ensure these records and documentation are maintained for sufficient
time to allow for monitoring, audit, and enforcement activities to take
place.\152\ Therefore, consistent with other Exchange maintenance of
records requirements,\153\ we propose to capture in new proposed Sec.
155.220(j)(2)(iii)(C) that agents, brokers, and web-brokers must
maintain the documentation described in proposed Sec.
155.220(j)(2)(iii)(A) for a minimum of 10 years, and produce the
documentation upon request in response to monitoring, audit and
enforcement activities conducted consistent with Sec. 155.220(c)(5),
(g), (h) and (k).
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\151\ Section 155.220(c)(3)(i)(E) requires web-brokers to
maintain audit trails and records in an electronic format for a
minimum of 10 years and cooperate with any audit under this section.
Section 156.340(a)(2) places responsibility on QHP issuers
participating in Exchanges using the Federal platform to ensure
their downstream and delegated entities (including agents and
brokers) are complying with certain requirements, including the
maintenance of records requirements in Sec. 156.705. Section
156.705(c) requires QHP issuers in the FFEs to maintain certain
records for 10 years.
\152\ While investigations consumer complaints are an example of
a more immediate, real-time monitoring and oversight activity,
market conduct examinations, audits, and other types of
investigations (e.g., compliance reviews) may occur several years
after the applicable coverage year.
\153\ See, for example, 45 CFR 155.220(c)(3)(i)(E) and
156.705(c).
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We seek comment on these proposals, including whether there are
other means or methods of documentation that HHS should consider
specifying are permissible for purposes of documenting the receipt of
consent from consumer or their, qualified employers, or qualified
employees.
4. Eligibility Standards (Sec. 155.305)
a. Failure to File and Reconcile Process (Sec. 155.305(f)(4))
We are proposing to amend Sec. 155.305(f)(4) which currently
prohibits an Exchange from determining a taxpayer eligible for APTC if
HHS notifies the Exchange that a taxpayer (or a taxpayer's spouse, if
married) has failed to file a Federal income tax return and reconcile
their past APTC for a year for which tax data would be utilized for
verification of household income and family size in accordance with
Sec. 155.320(c)(1)(i).
As background, Exchange enrollees whose taxpayer fails to comply
with current paragraph Sec. 155.305(f)(4) are referred to as having
failed to ``file and reconcile''. Since 2015, HHS has taken regulatory
and operational steps to help increase taxpayer compliance with filing
and reconciliation requirements under the Code as described at 26 CFR
1.36B-4(a)(1)(i) and (a)(1)(ii)(A) by tying eligibility for future APTC
to the taxpayer's reconciliation of past APTC paid. However, since the
finalization of the requirement at Sec. 155.305(f)(4), HHS has
determined that the costs of the current policy outweigh the benefits
for a number of reasons. For one, Exchanges have faced a longstanding
operational challenge, specifically that Exchanges sometimes have to
determine an enrollee ineligible for APTC without having up-to-date
information on the tax filing status of households while Federal income
tax returns are still being processed by the IRS. Currently, Exchanges
determine an enrollee ineligible for APTC if the IRS, through data
passed from the IRS to HHS, via the Federal Data Services Hub (the
Hub), tells an Exchange that the taxpayer did not comply with the
requirement to file a Federal income tax return and reconcile APTC for
one specific tax year. To address the challenge of receiving up-to-date
information, and to promote continuity of coverage in an Exchange QHP,
we are proposing a new process for Exchanges to conduct FTR while also
ensuring that Exchanges preserve program integrity by paying APTC only
to consumers who are eligible to receive it. HHS believes that any FTR
process should encourage compliance with the filing and reconciling
requirement under the Code, minimize the potential for APTC recipients
to incur large tax liabilities over time, and support eligible
enrollees' continuous enrollment in Exchange coverage with APTC by
avoiding situations where enrollees become uninsured when their APTC is
terminated.
For Exchanges using the Federal eligibility and enrollment
platform, which includes the FFEs and SBE-FPs, taxpayers who have not
met the requirement of Sec. 155.305(f)(4) are put into the FTR process
with the Exchange. As part of the normal process used by Exchanges
using the Federal eligibility and enrollment platform during Open
Enrollment, enrollees for whom IRS data indicates an FTR status for
their taxpayer receive notices from the Exchange alerting them that IRS
data shows that their taxpayer has not filed a Federal income tax
return for the applicable tax year and reconciled APTC for that year
using IRS Form 8962. FTR Open Enrollment notices sent directly to the
taxpayer clearly state that IRS data indicates the taxpayer failed to
file and reconcile, whereas FTR Open Enrollment notices sent to the
applicant's household contact, who may or may not be the taxpayer, list
a few different reasons consumers may be at risk of losing APTC,
including the possibility that IRS data indicates the taxpayer failed
to file and reconcile. Notices to the applicant's household contact can
be confusing because of the multiple reasons listed. Both of these Open
Enrollment notices encourage taxpayers identified as having an FTR
status to file their Federal income tax return and reconcile their APTC
for that year using IRS Form 8962, or risk losing APTC eligibility for
the next coverage year.
In late 2015, to allow consumers with an FTR status to be
determined eligible for APTC temporarily (if otherwise eligible), HHS
added a question to the single, streamlined application used by the
Exchanges using the Federal eligibility and enrollment platform that
allows enrollees to attest on their
[[Page 78256]]
application, under the penalty of perjury, that they have filed and
reconciled their APTC by checking a box that says, ``Yes, I reconciled
premium tax credits for past years.'' \154\ Enrollees who check this
attestation and enroll in coverage during Open Enrollment retain their
APTC, even if IRS data has not been updated to reflect their most
current Federal income tax filing status or if the individual has not
actually reconciled their APTC. Allowing enrollees to attest to filing
and reconciling even though IRS data indicates that they did not, is a
critical step to safeguard enrollees from losing APTC erroneously as
the IRS typically takes several weeks to process Federal income tax
returns, with additional time required for returns or amendments that
are filed using a paper process.
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\154\ We note that this question was removed from the single
streamlined application once the FTR process was paused in 2020 for
the 2021 PY.
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After Open Enrollment, Exchanges using the Federal platform then
conduct a second look at FTR data to follow up and verify an
enrollee(s)' reconciliation attestation by conducting a verification of
their taxpayer's FTR status early in the next coverage year, which
includes additional notices to enrollees and taxpayers. This
verification process early in the next coverage year is referred to as
FTR Recheck. State Exchanges that operate their own eligibility and
enrollment platform have each implemented similar processes to check
the FTR status of their enrollees annually based on data provided by
the IRS, to identify and notify enrollees who are at risk of losing
APTC eligibility, and to allow enrollees to attest under the penalty of
perjury that they have filed and reconciled their APTC.
There are many reasons we are proposing the changes to Sec.
155.305(f)(4) described herein. First, HHS' and State Exchanges'
experiences with running FTR operations have shown that Exchange
enrollees often do not understand the requirement that their taxpayer
must file a Federal income tax return and reconcile their APTC or that
they must also submit IRS Form 8962 to properly reconcile their APTC,
even though the single, streamlined application used by Exchanges on
the Federal platform and QHP enrollment process require a consumer to
attest to understanding the requirement to file and reconcile in two
places. For example, HHS is aware anecdotally that many third-party tax
preparers, such as accountants, are not aware of the requirement to
file and reconcile, nor prompt consumers to also include IRS Form 8962
along with their Federal income tax return. Although enrollees who rely
on third party tax preparers such as accountants or third-party tax
preparation software to prepare their Federal income tax returns are
still required to file and reconcile even if their tax preparer was
unaware of the requirement, consumers should have the opportunity to
receive additional guidance from Exchanges on the requirement to file
and reconcile to promote compliance and prevent termination of APTC.
While annual FTR notices help with this issue as the notices alert
consumers that they did not provide adequate documentation to fulfill
the requirement to file and reconcile, the current process that
requires Exchanges to determine an enrollee ineligible for APTC after 1
year of having an FTR status is overly punitive. Some consumers may
have their APTC ended due to delayed data, in which case their only
remedy is to appeal to get their APTC reinstated. Consumers also may be
confused or may have received inadequate education on the requirement
to file and reconcile, in which case they must actually file,
reconcile, and appeal to get their APTC reinstated. By requiring
Exchanges to determine an enrollee ineligible for APTC only after
having an FTR status for two consecutive tax years (specifically, years
for which tax data would be utilized for verification of household
income and family size), Exchanges would have more opportunity to
conduct outreach to consumers whom data indicate have failed to file
and reconcile to prevent erroneous terminations of APTC and to provide
access to APTC for an additional year even when APTC would have been
correctly terminated under the original FTR process. Under the proposed
change, Exchanges on the Federal platform would continue to send
notices to consumers for the year in which they have failed to
reconcile APTC as an initial warning to inform and educate consumers
that they need to file and reconcile or risk being determined
ineligible for APTC if they fail to file and reconcile for a second
consecutive tax year. This change would also alleviate burden on HHS
hearing officers by reducing the number of appeals related to denial of
APTC due to FTR, and prevent consumers who did reconcile, but for whom
IRS data was not updated quickly enough, from having to go through an
appeal process to have their APTC rightfully reinstated.
HHS believes in ensuring consumers have access to affordable
coverage and places high value on consumers maintaining continuity of
coverage in the Exchange as HHS has found that FFE and SBE-FP enrollees
who lose APTC tend to end their Exchange coverage and will experience
coverage gaps, as they cannot afford unsubsidized coverage. In light of
this, HHS believes it is imperative that any change to the current FTR
operations be done carefully and that HHS thoughtfully balance how it
enforces the requirement to file and reconcile, since a consequence of
losing APTC effectively means many consumers may lose access to needed
medical care.
Therefore, given these challenges that both Exchanges and consumers
have faced with the requirement to file and reconcile, we are proposing
to revise Sec. 155.305(f)(4) under which Exchanges would not be
required, or permitted, to determine consumers ineligible for APTC due
to having an FTR status for only 1 year. Given that HHS's experience
running FTR shows continued issues with compliance with the requirement
to file and reconcile, we propose that beginning on January 1, 2024,
Exchanges must find an applicant ineligible for APTC only if the
applicant has an FTR delinquent status for two consecutive years
(specifically, two consecutive years for which tax data would be
utilized for verification of household income and family size).
Previously, CMS announced that Exchanges on the Federal platform
would not act on data from the IRS for enrollees who have failed to
file Federal income tax returns and reconcile a previous year's APTC
with the PTC allowed for the year. The guidance also announced
flexibility for State Exchanges that operate their own eligibility and
enrollment platforms to take similar action.\155\ Due to the ongoing
COVID-19 PHE in 2020, for plan year 2021, CMS temporarily paused ending
APTC for enrollees with an FTR status due to IRS processing delays of
2019 Federal income tax returns.\156\ CMS then extended this pause for
the 2023 plan year in July 2022.\157\ As a result of these changes, 55
percent of enrollees who were automatically re-enrolled during 2021
open enrollment with an FTR status
[[Page 78257]]
remained enrolled in Exchange coverage as of March 2021. In contrast,
only 12 percent of those enrollees with an FTR status who were
automatically re-enrolled without APTC during the 2020 open enrollment
were still enrolled in coverage as of March 2020. These results show
the significant impact that loss of APTC due to FTR status has on
whether enrollees continue to remain in coverage offered through the
Exchange as these impacted enrollees must pay the full cost of their
Exchange plan, which is often unaffordable without APTC.
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\155\ See CMS. (2022, July 18). Failure to File and Reconcile
(FTR) Operations Flexibilities for Plan Year 2023. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/FTR-flexibilities-2023.pdf.
\156\ See CMS. (2021, July 23). Failure to File and Reconcile
(FTR) Operations Flexibilities for Plan Years 2021 and 2022--
Frequently Asked Questions (FAQ). https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/FTR-flexibilities-2021-and-2022.pdf.
\157\ See CMS. (2022, July 18). Failure to File and Reconcile
(FTR) Operations Flexibilities for Plan Year 2023. https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/FTR-flexibilities-2023.pdf.
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CMS proposes to continue to pause FTR until the point in time that
HHS and the IRS will be able to implement the new FTR policy, if
finalized. That is to say, until the IRS can update its systems to
implement the new FTR policy, and HHS can notify the Exchange of an
enrollee's consecutive 2-year FTR status, the Exchange will not
determine enrollees ineligible for APTC based on either the one-year or
2-year FTR status. We believe that removing APTC after 2 consecutive
years of an FTR status instead of one will help consumers avoid gaps in
coverage by increasing retention in the Exchange even if they have
failed to reconcile for 1 year, and will reduce the punitive nature of
the current process which may erroneously terminate APTC for consumers
who have filed and reconciled. We also believe that these proposed
changes would help protect consumers from accruing large tax
liabilities over multiple years by notifying and ending APTC for
consumers with an FTR status for two consecutive years. Finally, we
believe these proposed changes would allow Exchanges to maintain
program integrity by denying APTC to consumers who have, over the
course of two years, been given ample notification of their obligation
to file and reconcile and have nevertheless failed to do so.
We seek comment on this proposal, especially from States or other
interested parties regarding tax burdens on consumers which would
inform our decision on this proposal.
5. Verification Process Related to Eligibility for Insurance
Affordability Programs (Sec. Sec. 155.315 and 155.320)
a. Income Inconsistencies
We propose to amend Sec. 155.320 to require Exchanges to accept an
applicant's or enrollee's attestation of projected annual household
income when the Exchange requests tax return data from the IRS to
verify attested projected annual household income, but the IRS confirms
there is no such tax return data available. We further propose to amend
Sec. 155.315(f) to add that income inconsistencies must receive an
automatic 60-day extension in addition to the 90 days provided by Sec.
155.315(f)(2)(ii).
Section 155.320 sets forth the verification process for household
income. The Exchange requires that an applicant or enrollee applying
for financial assistance must attest to their projected annual
household income. See Sec. 155.320(a)(1) and (c)(3)(ii)(b). The
regulation also requires that for any individual in the applicant's or
enrollee's tax household (and for whom the Exchange has a SSN), the
Exchange must request tax return data regarding income and family size
from the IRS.\158\ See Sec. 155.320(c)(i)(A). When the Exchange
requests tax return data from the IRS and the data indicates that
attested projected annual household income represents an accurate
projection of the tax filer's household income for the benefit year for
which coverage is requested, the Exchange must determine eligibility
for APTC and CSR based on the IRS tax data. See Sec.
155.320(c)(3)(ii)(C).
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\158\ The Exchange must also request data regarding Social
Security Benefits from the Social Security Administration.
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When the Exchange requests tax return data from the IRS and the IRS
returns data that reflects that the attested projected annual household
income is not an accurate projection of the tax filer's household
income for the benefit year for which coverage is requested, the
applicant or enrollee is considered to have experienced a change in
circumstances, which allows HHS to establish procedures for determining
eligibility for APTC on information other than IRS tax return data, as
described in Sec. 155.320(c)(3)(iii)-(vi). See ACA Sec. 1412(b)(2).
The Exchange also considers an applicant or enrollee to have
experienced a change in circumstances when the Exchange requests tax
return data from the IRS to verify attested projected household income,
but the IRS confirms such data is unavailable. This is because tax data
is usually unavailable when an applicant or enrollee has experienced a
change in family size, other household circumstances (such as a birth
or death), filing status changes (such as a marriage or divorce), or
the applicant or enrollee was not required to file a tax return for the
year involved. See Sec. ACA 1412(b)(2). When an applicant or enrollee
has experienced a change in circumstances as described in ACA Sec.
1412(b)(2), the Exchange determines eligibility for APTC and CSR using
alternate procedures designed to minimize burden and protect program
integrity, described in Sec. 155.320(c)(3)(iii)-(vi).
If an applicant or enrollee qualifies for an alternate verification
process as described above, and the attested projected annual household
income is greater than the income amount returned by the IRS, the
Exchange accepts the applicant's attestation without further
verification under Sec. 155.320(c)(iii)(A). If an applicant qualifies
for an alternate verification process, and the attested projected
annual household income is more than a reasonable threshold less than
the income amount returned by the IRS, or there is no IRS data
available, the Exchange generates an income inconsistency (also
referred to as a data matching issue or DMI) and proceeds with the
process described in Sec. 155.315(f)(1) through (4), unless a
different electronic data source returns an amount within a reasonable
threshold of the projected annual household income. See Sec.
155.320(c)(3)(iv) and (c)(3)(vi)(D). This process usually requires the
applicant or enrollee to present satisfactory documentary evidence of
projected annual household income. If the applicant fails to provide
documentation verifying their projected annual household income
attestation, the Exchange determines the consumer's eligibility for
APTC and CSRs based on available IRS data, as required in Sec.
155.320(c)(3)(vi)(F). However, if there is no IRS data available, the
Exchange must determine the applicant ineligible for APTC and CSRs as
required in Sec. 155.320(c)(3)(vi)(G). We propose to make clarifying
revisions to the current regulations to ensure consistency between the
regulations and the current operations of the Exchanges on the Federal
platform, as described here.
We propose to add Sec. 155.320(c)(5) which would require Exchanges
to accept an applicant's or enrollee's attestation of projected annual
household income when the Exchange requests IRS tax return data but IRS
confirms such data is not available. The current process is overly
punitive to consumers and burdensome to Exchanges; reasons for IRS not
returning consumer data can extend beyond the consumer not filing tax
returns, and can be attributed to tax household composition changes
(such as birth, marriage, and divorce), name changes, or other
demographic updates or mismatches--all of which are legitimate changes
that currently prevent a consumer from avoiding an income
[[Page 78258]]
DMI. Additionally, the consequence of receiving an income DMI and being
unable to provide sufficient documentation to verify projected
household income outweighs the intended programmatic benefits: under
Sec. 155.320(c)(3)(vi)(G) consumers are determined completely
ineligible for APTC and CSRs. With respect to burden on Exchanges, DMI
verification by the Exchange requires an outlay of administrative hours
to monitor and facilitate the resolution of income inconsistencies.
Within the Federal Platform, this administrative task accounts for
approximately 300,000 hours of labor annually, which we believe is
proportionally mirrored by State Exchanges.
Accordingly, we propose to accept an applicant's or enrollee's
attestation of projected annual household income when IRS tax return
data is requested but is not available, and to determine the applicant
or enrollee eligible for APTC or CSRs in accordance with the
applicant's or enrollee's attested projected household income, to more
fairly determine eligibility for consumers and to reduce unnecessary
burden on Exchanges. This proposal is consistent with Sec. 1412(b)(2)
of the ACA, which allows the Exchange to utilize alternate verification
procedures when a consumer has experienced substantial changes in
income, family size or other household circumstances, or filing status,
or when an applicant or enrollee was not required to file a tax return
for the applicable year.\159\ It is also consistent with the
flexibility under ACA Sec. 1411(c)(4)(B) to modify methods for
verification of the information where we determine such modifications
would reduce the administrative costs and burdens on the applicant.
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\159\ 42 U.S.C. 18081
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We clarify that the Exchange would continue to generate income DMIs
when IRS tax data is available and the attested projected household
income amount is more than a reasonable threshold below the income
amount returned by the IRS, and other sources cannot provide income
data within the reasonable threshold. Additionally, the Exchange would
continue to generate income DMIs when IRS tax data cannot be requested,
because an applicant or enrollee did not provide sufficient information
(namely, a social security number), and other sources cannot provide
income data within the reasonable threshold of the attested projected
household income. Under Sec. 1411(c)(3) of the ACA, only data from the
IRS is required to be used to determine if income is inconsistent.
Currently, there are no reliable and accurate income data sources
legally available to the Exchange that would provide quality data for
the purpose of generating income DMIs. Income data from other
electronic data sources may continue to be used by Exchanges to verify
income when the attested projected household income amount is more than
a reasonable threshold below the income amount returned by the IRS or
IRS data cannot be requested.
Lastly, we propose to revise Sec. 155.315(f) to add new paragraph
(f)(7) to require that applicants must receive an automatic 60-day
extension in addition to the 90 days currently provided by Sec.
155.315(f)(2)(ii) to allow applicants sufficient time to provide
documentation to verify household income. The extension would be
automatically granted when consumers exceed the allotted 90 days
without resolving any active household income DMIs. This proposal
aligns with current Sec. 155.315(f)(3), which provides extensions to
applicants beyond the existing 90 days if the applicant demonstrates
that a good faith effort has been made to obtain the required
documentation during the period. It is also consistent with the
flexibility under ACA Sec. 1411(c)(4)(B) to modify methods for
verification of the information where we determine such modifications
would reduce the administrative costs and burdens on the applicant.
We have found that 90 days is often an insufficient amount of time
for many applicants to provide this income documentation, since it can
require multiple documents from various household members along with an
explanation of seasonal employment or self-employment, including
multiple jobs. As applicants are asked to provide a projection for
their next year's income, they often submit documents that do not fully
explain their attestation due to the complexities noted above, which
requires contact from the Exchange and additional document submission,
which often pushes the verification timeline past 90 days. An
additional 60 days would allow consumers more time to gather multiple
documents from multiple sources, and also allows time for back and
forth review with the Exchange. The majority of households with income
DMIs are low income and consumers often have multiple sources of
employment that can change frequently. Therefore, collecting and
submitting documentation to verify projected household income is
extremely complicated and difficult. The proposed extension would
provide consumers with necessary time to gather and submit sufficient
documentation to verify projected household income. The current
authority allowing for the granting of extensions is applied on a case
by case basis and requires the consumers to demonstrate difficulty
before the 90- day deadline, which does not address the need for
additional time more broadly for households with income DMIs.
A review of income DMI data indicates that when consumers receive
additional time, they are more likely to successfully provide
documentation to verify their projected household income. Between 2018
and 2021, over one third of consumers who resolved their income DMIs on
the Exchange did so in more than 90 days. These consumers were provided
additional time under Sec. 155.315(f)(3), but the extension under this
existing provision places the burden on the consumer to obtain more
time to submit documentation. The proposed extension would treat
consumers more equitably and would take into consideration the
complicated process of obtaining and submitting income documents for
these households. We believe the proposed extension would provide more
opportunity to work with consumers to submit the correct documentation
to verify their projected annual household income. Extensions enabled
HHS to determine eligibility for more consumers truly eligible for
coverage. HHS continues to study consumer behavior in resolving
consistencies to continue to support accurate eligibility
determination.
HHS has found that income DMIs have a negative impact on access,
health equity, and the risk pool. Per a review of PY 2022 data, the
majority of income DMIs disproportionately impacted households with
lower attested household income. Among households with an income DMI in
PY 2022, more than 60 percent attested to a household income of less
than $25,000; compared to households without an income DMI, where only
about 40 percent attested to household income less than $25,000.
Additionally, households with an attested household income below
$25,000 successfully submitted documentation to verify their income 25
percent less often than households with higher household incomes.
Income DMIs also may pose a strain on populations of color. A
review of available data indicates that income DMI expirations are
higher than expected among Black or African American consumers.
Further, the proposed changes would ensure that all consumers are able
to continue to have access to more affordable coverage by continuing to
receive their APTC, which
[[Page 78259]]
also supports HHS' goal of consumers maintaining continuous coverage.
Income DMIs also negatively impact the risk pool. When households
are unable to submit documentation to verify their household income and
lose eligibility for APTC, they are much more likely to drop coverage
since they must pay the entire monthly premium, which in many cases may
be significantly more than the premium minus the APTC. We found that
consumers who were unable to submit sufficient documentation to verify
their income and lost their eligibility for APTC were half as likely as
other consumers to remain covered through the end of the plan year.
Consumers aged 25-35 were the age group most likely to lose their APTC
eligibility due to an income DMI, resulting in a loss of a population
that, on average, has a lower health risk, thereby negatively impacting
the risk pool. This finding underscores the importance of consumers
being provided ample time to resolve their Income DMIs in order to
support HHS' commitment to advancing health equity for consumers
participating in the Exchange.
Given the information we have on the negative and disproportionate
impacts of income DMIs, we are proposing to adjust the household income
verification requirements in order to treat consumers more equitably,
help ensure continuous coverage, and strengthen the risk pool. If the
proposed changes are finalized, Exchanges would utilize only data from
the IRS to determine if income is inconsistent and would accept
attestation when tax return data is requested from IRS but not
returned. In cases where the IRS returns tax data that reflects that
the attested projected annual household income is not an accurate
projection of the tax filer's household income, Exchanges would
continue existing operations. Additionally, Exchanges would utilize the
additional time provided to work with consumers to submit documentation
to verify their projected annual household income. While the increased
protection for consumers from loss of eligibility for APTC could
present a program integrity risk, households are required to provide
true answers to application questions under penalty of perjury.
Additionally, HHS does not believe that individuals with a mismatch due
to situations such as family size change have a greater incentive to
misreport income than their counterparts, given that changes in family
size and other changes in circumstances are unlikely to be correlated
with income misreporting incentives. HHS will continue to engage with
partners to evaluate the impact of this proposal on APTC accuracy.
We seek comment on these proposals.
6. Annual Eligibility Redetermination (Sec. 155.335)
We propose amending Sec. 155.335(j)(1) and (2) to allow Exchanges,
beginning for PY 2024, to modify their re-enrollment hierarchies such
that enrollees who are eligible for CSRs in accordance with Sec.
155.305(g) and who would otherwise be automatically re-enrolled in a
bronze-level QHP without CSRs, to instead be automatically re-enrolled
in a silver-level QHP (with income-based CSRs) in the same product with
a lower or equivalent premium (after APTC), provided that certain
conditions are met.\160\ Furthermore, we propose to amend the Exchange
re-enrollment hierarchy to allow all Exchanges (Exchanges on the
Federal platform and SBEs) to ensure enrollees whose QHPs are no longer
available to them and enrollees who would be re-enrolled into a silver-
level QHP in order to receive income-based CSRs are re-enrolled into
plans with the most similar network to the plan they had in the
previous year, provided that certain conditions are met. To honor other
criteria the enrollee may have used to make the original selection, we
propose to limit re-enrollment of such enrollees into plans offered by
the same issuer and of the same product if the enrollee's plan and
product remains available through the Exchange for renewal consistent
with Sec. 147.106. We propose that Exchanges (including Exchanges on
the Federal platform and SBEs) would implement this option beginning
with the open enrollment period for plan year 2024 coverage, if
operationally feasible, and if not then beginning with the open
enrollment period for plan year 2025 coverage.
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\160\ Under Sec. 144.103, a product is defined as a discrete
package of health insurance coverage benefits that are offered using
a particular product network type (such as health maintenance
organization, preferred provider organization, exclusive provider
organization, point of service, or indemnity) within a service area.
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The re-enrollment hierarchy previously prioritized placing an
enrollee in a similar metal level; however, HHS now believes other
factors, such as access to income-based CSRs and net premium (that is,
premium minus the APTC), should also be taken into account. As
discussed later, HHS is considering whether for future years it would
be appropriate to modify the re-enrollment process to incorporate both
net premium and out-of-pocket costs attributable to cost sharing
(referred to in this preamble as total out-of-pocket cost) when both
directing re-enrollment to a plan at the same metal level as the
enrollee's current QHP and directing re-enrollment to a plan at a
higher metal level than the enrollee's current QHP in all
Exchanges.\161\ \162\
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\161\ As defined at Sec. 155.20, cost sharing means any
expenditure required by or on behalf of an enrollee with respect to
essential health benefits; such term includes deductibles,
coinsurance, copayments, or similar charges, but excludes premiums,
balance billing amounts for non-network providers, and spending for
non-covered services.
\162\ Total out-of-pocket costs could also include balance
billing amounts, but for purposes of this preamble, we use the term
total out-of-pocket costs to refer to net premium and out-of-pocket
costs attributable to amounts such as coinsurance, copayments, and
deductibles.
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In the 2014 Patient Protection and Affordable Care Act; Annual
Eligibility Redeterminations for Exchange Participation and Insurance
Affordability Programs; Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges (79 FR
52994, 52998 through 53001), we established the Exchange re-enrollment
hierarchy at Sec. 155.335(j) with the goal of ensuring continuous
coverage for consumers who opt not to make an active plan selection for
the upcoming year. In paragraph (j)(1), we finalized that if an
enrollee remains eligible for enrollment in a QHP through the Exchange
upon annual redetermination, and the product under which the QHP in
which the enrollee was enrolled remains available for renewal,
consistent with Sec. 147.106, such enrollee will have his or her
enrollment in a QHP through the Exchange under the product renewed
unless he or she terminates coverage, including termination of coverage
in connection with voluntarily selecting a different QHP, in accordance
with Sec. 155.430. We further finalized that the QHP in which the
enrollee's coverage will be renewed will be selected according to the
following order of priority: (1) in the same plan as the enrollee's
current QHP, unless the current QHP is not available through the
Exchange; (2) if the enrollee's current QHP is not available, the
enrollee's coverage will be renewed in a QHP at the same metal level as
the enrollee's current QHP within the same product; (3) if the
enrollee's current QHP is not available through the Exchange and the
enrollee's product no longer includes a QHP at the same metal level as
the enrollee's current QHP, the enrollee's coverage will be renewed in
a plan that is one metal level higher or lower than the enrollee's
current QHP (with the exception of when the enrollee's current QHP is a
silver level
[[Page 78260]]
plan); or (4) if the enrollee's current QHP is not available through
the Exchange and the enrollee's product no longer includes a QHP that
is at the same metal level as, or one metal level higher or lower, than
the enrollee's current QHP, the enrollee's coverage will be renewed in
any other QHP offered under the product in which the enrollee's current
QHP is offered in which the enrollee is eligible to enroll.\163\
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\163\ Under Sec. 155.335(j)(1)(iii)(A), if the enrollee's
current QHP is not available through the Exchange and the enrollee's
product no longer includes a QHP at the same metal level as the
enrollee's current QHP and the enrollee's current QHP is a silver
level plan, the enrollee will be re-enrolled in a silver level QHP
under a different product offered by the same QHP issuer that is
most similar to the enrollee's current product. If no such silver
level QHP is available for enrollment through the Exchange, the
enrollee's coverage will be renewed in a QHP that is one metal level
higher or lower than the enrollee's current QHP under the same
product.
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Under paragraph (j)(2), we finalized standards to address re-
enrollment in situations in which no plans under the product under
which an enrollee's QHP is offered are available through the Exchange
for renewal. In this situation, the enrollee may be enrolled in a QHP
under a different product offered by the same issuer, to the extent
permitted by applicable State law, unless the enrollee terminates
coverage including termination of coverage in connection with
voluntarily selecting a different QHP. In such cases, the re-enrollment
will occur according to the following order of priority: (1) in a QHP
through the Exchange at the same metal level as the enrollee's current
QHP in the product offered by the same issuer that is the most similar
to the enrollee's current product; (2) if the issuer does not offer
another QHP through the Exchange at the same metal level as the
enrollee's current QHP, the enrollee will be re-enrolled in a QHP
through the Exchange that is one metal level higher or lower than the
enrollee's current QHP in the product offered by the same issuer
through the Exchange that is the most similar to the enrollee's current
product; or (3) if the issuer does not offer another QHP through the
Exchange at the same metal level as, or one metal level higher or lower
than the enrollee's current QHP, the enrollee will be re-enrolled in
any other QHP offered through the Exchange by the same issuer in which
the enrollee is eligible to enroll.
In the 2017 Payment Notice (81 FR 12203), we finalized the rule to
provide for automatic re-enrollment in a QHP offered by another issuer
through the Exchange in order to maintain coverage with APTC and
income-based CSRs for the majority of Exchange enrollees who are
receiving these subsidies, as opposed to permitting a QHP issuer that
no longer has a QHP available to an enrollee through an Exchange to re-
enroll the enrollee outside the Exchange. Specifically, we established
that, beginning in PY 2017, if no QHP from the same issuer is available
to enrollees through the Exchange, the Exchange could direct alternate
enrollments for such enrollees to the extent permitted by applicable
State law into a QHP from a different issuer. In such cases, the re-
enrollment will occur as directed by the applicable State regulatory
authority, or, if the applicable State regulatory authority declines to
direct this activity, such alternate enrollments would be directed by
the Exchange. This rule provides considerable flexibility to Exchanges
to specify the logic that will be used to assign enrollees in this
situation to specific plans.
In the 2023 Payment Notice (87 FR 27208, 27273), HHS announced it
would consider proposing amendments to the Exchange re-enrollment
hierarchy in future rulemaking and would take into account comments
received. In the preamble to the 2023 Payment Notice proposed rule (87
FR 584, 652), we solicited comments on incorporating the net premium,
maximum out-of-pocket amount (MOOP), deductible, and total out-of-
pocket cost of a plan into the Exchange re-enrollment hierarchy.\164\
We also solicited comments on additional criteria or mechanisms HHS
could consider to ensure that the Exchange hierarchy for re-enrollment
aligns with plan generosity and consumer needs (87 FR at 652).
Additionally, we sought comment on the following examples: (1) re-
enrolling a current bronze QHP enrollee into an available silver QHP
with a lower net premium and higher plan generosity (that is, a higher
metal level) offered by the same QHP issuer; and (2) re-enrolling a
current silver QHP enrollee into another available silver QHP, under
the enrollee's current product and with a service area that is serving
the enrollee that is issued by the same QHP issuer, which has lower
total out-of-pocket cost (87 FR at 652). As described in further detail
later, we propose to codify example (1) described above by amending
Sec. 155.335(j)(1) and (2) to allow Exchanges, beginning for PY 2024,
to modify their re-enrollment hierarchies such that enrollees who are
eligible for CSRs in accordance with Sec. 155.305(g) and who would
otherwise be automatically re-enrolled in a bronze-level QHP without
CSRs, would instead be automatically re-enrolled in a silver-level QHP
(with income-based CSRs) in the same product with a lower or equivalent
premium after APTC. We believe initially limiting the scope to only
income-based CSR-eligible enrollees who are currently in a bronze QHP
and have a lower cost silver CSR QHP available would allow issuers and
Exchanges to incrementally update their processes, as opposed to
incorporating net premium and out-of-pocket cost (OOPC) throughout the
hierarchy for PY 2024.
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\164\ MOOP refers to the limit on cost sharing an enrollee has
to pay for covered services in a plan year. After the enrollee
spends this amount on cost sharing for in-network essential health
benefits, the health plan pays 100 percent of the costs of covered
essential health benefits. For purposes of this section of preamble,
the term total out-of-pocket costs refers to net premium and out-of-
pocket costs attributable to cost sharing and excludes any costs
attributable to balance billing.
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We received substantial comments from diverse interested parties
and have carefully considered these comments. Several commenters
encouraged HHS to take net premium or total out-of-pocket cost into
account for the re-enrollment hierarchy. Many commenters supported
amending Sec. 155.335(j)(1)(i) to allow the enrollee to be re-enrolled
into a different plan with a lower net premium and higher generosity if
there is no change in the issuer, product, service area, and provider
network. Some commenters raised concerns with Sec. 155.335(j)(1)(ii)
through (iv) and (j)(2)(iii), which outline the re-enrollment rules
when an enrollee's current QHP is no longer available, since they allow
consumers to be re-enrolled in a plan with far higher costs if the
issuer and provider networks types are prioritized. Commenters
explained that the current policy does not provide flexibility for
enrollees to be re-enrolled into a different plan even if a change in
market conditions has significantly raised the old plan's cost to the
enrollees. Further, commenters stated that the majority of enrollees
who do not shop at all during the Open Enrollment Period (OEP) care
more about cost than the issuer or provider network. More specifically,
commenters cited research on plans sold through Covered California that
showed, on average, families in California were charged an extra $466 a
year in annual premiums as a result of remaining with a plan that no
longer served their interests. Commenters stated that including total
out-of-pocket cost and plan generosity into re-enrollment rules would
be particularly beneficial for situations when enrollees are eligible
for
[[Page 78261]]
cost-sharing reductions and are not enrolled in a silver plan.
Commenters also recommended that provider network considerations be
incorporated into any revised re-enrollment hierarchy. Specifically,
commenters explained that a revised hierarchy that does not incorporate
provider networks could result in enrollees losing access to their
providers, increased out-of-network costs, and/or being placed in
narrower network plan. Some commenters urged the Exchange to provide
accessible notices and reasonable opportunities for the consumer to
return to their former plan or drop coverage. Commenters also mentioned
the importance of enhancing the consumer shopping experience and
decision support tools to improve consumer understanding, particularly
around cost sharing. In the 2023 Payment Notice, HHS did not finalize
any changes to Sec. 155.335(j).
HHS is aware of interested parties' concerns that enrollees in the
Exchanges on the Federal platform may fail to return to the Exchange to
make an active plan selection in situations in which changing plans
could be beneficial to the enrollee, and that re-enrollment rules may
default enrollees into less beneficial plans than other available
plans. Currently, the Federal hierarchy for re-enrollment ensures an
enrollee's coverage will be renewed in the same plan as the enrollee's
current QHP, unless the current QHP is not available through the
Exchange. If the enrollee's current QHP is no longer available through
the Exchange, the Federal hierarchy prioritizes the same metal level
and product network type in order to determine the most similar plans
within the same service area. However, if that is not an option, an
enrollee will be re-enrolled in a QHP that is one metal level lower or
higher within the same service area (with the exception of silver
plans). In the 2022 OEP, 28 percent of returning Exchange enrollees
using the HealthCare.gov platform were auto re-enrolled.\165\
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\165\ CMS (2021, April 21). 2022 Marketplace Open Enrollment
Public Use Files. https://www.cms.gov/research-statistics-data-systems/marketplace-products/2021-marketplace-open-enrollment-period-public-use-files.
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The current hierarchy assumes that the same metal level would be
least disruptive to enrollees in terms of premium and coverage.
However, in some instances it may be to the enrollee's advantage to
move to a different metal level. For example, for PY 2022,
approximately 110,000 consumers who were automatically re-enrolled also
had available to them a plan at one metal level higher than their
current plan in the same product from the same issuer with the same
network that had a lower net premium \166\ More specifically,
approximately 38,000 consumers who were automatically re-enrolled into
bronze plans also had available a silver-level plan in the same product
from the same issuer with the same network that had lower total costs.
Furthermore, the Federal hierarchy does not consider the availability
of lower premium plans at the same metal level under the same product
as the enrollee's current QHP. Directing re-enrollment into lower or
same cost, higher metal level plans would place enrollees in more
affordable plans with lower out-of-pocket costs, which would lower
health insurance costs for those lower-income (CSR-eligible)
individuals. Currently, a large majority of Hispanic, Black, and Asian
enrollees using the HealthCare.gov platform are in the 94 or 87 percent
CSR-eligible populations (68, 66, and 62 percent, respectively).\167\
As such, re-enrolling enrollees who would otherwise be automatically
re-enrolled in a bronze-level QHP without CSRs, into a silver-level QHP
(with income-based CSRs) may also improve coverage and affordability
for racial and ethnic minorities. Interested parties have emphasized
the critical importance of automatic re-enrollment policies for
immigrants and racial and ethnic minorities who may face greater
challenges in understanding and accessing the active re-enrollment
process, and who are disproportionately impacted by cost increases due
often to lower wealth and discretionary income. While the vast majority
of re-enrollees through HealthCare.gov actively select a plan for the
upcoming year during the open enrollment period, some remain in their
auto re-enrollment plan.
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\166\ CMS. (2022). Internal Eligibility and Enrollment Data.
\167\ CMS. (2021, October). Internal Eligibility and Enrollment
Data.
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We are aware that some number of enrollees who are automatically
re-enrolled are eligible for income-based CSRs (or become eligible for
these CSRs through the annual redetermination process under this
section), but remain enrolled in a bronze-level QHP, under which they
cannot receive income-based CSRs. Further, we know that in some cases,
a silver-level QHP in the same product, with the same issuer and
network and lower or equivalent premiums, is available. In order to
assist these enrollees in obtaining access to income-based CSRs given
their eligibility, and without additional net premium, we propose
revisions at Sec. 155.335(j). All of these considerations informed our
decision to propose the following revisions to the re-enrollment
hierarchy at Sec. 155.335(j), as well as our specific approach for
implementing these requirements.
We propose revising Sec. 155.335(j)(1)(i) and adding paragraphs
(j)(1)(i)(A), (B), and (C) to amend the Exchange re-enrollment
hierarchy for enrollment in coverage beginning in PY 2024.
Specifically, we propose that, if the enrollee's current QHP is
available and: (1) the enrollee is not CSR-eligible, in accordance with
Sec. 155.305(g), the Exchange will re-enroll the enrollee in the same
plan as the enrollee's current QHP (paragraph (j)(1)(i)(A)); (2) the
enrollee is CSR-eligible, in accordance with Sec. 155.305(g), and the
enrollee's current QHP is a bronze level plan, the Exchange will re-
enroll the enrollee either in the same plan as the enrollee's current
QHP, or, at the option of the Exchange, in a silver level QHP within
the same product that has a lower or equivalent premium after APTC and
that has the most similar network compared to the enrollee's current
QHP (paragraph (j)(1)(i)(B)); and (3) the enrollee is CSR-eligible, in
accordance with Sec. 155.305(g), and the enrollee's current QHP is not
a bronze level plan, the Exchange will re-enroll the enrollee in the
same plan as the enrollee's current QHP (paragraph (j)(1)(i)(C)). With
respect to current operations, the only effective change to the re-
enrollment hierarchy would be the change proposed in paragraph
(j)(1)(i)(B). HHS does not propose to shift enrollment out of the
enrollee's current product or issuer if the enrollee's current product
and/or issuer are available through the Exchange. We believe retaining
coverage in the enrollee's current product when available is important
in order to honor the various criteria the enrollee may have used to
make the original selection and ensure there is no disruption to the
enrollee's benefit coverage, such as the product network type (for
example, HMO, PPO, etc.) and covered items and services. Furthermore,
we believe it is of particular importance to ensure the enrollee's
specific provider coverage is maintained beyond a product's provider
network type when the enrollee is being auto re-enrolled into a
different QHP than their current QHP.
We also propose amending paragraphs (j)(1)(ii) through (iv), which
outline the steps for re-enrollment determinations when the enrollee's
current QHP is no longer available and the enrollee's current product
is still available through the Exchange for renewal. Specifically, we
propose revising paragraph (j)(1)(ii) by adding
[[Page 78262]]
paragraphs (j)(1)(ii)(A), (B), and (C) to specify for enrollment in
coverage beginning in PY 2024, that if the enrollee's current QHP is
not available through the Exchange and: (1) the enrollee is not CSR-
eligible, in accordance with Sec. 155.305(g), the Exchange will re-
enroll the enrollee in a QHP within the same product, at the same metal
level and that has the most similar network compared to the enrollee's
current QHP (paragraph (j)(1)(ii)(A)); (2) the enrollee is CSR-
eligible, in accordance with Sec. 155.305(g), and the enrollee's
current QHP is a bronze level plan, the Exchange will re-enroll the
enrollee in a bronze level QHP within the same product, or, at the
option of Exchange, in a silver level QHP within the same product that
has a lower or equivalent premium after APTC and that has the most
similar network compared to the enrollee's current QHP (paragraph
(j)(1)(ii)(B)); and (3) the enrollee is CSR-eligible, in accordance
with Sec. 155.305(g), and the enrollee's current QHP is not a bronze
level plan, the Exchange will re-enroll the enrollee in a QHP within
the same product at the same metal level and that has the most similar
network compared to the enrollee's current QHP (paragraph
(j)(1)(ii)(C)).
We also propose amending paragraphs (j)(1)(iii)(A) through (B),
which outline the re-enrollment rules when the enrollee's current QHP
is not available through the Exchange and the enrollee's product no
longer includes a QHP at the same metal level as the enrollee's current
QHP. Specifically, we propose, beginning for PY 2024, amending
paragraphs (j)(1)(iii)(A) and (B) to require if: (1) the enrollee's
current QHP is a silver level plan, the Exchange will re-enroll the
enrollee in a silver level QHP under a different product offered by the
same QHP issuer that is most similar to and that has the most similar
network compared to the enrollee's current product; if no such silver
level QHP is available for enrollment through the Exchange, the
Exchange will re-enroll the enrollee in a QHP under the same product
that is one metal level higher or lower than the enrollee's current QHP
and that has the most similar network compared to the enrollee's
current QHP (paragraph (j)(1)(iii)(A)); and (2) the enrollee's current
QHP is not a silver level plan, the Exchange will re-enroll the
enrollee in a QHP under the same product that is one metal level higher
or lower than the enrollee's current QHP and that has the most similar
network compared to the enrollee's current QHP (paragraph
(j)(1)(iii)(A)).
We propose amending paragraph (j)(1)(iv), which outlines the re-
enrollment rules when the enrollee's current QHP is not available
through the Exchange and the enrollee's product no longer includes a
QHP at the same metal level as, or one metal level higher or lower
than, the enrollee's current QHP. We propose, adding to paragraph
(j)(1)(iv) which would provide, beginning for PY 2024, if the
enrollee's current QHP is not available through the Exchange and the
enrollee's product no longer includes a QHP that is at the same metal
level as, or one metal level higher or lower than the enrollee's
current QHP, the Exchange will re-enroll the enrollee in any other QHP
offered under the product in which the enrollee's current QHP is
offered in which the enrollee is eligible to enroll that has the most
similar network compared to the enrollee's current QHP.
We propose amending paragraphs (j)(2)(i) through (iii), which
outlines the re-enrollment rules when the enrollee's current product is
no longer available through the Exchange for renewal. Specifically, we
propose to amend paragraph (j)(2)(i) to provide, beginning for the PY
2024, that if the enrollee is not CSR eligible, the Exchange will re-
enroll the enrollee in a QHP in the product offered by the same issuer
that is the most similar to the enrollee's current product at the same
metal level as and with the most similar network compared to the
enrollee's current QHP. We propose revising and redesignating paragraph
(j)(2)(ii) as paragraph (j)(2)(iv), which would require, if the issuer
does not offer another QHP at the same metal level as the enrollee's
current QHP, the Exchange will re-enroll the enrollee in a QHP that is
one metal level higher or lower than the enrollee's current QHP and
that has the most similar network compared to the enrollee's current
QHP in the product offered by the same issuer through the Exchange that
is the most similar to the enrollee's current product. We propose to
add a new paragraph (j)(2)(ii) to establish that if the enrollee is
CSR-eligible, in accordance with Sec. 155.305(g), and the enrollee's
current QHP is a bronze level plan, the Exchange will re-enroll the
enrollee in a bronze level QHP, or, at the option of the Exchange, in a
silver level QHP that has a lower or equivalent premium after APTC and
that has the most similar network compared to the enrollee's current
QHP in the product offered by the same issuer through the Exchange that
is most similar to the enrollee's current product.
We also propose, beginning for PY 2024, revising and redesignating
paragraph (j)(2)(iii) as paragraph (j)(2)(v), which would state that if
the issuer does not offer another QHP through the Exchange at the same
metal level as, or one metal level higher or lower than the enrollee's
current QHP, the Exchange will re-enroll the enrollee in any other QHP
offered by the same issuer in which the enrollee is eligible to enroll
in the product that is most similar to the enrollee's current product
and in a QHP within that product that has the most similar network to
the enrollee's current QHP. Lastly, we propose to add a new paragraph
(j)(2)(iii) to establish that if the enrollee is CSR-eligible, in
accordance with Sec. 155.305(g), and the enrollee's current QHP is not
a bronze level plan, the Exchange will re-enroll the enrollee in a QHP
at the same metal level that has the most similar network compared to
the enrollee's current QHP in the product offered by the same issuer
that is the most similar to the enrollee's current product.
We believe that enrollees are best able to make plan selections
themselves, and outreach from the Exchanges on the Federal platform
always encourages enrollees to actively return, provide their latest
eligibility information, and shop and compare Exchange plans to make
the selection that best meets their needs. Income-based CSR-eligible
enrollees in Exchanges on the Federal platform who are subject to the
proposed policy would receive a notice from the Exchange advising them
that they will be re-enrolled into a silver plan if they do not make an
active selection on or before December 15th, and would also see the
silver plan highlighted in the online shopping experience if they
return on or before December 15th to review their options. The notice
would also inform the enrollee that if they prefer to keep their bronze
plan, they can actively select it through December 15th, for an
effective date of January 1st. Enrollees in Exchanges on the Federal
platform who do not make an active selection on or before December 15th
would receive an additional communication from the Exchange after
December 15th reminding them of their new plan enrollment for January
1st, as well as their ability to make a different plan selection by
January 15th that would be effective starting February 1st.
This proposal is consistent with the 2014 Patient Protection and
Affordable Care Act; Annual Eligibility Redeterminations for Exchange
Participation and Insurance Affordability Programs; Health
[[Page 78263]]
Insurance Issuer Standards Under the Affordable Care Act, Including
Standards Related to Exchanges (79 FR 52994, 53001) explanation of the
guaranteed renewability provisions at Sec. 147.106. If a product
remains available for renewal, including outside the Exchange, the
issuer must renew the coverage within the product in which the enrollee
is currently enrolled at the option of the enrollee, unless an
exception to the guaranteed renewability requirements applies. However,
to the extent that the issuer is subject to Sec. 155.335(j) with
regard to an enrollee's coverage through the Exchange, the issuer must,
subject to applicable State law regarding automatic re-enrollments,
automatically enroll the enrollee in accordance with the re-enrollment
hierarchy, even where that results in re-enrollment in a plan under a
different product offered by the same QHP issuer through the Exchange.
Enrollments completed pursuant to Sec. 155.335(j) will be considered
to be a renewal of the enrollee's coverage, provided the enrollee also
is given the option to renew coverage within his or her current product
outside the Exchange. This proposal is intended to provide greater
financial security to bronze plan enrollees who do not actively re-
enroll and may not be aware that a more generous silver plan at the
same or lesser cost may be available with dramatically more costs
covered by the plan. Additionally, some of these consumers may have
been initially enrolled before more generous APTC became available with
the passage of the ARP,\168\ and may not have been initially income-
based CSR-eligible when they first enrolled, or may have been helped by
an agent, broker or assister who did not adequately explain the
benefits of silver enrollment for CSR-eligible enrollees. This proposal
would assist bronze enrollees who may be less engaged and are not aware
that a more generous version of their plan was available at the same or
lesser cost.
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\168\ With the passage of the IRA, these enhanced subsidies have
been extended for an additional three years (through 2025).
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Additionally, we note that HHS is not proposing any changes to SEP
eligibility or duration in connection with the proposed changes at
Sec. 155.335(j). Currently, under Sec. 155.420(d)(1)(i), a qualified
individual is eligible for a SEP to enroll in or change from one QHP to
another if the qualified individual loses MEC, which includes when an
enrollee's current product is no longer available for renewal. As such,
it is not considered a loss of MEC when an enrollee is re-enrolled from
a bronze QHP to a silver QHP within the same product and their current
plan is still available. We also note that consistent with longtime
binder payment policy for Exchange enrollees, auto re-enrollment into a
different plan or product with the same issuer that offers their
current plan would not require enrollees with already effectuated
coverage to make a new binder payment. This means, for example, that a
CSR-eligible bronze plan enrollee receiving APTC who is auto re-
enrolled in a silver plan offered by the same issuer as their current
bronze plan would enter the 3-month APTC grace period if they were late
on paying for January coverage in the future year.\169\
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\169\ Please refer to the following for further explanation on
binder payments and re-enrollment: CMS. (2022, July 28). 2022
Federally-facilitated Exchange (FFE) and Federally-facilitated Small
Business Health Options Program (FF-SHOP) Enrollment Manual.
(Exhibit 12, pp. 33-37, and p. 87). https://www.hhs.gov/guidance/document/2022-enrollment-manual.
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We acknowledge the operational complexities issuers and States may
face as a result of these proposed changes. Issuers would continue to
identify the re-enrollment plan for all enrollees still served by the
issuer in the new plan year, except that the Exchange would identify
the silver re-enrollment plan for bronze enrollees if those enrollees
were redetermined CSR eligible in accordance with Sec. 155.305(g). In
order to ensure enrollees are auto re-enrolled in a plan with the most
similar network to their current QHP, in the situations where the
enrollee would not be auto re-enrolled into their current QHP, HHS
would place enrollees into a plan with the same network ID as their
current QHP, if possible. Similar to the current Plan ID Crosswalk
process, issuers would be able to submit justifications for HHS review
if they believed a different network ID in the following plan year had
the most similar network to the enrollee's current QHP.\170\ Exchanges
and State regulators would have a more complicated analysis in assuring
that the issuer-identified re-enrollment plan was consistent with the
proposed premium and network requirements at Sec. 155.335(j). However,
we believe incorporating net premium and provider networks into re-
enrollment determinations would help ensure the hierarchy for re-
enrollment in all Exchanges takes into account plan generosity and
consumer needs beyond merely the retention of the most similar plan
available. The Exchanges would need to develop new Exchange notices to
provide the enrollees advance and sufficient notice that their plan
will change unless they return during open enrollment, and would seek
to improve other existing notices, as applicable, to improve
transparency and enrollees' understanding of their re-enrollment
options. We believe it is important to ensure re-enrollment rules
default consumers into lower-cost or more generous plans; promote
consumer access to affordable, high-quality coverage; and increase
consumer understanding of their re-enrollment options by developing
additional consumer notices and guidance.
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\170\ CMS (2022). Qualified Health Plan Certification Website.
https://www.qhpcertification.cms.gov/s/Plan%20Crosswalk.
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We seek comment on this proposal. We also seek comments on using
network IDs to determine the most similar network. Consistent with the
definition of a product at Sec. 144.103, the product ID accounts for
different product network types (for example, HMO, PPO, etc.) whereas
network IDs account for specific provider differences. As discussed
earlier, in situations where the enrollee would not be auto re-enrolled
into their current QHP, HHS intends to place enrollees into a plan with
the same network ID as their current QHP to ensure enrollee are being
auto re-enrolled into plans with the most similar network. We
particularly solicit comments on how States review network IDs and the
criteria or thresholds States use to determine whether a new network ID
is warranted, for example, whether States require that an issuer create
a new network ID if there is a five percent difference in the providers
covered under a network.
Additionally, HHS is considering whether for future years it would
be appropriate to incorporate net premium and total out-of-pocket cost
throughout the Exchange re-enrollment hierarchy. We solicit comments on
amending the hierarchy at Sec. 155.335(j), for future plan years, to
also allow the Exchange take the following actions in the following
circumstances: (1) if the enrollee's current plan is not available,
regardless of income-based CSR eligibility, direct re-enrollment to a
plan at a higher metal level than their current QHP, with a lower or
equivalent net premium and total out-of-pocket cost, within the same
product, network, and QHP issuer; (2) if the enrollee's current plan is
not available and the enrollee does not have a plan at a higher metal
level than their current QHP with a lower or equivalent net premium and
total out-of-pocket cost, regardless of income-based CSR eligibility,
direct re-enrollment to a plan at the same metal level as their current
QHP, with a lower or equivalent net premium and total out-of-pocket
cost, within the same product, network, and
[[Page 78264]]
QHP issuer; and (3) if a plan at the same metal level as their current
QHP is not available and the enrollee is not income-based CSR eligible,
direct re-enrollment to a QHP that is one metal level higher or lower
than the enrollee's current QHP, with a lower or equivalent net premium
and total out-of-pocket cost, under the same product, network, and
issuer. For example, an Exchange could consider re-enrolling a current
gold QHP enrollee into another available gold QHP, within the
enrollee's service area and current product that is issued by the same
QHP issuer that has a lower or equivalent net premium and out-of-pocket
cost. We also solicit comments on re-enrolling consumers into the
lowest cost silver plan in the following year if the consumer chose the
lowest cost silver plan in the current plan year. Due to operational
complexities, we seek comment on whether the actuarial value (AV) of a
plan should be used as a proxy for estimating the total costs that an
enrollee may be subject to under a given plan.\171\ Specifically, we
solicit comments on whether the Exchange should ensure that the net
premium of the higher AV plan is less than or equal to the net premium
of the default plan or use net premium and total out-of-pocket cost
calculations to determine if enrollees should be upgraded to a higher
metal level in future plan years.
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\171\ Actuarial value refers to the percentage of total average
costs for covered benefits that a plan will cover. However, the
enrollee could be responsible for a higher or lower percentage of
the total costs of covered services for the year, depending on their
actual health care needs and the terms of the insurance policy.
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We also seek comments on whether 73 percent CSR plan variation-
eligible enrollees should be re-enrolled into silver plan variations or
gold level plans since in some cases gold plans may be more affordable
than silver plan variations for 73 percent CSR-eligible enrollees.
Additionally, we solicit comments on the States' process for
calculating total out-of-pocket cost to understand if, and to what
extent, the States' methodology for calculating total out-of-pocket
costs vary. Furthermore, we solicit comment on whether the re-
enrollment hierarchy should also factor in potential out-of-pocket
costs, not attributable to cost sharing, such as balance billing, and
if so, how.
HHS also seeks broad comment on alternative auto-enrollment
policies that we should consider in future years.\172\ For example, we
are curious about interested parties' thoughts on an auto-enrollment
policy under which consumers who have entered delinquency on their QHP
premiums would be auto-enrolled into QHPs with no net premium after
application of APTC (referred to as zero-dollar plans). In accordance
with Sec. Sec. 155.430(b)(2)(ii) and 156.270, a QHP/SADP may terminate
an enrollee's coverage for non-payment of premiums, subject to certain
conditions. Specifically, Sec. 156.270(d) requires issuers to observe
a three-consecutive-month grace period before terminating coverage for
those enrollees who are eligible for, and have elected to receive, APTC
and who, upon failing to timely pay their premiums, are receiving APTC.
Research suggests that even small net premiums can significantly
decrease enrollment and that this could be because paying even a small
premium requires enrollees to take additional action.\173\ \174\
Enrollees may experience life changes that make it challenging to pay
their monthly premiums on an ongoing basis. Currently, the Exchanges on
the Federal platform only track nonpayment once the three-month APTC
grace period has expired, and do not know when the enrollee first
becomes delinquent on payment of premiums. Since providers are notified
when an individual is in the second and third month of the grace
period, they know that claims may not be paid and may require that the
enrollee pay in full at the point of service. A potential challenge
with auto enrolling enrollees into zero-dollar premium plans, with
retroactive coverage, if they go into delinquency is that re-processing
any claims for those enrollees able to self-pay during the pended
months would be difficult if the zero-dollar premium auto-assignment
was to the original issuer and would be especially burdensome if the
new plan was issued by another issuer. We solicit comments on if auto
enrolling enrollees into zero-dollar premium plans if they go into
delinquency should be prospective or retroactive. In order to mitigate
the barriers enrollees face to enroll, effectuate, and maintain
coverage, HHS is considering enrolling consumers who enter delinquency
into zero-dollar plans.
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\172\ HHS seeks comment on all auto-enrollment policies that
could better ensure consumer's continuous access to health coverage,
including policies that may require additional grants of authority
from Congress to HHS.
\173\ Fiedler, M., & McIntyre, A. (2022, September 13). Tweaking
the marketplace enrollment process could magnify effects of larger
premium tax credits. Brookings. https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2022/09/13/tweaking-the-marketplace-enrollment-process-could-magnify-effects-of-larger-premium-tax-credits/.
\174\ Drake, C., Cai, S., Anderson, D., and Sacks, D. (2021,
October 22). Financial Transaction Costs Reduce Benefit Take-Up:
Evidence from Zero-Premium Health Plans in Colorado. SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3743009.
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We also solicit comments on enrolling consumers into zero dollar
plans if they fail to make a binder payment. Sometimes QHP applicants
select plans, but fail to make a binder payment to effectuate coverage,
and thus have their coverage canceled by the issuer. As mentioned
previously in this proposed rule, enrollees face non-financial burdens
that cause them to miss these payments or in some cases fail to
complete the enrollment process. As such, it is likely that by
alleviating or eliminating these non-financial burdens, some enrollees
would choose to enroll in coverage. We request comments on these
proposals.
7. Special Enrollment Periods (Sec. 155.420)
a. Use of Special Enrollment Periods by Enrollees
We propose two technical corrections to Sec. 155.420(a)(4)(ii)(A)
and (B) to align the text with Sec. 155.420(d)(6)(i) and (ii). The
proposed revisions would clarify that only one person in a tax
household applying for coverage or financial assistance through the
Exchange must qualify for a special enrollment period under paragraphs
(d)(6)(i) and (ii) in order for the entire household to qualify for the
special enrollment period.
As discussed in previous rulemaking, certain SEPs under Sec.
155.420(d) are available to an entire tax household applying for
coverage or financial assistance through the Exchange when a qualified
individual or the qualified individual's dependent satisfies specified
requirements (rather than when the qualified individual and the
qualified individual's dependent satisfy such requirements).\175\ In
the 2022 Payment Notice (86 FR 24140), we finalized revisions to Sec.
155.420(a)(4)(ii)(C) to update the language from ``if an enrollee and
his or her dependents'' to ``if an enrollee or his or her dependents''
to align with the regulatory text for triggering events under Sec.
155.420(d)(6)(i) and (ii), but we neglected to propose and finalize
similar but necessary changes to the text of Sec. 155.420(a)(4)(ii)(A)
and (B) and noted that we intended to propose these changes in future
rulemaking. Therefore, to align the text of Sec. 155.420(a)(4)(ii)(A)
and (B) with the triggering event provisions under Sec.
155.420(d)(6)(i) and (ii), we are
[[Page 78265]]
proposing two technical corrections to Sec. 155.420(a)(4)(ii)(A) and
(B) by updating the sentence at paragraph (a)(4)(ii)(A) from ``if an
enrollee and his or her dependents'' to ``if an enrollee or his or her
dependents'' and by updating the sentence at paragraph (a)(4)(ii)(B)
from ``if an enrollee and his or her dependents'' to ``if an enrollee
or his or her dependents.'' Because these are two technical changes, we
do not anticipate that it will impact Exchanges' operations or
messaging.
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\175\ See 78 FR 42262. Also, the 2017 Market Stabilization Rule
used the phrase ``if an enrollee or his or her dependent'' when
describing the rule that would be finalized at what is now paragraph
Sec. 155.420(a)(4)(ii)(A), See 82 FR 18359.
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We seek comment on this proposal.
b. Effective Dates for Qualified Individuals Losing Other Minimum
Essential Coverage (Sec. 155.420(b))
We are proposing amendments to the coverage effective date rules at
Sec. 155.420(b)(2)(iv) to permit Exchanges the option to offer earlier
coverage effective start dates for consumers attesting to a future loss
of MEC. Doing so could mitigate coverage gaps when consumers lose forms
of MEC (other than Exchange coverage) mid-month and allow for more
seamless transitions from other coverage to Exchange coverage. We are
aware that consumers may face gaps in coverage because current coverage
effective date rules do not allow for retroactive or mid-month coverage
effective dates for consumers whose other coverage ends mid-month.
Under current rules, the earliest start date for Exchange coverage is
the first day of the month following the date of loss of MEC. We are
aware that in some States, Medicaid or CHIP is regularly terminated
mid-month, so we are soliciting input on whether the proposed change
would help consumers, especially those impacted by Medicaid/CHIP
unwinding, to seamlessly transition from another form of MEC to
Exchange coverage.
Consumers losing MEC, such as coverage through an employer,
Medicaid, or CHIP, already qualify for a special enrollment period
under Sec. 155.420(d)(1) and may report a loss of MEC to Exchanges and
select a QHP up to 60 days before or 60 days after their loss of MEC.
Exchanges must generally provide a regular coverage effective date as
described in Sec. 155.420(b)(1): for a QHP selection received by the
Exchange between the 1st and the 15th day of any month, the Exchange
must ensure a coverage effective date of the 1st day of the following
month; and for a QHP selection received by the Exchange between the
16th and the last day of any month, the Exchange must ensure a coverage
effective date of the 1st day of the second following month. However,
Exchanges must provide special coverage effective dates for certain
special enrollment period types including loss of MEC, as described in
Sec. 155.420(b)(2), and may elect to provide coverage effective dates
earlier than those specified in Sec. 155.420(b)(1) and (2)(i), as
described in Sec. 155.420(b)(3). The loss of MEC coverage effective
dates are generally governed by Sec. 155.420(b)(2)(iv). Currently, for
all Exchanges, consumers who report a future loss of MEC and select a
plan on or before the loss of MEC are provided an Exchange coverage
effective date of the 1st of the month after the date of loss of MEC,
pursuant to Sec. 155.420(b)(2)(iv). For example, if a consumer reports
on June 1st that they will lose MEC on July 15th and they make a plan
selection on or before July 15th, Exchange coverage will be effective
August 1st. The consumer in this case cannot avoid a gap in coverage of
more than two weeks.
For consumers reporting a loss of MEC that occurred up to 60 days
in the past, Exchanges must ensure that coverage is effective in
accordance with Sec. 155.420(b)(1) (the regular coverage effective
dates described above) \176\ through a cross reference from Sec.
155.420(b)(2)(iv). Alternatively, Exchanges can offer prospective
coverage effective dates so that coverage is effective the first of the
month following plan selection, at the option of the Exchange. See
Sec. 155.420(b)(2)(i). For example, if a consumer reports on July 1st
a past loss of MEC that occurred on June 30th and selects a plan on
July 15th, Exchange coverage is effective August 1st.
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\176\ For example, if a consumer selects a plan on May 2nd,
coverage will be effective June 1st, if a consumer selects a plan on
May 16th, coverage will be effective July 1st.
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Because current regulation at Sec. 155.420(b)(2)(iv) does not
allow for retroactive or mid-month coverage effective dates, consumers
may experience gaps in coverage, especially those consumers who live in
States that allow mid-month terminations of Medicaid or CHIP coverage.
Further, after the COVID-19 PHE comes to an end, HHS expects to see a
higher than usual volume of individuals transitioning from Medicaid and
CHIP coverage to the Exchange. This is because States will be required
to return to normal eligibility and enrollment operations after the
expiration of the continuous enrollment condition that provided a
temporary increase in Federal Medicaid matching funds authorized by the
Families First Coronavirus Response Act (FFCRA),\177\ and we expect
that many individuals experienced changes in income or household size
since the continuous enrollment condition took effect. Consumers who
become ineligible for Medicaid are at risk of being uninsured for a
period of time and postponing use of health care services, which can
lead to poorer health outcomes, if they are not able to successfully
transition between coverage programs without coverage gaps.
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\177\ FFCRA. Public Law 116-127 (2020). These provisions enabled
States to receive the temporary Federal Medical Assistance
Percentage increase under that section.
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Therefore, to ensure that qualifying individuals whose prior MEC
ends mid-month are able to seamlessly transition from non-Exchange MEC
to Exchange coverage as quickly as possible with no coverage gaps, we
are proposing to revisions to paragraph (b)(2)(iv). Specifically, we
propose to add additional language to paragraph (b)(2)(iv) that if a
qualified individual, enrollee, or dependent, as applicable, loses
coverage as described in paragraph (d)(1), experiences a change in
eligibility for APTC per paragraph (d)(6)(iii), or experiences a loss
of government contribution or subsidy per paragraph (d)(15), and if the
plan selection is made on or before the day of the triggering event,
the Exchange must ensure that the coverage effective date is the 1st
day of the month following the date of the triggering event (as
currently required under paragraph (b)(2)(iv)) and, at the option of
the Exchange, if the plan selection is made on or before the last day
of the month preceding the triggering event, the Exchange must ensure
that coverage is effective on the first of the month in which the
triggering event occurs. For example, if a consumer attests between May
16th and June 30th that they will lose MEC on July 15th and selects a
plan on or before June 30th, coverage would be effective on August 1st
(first of the month after the last day of prior MEC), or at the option
of the Exchange, on July 1st (the first of the month in which the
triggering event occurs).
We acknowledge that this proposed change may have a limited impact
because many types of coverage do not typically have end dates in the
middle of the month. However, for those that it does impact, the
proposed change would provide earlier access to coverage and APTC and
CSR. Under the current rule at paragraph (b)(2)(iv), consumers
reporting a future loss of MEC may have to wait weeks for their
coverage to start, even if they were proactive and attested to a
coverage loss as soon as they became aware. We do not believe that this
proposed change introduces
[[Page 78266]]
program integrity concerns because it only applies to those consumers
who report a future loss of MEC and have been determined eligible for
an SEP and found eligible for an Exchange QHP, fall within their 60-day
reporting window for reporting a future loss of MEC, and select a plan
on or before the last day of the month preceding the loss of MEC.
We believe this proposed change would provide additional
flexibilities for Exchanges as the proposed changes to paragraph
(b)(2)(iv) would provide Exchanges with the option to use the current
coverage effective dates available under current paragraph (b)(2)(iv)
as well as the option to provide earlier coverage effective dates for
some consumers who attest to a future loss of MEC. We also acknowledge
that if Exchanges do elect an earlier coverage effective date as we
propose, this would result in some consumers paying for both an
Exchange QHP and their other MEC for a short period of dual enrollment.
However, we do not believe the partial-month period of dual enrollment
should bar an enrollee from APTC or CSR benefits for the Exchange
coverage if otherwise eligible. Given that consumers impacted by the
proposed change to Sec. 155.420(b)(2) will have other MEC for only
part of the first month of their QHP coverage, Exchanges could look to
the definition of coverage month in 26 CFR 1.36B-3, which states that a
consumer may qualify when not eligible for the full calendar month for
minimum essential coverage, to find a consumer who receives an earlier
effective date under this rule as eligible for APTC and CSRs for the
first month of their QHP coverage, despite the brief period of
overlapping coverage. In order to clarify our interpretation that
consumers may be eligible for APTC and CSRs as of the earlier SEP
effective date proposed in this rulemaking, we are considering whether
any corresponding amendments to APTC eligibility rules may be necessary
and plan to codify such changes in the final rule as needed. For
example, since Exchange regulations regarding APTC eligibility do not
reference the statutory definition of a coverage month, we seek comment
on whether Exchange regulations at Sec. 155.305(f) should be revised
to correspond with the statutory definition of a coverage month.
We believe the largest beneficiaries of these proposed changes
would be consumers whose States permit mid-month terminations of
Medicaid or CHIP coverage. We seek comment from interested parties on
the frequency of mid-month coverage end dates, potential program
integrity issues associated with earlier effective dates, and on
instances when the expedited effective date would or would not mitigate
coverage gaps or introduce coordination of benefits issues.
Under Sec. 147.104(b)(5), applicable to health insurance issuers
that offer health insurance coverage in the individual, small group, or
large group market in a State, coverage elected during limited open and
special enrollment periods described in Sec. 147.104(b)(2) and (3)
must become effective consistent with the dates described in Sec.
155.420(b) (this excludes the special enrollment period under Sec.
155.420(d)(6) which is explicitly excepted from Sec. 147.104(b)(2)).
Therefore, with the exception of the triggering event in Sec.
155.420(d)(6), which is limited to coverage purchased through an
Exchange, these proposed changes to the effective date for future loss
of MEC would be effective for individual market coverage purchased off
an Exchange, as well as for coverage purchased through an Exchange, and
the proposed option of the Exchange to specify the effective date would
refer to an option of the applicable State authority with respect to
individual market coverage purchased off an Exchange.
While we also considered proposing retroactive coverage effective
dates for consumers reporting past loss of MEC, we decided to limit
these proposed changes to future loss of MEC to avoid adverse selection
and reduce burden on Exchanges, States, and issuers, as allowing for
retroactive coverage start dates can be operationally complex for
Exchanges to implement and for issuers to process. Also, we believe the
proposed changes would limit the financial burden on consumers, as
consumers who report a loss of MEC in the past 60 days may not want or
be able to afford to pay past premiums to effectuate coverage
retroactively. While we also considered providing mid-month coverage
effective dates for consumers who lose MEC mid-month, this would have
been disadvantageous to affording coverage given that IRS regulations
at 26 CFR 1.36B-3 generally provide that PTC is only available for a
month when, as of the first day of the month, the individual is
enrolled in a plan through the Exchange. We seek comment on additional
regulatory changes that would improve transitions to Exchange coverage
and minimize periods of uninsurance for consumers who report a loss of
MEC to the Exchange.
We seek comment on these proposals.
c. Special Rule for Loss of Medicaid or CHIP Coverage (Sec.
155.420(c))
In order to mitigate coverage gaps when consumers lose Medicaid or
CHIP coverage and to allow for a more seamless transition into Exchange
coverage, we are proposing a new special rule under Sec. 155.420(c)(6)
to provide more time for consumers who lose Medicaid or CHIP coverage
that is considered MEC as described in Sec. 155.420(d)(1)(i) to report
their loss of coverage and enroll in Exchange coverage. The proposed
regulation would align the special enrollment period window following
loss of Medicaid or CHIP with the reconsideration period available
under 42 CFR 435.916(a).
Currently, qualified individuals or their dependents who lose MEC,
such as coverage through an employer or most kinds of Medicaid or CHIP,
qualify for a special enrollment period under Sec. 155.420(d)(1)(i)
and may report a loss of MEC to Exchanges up to 60 days before and up
to 60 days after their loss of MEC. 45 CFR 155.420(c)(2). When these
qualified individuals or their dependents are disenrolled from Medicaid
or CHIP based on modified adjusted gross income (MAGI) following an
eligibility redetermination, 42 CFR 435.916 requires that the State
Medicaid agency provide a 90-day reconsideration window, which allows
former beneficiaries to provide the necessary information to their
State Medicaid agency to re-establish their eligibility for Medicaid or
CHIP without having to complete a new application. During the 90 days
following a Medicaid or CHIP denial or disenrollment, it would be
reasonable for a consumer who becomes uninsured to proceed first by
attempting to regain coverage through Medicaid or CHIP. However,
because the special enrollment period for loss of MEC at Sec.
155.420(d)(1)(i) currently lasts only 60 days after the loss of
Medicaid or CHIP coverage, by the time that a consumer exhausts their
attempt to regain coverage through Medicaid or CHIP (which they must do
within 90 days of loss of Medicaid or CHIP), they may have missed their
window to enroll in Exchange coverage through a special enrollment
period based on loss of MEC (60 days after loss of Medicaid or CHIP).
In further support of this proposal, we are aware that most
consumers losing Medicaid or CHIP may not transition to Exchange
coverage in a timely manner. A recent report published by the Medicaid
and CHIP Payment and Access Commission (MACPAC) \178\
[[Page 78267]]
found that only about three percent of beneficiaries who were
disenrolled from Medicaid or CHIP in 2018 enrolled in Exchange coverage
within 12 months. The 2018 data also showed that more than 70 percent
of adults and children moving from Medicaid to Exchange coverage had
gaps in coverage for an average of about three months.\179\ While there
are likely several reasons that consumers did not transition directly
from Medicaid or CHIP coverage to Exchange coverage in 2018, the
proposed special rule at Sec. 155.420(c)(6) has the potential to
mitigate an administrative hurdle that may pose a barrier to enrolling
in Exchange coverage in a timely manner and with little to no coverage
gaps.
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\178\ Medicaid and CHIP Payment Access Commission. (2022, July).
Transitions Between Medicaid, CHIP, and Exchange Coverage. https://www.macpac.gov/wp-content/uploads/2022/07/Coverage-transitions-issue-brief.pdf.
\179\ Ibid.
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Therefore, to ensure that qualifying individuals are able to
seamlessly transition from Medicaid or CHIP coverage to Exchange
coverage as quickly as possible to and mitigate the risk of coverage
gaps, we propose to create new paragraph (c)(6) which would add
language stating that effective January 1, 2024, Exchanges will have
the option to implement a new special rule that consumers eligible for
an SEP under Sec. 155.420(d)(1)(i) due to loss of Medicaid or CHIP
coverage that is considered MEC will have up to 90 days after their
loss of Medicaid or CHIP coverage to enroll in an Exchange QHP. This
proposal would align the special enrollment period window following
loss of Medicaid or CHIP with the reconsideration period available
under 42 CFR 435.916(a). We also propose adding language to paragraph
(c)(2) to clarify that a qualified individual or his or her dependent
who is described in paragraph (d)(1)(i) continues to have 60 days after
the triggering event to select a QHP unless an Exchange exercises the
option proposed in new paragraph (c)(6). We believe these proposed
changes would have a positive impact on consumers while providing
additional flexibilities for Exchanges as they can choose whether to
offer this special rule or not, depending on enrollment trends for
their respective populations.
We seek comment on this proposal.
d. Plan Display Error Special Enrollment Periods (Sec. 155.420(d))
We propose amending Sec. 155.420(d)(12) to align the policy of the
Exchanges for granting SEPs to persons who are adversely affected by a
plan display error with current plan display error SEP operations. We
propose amending paragraph (d)(12) by changing the subject of the
regulation to focus on the affected enrollment, not the affected
qualified individual or enrollees.\180\
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\180\ In this section, ``consumer'' may be used as shorthand for
``qualified individual, enrollee, or their dependents.''
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In accordance with Sec. 155.420, SEPs allow a qualified individual
or enrollee who experiences certain qualifying events to enroll in, or
change enrollment in, a QHP through the Exchange outside of the annual
OEP. In 2016, CMS added warnings on HealthCare.gov about inappropriate
use of SEPs, and tightened certain eligibility rules.\181\ We sought
comment on these issues in the Patient Protection and Affordable Care
Act; HHS Notice of Benefit and Payment Parameters for 2018 proposed
rule (81 FR 61456), especially on data that could help distinguish
misuse of SEPs from low take-up of SEPs among healthier eligible
individuals; evidence on the impact of eligibility verification
approaches, including pre-enrollment verification, on health insurance
enrollment, continuity of coverage, and risk pools (whether in the
Exchange or other contexts); and input on what SEP-related policy or
outreach changes could help strengthen risk pools. We examined
attrition rates in our enrollment data and have found that the
attrition rate for any particular cohort is no different at the end of
the year than at points earlier in the year, suggesting that any such
gaming, if it is occurring, does not appear to be occurring at
sufficient scale to produce statistically measurable effects.
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\181\ February 25, 2016. Fact Sheet: Special Enrollment
Confirmation Process. Available online at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-02-24.html.
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In the Patient Protection and Affordable Care Act; HHS Notice of
Benefit and Payment Parameters for 2018; Amendments to Special
Enrollment Periods and the Consumer Operated and Oriented Plan Program
(81 FR 94058, 94127 through 94129), CMS codified the plan display error
SEP in Sec. 155.420(d)(12) to reflect that plan display error SEP may
be triggered when a qualified individual or enrollee, or their
dependent, adequately demonstrates to the Exchange that a material
error related to plan benefits, service area, or premium (hereinafter
``plan display error'') influenced the qualified individual's,
enrollee's, or their dependents' decision to purchase a QHP through the
Exchange. This generally allowed consumers who enrolled in a plan for
which HealthCare.gov displayed incorrect plan benefits, service area,
cost-sharing, or premium, and who could demonstrate that such incorrect
information influenced their decision to purchase a QHP through the
Exchange, to select a new plan that better suited their needs.
In the same final rule, CMS also finalized the policies at Sec.
147.104(b)(2) to make clear that the plan display error SEP only
creates an opportunity to enroll in coverage through the Exchange, and
clarified that the special enrollment period is limited to plan display
errors presented to the consumer by the Exchange at the point at which
the consumer enrolls in a QHP (81 FR at 94128 through 94129). By this
we meant that the consumer must have already completed their Exchange
application, the Exchange must have determined that the consumer is
eligible for QHP coverage and any applicable APTC or CSRs, and the
consumer must have viewed the material error while making a final
selection to enroll in the QHP.
Currently, Sec. 155.420(d)(12) requires the qualified individual,
enrollee, or their dependent, to adequately demonstrate to the Exchange
that a material error related to plan benefits, service area, or
premium influenced the qualified individual's or enrollee's decision to
purchase a QHP through the Exchange. However, we have found that
consumers may benefit when other interested parties, besides a
qualified individual, enrollee, or their dependents, can demonstrate to
the Exchange that a material plan error influenced the qualified
individual's, enrollee's, or their dependents' enrollment decision to
purchase a QHP through the Exchange. In our experience, plan display
errors may not be obvious or detectable to the consumer and the
Exchange until after the enrollment has been impacted by the error
related to plan benefits, service area, premiums, or even cost-sharing.
In majority of the plan display errors, the issuer or State regulator
has identified the display error. For example, a plan display error can
influence a consumer's enrollment without the consumer's knowledge when
a consumer enrolls in a QHP, pays an incorrect premium amount that was
submitted to and displayed on HealthCare.gov, and the plan display
error regarding the premium amount is not known until the enrollment is
cancelled by the issuer for non-payment of premiums. In this case, the
plan display error would not be discovered until the issuer
investigates the reason for cancellation. The issuer is the only party
that can identify that the plan display error was caused by
[[Page 78268]]
incorrect premium amounts between the issuer's records and data
submitted to HealthCare.gov, and that can notify CMS of the plan
display error. CMS can then work with the issuer to implement its
established data correction processes to make the necessary corrections
to the Healthcare.gov. This process includes CMS investigating the plan
display error to determine if it is reasonable to expect that the
material error has influenced the enrollment or the consumer's
purchasing decision. In this example, CMS is likely to determine that
the plan display error impacted the consumer's purchasing decision
because the consumer was presented erroneous information when
purchasing the plan and likely made an enrollment decision based on the
premium and cost-sharing amount. Issuers that submit a data change
request that adversely impacts the consumers' enrollment on
HealthCare.gov are required to notify consumers of the plan display
error and the remediation.
Since qualified individuals, enrollees, and their dependents are
not always the parties best suited to demonstrate to the Exchange that
a material plan display has influenced their enrollment, we propose
revising paragraph (d)(12) to remove the burden solely from the
qualified individual, enrollee, and their dependents. We propose adding
cost-sharing to the list of plan display errors which is displayed on
HealthCare.gov alongside plan benefits, service area, and premiums, and
equally influence the consumer's purchasing decision or enrollment.
Specifically, we propose revising Sec. 155.420(d)(12) to reflect that
an SEP is available when the enrollment in a QHP through the Exchange
was influenced by a material error related to plan benefits, cost-
sharing, service area, or premium. We propose to consider a material
error to be one that is likely to have influenced a qualified
individual's, enrollee's, or their dependent's enrollment in a QHP.
It should be noted that an error related to plan benefits, service
area, cost-sharing or premium does not trigger an SEP when the error is
not material, such as when the error is honored as it was displayed.
Errors related to plan benefits, service area, cost-sharing or premium
include situations where coding on HealthCare.gov causes benefits to
display incorrectly, or where CMS identifies incorrect QHP data
submission or discrepancy between an issuer's QHP data and its State-
approved form filings.\182\ If the error involves information that
displays on HealthCare.gov, CMS works with the issuer and applicable
State's regulatory authority to arrive at a solution that has minimal
impact on consumers and affirms, to the extent possible, that they are
not negatively affected by the error. Generally, the most
straightforward and consumer-friendly resolution is for issuers to
honor the benefit as it was displayed incorrectly for affected
enrollees, if permitted by the applicable State regulatory authority.
If the issuer chooses to honor the error and administers the plan as it
was incorrectly displayed for the affected consumers, CMS will not
provide the consumers with an SEP. The proposed revision to the
regulation would be consistent with this approach, as the issuer's
honoring of the error would effectively eliminate the materiality of
the error.
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\182\ See the following: CMS. (2022, July 28). 2022 Federally-
facilitated Exchange (FFE) and Federally-facilitated Small Business
Health Options Program (FF-SHOP) Enrollment Manual. (Section 6.8.1,
p. 82). https://www.cms.gov/files/document/ffeffshop-enrollment-manual-2022.pdf.
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Our proposal would have minimal operational impact, as interested
parties currently have the infrastructure to demonstrate to the
Exchange that a plan display error influenced a qualified individual's,
enrollee's, or their dependents' decision to purchase a QHP through the
Exchange. CMS currently engages with partners and interested parties
throughout the plan display error SEP process, ensuring that issuers
and States are notified of CMS decisions as appropriate. States have
access to the status of all applicable plan display error SEPs and can
track the progress of the plan display error SEPs until remediation. In
addition, under Sec. 156.1256, issuers ``must notify their enrollees
of material plan or benefit display errors and the enrollees'
eligibility for an [SEP] . . . within 30 calendar days after being
notified by the [FFE] that the error has been fixed, if directed to do
so by the [FFE].'' Thus, impacted consumers are also currently being
notified and made aware of plan display error SEPs policies if their
plan data had a significant, material error. We expect that this
experience is similar on all Exchanges, and therefore are proposing
that this amendment to the description of the SEP trigger would apply
for all Exchanges.
We request comment on this proposal.
Additionally, HHS is considering for future years, whether
consumers whose providers leave their network mid-year should be
eligible for an SEP. Significant network changes, whether it is
initiated by the QHP issuer or the provider, can occur at any point
during the year. Under Medicare Advantage regulation 42 CFR
422.62(b)(23), individuals affected by a significant change in their
plan's provider network are eligible for an SEP that permits re-
enrollment into another Medicare Advantage plan or to original
Medicare. CMS is seeking comments on whether QHP consumers similarly
affected by a significant change in their plan's provider network
should be eligible for an SEP. We also solicit comment on whether we
should consider an enrollee who is impacted by a provider contract
termination to be someone who is experiencing an exceptional
circumstance, as specified in Sec. 155.420(d)(9), or should be
eligible for a new SEP for provider contract terminations, and what
standards for when termination of a provider from the network should
serve as a basis for SEP eligibility.
8. Termination of Exchange Enrollment or Coverage (Sec. 155.430)
a. Prohibition of Mid-Plan Year Coverage Termination for Dependent
Children Who Reach the Maximum Age
We propose to add Sec. 155.430(b)(3) to explicitly prohibit QHP
issuers participating in Exchanges on the Federal platform from
terminating coverage of dependent children before the end of the
coverage year because the child has reached the maximum age at which
issuers are required to make coverage available under Federal or State
law. The ACA amended the PHS Act to require at section 2714
(implemented at Sec. 147.120) that group health plans and health
insurance issuers offering group or individual health insurance
coverage that offer dependent child coverage must make such coverage
available for an adult child until age 26. The ACA also adds section
9815(a)(1) to the Code and section 715(a)(1) to the Employee Retirement
Income Security Act to incorporate the provisions of part A of title
XXVII of the PHS Act (including section 2714) and make them applicable
to group health plans, and health insurance issuers providing health
insurance coverage in connection with group health plans. This proposal
to amend Sec. 155.430 would not change the requirements under Sec.
147.120 nor would it affect parallel provisions in 26 CFR 54.9815-2714
and 29 CFR 2590.715-2714. Some States have established higher age
limits, and some issuers adopt higher than legally required age limits
as a business decision.
In operationalizing this regulation on the Federal eligibility and
enrollment platform, HHS has required issuers that
[[Page 78269]]
cover dependent children to provide coverage to dependent children
until the end of the plan year in which they turn 26 (or the maximum
age under State law), although this is not specifically required under
Sec. 147.120. Nevertheless, interested parties have requested that
HHS' policy be codified in regulation for clarity. Doing so would
reduce uncertainty for Federally-facilitated Exchange issuers regarding
their obligation under Sec. 155.430 to maintain coverage for a
dependent child who has turned 26 (or the maximum age under State law)
until the end of the plan year (unless coverage is otherwise permitted
to be terminated). Likewise, it would provide clarity for enrollees
themselves who may be uncertain about the rules governing their ability
to remain enrolled as a dependent child until the end of the plan year
in which they reach the maximum age (that is, age 26 or the maximum age
under State law). This proposal would codify the current implementation
of the Federal platform.
Payment of APTC on the Exchange, in addition to the way the Federal
eligibility and enrollment platform has operationalized Exchange
eligibility determinations, warrants a different policy for issuers of
individual market QHPs on the Exchanges with regard to child dependents
turning age 26 (or the maximum age under State law). This is especially
true when comparing individual market Exchange coverage to the employer
market, where the employer is typically contributing toward the cost of
child dependent coverage, but only until the child dependent attains
the maximum dependent age under the group health plan; in the Exchange,
the dependent child can receive a portion of the family's APTC for the
entire plan year. Exchange eligibility determinations for enrollment
through the Exchange and for APTC are based on the tax household, and
the determination is made for the entire plan year unless it is
replaced by a new determination of eligibility, such as when a change
is reported by the enrollee or identified by the Exchange in accordance
with Sec. 155.330. The annual basis of Exchange eligibility
determinations, absent a new determination, is made clear by the annual
eligibility redetermination requirements in Sec. 155.335. Eligibility
standards for enrollment through the Exchange and for APTC make no
mention of an issuer's business rules regarding dependent
relationships, or otherwise regarding the specific relationships
between applicants. Additionally, Exchange eligibility criteria do not
prohibit allocation of APTC to dependent children enrollees over the
age of 26. Every family member who is part of the tax household must be
listed on the Exchange application for coverage, and the IRS has no
maximum age cap for tax dependents. Because eligibility determinations
are made for the entire plan year, the Exchange will generally continue
to pay the issuer APTC, including the portion attributable to the
dependent child, through the end of the plan year in which the
dependent child turns 26, or through the end of the plan year in which
the dependent reaches the maximum age required under State law.
In developing the Federal eligibility and enrollment platform, HHS
directed QHP issuers on Exchanges that use the Federal platform to
honor the eligibility determination made by the Exchange. This
requirement applies whether or not the enrollees are determined
eligible for APTC. The situation for issuers on these Exchanges thus
differs from those in the off-Exchange insurance market, where
enrollees do not receive APTC, and in the group insurance market, where
contributions by employers may end on the day in which the dependent
child turns 26 (or the maximum age under State law).
To clarify, in Exchanges on the Federal platform, during the annual
re-enrollment process, enrollees who, during the plan year, have
reached age 26 (or the maximum age under State law) are, if otherwise
eligible, re-enrolled into a separate policy (following the re-
enrollment hierarchy at Sec. 155.335(j)) beginning January 1st of the
following plan year, with APTC, if applicable.
Additionally, consistent with existing policy, in circumstances in
which a household with an dependent child who has reached age 26 (or
the maximum age under State law) reports a change in circumstance to
the Exchanges on the Federal platform during the plan year after having
reached that age and becomes eligible for an SEP, the dependent child
who has exceeded age 26 (or the maximum age under State law) will have
their eligibility redetermined in accordance with Sec. 155.330, the
dependent child's coverage under that policy will be terminated, and
they will be enrolled into their own policy, subject to payment of a
binder payment. If, however, the household is not eligible for an SEP
as a result of the change, the original eligibility determination from
the initial enrollment will remain in place and the dependent child
will remain as a covered dependent on the original policy.
Therefore, we propose to add new paragraph (b)(3) to Sec. 155.430
to expressly prohibit QHP issuers participating in Exchanges on the
Federal platform from terminating coverage until the end of the plan
year for dependent children because the dependent child has reached age
26 (or the maximum age under State law). This change would provide
clarity to issuers participating in Exchanges on the Federal platform
regarding their obligation to maintain coverage for dependent children,
as well as to enrollees themselves regarding their ability to maintain
coverage. In addition, we propose to make implementation optional for
State Exchanges that wish to establish a similar prohibition.
We request comments on this proposal.
9. General Eligibility Appeals Requirements (Sec. 155.505)
We propose revising Sec. 155.505(g) to acknowledge the ability of
the CMS Administrator to review Exchange eligibility appeals decisions
prior to judicial review. Section 155.505 describes the general
Exchange eligibility appeals process, including applicants' and
enrollees' right to appeal certain Exchange eligibility determinations
specified in Sec. 155.505(b), and the obligation of the HHS appeals
entity and State Exchange appeals entities to conduct certain Exchange
eligibility appeals as described in Sec. 155.505(c). In accordance
with Sec. 155.505(g), appellants may seek judicial review of an
Exchange eligibility appeal decision made by the HHS appeals entity and
State Exchange appeals entities to the extent it is available by law.
Currently, the regulation specifies no other administrative
opportunities for appellants to appeal Exchange eligibility appeal
decisions made by the HHS appeals entity. We propose revising this
regulation to acknowledge the ability of the CMS Administrator to
review Exchange eligibility appeals decisions prior to judicial review.
This proposed change would ensure that accountability for the
decisions of the HHS appeals entity is vested in a principal officer,
as well as to bring Sec. 155.505(g) of the appeals process to a more
similar posture as other CMS appeals entities that provide
Administrator review.\183\ Revising the
[[Page 78270]]
regulation would also provide appellants and other parties with
accurate information about the availability of administrative review by
the CMS Administrator if they are dissatisfied with their Exchange
eligibility appeal decision.
---------------------------------------------------------------------------
\183\ Examples include: 42 CFR 405 subpart R (Provider
Reimbursement Review Board); 42 CFR 412 subpart L (Medicare
Geographic Classification Review Board); 42 CFR 430.60-430.104
(Medicaid State Plan Materials/Compliance Determinations); 42 CFR
423.890 (Retiree Drug Subsidy (RDS) Appeals); 42 CFR 411.120-124
(Group Health Plan Non-conformance Appeals); 42 CFR 417.640,
417.492. 417.500, 417.494 (Health Maintenance Organization
Competitive Medical Plan (HMO/CMP) Contract Related Appeals); 42 CFR
423.2345 (Termination of Discount Program Agreement Appeals).
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We seek comment on this proposal.
10. Improper Payment Pre-Testing and Assessment (IPPTA) for State
Exchanges (Sec. Sec. 155.1500 Through 155.1515)
We propose the establishment of the IPPTA, an improper payment
measurement program of APTC, that will include State Exchanges. The
proposed IPPTA would prepare State Exchanges for the planned
measurement of improper payments of APTC, would test processes and
procedures that support HHS' review of determinations of APTC made by
State Exchanges, and would provide a mechanism for HHS and State
Exchanges to share information that would aid in developing an
efficient measurement process. To codify the IPPTA requirements, we
propose to establish new subpart P under 45 CFR part 155.
The Payment Integrity Information Act of 2019 (PIIA) \184\ requires
Federal agencies to annually identify, review, measure, and report on
the programs they administer that are considered susceptible to
significant improper payments. HHS determined that APTC are susceptible
to significant improper payments and are subject to additional
oversight. In accordance with 45 CFR part 155, FFEs, SBE-FPs, and State
Exchanges that operate their own eligibility and enrollment systems
determine the amount of APTC to be paid to qualified applicants. Only
improper payments of APTC made by FFEs and SBE-FPs will be measured and
reported in the Annual Financial Report beginning in 2022 as part of
the Exchange Improper Payment Measurement (EIPM) program. We stated in
the 2023 Payment Notice proposed rule (87 FR 654 through 655) that HHS
was in the planning phase of establishing an improper payment
measurement program that would include State Exchanges--the SEIPM
program. We also stated in the 2023 Payment Notice proposed rule that
HHS had intended to implement the proposed SEIPM program beginning with
the 2023 benefit year. In response to that proposed rule, HHS received
several comments from State Exchanges that indicated concerns with the
proposed requirements, particularly with respect to the SEIPM program's
implementation timeline and proposed data collection processes. For
example, some State Exchanges commented that they would need more time
and information from HHS to prepare for the implementation of the SEIPM
program. We decided not to finalize the proposed rule due to
commenters' concerns surrounding the proposed implementation timeline
and other burdens that would be imposed by the proposed SEIPM program
(87 FR 27281). HHS is now proposing the IPPTA to provide State
Exchanges with more time to prepare for the planned measurement of
improper payments of APTC, to test processes and procedures that
support HHS' review of determinations of APTC made by State Exchanges,
and to provide a mechanism for HHS and State Exchanges to share
information that would aid in developing an efficient measurement
process.
---------------------------------------------------------------------------
\184\ PIIA, 31 U.S.C. 3352 (2020).
---------------------------------------------------------------------------
In 2019, HHS developed an initiative to provide the State Exchanges
with an opportunity to voluntarily engage with HHS to prepare for
future measurement of improper payments of APTC. HHS provided three
options to State Exchanges--program analysis, program design, and
piloting--designed to accommodate the State Exchanges' schedules and
availability to participate in the initiative. Currently, of the 18
State Exchanges, 10 have participated in various levels of engagement.
HHS proposes that the proposed IPPTA would replace the current,
voluntary State engagement initiative. HHS additionally proposes that
activities already completed by State Exchanges as part of the current
voluntary engagement may be used to satisfy elements of the proposed
IPPTA. HHS has determined that participation from all State Exchanges
is required in order to test processes and procedures that would
prepare the State Exchanges for the planned measurement of improper
payments of APTC.
Therefore, we propose to establish a new subpart P under 45 CFR
part 155 (containing Sec. Sec. 155.1500 through 155.1515) to codify
the proposed IPPTA requirements. The proposed regulations at subpart P
would be applicable beginning in 2024 with each State Exchange being
selected to participate for a period of one calendar year which would
occur either in 2024 or 2025.
a. Purpose and Scope (Sec. 155.1500)
We are proposing to add new subpart P to part 155, which would
address various State Exchange and HHS responsibilities. HHS may use
Federal contractors as needed to support the performance of IPPTA.
We are proposing to add new Sec. 155.1500 to convey the purpose
and scope of the IPPTA.
At paragraph (a), we are proposing the purpose and scope of subpart
P as setting forth the requirements of the IPPTA for State Exchanges.
The proposed IPPTA is an initiative between HHS and State Exchanges.
The proposed requirements are intended to prepare State Exchanges for
the planned measurement of improper payments, test processes and
procedures that support HHS' review of determinations of APTC made by
State Exchanges, and provide a mechanism for HHS and State Exchanges to
share information that would aid in developing an efficient measurement
process.
b. Definitions (Sec. 155.1505)
We are proposing to codify the definitions that are specific to
IPPTA and key to understanding the processes and procedures of IPPTA.
We are proposing the definition of ``business rules'' to
mean the State Exchange's internal directives defining, guiding, or
constraining the State Exchange's actions when making eligibility
determinations and related APTC calculations. For example, the internal
directives, methodologies, algorithms, or policies that a State
Exchange applies or executes on its own data to determine whether an
applicant meets the eligibility requirements for a QHP and any
associated APTC would be considered to be a business rule.
We are proposing the definition of ``entity relationship
diagram'' to mean a graphical representation illustrating the
organization and relationship of the data elements that are pertinent
to applications for QHP and associated APTC payments.
We are proposing the definition of ``Pre-testing and
assessment'' to mean the process that uses the procedures specified in
Sec. 155.1515 to prepare State Exchanges for the planned measurement
of improper payments of APTC.
We are proposing the definition of ``Pre-testing and
assessment checklist'' to mean the document that contains criteria that
HHS will use to review a State Exchange's completion of the
requirements of the IPPTA.
We are proposing the definition of ``Pre-testing and
assessment data request form'' to mean the document that
[[Page 78271]]
specifies the structure for the data elements that HHS would require
each State Exchange to submit.
We are proposing the definition of ``Pre-testing and
assessment period'' to mean the timespan during which HHS will engage
in the pre-testing and assessment procedures with a State Exchange. The
pre-testing and assessment period will cover one calendar year.
We are proposing the definition of ``Pre-testing and
assessment plan'' to mean the template developed by HHS in
collaboration with each State Exchange enumerating the procedures,
sequence, and schedule to accomplish the pre-testing and assessment.
We are proposing the definition of ``Pre-testing and
assessment report'' to mean the summary report provided by HHS to each
State Exchange at the end of the State Exchange's pre-testing and
assessment period that will include, but not be limited to, the State
Exchange's status regarding completion of each of the pre-testing and
assessment procedures specified in proposed Sec. 155.1515, as well as
observations and recommendations that result from processing and
testing the data submitted by the State Exchange to HHS. At Sec.
155.1515(g), we are proposing that the pre-testing and assessment
report is intended to be used internally by HHS and each State Exchange
as a reference document for performance improvement. The pre-testing
and assessment report will not be released to the public by HHS unless
otherwise required by law.
c. Data Submission (Sec. 155.1510)
We are proposing to add new Sec. 155.1510 which would address the
data submission requirements to support the IPPTA. Consistent with
this, we are proposing to establish a pre-testing and assessment data
request form to collect and compile information from each State
Exchange. As explained below in section IV., Collection of Information
Requirements, the pre-testing and assessment data request form has been
submitted to OMB for review and approval. As described below, HHS
proposes that each State Exchange submit to HHS a sample of no fewer
than 10 tax household identification numbers (that is, the record of a
tax household that applied for and was determined eligible to enroll in
a QHP and was determined eligible to receive APTC in an amount greater
than $0).
At paragraph (a)(1), we are proposing that a State
Exchange would be required to submit to HHS by the deadline in the pre-
testing and assessment plan the following documentation for their data:
(i) the State Exchange's data dictionary including attribute name, data
type, allowable values, and description; (ii) an entity relationship
diagram, which shall include the structure of the data tables and the
residing data elements that identify the relationships between the data
tables; and (iii) business rules and related calculations.
At paragraph (a)(2), we are proposing that the State
Exchange must use the pre-testing and assessment data request form, or
other method as specified by HHS, to submit to HHS the application data
associated with no fewer than 10 tax household identification numbers
and the associated policy identification numbers that address scenarios
specified by HHS to allow HHS to test all of the pre-testing and
assessment processes and procedures. The proposed scenarios would
include various application characteristics such as household
composition, data matching inconsistencies (for example, SSN,
citizenship, lawful presence, annual income) identified for the
applications, special enrollment period application types (for example,
relocation, marriage), periodic data matching (for example, Medicaid/
CHIP, Medicare, death), application status (for example, policy
terminated, policy canceled), and application types (for example,
initial application). HHS understands that it is unlikely that the
application data associated with a singular tax household could address
all of the characteristics contained in all of the scenarios specified.
Therefore, HHS proposes that while the application data for each tax
household does not need to address all of the scenarios specified, the
application data submitted for no fewer than 10 tax households should,
when taken together as a whole, address all of the characteristics in
all of the scenarios specified. For example, the application data for
one tax household may address lawful presence inconsistency
adjudication but not special enrollment eligibility verification.
Accordingly, the application data for another tax household should
address special enrollment eligibility verification. After receiving
the application data associated with no fewer than 10 tax households
from the State Exchange, HHS would test the data from each of the tax
households against its review procedures to determine if the respective
policy applications fulfill the scenarios. If the submitted application
data does not collectively fulfill the scenarios, HHS would coordinate
with the State Exchange to select additional tax households. For the
data submitted, HHS would also require the State Exchange to provide
digital copies such as PDFs of supporting consumer-submitted
documentation (for example, proof of residency, proof of citizenship).
In proposed Sec. 155.1515(e)(2), HHS proposes that for
each of the tax households, the State Exchange would align and populate
the data in the pre-testing and assessment data request form with the
assistance of HHS. HHS would require that the State Exchange
electronically transmit the completed pre-testing and assessment data
request form to HHS within the deadline specified in the pre-testing
and assessment plan. Once HHS receives the transmission from the State
Exchange, HHS then would execute the pre-testing and assessment
processes and procedures on the application data.
At paragraph (b), we are proposing the requirement that a
State Exchange must submit the data documentation as specified in Sec.
155.1510(a)(1) and the application data associated with no fewer than
10 tax households as specified in Sec. 155.1510(a)(2) within the
timelines in the pre-testing and assessment plan specified in Sec.
155.1515.
d. Pre-Testing and Assessment Procedures (Sec. 155.1515)
We are proposing to add new Sec. 155.1515 which would address the
requirements associated with the pre-testing and assessment procedures
that underlie and support the IPPTA. The pre-testing and assessment
procedures are the activities of the IPPTA that are, in part, designed
to test HHS' review processes and procedures that support HHS' review
of determinations of the APTC made by State Exchanges, to improve the
State Exchange's understanding of the IPPTA, to prepare State Exchanges
for the planned measurement of improper payments, and to provide HHS
and the State Exchanges with a mechanism to share information that
would aid in developing an efficient measurement process.
At paragraph (a), we are proposing the general requirement
that the State Exchange must participate in the IPPTA for a period of
one calendar year that would occur in either 2024 or 2025, and that the
State Exchange and HHS would work together to execute the IPPTA
procedures in accordance with timelines in the pre-testing and
assessment plan.
At paragraph (b), we are proposing the requirements for
the orientation and planning processes.
[[Page 78272]]
At paragraph (b)(1), we are proposing HHS would provide
State Exchanges with an overview of the pre-testing and assessment
procedures as part of the orientation process. We are also proposing
that, during the orientation process, HHS would identify the
documentation that a State Exchange must provide to HHS for pre-testing
and assessment. For example, if data use agreements or information
exchange agreements need to be executed, HHS would inform State
Exchanges about that documentation requirement.
At paragraph (b)(2), we are proposing that HHS, in
collaboration with each State Exchange, would develop a pre-testing and
assessment plan as part of the orientation process. The pre-testing and
assessment plan would be based on a template that enumerates the
procedures, sequence, and schedule to accomplish pre-testing and
assessment. While HHS would need to meet milestones specified in the
schedule and applicable deadlines due to the time span allotted for
this proposed program, HHS would take into account feedback from the
State Exchanges in an effort to minimize burden. The pre-testing and
assessment plan would take into consideration relevant activities, if
any, that were completed during a prior, voluntary, State engagement.
The pre-testing and assessment plan would include the pre-testing and
assessment checklist.
At paragraph (b)(3), we are proposing that HHS will issue
a pre-testing and assessment plan specific to a State Exchange at the
conclusion of the pre-testing and assessment planning process. The pre-
testing and assessment plan would be for HHS and State Exchange
internal use only and would not be made available to the public by HHS
unless otherwise required by law.
At paragraph (c), we are proposing the requirements
associated with notifications and updates.
At paragraph (c)(1), we are proposing the requirements
associated with HHS' responsibility to notify State Exchanges, as
needed throughout the pre-testing and assessment period, concerning
information related to the pre-testing and assessment processes and
procedures.
At paragraph (c)(2), we are proposing the requirements
associated with information State Exchanges must provide to HHS
throughout the pre-testing and assessment period regarding any
operational, policy, business rules (for example, data elements and
table relationships), information technology, or other changes that may
impact the ability of the State Exchange to satisfy the requirements of
the IPPTA during the pre-testing and assessment period. For example,
HHS would need to be made aware of changes to the State Exchange's
technical platform or modifications to its policies or procedures as
these changes may impact specific pre-testing and assessment processes
or procedures, the data to be reviewed, and ultimately a State
Exchange's determinations of an applicant's eligibility for APTC. We
are proposing that other decisions or changes made by a State Exchange,
which could affect the pre-testing and assessment including any changes
regarding items such as naming conventions or definitions of specific
data elements used in the pre-testing and assessment, must be submitted
to HHS. We propose this requirement because any lack of clarity in how
State Exchanges make eligibility determinations and payment
calculations could impact HHS' ability to assist the State Exchange in
understanding the pre-testing and assessment processes and procedures
and could affect HHS' recommendations in the pre-testing and assessment
report.
At paragraph (d), we are proposing the requirements
regarding the submission of required data and data documentation by
State Exchanges, and we state that, as specified in Sec. 155.1510(a)
of this subpart, HHS will inform State Exchanges about the form and
manner for State Exchanges to submit required data and data
documentation to HHS in accordance with the pre-testing and assessment
plan.
At paragraph (e), we are proposing the general
requirements regarding coordination between HHS and the State Exchanges
to facilitate HHS' processing of data and data documentation submitted
by State Exchanges.
At paragraph (e)(1), we are proposing the requirements
associated with HHS' responsibility to coordinate with each State
Exchange to track and manage the data and data documentation submitted
by a State Exchange as specified in Sec. 155.1510(a)(1) and (a)(2).
At paragraph (e)(2), we are proposing the requirements
associated with HHS' responsibility to coordinate with each State
Exchange to provide assistance in aligning the data specified in Sec.
155.1510(a)(2) from the State Exchange's existing data structure to
HHS' standardized set of data elements.
At paragraph (e)(3), we are proposing the requirement that
HHS will coordinate with each State Exchange to interpret and validate
the data specified in Sec. 155.1510(a)(2).
At paragraph (e)(4), we are proposing the requirement that
HHS would use the data and data documentation submitted by the State
Exchange to execute the pre-testing and assessment procedures.
At paragraph (f), we are proposing the requirements that
HHS would issue the pre-testing and assessment checklist in conjunction
with and as part of the pre-testing and assessment plan. The pre-
testing and assessment checklist criteria we are proposing would
include but would not be limited to:
++ At paragraph (f)(1), the State Exchange's submission of the data
documentation as specified in Sec. 155.1510(a)(1);
++ At paragraph (f)(2), the State Exchange's submission of the data
for processing and testing as specified in Sec. 155.1510(a)(2); and
++ At paragraph (f)(3), the State Exchange's completion of the pre-
testing and assessment processes and procedures related to the IPPTA
program.
At paragraph (g), we are proposing that, subsequent to the
completion of a State Exchange's pre-testing and assessment period, HHS
will prepare and issue a pre-testing and assessment report specific to
that State Exchange. The report would be for HHS and State Exchange
internal use only and would not be made available to the public by HHS
unless otherwise required by law.
We seek comments on these proposals.
C. Part 156--Health Insurance Issuer Standards Under the Affordable
Care Act, Including Standards Related to Exchanges
1. FFE and SBE-FP User Fee Rates for the 2024 Benefit Year (Sec.
156.50)
For the 2024 benefit year, we propose an FFE user fee rate of 2.5
percent of total monthly premiums and an SBE-FP user fee rate of 2.0
percent of the total monthly premiums. Section 1311(d)(5)(A) of the ACA
permits an Exchange to charge assessments or user fees on participating
health insurance issuers as a means of generating funding to support
its operations. If a State does not elect to operate an Exchange or
does not have an approved Exchange, section 1321(c)(1) of the ACA
directs HHS to operate an Exchange within the State. Accordingly, in
Sec. 156.50(c), we state that a participating issuer offering a plan
through an FFE or SBE-FP must remit a user fee to HHS each month that
is equal to the product of the annual user fee rate specified in the
annual HHS
[[Page 78273]]
notice of benefit and payment parameters for FFEs and SBE-FPs for the
applicable benefit year and the monthly premium charged by the issuer
for each policy where enrollment is through an FFE or SBE-FP. OMB
Circular A-25 established Federal policy regarding user fees and what
the fees can be used for. In particular, it specifies that a user fee
charge will be assessed against each identifiable recipient of special
benefits derived from Federal activities beyond those received by the
general public.
a. FFE User Fee Rates for the 2024 Benefit Year
Based on estimated costs, enrollment (including anticipated
establishment of State Exchanges in certain States in which FFEs
currently are operating), and premiums for the 2023 plan year, we
propose a 2024 user fee rate for all participating FFE issuers of 2.5
percent of total monthly premiums.
In Sec. 156.50(c)(1), to support the functions of FFEs, an issuer
offering a plan through an FFE must remit a user fee to HHS, in the
timeframe and manner established by HHS, equal to the product of the
monthly user fee rate specified in the annual HHS notice of benefit and
payment parameters for the applicable benefit year and the monthly
premium charged by the issuer for each policy where enrollment is
through an FFE. As in benefit years 2014 through 2023, issuers seeking
to participate in an FFE in the 2024 benefit year will receive two
special benefits not available to the general public: (1) the
certification of their plans as QHPs; and (2) the ability to sell
health insurance coverage through an FFE to individuals determined
eligible for enrollment in a QHP. For the 2024 benefit year, issuers
participating in an FFE will receive special benefits from the
following Federal activities:
Provision of consumer assistance tools;
Consumer outreach and education;
Management of a Navigator program;
Regulation of agents and brokers;
Eligibility determinations;
Enrollment processes; and
Certification processes for QHPs (including ongoing
compliance verification, recertification, and decertification).
Activities performed by the Federal Government that do not provide
issuers participating in an FFE with a special benefit are not covered
by the FFE user fee.
The proposed user fee rate reflects our estimates for the 2024
benefit year of costs for operating the Federal Exchanges, premiums,
enrollment, and transitions in Exchange models (from the FFE and SBE-FP
models to either the SBE-FP or State Exchange models). To develop the
proposed 2024 benefit year FFE user fee rates, we considered a range of
costs, premium and enrollment projections.\185\ We estimated stable
contract costs on FFE user fee eligible costs from the 2023 benefit
year. We took a number of factors into consideration in choosing which
premium and enrollment projections should inform the proposed 2024 FFE
user fee rates. The enhanced PTC subsidies in section 9661 of the ARP
were extended in section 12001 of the IRA through the 2025 benefit
year. The extension of enhanced PTC subsidies significantly influenced
our development of the 2024 enrollment and premium projections. We
expect this provision of the IRA to sustain the higher enrollment
levels observed in the 2021 benefit year after the ARP was established
and as a result, we expect the projected total premiums where the user
fee applies to increase, thereby increasing the amount of user fee that
will be collected. Our 2024 enrollment estimates also account for the
2022 benefit year transition (and projected transitions through the
2024 benefit year) of States from FFEs or SBE-FPs to State Exchanges,
as well as the enrollment impacts of section 1332 State innovation
waivers. We project that 2024 benefit year premiums will generally
increase at the rate of medical inflation. After considering the range
of costs, premium and enrollment projections, we propose a 2024 user
fee rate that will exert downward pressure on consumer premiums when
compared to the user fee rate from prior years, and that also ensures
adequate funding for Federal Exchange operations. The proposed FFE user
fee rates for 2024 are slightly lower than the 2.75 percent FFE user
fee rate that we established for the 2023 benefit year. After
accounting for the impact of the lower user fee rate, we estimate that
we would have sufficient funding available to fully fund user-fee
eligible Exchange activities.
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\185\ We used the most recent projections from the Congressional
Budget Office (https://www.cbo.gov/publication/57962) and our own
internal data.
---------------------------------------------------------------------------
We seek comment on the proposed 2024 FFE user fee rate.
b. SBE-FP User Fee Rates for the 2024 Benefit Year
We propose to charge issuers offering QHPs through an SBE-FP a user
fee rate of 2.0 percent of the monthly premium charged by the issuer
for each policy under plans offered through an SBE-FP for the 2024
benefit year.
In Sec. 156.50(c)(2), we specify that an issuer offering a plan
through an SBE-FP must remit a user fee to HHS, in the timeframe and
manner established by HHS, equal to the product of the monthly user fee
rate specified in the annual HHS notice of benefit and payment
parameters for the applicable benefit year and the monthly premium
charged by the issuer for each policy where enrollment is through an
SBE-FP, unless the SBE-FP and HHS agree on an alternative mechanism to
collect the funds from the SBE-FP or State instead of direct collection
from SBE-FP issuers. SBE-FPs enter into a Federal platform agreement
with HHS to leverage the systems established for the FFEs to perform
certain Exchange functions, and to enhance efficiency and coordination
between State and Federal programs. The benefits provided to issuers in
SBE-FPs by the Federal Government include use of the Federal Exchange
information technology and call center infrastructure used in
connection with eligibility determinations for enrollment in QHPs and
other applicable State health subsidy programs, as defined at section
1413(e) of the ACA, and QHP enrollment functions under 45 CFR part 155,
subpart E. The user fee rate for SBE-FPs is calculated based on the
proportion of user fee eligible FFE costs that are associated with the
FFE information technology infrastructure, the consumer call center
infrastructure, and eligibility and enrollment services, and allocating
a share of those costs to issuers in the relevant SBE-FPs.
To calculate the proposed SBE-FP rates for the 2024 benefit year,
we used the same assumptions on contract costs, enrollment, and
premiums as the proposed FFE user fee rates. The user fee rate for SBE-
FPs is calculated based on the proportion of the total FFE costs
utilized by SBE-FPs, such as the costs associated with the FFE
information technology infrastructure, the consumer call center
infrastructure, and eligibility and enrollment services and other
applicable State health subsidy programs, which we estimate to be
approximately 80 percent. Based on this methodology, the proposed 2024
SBE-FP user fee rate is lower than the user fee rate of 2.25 percent of
premiums that we established for the 2023 benefit year. The lower
proposed user fee rate for SBE-FP issuers for the 2024 benefit year
reflects our estimates of costs for operating the Federal Exchanges,
premiums, enrollment, as well as State Exchange transitions for the
2024 benefit year, and the costs associated
[[Page 78274]]
with performing these services that benefit SBE-FP issuers.
We seek comment on the proposed 2024 SBE-FP user fee rate.
2. Publication of the 2024 Premium Adjustment Percentage, Maximum
Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on
Cost Sharing, and Required Contribution Percentage in Guidance (Sec.
156.130)
As established in part 2 of the 2022 Payment Notice, HHS will
publish the premium adjustment percentage, the required contribution
percentage, maximum annual limitations on cost-sharing, and reduced
maximum annual limitation on cost-sharing, in guidance annually
starting with the 2023 benefit year. We note that these parameters are
not included in this rulemaking, as HHS does not propose to change the
methodology for these parameters for the 2024 benefit year, and
therefore, HHS is required to publish these parameters in guidance no
later than January 2023.
3. Standardized Plan Options (Sec. 156.201)
HHS proposes to exercise its authority under sections 1311(c)(1)
and 1321(a)(1)(B) of the ACA to make minor updates to its approach with
respect to standardized plan options for PY 2024 and subsequent PYs.
Section 1311(c)(1) of the ACA directs the Secretary to establish
criteria for the certification of health plans as QHPs. Section
1321(a)(1)(B) of the ACA directs the Secretary to issue regulations
that set standards for meeting the requirements of title I of the ACA
with respect to, among other things, the offering of QHPs through such
Exchanges.
Standardized plan options were first introduced in the 2017 Payment
Notice, and defined at Sec. 155.20. In the first iteration of
standardized plan options, HHS finalized one set of standardized plan
options designed to be similar to the most popular QHPs in the 2015
individual market FFEs at the bronze, silver, and gold metal levels.
Issuers were not required to offer these standardized plan options. To
facilitate plan shopping and to educate consumers about the distinctive
cost-sharing features of standardized plan options, these plans were
differentially displayed on HealthCare.gov under the authority at Sec.
155.205(b)(1). Specifically, consumers had the ability to filter plan
options to view only standardized plan options and received an
accompanying message explaining how standardized plan options differed
from non-standardized plan options.
In the 2018 Payment Notice, HHS finalized three new sets of
standardized plan options. The original standardized plan options from
the 2017 Payment Notice were updated to reflect changes in QHP
enrollment data in 2016, to include SBE-FP data, and to account for
State cost-sharing laws. Standardized plan options were once more
differentially displayed, but this time, they were also labeled
``Simple Choice'' plans to make them more easily distinguishable from
non-standardized plan options. HHS also established display
requirements for approved web-brokers and QHP issuers using a direct
enrollment pathway to facilitate enrollment through an FFE or SBE-FP--
including both the Classic DE and EDE Pathways--at Sec. Sec.
155.220(c)(3)(i)(H) and 156.265(b)(3)(iv), respectively (81 FR 94117
through 94118, 94148; 45 CFR 155.220(l) and 155.221(i)). Under these
requirements, these entities must differentially display standardized
plan options in accordance with the requirements under Sec.
155.205(b)(1) in a manner consistent with how standardized plan options
are displayed on HealthCare.gov, unless HHS approved a deviation.
Standardized plan options were then discontinued in the 2019
Payment Notice, but the discontinuance was challenged in the United
States District Court for the District of Maryland. On March 4, 2021,
the court decided City of Columbus, et al. v. Cochran.\186\ The court
reviewed nine separate policies HHS had promulgated in the 2019 Payment
Notice, vacating four of them. The court specifically vacated the
portion of the 2019 Payment Notice that ceased HHS' practice of
designating some plans in the FFEs as ``standardized options,'' a
policy that the 2019 Payment Notice stated was seeking to maximize
innovation by issuers in designing and offering a wide range of plans
to consumers (83 FR 16974 and 16975). Subsequently, HHS announced its
intent to engage in rulemaking under which it would propose to resume
standardized plan options in time for PY 2023.\187\ Relatedly,
President Biden's Executive Order on Promoting Competition in the
American Economy directed HHS to implement standardized plan options in
order to facilitate the plan selection process for consumers on the
Exchanges.\188\
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\186\ 523 F. Supp. 3d 731 (D. Md. 2021).
\187\ In part 3 of the 2022 Payment Notice, we explained that we
would not be able to fully implement those aspects of the court's
decision regarding standardized plan options in time for issuers to
design plans and for Exchanges to be prepared to certify such plans
as QHPs for PY 2022, and therefore, intended to address these issues
in time for plan design and certification for PY 2023. See 86 FR
24140, 24264.
\188\ Executive Order 14036 on Promoting Competition in the
American Economy, July 9, 2021. See 86 FR 36987.
---------------------------------------------------------------------------
More recently, in the 2023 Payment Notice, HHS finalized the
requirement for PY 2023 and beyond that issuers offering QHPs through
FFEs and SBE-FPs must offer through the Exchange standardized QHP
options designed by HHS at every product network type (as described in
the definition of ``product'' at Sec. 144.103), at every metal level,
and throughout every service area that they offer non-standardized QHP
options in the individual market. HHS did not require issuers in the
small group market to offer these standardized plan options.
Furthermore, HHS did not subject issuers in State Exchanges to these
requirements. HHS also exempted issuers in FFEs and SBE-FPs that are
already required to offer standardized plan options under State action
taking place on or before January 1, 2020, such as issuers in the State
of Oregon,\189\ from the requirement to offer the standardized plan
options finalized in the 2023 Payment Notice.
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\189\ See Or. Admin. R. 836-053-0009.
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In the 2023 Payment Notice, HHS finalized two sets of standardized
plan options for two different sets of States at the following metal
levels: one bronze plan, one bronze plan that meets the requirement to
have an AV up to 5 points above the 60 percent standard, as specified
in Sec. 156.140(c) (known as an expanded bronze plan), one standard
silver plan, one version of each of the three income-based silver CSR
plan variations, one gold plan, and one platinum plan. HHS did not
finalize standardized plan option designs for the Indian CSR plan
variations as provided for at Sec. 156.420(b) given that the cost-
sharing parameters for these plan variations are already largely
specified, but HHS still required issuers to offer these plan
variations for standardized plan options.\190\
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\190\ See QHP Certification Standardized Plan Options FAQs,
https://www.qhpcertification.cms.gov/s/Standardized%20Plan%20Options%20FAQs.
---------------------------------------------------------------------------
In the 2023 Payment Notice, HHS also elaborated upon the
methodology it utilized in creating the standardized plan options
designs. Specifically, HHS explained that it designed these plans to be
similar to the most popular QHPs in FFEs and SBE-FPs in PY 2021. This
was done based on an examination of the proportion of consumers
enrolled in plans with different cost sharing types (including
copayment exempt from the deductible, copayment subject to the
deductible, coinsurance exempt from
[[Page 78275]]
the deductible, and coinsurance subject to the deductible) for every
benefit category in the actuarial value (AV) calculator at each metal
level.
HHS chose the cost-sharing type with the majority or plurality of
enrollees. HHS then chose the enrollee-weighted median values for this
cost-sharing type as the copayment amount or coinsurance rate for each
benefit category before modifying these plans to have an AV near the
lower end of the de minimis range for each metal level to ensure the
competitiveness of these plans. HHS applied this methodology in
selecting the deductibles and MOOPs for these plans, as well.
HHS also explained that it designed two separate sets of
standardized plan options in order to accommodate applicable cost-
sharing laws in different sets of FFE and SBE-FP States, similar to the
approach previously taken for standardized plan options. Specifically,
in the 2018 Payment Notice, HHS designed three sets of standardized
plan options tailored to unique cost-sharing laws in different States.
The second and third sets of these standardized plan options differed
from the first set only to the extent necessary to comply with State
cost sharing laws.
The second set of standardized plan options in the 2018 Payment
Notice was designed to work in States that: (1) require that cost
sharing for physical therapy, occupational therapy, and speech therapy
be no greater than the cost sharing for primary care visits; (2) limit
the cost-sharing amount that can be charged for a 30-day supply of
prescription drugs by tier; or (3) require that all drug tiers carry a
copayment rather than coinsurance. The second set of standardized plan
options applied to Arkansas, Delaware, Iowa, Kentucky, Louisiana,
Missouri, Montana, and New Hampshire. The third set was designed to
work in a State with maximum deductible requirements and other cost
sharing standards. The third set of standardized plan options was
designed to work in the Exchange in New Jersey, which has since
transitioned to become a State Exchange and was thus outside the scope
of this particular rulemaking.
HHS explained that it included several of the defining features of
the second set of standardized plan options from the 2018 Payment
Notice in the first set of standardized plan options in the 2023
Payment Notice. As a result, in the first set of standardized plan
options, there was cost sharing parity between the primary care visit,
the speech therapy, and the occupational and physical therapy benefit
categories. There were also copayments for all prescription drug tiers,
including the non-preferred brand and specialty tiers, instead of
coinsurance rates. Finally, the copayment for the mental health/
substance use disorder in-network outpatient office visit sub-
classification was equal to the least restrictive level for copayments
for medical/surgical benefits in the in-network, outpatient office
visit sub-classification (and copayments applied to substantially all
medical/surgical benefits in this sub-classification), to ensure
issuers were able to design plans that comply with the Paul Wellstone
and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
(MHPAEA) and its implementing regulations.\191\ This first set of
standardized plan options applied to all FFE and SBE-FP issuers,
excluding those in Delaware and Louisiana.
---------------------------------------------------------------------------
\191\ In general, MHPAEA requires that the financial
requirements (such as coinsurance and copays) and treatment
limitations (such as visit limits) imposed on mental health or
substance use disorder benefits cannot be more restrictive than the
predominant financial requirements and treatment limitations that
apply to substantially all medical/surgical benefits in a
classification.
---------------------------------------------------------------------------
HHS further explained that it included all of the defining features
of the second set of standardized plan options from the 2018 Payment
Notice in the second set of standardized plan options in the 2023
Payment Notice. As a result, in this set of standardized plan options,
similar to the first set of standardized plan options, there was cost-
sharing parity between the primary care visit, the speech therapy, and
the occupational and physical therapy benefit categories, and there
were copayments for all prescription drug tiers, including the non-
preferred brand and specialty tiers, instead of coinsurance rates.
Additionally, the copayment for the mental health/substance use
disorder in-network outpatient office visit sub-classification was
equal to the least restrictive level for copayments for medical/
surgical benefits in the in-network, outpatient office visit sub-
classification (and copayments applied to substantially all medical/
surgical benefits in this sub-classification), to ensure issuers were
able to design plans that comply with MHPAEA and its implementing
regulations.
The feature that distinguished the first set of standardized plan
options from the second is that the second set of standardized plan
options had copayments of $150 or less for the specialty drug tiers of
standardized plan options at all metal levels. This feature was
included in the second set of standardized plan options in order to
accommodate relevant specialty tier prescription drug cost sharing laws
in Delaware and Louisiana (87 FR 674 through 676; 87 FR 27311 through
27313).\192\
---------------------------------------------------------------------------
\192\ See 87 FR 674 through 676 and 87 FR 27311 through 27313
for a more detailed discussion on the methodology HHS used to create
the standardized plan options in the 2023 Payment Notice.
---------------------------------------------------------------------------
In the 2023 Payment Notice, HHS also exercised the authority under
Sec. 155.205(b)(1) to resume the differential display of standardized
plan options, including those standardized plan options required under
State action taking place on or before January 1, 2020, on
HealthCare.gov beginning with the PY 2023 open enrollment period.
Similarly, also beginning with the PY 2023 open enrollment period, HHS
resumed enforcement of the existing standardized plan options display
requirements under Sec. Sec. 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv)
for approved web-brokers and QHP issuers using a direct enrollment
pathway to facilitate enrollment through an FFE or SBE-FP--including
those using the Classic DE and EDE Pathways--meaning these entities
were required to differentially display standardized plan options in a
manner consistent with how standardized plan options were displayed on
HealthCare.gov, unless HHS approved a deviation, beginning with the PY
2023 open enrollment period.
Most recently, after publishing the 2023 Payment Notice, HHS
conducted extensive interested party engagement with a range of
participants, including issuers, agents, brokers, web-brokers, States,
State Exchanges, researchers, disease advocacy groups, and consumer
support groups (87 FR 27318). HHS discussed a range of topics related
to standardized plan options in these engagement sessions, including
plan designs, cost sharing, pre-deductible coverage of particular
benefits, formulary tiering, enhancing choice architecture, plan
display on HealthCare.gov, reducing the risk of plan choice overload
(either through direct limits on the number of non-standardized plan
options or a revised version of the meaningful difference standard),
and advancing health equity.
For PY 2024 and subsequent PYs, we would maintain a large degree of
continuity with our approach to standardized plan options in the 2023
Payment Notice, except for minor updates as proposed in this section.
First, in contrast to the policy finalized in the 2023 Payment Notice,
we propose, for PY 2024 and subsequent PYs, to no longer include a
standardized
[[Page 78276]]
plan option for the non-expanded bronze metal level. Accordingly, we
propose at new Sec. 156.201(b) that for PY 2024 and subsequent PYs,
FFE and SBE-FP issuers offering QHPs through the Exchanges must offer
standardized QHP options designed by HHS at every product network type
(as described in the definition of ``product'' at Sec. 144.103), at
every metal level except the non-expanded bronze level, and throughout
every service area that they offer non-standardized QHP options. We
propose to re-designate the current regulation text at Sec. 156.201 as
paragraph (a) and revise it to apply only to PY 2023.
Thus, for PY 2024 and subsequent PYs, we propose standardized plan
options for the following metal levels: one bronze plan that meets the
requirement to have an AV up to 5 points above the 60 percent standard,
as specified in Sec. 156.140(c) (known as an expanded bronze plan),
one standard silver plan, one version of each of the three income-based
silver CSR plan variations, one gold plan, and one platinum plan.
Consistent with our approach in the 2023 Payment Notice, we are not
proposing standardized plan options for the Indian CSR plan variations
as provided for at Sec. 156.420(b) given that the cost-sharing
parameters for these plan variations are already largely specified. We
would continue to require issuers to offer these plan variations for
all standardized plan options offered, and we propose to remove the
regulation text language stating that standardized plan options for
these plan variations are not required to clarify that while issuers
must, under Sec. 156.420(b), continue to offer such plan variations
based on standardized plan options, those plan variations will
themselves not be standardized plan options based on designs we will
specify in this rulemaking.\193\
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\193\ See QHP Certification Standardized Plan Options FAQs,
https://www.qhpcertification.cms.gov/s/Standardized%20Plan%20Options%20FAQs.
---------------------------------------------------------------------------
We propose to discontinue standardized plan options for the non-
expanded bronze metal level mainly due to AV constraints. Specifically,
it is not feasible to design a non-expanded bronze plan that includes
any pre-deductible coverage while maintaining an AV within the
permissible AV de minimis range for the non-expanded bronze metal
level. Furthermore, few issuers chose to offer non-expanded bronze
standardized plan options in PY 2023, with the majority of issuers
offering bronze plans instead choosing to offer only expanded bronze
standardized plan options. Thus, we believe discontinuing non-expanded
bronze standardized plan options would minimize burden without any
deleterious consequences. We also clarify that issuers would still be
permitted to offer non-standardized plan options at the non-expanded
bronze metal level, meaning consumers would still have the ability to
choose these plan options if they so choose. We also clarify that if an
issuer offers a non-standardized plan option at the bronze metal level,
whether expanded or non-expanded, it would need to also offer an
expanded bronze standardized plan option.
Similar to the approach taken in the 2023 Payment Notice, we
propose to create standardized plan options that resemble the most
popular QHP offerings that millions are already enrolled in by
selecting the most popular cost-sharing type for each benefit category;
selecting enrollee-weighted median values for each of these benefit
categories based on refreshed PY 2022 cost-sharing and enrollment data;
modifying these plans to be able accommodate State cost-sharing laws;
and decreasing the AVs for these plan designs to be at the floor of
each AV de minimis range primarily by increasing deductibles.
Furthermore, consistent with the approach taken in the 2023 Payment
Notice, we propose to create two sets of standardized plan options at
the previously proposed metal levels, with the same sets of designs
applying to the same sets of States as in the 2023 Payment Notice.
Specifically, the first set of standardized plan options would continue
to apply to FFE and SBE-FP issuers in all FFE and SBE-FP States,
excluding those in Delaware, Louisiana, and Oregon, and the second set
of standardized plan options would continue to apply to Exchange
issuers specifically in Delaware and Louisiana. See Table 10 and Table
11 for the two sets of standardized plan options we propose for PY
2024.
In addition, since SBE-FPs use the same platform as the FFEs, we
would continue to apply the standardized plan option requirements
equally on FFEs and SBE-FPs. We continue to believe that proposing a
distinction between FFEs and SBE-FPs for purposes of these requirements
would create a substantial financial and operational burden that we
believe outweighs the benefit of permitting such a distinction.
Also, consistent with our policy in PY 2023, we would continue to
apply these requirements to applicable issuers in the individual market
but not in the small group market. We also would continue to exempt
issuers offering QHPs through FFEs and SBE-FPs that are already
required to offer standardized plan options under State action taking
place on or before January 1, 2020, such as issuers in the State of
Oregon,\194\ from the requirement to offer the standardized plan
options included in this rule. In addition, we would continue to exempt
issuers in State Exchanges from these requirements for several reasons.
First, we do not wish to impose duplicative standardized plan option
requirements on issuers in the eight State Exchanges that already have
standardized plan option requirements. Additionally, we continue to
believe that State Exchanges are best positioned to understand both the
nuances of their respective markets and consumer needs within those
markets. Finally, we continue to believe that States that have invested
the necessary time and resources to become State Exchanges have done so
in order to implement innovative policies that differ from those on the
FFEs, and we do not wish to impede these innovative policies so long as
they comply with existing legal requirements.
---------------------------------------------------------------------------
\194\ See Or. Admin. R. 836-053-0009.
---------------------------------------------------------------------------
Furthermore, consistent with the policy finalized in the 2023
Payment Notice, we would continue to differentially display
standardized plan options, including those standardized plan options
required under State action taking place on or before January 1, 2020,
on HealthCare.gov under the authority at Sec. 155.205(b)(1). We would
also continue enforcement of the standardized plan options display
requirements for approved web-brokers and QHP issuers using a direct
enrollment pathway to facilitate enrollment through an FFE or SBE-FP--
including both the Classic DE and EDE Pathways--at Sec. Sec.
155.220(c)(3)(i)(H) and 156.265(b)(3)(iv), respectively. This means
that these entities would be required to differentially display the
2024 benefit year standardized plan options in accordance with the
requirements under Sec. 155.205(b)(1) in a manner consistent with how
standardized plan options are displayed on HealthCare.gov, unless HHS
approves a deviation, beginning with the 2024 benefit year open
enrollment period. Consistent with our PY 2023 policy, any requests
from web-brokers and QHP issuers seeking approval for an alternate
differentiation format would continue to be reviewed based on whether
the same or similar level of differentiation and clarity is being
[[Page 78277]]
provided under the requested deviation as is provided on
HealthCare.gov.
Consistent with the approach to plan designs in the 2023 Payment
Notice, we would also continue to use the following four tiers of
prescription drug cost sharing in the proposed standardized plan
options: generic drugs, preferred brand drugs, non-preferred brand
drugs, and specialty drugs. We believe the use of four tiers of
prescription drug cost-sharing in the standardized plan options will
continue to allow for predictable and understandable drug coverage. We
believe the use of four tiers of prescription drug cost-sharing will
also play an important role in facilitating the consumer decision-
making process by allowing consumers to more easily compare formularies
between plans, and allow for easier year-to-year comparisons with their
current plan. The continued use of four tiers will also minimize issuer
burden since, for PY 2023, issuers have already created standardized
plan options with formularies that include only four tiers of
prescription drug cost-sharing. We will consider including additional
drug tiers for future years, and invite comment on the appropriate
number of drug tiers to use in standardized plan options in the future.
However, we would continue to use four tiers of prescription drug cost-
sharing in standardized plan options for PY 2024 and subsequent PYs to
maintain continuity with our approach to standardized plan options in
PY 2023.
We are aware of concerns that issuers may not be including specific
drugs at appropriate cost-sharing tiers for the standardized plan
options; for example, some issuers may be including brand name drugs in
the generic drug cost-sharing tier, while others include generic drugs
in the preferred or non-preferred brand drug cost-sharing tiers. We
believe that consumers understand the difference between generic and
brand name drugs, and that it is reasonable to assume that consumers
expect that only generic drugs are covered at the cost-sharing amount
in the generic drug cost-sharing tier, and that only brand name drugs
are covered at the cost-sharing amount in the preferred or non-
preferred brand drug cost-sharing tiers.
Accordingly, we propose to revise Sec. 156.201 to add a new
paragraph (c) specifying that issuers of standardized plan options must
(1) place all covered generic drugs in the standardized plan options'
generic drug cost-sharing tier, or the specialty drug tier if there is
an appropriate and non-discriminatory basis in accordance with Sec.
156.125 for doing so, and (2) place brand name drugs in either the
standardized plan options' preferred brand or non-preferred brand
tiers, or specialty drug tier if there is an appropriate and non-
discriminatory basis in accordance with Sec. 156.125 for doing so. For
purposes of this proposal, ``non-discriminatory basis'' means there
must be a clinical basis for placing a particular prescription drug in
the specialty drug tier in accordance with Sec. 156.125.
We also specify that within the Prescription Drug Template, for
standardized plan options, issuers should enter zero cost preventive
drugs for tier one, generic drugs for tier two, preferred brand drugs
for tier three, non-preferred drugs for tier four, specialty drugs for
tier five, and medical services drugs for tier six, if applicable.
We propose the approach described in this section for PY 2024 and
subsequent PYs for several reasons. To begin, we are continuing to
require FFE and SBE-FP issuers to offer standardized plan options in
large part due to continued plan proliferation, which has only
increased since the standardized plan option requirements were
finalized in the 2023 Payment Notice. With this continued plan
proliferation, it is increasingly important to continue to attempt to
streamline and simplify the plan selection process for consumers on the
Exchanges. We believe these standardized plan options can continue to
play a meaningful role in that simplification by reducing the number of
variables that consumers have to consider when selecting a plan option,
thus allowing consumers to more easily compare available plan options.
More specifically, with these standardized plan options, consumers will
continue to be able to take other meaningful factors into account, such
as networks, formularies, and premiums, when selecting a plan option.
We further believe these standardized plan options include several
distinctive features, such as enhanced pre-deductible coverage for
several benefit categories, that will continue to play an important
role in reducing barriers to access, combatting discriminatory benefit
designs, and advancing health equity. Including enhanced pre-deductible
coverage for these benefit categories will ensure consumers are more
easily able to access these services without first meeting their
deductibles. Furthermore, including copayments instead of coinsurance
rates for a greater number of benefit categories will enhance consumer
certainty and reduce the risk of unexpected financial harm sometimes
associated with high coinsurance rates.
Additionally, given that insufficient time has passed to assess all
the impacts of the standardized plan option requirements finalized in
the 2023 Payment Notice, we propose to maintain a high degree of
continuity with respect to many of the standardized plan option
policies previously finalized to reduce the risk of disruption for all
involved interested parties, including issuers, agents, brokers,
States, and enrollees. We believe making major departures from the
methodology used to create the standardized plan options as finalized
in the 2023 Payment Notice could result in drastic changes in these
plan designs that could potentially create undue burden for these
interested parties. Furthermore, if the standardized plan options that
HHS creates vary significantly from year to year, those enrolled in
these plans could experience unexpected financial harm if the cost-
sharing for services they rely upon differs substantially from the
previous year. Ultimately, we believe consistency in standardized plan
options is important to allow both issuers and enrollees to become
accustomed to these plan designs.
We seek comment on our proposed approach to standardized plan
options for PY 2024 and subsequent PYs. We also seek comment on the
specific approach to tiering for these standardized plan options within
the Prescription Drug Template.
[[Page 78278]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.020
[[Page 78279]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.021
4. Non-Standardized Plan Option Limits (Sec. 156.202)
At Sec. 156.202, HHS proposes to exercise the authority under
sections 1311(c)(1) and 1321(a)(1)(B) of the ACA to limit the number of
non-standardized plan options that issuers of QHPs can offer through
Exchanges on the Federal platform (including State-based Exchanges on
the Federal Platform) to two non-standardized plan options per product
network type (as described in the definition of ``product'' at Sec.
144.103) and metal level (excluding catastrophic plans), in any service
area, for PY 2024 and beyond, as a condition of QHP certification.
Section 1311(c)(1) of the ACA directs the Secretary to establish
criteria for the certification of health plans as QHPs. Section
1321(a)(1)(B) of the ACA directs the Secretary to issue regulations
that set standards for meeting the requirements of title I of the ACA
with respect to, among other things, the offering of QHPs through such
Exchanges.
Under this proposed requirement, an issuer would, for example, be
limited to offering through an Exchange two gold HMO and two gold PPO
non-standardized plan options in any service area in PY 2024 or any
subsequent PY. As an additional clarifying example, if an issuer wanted
to offer two Statewide bronze HMO non-standardized plan options as well
as two additional bronze HMO non-standardized plan options in one
particular service area that covers less than the entire State, in the
service areas that all four plans would cover, the issuer could choose
to offer through the Exchange either the two bronze HMO non-
standardized plan options offered Statewide or the two bronze HMO non-
standardized plan options offered in that particular service area (or
any combination thereof, so long as the total number of non-
standardized plan options does not exceed the limit of two per issuer,
product network type, and metal level in the service area).
Similar to the approach taken with respect to standardized plan
options in the 2023 Payment Notice and in this proposed rule, HHS
proposes to not apply this requirement to issuers in State Exchanges
for several reasons. First, HHS does not wish to impose duplicative
requirements on issuers in the State Exchanges that already limit the
number of non-standardized plan options. Additionally, HHS believes
that State Exchanges are best positioned to understand both the nuances
of their respective markets and consumer needs within those markets.
Finally, HHS
[[Page 78280]]
believes that States that have invested the necessary time and
resources to become State Exchanges have done so in order to implement
innovative policies that differ from those on the FFEs, and HHS does
not wish to impede these innovative policies, so long as they comply
with existing legal requirements.
However, consistent with the approach taken with respect to
standardized plan options in the 2023 Payment Notice and in this this
proposed rule, since SBE-FPs use the same platform as the FFEs, HHS
proposes to apply this requirement equally on FFEs and SBE-FPs. HHS
believes that proposing a distinction between FFEs and SBE-FPs for
purposes of this requirement would create a substantial financial and
operational burden that HHS believes outweighs the benefit of
permitting such a distinction.
Finally, also in alignment with the approach taken with
standardized plan options in the 2023 Payment Notice as well as the
approach taken in this proposed rule, HHS proposes that this proposed
requirement would not apply to plans offered through the SHOPs or to
SADPs, given that the nature of these markets differ substantially from
the individual medical QHP market, in terms of issuer participation,
plan offerings, plan enrollment, and services covered. For example, the
degree of plan proliferation observed in individual market medical QHPs
over the last several plan years is not evident to the same degree for
QHPs offered through the SHOPs or for SADPs offered in the individual
market. For these reasons, HHS does not believe the same requirements
should be applied to these other markets.
HHS believes that given the large number of plan offerings that
would continue to exist on the Exchanges, a sufficiently diverse range
of plan offerings would still exist for consumers to continue to select
innovative plans that meet their unique health needs, even if HHS did
ultimately choose to limit the number of non-standardized plan options
that issuers can offer. Thus, even if consumers believe that their
health needs may not be best met with the standardized plan options
included in this current rulemaking, they would still have the option
to select from a sufficient number of other non-standardized plan
options.
Under this proposed limit, we estimate that the weighted average
number of non-standardized plan options (which does not take into
consideration standardized plan options) available to each consumer
would be reduced from approximately 107.8 in PY 2022 to 37.2 in PY
2024, which we believe still provides consumers with a sufficient
number of plan offerings.\195\ Additionally, we estimate that of a
total of 106,037 non-standardized plan option plan-county combinations
offered in PY 2022, approximately 60,949 (57.5 percent) of these plan-
county combinations would no longer be permitted to be offered, a
number we believe would still provide consumers with a sufficient
degree of choice during the plan selection process.\196\
---------------------------------------------------------------------------
\195\ Utilizing weighted as opposed to unweighted averages takes
into consideration the number of enrollees in a particular service
area when calculating the average number of plans available to
enrollees. As a result of weighting by enrollment, service areas
with a higher number of enrollees have a greater impact on the
overall average than service areas with a lower number of enrollees.
Weighting averages allows a more representative metric to be
calculated that more closely resembles the actual experience of
enrollees.
\196\ Plan-county combinations are the count of unique plan ID
and FIPS code combinations. This measure is used because a single
plan may be available in multiple counties, and specific limits on
non-standardized plan options may have different impacts on one
county where there are four plans of the same product network type
and metal level versus another county where there are only two plans
of the same product network type and service area, for example.
---------------------------------------------------------------------------
Finally, if this limit were adopted, we estimate that of the
approximately 10.21 million enrollees in the FFEs and SBE-FPs in PY
2022, approximately 2.72 million (26.6 percent) of these enrollees
would have their current plan offerings affected, and issuers would
therefore be required to select another QHP to crosswalk these
enrollees into for PY 2024.\197\ CMS would utilize the existing
discontinuation notices and process as well as the current re-
enrollment hierarchy at Sec. 155.335(j) to ensure a seamless
transition and continuity of coverage for affected enrollees. In
addition, CMS would ensure that the necessary consumer assistance would
be made available to affected enrollees as part of the expanded funding
for Navigator programs.
---------------------------------------------------------------------------
\197\ These calculations assume that the non-standardized plan
options removed due to the proposed limit would be those with the
fewest enrollees based on PY 2022 data, which includes individual
market medical QHPs for Exchanges using the HealthCare.gov
eligibility and enrollment platform, including SBE-FPs.
---------------------------------------------------------------------------
In the 2023 Payment Notice, HHS solicited comment on enhancing
choice architecture and on preventing plan choice overload for
consumers on HealthCare.gov (87 FR 689 through 691 and 87 FR 27345
through 27347). In this comment solicitation, HHS noted that although
it continues to prioritize competition and choice on the Exchanges, it
was concerned about plan choice overload, which can result when
consumers have too many choices in plan options on an Exchange. HHS
referred to a 2016 report by the RAND Corporation reviewing over 100
studies which concluded that having too many health plan choices can
lead to poor enrollment decisions due to the difficulty consumers face
in processing complex health insurance information.\198\ HHS also
referred to a study of consumer behavior in Medicare Part D, Medicare
Advantage, and Medigap that demonstrated that a choice of 15 or fewer
plans was associated with higher enrollment rates, while a choice of 30
or more plans led to a decline in enrollment rates.\199\
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\198\ Taylor EA, Carman KG, Lopez A, Muchow AN, Roshan P, and
Eibner C. Consumer Decisionmaking in the Health Care Marketplace.
RAND Corporation. 2016.
\199\ Chao Zhou and Yuting Zhang, ``The Vast Majority of
Medicare Part D Beneficiaries Still Don't Choose the Cheapest Plans
That Meet Their Medication Needs.'' Health Affairs, 31, no.10
(2012): 2259-2265.
---------------------------------------------------------------------------
With this concern in mind, HHS explained in the 2023 Payment Notice
that it was interested in exploring possible methods of improving
choice architecture and preventing plan choice overload. HHS expressed
interest in exploring the feasibility and utility of limiting the
number of non-standardized plan options that FFE and SBE-FP issuers can
offer through the Exchanges in future plan years as one option to
reduce the risk of plan choice overload and to further streamline and
optimize the plan selection process for consumers on the Exchanges.
Accordingly, HHS sought comment on the impact of limiting the number of
non-standardized plan options that issuers can offer through the
Exchanges, on effective methods to achieve this goal, the advantages
and disadvantages of these methods, and if there were alternative
methods not considered.
In response to this comment solicitation, many commenters agreed
that the number of plan options that consumers can choose from on the
Exchanges has increased beyond a point that is productive for
consumers. Many of these commenters further explained that consumers do
not have the time, resources, our health literacy to be able to
meaningfully compare all available plan options. These commenters also
agreed that when consumers are faced with an overwhelming number of
plan options, many of which are similar with only minor differences
between them, the risk of plan choice overload is significantly
exacerbated.
Similarly, during the standardized plan option interested party
engagement
[[Page 78281]]
sessions HHS conducted after publishing the 2023 Payment Notice, many
participants agreed that the number of plan options was far too high
and supported taking additional action to prevent plan choice overload.
In short, many 2023 Payment Notice commenters and interested party
engagement participants supported limiting the number of non-
standardized plan options that issuers can offer to streamline the plan
selection process for consumers on the Exchanges.
In addition, current QHP submission data provide support for the
argument that enacting such a limit would be beneficial for consumers.
For example, it is estimated that there will be a weighted average of
113.6 plans available per enrollee on HealthCare.gov in PY 2023
compared to a weighted average of 107.8 plans available per enrollee in
PY 2022 and a weighted average of 25.9 plans available per enrollee in
PY 2019.\200\ Similarly, it is expected that there will be a weighted
average of 18.3 plan offerings per issuer in PY 2023 compared to 17.1
plan offerings per issuer in PY 2022 and 9.7 plan offerings per issuer
in PY 2019.\201\ With this continued plan proliferation for both
enrollees and issuers, HHS believes that limiting the number of non-
standardized plan options that FFE and SBE-FP issuers of QHPs can offer
through the Exchanges beginning in PY 2024 could greatly enhance the
consumer experience on HealthCare.gov.
---------------------------------------------------------------------------
\200\ Weighted averages were calculated by accounting for the
number of enrollees in particular service areas, with service areas
with a higher number of enrollees having a more significant impact
on the overall average than service areas with a lower number of
enrollees.
\201\ Ibid.
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To reduce the risk of plan choice overload, HHS also considered
solely focusing on enhancing choice architecture on HealthCare.gov,
instead of enhancing choice architecture in conjunction with limiting
the number of non-standardized plan options that issuers can offer, an
approach recommended by several commenters in the 2023 Payment Notice.
HHS agrees that enhancements to the consumer experience on
HealthCare.gov are critical in ensuring that consumers are able to more
meaningfully compare plan choices and more easily select a health plan
that meets their unique health needs. As such, HHS made several
enhancements to HealthCare.gov for the open enrollment period for PY
2023. HHS also intends to continue conducting research to inform
further enhancements to the consumer experience on HealthCare.gov for
PY 2024 and subsequent plan years.
That said, HHS believes that enhancing choice architecture on
HealthCare.gov is necessary but, alone, insufficient to reduce the risk
of plan choice overload for several reasons. First, HealthCare.gov is
not the only pathway for consumers to search for, compare, select, and
enroll in a QHP, and it is not the only information resource consumers
seek when considering Exchange coverage. Instead, consumers shop
through a multitude of channels, sometimes utilizing a mix of customer
service channels including the Marketplace Call Center; online on
HealthCare.gov; through assisters, agents, and brokers; and through
certified enrollment partners (such as Classic DE and EDE web brokers
and issuers). Thus, HHS believes that consumers enrolling in QHPs
through these alternative pathways would not benefit to the same degree
as those enrolling through HealthCare.gov if HHS focused on reducing
plan choice overload solely by making enhancements to HealthCare.gov.
Moreover, considering that an increasingly greater portion of QHP
enrollment is occurring through these alternative enrollment pathways,
HHS believes that a more comprehensive approach to reducing plan choice
overload that would also benefit those utilizing these alternative
enrollment pathways is required.
Furthermore, while enhancements to choice architecture and the plan
comparison experience can play a critical role in streamlining the plan
selection process and reducing the risk of plan choice overload, the
number of plans available per enrollee has increased beyond a number
that is beneficial for consumers, and this high number of plan choices
makes it increasingly difficult to meaningfully manage choice
architecture on HealthCare.gov and through other Exchange customer
service channels.
Relatedly, HHS believes that low-income consumers would
particularly benefit from a policy that limits the number of plans.
This is because silver plans deliver the most value to low-income
consumers, but it is exactly these consumers--who often have the lowest
health insurance literacy--who now face choosing among the highest
number of near-duplicate silver plans, which will continue unless
limits on the number of these plans are set. Near-duplicate plans are
the most difficult to filter and sort out by interface improvements.
As such, HHS believes that having an excessive number of plans
(particularly those at the silver metal level) places an inequitable
burden on those who need insurance the most, those who face the
greatest challenges in selecting the most suitable health plan, and
those who can least withstand the consequences of choosing a plan that
costs too much and delivers too little. For this reason, HHS believes
that reducing the number of available plans (particularly silver plans)
by limiting the number of non-standardized plan options that issuers
can offer, can play an important role in advancing the agency's
commitments to health equity.
In short, HHS believes that limiting the number of non-standardized
plan options that issuers can offer in conjunction with enhancing the
plan comparison experience on HealthCare.gov is the most effective
method to streamline the plan selection process and to reduce the risk
of plan choice overload for consumers on the HealthCare.gov Exchanges.
As an alternative to limiting the number of non-standardized plan
options that issuers in FFEs and SBE-FPs can offer through the
Exchanges to reduce the risk of plan choice overload, HHS could also
apply a meaningful difference standard. Such a standard was previously
codified at Sec. 156.298.
The original meaningful difference standard was introduced in the
2015 Payment Notice, revised in the 2017 Payment Notice, and
discontinued and removed from regulation in the 2019 Payment Notice.
The meaningful difference standard was originally intended to enhance
the consumer experience on the Exchanges by preventing duplicative plan
offerings. The decision to discontinue the meaningful difference
standard in the 2019 Payment Notice was made largely due to the
decreased number of plan offerings on the Exchanges (that is, there was
a weighted average of 25.9 plans available per enrollee in PY 2019), as
well as the low number of plans flagged under the prior review.
Under the original meaningful difference standard introduced in the
2015 Payment Notice, a plan was considered to be ``meaningfully
different'' from another plan in the same service area and metal tier
(including catastrophic plans) if a reasonable consumer would be able
to identify one or more material differences among the following
characteristics between the plan and other plan offerings: (1) cost
sharing; (2) provider networks; (3) covered benefits; (4) plan type;
(5) Health Savings Account eligibility; or (6) self-only, non-self-
only, or child only plan offerings (79 FR 13813, 13840). Additionally,
CMS believed that a
[[Page 78282]]
reasonable consumer would be likely to identify a difference in MOOP of
$100 or more or a difference in deductible of $50 for purposes of the
meaningful difference standard.\202\ The 2017 Payment Notice eliminated
the Health Savings Account eligibility element, and revised the self-
only, non-self-only, or child-only plan offerings element (87 FR 27208,
27345). In the 2017 Letter to Issuers, the MOOP and deductible dollar
difference thresholds were increased to $500 and $250,
respectively.\203\
---------------------------------------------------------------------------
\202\ 2015 Letter to Issuers in the Federally-facilitated
Marketplaces, chapter 3, section 3. Available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2015-final-issuer-letter-3-14-2014.pdf.
\203\ 2017 Letter to Issuers in the Federally-facilitated
Marketplaces, chapter 2, section 12. Available at https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/final-2017-letter-to-issuers-2-29-16.pdf.
---------------------------------------------------------------------------
In the 2023 Payment Notice comment solicitation on enhancing choice
architecture and preventing plan choice overload (87 FR 27208, 27345),
in addition to soliciting comment on limiting the number of non-
standardized plan options that issuers can offer, HHS also solicited
comment on resuming the meaningful difference standard as one potential
method it could use to reduce the risk of plan choice overload. In
response to this comment solicitation, many commenters and standardized
plan option interested party engagement participants supported resuming
the meaningful difference standard, with the caveat that the standard
should be strengthened since the original version of the standard from
the 2015 Payment Notice as well as the updated version of the standard
from the 2017 Payment Notice both failed to meaningfully reduce
duplicative plan offerings.
These commenters and workgroup participants further explained that
earlier versions of the meaningful difference standard relied on
several criteria and difference thresholds (that is, only having one
difference among the following attributes: cost sharing, provider
networks, covered benefits, plan type, Health Savings Account
eligibility, or self-only, non-self-only, or child only plan offerings)
which allowed issuers to more easily meet the standard. Several of
these commenters and workgroup participants noted that no State
Exchange currently utilizes the meaningful difference standard to
reduce the risk of plan choice overload.
As such, HHS proposes, as an alternative to our proposal to limit
the number of non-standardized plan options that an FFE or SBE-FP
issuer may offer on the Exchange, to impose a new meaningful difference
standard, which would be more stringent than the previous standard, for
PY 2024 and subsequent PYs. Specifically, instead of including all of
the criteria from the original standard from the 2015 Payment Notice
(that is, cost sharing, provider networks, covered benefits, plan type,
Health Savings Account eligibility, or self-only, non-self-only, or
child only plan offerings), HHS proposes grouping plans by issuer ID,
county, metal level, product network type, and deductible integration
type, and then evaluating whether plans within each group are
``meaningfully different'' based on differences in deductible amounts.
With this proposed approach, two plans would need to have
deductibles that differ by more than $1,000 to satisfy the new proposed
meaningful difference standard. We believe that adopting this approach
for a new meaningful difference standard would more effectively reduce
the risk of plan choice overload and streamline the plan selection
process for consumers on the Exchanges. With a dollar deductible
difference threshold of $1,000, we estimate that the weighted average
number of non-standardized plan options (which does not take into
consideration standardized plan options) available to each consumer
would be reduced from approximately 107.8 in PY 2022 to 53.2 in PY
2024, which we believe still provides consumers with a sufficient
number of plan offerings. In addition, we estimate that of a total of
106,037 non-standardized plan option plan-county combinations offered
in PY 2022, approximately 49,629 (46.8 percent) of these plan-county
combinations would no longer be permitted to be offered, a number we
believe would still provide consumers with a sufficient degree of
choice during the plan selection process.\204\ If this dollar
deductible difference threshold were adopted, we estimate that of the
approximately 10.21 million enrollees in the FFEs and SBE-FPs in PY
2022, approximately 2.64 million (25.9 percent) of these enrollees
would have their current plan offerings affected.\205\
---------------------------------------------------------------------------
\204\ Plan-county combinations are the count of unique plan ID
and FIPS code combinations. This measure is used because a single
plan may be available in multiple counties, and specific limits on
non-standardized plan options or specific dollar deductible
difference thresholds may have different impacts on one county where
there are four plans of the same product network type and metal
level versus another county where there are only two plans of the
same product network type and metal level, for example.
\205\ These calculations assume that the non-standardized plan
options removed due to the proposed limit would be those with the
fewest enrollees based on PY 2022 data, which includes individual
market medical QHPs for Exchanges using the HealthCare.gov
eligibility and enrollment platform, including SBE-FPs.
---------------------------------------------------------------------------
We seek comment on the feasibility and utility of limiting the
number of non-standardized plan options that FFE and SBE-FP issuers can
offer through the Exchanges beginning in PY 2024. We also seek comment
on whether the limit of two non-standardized plan options per issuer,
product network type, and metal level in any service area is the most
appropriate approach, or if a stricter or more relaxed limit should be
adopted instead. In addition, we seek comment on the advantages and
disadvantages of utilizing a phased approached of limiting the number
of non-standardized plan options (for example, if there were a limit of
three non-standardized plan options per issuer, product network type,
metal level, and service area for PY 2024, two for PY 2025, and one for
PY 2026). We also seek comment on the effect that adopting such a limit
would have on particular product network types, and whether this limit
would cause a proliferation of product network types that are not
actually differentiated for consumers.
Furthermore, we seek comment on whether we should consider
additional factors, such as variations of products or networks, when
limiting the number of non-standardized plan options--which would mean
that issuers would be limited to offering two non-standardized plan
options per product network type, metal level, product, and network
variation (for example, by network ID) in any service area (or some
combination thereof). If we were to adopt such an approach, issuers
would be permitted to offer two non-standardized gold HMOs within one
product as well as an additional two non-standardized gold HMOs within
a second product in a particular service area, for example. This would
also mean that issuers would be permitted to offer two non-standardized
gold HMOs with one particular network ID as well as two additional non-
standardized gold HMOs with a different network ID in a particular
service area, for example.
We also seek comment on whether permitting additional variation
only for specific benefits, such as adult dental and adult vision
benefits, instead of permitting any variation in a product (for
example, by product ID) would be more appropriate--which would mean,
[[Page 78283]]
for example, that issuers could offer two gold HMO non-standardized
plan options without adult vision and dental benefits and two gold HMO
non-standardized plan options with adult vision and dental benefits in
the same service area.
In addition, we seek comment on imposing a new meaningful
difference standard in place of limiting the number of non-standardized
plan options that issuers can offer. We also seek comment on additional
or alternative specific criteria that would be appropriate to include
in the meaningful difference standard to determine whether plans are
``meaningfully different'' from one another, including whether the same
criteria and difference thresholds from the original standard from the
2015 Payment Notice or the updated difference thresholds from the 2017
Payment Notice should be instituted, or some combination thereof.
Finally, we seek comment on the specific deductible dollar difference
thresholds that would be appropriate to determine whether plans are
considered to be ``meaningfully different'' from other plans in the
same grouping, and whether a deductible threshold of $1,000 would be
most appropriate and effective, or if a stricter or more relaxed
threshold should be adopted instead.
5. QHP Rate and Benefit Information (Sec. 156.210)
a. Age on Effective Date for SADPs
We propose at new Sec. 156.210(d)(1) to require issuers of stand-
alone dental plans (SADPs), as a condition of Exchange certification,
to use an enrollee's age at the time of policy issuance or renewal
(referred to as age on effective date) as the sole method to calculate
an enrollee's age for rating and eligibility purposes, beginning with
Exchange certification for PY 2024. We propose that this requirement
apply to Exchange-certified SADPs, whether sold on- or off-Exchange.
Since PY 2014, the process the FFEs use in QHP certification allows
SADP issuers seeking certification of their SADPs to enter multiple
options to explain how age is determined for rating and eligibility
purposes. Because the Federal eligibility and enrollment platform
operationalizes the rating and eligibility standards when an applicant
seeks SADP coverage through an SBE-FP, issuers in SBE-FPs have also
been required to comply with this part of the process. While market
rules at Sec. 147.102(a)(1)(iii) require medical QHP issuers to enter
age on effective date as the method to calculate an enrollee's age for
rating and eligibility purposes, SADP issuers have been able to enter
any of the following four options in the Business Rules Template: (1)
Age on effective date; (2) Age on January 1st of the effective date
year; (3) Age on insurance date (age on birthday nearest the effective
date); or (4) Age on January 1st or July 1st.\206\
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\206\ See, for example, Qualified Health Plan Issuer Application
Instructions, Plan Year 2023, Extracted section: Section 3B:
Business Rules. https://www.qhpcertification.cms.gov/s/Business%20Rules.
---------------------------------------------------------------------------
Despite the availability of these other options for SADPs, age on
effective date is the most commonly used age rating methodology; the
vast majority of individual market SADP issuers have used the age on
effective date method since PY 2014. Not only is it the most commonly
used method, but it is also the most straightforward methodology for
consumers to understand. For example, under the age on effective date
method, if an enrollee is age 30 at the time of a plan's effective
date, the enrollee is rated at age 30 for the rest of the plan year.
The less commonly used options are likely more confusing for consumers,
who may experience a mismatch between their age on the date on which
they enrolled into an SADP versus the age on which the rate charged to
them is based, due to the alternate age calculation methodologies.
Thus, consumers can more easily understand the premium rate they are
charged when the age on effective date method is used instead of the
other methods, reducing consumers confusion.
Allowing Exchange-certified SADPs to rate by other methods imposes
unnecessary complexity, not only to CMS as operator of the FFEs and the
Federal eligibility and enrollment platform, but also to enrollment
partners and consumers in the Exchanges on the Federal platform. For
example, the added complexity results in occasional inability to
effectuate enrollment due to the unclear logic used to support the
uncommon and alternative Exchange-certified SADP rating methods, which
require expensive manual workarounds for the Exchanges on the Federal
platform and Exchange-certified SADP issuers. Using the other methods
also affects the efficiency of Classic DE and EDE partners, who rely
more on Application Programming Interfaces (APIs) and must account for
these alternate Exchange-certified SADP age calculation methods. It is
more challenging for the Classic DE and EDE partners to replicate the
logic needed for enrolling consumers into Exchange-certified SADPs
using methods other than the conventional age on effective date method.
Additionally, the more complicated alternative age calculation methods
currently in use make it more difficult for consumers to understand the
premium rate they are charged. Thus, requiring Exchange-certified SADPs
to use the age on effective date methodology to calculate an enrollee's
age as a condition of QHP certification, and consequently removing the
less commonly used and more complex age calculation methods, will
reduce consumer confusion and promote operational efficiency.
By helping to reduce consumer confusion and promote operational
efficiency during the QHP certification process, this proposed policy
would help facilitate more informed enrollment decisions and enrollment
satisfaction. Accordingly, we believe it is appropriate to extend this
proposed certification requirement to SADPs seeking certification on
the FFEs as well as the SBE-FPs and SBEs. We seek comment on any
anticipated challenges that this proposal could present for SBEs using
their own platform, and whether and to what extent we should, if this
proposal is finalized, limit or delay this proposed certification
requirement for those SBEs.
We acknowledge the potential that Exchange-certified SADPs whose
issuers use the alternative age calculation methods could withdraw from
the Exchanges rather than comply with this new requirement. However, we
do not anticipate that any such issuers would choose to withdraw from
the Exchanges because of this proposal; and even if an issuer were to
withdraw, we would expect that any such withdrawal would cause minimal
disruption to consumers and other Exchange-certified plans. Given that
a large majority of Exchange-certified SADP issuers are already using
the age on effective date method, and based on the current availability
of such plans in all service areas, we do not anticipate that consumers
or other Exchange-certified plans would be materially affected.\207\
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\207\ In the EHB Rule (78 FR at 12853), we operationalized
section 1302(b)(4)(F) of the ACA to permit QHP issuers to omit
coverage of the pediatric dental EHB if an Exchange-certified SADP
exists in the same service area in which they intend to offer
coverage. As a corollary, if no such SADP is offered through an
Exchange in that service area, then all health plans offered through
the Exchange in that service area would be required to provide
coverage of the pediatric dental EHB, as section 2707(a) of the PHS
Act requires all non-grandfathered plans in the individual and small
group markets to provide coverage of the EHB package described at
section 1302(a) of the ACA.
---------------------------------------------------------------------------
We seek comment on this proposal to require Exchange-certified
SADPs, whether sold on- or off-Exchange, to use age on effective date
as the sole method
[[Page 78284]]
to calculate an enrollee's age for rating and eligibility purposes,
beginning with PY 2024.
b. Guaranteed Rates for SADPs
We propose at new Sec. 156.210(d)(2) to require issuers of SADPs,
as a condition of Exchange certification, to submit guaranteed rates
beginning with Exchange certification for PY 2024. We propose that this
requirement apply to Exchange-certified SADPs, whether they are sold
on- or off-Exchange.
SADPs are excepted benefits, as defined by section 2791(c)(2)(A) of
the PHS Act and HHS implementing regulations at Sec. Sec.
146.145(b)(3)(iii)(A) and 148.220(b)(1), and are not subject to the PHS
Act insurance market reform provisions that generally apply to non-
grandfathered health plans in the individual and group markets inside
and outside the Exchange.\208\ In particular, because SADP issuers are
not required to comply with the premium rating requirement under
section 2701 of the PHS Act applicable to non-grandfathered individual
and small group health insurance coverage, we have permitted SADP
issuers in the FFEs and SBE-FPs to comply with the rate information
submission requirements at Sec. 156.210 under a modified
standard.\209\ Specifically, CMS has historically granted SADP issuers
the flexibility to offer guaranteed or estimated rates. By indicating
the rate is a guaranteed rate, the SADP issuer commits to charging the
consumer the approved premium rate, which has been calculated using
consumers' geographic location, age, and other permissible rating
factors. Estimated rates require enrollees to contact the issuer to
determine a final rate.
---------------------------------------------------------------------------
\208\ See 42 U.S.C. 300gg-21(b) and (c) and 42 U.S.C. 300gg-
63(b). Examples of PHS Act insurance market reforms added by the ACA
that do not apply to stand-alone dental plans include but are not
limited to section 2702 guaranteed availability standards, section
2703 guaranteed renewability standards, and section 2718 medical
loss ratio standards.
\209\ See, for example, the 2014 Final Letter to Issuers on
Federally-facilitated and State Partnership Exchanges for more
information on how SADPs in the FFEs and SBE-FPs have flexibility to
comply with the rate information submission requirements at Sec.
156.210.
---------------------------------------------------------------------------
This flexibility for SADPs to offer estimated rates was effective
for SADP issuers beginning with PY 2014. It was necessary because the
relevant certification template was originally designed to support
medical QHPs, which forced operational limits that prevented the
accurate collection of rating rules for SADPs. Since PY 2014, we have
improved the certification templates to allow SADPs to set the maximum
age for dependents to 18, and to rate all such dependents. Thus, the
FFEs and SBE-FPs can now accommodate dental rating rules properly in
most reasonable circumstances.
We believe this proposal would significantly benefit enrollees.
Consistent with Sec. Sec. 156.440(b) and 156.470, APTC may be applied
to the pediatric dental EHB portion of SADP premiums. If SADP issuers
submit estimated rates and subsequently modify their actual rates, the
Exchanges, including State Exchanges (including State Exchanges on the
Federal platform) and FFEs, could incorrectly calculate APTC for the
pediatric dental EHB portion of a consumer's premium, which could
potentially cause consumer harm. Thus, since low-income individuals may
qualify for APTC \210\ and are disproportionately impacted by limited
access to affordable health care,\211\ we believe this proposed policy
change would help advance health equity by helping ensure that low-
income individuals who qualify for APTC are charged the correct premium
amount when enrolling in SADPs on the Exchange.
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\210\ The PTC is generally available to people who buy
Marketplace coverage and who have a household income that equals or
exceeds the Federal poverty level, and who meet other eligibility
criteria.
\211\ Research and policy analysis has shown that low-income
individuals are disproportionately impacted by lack of access to
affordable health care. According to a 2018 Health Affairs Health
Policy Brief, compared to higher-income Americans, low-income
individuals face greater barriers to accessing medical care. More
specifically, low-income individuals are less likely to have health
insurance, receive new drugs and technologies, and have ready access
to primary and specialty care. See Khullar, D., & Chokshi, D. A.
(2018). Health, Income, And Poverty: Where We Are And What Could
Help. Health Affairs. https://doi.org/10.1377/hpb20180817.901935.
Additionally, a 2007 study found that barriers to health care can be
insurmountable for low-income families, even those with insurance
coverage. In particular, this study found that families reported
three major barriers to health care: lack of insurance coverage,
poor access to services, and unaffordable costs. See DeVoe, J. E.,
Baez, A., Angier, H., Krois, L., Edlund, C., Carney, P. A. (2007).
Insurance + Access [ne] Health Care: Typology of Barriers to Health
Care Access for Low-Income Families. Annals of Family Medicine,
5(6), 511-518. https://doi.org/10.1370/afm.748.
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We acknowledge that requiring guaranteed rates presents a small
risk that SADP issuers that offer estimated rates could cease offering
SADPs on the Exchanges. While we recognize this risk, we strongly
believe that the benefits of this proposal far exceed the
disadvantages. Specifically, as discussed previously, we believe this
proposed policy change would significantly reduce the risk of consumer
harm by reducing the risk of incorrect APTC calculation for the
pediatric dental EHB portion of premiums. Thus, we believe this
proposed policy would have a positive financial impact by ensuring that
SADP enrollees receive the correct APTC calculation for the pediatric
dental EHB portion of premiums, and therefore, are charged the correct
premium rate.
We also note that although the FFEs and SBE-FP issuers currently
allow SADP issuers to submit estimated rates, the vast majority elect
to submit guaranteed rates. The vast majority of SADP issuers offering
on-Exchange and off-Exchange Exchange-certified SADPs also elect to
submit guaranteed rates. Given that most SADP issuers already submit
guaranteed rates, the majority of SADP issuers are unlikely to be
impacted by this proposal.
Because we believe this proposed policy would significantly benefit
enrollees by ensuring that SADP enrollees receive the correct APTC
calculation for the pediatric dental EHB portion of premiums, and
therefore, are charged the correct premium rate, we believe it is
appropriate to apply this proposed certification requirement to SADPs
seeking certification on the FFEs as well as the SBE-FPs and SBEs. We
seek comment on any anticipated challenges that this proposal could
present for SBEs using their own platform, and whether and to what
extent we should, if this proposal is finalized, limit or delay this
proposed certification requirement for those SBEs.
We seek comment on this proposal to require Exchange-certified SADP
issuers to submit guaranteed rates as a condition of Exchange
certification beginning with Exchange certification for PY 2024.
6. Plan and Plan Variation Marketing Name Requirements for QHPs (Sec.
156.225)
We propose to add a new paragraph (c) to Sec. 156.225 to require
that QHP plan and plan variation \212\ marketing names include correct
information, without omission of material fact, and do not include
content that is misleading. If finalized as proposed, CMS would review
plan and plan variation marketing names during the annual
[[Page 78285]]
QHP certification process in close collaboration with State regulators
in States with Exchanges on the Federal platform.
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\212\ In practice, CMS and interested parties often use the term
``plan variants'' to refer to ``plan variations.'' Per Sec.
156.400, plan variation means a zero-cost sharing plan variation, a
limited cost sharing plan variation, or a silver plan variation.
Issuers may choose to vary plan marketing name by the plan variant--
for example, use one plan marketing name for a silver plan that
meets the actuarial value (AV) requirements at Sec. 156.140(b)(2),
and a different name for that plan's equivalent that meets the AV
requirements at Sec. 156.420(a)(1), (2), or (3).
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Section 1311(c)(1)(A) of the ACA states that the Secretary shall
establish QHP certification criteria, which must include, at a minimum,
that a QHP meet marketing requirements and not employ marketing
practices or benefit designs that have the effect of discouraging
enrollment by individuals with significant health needs. CMS, States,
and QHP issuers work together to ensure that consumers can make
informed decisions when selecting a health insurance plan based on
factors such as QHP benefit design, cost-sharing requirements, and
available financial assistance. In PY 2022, Exchanges on the Federal
platform saw a significant increase in the number of plan and plan
variation marketing names that included cost-sharing information and
other benefit details. Following Open Enrollment for PY 2022, CMS
received complaints from consumers in multiple States who misunderstood
cost-sharing information in their QHP's marketing name.
Upon further investigation, CMS and State regulators determined
that this language was often incorrect or could be reasonably
interpreted by consumers as misleading based on information in
corresponding plan benefit documentation submitted as part of the QHP
certification process.\213\ CMS's review of QHP data for PY 2023
indicates continued use of cost-sharing information in plan and plan
variation marketing names.
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\213\ For example, in some cases a plan marketing name described
a limited benefit in a way that could be understood as being
unlimited, such as a ``$5 co-pay'' when the $5 co-pay was only
available for an initial visit. Consumers were concerned upon
learning the full extent of the cost-sharing for which they would be
responsible during the plan year.
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This proposed policy would require all information included in plan
and plan variation marketing names that relates to plan attributes to
correspond to and match information that issuers submit for the plan in
the Plans & Benefits Template, and in other materials submitted as part
of the QHP certification process, such as any content that is part of
the Summary of Benefits and Coverage. If necessary, this information
can be included in the ``Benefit Explanation'' field of the Plans &
Benefits Template. Consumers applying for coverage should be able to
understand references to benefit information in plan and plan variation
marketing names, and they should be able to confirm any information
from a plan or plan variation marketing name in the plan's publicly
available benefit descriptions. Also, plan benefit or cost sharing
information in a plan or plan variation marketing name should not
conflict with plan or plan variation information displayed on
HealthCare.gov during the plan selection process in terms of dollar
amount and, where applicable, terminology.
Under this proposal, as an example, CMS would flag plan and plan
variation marketing names for revision to help consumers understand the
cost-sharing and coverage implications. The following are examples of
information that should be validated to ensure accuracy and consistency
across the plan or plan variation marketing name, Plans & Benefits
Template, HealthCare.gov plan selection information, and other
applicable QHP certification materials. These examples are not all-
inclusive, but they illustrate the kinds of information in plan and
plan variation marketing names that could mislead consumers through
inaccurate information or omission of material facts.
Cost-sharing amounts that do not specify limitations the
plan or plan variation includes, such as whether the cost-sharing
amount is only available for drugs in a certain prescription drug
category/tier, providers in a specific network or tier, or for a
certain number of provider visits following which a higher cost-sharing
amount will apply;
Dollar amounts that do not specify what they refer to (for
example, deductible, maximum out-of-pocket, or something else), whether
they apply only to medical, drug, or another type of benefit, or
whether, in cases of deductible or maximum out-of-pocket amounts, they
apply to an individual or a family;
Benefits, such as adult dental care, that are listed in a
plan or plan variation marketing name to indicate that they are
covered, but that plan documents indicate are not covered; and
Reference(s) to health savings accounts (HSAs) in
marketing names of plans or plan variations that do not permit
enrollees to set up an HSA.\214\
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\214\ An HSA is a tax-exempt trust or custodial account that a
taxpayer may set up with a qualified HSA trustee to pay or reimburse
certain medical expenses they incur. (See IRS Publication 969
(2021), Health Savings Accounts and Other Tax-Favored Health Plans:
https://www.irs.gov/publications/p969#en_US_2021_publink1000204030.)
Taxpayers must meet certain requirements to qualify for an HSA,
including being enrolled in a High Deductible Health Plan (HDHP) as
defined in Section 223(c)(2) of the U.S. Tax Code. HDHP requirements
include minimum levels for family and individual deductible
amounts--for example, for calendar year 2022, an HDHP was defined as
a health plan with an annual deductible not less than $1,400 for
self-only coverage or $2,800 for family coverage, with annual out-
of-pocket expenses not more than $7,050 for self-only coverage or
$14,100 for family coverage. (See IRS Rev. Proc. 2021-25: https://www.irs.gov/pub/irs-drop/rp-21-25.pdf.) Plan variants with limited
or no cost sharing, such as those described at Sec. 156.420(a)(1)
and (b)(1), by definition do not meet the requirements to be HDHPs,
and enrollees in these plans therefore cannot set up an HSA. CMS
will consider references to HSAs in the names of plans that do not
qualify as HDHPs to be incorrect and misleading.
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We seek comment on this proposal and whether there are additional
methods of preventing consumer confusion and market disruption related
to this issue. In particular, we seek comment on the potential to
identify components of plan and plan variation marketing names that
could be uniformly structured and defined across QHPs, so as to
consistently communicate information and ensure that plan and plan
variation marketing names complement and do not contradict other
sources of plan detail, such as cost-sharing and benefit information,
displayed during the plan selection process on HealthCare.gov and other
enrollment platforms. For example, we seek comment on whether, to
address this, CMS should establish a required format for plan and plan
variation marketing names that specifies elements such as name of
issuer, metal level, and limited cost-sharing information.
7. Plans That Do Not Use a Provider Network: Network Adequacy (Sec.
156.230) and Essential Community Providers (Sec. 156.235)
We propose to revise the network adequacy and ECP standards at
Sec. Sec. 156.230 and 156.235 to state that all individual market QHPs
and SADPs and all SHOP QHPs across all Exchanges must use a network of
providers that complies with the standards described in those sections,
and to remove the exception that these sections do not apply to plans
that do not use a provider network.
In the Exchange Establishment Rule, we established the minimum
network adequacy criteria that health and dental plans must meet to be
certified as QHPs at Sec. 156.230. In the 2016 Payment Notice, we
modified Sec. 156.230(a), in part, to specify that network adequacy
requirements apply only to QHPs that use a provider network to deliver
services to enrollees and that a provider network includes only
providers that are contracted as in-network. We also revised Sec.
156.235(a) to state that the ECP criteria apply only to QHPs that use a
provider network. In Part 1 of the 2022
[[Page 78286]]
Payment Notice (86 FR 6138), we added section (f) to Sec. 156.230 to
state that a plan for which an issuer seeks QHP certification or any
certified QHP that does not use a provider network (meaning that the
plan or QHP does not condition or differentiate benefits based on
whether the issuer has a network participation agreement with a
provider that furnishes covered services) is not required to comply
with the network adequacy standards at paragraphs (a) through (e) of
Sec. 156.230 to qualify for certification as a QHP. In that rule, we
also stated that plans that do not utilize a provider network must
still comply with all applicable QHP certification requirements to
obtain QHP certification, which ensures that any plan that does not
comply with applicable QHP certification requirements will be denied
QHP certification (86 FR 6138).
Since 2016, only a single issuer has sought a certification on an
FFE for a plan that does not use a network. Despite lengthy
negotiations with this issuer, our experience with this plan convinced
us that commenters to Part 1 of the 2022 Payment Notice who raised
concerns about the burden plans without networks place on enrollees
appear to have been correct, and so, for that reason and the other
reasons explained below, we are proposing to revisit this policy.
Section 1311(c)(1)(B) and (C) of the ACA directs HHS to establish
by regulation certification criteria for QHPs, including criteria that
require QHPs to ensure a sufficient choice of providers (in a manner
consistent with applicable provisions under section 2702(c) of the PHS
Act, which governs insured health plans that include a provider
network), provide information to enrollees and prospective enrollees on
the availability of in-network and out-of-network providers, and to
include within health insurance plan provider networks those ECPs that
serve predominantly low income, medically underserved individuals. HHS
carries out this directive through establishing network adequacy and
ECP requirements and reviewing QHP compliance with such requirements.
When we added section (f) to Sec. 156.230 in Part 1 of the 2022
Payment Notice to except plans that do not use a provider network from
meeting the network adequacy standards described at Sec. 156.230(a)
through (e), we did not intend to allow a plan to ignore the minimum
statutory criteria for QHP certification. Plans without provider
networks still are required by section 1311(c)(1)(B) of the ACA to
ensure sufficient choice of providers and provide information to
enrollees and prospective enrollees on the availability of in-network
and out-of-network providers to obtain certification, even though they
are not currently subject to Sec. Sec. 156.230 and 156.235. Whether a
plan that does not use a network provides sufficient a choice of
providers is a more nuanced inquiry than a simple assertion that an
enrollee can receive benefits for any provider. For a prospective
enrollee, a ``sufficient choice of providers'' likely involves factors
like the burden of accessing those providers, including whether there
are providers nearby that they can see without unreasonable delay that
would accept such a plan's benefit amount as payment in full, or
whether they are able to receive all of the care for a specific health
condition from a single provider without incurring additional out-of-
pocket costs. These are among the factors involved in determining
whether a network plan is in compliance with the network adequacy and
ECP standards at Sec. Sec. 156.230 and 156.235; a plan's compliance
with these regulatory standards is one way that HHS can verify that
plans meet the statutory criteria that QHPs ensure a sufficient choice
of providers, including ECPs.
To more effectively ensure that all plans provide sufficient choice
of providers and to provide for consistent standards across all QHPs,
we believe it would be appropriate to revise the network adequacy and
ECP standards at Sec. Sec. 156.230 and 156.235 to state that all QHPs,
including SADPs, must use a network of providers that complies with the
standards described in those sections and to remove the exception at
Sec. 156.230(f). Consistent standards also would allow for easier
comparability across all QHPs in a more comprehensible manner for
prospective enrollees. The benefits of easier comparability between
plans and other challenges posed by plan choice overload are discussed
in more detail in the preamble sections about Standardized Plan Options
and Non-Standardized Plan Option Limits.
We have previously stated that ``nothing in [the ACA] requires a
QHP issuer to use a provider network,'' (84 FR at 6154) and it is true
that the ACA includes no standalone network requirement. However, after
revisiting the statute, we now doubt that a plan without a network can
comply with the statutory requirement at section 1311(c)(1)(C) of the
ACA that ``a plan shall, at a minimum . . . include within health
insurance plan networks those essential community providers, where
available, that serve predominately low-income, medically-underserved
individuals.'' We have always understood Section 1311(c)(1)(C) of the
ACA to require all plans to provide sufficient access to ECPs, where
available, whether or not the plan included a provider network. But we
have not previously considered whether this specific statutory text is
consistent with a policy exempting plans without a network from network
adequacy regulations. We now understand the statute's text to best
support a reading that access to ECPs will be provided ``within health
insurance networks.''
Additionally, under section 1311(e)(1)(B) of the ACA and Sec.
155.1000(c)(2), an Exchange may certify plans only if it determines
that making the plans available through the Exchange is in the
interests of qualified individuals. Section 155.1000 provides Exchanges
with broad discretion to certify health plans that may otherwise meet
the QHP certification standards specified in part 156. When we
implemented section 1311(e)(1)(B) of the ACA at Sec. 155.1000(c)(2) in
the Exchange Establishment Rule, we noted that ``an Exchange could
adopt an `any qualified plan' certification, engage in selective
certification, or negotiate with plans on a case-by-case basis'' (77 FR
18405). Under this authority, we believe that requiring QHPs to use a
provider network would be in the interests of qualified individuals and
would better protect consumers from potential harms that could arise in
cases where QHPs do not use provider networks. For example, the
implementation of a provider network can help mitigate against risks of
substantial out-of-pocket costs, ensure access without out-of-pocket
costs to preventive services that must be covered without cost sharing,
and, in the individual market, facilitate comparability of standardized
plan options. Furthermore, studies have found that provider networks
allow for insurer-negotiated prices and controlled (that is, reduced)
costs in the form of reduced patient cost sharing, premiums, and
service price, as compared with such services obtained out of
network.\215 216\
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\215\ Benson NM, Song Z. Prices And Cost Sharing For
Psychotherapy In Network Versus Out Of Network In The United States.
Health Aff (Millwood). 2020 Jul;39(7):1210-1218. https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.01468.
\216\ Song, Z., Johnson, W., Kennedy, K., Biniek, J. F., &
Wallace, J. Out-of-network spending mostly declined in privately
insured populations with a few notable exceptions from 2008 to 2016.
Health Aff. 2020;39(6), 1032-1041. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2019.01776.
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This proposed revision would assure HHS that all plans certified as
QHPs
[[Page 78287]]
offer sufficient choice of providers in compliance with a consistent
set of criteria for easier comparability across all QHPs and better
ensure substantive consumer protections afforded by the ACA without
undue barriers to access those protections. This consistency would be
valuable to consumers as it ensures all consumers will have access to a
set of providers with whom their plan has contracted in accordance with
our established network adequacy and ECP requirements and allows for
easier comparison between plans for prospective enrollees. This will
also allow consumers to seek care from providers with whom their plan
has negotiated a rate, limiting their potential exposure to out-of-
pocket costs under the plan.
Accordingly, pursuant to the authority delegated to HHS to
establish criteria for the certification of health plans as QHPs, we
propose to remove the exception at Sec. 156.230(f) and to revise
Sec. Sec. 156.230 and 156.235 to state that all individual market QHPs
and SADPs and all SHOP plan QHPs across all Exchanges-types must use a
network of providers that complies with the standards described in
those sections, beginning with PY 2024. Under this proposal, an
Exchange could not certify as a QHP a health plan that does not use a
network of providers. However, we solicit comment on whether it is
possible to design a plan that does not use a network in a way that
would address our concerns about the plan's ability to offer a
sufficient choice of providers without excessive burden on consumers,
or what regulatory standards such a plan could meet to ensure a
sufficient choice of providers without excessive burden on consumers.
This proposal would also generally apply to SADPs. Since 2014, the
FFEs have received, and approved, QHP certification applications for
SADPs that do not use a provider network in every plan year. However,
the number of SADPs that do not use a provider network has never
accounted for a significant number of SADPs approved as QHPs on the
FFEs. At their most prevalent in PY 2014, only 50 of the 1,521 SADPs
certified as QHPs on the FFEs were plans that do not use a provider
network. In PY 2022, only 8 of the 672 SADPs certified as QHPs on the
FFEs were plans that do not use a provider network.
Further, the number of SADPs on the FFEs that do not use a provider
network appears to be limited since 2017 to fewer and fewer States;
while 9 FFE States had SADPs that do not use a provider network
certified as QHPs in PY 2014, only 2 FFE States still had SADPs that do
not use a provider network certified in PY 2022. Since PY 2021, only 85
counties in Alaska and Montana still have SADPs that do not use a
provider network certified as QHPs. We assume that the few SADP issuers
that still offer SADPs that do not use a provider network on the FFEs
in Alaska and Montana only do so because of difficulty in maintaining a
sufficient provider network in those States. We believe it is
reasonable to assume that consumers increasingly gravitate towards
SADPs that use a network, given this overall decrease in the
availability of SADPs that do not use a provider network. We invite
comment to confirm these understandings, as well as comment on the
prevalence of SADPs that do not use a provider network offered outside
of the FFEs in the non-grandfathered individual and small group
markets.
[[Page 78288]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.022
Given the overall lack of popularity of SADPs that do not use a
provider network, we believe that consumers find that such plans do not
offer the same levels of protections against out-of-pocket costs as
network plans. Thus, we believe it would be appropriate to revise
Sec. Sec. 156.230 and 156.235 so that all SADPs must use a network of
providers that complies with the standards described in those sections
as a condition of QHP certification, beginning with PY 2024.
However, we are cognizant that it can be more challenging for SADPs
to establish a network of dental providers based on the availability of
nearby dental providers, and we are aware this proposal could result in
no SADPs offered through Exchanges in States like Alaska and Montana,
which have historically offered SADPs without
[[Page 78289]]
provider networks (see Table 12). Further, we are aware that having no
Exchange-certified SADPs offered through an Exchange in an area would
impact all non-grandfathered individual and small group plans in such
areas. Without an SADP available on the respective Exchange, all non-
grandfathered individual and small group health plans in impacted areas
would be required to cover the pediatric dental EHB. We note that
section 1302(b)(4)(F) of the ACA states that if such an SADP is offered
through an Exchange, another health plan offered through such Exchange
shall not fail to be treated as a QHP solely because the plan does not
offer coverage of pediatric dental benefits offered through the SADP.
In the EHB Rule (78 FR at 12853), we operationalized this provision
at section 1302(b)(4)(F) of the ACA to permit QHP issuers to omit
coverage of the pediatric dental EHB if an Exchange-certified SADP
exists in the same service area in which they intend to offer coverage.
As a corollary, if no such SADP is offered through an Exchange in that
service area, then all health plans offered through the Exchange in
that service area would be required to provide coverage of the
pediatric dental EHB, as section 2707(a) of the ACA requires all non-
grandfathered plans in the individual and small group markets to
provide coverage of the EHB package described at section 1302(a) of the
ACA. However, to our knowledge, at least one Exchange-certified SADP
has been offered in all service areas nationwide since implementation
of this requirement in 2014, and no Exchange has required a medical QHP
to provide coverage of the pediatric dental EHB in this manner. We
solicit comment to confirm this understanding.
To prevent a situation where this proposal would require health
plans in those areas to cover the pediatric dental EHB, we solicit
comment on the extent to which we should finalize a limited exception
to this proposal only for SADPs that sell plans in areas where it is
prohibitively difficult for the issuer to establish a network of dental
providers; this exception would not be applicable to health plans.
Under such an exception, we could consider an area to be
``prohibitively difficult'' for the SADP issuer to establish a network
of dental providers on a case-by-case basis, taking into account a
number of non-exhaustive factors, such as the availability of other
SADPs that use a provider network in the service area, and prior years'
network adequacy data to identify counties in which SADP issuers have
struggled to meet standards due to a shortage of dental providers.
Other factors could include an attestation from the issuer about
extreme difficulties in developing a dental provider network, or data
provided in the ECP/NA template or justification forms during the QHP
application submission process that reflect such extreme difficulties.
We seek comment on whether it would be appropriate to finalize such an
exception in this rule, other factors that we might consider in
evaluating whether an exception is appropriate, as well as alternative
approaches to such an exception.
We seek comment on this proposal, as well as on other topics
included in this section.
Compliance With Appointment Wait Time Standards
In the 2023 Payment Notice, HHS finalized the requirement that
issuers demonstrate compliance with appointment wait time standards via
attestation, beginning in PY 2024. Issuers must work with their network
providers to collect the necessary data to assess appointment wait
times and determine if their provider network meets the wait time
standards detailed in the 2023 Letter to Issuers, as CMS will begin
conducting such reviews of issuer attestations for PY 2024.
8. Essential Community Providers (Sec. 156.235)
We propose to expand access to care for low-income and medically
underserved consumers by strengthening ECP standards for QHP
certification, as discussed in this section. First, HHS proposes to
establish two additional stand-alone ECP categories at Sec.
156.235(a)(2)(ii)(B) for PY 2024 and beyond: Mental Health Facilities
and Substance Use Disorder (SUD) Treatment Centers. In doing so, two
provider types currently categorized as ``Other ECP Providers''
(Community Mental Health Centers and Substance Use Disorder (SUD)
Treatment Centers) would be recategorized within these new proposed
stand-alone ECP categories. We propose to crosswalk the Community
Mental Health Centers provider type into the newly created stand-alone
Mental Health Facilities category and the SUD Treatment Centers
provider type into the newly created stand-alone SUD Treatment Centers
category. Additionally, we propose to add Rural Emergency Hospitals
(REHs) as a provider type in the Other ECP Providers ECP category. This
addition reflects the fact that on or after January 1, 2023, REHs may
begin participating in the Medicare program. As CMS noted in July of
this year, ``[t]he REH designation provides an opportunity for Critical
Access Hospitals (CAHs) and certain rural hospitals to avert potential
closure and continue to provide essential services for the communities
they serve.'' \217\ HHS believes that the inclusion of REHs on the ECP
List may increase access to needed care for low-income and medically
underserved consumers in rural communities.
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\217\ https://www.cms.gov/newsroom/fact-sheets/rural-emergency-hospitals-proposed-rulemaking.
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ECPs include providers that serve predominantly low-income and
medically underserved individuals, and specifically include providers
described in section 340B(a)(4) of the PHS Act and section
1927(c)(1)(D)(i)(IV) of the Social Security Act (the Act). Section
156.235 establishes the requirements for the inclusion of ECPs in QHP
provider networks. Section 156.235(a) requires QHP issuers to include a
sufficient number and geographic distribution of ECPs in their
networks, where available. Each plan year, HHS releases a final list of
ECPs to assist issuers with identifying providers that qualify for
inclusion in a QHP issuer's plan network toward satisfaction of the ECP
standard under Sec. 156.235. The list is not exhaustive and does not
include every provider that participates or is eligible to participate
in the 340B drug program, every provider that is described under
section 1927(c)(1)(D)(i)(IV) of the Act, or every provider that may
otherwise qualify under Sec. 156.235. CMS endeavors to continue
improving the ECP list for future years. These efforts include direct
provider outreach to ECPs themselves, as well as reviewing the provider
data with Federal partners.
Section 156.235(b) establishes an Alternate ECP Standard for QHP
issuers that provide a majority of their covered professional services
through physicians employed directly by the issuer or a single
contracted medical group. We note that the above proposal establishing
two additional ECP categories and the proposed threshold requirements
discussed later in this section would affect all QHP issuers,
regardless of whether they are subject to the General ECP Standard
under Sec. 156.235(a) or Alternate ECP Standard under Sec.
156.235(b). However, SADP issuers would only be subject to such
requirements as applied to provider types that offer dental services,
as reflected in Sec. 156.235(a)(2)(ii)(B).
Currently, QHPs that utilize provider networks are required to
contract with at least 35 percent of available ECPs in each plan's
service area to participate in the plan's provider network. In
[[Page 78290]]
addition, under Sec. 156.235(a)(2)(ii)(B), medical QHPs must offer a
contract in good faith to at least one ECP in each of the available ECP
categories in each county in the plan's service area and offer a
contract in good faith to all available Indian health care providers in
the plan's service area. Under Sec. 156.235(a)(2)(ii)(B), the six ECP
categories currently include Federally Qualified Health Centers, Ryan
White Program Providers, Family Planning Providers, Indian Health Care
Providers, Inpatient Hospitals, and Other ECP Providers (currently
defined to include Substance Use Disorder Treatment Centers, Community
Mental Health Centers, Rural Health Clinics, Black Lung Clinics,
Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics, and
Tuberculosis Clinics).
The proposed establishment of two new stand-alone ECP categories
(Mental Health Facilities and SUD Treatment Centers) would strengthen
the ECP standard in two ways: (1) by requiring that medical QHP issuers
offer a contract in good faith to at least one SUD Treatment Center and
at least one Mental Health Facility that qualify as ECPs in each county
in the plan's service area, as opposed to being blended with other
provider types in the existing ``Other ECP Provider'' category; and (2)
by decreasing the number of provider types remaining in the ``Other ECP
Provider'' category, thereby increasing the likelihood that remaining
provider types included in the ``Other ECP Provider'' category will
receive a contract offer from a medical QHP issuer to satisfy the
requirement that they must offer a contract in good faith to at least
one provider in each ECP category in each county in the plan's service
area.
Given that the ECP standard is facility-based, if finalized as
proposed, the inclusion of SUD Treatment Centers and Mental Health
Facilities on the HHS ECP List would be limited to those facilities
identified by the Substance Abuse and Mental Health Services
Administration (SAMHSA) and/or CMS as providing such services, in
addition to fulfilling other ECP qualification requirements as
specified at Sec. 156.235(c).
If finalized as proposed, the eight available stand-alone ECP
categories would consist of the following: (1) Federally Qualified
Health Centers; (2) Ryan White Program Providers; (3) Family Planning
Providers; (4) Indian Health Care Providers; (5) Inpatient Hospitals,
(6) Mental Health Facilities; (7) SUD Treatment Centers, and (8) Other
ECP Providers, to include Rural Health Clinics, Black Lung Clinics,
Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics, and
Tuberculosis Clinics. The proposed ECP categories and ECP provider
types within those categories in the FFEs for PY 2024 and beyond are
set forth in Table 13.
[GRAPHIC] [TIFF OMITTED] TP21DE22.023
[[Page 78291]]
In addition, HHS proposes to revise Sec. 156.235(a)(2)(i) to
require QHPs to contract with at least a minimum percentage of
available ECPs in each plan's service area within certain ECP
categories, as specified by HHS. Specifically, HHS proposes to require
QHPs to contract with at least 35 percent of available FQHCs that
qualify as ECPs in the plan's service area and at least 35 percent of
available Family Planning Providers that qualify as ECPs in the plan's
service area. Furthermore, HHS proposes to revise Sec.
156.235(a)(2)(i) to clarify that these proposed requirements would be
in addition to the existing provision that QHPs must satisfy the
overall 35 percent ECP threshold requirement in the plan's service
area. We note that HHS would retain its current overall ECP provider
participation standard of 35 percent of available ECPs based on the
applicable PY HHS ECP list, including approved ECP write-ins that would
also count toward a QHP issuer's satisfaction of the 35 percent
threshold.
HHS is proposing that only two ECP categories, FQHCs and Family
Planning Providers, be subject to the additional 35 percent threshold
in PY 2024 and beyond. These two categories were selected, in part,
because they represent the two largest ECP categories; together, these
two categories comprise roughly 62 percent of all facilities on the ECP
List. Applying an additional 35 percent threshold to these two
categories could increase consumer access in low-income areas that
could benefit from the additional access to the broad range of health
care services that these particular providers offer. HHS may consider
applying a specified threshold to other ECP categories in future
rulemaking, if HHS finds that additional ECP categories contain a
sufficient number and geographic distribution of providers to allow for
application of the threshold without inflicting undue burden on issuers
by effectively forcing them to contract with a few specific providers.
Based on data from PY 2023, it is likely that a majority of issuers
would be able to meet or exceed the threshold requirements for FQHCs
and Family Planning Providers without needing to contract with
additional providers in these categories. To illustrate, if these
requirements had been in place for PY 2023, out of 137 QHP issuers on
the FFEs, 76 percent would have been able to meet or exceed the 35
percent FQHC threshold, while 61 percent would have been able to meet
or exceed the 35 percent Family Planning Provider threshold without
contracting with additional providers. For SADP issuers, 84 percent
would have been able to meet the 35 percent threshold requirement for
FQHCs offering dental services without contracting with additional
providers. In PY 2023, for medical QHPs, the mean and median
percentages of contracted ECPs for the FQHC category were 74 and 83
percent, respectively. For the Family Planning Providers category, the
mean and median percentages of contracted ECPs were 66 and 71 percent,
respectively. For SADPs, the mean and median percentages of contracted
ECPs for the FQHC category were 61 and 64 percent, respectively.
We acknowledge challenges associated with a general shortage and
uneven distribution of SUD Treatment Centers and Mental Health
Facilities. However, the ACA requires that a QHP's network include ECPs
where available. As such, the proposal to require QHPs to offer a
contract to at least one available SUD Treatment Center and one
available Mental Health Facility in every county in the plan's service
area does not unduly penalize issuers facing a lack of certain types of
ECPs within a service area, meaning that if there are no provider types
that map to a specified ECP category available within the respective
county, the issuer is not penalized. Further, as outlined in prior
Letters to Issuers, HHS prepares the applicable PY HHS ECP list that
potential QHPs use to identify eligible ECP facilities. The HHS ECP
list reflects eligible providers (that is, the denominator) from which
an issuer may select for contracting to count toward satisfying the ECP
standard. As a result, issuers are not disadvantaged if their service
areas contain fewer ECPs. HHS anticipates that any QHP issuers falling
short of the 35 percent threshold for PY 2024 and beyond could satisfy
the standard by using ECP write-ins and justifications. As in previous
years, if an issuer's application does not satisfy the ECP standard,
the issuer would be required to include as part of its application for
QHP certification a satisfactory justification.
We seek comment on these proposals.
9. Termination of Coverage or Enrollment for Qualified Individuals
(Sec. 156.270)
a. Establishing a Timeliness Standard for Notices of Payment
Delinquency
We propose to amend Sec. 156.270(f) by adding a timeliness
standard to the requirement for QHP issuers to send enrollees notice of
payment delinquency. Specifically, we propose to revise Sec.
156.270(f) to require issuers to send notice of payment delinquency
promptly and without undue delay. HHS has long required issuers to send
notices of non-payment of premium (77 FR 18469), so that enrollees who
become delinquent on premium payments are aware and have a chance to
avoid termination of coverage. In accordance with Sec. 156.270(a),
issuers may terminate coverage for the reasons specified in Sec.
155.430(b), which under paragraph (2)(ii) includes termination of
coverage due to non-payment of premiums. Enrollees who are receiving
APTC and who fail to timely pay their premiums are entitled to a 3-
month grace period, described at Sec. 156.270(d), during which they
may return to good standing by paying all outstanding premium before
the end of the 3 months. Enrollees who are not receiving APTC may also
be entitled to a grace period under State law, if applicable.
HHS has an interest in helping enrollees maintain coverage by
establishing basic standards of communication between the QHP issuer
and enrollee regarding premium payment status, especially at the start
of an enrollment and when an enrollment has entered delinquency for
failure to timely pay premium and is at risk for termination. For
example, before Exchange coverage is effectuated, the Exchanges on the
Federal platform generally require that the enrollee make a binder
payment (first month's premium) by prescribed due dates.\218\ At Sec.
156.270(f), HHS has also regulated on communicating to an enrollee when
they have become delinquent on premium payment and when their coverage
has been terminated. But while the regulation at Sec. 156.270(f)
requires that issuers notify enrollees when they become delinquent on
premium payments, CMS currently sets no timeliness requirements for
issuers. In conducting oversight of issuers, HHS is aware that in some
instances, issuers have delayed notifying enrollees of delinquency. HHS
is concerned that there may be situations in which enrollees are not
timely informed that they have become delinquent on premium payments,
thus limiting the amount of time they have available to rectify the
delinquency and avoid termination of coverage. In extreme cases, an
enrollee may not become aware that they have become delinquent until
termination of coverage has already occurred. For example, if an
enrollee (who was not receiving APTC) failed to pay August's premium
but was not informed by the issuer they had become delinquent until
September, they would have already lost coverage and would not have an
opportunity to
[[Page 78292]]
restore it. There may also be uncertainty among issuers regarding their
requirement to send notices of delinquency, since HHS has not provided
guidance on when this notice must be sent.
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\218\ See Sec. 155.400(e).
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Modifying Sec. 156.270(f) to require issuers to send notices of
payment delinquency promptly and without undue delay would ensure that
issuers are promptly sending these notices when enrollees fail to make
premium payments, so that enrollees are aware they are at risk of
losing coverage, including when they are entering a grace period
(either the 3-month grace period for enrollees who are receiving APTC,
or a State grace period if applicable). It would also provide clarity
to issuers regarding their obligation to send a notice when an enrollee
becomes delinquent on premium payment. Finally, updating this
regulation would serve HHS' goal of promoting continuity of coverage by
ensuring enrollees are aware they have become delinquent on premium
payment and have a chance to pay their outstanding premium to avoid
losing coverage. To further help ensure that notices are sent in a
timely and uniform manner, HHS also believes it would be important to
specify the number of days within which the issuer must send notice
from the time an enrollee becomes delinquent on payment. However, we
also recognize that issuers have a variety of practices for sending
delinquency notices, and thus we request comment on what a reasonable
timeframe would be for sending notices of delinquency to enrollees.
We seek comments on this proposal.
10. Final Deadline for Reporting Enrollment and Payment Inaccuracies
Discovered After the Initial 90-Day Reporting Window (Sec.
156.1210(c))
We propose to amend Sec. 156.1210(c) to remove the alternate
deadline at Sec. 156.1210(c)(2) that allows an issuer to describe all
data inaccuracies identified in a payment and collection report by the
date HHS notifies issuers that the HHS audit process with respect to
the plan year to which such inaccuracy relates has been completed, in
order for these data inaccuracies to be eligible for resolution.
In prior rulemakings (78 FR 65080 through 65081, 85 FR 29254, and
86 FR 24256 through 24258), we established provisions at Sec. 156.1210
related to the review and identification of inaccuracies in the monthly
payment and collection reports provided by HHS for Exchange coverage.
These reports currently include information on APTC the Federal
Government is paying to the issuer for each policy listed on the
report, any amounts owed by the issuer for FFE and SBE-FP user fees, as
well as any adjustments from previous payments under those programs.
This process is intended to confirm that accurate payments are made and
to facilitate adjustments where inaccuracies are identified. The
policies and standards governing this process have evolved over time as
HHS, State Exchanges, and issuers have gained experience with handling
payment errors and enrollment reconciliation activities for Exchange
coverage. Issuers are generally required to review these detailed
monthly reports against the payments they expect for each policy based
on the eligibility and enrollment information transmitted by the
Exchange, and any amounts it expects the Federal Government to collect
for FFE and SBE-FP user fees. If an issuer identifies an inaccuracy in
these amounts (including incorrect payment amounts, or extra or missing
policies in the report), it must notify HHS or the State Exchange (as
applicable) within certain timeframes. HHS works with issuers and State
Exchanges (as applicable) to resolve any discrepancies between the
amounts listed in the payment and collections report and the amounts
the issuer believes it should receive for the time period(s) specified
on the report. The prompt identification and correction of payment and
enrollment errors protects enrollees from unanticipated tax liability
that could result if the APTC is greater than the amount authorized by
the Exchange and accepted by the enrollee. It also supports the
efficient operation of Exchanges by aligning the Exchange's enrollment
and eligibility data, payments provided by and collected by HHS for
Exchange coverage, and the issuer's own records of payments due.
Section 156.1210(c) currently establishes the final deadline to
report inaccuracies identified in a payment and collections report for
discovered underpayments \219\ as before the later of (1) the end of
the 3-year period beginning at the end of the plan year to which the
inaccuracy relates or (2) the date by which HHS notifies issuers that
the HHS audit process with respect to the plan year to which such
inaccuracy relates has been completed. The final 3-year or end of the
HHS audit process deadline set forth in Sec. 156.1210(c)(1) and (2) is
significant because HHS will only provide payment to the issuer for
identified data inaccuracies related to discovered underpayments
reported before this deadline.\220\ As we explained in part 2 of the
2022 Payment Notice (86 FR 24257), under section 1313(a)(6) of the ACA,
``payments made by, through, or in connection with an Exchange are
subject to the False Claims Act (31 U.S.C. 3729, et. seq.) if those
payments include any Federal funds.'' As such, if any issuer has an
obligation to pay back APTC or pay additional user fees, the issuer
could be liable under the False Claims Act for knowingly and improperly
avoiding the obligation to pay. Section 156.1210(c)(3) therefore states
that if a payment error is discovered after the 3-year or end of audit
reporting deadline as set forth at Sec. 156.1210(c)(1) and (2), the
issuer is obligated to notify HHS and the State Exchange (as
applicable) and repay any overpayment.
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\219\ Underpayment refers to both APTC underpayments to the
issuer and user fee overpayments to HHS, for which an issuer would
be entitled to additional payment from HHS.
\220\ HHS will work with the issuer or the State Exchange (as
applicable) to resolve the inaccuracy in these situations as long as
the issuer meets other applicable requirements. For example, the
issuer must demonstrate that failure to identify the inaccuracy and
submit it to HHS or the State Exchange (as applicable) in a timely
manner (within the 90-day reporting window under Sec. 156.1210(a))
was not unreasonable or due to the issuer's misconduct or
negligence. See 45 CFR 156.1210(b)(2). In addition, once identified,
the issuer must notify HHS or the State Exchange (as applicable)
within 15 days of identifying the inaccuracy. See 45 CFR
156.1210(b)(1).
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After further consideration of the final deadline for reporting
identified data inaccuracies for discovered underpayments, we propose,
beginning with adjustments to APTC and user fee payments and
collections for 2015 plan year coverage,\221\ to remove the alternate
deadline currently set forth at Sec. 156.1210(c)(2) to ensure HHS and
Exchange processes for handling payment and enrollment disputes related
to discovered underpayments are completed before the existing IRS
limitation on filing corrected tax returns. We further propose to
revise Sec. 156.1210(c) to generally include the final 3-year deadline
to identify and report data inaccuracies for discovered
underpayments.\222\ As such, the first sentence in proposed new Sec.
156.1210(c) would provide that to be eligible for resolution under
Sec. 156.1210(b), the issuer must describe all inaccuracies identified
in a payment and collections report before the end of the 3-year period
beginning at the end of the plan
[[Page 78293]]
year to which the inaccuracy relates. By requiring all issuers in all
Exchanges \223\ to adhere to the final 3-year deadline for identifying
and reporting discovered underpayments, HHS would be balancing the
desire to continue to provide issuers flexibility to identify and
report discovered underpayments after the initial 90-day reporting
window at Sec. 156.1210(a), to encourage the prompt reporting and
timely resolution of data inaccuracies, and to establish a more
consistent, predictable, and less operationally burdensome process for
the identification and resolution of such inaccuracies for enrollees,
issuers, HHS, and State Exchanges.
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\221\ The 2014 plan year is excluded because the alternative
deadline for reporting inaccuracies closed upon completion of the
2014 audits. See CMS. (2019, April 1). CMS Issuer Audits of the
Advanced Payments of the Premium Tax Credit. www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/2014-CMS-APTC-Audits.PDF.
\222\ See 45 CFR 156.1210(c)(1).
\223\ The requirements captured in 45 CFR 156.1210 apply to all
issuers who receive APTC, including issuers in State Exchanges. See
part 2 of the 2022 Payment Notice, 86 FR at 24258.
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Under this proposal, and consistent with the deadline currently set
forth in Sec. 156.1210(c)(1), for 3 years after the end of the
applicable plan year, HHS would accept and work with the issuer (or
State Exchange, as applicable) to resolve the identified data
inaccuracies for discovered underpayments, and would process resulting
payment corrections through policy-level data, which would generate new
Forms 1095-A for impacted enrollees', if other applicable requirements
are met.\224\ Establishing a firm 3-year timeframe to resolve data
inaccuracies and make subsequent adjustments for discovered APTC
underpayments ensures that new Forms 1095-A are generated and sent to
enrollees and filed with the IRS with sufficient time for the enrollee
to potentially amend their tax filing with the IRS. This change would
therefore provide greater consistency and predictably for enrollees and
reduce potential confusion caused by the receipt of Forms 1095-A
outside of the allowable re-filing window with the IRS. In addition to
reducing enrollee confusion, requiring adherence to a firm 3-year final
deadline to report data inaccuracies for discovered APTC underpayments
(or user fee overpayments) would also benefit issuers by ensuring a
more consistent and predictable timeline for resolution of these data
inaccuracies. Aligning the payment and enrollment final dispute
timeline with the 3-year Form 1095-A timeline would limit
administrative burden on issuers, State Exchanges, and HHS by
standardizing these related processes for resolving errors and
generating new Forms 1095-A for enrollees.
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\224\ For example, the issuer must demonstrate the failure to
identify and promptly report the data inaccuracies and discovered
underpayments within the initial 90-day reporting window, under
Sec. 156.1210(a), was not unreasonable or due to the issuer's
misconduct or negligence. See Sec. 156.1210(b)(2). In addition,
once identified, the issuer must notify HHS or the State Exchange
(as applicable) within 15 days of identifying the inaccuracy. See
Sec. 156.1210(b)(1).
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Under this proposal, beginning with the 2020 plan year coverage,
HHS would not pay additional APTC payments or reimburse user fee
payments for FFE, SBE-FP, and SBE issuers for data inaccuracies
reported after the 3-year deadline. HHS would require issuers to adhere
to the 3-year deadline to submit all disputes and address all errors,
instead of utilizing the end of the audit process as an alternative
timeframe to receive additional APTC or reimbursement of user fee
payments beyond the 3-year deadline. Thus, HHS would not accept or take
action that results in an outgoing payment on data inaccuracies or
payment errors for 2020 plan year coverage that are reported after
December 31, 2023. Similarly, HHS would not accept or take action that
results in an outgoing payment on data inaccuracies or payment errors
for 2021 plan year coverage that are reported after December 31, 2024,
and so on.
Additionally, we propose that HHS would not accept or take action
that results in an outgoing payment on data inaccuracies or payment
errors for the 2015 through 2019 plan year coverage that are reported
after December 31, 2023. If finalized, this proposal would grant
issuers some additional time after this rule is finalized to submit any
inaccuracies for the 2015 through 2019 plan year coverage, for which
submission would no longer be permitted if this proposal was effective
upon finalization.
We are not proposing any changes to the general framework outlined
in Sec. 156.1210(c)(3), which currently states that if a payment error
is discovered after the final deadline set forth in Sec.
156.1210(c)(1) and (2), the issuer must notify HHS, the State Exchange,
or SBE-FP (as applicable) and repay any overpayments to HHS. We propose
to retain this language as the last sentence of new proposed Sec.
156.1210(c), except for the reference to the alternative deadline at
Sec. 156.1210(c)(2).
With regard to issuers in State Exchanges, we further affirm that
this proposal would not change the requirement that issuers promptly
identify and report data inaccuracies to the State Exchange.\225\ Under
the proposed revisions to Sec. 156.1210(c), issuers in State Exchanges
would be subject to the same final 3-year deadline to work with the
State Exchange to resolve any enrollment or payment inaccuracies
identified after the initial 90-day reporting window for discovered
underpayments. Similarly, we also propose that HHS would not make any
payments to issuers in State Exchanges on data inaccuracies or payment
errors for 2015 through 2019 plan year coverage that are reported after
December 31, 2023. Issuers in State Exchanges would also remain subject
to the existing requirement to report data inaccuracies identified at
any time when related to overpayments. We note that when HHS initially
proposed the deadline of 3 years or the date by which the HHS audit
process is completed, as currently described at Sec. 156.1210(c), we
requested comment on the ability of State Exchanges to resolve data
inaccuracies and report payment adjustments to HHS under the 3-year
deadline framework currently captured in Sec. 156.1210(c)(1). We did
not receive any comments objecting to this timeframe based on the
ability of State Exchanges to resolve such disputes, and therefore,
believe that the current proposal to set the final deadline to identify
and report data inaccuracies for discovered underpayments at 3 years is
reasonable and will not pose a challenge to State Exchanges or issuers.
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\225\ As previously noted, the requirements captured in 45 CFR
156.1210 apply to all issuers who receive APTC, including issuers in
State Exchanges. Also see part 2 of the 2022 Payment Notice, 86 FR
at 24258.
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We seek comment on this proposal.
11. Administrative Appeals (Sec. 156.1220)
As discussed in section III.A.7.d. of this preamble (HHS-RADV
Discrepancy and Administrative Appeals Process), we propose amendments
to Sec. 156.1220(a)(4)(ii) to add a reference to new proposed Sec.
153.630(d)(3). As discussed in section III.A.7.d of this preamble,
under new proposed Sec. 153.630(d)(3), we would retain the 30-
calendar-day window to confirm, or file a discrepancy, regarding the
calculation of the risk score error rate as a result of HHS-RADV. Under
this proposal, the cross-reference to Sec. 153.630(d)(2) in Sec.
156.1220(a)(4)(ii) would be maintained and would capture the new
proposed 15-calendar-day window to confirm, or file a discrepancy, for
SVA findings (if applicable).
In addition, we propose to amend Sec. 156.1220(b)(1) to address
situations when the last day of the period to request an informal
hearing does not fall on a business day. In these cases, we propose
that the deadline to request an informal hearing would be extended to
the next applicable business day. This proposal is consistent with our
policy
[[Page 78294]]
for other risk adjustment deadlines that do not fall on a business
day.\226\
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\226\ See, for example, 45 CFR 153.730.
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We solicit comment on these proposed amendments.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of the agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs).
A. Wage Estimates
To derive wage estimates, we generally used data from the Bureau of
Labor Statistics to derive average labor costs (including a 100 percent
increase for the cost of fringe benefits and overhead) for estimating
the burden associated with the ICRs.\227\ Table 14 in this proposed
rule presents the mean hourly wage, the cost of fringe benefits and
overhead, and the adjusted hourly wage.
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\227\ See May 2021 Bureau of Labor Statistics, Occupational
Employment Statistics, National Occupational Employment and Wage
Estimates. Available at https://www.bls.gov/oes/current/oes_stru.htm.
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As indicated, employee hourly wage estimates have been adjusted by
a factor of 100 percent. This is necessarily a rough adjustment, both
because fringe benefits and overhead costs vary significantly across
employers, and because methods of estimating these costs vary widely
across studies. Nonetheless, there is no practical alternative, and we
believe that doubling the hourly wage to estimate total cost is a
reasonably accurate estimation method.
[GRAPHIC] [TIFF OMITTED] TP21DE22.024
B. ICRs Regarding Repeal of Risk Adjustment State Flexibility To
Request a Reduction in Risk Adjustment State Transfers (Sec.
153.320(d))
We propose to repeal the flexibility for any State, including prior
participant States, to request a reduction in risk adjustment State
transfers in all State market risk pools beginning with the 2025
benefit year. As such, we propose several amendments to Sec.
153.320(d).
The burden currently associated with this requirement is the time
and effort for the State regulator to submit its request and supporting
evidence and analysis to HHS. In the Standards Related to Reinsurance,
Risk Corridors, and Risk Adjustment information collection (OMB control
number: 0938-1155), we estimated that submitting the request and
supporting evidence and analysis would take a business operations
specialist 40 hours (at a rate of $76.20 per hour) to prepare the
request and 20 hours for a senior operations manager (at a rate of
$110.82 per hour) to review the request and transmit it electronically
to HHS. We estimated that each State seeking a reduction would incur a
burden of 60 hours at a cost of approximately $5,264.40 per State to
comply with this reporting requirement (40 hours for the operations
specialist and 20 hours for the operations manager).
Since this proposal would eliminate the ability of the one prior
participating State (Alabama) to request this flexibility beginning
with benefit year 2025, we similarly propose to rescind this
information collection beginning with the 2025 benefit year. The burden
associated with this information collection estimated above would be
removed if this proposal is finalized, since no State would have the
opportunity to request this flexibility moving forward. This
information collection is approved under OMB control number 0938-1155,
and if this proposal is finalized, HHS would rescind the information
collection under OMB control number 0938-1155 accordingly and provide
the applicable comment periods once the policy is no longer in effect.
We seek comment on this proposed rescission.
C. ICRs Regarding Risk Adjustment Issuer Data Submission Requirements
(Sec. Sec. 153.610, 153.700, and 153.710)
We propose to require issuers to collect and make available for
HHS' extraction from issuers' EDGE servers a new data element, a QSEHRA
indicator. We propose to adopt the same transitional approach and
schedule for the population of the QSEHRA indicator as was finalized
for the ICHRA indicator in the 2023 Payment Notice. Under this
proposal, for the 2023 and 2024 benefit years, issuers would be
required to populate the QSEHRA indicator using
[[Page 78295]]
data they already collect or have accessible regarding their enrollees.
Then, beginning with the 2025 benefit year, issuers that do not have an
existing source to populate this field for particular enrollees would
be required to make a good faith effort to collect and submit the
QSEHRA indicator for these enrollees. We propose to extract this data
element beginning with the 2023 benefit year and also propose to
include the QSEHRA indicator in the enrollee-level EDGE limited data
sets available to qualified researchers upon request, once available.
We propose to begin collection of the QSEHRA indicator with the
2023 benefit year, and estimate that approximately 650 issuers of risk
adjustment covered plans would be subject to this data collection. We
propose to collect a QSEHRA indicator from issuers' ESES files and risk
adjustment recalibration enrollment files. We believe the burden
associated with the collection of this data would be similar to that of
the collection of ICHRA indicator finalized in the 2023 Payment Notice.
Much like the ICHRA indicator data, we believe that some issuers
already collect or have access to the relevant information to populate
the QSEHRA indicator. However, we do not believe the information to
populate the QSEHRA indicator is routinely collected by all issuers at
this time; therefore, we anticipate that there may be administrative
burden for some issuers in developing processes for collection,
validation, and submission of this new data element. In recognition of
the burden that collection of this new data element potentially would
pose for some issuers, we propose to adopt a transitional approach for
the QSEHRA indicator that mirrors the approach finalized for the ICHRA
indicator in the 2023 Payment Notice and is similar to how we have
handled other new data collection requirements.\228\ For successful
EDGE server data submission, each issuer would need to update their
file creation process to include the new data element, which would
require a one-time administrative cost. After incorporating the most
recently updated wage estimate data, we estimate this one-time
administrative cost at $579.96 per issuer (reflecting 6 hours of work
by a management analyst at an average hourly rate of $96.66 per hour).
Based on this, we estimate the cumulative one-time cost to update
issuers' file creation process to be $376,974 for 650 issuers (3,900
total hours for all issuers). We also estimate a cost of $96.66 in
total annual labor costs for each issuer which reflects 1 hour of work
by a management analyst per issuer at an average hourly rate of $96.66
per hour. Based on this, we estimate $62,829 in total annual labor
costs for 650 issuers (650 total hours per year for all issuers). We
believe that this proposed data collection should not pose significant
additional operational burden to issuers given that the operational
burden associated with populating the QSEHRA indicator should be aided
by the requirement finalized in the 2023 Payment Notice mandating the
collection of the ICHRA indicator in the same fashion. The proposed
extraction of the new proposed QSEHRA indicator should also not pose
additional burden to issuers since the creation and storage of the
extract--which issuers do not receive--are mainly handled by HHS. If
finalized, HHS would revise the information collection request to
account for the burden associated with this policy, and would provide
the applicable comment periods.\229\
---------------------------------------------------------------------------
\228\ For example, HHS did not penalize issuers for temporarily
submitting a default value for the in/out-of-network indictor for
the 2018 benefit year to give issuers time to make the necessary
changes to their operations and systems to comply with the new data
collection requirement, but required issuers to provide full and
accurate information for the in/out-of-network indicator beginning
with the 2019 benefit year.
\229\ Standards Related to Reinsurance, Risk Corridors, and Risk
Adjustment (OMB control number 0938-1155).
---------------------------------------------------------------------------
We also propose to amend the applicability date for the extraction
of the plan ID and rating area data elements to extend the extraction
of these two data elements to the 2017, 2018, 2019 and 2020 benefit
year data sets. As detailed earlier and in prior rulemakings, issuers
have been required to collect and submit these two data elements as
part of the required risk adjustment data since the 2014 benefit year.
Therefore, HHS estimates that the proposal to extract these data
elements would not pose additional operational burden to the majority
of issuers, since the creation and storage of the extract--which
issuers do not receive--is mainly handled by HHS. However, some issuers
may not have benefit year 2017, 2018, 2019, or 2020 data readily
available for extraction from their EDGE servers, and therefore, there
may be some burden associated with restoring past years' data to their
respective EDGE servers should this be the case. Our intention with
this policy proposal is to limit the burden on issuers for us to
collect and extract the plan ID and rating area data elements from
additional prior benefit year data. Therefore, while we broadly solicit
comment on these data collection proposals, we specifically solicit
comments on this burden estimate and ways that we can further limit the
burden on extracting these two data elements from the 2017, 2018, 2019
and 2020 benefit year data sets.
D. ICRs Regarding Risk Adjustment Data Validation Requirements When HHS
Operates Risk Adjustment (HHS-RADV) (Sec. 153.630)
Under Sec. 153.630(g)(2), issuers below a materiality threshold,
as defined by HHS, are exempt from the annual HHS-RADV audit
requirements in Sec. 153.630(b). While these issuers are exempt from
the annual HHS-RADV audit process, they are subject to random and
targeted sampling such that they undergo HHS-RADV approximately every 3
years (barring any risk-based triggers based on experience that would
warrant more frequent audits). We propose, beginning with 2022 benefit
year HHS-RADV, to change the materiality threshold from $15 million in
total annual premiums Statewide in the benefit year being audited to
30,000 BMM Statewide in the benefit year being audited.
We estimate that this proposal will not significantly impact issuer
burden relative to previous estimates for HHS-RADV and the current
materiality threshold. In particular, the proposed threshold will not
significantly alter the anticipated number of issuers that would fall
under the materiality threshold and be subject to random and targeted
sampling rather than the annual audit requirements. We estimate that
each year, on average, there are 197 issuers of risk adjustment covered
plans with total annual Statewide premiums below $15 million and 201
issuers of risk adjustment covered plans below 30,000 BMM Statewide. If
we assume one-third of issuers below the materiality threshold would be
subject to HHS-RADV each year, we estimate that the total number of
issuers selected for HHS-RADV that fall under the materiality threshold
would remain fairly constant. We believe that the number of issuers
participating in HHS-RADV for any given benefit year under the proposed
30,000 BMM Statewide threshold will not be significantly different than
the number of issuers participating under the current $15 million total
annual premium Statewide threshold and reflected in our current HHS-
RADV burden estimates, and therefore, we believe that there will not be
an overall increase or decrease in burden. If finalized, we would
revise the information collection currently approved under OMB control
number 0938-1155 to account for the changes to
[[Page 78296]]
the HHS definition for the materiality threshold in Sec.
153.630(g)(2).
E. ICRs Regarding Navigator, Non-Navigator Assistance Personnel, and
Certified Application Counselor Program Standards (Sec. Sec. 155.210
and 155.225)
This proposal would not impose any new information collection
requirements, that is, reporting, recordkeeping or third-party
disclosure requirements. Though CMS requires Navigator grantees to
track enrollment numbers on weekly, monthly, and quarterly progress
reports, this is already accounted for in an existing PRA package (OMB
control number 0938-1205, Exchange Functions: Standards for Navigators
and Non-Navigator Assistance Personnel--CAC), and they are not required
to specifically track enrollments completed for door-to-door
enrollments.
F. ICRs Regarding Providing Correct Information to the FFEs (Sec.
155.220(j))
As discussed in the preamble of this proposed rule, we are
proposing amendments to Sec. 155.220(j)(2)(ii) to require agents,
brokers, and web-brokers to document that eligibility application
information has been reviewed by and confirmed to be accurate by the
consumer or their authorized representative prior to application
submission. This proposal would require the consumer or their
authorized representative to take an action that produces a record that
they reviewed and confirmed the information on the eligibility
application to be accurate prior to application submission. This
documentation would be required to be maintained by agents, brokers,
and web-brokers for a minimum of 10 years and produced upon request in
response to monitoring, audit, and enforcement activities.
We estimate costs will be associated with this proposal, including
those related to documenting, maintaining, and producing the
documentation. Our proposal, if finalized, would not mandate any method
or prescribe a template for documenting that a consumer or their
authorized representative reviewed and confirmed the accuracy of their
eligibility application information. It would be up to the agents,
brokers, and web-brokers to determine the best way to meet these
proposed regulatory requirements.
Costs related to requiring the consumer take some affirmative
action to memorialize the review of application information are as
follows. We estimate it would take an additional 5 minutes for an
enrolling agent, broker, or web-broker to obtain documentation from a
consumer or their authorized representative that they have reviewed and
confirmed the accuracy of their application information. Billing at
$66.68 per hour using the Insurance Sales Agent occupation code, each
enrollment will have approximately $5.33 additional cost associated
with it based on extra time commitment. In PY 2021, agents submitted
3,630,849 policies. This makes the yearly total cost associated with
the extra time per enrollment approximately $19,352,425.17 (3,630,849 x
$5.33).
Costs associated with maintaining consumer or their authorized
representative's documentation would depend on the method selected by
the agent, broker, or web-broker to meet the regulatory requirements.
For those agents, brokers, or web-brokers currently meeting the
requirements, no additional costs would be incurred. If an enrolling
entity opts to use paper for documentation, they would bear the costs
of paper, ink and filing cabinets to store the paperwork.
HHS would only require an agent, broker, or web-broker to produce
retained records in limited circumstances related to monitoring, audit,
and enforcement activities. In instances of fraud investigation, HHS
typically asks for documentation associated with approximately 10
different applications, generally from the past 2 to 3 years. We
estimate it would take an agent approximately 2 hours to gather
consumer documentation for 10 applications. Each year, HHS generally
investigates approximately 50 agents, brokers, or web-brokers.
Therefore, we estimate the yearly cost of producing documentation for
HHS to be approximately $6,668 (($66.68 hourly rate x 2 hours) x 50).
The documentation would be able to be mailed electronically, so there
would be no cost associated with printing or mailing the documentation.
Agency-wide audits are not completed often by HHS but may become more
widespread. In those instances, HHS would ask the agency to produce a
certain number of records from the past 10 years.
We seek comment on these burden estimates.
G. ICRs Regarding Documenting Receipt of Consumer Consent (Sec.
155.220(j))
As discussed earlier in the preamble of this proposed rule, we are
proposing amendments to Sec. 155.220(j)(iii) to require agents,
brokers, and web-brokers to document the receipt of consumer consent.
This proposal would require the consumer or their authorized
representative to take an action that produces a record that they
provided consent. Agents, brokers, and web-brokers would be required to
maintain the records for a minimum of 10 years and produce the records
upon request in response to monitoring, audit, and enforcement
activities.
We estimate costs will be associated with this proposal, including
those related to documenting, maintaining, and producing the records of
consumer consent. Our proposal, if finalized, would not mandate any
method or prescribe a template for documenting receipt of consumer
consent. It would be up to the agents, brokers, and web-brokers to
determine the best way to meet these proposed regulatory requirements.
As agents, brokers, and web-brokers are currently required to obtain
consumer consent prior to assisting them, the requirement to obtain
consent would not add any costs to the enrolling agent, broker, or web-
broker.
Costs related to requiring that the consumer or their authorized
representative take some affirmative action to memorialize that consent
was provided are as follows. We estimate it would take about 5 minutes
for an enrolling agent, broker or web-broker to obtain consumer, or
their authorized representative, affirmation of their consent. Using
the adjusted hourly wage rate of $66.68 for an Insurance Sales Agent,
each enrollment will have approximately $5.33 in additional cost
associated with it based on the extra time commitment from these
proposed policy changes. In PY 2021, agents submitted 3,630,849
policies. Based on this number of enrollments, the total annual burden
is 290,468 hours with a total annual cost of $19,352,425.17. HHS would
only require an agent, broker, or web-broker to produce retained
records in limited circumstances related to fraud investigation or
agency audits. In instances of fraud investigation, HHS typically asks
for consent records of approximately 10 different applications,
generally from the past 2 to 3 years. We estimate it would take an
agent approximately 2 hours to gather consent documentation for 10
applications. Each year, HHS generally investigates approximately 50
agents, brokers, or web-brokers. Therefore, we estimate the yearly cost
of producing consumer consent documentation to HHS to be approximately
$6,668 (($66.68 hourly rate x 2 hours) x 50). These records are able to
be mailed electronically, so there would be no cost associated with
printing or mailing the records. Agency-wide audits are not completed
often by HHS but may become more widespread.
[[Page 78297]]
In those instances, HHS would ask the agency to produce a certain
number of records from the past 10 years.
The estimated total annual cost of memorializing the documentation
of consumer consent is $19,352,425.17, and the estimated total cost of
producing the retained eligibility and consent records is $6,668.00.
Combined, the total annual cost of the proposed information collection
requirements is $19,359,093.17.
We seek comment on these burden estimates.
H. ICRs Regarding Failure To File and Reconcile Process (Sec.
155.305(f))
We are proposing to amend current regulation at Sec. 155.305(f)(4)
under which an Exchange may not find a consumer eligible for APTC where
a consumer has failed to file a tax return reconciling their APTC for a
previous year to provide more flexibility to Exchanges to ensure that
consumers are complying with the requirement to file their Federal
income tax returns and reconcile past year's APTC, while ensuring
continuity of coverage in Exchange QHPs. We are proposing to provide
Exchanges the option to end APTC after 1 year of a taxpayer's (or
taxpayer's spouse, if married) failure to file and reconcile APTC, or
only after two consecutive years of a taxpayer's failure to file and
reconcile APTC.
On Exchanges on the Federal platform, FTR would otherwise be
conducted in the same as manner it had previously been conducted, with
minimal changes to the language of the Exchange application questions
necessary to obtain relevant information; as such, we anticipate that
the proposed amendment will not impact the information collection (OMB
control number 0938-1191) burden for consumers.
I. ICRs Regarding Income Inconsistencies (Sec. Sec. 155.315 and
155.320)
Section 155.320 requires the Exchange to generate an income DMI and
proceed with the process in Sec. 155.315(f)(1) through (4) when there
is no IRS data available to verify attested projected annual household
income or when such IRS data available but it is inconsistent with the
projected annual household income attestation. In order to verify an
applicant or enrollee's attested projected annual household income to
determinate eligibility for APTC and CSRs, an applicant generally must
mail or upload documentation which must then be reviewed by an HHS
eligibility support staffer. We propose to amend Sec. 155.320 to
require Exchanges to accept attestation when the Exchange requests tax
return data from the IRS to verify attested projected annual household
income, but the IRS confirms there is no such tax return data
available.
Based on historical DMI data, we estimate that HHS would conduct
document verification for 1.2 million fewer households per year. Once
households have submitted the required verification documents, we
estimate that it takes approximately 12 minutes for an eligibility
support staff person (occupation No. 43-4061), at an hourly cost of
$46.70, to review and verify submitted verification documents. The
proposed revisions to Sec. 155.320 would result in a decrease in
annual burden for the Federal Government of 240,000 hours at a cost of
$11,208,000.
In addition to the reduced administrative burden for HHS
eligibility support staff, the proposed change would reduce the time
consumers spend submitting documentation to verify their income. We
estimate that consumers each spend 1 hour to submit documentation and
that the proposed change would decrease burden on consumers by 1.2
million hours per year.
We would revise the information collection currently approved under
OMB control number 0938-1207 (Medicaid and Children's Health Insurance
Programs: Essential Health Benefits in Alternative Benefit Plans,
Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums
and Cost Sharing; Exchanges: Eligibility and Enrollment) to account for
this decreased burden. Given that this change entails a reduction in
consumer burden, the 30-day notice soliciting public comment will be
published in the Federal Register at a future date.
J. ICRs Regarding the Improper Payment Pre-Testing and Assessment
(IPPTA) for State Exchanges (Sec. Sec. 155.1500-155.1515)
As described in the preamble to Sec. 155.1510, the IPPTA is
proposed to replace the existing voluntary State engagement initiative
with mandatory participation and related requirements. The IPPTA is
designed to test processes and procedures that support HHS's review of
determinations of APTC made by State Exchanges and to prepare State
Exchanges for the planned measurement of improper payments.
In the preamble to Sec. 155.1510(a)(1), we propose that State
Exchanges provide to HHS: (1) the State Exchange's data dictionary
including attribute name, data type, allowable values, and description;
(2) an entity relationship diagram; and (3) business rules and related
calculations. This data documentation is currently retained by State
Exchanges in a digital format and can be electronically transmitted to
HHS. We estimate that the burden associated with this data transfer
would be no more than 22 hours.
In the preamble to Sec. 155.1510(a)(2), we propose that HHS will
provide State Exchanges with the pre-testing and assessment data
request form. HHS proposes to review the form and its instructions with
each State Exchange prior to the State Exchange completing and
returning the form and required data to HHS. Both the pre-testing and
assessment data request form and the requested source data are in an
electronic format. The burden associated with completion and return of
the pre-testing and assessment data request form and required data
would be the time it would take each State Exchange to meet with HHS to
review the form and its requirements, analyze and design the database
queries based on the data elements identified in the form,
electronically transmit the data to HHS, and meet with HHS to verify
and validate the data.
We expect respondent costs will not substantially vary since the
data being collected is largely in a digitized format and that each
State Exchange will be providing the application data and consumer
submitted documents for approximately 10 tax households. We seek
comment on these assumptions.
We estimate that gathering and transmitting the data documentation
as specified in Sec. 155.1510(a)(1) and completion of the pre-testing
and assessment data request form as specified in Sec. 155.1510(a)(2)
would take 530 hours per respondent at an estimated cost of $56,986.48
per respondent. To compile our estimates, we referenced our experience
collecting data in our FFE pilot initiative and in working with State
Exchanges in the existing voluntary State engagement initiative. We
identified specific personnel and the number of hours that would be
involved in collecting the data broken down by specific area (for
example, eligibility verification, auto-re-enrollment, periodic data
matching, enrollment reconciliation, plan management, and manual
reviews including document retrieval).
Hourly wage rates vary from $92.92 for a Computer Programmer to
$156.66 for a Computer and Information Systems Manager depending on
occupation code and function. With a mean hourly rate of $111.07 for
the respective occupation codes, the burden across the 18 State
Exchanges equals 9,540 hours for a total
[[Page 78298]]
cost of up to $1,025,756. We seek comment on these burden estimates.
K. ICRs Regarding QHP Rate and Benefit Information (Sec. 156.210)
a. Age on Effective Date for SADPs
In this proposed rule, we propose to require issuers of Exchange-
certified stand-alone dental plans (SADPs), whether they are sold on-
or off-Exchange, to use the age on effective date methodology as the
sole method to calculate an enrollee's age for rating and eligibility
purposes, as a condition of QHP certification, beginning with Exchange
certification for PY 2024. This rule does not propose to alter any of
the information collection requirements related to age determination
for rating and eligibility purposes during the QHP certification
process in a way that would create any additional costs or burdens for
issuers seeking QHP certification. This information collection is
currently approved under OMB control number 0938-1187.
b. Guaranteed Rates for SADPs
The proposal to require issuers of Exchange-certified SADPs,
whether they are sold on- or off-Exchange, to submit guaranteed rates,
as a condition of Exchange certification beginning with Exchange
certification for PY 2024, will not impose an additional burden on
issuers. Exchange-certified SADP issuers already submit either
guaranteed or estimated rates during QHP certification, and are
therefore, familiar with the QHP certification rate submission process.
This information collection is currently approved under OMB control
number 0938-1187.
L. ICRs Regarding Establishing a Timeliness Standard for Notices of
Payment Delinquency (Sec. 156.270)
The proposal to add a timeliness standard to the requirement for
QHP issuers to send enrollees notice of payment delinquency would not
impose an additional information burden on issuers. Per Sec.
156.270(f), issuers are already required to send notices to enrollees
when they become delinquent on premium payments, and this proposal
would not require any additional information collection. We are merely
proposing to add a requirement that issuers send these notices promptly
and without undue delay. This information collection is currently
approved under OMB control number 0938-1341 (CMS-10592).
M. Summary of Annual Burden Estimates for Proposed Requirements
[GRAPHIC] [TIFF OMITTED] TP21DE22.025
This proposed rule includes one proposal--repealing risk adjustment
State flexibility to request a reduction in risk adjustment State
transfers (Sec. 153.320(d))--with information collection requests
which seeks to use this rulemaking as the Federal Register notice
through which to receive comment on its proposed revisions to the
associated PRA package.
The following proposals with associated information collection
requests will be submitted for PRA approval outside of this rulemaking,
through separate Federal Register notices: risk adjustment issuer data
submission requirements (Sec. Sec. 153.610, 153,700, and 153.710); and
income inconsistencies (Sec. 155.320).
The HHS-RADV, Navigator, FTR, application to SADPs, and QHP rate
and benefit information proposals contain information collections which
are covered by the following PRA packages: Standards Related to
Reinsurance, Risk Corridors, and Risk Adjustment, OMB control number:
0938-1155; Cooperative Agreement to Support Navigators in Federally-
facilitated and State Partnership Exchanges, OMB control number: 0938-
1215; Data Collection to Support Eligibility Determinations for
Insurance Affordability Programs and Enrollment through Health Benefits
Exchanges, Medicaid and CHIP Agencies, OMB control number: 0938-1191;
Initial Plan Data Collection to Support QHP Certification and other
Financial Management and Exchange Operations, OMB control number: OMB
0938-1187; and Establishment of Qualified Health Plans and American
Health Benefit Exchanges, OMB control number: 0938-1156.
N. Submission of PRA-Related Comments
We have submitted a copy of this proposed rule to OMB for its
review of the rule's information collection and recordkeeping
requirements. These requirements are not effective until they have been
approved by the OMB. To obtain copies of the supporting statement and
any related forms for the proposed collections discussed above, please
access the CMS PRA website by copying and pasting the following web
address into your web browser: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing, or call
the Reports Clearance Office at 410-786-1326.
[[Page 78299]]
We invite public comments on these potential information collection
requirements. If you wish to comment, please submit your comments
electronically as specified in the ADDRESSES section of this proposed
rule and identify the rule (CMS-9899-P), the ICR's CFR citation, CMS ID
number, and OMB control number.
Comments must be received on/by February 13, 2023.
V. Regulatory Impact Analysis
A. Statement of Need
This rule proposes to improve risk adjustment and HHS-RADV policies
to use the most recent data to recalibrate the risk adjustment models
and reduce operational burden for HHS-RADV, and to update Navigator
standards to permit door-to-door and other unsolicited means of direct
contact. The rule also proposes to require agents, brokers, and web-
brokers to provide correct consumer information and document consumer
consent; and require Exchanges on the Federal platform to accept an
applicant's or enrollee's attestation of projected annual household
income when IRS data is not available and determine the applicant or
enrollee eligible for APTC or CSRs in accordance with the applicant's
or enrollee's attested projected household income. In addition, the
rule proposes to implement the IPPTA, reduce 2024 user fee rates to 2.5
percent of premiums for FFE issuers and 2.0 percent of premiums for
SBE-FP issuers, and make minor updates to standardized plan options and
limit the number of non-standardized plan options issuers can offer.
Finally, the rule proposes to require that QHP plan marketing names
include correct information, without omission of material fact, and do
not include content that is misleading; revise the network adequacy and
ECP standards Sec. Sec. 156.230 and 156.235 to state that all QHP
issuers, including SADPs, must use a network of providers that complies
with the standards described in those sections; expand access to care
for low-income and medically underserved consumers by strengthening ECP
standards for QHP certification; and add a timeliness standard to the
requirement for QHP issuers to send enrollees notice of payment
delinquency.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory action/s and/or with economically
significant effects ($100 million or more in any 1 year). Based on our
estimates, OMB's Office of Information and Regulatory Affairs has
determined this rulemaking is ``economically significant'' as measured
by the $100 million threshold. Accordingly, we have prepared an RIA
that to the best of our ability presents the costs and benefits of the
rulemaking. Therefore, OMB has reviewed these proposed regulations, and
the Departments have provided the following assessment of their impact.
C. Impact Estimates of the Payment Notice Provisions and Accounting
Table
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in
Table 16 showing the classification of the impact associated with the
provisions of this proposed rule.
This proposed rule proposes standards for programs that will have
numerous effects, including providing consumers with access to
affordable health insurance coverage, reducing the impact of adverse
selection, and stabilizing premiums in the individual and small group
health insurance markets and in an Exchange. We are unable to quantify
all benefits and costs of this proposed rule. The effects in Table 16
reflect qualitative assessment of impacts and estimated direct monetary
costs and transfers resulting from the provisions of this proposed rule
for health insurance issuers and consumers. The annual monetized
transfers described in Table 16 include changes to costs associated
with the risk adjustment user fee paid to HHS by issuers.
We are proposing the risk adjustment user fee of $0.21 PMPM for the
2024 benefit year to operate the risk adjustment program on behalf of
States,\230\ which we estimate to cost approximately $60 million in
benefit year 2024. This estimated total cost remains stable with the
approximately $60 million estimated for the 2023 benefit year.
---------------------------------------------------------------------------
\230\ As noted previously in this proposed rule, no State has
elected to operate the risk adjustment program for the 2024 benefit
year; therefore, HHS will operate the risk adjustment program for
all 50 States and the District of Columbia.
---------------------------------------------------------------------------
Additionally, for 2024, we are proposing an FFE and SBE-FP user fee
rate of 2.5 and 2.0 percent of premiums, respectively. These user fee
rates are lower than the 2023 FFE and SBE-FP user fee rates of 2.75 and
2.25 percent of premiums, respectively.
For our proposed implementation of the IPPTA program, we estimate
record keeping costs for data submission to be approximately $1,025,756
beginning in PY 2024.
BILLING CODE 4120-01-P
[[Page 78300]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.026
[[Page 78301]]
[GRAPHIC] [TIFF OMITTED] TP21DE22.027
BILLING CODE 4120-01-C
This RIA expands upon the impact analyses of previous rules and
utilizes the Congressional Budget Office's (CBO) analysis of the ACA's
impact on Federal
[[Page 78302]]
spending, revenue collections, and insurance enrollment. Table 17
summarizes the effects of the risk adjustment program on the Federal
budget from fiscal years 2024 through 2028, with the additional,
societal effects of this proposed rule discussed in this RIA. We do not
expect the provisions of this proposed rule to significantly alter
CBO's estimates of the budget impact of the premium stabilization
programs that are described in Table 17.\231\
---------------------------------------------------------------------------
\231\ Reinsurance collections ended in FY 2018 and outlays in
subsequent years reflect remaining payments, refunds, and allowable
activities.
[GRAPHIC] [TIFF OMITTED] TP21DE22.028
1. Data for Risk Adjustment Model Recalibration for 2024 Benefit Year
We propose to use the 2018, 2019, and 2020 benefit year enrollee-
level EDGE data to recalibrate the 2024 benefit year risk adjustment
models with an exception for the use of the 2020 benefit year to
recalibrate the age-sex coefficients for the adult models.
Specifically, we propose to use only 2018 and 2019 benefit year
enrollee-level EDGE data to recalibrate the age-sex coefficients in the
adult models to account for the observed anomalous decreases in the
unconstrained coefficients for the 2020 benefit year enrollee-level
EDGE data for older adult enrollees, especially older female adult
enrollees. Consistent with the approach outlined in the 2020 Payment
Notice to no longer rely upon MarketScan[supreg] data for recalibrating
the risk adjustment models, under this proposal, we would continue to
recalibrate the risk adjustment models for the 2024 benefit year using
only enrollee-level EDGE data, and would continue to use blended, or
averaged, coefficients from the 3 years of separately solved models for
the 2024 benefit year model recalibration, with the noted exception for
recalibration of the adult models' age-sex factors. This approach seeks
to maintain stability in the markets, and therefore, we anticipate that
this proposal would have minimal impact on risk scores and transfers
for issuers in the individual and small group (including merged)
markets.
2. Repeal of Risk Adjustment State Flexibility To Request a Reduction
in Risk Adjustment State Transfers (Sec. 153.320(d))
We propose to eliminate the flexibility for any State, including
prior participant States, to request reductions of risk adjustment
State transfers calculated by HHS under the State payment transfer
formula beginning with the 2025 benefit year. We anticipate that this
change would have a minimal impact as only one State, Alabama, is
considered a prior participant and would no longer be able to request
reductions in risk adjustment transfers if this policy is finalized.
3. Risk Adjustment Issuer Data Requirements (Sec. Sec. 153.610,
153.700, and 153.710)
We are also proposing the collection and extraction of a new data
element, the QSEHRA indicator, as part of the required risk adjustment
data submissions issuers make accessible to HHS through their
respective EDGE servers. For the 2023 and 2024 benefit years, similar
to the transitional approach finalized for the ICHRA indicator, issuers
would be required to populate the field for the QSEHRA indicator using
only data they already collect or have accessible regarding their
enrollees. Then, beginning with the 2025 benefit year, the transitional
approach would end, and issuers would be required to populate the field
using available sources (for example, information from Exchanges, and
requesting information directly from enrollees) and, in the absence of
an existing source for particular enrollees, to make a good faith
effort to ensure collection and submission of the QSEHRA indicator for
these enrollees. HHS would provide additional details on what
constitutes a good faith effort to ensure collection and submission of
the QSEHRA indicator beginning with 2025 benefit year data submissions
in the future. An updated burden estimate associated with this policy
may be found in section IV of this proposed rule, in the ICRs Regarding
Risk Adjustment Issuer Data Submission Requirements (Sec. Sec.
153.610, 153.700, and 153.710) section earlier in this rule.
In addition, we propose to extract the plan ID and rating area data
elements from issuers' EDGE servers that issuers already make
accessible to HHS as part of the required risk adjustment data for
additional prior benefit years of data. Specifically, we propose to
amend the applicability date for the extraction of these two data
elements from issuers' enrollee-level EDGE data as finalized in the
2023 Payment Notice to also allow extraction of these data elements
from the 2017, 2018, 2019 and 2020 benefit year data.
4. Risk Adjustment User Fee for 2024 Benefit Year (Sec. 153.610(f))
For the 2024 benefit year, HHS will operate a risk adjustment
program in every State and the District of Columbia. As described in
the 2014 Payment Notice (78 FR 15416 through 15417), HHS' operation of
risk adjustment on behalf of States is funded through a risk adjustment
user fee. For the 2024 benefit year, we propose to use the same
methodology to estimate our
[[Page 78303]]
administrative expenses to operate the risk adjustment program as was
used in the 2023 Payment Notice. Risk adjustment user fee costs for the
2024 benefit year are expected to remain stable from the prior 2023
benefit year estimates. However, we project higher enrollment than our
prior estimates in the individual and small group (including merged)
markets in the 2023 and 2024 benefit years due to the enactment of the
ARP,\232\ and section 12001 of the IRA, which extended the enhanced PTC
subsidies in section 9661 of ARP through the 2025 benefit year. We
estimate that the total cost for HHS to operate the risk adjustment
program on behalf of States and the District of Columbia for 2024 will
be approximately $60 million, and therefore, the proposed risk
adjustment user fee would be $0.21 PMPM. Because enrollment projections
have increased for the 2023 and 2024 benefit year due to the IRA and
the proposed 2024 risk adjustment user fee is $0.01 PMPM lower than the
2023 user fee, we expect the proposed risk adjustment user fee for the
2024 benefit year to reduce the transfer amounts collected or paid by
issuers of risk adjustment covered plans.
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\232\ Public Law 117-2.
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5. Risk Adjustment Data Validation Requirements When HHS Operates Risk
Adjustment (HHS-RADV) (Sec. 153.630)
We propose, beginning with 2022 benefit year HHS-RADV, to change
the HHS definition for the materiality threshold for the HHS-RADV
exemption under Sec. 153.630(g)(2) from $15 million total annual
premiums Statewide to 30,000 BMM Statewide in the benefit year being
audited. The purpose of this policy is to address the estimated
increase in costs to complete the IVA over the years and to ensure the
materiality threshold is not eroded as costs increase. We quantify this
increase in IVA cost in the Standards Related to Reinsurance, Risk
Corridors, Risk Adjustment, and Payment Appeal of the PRA (OMB Control
Number 0938-1155), which was updated in 2022.\233\ We believe that the
number of issuers exempt from HHS-RADV for any given benefit year under
the proposed 30,000 BMM threshold will not be significantly different
than the number of issuers exempt under the current $15 million total
annual premium Statewide threshold, and therefore, we believe that
there will not be an overall reduction in burden. However, those
issuers that are exempted from HHS-RADV will have less burden and
administrative costs than an issuer subject to these requirements.
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\233\ Available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202207-0938-001.
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We propose, beginning with 2021 benefit year HHS-RADV, to remove
the policy to only make adjustments to reflect exiting outlier issuers
HHS-RADV results when the issuer is a positive error rate outlier in
the applicable benefit year's HHS-RADV. Under the proposal to remove
this policy, exiting and non-exiting outlier issuers would be treated
the same, and HHS would apply HHS-RADV adjustments to risk scores and
risk adjustment State transfers for both positive and negative error
rate outlier exiting and non-exiting issuers. Based on our experience,
we estimate that the number of negative error rate outlier exiting
issuers in any given benefit year would be very small, and therefore,
we believe that changing this policy would not significantly increase
burden.
We also propose to change the attestation and discrepancy reporting
window to file a discrepancy report or confirm SVA findings from 30
calendar days to within 15 calendar days of the notification by HHS,
beginning with the 2022 benefit year HHS-RADV. Shortening this
attestation and discrepancy reporting window would improve HHS' ability
to finalize SVA findings results prior to release of the HHS Risk
Adjustment Data Validation (RADV) Results Memo and the Summary Report
of Risk Adjustment Data Validation Adjustments to Risk Adjustment
Transfers for the applicable benefit year in a timely fashion, which
would support timely reporting of information on HHS-RADV adjustments
to risk adjustment State transfers in issuers' MLR reports.
Based on our experience operating HHS-RADV, few issuers have
insufficient pairwise agreement and receive SVA findings, and the 15-
calendar-day attestation and discrepancy reporting window is consistent
with the IVA sample and EDGE discrepancy reporting windows under
Sec. Sec. 153.630(d)(1) and 153.710(d)(1). Further, HHS believes that
this shortened reporting window would not be overly burdensome to the
few impacted issuers, and that any disadvantages of this shortened
reporting window would be outweighed by the benefits of timely
resolution of any discrepancies before the release of the applicable
benefit year HHS Risk Adjustment Data Validation (RADV) Results Memo
and the Summary Report of Risk Adjustment Data Validation Adjustments
to Risk Adjustment Transfers for the applicable benefit year.
6. EDGE Discrepancy Materiality Threshold (Sec. 153.710)
We propose to amend the materiality threshold for EDGE
discrepancies at Sec. 153.710(e) to align with the materiality
threshold as described in the preamble of part 2 of the 2022 Payment
Notice final rule (86 FR 24194 through 24195) to reflect that the
amount in dispute must equal to or exceeds $100,000 or 1 percent of the
total estimated transfer amount in the applicable State market risk
pool, whichever is less. HHS generally only takes action on reported
material EDGE discrepancies when an issuer's submission of incorrect
EDGE server premium data has the effect of increasing or decreasing the
magnitude of the risk adjustment transfers to other issuers in the
market (83 FR 16970 through 16971). We do not believe that the proposal
related to the materiality threshold for EDGE discrepancies would
impose additional administrative burden on issuers beyond the effort
already required to submit data to HHS for the purposes of operating
State market risk pool transfers, as previously estimated in part 2 of
the 2022 Payment Notice (86 FR 24273 through 24274).
7. Exchange Blueprint Approval Timelines (Sec. 155.106)
As discussed in the preamble of this proposed rule, the proposed
regulatory amendments would not eliminate the requirement for States
seeking to transition to a different Exchange operational model (FFE to
SBE-FP or SBE, or SBE-FP to SBE) to submit an Exchange Blueprint or for
HHS to approve, or conditionally approve, a State's Exchange Blueprint.
It would only impact the timeline, by providing additional time, for
HHS to provide approval, or conditional approval.
We do not estimate any burden associated with this proposal as
States are currently required to submit an Exchange Blueprint to HHS
for approval, or conditional approval, and HHS is currently required to
approve, or conditionally approve, a State's Exchange Blueprint.
We seek comment on this estimate.
8. Navigator, Non-Navigator Assistance Personnel, and Certified
Application Counselor Program Standards (Sec. Sec. 155.210 and
155.225)
As discussed in the preamble, this new language would permit
enrollment assistance on initial door-to-door outreach. Currently,
Assisters are permitted to go door-to-door to engage in outreach and
education activities, just not enrollment assistance. Therefore, this
proposed change would
[[Page 78304]]
not impose any new or additional opportunity costs on Navigators, non-
Navigator assistance personnel, or CACs, and we do not anticipate any
estimated burden associated with this proposal. The benefits of this
proposal would be eliminating barriers to coverage access by maximizing
pathways to enrollment. We believe it is important to be able to
increase access to coverage for those whose ability to travel is
impeded due to mobility, sensory or other disabilities, who are
immunocompromised, and who are limited by a lack of transportation. We
anticipate that this proposal would be a positive step toward enabling
Assisters to reach a broader consumer base in a timely manner--helping
to reduce uninsured rates and health disparities by removing underlying
barriers to accessing health coverage.
We seek comment on these assumptions, specifically about any
reduction in costs, benefits, or burdens on Navigators, non-Navigator
assistance personnel, CACs, and consumers as related to this proposal.
9. Extension of Time To Review Suspension Rebuttal Evidence and
Termination Reconsideration Requests (Sec. Sec. 155.220(g) and
155.220(h))
As discussed in the preamble of this proposed rule, the proposed
regulatory amendments would provide HHS with up to an additional 15
calendar days to review evidence submitted by agents, brokers, or web-
brokers to rebut allegations that led to the suspension of their
Exchange agreement(s) and up to an additional 30 calendar days to
review evidence submitted by agents, brokers, or web-brokers to request
reconsideration of termination of their Exchange agreement(s).
We do not estimate much burden associated with this proposal, as
there is no requirement for HHS to utilize the additional 15 or 30
calendar days and this will only impact a very small percentage of
enrolling agents, brokers, or web-brokers. Only those agents, brokers,
or web-brokers that are reasonably suspected to have engaged in fraud
or abusive conduct, or those with a specific finding of non-compliance
against them or who have exhibited a pattern of non-compliance or abuse
that may pose imminent consumer harm would be impacted.
As discussed in the preamble, this proposal would not impose any
new requirements on agents, brokers, or web-brokers. At present,
agents, brokers, or web-brokers whose Exchange agreement(s) are
suspended or terminated may submit rebuttal evidence or reconsideration
requests for HHS to consider. During this review, the submitting agent,
broker, or web-broker remains unable to enroll consumers on the FFEs.
This process would not change. While we would be increasing the amount
of potential time the review process would take, which could lead to
slightly longer periods during which agents, brokers, or web-brokers
cannot enroll consumers through the FFEs and SBE-FPs, we would not be
mandating HHS utilize the additional 15 or 30 calendars days for its
reviews. For this reason, we do not expect any impact on agents,
brokers, or web-brokers based on this proposal. We seek comment on this
assumption.
10. Providing Correct Information to the FFEs and Documenting Receipt
of Consumer Consent (Sec. 155.220(j))
As discussed in the preamble of this proposed rule, the proposed
regulatory amendments would require agents, brokers, and web-brokers
assisting with and facilitating enrollment through FFEs and SBE-FPs or
assisting an individual with applying for APTC and CSRs for QHPs to
document that eligibility application information has been reviewed by
and confirmed to be accurate by the consumer or their authorized
representative prior to application submission. The proposal would
require the consumer or their authorized representative taking an
action that produces a record showing the consumer or their authorized
representative reviewed and confirmed the accuracy of their application
information that must be maintained by the assisting agent, broker, or
web-broker and produced to confirm the submitted eligibility
application information was reviewed and confirmed to be accurate by
the consumer or their authorized representative.
Also discussed in the preamble of this proposed rule, the proposed
regulatory amendments would require agents, brokers, and web-brokers
assisting with and facilitating enrollment through FFEs and SBE-FPs or
assisting an individual with applying for APTC and CSRs for QHPs to
document the receipt of consent from the consumer or their authorized
representative, designated in compliance with Sec. 155.227, qualified
employers, or qualified employees they are assisting. The proposal
would require the consumer or their authorized representative taking an
action that produces a record of consent that must be maintained by the
assisting agent, broker, or web-broker and produced to confirm the
consumer or their authorized representative's consent was provided. As
these two documentation processes would likely be occurring as part of
the same consumer interaction,\234\ the two proposals are discussed
below together.
---------------------------------------------------------------------------
\234\ We note that obtaining documentation of consumer consent
must occur before an application is completed. In contrast,
obtaining documentation that a consumer has reviewed and confirmed
the accuracy of their application information must necessarily take
place during or after the application is completed. However, we
expect generally that application completion, including the
documentation we are proposing to require before and after the
completion of the application, would occur as part of a single
interaction in most cases.
---------------------------------------------------------------------------
A potential cost to consider is the additional time it would take
to process and submit each consumer's application. It currently takes
approximately 30 minutes for an assisting agent, broker, or web-broker
to submit a consumer's application. These proposed requirements may add
approximately five minutes additional time, per proposal, to each
application, making each application submission take 40 minutes under
the new proposed policies. This means that for every six policies
submitted under the proposed regulatory requirements, there would have
been two additional applications that could have been submitted under
the former regulatory requirements (10 extra minutes per application x
3 applications = 30 minutes, which is the estimated completion time for
applications at present). If we assume agents, brokers, and web-brokers
work traditional 8-hour days, they would have been able to enroll
approximately 4 more consumers per day (1 application per 30 minutes =
16 per day; 1 application per 40 minutes = 12 per day). An
approximation of commission for each submitted policy is $16.67.\235\
Therefore, the proposed regulatory text may result in $66.68 lost per
day per agent, broker, or web-broker. ($16.67 x 4 less applications
submitted).
---------------------------------------------------------------------------
\235\ This was derived using the Insurance Sales Agent mean
hourly wage from the above wage estimate table of $33.34 and
dividing in-half.
---------------------------------------------------------------------------
However, there would only be a potential loss of income if an
agent, broker, or web-broker were constantly enrolling consumers and
running out of time during the workday. It is unlikely agents, brokers,
and web-brokers are constantly enrolling consumers non-stop throughout
an 8-hour workday. During PY 2021, agents submitted 3,630,849 policies.
The top 1 percent of agents \236\ submitted 1,159,608 policies during
PY 2021, which equals approximately 7 submitted policies per day.\237\
As it was determined under the
[[Page 78305]]
new proposed policies that an agent could submit approximately 12
applications per day, there is no clear impact associated with this
proposal as far as the number of applications being submitted. However,
this could be different during Open Enrollment Period (OEP) as that
generally has more activity than regular business days. During PY 2022
Open Enrollment, agents submitted 2,572,341 applications, which
translates to 38 per agent. The top selling 1 percent of agents
submitted 689,146 applications during Open Enrollment, which is
approximately 18 applications per day.\238\ Under the proposed
regulatory amendments, a top-selling agent could lose approximately 6
applications per day due to time constraints. OEP runs from November 1
through January 15, which is 76 days. Under the assumption an agent is
working 5 days per work for eight hours per day, an agent would submit
330 fewer applications during OEP (55 days working x 6 fewer
applications per day). Using the above reference of $16.67 commission
gained per submitted policy, a top-selling agent may lose $5,501.10 in
commissions during OEP (330 applications x $16.67). It is likely these
agents are working more hours than we accounted for, meaning the 330
fewer applications is an estimate such that the actual loss of
commission would be less than we estimated. We seek comment on these
burden estimates.
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\236\ The current number of agents registered with the Exchange
is 66,893. We looked at data from the 668 top-selling agents.
\237\ This assumed an agent worked 250 days per year (50 weeks
at 5 days per week).
\238\ This assumed an agent worked 5 days per week at 8 hours
per day, which is likely a low estimate.
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11. Failure To File and Reconcile Process (Sec. 155.305)
We propose to require that Exchanges instead determine an enrollee
as ineligible for APTC if their taxpayer did not file a Federal income
tax return and reconcile their APTC for two consecutive tax years,
rather than one tax year as currently outlined at Sec. 155.305(f)(4).
We believe this proposal would benefit both Exchanges and consumers as
it provides Exchanges with additional flexibility with their FTR
operations and procedures, while ensuring continuity of coverage for
consumers, that would otherwise go uninsured after losing ATPC to help
pay for their Exchange QHPs.
We anticipate that this proposal would increase APTC expenditures
by promoting continuous enrollment of consumers with APTC, who, absent
this proposal, would likely choose to terminate their coverage
altogether after losing their APTC eligibility due to having an FTR
status. Based on HHS' own analysis, for Open Enrollment 2020, about
116,000 enrollees with an FTR status were automatically re-enrolled
into an Exchange QHP without APTC; by March 2020, approximately 14,000
(12 percent) of those enrollees were still enrolled in an Exchange QHP.
With the new 2-year FTR proposal, if those enrollees that ended their
QHP coverage after losing APTC were given another year of APTC
eligibility to come into compliance with the requirement to file and
reconcile, we estimate that about 102,000 enrollees would have retained
coverage with APTC for another coverage year; however, based on HHS'
experience running FTR since 2015, we anticipate that about 20,400 (20
percent) of these enrollees are likely to receive a second FTR flag.
Therefore, we estimate that this 2-year FTR proposal is likely to
increase APTC expenditures by approximately $373 million per year
beginning in benefit year 2024.
HHS is also aware of five States that have only recently
transitioned to operating their own State Exchange and have not yet
fully implemented the infrastructure to run FTR operations for plan
years through 2023 due to the flexibility the Exchanges were given to
temporarily pause FTR operations between 2021 and 2023 due to the
COVID-19 public health emergency. We estimate the one-time costs for
these five States to fully implement the functionality and
infrastructure to conduct FTR operations to be approximately $6.6
million and estimate that the annual costs to maintain FTR operations
to be approximately $10 million.
We invite comments from interested parties on this proposal,
including regarding additional costs, burdens, and benefits to issuers,
consumers, and Exchanges as a result of this proposal.
12. Income Inconsistencies (Sec. Sec. 155.315 and 155.320)
We anticipate that proposed revision to Sec. 155.315 would impose
a minimal regulatory and cost burden on Exchanges using the Federal
platform and State Exchanges in order to grant the 60-day extension for
income DMIs. We estimate that the proposed change to grant a 60-day
extension to applicants with income DMIs would result in a $500,000
one-time cost to Exchanges on the Federal platform and to each of the
State Exchanges using their own platform. Therefore, we estimate that
the total cost for State Exchanges would be $9 million to comply with
the requirement to grant the 60-day extension, and the total cost to
the Federal Government would be $500,000.
We anticipate that the proposed revisions to Sec. 155.320 would
impose a minimal regulatory burden and a one-time cost burden on the
Exchanges using the Federal platform and State Exchanges using their
own platform. We estimate that the proposed change to accept the income
attestation for households for which the Exchange requests tax return
data from the IRS to verify attested projected annual household income
but for whom the IRS confirms there is no such tax return data
available would result in a $500,000 one-time cost to the Federal
Government and a one-time cost of $500,000 to each of the State
Exchanges using their own platform. We also anticipate $175 million in
increased APTC costs annually as a result of this proposal, due to
applicants remaining enrolled through the end of the plan year instead
of losing eligibility for APTC due to not providing sufficient
documentation to verify their projected household income.
However, we do anticipate that the proposed revisions to Sec.
155.320 would also result in some decreases in ongoing administrative
costs for the Exchanges using the Federal platform and State Exchanges.
The proposed change would eliminate the requirement to generate income
DMIs when the Exchange requests tax return data from the IRS for an
applicant or enrollee and the IRS confirms no such data is available.
For Exchanges on the Federal platform, we anticipate that this will
result in 1.2 million fewer households receiving an income DMI, which
would result in $66 million in annual cost savings to the Federal
Government. Additionally, State Exchanges using their own platform
would also experience annual cost savings of $37 million due to this
proposed change.
We do not anticipate that these proposed changes would impose a
cost or regulatory burden on issuers. However, the proposed changes
would have a financial impact on issuers via the continued enrollment
of consumers who otherwise would have experienced APTC adjustment and
are thus likely to disenroll.
13. Annual Eligibility Redetermination (Sec. 155.335(j))
We propose revising Sec. 155.335(j) to allow the Exchange,
beginning in PY 2024, to direct re-enrollment for enrollees who are
eligible for CSR in accordance with Sec. 155.305(g) from a bronze QHP
to a silver QHP with a lower or equivalent premium after APTC within
the same product and QHP issuer, regardless of whether their current
plan is available or not. We also
[[Page 78306]]
propose to amend the Exchange re-enrollment hierarchy to allow all
Exchanges (Exchanges on the Federal platform and SBEs) to ensure
enrollees whose QHPs are no longer available to them and enrollees who
would be re-enrolled into a silver-level QHP in order to receive
income-based CSRs are re-enrolled into plans with the most similar
network to the plan they had in the previous year, provided that
certain conditions are met.
We propose revising paragraph (j)(2)(i) to state that if the
enrollee is not CSR eligible, the Exchange will re-enroll the enrollee
in a QHP at the same metal level as and with the most similar network
compared to the enrollee's current QHP. We propose amending and
redesignating paragraphs (j)(2)(ii) and (iii) as paragraphs (j)(2)(iv)
and (v), respectively, to specify that the enrollee's provider network
must also be considered in re-enrollment determinations. We also
propose adding a new paragraph (j)(2)(ii) to establish that if the
enrollee is CSR-eligible, in accordance with Sec. 155.305(g), and the
enrollee's current QHP is a bronze level plan, the Exchange will re-
enroll the enrollee either in a bronze level QHP, or, at the option of
the Exchange, in a silver level QHP that has a lower or equivalent
premium after APTC and has the most similar network compared to the
enrollee's current QHP in the product offered by the same issuer
through the Exchange that is most similar to the enrollee's current
product. Lastly, we propose to add a new paragraph (j)(2)(iii) to
establish that if the enrollee is CSR-eligible, in accordance with
Sec. 155.305(g), and the enrollee's current QHP is not a bronze level
plan, the enrollee will be re-enrolled in a QHP at the same metal level
that has the most similar network compared to the enrollee's current
QHP in the product offered by the same issuer that is the most similar
to the enrollee's current product.
We anticipate that the inclusion of additional criteria in the
Federal hierarchy for re-enrollment would increase costs and burden for
issuer and Exchanges, although we are unable to quantify this increase.
However, we believe initially limiting the scope to only CSR-eligible
enrollees who are currently in a bronze QHP and have a lower cost
silver CSR QHP available would allow issuers and Exchanges to
incrementally update their processes, as opposed to incorporating both
premium (after APTC) and out-of-pocket cost (OOPC) throughout the
hierarchy in PY 2024. Additionally, we believe that allowing the
Exchange to direct re-enrollment for CSR-eligible enrollees from bronze
plans to silver CSR plans with lower or equivalent premium after APTC
would facilitate enrollment into silver CSR plans and help reduce CSR
forfeiture. We believe these proposed changes to the re-enrollment
process, in combination with improved consumer notification, would
further streamline the consumer shopping experience, enhance consumer
understanding of plan options, and help move enrollment into more
affordable, higher generosity plans, especially in cases where market
conditions have substantially increased the old plan's cost. By
amending the current Federal hierarchy for re-enrollment to incorporate
provider networks and facilitate enrollment into lower cost, higher
generosity plans, we believe we would be promoting consumer access to
affordable, high-quality coverage.
We seek comment on the estimated costs and benefits described in
this section, as well as any additional impacts on consumers, issuers,
and Exchanges as a result of this proposal.
14. Coverage Effective Dates for Qualified Individuals Losing Other
Minimum Essential Coverage (Sec. 155.420(b))
We propose to add paragraph (b)(2)(iv) to Sec. 155.420(b) to
provide earlier SEP coverage effective dates for qualifying individuals
who attest to a future loss of MEC, such as coverage offered through an
employer, Medicaid, CHIP, or Medicare., within 60 days before such loss
of MEC s. Currently, the earliest start date for Exchange coverage when
a qualifying individual attests to a future loss of MEC is the first
day of the month following the date of loss of MEC, which may result in
coverage gaps when consumers lose forms of MEC (other than Exchange
coverage) mid-month. We believe that this proposed change is necessary
to ensure that qualifying individuals are able to seamlessly transition
from other non-Exchange MEC to Exchange coverage as quickly as possible
with minimal coverage gaps. As discussed earlier in preamble, ensuring
smooth and quick transitions into Exchange coverage will be especially
critical once the COVID-19 PHE comes to an end and higher numbers of
consumers lose their Medicaid or CHIP coverage and transition to
Exchange coverage, as applicable.
Based on HHS' own analysis, for plan years 2019 through 2021,
approximately 214,000 households seeking coverage on Exchanges using
the Federal platform reported a future mid-month loss of MEC date and
ultimately did not enroll in a QHP. In PY 2021, about 45,000 households
attested to a future mid-month loss of coverage MEC date and did not
enroll in QHP coverage. If these consumers had been given the
opportunity for Exchange coverage to begin the first of the month in
which their prior mid-month loss of MEC coverage end date occurred,
rather than having to wait weeks for their coverage to start, these
consumers could have avoided a gap in coverage and could have received
an additional month of APTC, given our interpretation of IRS'
definition of a coverage month, which we plan to codify in the final
rule. Therefore, for consumers who report a future loss of MEC,
especially those who reside in States that allow mid-month terminations
for Medicaid or CHIP, we estimate that this proposed change could
increase APTC expenditures by approximately $161 million dollars per
coverage year by allowing Exchange coverage to start the first of the
month in which the mid-month loss of MEC or COBRA occurs and assuming
that similar volume of consumers would choose enroll in an Exchange
QHP, however, this number could be slightly lower but we are unable to
estimate what proportion of consumers would still elect to not enroll
in an Exchange QHP. We also anticipate additional costs to certain
consumers as some consumers would be required to pay for an additional
month of Exchange coverage for which they would not have previously
been eligible while also still possibly paying for one last month of
their prior MEC coverage. However, in order to mitigate adverse
selection concerns, we are not proposing that Exchanges permit
consumers to select a different, prospective coverage start date, such
as the first of the month following plan selection. We also seek
comment from issuers regarding any additional or remaining risk
regarding mid-month coverage effective dates.
We seek comment on this proposal, specifically about any additional
costs, benefits, or burdens on State Exchanges, issuers, and consumers
as related to this proposal.
15. Special Rule for Loss of Medicaid or CHIP Coverage (Sec.
155.420(c))
We propose to add paragraph (c)(6) to Sec. 155.420(c) to provide
qualifying individuals losing Medicaid or CHIP that is considered MEC
in accordance with Sec. 155.420(d)(1)(i), and who qualify for a
special enrollment period, with up to 60 days before and up to 90 days
after their loss of coverage to enroll in QHP coverage. We believe that
this proposed change is necessary to ensure that qualifying individuals
are able to seamlessly transition from Medicaid or
[[Page 78307]]
CHIP into Exchange coverage as quickly as possible with little to no
coverage gaps. As discussed earlier in preamble, ensuring smooth and
quick transitions into Exchange coverage will be especially critical
once the COVID-19 PHE comes to an end and higher numbers of consumers
lose their Medicaid or CHIP coverage and transition to Exchange
coverage, as applicable.
Based on HHS's own analysis, in plan year 2019, about 60,000
consumers seeking coverage on Exchanges using the Federal platform
attested to a Medicaid/CHIP loss or denial between 60 to 90 days prior
on their HealthCare.gov application. We estimate that this proposed
change to permit Exchanges to use a special rule to provide consumers
losing Medicaid or CHIP with 90 days after their loss of Medicaid or
CHIP to enroll in QHP coverage would increase APTC expenditures by
approximately $98 million per year.
We seek comment on this proposal, specifically about any additional
costs, benefits, or burdens on States, issuers, and consumers as
related to this proposal.
16. Plan Display Error Special Enrollment Periods (Sec. 155.420(d))
We anticipate that revisions to Sec. 155.420(d)(12) would maintain
current regulatory burden and cost on issuers. As discussed earlier in
preamble, our proposal to make necessary changes to the text of Sec.
155.420(d)(12) is to align the policy for granting SEPs to persons who
are adversely affected by a plan display error with current plan
display error SEP operations. Our proposal would have minimal
operational impact, as interested parties such as issuers, States, and
the Exchanges on the Federal platform currently have the infrastructure
to demonstrate that a material plan display error influenced a
qualified individual's, enrollee's, or their dependents' enrollment
and, or decision to purchase a QHP through the Exchange. This does not
impose additional regulatory burden or costs because the revisions do
not require the consumers, HHS, or issuers to conduct new or additional
processes to existing data change requirements.
17. Termination of Exchange Enrollment or Coverage (Sec. 155.430)
We anticipate that the proposal to expressly prohibit issuers from
terminating coverage for policy dependent children because they reached
the maximum allowable age mid-plan year would benefit affected
enrollees by providing clarity regarding their ability to maintain
coverage. Because this prohibition has already been in place on the
Exchanges on the Federal platform, we do not anticipate a financial
impact to issuers or HHS. There may be some minor costs for State
Exchanges that choose to implement this prohibition and have not
previously done so, but we do not have adequate data to estimate these
costs. We seek comment on these benefit and burden assumptions.
18. Improper Payment Pre-Testing and Assessment for State Exchanges
(Sec. 155.1500)
This proposal would prepare HHS to implement the Payment Integrity
Information Act of 2019 (PIIA) requirements for State Exchanges. As
described in the preamble earlier in this proposed rule, the PIIA
requires that agencies measure the improper payments rate for programs
susceptible to significant improper payments. HHS already undertakes
annual measurements for Medicare, Medicaid, FFEs, and SBE-FPs. This
proposed rule would lay the groundwork to complete the Exchanges'
measurement program by including State Exchanges and to enable HHS to
estimate improper payment rates as mandated by statute.
This proposal tests State Exchanges' readiness to provide the
information necessary to measure the rate of improper payments. Even
slight decreases in this rate would accrue large taxpayer savings. The
IPPTA incurs approximately $57,000 in costs per respondent.
Nevertheless, HHS believes that the potential benefits of this
regulatory action justify the present costs.
This proposal would prepare HHS to implement the statutory
requirement for measurement of improper payments for programs
susceptible to significant improper payments. We have quantified the
costs for this proposal. Neither this IPPTA nor any follow-on program
should affect transfers between parties.
19. FFE and SBE-FP User Fee Rates for the 2024 Benefit Year (Sec.
156.50)
We are proposing an FFE user fee rate of 2.5 percent of monthly
premiums for the 2024 benefit year, which is a decrease from the 2.75
percent FFE user fee rate finalized in the 2023 Payment Notice (87 FR
27289). We also propose an SBE-FP user fee rate of 2.0 percent for the
2024 benefit year, which is a decrease from the 2.25 percent SBE-FP
user fee rate finalized in the 2023 Payment Notice. Based on our
estimated costs, enrollment (including anticipated transitions of
States from the FFE and SBE-FP models to either the SBE-FP or State
Exchange model), premiums for the 2024 benefit year, and proposed user
fee rates, we are estimating that FFE and SBE-FP user fee transfers
from issuers to the Federal Government would be $170 million lower
compared to those estimated for the prior benefit year. We also
anticipate that the lower user fee rates may exert downward pressure on
premiums.
20. Standardized Plans
a. Standardized Plan Options (Sec. 156.201)
At Sec. 156.201, we propose minor updates to our approach to
standardized plan options for PY 2024 and subsequent PYs. In
particular, in contrast to the policy finalized in the 2023 Payment
Notice, HHS proposes, for PY 2024 and subsequent PYs, to no longer
include a standardized plan option for the non-expanded bronze metal
level. Accordingly, HHS proposes at new Sec. 156.201(b) that for PY
2024 and subsequent PYs, FFE and SBE-FP issuers offering QHPs through
the Exchanges must offer standardized QHP options designed by HHS at
every product network type (as described in the definition of
``product'' at Sec. 144.103), at every metal level except the non-
expanded bronze level, and throughout every service area that they
offer non-standardized QHP options.
HHS believes that maintaining the highest degree of continuity
possible in the approach to standardized plan options minimizes the
risk of disruption for a range of interested parties, including
issuers, agents, brokers, States, and enrollees. HHS believes that
making major departures from the approach to standardized plan options
in the 2023 Payment Notice could result in drastic changes in these
plan designs that could potentially cause undue burden for these
interested parties. Furthermore, if the standardized plan options HHS
creates vary significantly from year to year, those enrolled in these
plans could experience unexpected financial harm if the cost-sharing
for services they rely upon differs substantially from the previous
year. Ultimately, HHS believes consistency in standardized plan options
is important to allow both issuers and enrollees to become accustomed
to these plan designs.
Thus, similar to the approach taken in the 2023 Payment Notice, HHS
proposes to create standardized plan options that would continue to
resemble the most popular QHP offerings that millions of consumers are
already enrolled in. As such, these proposed standardized plan options
are based on refreshed PY 2022
[[Page 78308]]
cost-sharing and enrollment data to ensure that these plans continue to
reflect the most popular offerings in the Exchanges.
With HHS proposing to maintain a similar approach to standardized
plan options to that taken in the 2023 Payment Notice, issuers would
continue to be able to utilize many existing benefit packages,
networks, and formularies, including those paired with standardized
plan options for PY 2023. Furthermore, since HHS is proposing to
require QHP issuers to offer standardized plan options at every product
network type, at every metal level except the non-expanded bronze metal
level, and throughout every service area they also offer non-
standardized plan options (but not for different product network types,
metal levels, and service areas where they do not also offer non-
standardized plan options), issuers would continue to not be required
to extend plan offerings beyond their existing service areas.
Furthermore, as discussed earlier in the preamble, HHS noted that
it would continue to differentially display standardized plan options
on HealthCare.gov per the existing authority at Sec. 155.205(b)(1).
Since HHS would continue to assume the burden for differentially
displaying standardized plan options on HealthCare.gov, FFE and SBE-FP
issuers would continue to not be subject to this burden.
In addition, as noted in the preamble, HHS would continue
enforcement of the standardized plan option display requirements for
approved web-brokers and QHP issuers using a direct enrollment pathway
to facilitate enrollment through an FFE or SBE-FP--including both the
Classic DE and EDE Pathways--at Sec. Sec. 155.220(c)(3)(i)(H) and
156.265(b)(3)(iv), respectively. HHS believes that continuing the
enforcement of these differential display requirements would not
require significant modification of these entities' platforms and non-
Exchange websites, especially since the majority of this burden already
occurred when the standardized plan option differential display
requirements were first finalized in the 2018 Payment Notice \239\ or
when enforcement of these requirements resumed beginning with the PY
2023 open enrollment period.
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\239\ These differential display requirements were first
effective and enforced beginning with PY 2018. See 81 FR 94117
through 94118, 94148.
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Finally, since HHS would continue to allow these entities to submit
requests to deviate from the manner in which standardized plan options
are differentially displayed on HealthCare.gov, the burden for these
entities would continue to be minimized. HHS intends to continue
providing access to information on standardized plan options to web-
brokers through the Health Insurance Marketplace Public Use Files
(PUFs) and QHP Landscape file to further minimize burden. Specific
burden estimates for these requirements can be found in the
corresponding ICR sections for Sec. Sec. 155.220 and 156.265 of the
2023 Payment Notice (87 FR 698 and 699 and 87 FR 27360 and 27361).
b. Non-Standardized Plan Option Limits (Sec. 156.202)
At Sec. 156.202, we propose to limit the number of non-
standardized plan options that issuers of individual market medical
QHPs can offer through the FFEs and SBE-FPs to two per product network
type, metal level, and service area. If such a limit were adopted in PY
2024, it is estimated that the weighted average number of non-
standardized plan options (which does not take into consideration
standardized plan options) available to each consumer would be reduced
from approximately 107.8 in PY 2022 to 37.2 in PY 2024. Furthermore, it
is estimated that approximately 60,949 of a total 106,037 non-
standardized plan option plan-county combinations (amounting to 57.5
percent of non-standardized plan option plan-county combinations) would
be discontinued.\240\ Finally, it is estimated that approximately 2.72
million of the approximate 10.21 million enrollees on the FFEs and SBE-
FPs (amounting to 26.6 percent of enrollees) would be affected by these
discontinuations.\241\
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\240\ Plan-county combinations are the count of unique plan ID
and FIPS code combinations. This measure is used because a single
plan may be available in multiple counties, and specific limits on
non-standardized plan options may have different impacts on one
county where there are four plans of the same product network type
and metal level versus another county where there are only two plans
of the same product network type and service area, for example.
\241\ These calculations assume that the non-standardized plan
options removed due to the proposed limit would be those with the
fewest enrollees based on PY 2022 data, which includes individual
market medical QHPs for Exchanges using the HealthCare.gov
eligibility and enrollment platform, including SBE-FPs.
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The total number of QHPs that would have to undergo QHP
certification each year would be reduced as a result of limiting the
number of non-standardized plan options. Relatedly, although issuers
would be required to select another QHP to which to crosswalk affected
enrollees from discontinued non-standardized plan options, the existing
discontinuation notices and process as well as the current re-
enrollment hierarchy and corresponding crosswalk process outlined at
Sec. 155.335(j) could accommodate crosswalking these affected
enrollees, and no additional modification to these processes or to this
re-enrollment hierarchy would be required. Finally, no additional
action would be required from consumers to complete this crosswalking
process.
We do not have sufficient data to estimate the costs associated
with these proposed changes, so we seek comment from interested parties
regarding cost estimates and data sources.
21. QHP Rate and Benefit Information (Sec. 156.210)
a. Age on Effective Date for SADPs
This rule proposes standards related to the rate submission process
for Exchange-certified SADPs during QHP certification. This rule
proposes to modify the rate submission process to require issuers of
Exchange-certified SADPs, whether they are sold on- or off-Exchange, to
use age on effective date as the sole method to calculate an enrollee's
age for rating and eligibility purposes beginning with Exchange
certification in PY 2024. Requiring these issuers to use the age on
effective date methodology for calculating an enrollee's age, and
consequently removing the less common and more complex age calculation
methods, will reduce potential consumer confusion and the burden placed
on Exchange interested parties (including issuers, as well as DE and
EDE partners) by promoting operational efficiency.
This proposed policy change reduces the risk of consumer harm and
confusion since the age on effective date method allows consumers to
more easily understand the rate they are charged. This proposed policy
also helps reduce enrollment blockers, which will improve the
efficiency of the enrollment process and reduce the burden placed on
Exchange interested parties (including issuers, as well as DE and EDE
partners). Therefore, this proposed policy helps facilitate more
informed enrollment decisions and enrollment satisfaction.
We also do not anticipate any negative financial impact as a result
of this proposed policy, given that it would be a small operational
change. If anything, this proposed policy has the potential to reduce
financial burden on issuers and CMS, as removing the other age rating
methods would reduce the added expense and slower development times
that must account for test cases in
[[Page 78309]]
the rating engine for the less commonly used and more complex methods.
Additionally, this proposed policy change would not create any
additional information submission burden, as it would apply to
information that Exchange issuers already submit as part of the QHP
certification process.
b. Guaranteed Rates for SADPs
This rule proposes standards related to the rate submission process
for Exchange-certified SADPs during QHP certification. This rule
proposes to modify the rate submission process to require issuers of
Exchange-certified SADPs, whether they are sold on- or off-Exchange, to
submit guaranteed rates beginning with Exchange certification in PY
2024. Requiring guaranteed rates would reduce potential consumer harm
and burden associated with incorrect APTC calculation for the pediatric
dental EHB portion of premiums, and the need for consumers to contact
issuers who post estimated rates for final rates.
Requiring guaranteed rates would reduce the risk of consumer harm
by reducing the risk of incorrect APTC calculation for the pediatric
dental EHB portion of premiums. Therefore, we believe that this
proposed policy change would support health equity by helping to ensure
that low-income enrollees who qualify for APTC are charged the correct
premium amount. Beyond reducing the potential for consumer financial
harm, this proposed policy would also reduce the burden placed on
consumers because it would allow them to rely on the information they
see on the issuer's website and not have to contact issuers for final
rates after the QHP certification process.
22. Plan and Plan Variation Marketing Name Requirements for QHPs (Sec.
156.225)
We propose at Sec. 156.225 to require that QHP plan and plan
variation marketing names include correct information, without omission
of material fact, and do not include content that is misleading. CMS,
States, and QHP issuers work together to ensure that consumers can make
informed decisions when selecting a health insurance plan based on
factors such as QHP benefit design, cost-sharing requirements, and
available financial assistance. In PY 2022, Exchanges on the Federal
platform saw a significant increase in the number of plan and plan
variation marketing names using cost-sharing information and other
benefit details. Following Open Enrollment for PY 2022, CMS received
complaints from consumers in multiple States who misunderstood cost-
sharing information in their QHP's marketing name. We believe that
clear policy can result in plan and plan variation marketing names that
reduce consumer confusion.
By providing standards that help ensure plan and plan variation
marketing names are clear and accurate, we anticipate the proposed
policy will reduce burden on consumers and on those who help consumers
to enroll in Exchange coverage because it will allow them to rely on
information they see during the plan selection process. In addition, we
believe that the proposed standards for plan and plan variation
marketing names would have an overall positive impact on other Exchange
interested parties as well, by ensuring that the consumer education
that plans use to compete in the individual health insurance market is
clear and accurate.
This proposed policy may require additional effort during the QHP
certification process on the part of Exchange issuers to comply with
new plan marketing name standards. However, we would work to streamline
this process by incorporating education about plan and plan variation
marketing name standards into the annual QHP certification process, and
proactively addressing issuer and State questions through existing
outreach and education vehicles including webinars, email blasts, and
regularly scheduled meetings on individual health insurance market
policy and operations.
The proposed policy would not create any new information submission
burden, because it would apply to information that Exchange issuers
already submit as part of the QHP certification process. Additionally,
while requiring increased effort initially, we believe this proposed
policy would ultimately decrease issuer and State effort following QHP
certification, and during and after the annual Open Enrollment Period,
by reducing the number of plan and plan variation marketing name-
related consumer complaints to triage and, in some cases, special
enrollment periods to be provided.
We seek comment on the burden that this proposed policy would
impose, and on the burden reduction it could provide. We also seek
comment on how CMS can further alleviate any burden associated with
this proposed policy, such as through technical assistance to Exchange
interested parties, including issuers and enrollment assisters.
Finally, we also believe that the proposed policy would promote
health equity by reducing the likelihood of QHP benefit
misunderstanding and confusion that leads to less informed enrollment
decisions, especially for consumers with low health literacy, which is
disproportionately experienced among underserved communities and other
vulnerable populations. For example, a 2022 study found higher self-
reported low health literacy among people who are Hispanic, non-U.S.
citizens, unemployed, or who have less than a high school
education.\242\ A 2019 study that tested participants' knowledge of
health insurance terminology found statistically significant
disparities based on race, ethnicity, and language preference.\243\ We
seek comment on this proposal and on whether this proposal would
promote health equity, and on additional ways that CMS can support
health insurance literacy through plan marketing guidance and technical
assistance.
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\242\ Edward J, Wiggins A, Young MH, Rayens MK. Significant
Disparities Exist in Consumer Health Insurance Literacy:
Implications for Health Care Reform. Health Lit Res Pract. 2019 Nov
5;3(4):e250-e258. doi: 10.3928/24748307-20190923-01. PMID: 31768496;
PMCID: PMC6831506.
\243\ Villagra VG, Bhuva B, Coman E, Smith DO, Fifield J. Health
insurance literacy: disparities by race, ethnicity, and language
preference. Am J Manag Care. 2019 Mar 1;25(3):e71-e75. PMID:
30875174.
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23. Network Adequacy (Sec. 156.230)
Regarding HHS's proposal to require all QHP issuers, including SADP
issuers, to utilize a contracted network of providers and comply with
network adequacy standards at Sec. 156.230 and ECP standards at Sec.
156.235, we acknowledge that SADP issuers that only offer plans that do
not use a provider network and that want to be certified may initially
face increased costs associated with developing contractual
relationships with providers or leveraging pre-existing networks
associated with their other plans. However, studies have found that
provider networks allow for insurer-negotiated prices and controlled
(that is, reduced) costs in the form of reduced patient cost-sharing,
premiums, and service price, as compared with such services obtained
out of network.\244\ \245\ We expect any initial increased issuer costs
to differ from the costs experienced once such provider
[[Page 78310]]
contractual relationships have been established or pre-existing
networks associated with their other plans have been leveraged. We
request comment on whether and how to extrapolate from literature on
voluntary network formation for purposes of assessing impacts of this
regulatory provision.
---------------------------------------------------------------------------
\244\ Benson NM, Song Z. Prices And Cost Sharing For
Psychotherapy In Network Versus Out Of Network In The United States.
Health Aff (Millwood). 2020 Jul;39(7):1210-1218. https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.01468.
\245\ Song, Z., Johnson, W., Kennedy, K., Biniek, J. F., &
Wallace, J. Out-of-network spending mostly declined in privately
insured populations with a few notable exceptions from 2008 to 2016.
Health Aff. 2020;39(6), 1032-1041. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2019.01776.
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For SADPs that do not use a provider network, this proposal would
require these issuers to contract with providers in accordance with our
existing network adequacy requirements or withdraw from the Exchange.
The latter may create a burden for enrollees and QHP plans in the
service area if no SADPs remain. However, we expect this burden to only
affect a small number of consumers, given the overall small number of
Exchange-certified SADPs that do not use a provider network on the
FFEs. As discussed further in Table 12 in the preamble for part 156,
over the last few years, fewer than 100 counties have had SADPs without
provider networks, and most of these counties had SADPs with provider
network options available. For PY 2022, there were only 8 Exchange-
certified SADPs without provider networks in the FFEs. Similarly, the
number of States with these types of plans has decreased over time. At
its highest, in 2014, 9 FFE States had Exchange-certified SADPs without
provider networks. Since PY 2020, this number has dropped to 4 or fewer
FFE States, with only 2 FFE States having this plan type in PYs 2022
and 2023. Additionally, Exchange-certified SADPs with provider networks
are becoming more available in counties that previously only had no-
network SADP options: for PYs 2022 and 2023, only 2 FFE States (Alaska
and Montana) offer Exchange-certified SADPs without provider networks.
For Montana, all counties offering this plan type also offer Exchange-
certified SADPs with provider networks. For Alaska in PYs 2022 and
2023, 90 percent of counties with Exchange-certified SADPs without
provider networks have no Exchange-certified SADPs with provider
networks.
We anticipate approximately 2,200 enrollees will be affected by
this proposal. Enrollees in SADPs that choose not to comply with this
requirement would need to select a different plan for coverage, which
may cause hardship if the enrollee cannot access assistance, requires
culturally and linguistically appropriate support, and/or does not have
an understanding of health insurance design and benefits. In the event
service areas are left without SADPs due to the provider network
requirement, health plans will have to amend their benefits to include
the pediatric dental benefit EHB. This change may require costs for
issuers to build the benefit and contract with providers.
These impacts may be mitigated if we finalize a limited exception
to allow SADPs to not use a provider network in areas where it is
prohibitively difficult for the SADP issuer to establish a network of
dental providers that complies with Sec. Sec. 156.230 and 156.235.
Finally, we do not anticipate any impact as a result of this
proposal on health plans that do not use a network, given our
understanding that no such plan is currently certified as a QHP by an
Exchange, but solicit comment to inform that understanding.
24. Essential Community Providers (Sec. Sec. 156.235(a)(2)(i) and
156.235(a)(2)(ii)(B))
Regarding HHS's proposal to strengthen the ECP standards under
Sec. 156.235(a)(2)(i) by requiring QHPs to contract with at least 35
percent of available FQHCs that qualify as ECPs in the plan's service
area and at least 35 percent of available Family Planning Providers
that qualify as ECPs in the plan's service area, we acknowledge that
issuers whose provider networks do not currently include such a
percentage of these provider types that qualify as ECPs may face
increased costs associated with complying with the proposed policies.
However, we do not expect this increase to be prohibitive. Based on
data from PY 2023, it is likely that a majority of issuers would be
able to meet or exceed the threshold requirements for FQHCs and Family
Planning Providers without needing to contract with additional
providers in these categories.
To illustrate, if these requirements had been in place for PY 2023,
out of 137 QHP issuers on the FFEs, 76 percent would have been able to
meet or exceed the 35 percent FQHC threshold, while 61 percent would
have been able to meet or exceed the 35 percent Family Planning
Provider threshold without contracting with additional providers. For
SADP issuers, 84 percent would have been able to meet the 35 percent
threshold requirement for FQHCs offering dental services without
contracting with additional providers. In PY 2023, for medical QHPs,
the mean and median ECP percentages for the FQHC category were 74 and
83 percent, respectively. For the Family Planning Providers category,
the mean and median ECP percentages were 66 and 71 percent,
respectively. For SADPs, the mean and median ECP percentages for the
FQHC category were 61 and 64 percent, respectively.
Regarding HHS's proposal to strengthen the ECP standards under
Sec. 156.235(a)(2)(ii)(B) by establishing two additional stand-alone
ECP categories to include SUD Treatment Centers and Mental Health
Facilities, we acknowledge challenges associated with a general
shortage and uneven distribution of SUD Treatment Centers and mental
health providers. However, the ACA requires that a QHP's network
include ECPs where available. As such, the proposal to require QHPs to
offer a contract to at least one available SUD Treatment Center and one
available Mental Health Facility in every county in the plan's service
area does not unduly penalize issuers facing a lack of certain types of
ECPs within a service area, meaning that if there are no provider types
that map to a specified ECP category available within the respective
county, the issuer is not penalized. Further, as outlined in prior
Letters to Issuers, HHS prepares the applicable PY HHS ECP list that
potential QHPs use to identify eligible ECP facilities. The HHS ECP
list reflects the total supply of eligible providers (that is, the
denominator) from which an issuer may select for contracting to count
toward satisfying the ECP standard. As a result, issuers are not
disadvantaged if their service areas contain fewer ECPs. HHS
anticipates that any QHP issuers falling short of the 35 percent
threshold for PY 2024 could satisfy the standard by using ECP write-ins
and justifications. As in previous years, if an issuer's application
does not satisfy the ECP standard, the issuer would be required to
include as part of its application for QHP certification a satisfactory
justification.
25. Termination of Coverage or Enrollment for Qualified Individuals
(Sec. 156.270)
We propose to amend Sec. 156.270(f) by adding a timeliness
standard to the requirement for QHP issuers to send enrollees notice of
payment delinquency. Specifically, we propose to revise Sec.
156.270(f) to require issuers to send notice of payment delinquency
promptly and without undue delay. We anticipate that this proposal
would be beneficial to enrollees who become delinquent on premium
payments by ensuring they are properly informed of their delinquency in
time to avoid losing coverage. It may be especially beneficial to
enrollees who are low income, who would be especially negatively
impacted by disruptions in coverage. We expect some minimal costs to
issuers associated with updating their internal processes to ensure
compliance with the finalized
[[Page 78311]]
timeliness standard, but do not have adequate data to estimate these
costs. We seek comment on the benefit and cost assumptions of this
proposal.
26. Final Deadline for Reporting Enrollment and Payment Inaccuracies
Discovered After the Initial 90-Day Reporting Window (Sec.
156.1210(c))
We propose to amend Sec. 156.1210(c) to remove the alternate
deadline at Sec. 156.1210(c)(2), which requires an issuer to describe
all data inaccuracies identified in a payment and collection report by
the date HHS notifies issuers that the HHS audit process with respect
to the plan year to which such inaccuracy relates has been completed,
in order for these data inaccuracies to be eligible for resolution.
Under this proposal, we would retain only the deadline at Sec.
156.1210(c)(1), which requires that issuers describe all inaccuracies
identified in a payment and collections report within 3 years of the
end of the applicable plan year to which the inaccuracy relates to be
eligible to receive an adjustment to correct an underpayment. Under
this proposal, beginning with the 2020 plan year coverage, HHS would
not pay additional APTC payments or reimburse user fee payments for
FFE, SBE-FP, and SBE issuers for data inaccuracies reported after the
3-year deadline. Further, we propose that HHS would not accept or take
action that results in an outgoing payment on data inaccuracies or
payment errors for the 2015 through 2019 plan year coverage that are
reported after December 31, 2023. We anticipate that this proposed
change would result in a less operationally burdensome process for the
identification and resolution of these data inaccuracies for issuers,
State Exchanges, and HHS, and a slight reduction in associated burdens,
such as resolution of data inaccuracies for discovered underpayments.
However, we anticipate the impact would be minimal, if any, and result
in no significant financial impact.
27. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed or final
rule, we should estimate the cost associated with regulatory review.
Due to the uncertainty involved with accurately quantifying the number
of entities that will review the rule, we assume that the total number
of unique commenters on last year's proposed rule (465) will be the
number of reviewers of this proposed rule. We acknowledge that this
assumption may understate or overstate the costs of reviewing this
rule. It is possible that not all commenters reviewed last year's rule
in detail, and it is also possible that some reviewers chose not to
comment on the proposed rule. For these reasons, we thought that the
number of past commenters would be a fair estimate of the number of
reviewers of this rule. We welcome any comments on the approach in
estimating the number of entities which will review this proposed rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this proposed rule,
and therefore, for the purposes of our estimate we assume that each
reviewer reads approximately 50 percent of the rule. We seek comments
on this assumption.
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $115.22 per hour, including overhead and fringe
benefits.\246\ Assuming an average reading speed, we estimate that it
would take approximately 1 hour for the staff to review half of this
proposed or final rule. For each entity that reviews the rule, the
estimated cost is $115.22 (1-hour x $115.22). Therefore, we estimate
that the total cost of reviewing this regulation is $53,577.30 ($115.22
x 465).
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\246\ https://www.bls.gov/oes/current/oes_nat.htm.
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D. Regulatory Alternatives Considered
With respect to the inclusion or exclusion of the 2020 benefit year
enrollee-level EDGE data in the recalibration of 2024 benefit year risk
adjustment models, we considered a variety of alternative options to
our proposal to use 2018, 2019, and 2020 enrollee-level EDGE data with
an exception to exclude 2020 benefit year data from recalibration of
the age-sex coefficients for the adult models, which is the fourth
option outlined above. The first option considered was to maintain
current policy, recalibrating the risk adjustment models using 2018,
2019, and 2020 enrollee-level EDGE data (without any adjustment). The
second option involved using 2018, 2019, and 2020 enrollee-level EDGE
data, but assigning a lower weight to the 2020 data. The third option
we considered would utilize 4 years of enrollee-level EDGE data,
instead of three, to recalibrate the risk adjustment models using 2017,
2018, 2019, and 2020 data. The fifth option would exclude the 2020
enrollee-level EDGE data and use the 2017, 2018, and 2019 enrollee-
level EDGE data in recalibration for the 2024 benefit year or to use
the final 2023 models as the 2024 risk adjustment models. The sixth and
final option we considered would use 2 years of enrollee-level EDGE
data for 2024 benefit year recalibration--only 2018 and 2019 data.
Our analyses found that the 2019 and 2020 benefit year enrollee-
level EDGE recalibration data were largely comparable, however, there
were observed anomalous decreases in the unconstrained coefficients for
the 2020 benefit year enrollee-level EDGE recalibration data for older
adult enrollees, especially older female enrollees. Option 1 therefore
would not address the identified anomalous trend that is not expected
to continue in future benefit years.
The second option would represent a compromise between those who
wish to include 2020 data in model recalibration and those who wish to
exclude 2020 data, by capturing the utilization and spending patterns
underlying the 2020 data while dampening its effects in the model.
However, we were concerned this approach would require finding an
appropriate weighting methodology, and we are further concerned that
broadly dampening the effect of the 2020 benefit year data in the
models defeats the purpose of adding the next available benefit year of
data as part of model recalibration because doing so would prevent the
models from reflecting changes in utilization and cost of care that are
unrelated to the impact of the COVID-19 PHE. There are similar concerns
with option 3 and the inclusion of an additional prior benefit year
(that is, 2017) to recalibrate the 2024 benefit year models to dampen
the impact of the 2020 benefit year data. We do not believe that such a
broad dampening is necessary because the anomalous coefficient changes
identified from the 2020 benefit year data were largely limited to the
adult model age-sex coefficients, and incorporating an additional prior
benefit year of data would dampen the impact of the 2020 benefit year
data on other factors and would prevent the models from reflecting
changes in utilization and cost of care that are unrelated to the
impact of the COVID-19 PHE.
We are similarly concerned about options 5 and 6, which would
involve the complete exclusion of 2020 benefit year data, because both
of these options would result in reliance on data that may not be the
most reflective data set of the utilization and spending trends.
Furthermore, there are questions about whether there is a sufficient
justification to completely exclude 2020 benefit year
[[Page 78312]]
enrollee-level EDGE recalibration data in the recalibration of the risk
adjustment models. The sixth option has the same limitations and would
also have the additional drawback of decreasing the stabilizing effect
of using multiple years of data in model recalibration. More
specifically, because this option would reduce the number of years of
data used, a change in a coefficient occurring in just 1 year of the
data that is actually included in recalibration (that is, the 2018 or
2019 benefit years of enrollee-level EDGE recalibration data) would
have a greater impact on the risk adjustment model coefficients due to
the increase in the reliance of the blended coefficients on the
remaining 2 years of data.
We solicit comment on all of these alternatives for the use of the
2020 enrollee-level EDGE data in the 2024 benefit year risk adjustment
model recalibration.
In developing the updated materiality threshold for HHS-RADV
proposed in this rule, we sought to ensure the materiality threshold
would ease the burden of annual audit requirements for smaller issuers
of risk adjustment covered plans that do not materially impact risk. To
do this, we considered the costs associated with hiring an initial
validation auditor and submitting IVA results and the relative growth
of issuers' total annual premiums Statewide and total BMM. We also
evaluated the benefits of shifting to a threshold based on BMM rather
than annual premiums, and we are proposing changing the materiality
threshold from $15 million in total annual premiums Statewide to 30,000
BMM Statewide. As an alternative option, we considered increasing the
threshold to $17 million in total annual premiums Statewide and
maintaining a cutoff based on premium dollars (instead of BMMs).
However, we were concerned that a premium threshold would fail to
capture small issuers overtime as PMPM premiums grow and would require
more regular updates to the materiality threshold to maintain the
current balance. The use of a BMM threshold avoids this issue. We
invite comment on our proposed materiality threshold and on the
potential alternative option to update the threshold to $17 million
annual premiums Statewide for the benefit year being audited, and we
also invite comment on the applicability date for when the new
materiality threshold should begin to apply.
Regarding our proposal to require Exchanges to determine an
enrollee as ineligible for APTC after having failed to file and
reconcile for two consecutive tax years rather than after one tax year,
we considered multiple alternatives. One alternative we considered was
extending the current pause on FTR operations through plan year 2024,
while HHS continued to examine the current FTR process, and explore
ways in which the FTR process could promote continuity of coverage,
while maintaining its critical program integrity function to ensure
that only enrollees eligible for APTC continue to do so. Another
alternative we considered was repealing the requirement under 45 CFR
155.305(f)(4) that a taxpayer(s) must file a Federal income tax return
and reconcile their APTC for any tax year in which they or their tax
household received APTC in order to continue their eligibility for
APTC. However, we wanted to maintain the program integrity benefits of
the FTR process, and believe there is still value in ensuring that only
people who are filing and reconciling remain eligible to receive APTC.
Because of this, we have amended our proposal and are instead proposing
requiring that Exchanges end APTC only after two consecutive years of
FTR status rather than ending APTC after a single year.
We considered two alternatives to accepting attestation to
determine household income for households for which IRS does not return
any data and expanding the amount of time to resolve income DMIs to
meet the goal of increased consumer service and advancing health
equity. We considered establishing a threshold when adjusting APTC
following an income inconsistency period. Under this alternative, HHS
would continue current operations but would not eliminate APTC
eligibility completely if consumers are unable to provide sufficient
documentation. While this alternative would require fewer changes to
implement, our current proposal would create better outcomes for more
consumers and decrease administrative burden. Additionally, we
considered eliminating income DMIs for all consumers, including those
for whom the Exchanges have IRS data, due to the large burden the
income verification process places on consumers, but we found that the
verification process was required for consumers with IRS data, and that
consumers with other IRS data would have their household income
adjusted based on that data as opposed to those without IRS data who
would instead lose all of their APTC.
In developing the proposal for re-enrollment hierarchy, we
considered a variety of alternatives, including making no
modifications. We also considered revising the policy, beginning in PY
2024, such that the Exchange could direct re-enrollment for income-
based CSR-eligible enrollees from a bronze QHP to a silver QHP with a
$0 net premium within the same product and QHP issuer, regardless if
the enrollee's current plan is available. Under this alternative we
considered revising the policy to allow the Exchange to ensure the
enrollee's coverage retained a similar provider network throughout the
Federal hierarchy for re-enrollment. While we believe this may slightly
reduce operational complexity, we believe income-based CSR-eligible
enrollees who have a de minimis or non-zero-dollar premium would still
greatly benefit from having their coverage renewed into a silver CSR
QHP with a lower or equivalent net premium and OOPC, by saving
thousands in care costs.
We also considered revising the policy, beginning in PY 2024, such
that the Exchange could: (1) direct re-enrollment, for income-based
CSR-eligible enrollees, from a bronze QHP to a silver QHP with a lower
or equivalent net premium and total OOPC within the same product and
QHP issuer regardless if their current plan is available; (2) if their
current plan is available and the enrollee is not income-based CSR
eligible, re-enroll the enrollee's coverage in the enrollee's same
plan; (3) if their current plan is not available and the enrollee is
not income-based CSR eligible, direct re-enrollment to a plan at the
same metal level that has a lower or equivalent net premium and total
out-of-pocket cost compared to the enrollee's current QHP within the
same product and QHP issuer; and (4) if a plan at the same metal level
as their current QHP is not available and the enrollee is not income-
based CSR eligible, direct re-enrollment to a QHP that is one metal
level higher or lower than the enrollee's current QHP and has a lower
or equivalent net premium and total OOPC compared to the enrollee's
current QHP within the same product and issuer. Under this alternative,
we considered revising the policy to allow the Exchange to ensure the
enrollee's coverage retained a similar provider network throughout the
Federal hierarchy for re-enrollment. While we believe this alternative
would be beneficial for all enrollees, we understand this would pose a
substantial operational burden and complexities for issuers and
Exchanges to shift from the current policy to this revised alternative.
We believe an incremental change would help issuers and Exchanges
diligently and appropriately adjust their re-enrollment operations. We
solicit comment on all
[[Page 78313]]
aspects of the re-enrollment proposal at Sec. 155.335(j).
HHS considered taking no action related to the two technical
corrections to the regulatory text at Sec. 155.420(a)(4)(ii)(A) and
(B). However, HHS felt these changes were necessary to make it
explicitly clear that when a qualified individual or enrollee, or his
or her dependent, experiences the special enrollment period triggering
event, all members of a household may enroll in or change plans
together in response to the event experienced by one member of the
household. These proposed technical corrections should eliminate any
confusion surrounding special enrollment period triggering events and
may help Exchanges and other interested parties more effectively
communicate and message rules that determine eligibility for special
enrollment periods and how plan category limitations may apply for
certain special enrollment periods as outlined under Sec. 155.420(a).
We considered taking no action related to our proposal to revise
paragraph Sec. 155.420(b)(2)(iv), to provide Exchanges with more
flexibility by allowing Exchanges the option to provide consumers with
earlier coverage effective dates so that consumers are able to
seamlessly transition from one form of coverage to Exchange coverage as
quickly as possible with no coverage gaps. However, we believe that
many consumers would benefit from this proposed change, especially
those consumers whose States allow for mid-month terminations for
Medicaid/CHIP or those consumers whose COBRA coverage ends mid-month
and who report their coverage loss to the Exchange before it happens.
We also considered allowing consumers the option to request a
prospective coverage start date rather than the day following loss of
MEC or COBRA coverage but we determined that this could introduce
adverse selection as consumers could choose to delay enrolling in
Exchange coverage and paying premiums until coverage was necessary.
Finally, we also considered for consumers attesting to a past loss of
MEC and who also report a mid-month coverage loss that Exchange
coverage would be effective retroactively back to the first day after
the prior coverage loss date. For example, if a consumer lost coverage
on July 15, coverage would be effective retroactively back to July 16.
We decided against this option as it would require a statutory change
to allow for mid-month PTC for consumers losing MEC mid-month, in
addition to being too operationally complex for both Exchanges and
issuers to implement.
We considered taking no action related to our proposal to add new
paragraph Sec. 155.420(c)(6), to ensure that qualifying individuals
losing Medicaid or CHIP coverage are able to seamlessly transition to
Exchange coverage as quickly as possible with little to no coverage
gaps. However, we believe that many consumers will benefit from this
proposed change, especially during the PHE unwinding period, where many
consumers will need to seamlessly transition off Medicaid or CHIP and
into Exchange coverage. We also considered whether this proposed change
should be broadened to include consumers in other disadvantaged groups
such as those impacted by natural disasters or other exceptional
circumstances, consumers losing Medicaid or CHIP that is not considered
MEC, and consumers who are denied Medicaid or CHIP coverage. We decided
not to include other groups, such as those residing in a Federal
Emergency Management Agency (FEMA) declared disaster area, as current
CMS guidance requires that an SEP be made available for an additional
60 days after the end of a FEMA declaration.\247\ Additionally, for
other exceptional circumstances, there is flexibility under Sec.
155.420(d)(9) that CMS may offer impacted consumers more time to enroll
under an SEP depending on the type of exceptional circumstance, like a
national PHE such as COVID-19. Finally, regarding the population that
is denied Medicaid or CHIP coverage, we also considered whether to
extend the SEP window length from 60 days to 90 days for the population
that is denied Medicaid or CHIP, however, we chose not to extend the
SEP window length for this population as there is no 90 day
reconsideration period that needs alignment for consumers denied
Medicaid or CHIP as there is for consumers who have lost eligibility
for Medicaid or CHIP as described earlier in preamble.
---------------------------------------------------------------------------
\247\ https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/8-9-natural-disaster-SEP.pdf.
---------------------------------------------------------------------------
We considered taking no action regarding our proposal to modify
Sec. 155.430(b) to expressly prohibit issuers from terminating
coverage for policy dependent enrollees because they reached the
maximum allowable age mid-Plan Year. However, we believe it is
important to provide clarity to issuers and consumers regarding this
policy so that coverage is not prematurely disrupted.
In developing the IPPTA policies contained in this proposed rule
(Sec. 155.1500), we requested to meet individually with each State
Exchange currently participating in the voluntary State engagement
initiative in order to gather State-specific information regarding
options for data collection that would impose the least burden on State
Exchanges. Based on information provided by those State Exchanges that
were able to participate in the meetings, we considered several data
collection options but chose the option that provides State Exchanges
with the greatest amount of control in aligning their source data to
the requested data elements. In addition, the proposed data collection
option requests that the State Exchange provide no fewer than 10
sampled tax households that we propose the State Exchange would
identify based upon fulfilling the scenarios described in the preamble.
An alternative option consisted of allowing the State Exchange to
provide to HHS all of the source data in an unstructured format for the
respective, sampled tax households. HHS using its own resources would
then map the State Exchange source data to the required data elements
that are necessary for performing the pre-testing and assessment. The
mapping process would require consultative sessions with each State
Exchange and a validation process to ensure the accurate mapping of the
data. While the proposed pre-testing and assessment data request form
also entails a process to validate the data with the State Exchanges,
the consultative process associated with this alternative data
collection mechanism would entail more frequency and a higher level of
intensity.
We invite comment on this proposed data collection option and
invite comment on potential alternative data collection options.
With respect to standardized plan options, we considered a range of
options for the proposed policy approach at Sec. 156.201, such as
modifying the methodology used to create the standardized plan options
for PY 2024 and subsequent PYs. Specifically, we considered including
more than four tiers of prescription drug cost-sharing in the
standardized plan option formularies. We also considered lowering the
deductibles in these plan designs and offsetting this increase in plan
generosity by increasing cost-sharing amounts for several benefit
categories. We also considered simultaneously maintaining the current
cost-sharing structures and decreasing the deductibles for these plan
designs, which would have increased the AVs of these plans to be at the
ceiling of each AV de minimis range. Ultimately, we
[[Page 78314]]
decided to maintain the AVs of these plans near the floor of each de
minimis range by largely maintaining the cost-sharing structures and
deductible values from the standardized plan options from PY 2023, as
well as by increasing the MOOP values for these plan designs. We
believe this proposed approach would strike the greatest balance in
providing enhanced pre-deductible coverage while ensuring competitive
premiums for these standardized plan options.
We invite comment on this proposed approach.
With respect to non-standardized plan option limits, we considered
a range of options for the proposed policy approach at Sec. 156.202.
Specifically, we considered limiting the number of non-standardized
plan options to three, two, or one per issuer, product network type,
metal level, and service area combination. We also considered no longer
permitting non-standardized plan options to be offered through the
Exchanges.
We also considered redeploying the meaningful difference standard,
which was previously codified at Sec. 156.298, either in place of or
in conjunction with imposing limits on the number of non-standardized
plan options that issuers can offer through the Exchanges. In this
scenario, we considered selecting from among several combinations of
the criteria in the original version of the meaningful difference
standard to determine whether plans are ``meaningfully different'' from
one another.\248\ Specifically, we considered using only a difference
in deductible type (that is, integrated or separate medical and drug
deductible), as well as a $1,000 difference in deductible to determine
whether plans are ``meaningfully different'' from one another.
---------------------------------------------------------------------------
\248\ Under the original meaningful difference standard, a plan
was considered to be ``meaningfully different'' from other plans in
the same product network type, metal level, and service area
combination if the plan had at least one of the following
characteristics: difference in network ID, difference in formulary
ID, difference in MOOP type, difference in deductible, multiple in-
network provider tiers rather than only one, a difference of $500 or
more in MOOP, a difference of $250 or more in deductible, or any
difference in covered benefits.
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We believe the proposed approach of limiting the number of non-
standardized plan options to two per issuer, product network type,
service area, and metal level would most significantly reduce the risk
of plan choice overload, streamlining the plan selection process and
enhancing choice architecture for consumers on the Exchanges.
We invite comment on this proposed approach.
With respect to plan and plan variation marketing names, we
considered issuing sub-regulatory guidance in lieu of proposed
rulemaking to require that marketing names include correct information,
without omission of material fact, and not include content that is
misleading. However, given the important role that plan and plan
variation marketing names play in facilitating plan competition through
consumer education on Exchanges, we are proposing this requirement in
regulation to allow interested parties the opportunity to comment.
We considered leaving the ECP provider participation threshold and
major ECP categories unchanged from PY 2023, but elected to propose
these changes to ECP policy in an effort to increase access to care,
particularly mental health care and SUD treatment, for low-income and
medically underserved consumers. We invite comment on these proposals.
We considered not introducing a proposal to require all QHP
issuers, including stand-alone dental plans, to utilize a contracted
network of providers, but elected to propose this change to network
adequacy policy in an effort to ensure that consumers have access to
insurer-negotiated prices and reduced costs in the form of reduced
cost-sharing, premiums, and service price, as compared with cost-
sharing, premiums, and service prices obtained from plans with no
network of contracted providers. We invite comment on this proposal.
We considered not proposing an amendment to Sec. 156.270(f) to add
a timeliness standard to the requirement for QHP issuers to send
enrollees notices of payment delinquency. However, because there is
currently no timeliness standard for delinquency notices, we are
concerned that there is a risk that enrollees may not receive
sufficient notice of their delinquency in order to avoid termination of
coverage. We also considered proposing requirements on how much advance
notice issuers must provide on premium bills after coverage is
effectuated, but have declined to propose regulation here, determining
that our focus on delinquency notice timeliness will have the desired
impact without creating potential conflicts with the existing pattern
of State rules and issuer practices that have long applied in the
individual market.
E. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, we estimate that
small businesses, nonprofit organizations, and small governmental
jurisdictions are small entities as that term is used in the RFA. The
great majority of hospitals and most other health care providers and
suppliers are small entities, either by being nonprofit organizations
or by meeting the SBA definition of a small business (having revenues
of less than $8.0 million to $41.5 million in any 1 year). Individuals
and States are not included in the definition of a small entity.
For purposes of the RFA, we believe that health insurance issuers
and group health plans would be classified under the North American
Industry Classification System (NAICS) code 524114 (Direct Health and
Medical Insurance Carriers). According to SBA size standards, entities
with average annual receipts of $41.5 million or less would be
considered small entities for these NAICS codes. Issuers could possibly
be classified in 621491 (HMO Medical Centers) and, if this is the case,
the SBA size standard would be $35 million or less.\249\ We believe
that few, if any, insurance companies underwriting comprehensive health
insurance policies (in contrast, for example, to travel insurance
policies or dental discount policies) fall below these size thresholds.
Based on data from MLR annual report submissions for the 2020 MLR
reporting year, approximately 78 out of 480 issuers of health insurance
coverage nationwide had total premium revenue of $41.5 million or
less.\250\ This estimate may overstate the actual number of small
health insurance issuers that may be affected, since over 76 percent of
these small issuers belong to larger holding groups, and many, if not
all, of these small companies are likely to have non-health lines of
business that will result in their revenues exceeding $41.5 million.
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\249\ https://www.sba.gov/document/support--table-size-standards.
\250\ Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------
In this proposed rule, we propose standards for the risk adjustment
and HHS-RADV programs, which are intended to stabilize premiums and
reduce incentives for issuers to avoid higher-risk enrollees. Because
we believe that insurance firms offering comprehensive health insurance
policies generally exceed the size thresholds for ``small entities''
established by the SBA, we do not
[[Page 78315]]
believe that an initial regulatory flexibility analysis is required for
such firms. Furthermore, the proposals related to IPPTA at Sec. Sec.
155.1500-155.1515 will affect only State Exchanges. As State
governments do not constitute small entities under the statutory
definition, and as all State Exchanges have revenues exceeding $5
million, an impact analysis for these provisions is not required under
the RFA.
As its measure of significant economic impact on a substantial
number of small entities, HHS uses a change in revenue of more than 3
to 5 percent. We do not believe that this threshold will be reached by
the requirements in this proposed rule. Therefore, the Secretary has
certified that this proposed rule will not have a significant economic
impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. While this rule is not
subject to section 1102 of the Act, we have determined that this
proposed rule would not affect small rural hospitals. Therefore, the
Secretary has certified that this proposed rule will not have a
significant impact on the operations of a substantial number of small
rural hospitals.
F. Unfunded Mandates Reform Act (UMRA)
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2022, that
threshold is approximately $165 million. Although we have not been able
to quantify all costs, we expect the combined impact on State, local,
or Tribal governments and the private sector does not meet the UMRA
definition of unfunded mandate.
G. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications.
In compliance with the requirement of E.O. 13132 that agencies
examine closely any policies that may have Federalism implications or
limit the policy making discretion of the States, we have engaged in
efforts to consult with and work cooperatively with affected States,
including participating in conference calls with and attending
conferences of the NAIC, and consulting with State insurance officials
on an individual basis.
While developing this rule, we attempted to balance the States'
interests in regulating health insurance issuers with the need to
ensure market stability. By doing so, we complied with the requirements
of E.O. 13132.
Because States have flexibility in designing their Exchange and
Exchange-related programs, State decisions will ultimately influence
both administrative expenses and overall premiums. States are not
required to establish an Exchange or risk adjustment program. For
States that elected previously to operate an Exchange, those States had
the opportunity to use funds under Exchange Planning and Establishment
Grants to fund the development of data. Accordingly, some of the
initial cost of creating programs was funded by Exchange Planning and
Establishment Grants. After establishment, Exchanges must be
financially self-sustaining, with revenue sources at the discretion of
the State. Current State Exchanges charge user fees to issuers.
In our view, while this proposed rule would not impose substantial
direct requirement costs on State and local governments, this
regulation has Federalism implications due to potential direct effects
on the distribution of power and responsibilities among the State and
Federal Governments relating to determining standards relating to
health insurance that is offered in the individual and small group
markets. For example, the repeal of the risk adjustment State
flexibility policy may have Federalism implications, but they are
mitigated because States have the option to operate their own Exchange
and risk adjustment program if they believe the HHS risk adjustment
methodology does not account for State-specific factors unique to the
State's markets.
As previously noted, the proposals in this rule related to IPPTA
would impose a minimal unfunded mandate on State Exchanges to supply
data for the improper payment calculation. Accordingly, E.O. 13132 does
not apply to this section of the proposed rule. In addition, statute
requires HHS to determine the amount and rate of improper payments.
Finally, States have the option to choose an FFE or SBE-FP, each of
which place different Federal burdens on the State. As the IPPTA
section of the proposed rule should not conflict with State law, HHS
does not anticipate any preemption of State law. We invite State
Exchanges to submit comments on this section of the proposed rule if
they believe it would conflict with State law.
In addition, we believe this proposed regulation does have
Federalism implications due to our proposal that Exchanges offer
earlier effective dates for consumers attesting to future mid-month
loss of MEC or COBRA coverage. However, the Federalism implications are
mitigated as Exchanges would have the flexibility to continue offering
the current coverage effective dates as described at Sec.
155.420(b)(2)(iv) or the new proposed earlier effective dates for
consumers attesting to a future loss of MEC as described earlier in
preamble. In addition, through the cross-references in Sec.
147.104(b)(5), the new proposed earlier coverage effective dates for
consumers attesting to a future loss of MEC would be applicable market-
wide at the option of the applicable State authority.
Additionally, we believe this proposed regulation does have
Federalism implications due to our proposal that Exchanges provide
consumers losing Medicaid or CHIP with a 90-day special enrollment
period window to enroll in an Exchange QHP rather than the current 60-
day window. However, the Federalism implications are mitigated as
Exchanges will have the flexibility to decide whether to continue
providing 60 days before or 60 days after for consumers losing Medicaid
or CHIP to enroll in a QHP plan as described at Sec. 155.420(c)(1) or
to implement the proposed new special rule providing consumers with 60
days before or 90 days after their loss of Medicaid or CHIP to enroll
in QHP coverage.
List of Subjects
45 CFR Part 153
Administrative practice and procedure, Health care, Health
insurance, Health records, Intergovernmental relations, Organization
and functions (Government agencies), Reporting and recordkeeping
requirements.
45 CFR Part 155
Administrative practice and procedure, Advertising, Brokers,
[[Page 78316]]
Conflict of interests, Consumer protection, Grants administration,
Grant programs-health, Health care, Health insurance, Health
maintenance organizations (HMO), Health records, Hospitals, Indians,
Individuals with disabilities, Intergovernmental relations, Loan
programs-health, Medicaid, Organization and functions (Government
agencies), Public assistance programs, Reporting and recordkeeping
requirements, Technical assistance, Women and youth.
45 CFR Part 156
Administrative practice and procedure, Advertising, Advisory
committees, Brokers, Conflict of interests, Consumer protection, Grant
programs-health, Grants administration, Health care, Health insurance,
Health maintenance organization (HMO), Health records, Hospitals,
Indians, Individuals with disabilities, Loan programs-health, Medicaid,
Organization and functions (Government agencies), Public assistance
programs, Reporting and recordkeeping requirements, State and local
governments, Sunshine Act, Technical assistance, Women, and Youth.
For the reasons set forth in the preamble, under the authority at 5
U.S.C. 301, the Department of Health and Human Services proposes to
amend 45 CFR subtitle A, subchapter B, as set forth below.
PART 153--STANDARDS RELATED TO REINSURANCE, RISK CORRIDORS, AND
RISK ADJUSTMENT UNDER THE AFFORDABLE CARE ACT
0
1. The authority citation for part 153 continues to read as follows:
Authority: 42 U.S.C. 18031, 18041, and 18061 through 18063.
0
2. Amend Sec. 153.320 by revising paragraphs (d) introductory text,
(d)(1)(iv), and (d)(4)(i)(B) to read as follows:
Sec. 153.320 Federally certified risk adjustment methodology
* * * * *
(d) State flexibility to request reductions to transfers. For the
2020 through 2023 benefit years, States can request to reduce risk
adjustment transfers in the State's individual catastrophic, individual
non-catastrophic, small group, or merged market risk pool by up to 50
percent in States where HHS operates the risk adjustment program. For
the 2024 benefit year, only prior participants, as defined in paragraph
(d)(5) of this section, may request to reduce risk adjustment transfers
in the State's individual catastrophic, individual non-catastrophic,
small group, or merged market risk pool by up to 50 percent in States
where HHS operates the risk adjustment program.
(1) * * *
(i) * * *
(iv) For the 2024 benefit year only, a justification for the
requested reduction demonstrating the requested reduction would have de
minimis impact on the necessary premium increase to cover the transfers
for issuers that would receive reduced transfer payments.
* * * * *
(4) * * *
(B) For the 2024 benefit year only, that the requested reduction
would have de minimis impact on the necessary premium increase to cover
the transfers for issuers that would receive reduced transfer payments.
* * * * *
0
3. Section 153.630 is amended by--
0
a. Revising paragraph (d)(2);
0
b. Redesignating paragraph (d)(3) as paragraph (d)(4); and
0
c. Adding new paragraph (d)(3).
The revision and addition read as follows:
Sec. 153.630 Data validation requirements when HHS operates risk
adjustment.
* * * * *
(d) * * *
(2) Within 15 calendar days of the notification of the findings of
a second validation audit (if applicable) by HHS, in the manner set
forth by HHS, an issuer must confirm the findings of the second
validation audit (if applicable), or file a discrepancy report to
dispute the findings of a second validation audit (if applicable).
(3) Within 30 calendar days of the notification by HHS of the
calculation of a risk score error rate, in the manner set forth by HHS,
an issuer must confirm the calculation of the risk score error rate as
a result of risk adjustment data validation, or file a discrepancy
report to dispute the calculation of a risk score error rate as a
result of risk adjustment data validation.
* * * * *
0
4. Section 153.710 is amended by revising paragraphs (e) and (h)(1)
introductory text to read as follows:
Sec. 153.710 Data requirements.
* * * * *
(e) Materiality threshold. HHS will consider a discrepancy reported
under paragraph (d)(2) of this section to be material if the amount in
dispute is equal to or exceeds $100,000 or 1 percent of the total
estimated transfer amount in the applicable State market risk pool,
whichever is less.
* * * * *
(h) * * *
(1) Notwithstanding any discrepancy report made under paragraph
(d)(2) of this section, any discrepancy filed under Sec. 153.630(d)(2)
or (3), or any request for reconsideration under Sec. 156.1220(a) of
this subchapter with respect to any risk adjustment payment or charge,
including an assessment of risk adjustment user fees and risk
adjustment data validation adjustments; reinsurance payment; cost-
sharing reduction payment or charge; or risk corridors payment or
charge, unless the dispute has been resolved, an issuer must report,
for purposes of the risk corridors and MLR programs:
* * * * *
PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
0
5. The authority citation for part 155 continues to read as follows:
Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042,
18051, 18054, 18071, and 18081-18083.
0
6. Section 155.106 is amended by revising paragraphs (a)(3) and (c)(3)
to read as follows:
Sec. 155.106 Election to operate an Exchange after 2014.
(a) * * *
(3) Have in effect an approved, or conditionally approved, Exchange
Blueprint and operational readiness assessment prior to the date on
which the Exchange would begin open enrollment as a State Exchange;
* * * * *
(c) * * *
(3) Have in effect an approved, or conditionally approved, Exchange
Blueprint and operational readiness assessment prior to the date on
which the Exchange proposes to begin open enrollment as an SBE-FP, in
accordance with HHS rules, as a State Exchange utilizing the Federal
platform;
* * * * *
Sec. 155.210 [Amended]
0
7. Section 155.210 is amended by removing and reserving paragraph
(d)(8).
0
8. Section 155.220 is amended by--
0
a. Revising paragraphs (g)(5)(i)(B), (h)(3), and (j)(2)(ii)
introductory text;
0
b. Redesignating paragraphs (j)(2)(ii)(A) through (D) as paragraphs
(j)(2)(ii)(B), through (E), respectively;
0
c. Adding new paragraph ((j)(2)(ii)(A); and
[[Page 78317]]
0
d. Revising paragraph (j)(2)(iii).
The revisions and additions read as follows:
Sec. 155.220 Ability of States to permit agents and brokers and web-
brokers to assist qualified individuals, qualified employers, or
qualified employees enrolling QHPs.
* * * * *
(g) * * *
(5) * * *
(i) * * *
(B) The agent, broker, or web-broker may submit evidence in a form
and manner to be specified by HHS, to rebut the allegation during this
90-day period. If the agent, broker, or web-broker submits such
evidence during the suspension period, HHS will review the evidence and
make a determination whether to lift the suspension within 45 calendar
days of receipt of such evidence. If the rebuttal evidence does not
persuade HHS to lift the suspension, or if the agent, broker, or web-
broker fails to submit rebuttal evidence during the suspension period,
HHS may terminate the agent's, broker's, or web-broker's agreements
required under paragraph (d) of this section and under Sec. 155.260(b)
for cause under paragraph (g)(5)(ii) of this section.
* * * * *
(h) * * *
(3) Notice of reconsideration decision. The HHS reconsideration
entity will provide the agent, broker, or web-broker with a written
notice of the reconsideration decision within 60 calendar days of the
date it receives the request for reconsideration. This decision will
constitute HHS' final determination.
* * * * *
(j) * * *
(2) * * *
(ii) Provide the Federally-facilitated Exchanges with correct
information, and document that eligibility application information has
been reviewed by and confirmed to be accurate by the consumer, or the
consumer's authorized representative designated in compliance with
Sec. 155.227, prior to the submission of information under section
1411(b) of the Affordable Care Act, including but not limited to:
(A) Documenting that eligibility application information has been
reviewed by and confirmed to be accurate by the consumer or the
consumer's authorized representative must require the consumer or their
authorized representative to take an action that produces a record that
can be maintained by the individual or entity described in paragraph
(j)(1) of this section and produced to confirm the consumer or their
authorized representative has reviewed and confirmed the accuracy of
the eligibility application information. Non-exhaustive examples of
acceptable documentation include obtaining the signature of the
consumer or their authorized representative (electronically or
otherwise), verbal confirmation by the consumer or their authorized
representative that is captured in an audio recording, a written
response (electronic or otherwise) from the consumer or their
authorized representative to a communication sent by the agent, broker,
or web-broker, or other similar means or methods specified by HHS in
guidance.
(1) The documentation required under paragraph (j)(2)(ii)(A) of
this section must include the date the information was reviewed, the
name of the consumer or their authorized representative, an explanation
of the attestations at the end of the eligibility application, and the
name of the assisting agent, broker, or web-broker.
(2) An individual or entity described in paragraph (j)(1) of this
section must maintain the documentation described in paragraph
(j)(2)(ii)(A) of this section for a minimum of ten years, and produce
the documentation upon request in response to monitoring, audit, and
enforcement activities conducted consistent with paragraphs (c)(5),
(g), (h), and (k) of this section.
* * * * *
(iii) Obtain and document the receipt of consent of the consumer or
their authorized representative designated in compliance with Sec.
155.227, employer, or employee prior to assisting with or facilitating
enrollment through a Federally-facilitated Exchange or assisting the
individual in applying for advance payments of the premium tax credit
and cost-sharing reductions for QHPs;
(A) Obtaining and documenting the receipt of consent must require
the consumer, or the consumer's authorized representative designated in
compliance with Sec. 155.227, to take an action that produces a record
that can be maintained and produced by an individual or entity
described in paragraph (j)(1) of this section to confirm the consumer's
or their authorized representative's consent has been provided. Non-
exhaustive examples of acceptable documentation of consent include
obtaining the signature of the consumer or their authorized
representative (electronically or otherwise), verbal confirmation by
the consumer or their authorized representative that is captured in an
audio recording, a response from the consumer or their authorized
representative to an electronic or other communication sent by the
agent, broker, or web-broker.
(B) The documentation required under paragraph (j)(2)(iii)(A) of
this section must include a description of the scope, purpose, and
duration of the consent provided by the consumer or their authorized
representative designated in compliance with Sec. 155.227, the date
consent was given, name of the consumer or their authorized
representative, and the name of the agent, broker, web-broker, or
agency being granted consent, as well as a process through which the
consumer or their authorized representative may rescind the consent.
(C) An individual or entity described in paragraph (j)(1) of this
section must maintain the documentation described in paragraph
(j)(2)(iii)(A) of this section for a minimum of 10 years, and produce
the documentation upon request in response to monitoring, audit, and
enforcement activities conducted consistent with paragraphs (c)(5),
(g), (h), and (k) of this section.
* * * * *
Sec. 155.225 [Amended]
0
9. Section 155.225 is amended by removing and reserving paragraph
(g)(5).
0
10. Section 155.305 is amended by revising paragraph (f)(4) to read as
follows.
Sec. 155.305 Eligibility standards.
* * * * *
(f) * * *
(4) Compliance with filing requirement. Beginning January 1, 2024,
the Exchange may not determine a tax filer eligible for APTC if the IRS
notifies HHS and HHS notifies the Exchange as part of the process
described in Sec. 155.320(c)(3) that APTC payments were made on behalf
of the tax filer or either spouse if the tax filer is a married couple
for two consecutive years for which tax data would be utilized for
verification of household income and family size in accordance with
Sec. 155.320(c)(1)(i), and the tax filer or his or her spouse did not
comply with the requirement to file an income tax return for that year
and for the previous year as required by 26 U.S.C. 6011, 6012, and
their implementing regulations and reconcile APTC for that period.
* * * * *
0
11. Section 155.315 is amended by adding paragraph (f)(7) to read as
follows:
[[Page 78318]]
Sec. 155.315 Verification process related to eligibility for
enrollment in a QHP through the Exchange.
* * * * *
(f) * * *
(7) Must extend the period described in paragraph (f)(2)(ii) of
this section by a period of 60 days for an applicant if the applicant
is required to present satisfactory documentary evidence to verify
household income.
* * * * *
0
12. Section 155.320 is amended by adding paragraph (c)(5) to read as
follows:
Sec. 155.320 Verification process related to eligibility for
insurance affordability programs.
* * * * *
(c) * * *
(5) Notwithstanding any other requirement described in this
paragraph (c) to the contrary, when the Exchange requests tax return
data and family size from the Secretary of Treasury as described in
Sec. 155.320(c)(1)(i)(A) but no such data is returned for an
applicant, the Exchange will accept that applicant's attestation of
income and family size without further verification.
* * * * *
0
13. Section 155.335 is amended by revising paragraphs (j)(1)(i),
(j)(1)(ii), (j)(1)(iii)(A) and (B), (j)(1)(iv), (j)(2)(i) through (iii)
and adding paragraphs (j)(2)(iv) and (v) to read as follows:
Sec. 155.335 Annual eligibility redetermination.
* * * * *
(j) * * *
(1) * * *
(i) If the enrollee's current QHP is available through the Exchange
and -
(A) The enrollee is not CSR-eligible, in accordance with Sec.
155.305(g), the Exchange will re-enroll the enrollee in the same plan
as the enrollee's current QHP.
(B) The enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is a bronze level plan, the
Exchange will re-enroll the enrollee either in the same plan as the
enrollee's current QHP, or, at the option of the Exchange, in a silver
level QHP within the same product that has a lower or equivalent
premium after APTC and that has the most similar network compared to
the enrollee's current QHP;
(C) The enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is not a bronze level plan,
the Exchange will re-enroll the enrollee in the same plan as the
enrollee's current QHP.
(ii) If the enrollee's current QHP is not available through the
Exchange and -
(A) The enrollee is not CSR-eligible, in accordance with Sec.
155.305(g), the Exchange will re-enroll the enrollee in a QHP within
the same product, at the same metal level and that has the most similar
network compared to the enrollee's current QHP.
(B) The enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is a bronze level plan, the
Exchange will re-enroll the enrollee either in a bronze level QHP
within the same product, or, at the option of Exchange, in a silver
level QHP within the same product that has a lower or equivalent
premium after APTC and that has the most similar network compared to
the enrollee's current QHP;
(C) The enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is not a bronze level plan,
the Exchange will re-enroll the enrollee in a QHP within the same
product at the same metal level and that has the most similar network
compared to the enrollee's current QHP;
(iii) * * *
(A) The enrollee's current QHP is a silver level plan, the Exchange
will re-enroll the enrollee in a silver level QHP under a different
product offered by the same QHP issuer that is most similar to and that
has the most similar network compared to the enrollee's current
product. If no such silver level QHP is available for enrollment
through the Exchange, the Exchange will re-enroll the enrollee in a QHP
under the same product that is one metal level higher or lower than the
enrollee's current QHP and that has the most similar network compared
to the enrollee's current QHP;
(B) The enrollee's current QHP is not a silver level plan, the
Exchange will re-enroll the enrollee under the same product that is one
metal level higher or lower than the enrollee's current QHP and that
has the most similar network compared to the enrollee's current QHP and
; or
(iv) If the enrollee's current QHP is not available through the
Exchange and the enrollee's product no longer includes a QHP that is at
the same metal level as, or one metal level higher or lower than the
enrollee's current QHP, the Exchange will re-enroll the enrollee in any
other QHP offered under the product in which the enrollee's current QHP
is offered in which the enrollee is eligible to enroll that has the
most similar network compared to the enrollee's current QHP.
(2) * * *
(i) If the enrollee is not CSR eligible, the Exchange will re-
enroll the enrollee in a QHP in the product offered by the same issuer
that is the most similar to the enrollee's current product at the same
metal level as and with the most similar network compared to the
enrollee's current QHP;
(ii) If the enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is a bronze level plan, the
Exchange will re-enroll the enrollee either in a bronze level QHP, or,
at the option of the Exchange, in a silver level QHP that has a lower
or equivalent premium after APTC and that has the most similar network
compared to the enrollee's current QHP in the product offered by the
same issuer through the Exchange that is most similar to the enrollee's
current product;
(iii) If the enrollee is CSR-eligible, in accordance with Sec.
155.305(g), and the enrollee's current QHP is not a bronze level plan,
the Exchange will re-enroll the enrollee in a QHP at the same metal
level that has the most similar network compared to the enrollee's
current QHP in the product offered by the same issuer that is the most
similar to the enrollee's current product;
(iv) If the issuer does not offer another QHP at the same metal
level as the enrollee's current QHP, the Exchange will re-enroll the
enrollee in a QHP that is one metal level higher or lower than the
enrollee's current QHP and that has the most similar network compared
to the enrollee's current QHP in the product offered by the same issuer
through the Exchange that is the most similar to the enrollee's current
product; or
(v) If the issuer does not offer another QHP through the Exchange
at the same metal level as, or one metal level higher or lower than the
enrollee's current QHP, the Exchange will re-enroll the enrollee in any
other QHP offered by the same issuer in which the enrollee is eligible
to enroll in the product that is most similar to the enrollee's current
product and in a QHP within that product that has the most similar
network to the enrollee's current QHP.
* * * * *
0
14. Section 155.420 is amended by--
0
a. Revising paragraphs (a)(4)(ii)(A) and (B), (b)(2)(iv), and (c)(2);
0
b. Adding paragraph (c)(6); and
0
c. Revising paragraph (d)(12).
The revisions and addition read as follows:
Sec. 155.420 Special enrollment periods.
(a) * * *
(4) * * *
(ii) * * *
(A) If an enrollee or his or her dependents become newly eligible
for cost-sharing reductions in accordance with paragraph (d)(6)(i) or
(ii) of this section and the enrollee or his or her
[[Page 78319]]
dependents are not enrolled in a silver-level QHP, the Exchange must
allow the enrollee and his or her dependents to change to a silver-
level QHP if they elect to change their QHP enrollment; or
(B) Beginning January 2022, if an enrollee or his or her dependents
become newly ineligible for cost-sharing reductions in accordance with
paragraph (d)(6)(i) or (ii) of this section and the enrollee or his or
her dependents are enrolled in a silver-level QHP, the Exchange must
allow the enrollee and his or her dependents to change to a QHP one
metal level higher or lower if they elect to change their QHP
enrollment;
* * * * *
(b) * * *
(2) * * *
(iv) If a qualified individual, enrollee, or dependent, as
applicable, loses coverage as described in paragraphs (d)(1) or
(d)(6)(iii) of this section, or is enrolled in COBRA continuation
coverage for which an employer is paying all or part of the premiums,
or for which a government entity is providing subsidies, and the
employer contributions or government subsidies completely cease as
described in paragraph (d)(15) of this section, gains access to a new
QHP as described in paragraph (d)(7) of this section, becomes newly
eligible for enrollment in a QHP through the Exchange in accordance
with Sec. 155.305(a)(2) as described in paragraph (d)(3) of this
section, becomes newly eligible for advance payments of the premium tax
credit in conjunction with a permanent move as described in paragraph
(d)(6)(iv) of this section, and if the plan selection is made on or
before the day of the triggering event, the Exchange must ensure that
the coverage effective date is the first day of the month following the
date of the triggering event. If the plan selection is made after the
date of the triggering event, the Exchange must ensure that coverage is
effective in accordance with paragraph (b)(1) of this section or on the
first day of the following month, at the option of the Exchange.
Notwithstanding the requirements of this paragraph (b)(2)(iv), and at
the option of the Exchange, if the plan selection is made on or before
the last day of the month preceding the triggering event, the Exchange
must ensure that the coverage effective date is the first of the month
in which the triggering event occurs for losses of coverage as
described in paragraphs (d)(1), (d)(6)(iii), and (d)(15) of this
section.
* * * * *
(c) * * *
(2) Advanced availability. A qualified individual or his or her
dependent who is described in paragraph (d)(1), (d)(6)(iii), or (d)(15)
of this section has 60 days before and, unless the Exchange exercises
the option in paragraph (c)(6) of this section, 60 days after the
triggering event to select a QHP. At the option of the Exchange, a
qualified individual or his or her dependent who is described in
paragraph (d)(7) of this section; who is described in paragraph
(d)(6)(iv) of this section becomes newly eligible for advance payments
of the premium tax credit as a result of a permanent move to a new
State; or who is described in paragraph (d)(3) of this section and
becomes newly eligible for enrollment in a QHP through the Exchange
because he or she newly satisfies the requirements under Sec.
155.305(a)(2), has 60 days before or after the triggering event to
select a QHP.
* * * * *
(6) Special rule for individuals losing Medicaid or CHIP. Beginning
January 1, 2024, at the option of the Exchange, a qualified individual
or his or her dependent(s) who is described in paragraph (d)(1)(i) of
this section and whose loss of coverage is a loss of Medicaid or CHIP
coverage shall have 90 days after the triggering event to select a QHP.
* * * * *
(d) * * *
(12) The enrollment in a QHP through the Exchange was influenced by
a material error related to plan benefits, service area, cost-sharing,
or premium. A material error is one that is likely to have influenced a
qualified individual's, enrollee's, or their dependent's enrollment in
a QHP.
* * * * *
0
15. Section 155.430 is amended by adding paragraph (b)(3) to read as
follows:
Sec. 155.430 Termination of Exchange enrollment or coverage.
* * * * *
(b) * * *
(3) Prohibition of issuer-initiated terminations due to aging-off.
Exchanges on the Federal platform must, and State Exchanges using their
own platform may, prohibit QHP issuers from terminating dependent
coverage of a child before the end of the plan year in which the child
attains age 26, or before the end of the plan year in which the child
attains the maximum age a QHP issuer is required to make available
dependent coverage of children under applicable State law, on the basis
of the child's age, unless otherwise permitted.
* * * * *
0
16. Section 155.505 is amended by revising paragraph (g) to read as
follows:
Sec. 155.505 General eligibility appeals requirements.
* * * * *
(g) Review of Exchange Eligibility Appeal Decisions. An appellant
may seek review of Exchange eligibility appeal decisions issued under
paragraph (b) of this section as follows:
(1) Administrative Review. The Administrator may review an Exchange
eligibility appeal decision as follows:
(i) Request by a party to the appeal. (A) Within 14 calendar days
of the date of the Exchange eligibility appeal decision issued by an
impartial official as described in Sec. 155.535(c)(4), a party to the
appeal may request review of the Exchange eligibility appeal decision
by the CMS Administrator. Such a request may be made even if the CMS
Administrator has already at their initiative declined review as
described in paragraph (g)(1)(ii)(B) of this section. If the CMS
Administrator accepts that party's request for a review after having
declined review, then the CMS Administrator's initial declination to
review the eligibility appeal decision is void.
(B) Within 30 days of the date of the party's request for
administrative review, the CMS Administrator may:
(1) Decline to review the Exchange eligibility appeal decision;
(2) Render a final decision as described in Sec. 155.545 (a)(1)
based on their review of the eligibility appeal decision; or
(3) Choose to take no action on the request for review.
(C) The Exchange eligibility appeal decision of the impartial
official as described in Sec. 155.535(c)(4) is final as of the date of
the Exchange eligibility appeal decision if the CMS Administrator
declines the party's request for review or if the CMS Administrator
does not take any action on the party's request for review by the end
of the 30-day period described in paragraph (a)(ii).
(ii) Review at the discretion of the CMS Administrator. (A) Within
14 calendar days of the date of the Exchange eligibility appeal
decision issued by an impartial official as described in Sec.
155.535(c)(4), the CMS Administrator may initiate a review of an
eligibility appeal decision at their discretion.
(B) Within 30 days of the date the CMS Administrator initiates a
review, the CMS Administrator may:
[[Page 78320]]
(1) Decline to review the Exchange eligibility appeal decision;
(2) Render a final decision as described in Sec. 155.545 (a)(1)
based on their review of the eligibility appeal decision; or
(3) Choose to take no action on the Exchange eligibility appeal
decision.
(C) The eligibility Exchange appeal decision of the impartial
official as described in Sec. 155.535(c)(4) is final as of the date of
the Exchange eligibility appeal decision if the CMS Administrator
declines to review the eligibility appeal decision or chooses to take
no action by the end of the 30-day period described in paragraph
(g)(1)(i)(B) of this section.
(iii) Effective dates. If a party requests a review of an Exchange
eligibility appeal decision by the CMS Administrator or the CMS
Administrator initiates a review of an Exchange eligibility appeal
decision at their own discretion, the eligibility appeal decision is
effective as follows:
(A) If an Exchange eligibility appeal decision is final pursuant to
paragraphs (g)(1)(ii)(B) of this section and (g)(1)(ii)(C) in this
section, the Exchange eligibility appeal decision of the impartial
official as described in Sec. 155.535(c)(4) is effective as of the
date of the official's decision.
(B) If the CMS Administrator renders a final decision after
reviewing an Exchange eligibility appeal decision as described in
paragraphs (g)(1)(i)(B)(2) and (1)(ii)(B)(2) of this section, the CMS
Administrator may choose to change the effective date of the Exchange
eligibility appeal decision as described in Sec. 155.545 (a)(5).
(iv) Informal resolution decisions as described in Sec.
155.535(a)(4) are not subject to administrative review by the CMS
Administrator.
(2) Judicial Review. To the extent it is available by law, an
appellant may seek judicial review of a final Exchange eligibility
appeal decision.
* * * * *
0
17. Add subpart P to read as follows:
Subpart P--Improper Payment Pre-Testing and Assessment (IPPTA) for
State Exchanges
Sec.
155.1500 Purpose and scope.
155.1505 Definitions.
155.1510 Data submission.
155.1515 Pre-testing and assessment procedures.
Subpart P--Improper Payment Pre-Testing and Assessment (IPPTA) for
State Exchanges
Sec. 155.1500 Purpose and scope.
(a) This subpart sets forth the requirements of the IPPTA. The
IPPTA is an initiative between HHS and the State Exchanges. These
requirements are intended to:
(1) Prepare State Exchanges for the planned measurement of improper
payments.
(2) Test processes and procedures that support HHS's review of
determinations of APTC made by State Exchanges.
(3) Provide a mechanism for HHS and State Exchanges to share
information that will aid in developing an efficient measurement
process.
(b) [Reserved]
Sec. 155.1505 Definitions.
As used in this subpart--
Business rules means the State Exchange's internal directives
defining, guiding, or constraining the State Exchange's actions when
making eligibility determinations and related APTC calculations.
Entity relationship diagram means a graphical representation
illustrating the organization and relationship of the data elements
that are pertinent to applications for QHP and associated APTC
payments.
Pre-testing and assessment means the process that uses the
procedures specified in Sec. 155.1515 to prepare State Exchanges for
the planned measurement of improper payments of APTC.
Pre-testing and assessment checklist means the document that
contains criteria that HHS will use to review a State Exchange's
ability to accomplish the requirements of the IPPTA.
Pre-testing and assessment data request form means the document
that specifies the structure for the data elements that HHS will
require each State Exchange to submit.
Pre-testing and assessment period means the one calendar year
timespan during which HHS will engage in pre-testing and assessment
procedures with a State Exchange.
Pre-testing and assessment plan means the template developed by HHS
in collaboration with each State Exchange enumerating the procedures,
sequence, and schedule to accomplish pre-testing and assessment.
Pre-testing and assessment report means the summary report provided
by HHS to each State Exchange at the end of the State Exchange's pre-
testing and assessment period that will include, but not be limited to,
the State Exchange's status regarding completion of each of the pre-
testing and assessment procedures specified in Sec. 155.1515, as well
as observations and recommendations that result from processing and
reviewing the data submitted by the State Exchange to HHS.
Sec. 155.1510 Data submission.
(a) Requirements. For purposes of the IPPTA, a State Exchange must
submit the following information in a form and manner specified by HHS:
(1) Data documentation. The State Exchange must provide to HHS the
following data documentation:
(i) The State Exchange's data dictionary including attribute name,
data type, allowable values, and description;
(ii) An entity relationship diagram, which shall include the
structure of the data tables and the residing data elements that
identify the relationships between the data tables; and
(iii) Business rules and related calculations.
(2) Data for processing and testing. The State Exchange must use
the pre-testing and assessment data request form, or other method as
specified by HHS, to submit to HHS the application data associated with
no fewer than 10 tax household identification numbers and the
associated policy identification numbers that address scenarios
specified by HHS to allow HHS to test all of the pre-testing and
assessment processes and procedures.
(b) Timing. The State Exchange must submit the information
specified in paragraph (a) of this section within the timelines in the
pre-testing and assessment plan specified in Sec. 155.1515.
Sec. 155.1515 Pre-testing and assessment procedures.
(a) General requirement. The State Exchanges are required to
participate in the IPPTA for a period of one calendar year. The State
Exchange and HHS will execute the pre-testing and assessment procedures
in this section within the timelines in the pre-testing and assessment
plan.
(b) Orientation and planning processes. (1) As a part of the
orientation process, HHS will provide State Exchanges with an overview
of the pre-testing and assessment procedures and identify documentation
that a State Exchange must provide to HHS for pre-testing and
assessment.
(2) As a part of the planning process, HHS, in collaboration with
each State Exchange, will develop a pre-testing and assessment plan
that takes into consideration relevant activities, if any, that were
completed during a prior,
[[Page 78321]]
voluntary State engagement. The pre-testing and assessment plan will
include the pre-testing and assessment checklist.
(3) At the conclusion of the pre-testing and assessment planning
process, HHS will issue the pre-testing and assessment plan specific to
that State Exchange. The pre-testing and assessment plan will be for
HHS and State Exchange internal use only and will not be made available
to the public by HHS unless otherwise required by law.
(c) Notifications and updates. (1) Notifications. As needed
throughout the pre-testing and assessment period, HHS will issue
notifications to State Exchanges concerning information related to the
pre-testing and assessment processes and procedures.
(2) Updates regarding changes. Throughout the pre-testing and
assessment period, the State Exchange must provide HHS with information
regarding any operational, policy, business rules, information
technology, or other changes that may impact the ability of the State
Exchange to satisfy the requirements of the pre-testing and assessment.
(d) Submission of required data and data documentation. As
specified in Sec. 155.1510, HHS will inform State Exchanges about the
form and manner for State Exchanges to submit required data and data
documentation to HHS in accordance with the pre-testing and assessment
plan.
(e) Data processing. (1) HHS will coordinate with each State
Exchange to track and manage the data and data documentation submitted
by a State Exchange as specified in Sec. 155.1510(a)(1) and (2).
(2) HHS will coordinate with each State Exchange to provide
assistance in aligning the data specified in Sec. 155.1510(a)(2) from
the State Exchange's existing data structure to the standardized set of
data elements.
(3) HHS will coordinate with each State Exchange to interpret and
validate the data specified in Sec. 155.1510(a)(2).
(4) HHS will use the data and data documentation submitted by the
State Exchange to execute the pre-testing and assessment procedures.
(f) Pre-testing and assessment checklist. HHS will issue the pre-
testing and assessment checklist as part of the pre-testing and
assessment plan. The pre-testing and assessment checklist criteria will
include but are not limited to:
(1) A State Exchange's submission of the data documentation as
specified in Sec. 155.1510(a)(1).
(2) A State Exchange's submission of the data for processing and
testing as specified in Sec. 155.1510(a)(2); and
(3) A State Exchange's completion of the pre-testing and assessment
processes and procedures related to the IPPTA program.
(g) Pre-testing and assessment report. Subsequent to the completion
of a State Exchange's pre-testing and assessment period, HHS will issue
a pre-testing and assessment report specific to that State Exchange.
The pre-testing and assessment report will be for HHS and State
Exchange internal use only and will not be made available to the public
by HHS unless otherwise required by law.
PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES
0
The authority citation for part 156 continues to read as follows:
Authority: 42 U.S.C. 18021-18024, 18031-18032, 18041-18042,
18044, 18054, 18061, 18063, 18071, 18082, and 26 U.S.C. 36B.
0
18. Section 156.201 is revised to read as follows:
Sec. 156.201 Standardized plan options.
A QHP issuer in a Federally-facilitated Exchange or a State-based
Exchange on the Federal platform, other than an issuer that is already
required to offer standardized plan options under State action taking
place on or before January 1, 2020, must:
(a) For the plan year 2023, offer in the individual market at least
one standardized QHP option, defined at Sec. 155.20 of this
subchapter, at every product network type, as the term is described in
the definition of ``product'' at Sec. 144.103 of this subchapter, at
every metal level, and throughout every service area that it also
offers non-standardized QHP options, including, for silver plans, for
the income-based cost-sharing reduction plan variations, as provided
for at Sec. 156.420(a); and
(b) For plan year 2024 and subsequent plan years, offer in the
individual market at least one standardized QHP option, defined at
Sec. 155.20 of this subchapter, at every product network type, as the
term is described in the definition of ``product'' at Sec. 144.103 of
this subchapter, at every metal level except the non-expanded bronze
metal level, and throughout every service area that it also offers non-
standardized QHP options, including, for silver plans, for the income-
based cost-sharing reduction plan variations, as provided for at Sec.
156.420(a)
(c) With respect to covered drugs:
(1) Place all covered generic drugs in the standardized plan
options' generic drug cost-sharing tier, or the specialty drug tier if
there is an appropriate and non-discriminatory basis in accordance with
Sec. 156.125 for doing so; and
(2) Place all covered brand drugs in either the standardized plan
options' preferred brand or non-preferred brand drug cost-sharing tier,
or the specialty drug cost-sharing tier if there is an appropriate and
non-discriminatory basis in accordance with Sec. 156.125 for doing so.
0
19. Section 156.202 is added to read as follows:
Sec. 156.202 Non-standardized plan option limits.
For the plan year 2024 and subsequent plan years, a QHP issuer in a
Federally-facilitated Exchange or a State-based Exchange on the Federal
platform is limited to offering two non-standardized plan options per
product network type, as the term is described in the definition of
``product'' at Sec. 144.103 of this subchapter, and metal level
(excluding catastrophic plans), in any service area.
0
20. Section 156.210 is amended by adding paragraph (d) to read as
follows:
The addition reads as follows:
Sec. 156.210 QHP rate and benefit information.
(d) Rate requirements for stand-alone dental plans. For benefit and
plan years beginning on or after January 1, 2024:
(1) Age on effective date. The premium rate charged by an issuer of
stand-alone dental plans may vary with respect to the particular plan
or coverage involved by determining the enrollee's age. Any age
calculation for rating and eligibility purposes must be based on the
age as of the time of policy issuance or renewal.
(2) Guaranteed rates. An issuer of stand-alone dental plans must
set guaranteed rates.
0
21. Section 156.225 is amended by --
0
a. In paragraph (a) removing ``and'' from the end of the paragraph; and
0
b. In paragraph (b) removing ``.'' from the end of the paragraph and
replacing it with ``; and''; and
0
c. By adding paragraph (c).
The addition reads as follows:
Sec. 156.225 Marketing and Benefit Design of QHPs.
* * * * *
(c) Plan marketing names. Offer plans and plan variations with
marketing names that include correct information, without omission of
material fact, and
[[Page 78322]]
do not include content that is misleading.
* * * * *
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22. Section 156.230 is amended by--
0
a. Revising paragraphs (a)(1) introductory text and (e) introductory
text; and
0
b. Removing and reserving paragraph (f).
The revisions read as follows:
Sec. 156.230 Network adequacy standards.
(a) General requirement. (1) Each QHP issuer must use a provider
network and ensure that the provider network consisting of in-network
providers, as available to all enrollees, meets the following
standards:
* * * * *
(e) Out-of-network cost-sharing. Beginning for the 2018 and later
benefit years, for a network to be deemed adequate, each QHP must:
* * * * *
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23. Section 156.235 is amended by revising paragraphs (a)(1), (a)(2)(i)
and (a)(2)(ii)(B) to read as follows:
Sec. 156.235 Essential community providers.
(a) * * *
(1) A QHP issuer must include in its provider network a sufficient
number and geographic distribution of essential community providers
(ECPs), where available, to ensure reasonable and timely access to a
broad range of such providers for low-income individuals or individuals
residing in Health Professional Shortage Areas within the QHP's service
area, in accordance with the Exchange's network adequacy standards.
(2) * * *
(i) The QHP issuer's provider network includes as participating
providers at least a minimum percentage, as specified by HHS, of
available ECPs in each plan's service area collectively across all ECP
categories defined under paragraph (ii)(B) of this section, and at
least a minimum percentage of available ECPs in each plan's service
area within certain individual ECP categories, as specified by HHS.
Multiple providers at a single location will count as a single ECP
toward both the available ECPs in the plan's service area and the
issuer's satisfaction of the ECP participation standard. For plans that
use tiered networks, to count toward the issuer's satisfaction of the
ECP standards, providers must be contracted within the network tier
that results in the lowest cost-sharing obligation. For plans with two
network tiers (for example, participating providers and preferred
providers), such as many PPOs, where cost-sharing is lower for
preferred providers, only preferred providers will be counted towards
ECP standards.; and
(ii) * * *
(B) At least one ECP in each of the eight (8) ECP categories in
each county in the service area, where an ECP in that category is
available and provides medical or dental services that are covered by
the issuer plan type. The ECP categories are: Federally Qualified
Health Centers, Ryan White Program Providers, Family Planning
Providers, Indian Health Care Providers, Inpatient Hospitals, Mental
Health Facilities, Substance Use Disorder Treatment Centers, and Other
ECP Providers. The Other ECP Providers category includes the following
types of providers: Rural Health Clinics, Black Lung Clinics,
Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics,
Tuberculosis Clinics, and Rural Emergency Hospitals
* * * * *
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24. Section 156.270 is amended by revising paragraph (f) to read as
follows:
Sec. 156.270 Termination of coverage or enrollment for qualified
individuals
* * * * *
(f) Notice of non-payment of premiums. If an enrollee is delinquent
on premium payment, the QHP issuer must provide the enrollee with
notice of such payment delinquency promptly and without undue delay.
* * * * *
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25. Section 156.1210 is amended by revising paragraph (c) to read as
follows:
Sec. 156.1210 Dispute submission.
* * * * *
(c) Deadline for describing inaccuracies. To be eligible for
resolution under paragraph (b) of this section, an issuer must describe
all inaccuracies identified in a payment and collections report before
the end of the 3-year period beginning at the end of the plan year to
which the inaccuracy relates. For plan years 2015 through 2019, to be
eligible for resolution under paragraph (b) of this section, an issuer
must describe all inaccuracies identified in a payment and collections
report before January 1, 2024. If a payment error is discovered after
the timeframe set forth in this paragraph, the issuer must notify HHS,
the State Exchange, or SBE-FP (as applicable) and repay any
overpayments to HHS.
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26. Section 156.1220 is amended by revising paragraphs (a)(4)(ii) and
(b)(1) to read as follows:
Sec. 156.1220 Administrative appeals.
(a) * * *
(4) * * *
(ii) Notwithstanding paragraph (a)(1) of this section, a
reconsideration with respect to a processing error by HHS, HHS's
incorrect application of the relevant methodology, or HHS's
mathematical error may be requested only if, to the extent the issue
could have been previously identified, the issuer notified HHS of the
dispute through the applicable process for reporting a discrepancy set
forth in Sec. Sec. 153.630(d)(2) and (3), 153.710(d)(2), and
156.430(h)(1) of this subchapter, it was so identified and remains
unresolved.
* * * * *
(b) * * *
(1) Manner and timing for request. A request for an informal
hearing must be made in writing and filed with HHS within 30 calendar
days of the date of the reconsideration decision under paragraph (a)(5)
of this section. If the last day of this period is not a business day,
the request for an informal hearing must be made in writing and filed
by the next applicable business day.
* * * * *
Dated: December 12, 2022.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2022-27206 Filed 12-14-22; 4:15 pm]
BILLING CODE 4120-01-P