The “How To” Guide to the Federally Facilitated Exchange

Late last week, the Centers for Medicare and Medicaid Services (CMS) issued a set of instructions to insurers for participation in the federally facilitated exchange (FFE), including in states that are acting as partners with the federal government. The instructions, in the form of an open letter, provide insurers with a roadmap on how to get their products certified as “qualified health plans” (QHP) for the FFE. The letter also details CMS’ plans for ongoing oversight of participating insurers and plans, describes the processes for collecting premium payments from consumers, and outlines CMS’ infrastructure for consumer support, including complaint tracking and resolution.

For advocates and stakeholders working on exchange implementation, the letter helps answer critical questions about how CMS will undertake plan management for FFEs and the role of state regulatory agencies in FFE and Partnership states. The letter also recognizes the role of so-called “unbranded” partnership states, like Ohio and Virginia, which will perform all the required plan management functions, but do not want to be formal partners. In general, CMS assumes that these states will be doing everything that official Partnership states will do. Below are a few additional highlights from the letter.

Defining the role of the states

In all FFE states, whether Partnership or not, CMS hopes to rely on state insurance departments (DOIs) to enforce the ACA’s market-wide reforms, such as guaranteed issue and the essential health benefits standard. Left unstated, however, is whether some of these states will be unwilling or unable to enforce the market reforms, in which case, under federal law, CMS is required to step in and enforce them.

For Partnership states (branded and non-branded alike), CMS will review and confirm the state’s recommendations and make final certification decisions. CMS will also be ultimately responsible for loading plan information onto the FFE website and the ultimate display of plan options to consumers.

Network adequacy

CMS indicates that, to the extent a state DOI is conducting network adequacy reviews that are consistent with federal standards, it will rely on the state’s analyses and recommendations. If a state is not sufficiently conducting network adequacy review, then CMS will use accreditation from NCQA or URAC as a proxy for network adequacy. Over time, CMS intends to monitor network adequacy through complaint tracking. The agency also reserves the right to “gather network data from any QHP issuer at any time” to determine whether the network meets federal standards.

Essential community providers

The ACA requires QHPs to include “essential community providers” (ECPs) in their networks. These are often providers who serve primarily low-income and underserved communities. CMS articulates a minimum expectation that at least 10% of available ECPs in the plan’s service area must participate in the plan’s network. The insurer must also include, as part of its QHP application, a narrative description of how their network provides an adequate level of service for low-income and medically underserved enrollees.

Accreditation

Previous federal rulemaking provides a phased-in timeline for QHPs to be accredited in FFEs. As part of the application process, insurers will need to upload their accreditation certificates, and CMS notes that it will use information about the insurer’s performance on a consumer survey (called CAHPS®) to determine whether the insurer’s participation in the exchange is “in the interest of qualified individuals and qualified employers.” In addition, the exchange website (healthcare.gov) will display selected results from the consumer survey when available.

Rate review

The ACA requires the exchange to consider all rate increases when certifying QHPs. To do so, CMS will review insurers’ Unified Rate Template, as well any recommendations it receives from state DOIs. CMS notes that it “anticipates integrating state…rate reviews into its QHP certification processes, provided that states provide information to CMS consistent with federal standards and agreed-upon timelines.” In FFE states that are not conducting plan management, it remains to be seen whether and how this integration will work.

CMS also indicates that they will use an “outlier” test to determine whether QHP rates are reasonable. If a QHP has rates that are relatively high or low compared to other QHPs, it will notify the relevant state DOI. If the state DOI confirms that the rate is justified, CMS expects it will certify the QHP.

Non-discrimination

In a previous blog I noted that CMS’ rules on non-discrimination in benefit design no longer prohibit insurers from using consumer cost-sharing in a discriminatory manner. However, while not required for plans outside the exchanges, the law does prohibit QHPs from using cost-sharing designs that would discourage people with significant health needs from enrolling. In this letter, CMS confirms that requirement and notes that it will perform an outlier analysis on QHP cost-sharing. Specifically, their outlier analysis will review cost-sharing for inpatient hospital stays, inpatient mental/behavioral health stays, specialist visits, pregnancy and newborn care, specific conditions (including behavioral health conditions and substance abuse, and prescription drugs). CMS may require insurers with outlier benefit designs to modify their benefit packages before they can be certified.

CMS also intends to review the information that plans submit in the “explanations” and “exclusions” section of their application, to attempt to identify any discriminatory practices or wording. Finally, insurers will be required to submit attestations that they will not discriminate against individuals based on health status, race, color, national origin, disability, age, sex, gender identity or sexual orientation.

QHPs must be “meaningfully different”

To promote “informed consumer choice,” CMS will bar insurers from submitting many very similar QHPs in an attempt to “monopolize virtual shelf space.” If an insurer submits multiple QHPs that are not meaningfully different from one another, CMS may ask them to withdraw some of those offerings.

Oversight

CMS will assign an Account Manager for all insurers participating in the FFE. The Account Manager will be the insurer’s primary point of contact and provide ongoing guidance about the insurer’s responsibilities. In Partnership states, the Account Manager will focus on issues unique to exchange participation, such as the display of plans on the website, enrollment transaction files, and other operational issues.

Generally, CMS indicates it will use a “risk-based” approach to oversight, focusing on insurers that show signs of problems. In such cases, CMS may perform a compliance review.

To the extent possible, CMS will rely on states’ enforcement efforts. For example, the letter indicates that CMS will not review QHP marketing materials because the agency believes states already regulate health plan marketing. (In previous CHIR research on this subject, we found that DOIs do not typically conduct a comprehensive prior review and approval process for insurers’ marketing plans and materials, although such processes are more common for Medicaid plans).

Enrolling directly through an insurance company

The CMS letter provides further information on previous rulemaking that allows QHP insurers to enroll consumers directly into an exchange, without using the exchange’s website. The letter notes that the insurer must ensure that the consumer gets an eligibility determination through the exchange before they can be considered enrolled. The letter notes that further guidance on this is coming. To the extent CMS allows such direct enrollment, protections against marketing abuses may be necessary. For example, consumers should be allowed an opportunity to view and compare all QHP options on the exchange’s website, not just those offered by a particular insurer.

Consumer support

The letter provides some detail about the FFE’s call center, noting that call center workers will be able to answer requests for “general information, consumer eligibility, plan comparisons, and enrollment.” However, the letter further notes that “[w]here possible, the…Call Center…will be able to provide referrals to the appropriate state or federal agencies or assistance programs (such as Navigators and other in-person assisters), or issuers.” Of course, particularly in FFE states, it remains to be seen how much on-the-ground consumer assistance will be available.

CMS also notes that they will have a complaint tracking system, and will use aggregated complaints information as a tool for oversight. CMS indicates the hope that they can collaborate with states in tracking complaints and sharing information.

These are just a few highlights. For a comprehensive overview of CMS’ letter, see Professor Tim Jost’s blog for Health Affairs. And as always, we’ll continue to track implementation of the market reforms and new marketplaces here at CHIRblog.

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