HHS Releases Wide-Ranging Final Rule On Requirements for 2016 Exchanges

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By Sara Hansard

Feb. 20 — The CMS Feb. 20 issued the final Notice of Benefit and Payment Parameters for 2016 (CMS-9944-F; RIN 0938-AS19) and the final 2016 Letter to Issuers in the Federally-facilitated Marketplaces covering a wide range of regulations governing ACA marketplaces.

The final benefit and payment parameters regulation generally takes effect 60 days from publication in the Federal Register, which is slated for Feb. 27. The annual letter to issuers provides additional guidance on standards for plans participating in the federal ACA marketplace, a Centers for Medicare & Medicaid Services release said.

The benefit and payment parameters rule finalizes the annual Affordable Care Act open enrollment period for 2016 as the three-month period from Nov. 1, 2015, through Jan. 31, 2016. The final rule “clarifies standards for qualified health plan (QHP) issuers to publish up-to-date, accurate, and complete provider directories and formularies,” according to the CMS release. The proposed rule was issued in November 2014.

The final rule includes provisions to facilitate public access to information about rate increases in the individual and small group markets for both QHPs and non-QHPs using a uniform timeline, the release said. It also includes provisions “to further protect consumers against unreasonable rate increases by ensuring more rates are subject to review,” it said.

Rate Reviews for Plans

Under an earlier Health and Human Services Department rule, issuers of individual or small group plans that took effect after enactment of the ACA who seek increases of 10 percent or more, or above a threshold established by some states, are required to publicly disclose the proposed increases and the justification for them, and the increases are reviewed by state or federal regulators to determine whether they are unreasonable. The federal government doesn't have authority to disapprove rates, but some states do.

According to a fact sheet, the final rule changes the review trigger for rates filed beginning in 2016 for coverage effective on or after Jan. 1, 2017. Rate increases will be subject to review when a plan within a product has an increase that meets or exceeds the threshold. Currently the HHS determines whether the increases must be reviewed at the product level, such as for an issuer's individual market preferred provider organization product, which could include plans at many levels. An example of a plan would be an issuer's particular silver-tier plan.

Modifications to Premium Stabilization

The final rule includes new provisions and modifications to implement premium stabilization, or risk adjustment, programs authorized by the ACA, as well as the key payment parameters for the 2016 benefit year.

The fact sheet said that if in the last year of the risk corridors program collections have exceeded payments, “we will implement an adjustment to the profit floor and administrative cost ceiling to increase risk corridors payments for eligible issuers for benefit year 2016. We reiterate our previous guidance that in the unlikely event that risk corridors collections, including any potential carryover from prior years, are insufficient to make risk corridors payments for the 2016 program year, HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.”

Republican lawmakers have attacked the risk corridors program as a “bailout” for insurers, and President Barack Obama Dec. 16 signed an appropriations bill (H.R. 83) blocking the payments for fiscal 2015.

Committees for Formulary Design

The fact sheet also said the final rule allows issuers to use a pharmacy and therapeutics committee system to design drug formularies that “cover a range of drugs in a broad distribution of therapeutic categories and classes, and provide access to drugs that are included in broadly accepted treatment guidelines.” Patient advocacy groups had complained that the previous rule for prescription drug coverage effectively excluded drugs many patients needed.

The rule provides that states may select new benchmark plans for 2017 based on plans available in 2014.

It also seeks to streamline the administration of group coverage provided through the Small Business Health Options Program “and to align SHOP regulations with existing market practices,” the release said.

To contact the reporter on this story: Sara Hansard in Washington at shansard@bna.com

To contact the editor responsible for this story: Janey Cohen at jcohen@bna.com

The final 2016 Letter to Issuers in the Federally-facilitated Marketplaces and a fact sheet on the notice of benefit and payment parameters are available in HealthDocs™.