Seema Verma had a choice: Properly review & respond to every #NBPP2022 comment...or do a sloppy rush job before 1/20. Guess what route she chose?

Regular readers (and some non-regular readers) may recall that in the week between Christmas and New Year's Eve, I put out an urgent "call to action" request for people to submit Public Comment on the proposed annual Notice of Benefit & Payment Parameters for 2022 (NBPP) rule.

As I explained, every year, the Centers for Medicare & Medicaid (CMS) puts together a bunch of proposed modifications to the implementation details of the ACA. Some are simple clarifications of existing procedures; some are minor tweaks; and some are major changes. Of the major changes, some are positive...and some are negative. In the case of the 2022 NBPP, there are examples of all three...and the major changes are really major. As in, ranging from harmful to likely flat-out illegal.

For 2022, there were several NBPP items which seem either innocuous or are actually good ideas...but there are a couple of pretty questionable ones and a few more which would be outright devastating (there are also a few involving things like Risk Adjustment which I'm not familiar enough with to comment on one way or the other).

The five which most concerned me, and which I emphasized opposition to in my comment are:

  1. Allowing states to flat-out privatize their ACA marketplaces
  2. Pushing navigators and assisters to use private, 3rd-party direct enrollment brokers
  3. Further reducing the ACA's User Fee beyond how much it's already been reduced
  4. Codifying the Trump Administration's warped interpretation of ACA Section 1332 waivers
  5. Continuing the less-generous interpretation of the Premium Adjustment Percentage Index (PAPI)

You can read an explanation of all five and my opposition to each in my actual comment at my earlier post. Of the five, #3 and 5 are the less problematic; each of these would weaken the ACA somewhat but neither one would be devastating. The other three, however, would be catastrophic.

Over 300 public comments were submitted to CMS before the 12/30 deadline, and while some of these are duplicates and a few supported these measures, a random sampling I did indicates that the vast majority are strongly opposed to most if not all of the above proposals. In addition, some of the other comments (especially the Risk Adjustment-related ones I noted above) get very technical and wonky.

Trump's CMS Administrator Seema Verma had a choice to make: She could have chosen to carefully and properly review each and every comment, documenting her rationale in detail...which would have almost certainly taken at least a month, pushing past the January 20th inauguration of Joe Biden and the confirmation of his new HHS Secretary nominee, Xavier Becerra. This would likely have resulted in most or all of her 2022 NBPP being rejected, with the new administration starting over.

Her other choice was to do a rush job: Hastily bulldozing through some pretty long, detailed, highly technical comments in haphazard fashion in order to put her stamp of approval on the 2022 NBPP before the clock runs out on 1/20/21.

Take a guess which route she chose?

The Centers for Medicare & Medicaid Services (CMS) today issued a rule finalizing a number of proposed provisions for the annual Notice of Benefit and Payment Parameters for 2022 (the 2022 payment notice), continuing the agency’s efforts to build a better and more affordable insurance marketplace for Americans. CMS anticipates continuing to review comments and finalizing other proposed policies in a second final rule to be published at a later date. Working to address comments and feedback from the public after publishing the proposed 2022 payment notice in November 2020, CMS is using this first final rule to tackle a number of critical priorities. Today’s rule finalizes changes to reduce consumer costs, empower states to develop their own unique plans, accelerate innovation, and clarify program requirements.

“Since 2017, premiums are down, coverage options are up, and we have stabilized the individual market with better care at lower costs,” said CMS Administrator Seema Verma. “The actions we’re taking today ensure these improvements can continue tomorrow, because we must never be satisfied when too many Americans still cannot afford coverage in the individual market.”

The policies and parameters announced today give consumers, insurers, and other stakeholders across the health care industry ample time to prepare for implementing top priorities in 2022. Those priorities include:

...For 2022, CMS will reduce the user fee for qualified health plans (QHPs) sold through a Federally-facilitated Exchange (FFE) from 3.0% to 2.25% of premium. This is an additional reduction beyond the 0.5 percentage point reduction in the user fee rate included in the 2020 payment notice. CMS also is finalizing a reduction in the user fee for issuers offering plans through State-based Exchanges that use the federal platform (SBE-FPs) from 2.25% to 1.75% of premium. In years past, including 2020 and 2021, this provision has been key to reducing insurance premiums to deliver an 8% average premium reduction across states with exchanges using since the 2018 coverage year. These reductions reflect successful cost-saving measures CMS implemented over the past several years to strengthen program integrity and improve technological infrastructure.

...Implemented through 1332 waivers, this update solidifies an important opportunity for states to waive certain statutory requirements to create health programs tailored to their own citizens, subject to federal approval. The final rule codifies in regulatory text guidance published in 2018 to give states greater certainty over how the federal government will evaluate and monitor section 1332 waivers moving forward.

New options for states to develop next generation Exchanges that leverage web-brokers and insurance issuers for the direct purchase of QHPs. This approach would rely on web-brokers and issuers to serve as the primary consumer-facing means to apply for and enroll in individual market QHPs through the Exchange. Under these options, Exchanges would retain responsibility for ensuring that participating web brokers and insurers meet all applicable consumer protections, as well as remain responsible for making all eligibility determinations, performing required verifications of consumer application information, and meeting all statutory and regulatory requirements for operating an Exchange.

Protective provisions for consumers covered through certain health reimbursement arrangements (HRAs). HRAs are an alternative to “traditional” group health plans that allow employers to provide defined pre-tax reimbursements to employees for qualified medical expenses, including monthly premiums. In response to questions and confusion regarding policy, the 2022 payment notice clarifies that issuers of individual market QHPs must accept premium payments made by or on behalf of an enrollee in connection with an individual coverage health reimbursement arrangement (individual coverage HRA) or qualified small employer health reimbursement arrangement (QSEHRA).

Greater clarity on building plans that lack a traditional provider network. Some insurance plans do not use a provider network, meaning they do not vary benefits based on whether enrollees receive services from an “in-network” or “out-of-network” provider. To address lingering confusion regarding regulatory requirements that might limit plan innovations, the 2022 payment notice clarifies that, to have such plans certified as QHPs, issuers of these plans need not pursue compliance with network adequacy requirements applicable to QHPs, since their benefits do not vary based on a provider’s network status.

I don't have much to say about the last two (HRAs and plans w/out traditional networks)...but the first three are exactly what I feared: They're ramming through a 25% reduction in HealthCare.Gov's marketing & operational budget and trying to codify their bastardized 1332 waiver interpration and illlegally allowing states to abandon not only the federal ACA exchange (HealthCare.Gov) but even operating their own official state-based exchange, as 14 states & DC already do.

So how were they able to do this so quickly? Well, the key seems to be in the second sentence: "CMS anticipates continuing to review comments and finalizing other proposed policies in a second final rule to be published at a later date."

It sounds like they split the larger NBPP in half, ramming through these "final rules" now, knowing that they didn't have time to properly address the other rules before the clock runs out. My guess is that they still did a rush job. For one thing, as Dave Anderson has pointed out, look at the timing: While CMS publicly announced the "final rule" today, it was actually submitted to the Office of Management & Budget last Friday. As he put it:

I am quite perplexed as to how CMS can read several hundred fairly technical comments, respond and adjust a very complex rule in <11 business days from the end of the comment period to the rule showing up at OMB#NBPP2022

— David Anderson (@bjdickmayhew) January 8, 2021

Hell, I'm wrong; comments were due EOB on 12/30. 12/31 is an unlikely work day. 1/1 is a holiday, 1/2-3 are weekend. 1/4, 1/5, 1/6 are full review days. CMS might send the rule to OMB late on 1/7.

So 3.9 to 4.9 working days for review.... Yeah

— David Anderson (@bjdickmayhew) January 8, 2021

In addition, the 1332 and private broker portions will almost certainly face legal challenges...but the bottom line is that this is Verma's way of sabotaging the ACA as much as possible one last time before she's kicked to the curb.

It's my understanding that either Congress or the incoming Biden Administration should be able to reverse these rules...but doing so would take a lot of time and resources. Besides legal challenges, there's also the Administrative Procedure Act and the Congressional Review Act, both of which just became a lot more important with Democrats retaining control of the House and flipping control (if just barely) of the Senate:

The Administrative Procedure Act (APA):

The Administrative Procedure Act (APA), Pub.L. 79–404, 60 Stat. 237, enacted June 11, 1946, is the United States federal statute that governs the way in which administrative agencies of the federal government of the United States may propose and establish regulations and grants U.S. federal courts oversight over all agency actions. It is one of the most important pieces of United States administrative law, and serves as a sort of "constitution" for U.S. administrative law.

The APA applies to both the federal executive departments and the independent agencies. U.S. Senator Pat McCarran called the APA "a bill of rights for the hundreds of thousands of Americans whose affairs are controlled or regulated" by federal government agencies. The text of the APA can be found under Title 5 of the United States Code, beginning at Section 500.

I believe it's the APA which is what allowed a federal judge to strike down the Trump Administration's Medicaid work requirement waivers in several states a year or so ago.

The Congressional Review Act:

The Congressional Review Act (CRA) is a law that was enacted by the United States Congress under House Speaker Newt Gingrich as Subtitle E of the Contract with America Advancement Act of 1996 (Pub.L. 104–121 and signed into law by President Bill Clinton on March 29, 1996.

The law empowers Congress to review, by means of an expedited legislative process, new federal regulations issued by government agencies and, by passage of a joint resolution, to overrule a regulation. Once a rule is thus repealed, the CRA also prohibits the reissuing of the rule in substantially the same form or the issuing of a new rule that is substantially the same "unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule" (5 U.S. Code § 801(b)(2)). Congress has a window of time lasting 60 legislative days (i.e., days that Congress is actually in session, rather than simple calendar days) to disapprove of any given rule by simple majority vote; otherwise, the rule will go into effect at the end of that period.[5][6]

Prior to 2017, the CRA had been successfully invoked only once to overturn a rule (in 2001; see below). In January 2017, however, with a new Republican president (Donald Trump), the Republican-controlled 115th Congress began passing a series of disapproval resolutions to overturn a variety of rules issued under the Obama administration. Ultimately, fourteen such resolutions repealing Obama administration rules were passed and signed into law; a fifteenth resolution was passed by the House but failed in the Senate. Because of the shortness of legislative sessions during the 114th Congress, the 115th Congress was able to target rules issued by the Obama administration as far back as May 2016. In late 2017 and early 2018 Congress passed two resolutions repealing Consumer Financial Protection Bureau rules made by former President Obama's CFPB Director, Richard Cordray, who did not leave his post until late 2017.

Stay tuned...