You Down With NBPP? (Yeah You Know Me!) CMS releases #NBPP2023!

 

The Affordable Care Act includes a long list of codified instructions about what's required under the law. However, like any major piece of legislation, many of the specific details are left up to the agency responsible for implementing the law.

While the PPACA is itself a lengthy document, it would have to be several times longer yet in order to cover every conceivable detail involved in operating the ACA exchanges, Medicaid expansion and so forth. The major provisions of the ACA fall under the Department of Health & Human Services (HHS), and within that, the Centers for Medicare & Medicaid (CMS)

Every year, CMS issues a long, wonky document called the Notice of Benefit & Payment Parameters (NBPP) for the Affordable Care Act. This is basically a list of proposed tweaks to some of the specifics of how the ACA is actually implemented.

For example, here's what the actual PPACA legislative text itself said about the annual Open Enrollment Period (OEP):

(6) Enrollment periods.--The Secretary shall require an Exchange to provide for--

(A) <<NOTE: Determination.>> an initial open enrollment, as determined by the Secretary (such determination to be made not later than July 1, 2012);

(B) <<NOTE: Determination.>> annual open enrollment periods, as determined by the Secretary for calendar years after the initial enrollment period;

(C) special enrollment periods specified in section 9801 of the Internal Revenue Code of 1986 and other special enrollment periods under circumstances similar to such periods under part D of title XVIII of the Social Security Act; and

(D) <<NOTE: Native Americans.>> special monthly enrollment periods for Indians (as defined in section 4 of the Indian Health Care Improvement Act).

You'll notice that nowhere above does it specify how long the annual Open Enrollment Period has to be, nor the starting or ending date; it just says that there had to be an initial one decided by 2012 and another one each year after that.

This is why the first OEP was a full six months long (from Oct 1st - March 31st); the next few years it was only three months long; for the past several years the federal OEP has only lasted 45 days (from Nov. 1st - Dec. 15th); and for the 2022 OEP, the Biden Administration split the difference by running it for 75 days (Nov. 1st - Jan. 15th). The length and start date of Open Enrollment is pretty much up to the HHS Secretary (and in most cases is actually determined by the CMS Administrator).

There are hundreds of other examples of these sorts of details being up to whoever runs HHS/CMS, most of which aren't nearly as obvious to the general public. Most of the changes from year to year of this nature are included in the annual NBPP.

WITH THIS IN MIND, CMS has just released the 2023 NBPP, which includes some important changes which will go into effect starting next fall.

I'll have a lot more to say once I've had a chance to read the actual rule itself (the full thing is over 400 pages long). In the meantime, here's the press release & Fact Sheet, along with a few initial thoughts (note: this is a live post, which is to say I'm still reading through the fact sheet and gathering my thoughts on some of the major proposals, so it will be updated several times this afternoon/evening):

HHS to Make Coverage More Accessible and Affordable for Millions of Americans in 2023

The Biden-Harris Administration today released the Notice of Benefit and Payment Parameters 2023 Proposed Rule, which would make it easier for millions of consumers to find affordable, comprehensive health coverage in 2023. Among the many policies it advances, the proposed rule aims to improve shopping for health care coverage, establish rules to ensure people can access care, and advance health equity for consumers purchasing Marketplace coverage. Collectively, these proposals build on the Biden-Harris Administration’s priority to build on the Affordable Care Act (ACA), lower health care costs, and make coverage options more equitable.

“Today’s rule is part of the Biden-Harris Administration’s ongoing efforts to ensure an equitable health care system as we continue to make coverage more accessible and affordable,” said Health and Human Services Secretary Xavier Becerra. “We are building a more competitive, transparent and affordable health care market. At the end of the day, health care should be a right for everyone, not a privilege for some.”

“This year, we’ve implemented changes that have helped connect millions of people to health care coverage,” said CMS Administrator Chiquita Brooks-LaSure. “With this proposed rule, we are working to ensure the Marketplaces are a model for accessible, affordable, inclusive coverage—particularly for eligible individuals who have thought comprehensive coverage was out of reach.”

Advancing Standardized Plan Options

Supporting a direct call to action in President Joe Biden’s Executive Order on Promoting Competition in the American Economy,the 2023 Payment Notice proposed rule would require all issuers in the Federally-facilitated Marketplace and State-based Marketplaces on the Federal Platform to offer standardized plan options for every product network type, metal type, and plan classification, as well as in every service area where the issuer will offer Marketplace plans.

Because standardized plan options have a uniform cost-sharing structure, they help consumers to make simple and easy-to-understand comparisons across plans to select a plan that meets their needs. A report released by the Office of the Assistant Secretary for Planning & Evaluation, for example, detailed how standardized plans can improve competition and coverage choice.

This could be HUGE...but only if all plans have to be standardized. This is how California and Massachusetts do it (and possibly a couple of other states). If the carriers are allowed to sell standardized and non-standardized plans, which is something HealthCare.Gov tried for a couple of years under the Obama Administration, it would kind of defeat the purpose in my view.

The whole point is to reduce complexity & confusion. Giving people the options of "standard plans" and "non standard plans" could end up doing the opposite, while also eliminating another benefit of mandatory standardization: The elimination of "Silver Spamming" as David Anderson labels it.

Unfortunately, according to the Fact Sheet:

Standardized Plan Options

CMS proposes to require issuers in the FFMs and State-based Marketplaces on the Federal Platform (SBM-FPs) to offer standardized plan options at every product network type, metal level, and throughout every service area that they offer non-standardized options in plan year (PY) 2023. For example, if an issuer offers a non-standardized gold plan in a particular service area, that issuer must also offer a standardized gold plan in that same service area. CMS is not proposing to require issuers to offer standardized plan options at product network types, metal levels, and throughout services areas in which they do not offer non-standardized options.

CMS has designed two sets of standardized plan options at each of the bronze, expanded bronze, silver, silver cost-sharing reduction (CSR) variations, gold, and platinum metal levels of coverage, with each set being tailored to the unique cost-sharing laws in different sets of states. CMS also proposes to display these standardized options differentially on HealthCare.gov and to resume enforcement of the existing standardized plan option differential display requirements for web brokers and QHP issuers utilizing a Classic Direct Enrollment or Enhanced Direct Enrollment pathway.

Hmmm...sounds pretty much like the "Simple Choice" overlay that was offered on HealthCare.Gov for a couple of years after all. Wesley Sanders did just note that two big differences between the Obama version and Biden's version are 1) carriers will be required to offer the standardized plans as well, and 2) The enhanced display of the standardized plans (I thought that was already a thing in the past, but perhaps not).

I'll have to see how it works in practice (and mandating it for web brokers & EDEs is a good thing), but for now color me mostly disappointed.

Implementing Network Adequacy Reviews

To help ensure consumers have better access to the right type of provider or facility at the right time and in an accessible location, CMS proposes to reestablish federal network adequacy reviews in states utilizing the Federally-facilitated Marketplace. The standards used for these reviews would highlight key characteristics like time and distance to care, as well as appointment wait times.

I had no idea that network adequacy reviews had been mothballed, although that makes total sense given the Trump Administration's disdain for federal regulation of any sort. I hope this makes a big difference, but the current network adequacy standards were never strong enough to begin with in my view.

Here's what the Fact Sheet says:

Network Adequacy

CMS proposes to conduct network adequacy reviews in all Federally-facilitated Marketplace (FFM) states except for states performing plan management functions that adhere to a standard as stringent as the federal standard and elect to perform their own reviews. The federal standard would be based on quantitative time and distance standards and appointment wait time standards, and reviews would occur prospectively during the Qualified Health Plan (QHP) certification process. Issuers that are unable to meet the specified standards would be able to submit a justification to explain why they are not meeting the standards, what they are doing to work towards meeting them, and how they are protecting consumers in the meantime. CMS also proposes to collect data from issuers on which of their in-network providers offer telehealth services.

Again, I don't really know how much this differs from what was in place under the Obama Administration. It has to be an improvement over the Trump Administration, however, if the prior reviews were dropped altogether. Certainly the requirement to take time, distance and wait times for providers within the network is a huge plus!

Strengthening Access to Essential Community Providers

The proposed rule would help improve access to health care for low-income and medically underserved consumers, particularly through essential community providers (ECPs). Issuers would need to include 35 percent of available ECPs in their network for each plan’s service area. The rule would also add Substance Use Disorder Treatment Centers as eligible ECPs.

THIS sounds like an important step in the right direction. I don't know much about ECPs, so I can't comment much beyond that. According to the Fact Sheet:

Raise the Essential Community Provider (ECP) Threshold from 20 to 35 percent

For PY2023 and beyond, we propose increasing the ECP threshold from 20 to 35 percent of available ECPs in each plan’s service area. For PY2021, the percentages of medical and dental FFM issuers that could have satisfied a 35 percent ECP threshold were 80 and 74 percent, respectively. CMS anticipates that issuers will be able to meet the 35 percent threshold with only minimal reliance on our ECP write-in and justification processes, if needed. CMS does not anticipate any meaningful premium impact, and believes that raising the ECP threshold will help ensure greater access to health care for vulnerable populations.

Sounds good to me, I guess.

Prohibiting Discriminatory Practices & Refining Health Plan Designs with Clinical Evidence

The 2023 Payment Notice proposed rule also would explicitly prohibit health insurance issuers from discriminating on the basis of sexual orientation and gender identity. Restoring these protections for covered services—previously removed from the list of non-discrimination protections in 2020—can lead to improved health outcomes in the LGBTQI+ community.

Additionally, this proposal refines the Essential Health Benefits nondiscrimination policy by requiring issuers to rely on clinical evidence as a basis of the health plan design. For example, plans could not be designed to burden people managing chronic conditions with inordinately high prescription costs, absent a clinical rationale.

Again, a lot of this is pretty much just repairing damage & cruel policies implemented by the Trump Administration, but it's still a good thing.

More via the Fact Sheet:

Prohibit Discrimination Based on Sexual Orientation and Gender Identity

CMS proposes to prohibit Marketplaces, issuers, agents, and brokers from discriminating against consumers based on sexual orientation and gender identity. CMS rules previously prohibited discrimination based on “race, color, national origin, disability, age, sex, gender identity or sexual orientation,” but in 2020 the HHS final rule on Section 1557 removed gender identity and sexual orientation from these non-discrimination protections by revising CMS regulations. Prohibiting discrimination based on sexual orientation and gender identity would increase access to health care, decrease health disparities, and align with the Executive Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation.

Refine Essential Health Benefits (EHBs) Nondiscrimination Policy for Health Plan Designs

CMS proposes to refine the EHB nondiscrimination policy to ensure that benefit designs, and particularly benefit limitations and plan coverage requirements, are based on clinical evidence. CMS proposes refining CMS regulations and providing examples that illustrate presumptive discriminatory plan designs, such as discrimination based on age, health conditions, and sociodemographic factors. CMS current rules provide that an issuer does not provide EHB “if its benefit design, or the implementation of its benefit design, discriminate based on an individual’s age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health conditions.”

Meanwhile...

Reducing Health Care Costs and Further Streamlining HealthCare.gov Operations

The annual payment notice proposed rule also includes a variety of other provisions to streamline Marketplace operations and reduce health care costs. These include scaling back pre-enrollment verification for special enrollment periods (SEPs) to include only the SEP for loss of minimum essential coverage. Additionally, changes to certain individual market plan variants mean subsidized enrollees would see even lower premiums in 2023 and beyond.

The first item here, about scaling back SEP verification, is something I've been expecting since the moment the Biden Administration announced last spring/summer's COVID-19 SEP back in February:

Special Enrollment Period (SEP) Verification

CMS proposes scaling back pre-enrollment SEP verification in the FFMs and SBM-FPs to include only the SEP for loss of minimum essential coverage—the SEP type that comprises the majority of all SEP enrollments on the Marketplaces on the federal platform—and to clarify that Marketplaces maintain the option to verify eligibility for any SEP types and may provide an exception to pre-enrollment SEP verification for circumstances that could include natural disasters or public health emergencies impacting consumers or the Marketplace. The FFM currently conducts verification for five SEP types (loss of minimum essential coverage, Medicaid/Children’s Health Insurance Program (CHIP) denial, permanent move, marriage, and dependent addition); 90% of applications successfully verify.

While pre-enrollment SEP verification can decrease the risk for adverse selection and improve program integrity, it can also deter eligible consumers from enrolling in coverage through a SEP because of the barrier of document verification. Our experience operating the FFMs and the federal platform shows that pre-enrollment SEP verification disproportionately negatively impacts Black and African American consumers who submit acceptable documentation to verify their SEP eligibility at much lower rates than white consumers. We have also found that younger, often healthier consumers submit acceptable documentation to verify their SEP eligibility at much lower rates than older, often less healthy consumers, which can negatively impact the risk pool. Scaling back SEP verification would mitigate the negative impacts of pre-enrollment SEP verification on populations that have historically faced barriers to accessing health care, and would decrease overall consumer burden without substantially sacrificing program integrity.

As I've noted for years, there are three main reasons for having a limited time Open Enrollment Period in the first place: First, to help spur people into action (most people are very deadline-oriented). Second, to make sure the carriers have as much enrollment data as possible locked in in time to have their actuaries figure out what impact their risk pool will have when it comes to setting pricing for the following year; and third. The most important reason, however, is to avoid adverse selection.

Avoiding adverse selection is the reason you can't drive a car without auto insurance and you can't get a mortgage without homeowner's insurance. Otherwise people would wait until after they crashed their car or after their house caught on fire to buy it. By restricting ACA enrollment to a limited time window, you prevent people from "going bare" until after they get diagnosed with cancer or diabetes to #GetCovered. The ACA used to have two measures in place to prevent this...but of course the federal Individual Mandate Penalty is no more, though 4 states + DC still have their own these days.

If you're going to limit most people to a limited time window (OEP), that of course means you have to have rules about who can enroll outside of that period. That's where Special Enrollment Periods (SEPs) come in. To be eligible to enroll via an SEP, you generally have to have had a Qualifying Life Experience (QLE) such as losing your employer-based healthcare coverage, moving outside your rating area, turning 26 and being kicked off your parents plan, losing Medicaid eligibility, getting out of prison, having a baby, getting married and so on.

For the first few years of ACA Open Enrollment, verification of SEP eligibility was pretty much done on the honors system. There was a warning that lying about having a QLE was a federal offense, but that was about it. In 2015, when a lot of carriers were losing money on ACA exchange enrollees, there was a backlash in which they demanded that CMS start cracking down on SEP verification by requiring enrollees to upload documentation to prove they were eligible.

The Obama Administration started doing so in 2016 with "spot checks" (they required documentation from random enrollees, but not all of them). Under the Trump Administration, CMS cracked down even harder, requiring documentation of every SEP enrollee.

It's important to understand that there wasn't a whole lot of evidence that people were deliberately gaming the system, mind you; the carriers assumed that this was a widespread problem, but I don't know if they ever proved it.

All of this came to a head when the pandemic hit in spring 2020, however: As tens of millions of Americans suddenly became unemployed overnight, the SEP verfiication system became overwhelmed, and everyone from my own Governor to the health insurance industry itself began clamouring for CMS to re-open enrollment to anyone who would otherwise be eligible during OEP regardless of whether they provided proof of SEP eligibility or not.

CMS refused to do this under the Trump Administration (though they did quietly smooth the path by "unofficially" waiving the verfication process and, later, by widening the eligiblity period from 60 days all the way back to the beginning of January 2020), but the Biden Administration did exactly that this past spring...in a big way.

Result? Over 2.8 million additional Americans enrolled nationally over the spring/summer...over 3.7x as many as normally would have via standard SEP policy. Put another way, a good 2 million more people enrolled who otherwise likely wouldn't have...and the fact that they didn't have to go through a lot of cumbersome QLE documentation is a big reason for this.

Going forward, it looks like the Biden Administration has decided to split the difference: They'll still require verification for most SEPs (loss of coverage, which is what the vast majority of SEP cases involve), but will no longer do so for cases where the enrollee was denied Medicaid/CHIP coverage, moved outside their rating area, got married or gave birth/adopted a child...all of which seems reasonable to me.

Updating Quality Improvement Strategy (QIS) Standards to Require Issuers to Address Health and Health Care Disparities

CMS proposes to update the QIS standards beginning in PY2023 to require QHP issuers to address health and health care disparities as a specific topic area within their QIS. Currently, QHP issuers participating in a Marketplace for two or more consecutive years are required to implement and report on a QIS that includes at least one topic area defined in section 1311(g)(1) of the ACA (activities to improve health outcomes, prevent hospital readmissions, improve patient safety and reduce medical errors, promote wellness and health and reduce health and health care disparities). In PY2020, an estimated 60% of QHP issuer QIS submissions across the FFM did address health care disparities. CMS is now proposing to require QHP issuers to address the topic of reducing health and health care disparities in their QIS submissions in addition to at least one other topic area described in section 1311(g)(1) of the ACA beginning in 2023.

I don't know much about this, but it basically amounts to tightening up the ACA carrier quality control standards. Good.

FFM and SBM-FP User Fees

For the 2023 benefit year, CMS proposes to maintain the FFM user fee rate of 2.75% of premium and the SBM-FP user fee rate of 2.25% of premium based on the portion of FFM user fee-eligible costs allocated to SBM-FP activities.

Fair enough. These were already reduced twice before by the Trump Administration; no need to reduce them further yet, especially as the revenue is needed to maintain the marketing, outreach & navigator program funding, as well as HealthCare.Gov itself, of course.

Risk Adjustment

CMS proposes a number of changes to the risk adjustment models that would improve prediction in the adult and child models for the lowest-risk enrollees, the highest-risk enrollees, and partial-year enrollees, whose plan liabilities are underpredicted in the current models. Beginning with the 2023 benefit year, CMS proposes the following risk adjustment model changes: (1) adding a two-stage weighted approach to the adult and child models; (2) removing the current severity illness factors from the adult models and adding an interacted hierarchical condition category (HCC) count model specification to the adult and child models; and (3) replacing the current enrollment duration factors in the adult models with HCC-contingent enrollment duration factors.

As always, Risk Adjustment is an area which I only understand vaguely, so I'm not gonna try to comment on whether these changes are Good or Bad things. Other healthcare wonks know far more about this area.

Premium Adjustment Percentage and Payment Parameters

CMS will issue the 2023 benefit year premium adjustment percentage, the maximum annual limitation on cost sharing, reduced maximum annual limitation on cost sharing, and the required contribution percentage (payment parameters) in guidance by January 2022, consistent with policy finalized in the 2022 Payment Notice (86 FR 24140).

I've written about PAPI before. Personally I wish they'd just eliminate it entirely, permanently, but that depends on the Build Back Better Act, which would eliminate the PAPI modifier after 2025.

Prohibit Inclusion of Indirect Quality Improvement Activity (QIA) Expenses in Medical Loss Ratio (MLR)

CMS proposes to specify that QIA expenses that may be included for MLR reporting and rebate calculation purposes are only those expenses that are directly related to activities that improve health care quality. Some issuers appropriately include only direct QIA expenses, such as salaries of the staff actually performing QIA functions, while others additionally allocate indirect expenses, such as a portion of overhead (including holding group overhead), marketing, office space, IT infrastructure (such as IT mainframes, which are primarily used to process claims), and vendor profits that have no traceable or quantifiable connection to QIA.

The ACA's Medical Loss Ratio (MLR) rule stipulates that insurance carriers have to spend at least 80% of their premium revenue on actual healthcare claims, and are limited to a 20% gross (not net) profit margin. Anything over that 20% threshold has to be rebated to the enrollees.

This is basically the main way the ACA prevents price gouging, and it's been very successful over the years, as billions of dollars have been paid back to ACA enrollees (including over $2 billion this year alone).

HOWEVER, insurance carriers being what they are, they of course try to cram as many expenses as possible into that 20% "overhead." This rule would nip one of those practices in the bud. I have no idea how much of an issue this has been, but good on CMS for stopping it.

Advanced Payments of the Premium Tax Credit (APTC) Proration

CMS proposes that beginning in the 2024 benefit year, all Marketplaces, specifically certain State-based Marketplaces that have not done so, would be required to prorate APTC due to issuers when an enrollee is enrolled in a particular policy for less than the full coverage month. This method of administering APTC would help prevent APTC overpayment that exceeds an enrollee’s premium tax credit, and thus protect the enrollee from potentially incurring additional income tax liability.

Huh. I didn't realize this was a thing, but apparently so.

Require the Display of Explanations for QHP Recommendations on Web Broker Websites

CMS proposes to require web broker websites to display a prominent and clear explanation of the rationale for explicit QHP recommendations and the methodology for default display of QHPs on their websites (for example, alphabetically based on plan name, from lowest to highest premium, etc.) to ensure consumers are better able to make informed decisions and shop for and select QHPs that best fit their needs.

I have 3 different Enhanced Direct Enrollment (EDE) broker sites which have banner ads on my site. I've vetted all three of them to make sure they only offer on-exchange, ACA-compliant healthcare policies (that is, they don't sell short-term plans, etc.), and I'm comfortable that all three are on the up & up.

Having said that, many enrollees will go for whatever the default policy which shows up turns out to be, and it's a good thing to know how that particular choice was made by the broker, to avoid "payola"-style scenarios. Related to this...

Prohibit QHP Advertising on Web Broker Websites

CMS proposes prohibiting QHP advertising, or otherwise providing favored or “preferred placement” in the display of QHPs on web broker websites based on compensation an agent, broker, or web-broker receives from QHP issuers.

Precisely.

For more information on these and other proposals, consult CMS’s fact sheet.

The comment period on the proposed rule will be open for 30 days. To view the proposed rule in its entirety, visit the Federal Register.