CMS in hot seat over ex­change rules

Modern Healthcare - - NEWS - By Bob Her­man

The CMS faces a daunt­ing task in fi­nal­iz­ing reg­u­la­tions for health plans sold on the fed­eral ex­change in 2017, given in­sur­ance and busi­ness groups’ strong push­back to the agency’s pro­posed rules is­sued in Novem­ber.

In­sur­ers urged the agency to nix cer­tain con­sumer pro­tec­tion and rate-trans­parency pro­vi­sions, while provider and con­sumer groups fa­vored those pro­vi­sions.

There is grow­ing crit­i­cism that Af­ford­able Care Act plans of­fer in­ad­e­quate cov­er­age in terms of af­ford­abil­ity and provider ac­cess. On the other hand, in­sur­ers led by Unit­edHealth Group have threat­ened to aban­don the ACA ex­changes in 2017 if the rules and the risk pool make that busi­ness un­prof­itable. Now the Obama ad­min­is­tra­tion has to fig­ure out how to find a bal­ance.

More than 500 com­ments were sub­mit­ted on the pro­posed rule, many slam­ming the CMS’ pro­pos­als to more tightly reg­u­late provider net­works and stan­dard­ize plan op­tions. Crit­ics said th­ese pro­vi­sions would hurt in­sur­ers’ abil­ity to keep pre­mi­ums down.

“Un­less some fun­da­men­tal flaws are cor­rected, we be­lieve there is a grave risk that the fed­eral ex­change will not op­er­ate as a vi­able, com­pet­i­tive mar­ket in 2017,” wrote Steven Kel­mar, Aetna’s ex­ec­u­tive vice pres­i­dent for cor­po­rate af­fairs.

The CMS pro­posed that all plans sold on the fed­eral ex­change would have to in­clude hos­pi­tals and doc­tors within cer­tain travel times or dis­tances from mem­bers.

There also would be min­i­mum provider-to-mem­ber ra­tios for cer­tain med­i­cal spe­cial­ties. The goal was to en­sure that con­sumers had ad­e­quate ac­cess to providers as more in­sur­ers moved to nar­row- net­work prod­ucts.

Many hos­pi­tal and doc­tor groups sup­ported the pro­posal. The Amer­i­can Acad­emy of Fam­ily Physi­cians asked the CMS to go a step fur­ther and set net­work stan­dards for ap­point­ment wait times.

But the CMS pro­posal was a big de­par­ture from the re­cently ap­proved model law drafted by the Na­tional As­so­ci­a­tion of In­sur­ance Com­mis­sion­ers, which would let state in­sur­ance de­part­ments es­tab­lish cri­te­ria for net­work ad­e­quacy.

“The NAIC model pur­posely did not in­clude a time and dis­tance stan­dard be­cause in states with large ar­eas of sparsely pop­u­lated land such as Ne­braska, it is not re­al­is­tic for a provider to be within a set num­ber of miles from ev­ery in­sured,” Ne­braska In­sur­ance Di­rec­tor Bruce Ramge wrote. “This ef­fec­tively gives the ad­van­tage to providers who will de­mand a greater re­im­burse­ment rate if they are the only provider within a cer­tain range.”

An­thony Bar­rueta, se­nior vice pres­i­dent of gov­ern­ment re­la­tions at Kaiser Per­ma­nente, the Oak­land, Calif.-based in­te­grated health sys­tem, wrote that such stan­dards are “not mean­ing­ful as mea­sures of en­rollees’ true ac­cess to care.”

The NAIC said, “Many states al­ready have strong stan­dards in place. Oth­ers will con­sider the best way to im­prove their over­sight based on the up­dated NAIC model.”

The CMS’ pro­posal to stan­dard­ize ben­e­fits among ex­change plans, in­tended to make it eas­ier for con­sumers to com­par­i­son shop, also drew fire from in­sur­ers. The CMS pro­posed that all plans in each metal tier on the fed­eral ex­change have sim­i­lar ben­e­fits. For ex­am­ple, all 2017 bronze plans would have a $6,650 de­ductible and all plans would have no more than one provider tier.

Sev­eral state- based ex­changes in­clud­ing Cal­i­for­nia’s al­ready re­quire more stan­dard­ized plan de­signs. Hos­pi­tals have been par­tic­u­larly big supporters of crack­ing down on provider tiers, which place some fa­cil­i­ties in higher cost-shar­ing brack­ets than oth­ers.

But Aetna was blunt in its op­po­si­tion: “Do not pursue stan­dard­ized plans.” Thad John­son, the chief le­gal of­fi­cer of Unit­edHealth­care, wrote that lim­it­ing plan op­tions “sti­fles com­pe­ti­tion and in­no­va­tion, and runs counter to cre­at­ing more af­ford­able and ac­ces­si­ble health­care.”

In­sur­ers also crit­i­cized the gov­ern­ment’s sug­ges­tion to make pub­lic all pro­posed pre­mium in­creases, not only fi­nal rate in­creases of 10% or more. Pub­licly dis­clos­ing all pro­posed and fi­nal rate in­creases would be a vic­tory for trans­parency ad­vo­cates.

“While we fully sup­port in­creased trans­parency, we be­lieve that making all rate in­creases pub­lic, in­clud­ing those not sub­ject to rate re­view, would re­sult in un­nec­es­sary con­sumer con­fu­sion,” wrote Kristin Lewis, vice pres­i­dent of gov­ern­ment af­fairs at Tufts Health Plan.

Cigna Corp. dis­agreed. The in­surer ad­vo­cated that all rate pro­pos­als be pub­licly dis­closed be­cause that “would in­crease the trans­parency of the rate-set­ting process.”

Miami res­i­dents en­roll in ACA plans at the start of the 2016 open-en­roll­ment win­dow, which closes Jan. 31.

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