CMS’ New Interpretations And Guidance Relating To The Rules Governing The Affordable Care Act

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While H.R. 1628, the American Health Care Act of 2017, the bill that seeks to repeal key provisions of the Patient Protection and Affordable Care Act (“PPACA”), passed the House on May 4, 2017, and is being considered by the Senate, it appears that the Centers for Medicare and Medicaid Services (“CMS”), the part of the U.S. Department of Health and Human Services (“HHS”) that administers the Health Insurance Market Place, is working on other fronts simultaneously to seemingly chip away at certain insurance provisions under PPACA.  CMS’s Market Stabilization Final Rule, published on April 18, 2017, made a number of regulatory changes based on revised “interpretations.”  According to CMS, these revisions and other changes intend to stabilize the individual and small group markets by, among other things, improving the risk pool, giving issuers more flexibility, and returning more control to states. Generally, key changes under this Final Rule include:

  • open enrollment period is shorted from 3 months to 1 ½ months;
  • expanded and enhanced pre-enrollment eligibility verification for special enrollment period requests and other limits on special enrollment (affecting mostly individual markets in states on the HealthCare.gov platform - FFE and SBE-FPs);
  • issuers can, subject to applicable state law, and certain other conditions, require applicants to first pay past debt owed to the issuer as a condition for new coverage;
  • states can determine network adequacy standards and conduct reviews (provided the State has the authority and the means to conduct network adequacy reviews);
  • QHP issuers must contract with at least 20% of the available essential community providers in the plan’s service area (down from a minimum of 30 %); and
  • plans can broaden the variation in the actuarial values used to determine metal levels of coverage for individual and small group market plans (e.g., from -2/+ 2 percentage points, to -4/+2 for certain metal plans) (note: states can apply stricter standards). 

The Final Rule, which can be found at 82 Fed. Reg. 18346 (4/18/2017), goes into more detail. It is effective June 19, 2017, but most of the changes begin effective for the 2018 plan year.

Similarly, in an effort to fulfill President Trump’s January 20, 2017, Executive Order directing agencies to “alleviate the burdens of the Affordable Care Act,” HHS Secretary Thomas Price sent a letter to states encouraging them to apply for State Innovation Waivers under Section 1332 of PPACA. Mr. Price’s March 13, 2017, letter encourage states to seek waivers that implement high-risk pool and/or state-operated reinsurance programs as an opportunity to lower premiums, improve market stability, and increase consumer choice. Mr. Price’s letter promises, “If a state's plan under its waiver proposal is approved, a state may be able to receive pass-through funding to help offset a portion of the costs for the high-risk pool/state-operated reinsurance program.” These waivers seem difficult to obtain, however, as according to Mr. Price’s letter, to receive waiver approval, among other things, “the state must demonstrate that a proposed waiver will provide access to quality health care that is at least as comprehensive and affordable as would be provided without the waiver” and “will provide coverage to at least a comparable number of residents of the state as would be provided coverage without a waiver.”  The letter further provides that states must provide a public notice and comment period and public hearings, and enact a law providing for its implementation of the waiver.  The CMS.gov website shows that Alaska, California, Hawaii and Vermont have submitted 1332 waiver applications.  A copy of Mr. Price’s letter can be found at https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Section_1332_state_Innovation_Waivers-.html#Section 1332 State  Waiver Applications. On May 16, 2017, CMS announced a new tool, a checklist, to help states seek the Section 1332 waiver, which can be found at https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/Checklist-for-Section-1332-State-Innovation-Waiver-Applications-5517-c.pdf. So while there seems to be a lull with respect to H.R. 1628, CMS is not sitting still.  We could expect more guidance and regulatory “reinterpretations” of PPACA requirements in the near future.

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