CMS Issues Final 2019 Payment Notice Rule

The Health and Human Services (HHS) Notice of Benefit and Payment Parameters for 2019, issued by the Centers for Medicare and Medicaid Services (CMS), aims to increase state flexibility, improve affordability, strengthen program integrity, empower consumers, promote stability and reduce unnecessary regulatory burdens imposed by the Patient Protection and Affordable Care Act. The final rule includes these key provisions:

• Essential health benefits (EHBs). Instead of being limited to 10 options, states will be able to choose from the 50 EHB-benchmark plan used for the 2017 plan year in other states or select specific EHB categories such as drug coverage or hospitalization from among the categories used for the 2017 year in other states. States will also be able to build their own set of benefits that could potentially become their EHB-benchmark plan, subject to certain scope of benefits.
• Qualified health plan (QHP) certification standards. Oversight authority will be returned to states regarding state review of network adequacy, and will ease the burden on issuers related to essential community providers. It will also eliminate the meaningful difference requirement for QHPs to give insurers more flexibility in designing plans.
• Exemptions. Exchanges will be able to make a determination of lack of affordable coverage based on projected income using the lowest cost exchange metal level plan when there is no bronze level plan available in the service area.
• Risk adjustment. The HHS-operated risk adjustment data validation program will be amended to reduce burdens on issuers. In addition, the HHS-operated risk adjustment program will be recalibrated for the 2019 benefit year to incorporate new data that reflects the actual experience of individual and small group market enrollees, which should more closely reflect the risk within markets. In states where HHS operates the risk adjustment program, CMS will also provide states with the flexibility to request a reduction to the otherwise applicable risk adjustment transfers in the individual, small group or merged market by up to 50 percent beginning with the 2020 benefit year, which may be helpful in attracting and retaining insurers and more precisely accounting for relative risk differences in the state market.
• Advanced premium tax credit (APTC) program integrity. Exchanges will be required to implement stronger checks to verify applicants actually earn the income they claim to qualify for APTCs. And, it will require exchanges to discontinue APTCs for enrollees who fail to file taxes and reconcile past APTCs, even if the exchange does not first send notice directly to the tax filer.
• Special enrollment periods (SEPs). For consumers newly gaining or becoming a dependent and enrolling through the birth, adoption, foster care placement or court order SEPs, the alternate coverage start date options available under all of these SEPs will be amended and standardized. Pregnant women who are receiving healthcare services through Children’s Health Insurance Program coverage for their unborn child will qualify for a loss of coverage SEP upon losing access to this coverage. Finally, consumers will be exempted from the prior coverage requirement that applies to certain special enrollment periods if they lived in a service area without qualified health plans available through an exchange.
• Medical loss ratio (MLR). MLR requirements will be amended to reduce quality improvement activity reporting burdens on insurers and allows states to request reasonable adjustments to the MLR standard for the individual market if the state shows a lower MLR standard could help stabilize its individual insurance market.
• Small business health options program (SHOP). SHOPs will be allowed to eliminate the online enrollment process and employers will be allowed to enroll directly with an exchange-registered agent, broker or issuer.
• Rate review. The primary role of state regulators in the rate review process will be increased, while the regulatory burden for states and issuers will be reduced. The rule will exempt student health insurance coverage from federal rate review requirements, and will raise the default threshold for review of reasonableness from 10 percent to 15 percent.

For additional information about the final rule, go to www.cms.gov/CCIIO/ Resources/Regulations-and-Guidance/Downloads/2019-Letter-to-Issuers.pdf.