November 27, 2017
Randy Pate, Deputy Administrator and Director
Center for Consumer Information and Insurance Oversight
Centers for Medicare & Medicaid Services
Department of Health & Human Services
Submitted electronically via: www.regulations.gov
Dear Director Pate:
The Association for Community Affiliated Plans (ACAP) respectfully submits comments regarding HHS Notice of Benefit and Payment Parameters for 2019: Proposed Rule.
ACAP is an association of 61 not-for-profit and community-based Safety Net Health Plans (SNHPs) located in 29 states. Our member plans provide coverage to more than 20 million individuals enrolled in Medicaid, the Children’s Health Insurance Program (CHIP) and Medicare Special Needs Plans for dually-eligible individuals, including nearly 600,000 Marketplace enrollees. Nationally, Safety Net Health Plans serve almost half of all Medicaid managed care enrollees. Seventeen of ACAP’s Safety Net Health Plan members offer qualified health plans (QHPs) in the Marketplaces in 2017.
Summary of ACAP’s Comments
ACAP has chosen to respond to a subset of proposals in the draft Notice that are particularly relevant to Safety Net Health Plans (SNHPs). ACAP appreciates the Administration’s recognition of the importance of reducing operational burdens and ACAP’s comments are focused on ensuring a balance between increased flexibility for states and plans and the impact on enrollees. Specifically, our comments are focused so as not to place undue burden or harm on either SNHPs or consumers, in particular the low-income and vulnerable populations that are traditionally served by these SNHPs.
ACAP would like to emphasize that the comments herein support SNHPs in their efforts to serve their communities, which they are generally well-acquainted to by way of their experience with serving Medicaid enrollees.
In this section, we wish to draw attention to the following sections of our comments, which align with ACAP’s top priority areas:
- Meaningful difference standards: ACAP objects to CMS’ proposal to eliminate QHP meaningful difference standards and has previously advocated for a strengthening of meaningful difference standards.
- Essential health benefits: ACAP does not object to increased flexibility for states to choose their benchmark benefit packages per se, however, we do identify a variety of concerns and considerations for CMS. ACAP does, however, object to CMS’ proposal to allow states to choose a new benchmark benefit package annually, as developing new benefit packages and plan design annually would place a significant burden on issuers.
- Mental health record requirements for risk adjustment data validation: ACAP’s member plans are concerned by the need to obtain written patient consent in order to comply with RADV requirements for enrollees with substance use disorder. Securing written consent, especially retroactively or multiple times, presents significant burden to the issuer and may, frankly, be impossible. ACAP has long recommended that 42 CFR Part 2 should be aligned with HIPAA and amended to not require specific patient consent for purposes of treatment, payment, and health care operations.
- Medical Loss Ratio: ACAP supports CMS’ proposal to establish a fixed percentage threshold accounting for quality improvement activity expenses in the MLR calculation. Conversely, ACAP opposes CMS’ proposal to permit states to more easily lower MLR below 80 percent.
ACAP’s full comments are addressed below.
Risk Adjustment & Data Validation (RADV)
ACAP supports CMS’ efforts to gradually move to EDGE data for risk adjustment purposes through and encourages CMS to publish a detailed review of the differences found between EDGE data and MarketScan data moving forward. As CMS moves forward with model recalibration we urge CMS to retain the induced demand factors currently included in the model.
If CMS moves forward on allowing state flexibility for risk adjustment transfers in the small group market, ACAP also urges CMS to fully evaluate and publish the impact of any such adjustments before moving forward with a similar process in the individual market.
For the purposes of risk adjustment data validation (RADV) adjustments based on error rates, we appreciate CMS’ desire to balance the finality of transfer amounts with potential errors and gaming by issuers exiting the market. Accordingly, we urge CMS to only proceed with retroactive RADV adjustments in cases where only the exiting issuer would be penalized for their incorrect data. This would ensure there is no incentive for exiting issuers to game their data in their final year while still protecting other issuers from potential retroactive negative adjustments due to another issuer’s faulty data.
Finally, ACAP urges CMS to establish criteria for determining ‘outlier’ error rates prior to moving forward with the proposal to adjust an issuer’s risk score based on such deviation. Some error may well be outside the issuer’s control and, as written, CMS’ proposal does not identify specifically how outlier status would be calculated. Issuers should have the opportunity to comment fully on the proposal before it is implemented.
Mental and Behavioral Health Records
ACAP has in other contexts provided significant feedback on the need to change 42 CFR Part 2 to ensure that issuers are better able to manage care for enrollees with substance use disorder. ACAP’s previous recommendations are also relevant in the context of RADV requirements and we believe that 42 CFR Part 2 should be aligned with HIPAA and amended to not require specific patient consent for purposes of treatment, payment, and health care operations. This would still protect patients in the context of criminal justice and other matters, but would enable issuers to comply with both RADV requirements and ensure better care coordination and patient safety for enrollees. Additionally, ACAP believes that for the purposes of RADV, allowing a behavioral health assessment instead of full medical record data will not significantly improve the burden placed on plans.
We object to CMS’ statement that the requirement for patient consent is not inconsistent with the RADV requirements to furnish mental or behavioral health records or assessments and that issuers “may be required to obtain written patient consent in order to comply with this proposal.” Securing written consent, especially retroactively or multiple times, presents significant burden to the issuer and may, frankly, be impossible.
We also understand CMS’ desire to require complete records for data validation; without such a requirement there would be significant potential for gaming. While this has been addressed in Medicare Advantage through the use of a deflationary factor, we would strongly oppose this approach as it is based on the assumption that all plans are participating in gaming or upcoding.
This would unfairly penalize issuers—such as Safety Net Health Plans in particular—that do not participate in such practices. Accordingly, we believe it makes the most sense to revise Federal regulations at 42 CFR part 2 and elsewhere to create an exemption to patient consent rules for the purposes of health care operations and payment.
Essential Health Benefits (EHB)
ACAP does not in and of itself object to a broadening of choices for EHB benchmark packages, however, we do urge caution on some of the components included in CMS’ proposal. For example, allowing states to choose other states’ benchmark plans will advantage national plans and may disadvantage smaller, locally-based plans such as many Safety Net Health Plans and we urge CMS to consider this possibility.
Most concerning, however, is CMS’ proposal to permit states to change their EHB benchmark or benefits annually. This would cause a great operational burden on issuers that would need to adjust their product design accordingly and would lead to increased administrative costs to do so. ACAP strongly objects to this proposal and recommends that states be permitted to change their EHB benchmark or benefits no more frequently than every five years in order to provide some consistency and stability for issuers.
ACAP also objects to CMS’ proposal to allow substitution across benefit categories—even if the benefits are actuarily equivalent—as it could function as a back-door method for plans to cherry pick enrollees with particular health conditions or needs, ultimately subverting the statutory reasoning for defining essential health benefit categories in the first place. Additionally, this could lead to extreme chaos in the market for consumers who are shopping for plans that do not have the same level of coverage across all EHB categories.
Lastly, ACAP is concerned about the potential impact of CMS’ proposal to include in the definition of a typical employer plan, a self-insured group health plan. Given the differing rules guiding ERISA plans and lack of transparency of what benefits are covered by many such plans, we do not believe it is appropriate at this time to use such an undefined, unknown plan type as an allowable benchmark.
Medical Loss Ratio (MLR)
ACAP supports some of CMS’ proposed changes to MLR calculations and objects to others.
Specifically, ACAP supports CMS’ proposal to allow issuers to report quality improvement activity (QIA) expenses as a single fixed percentage of premium. As CMS notes, issuers must undertake significant effort to accurately identify, track, and report QIA expenditures. ACAP’s member plans have indicated that 0.8 percent of earned premium is an appropriate fixed percentage for issuers that choose to use this option rather than reporting the total, higher amount spent among the five QIA categories.
Conversely, ACAP objects to CMS’ proposal to allow States to more easily request a lowering of the 80 percent MLR threshold. ACAP’s member plans state that they do not generally have difficulty meeting the current threshold, and even if some do, they believe that lowering the threshold would actually destabilize and harm the individual market in the long-run and would create perverse incentives for some issuers. Additionally, a lowered MLR threshold means fewer actual health care services for consumers, which, when combined with the proliferation of high-deductibles and cost-sharing that consumers are already paying, we do not believe a permitting to lower the MLR threshold would serve to benefit consumers.
Meaningful Difference Standard
ACAP opposes CMS’ proposal to eliminate meaningful difference standards for QHPs. ACAP has, in fact, long urged CMS to instead strengthen meaningful difference standards in order to prevent issuers from dominating the market with numerous products that offer little variation. While CMS states that eliminating the meaningful difference standard would encourage innovation, we do not believe that slight variations in benefits equate to innovation. Additionally, research has shown that if there are too many options to choose from, consumers actually will not make any choice at all. ACAP urges CMS to reconsider this proposal and leave the meaningful difference standards intact in order to promote true innovation and choice in the market.
ACAP supports CMS’ proposal to increase the default rate review threshold from 10 percent to 15 percent, as it would reduce operational burden for issuers. However, ACAP strongly opposes CMS’ proposal to allow states with their own rate review programs to set different submission deadlines for QHP and non-QHP issuers. Allowing different submission deadlines could impact how issuers act in the market, particularly issuers that do not offer QHPs – providing an unfair competitive advantage for such issuers.
ACAP supports CMS’ proposal to eliminate standardized options and the corresponding differential display. ACAP has previously urged CMS to eliminate the standardized options and we thank CMS for moving forward accordingly. Not all issuers have implemented standardized options, and the differential display disadvantages issuers that have not done so. Additionally, the differential display may urge consumers to sign up for QHPs that do not best meet their needs. Accordingly, we support CMS’ proposal and believe it will benefit both issuers and consumers.
Network Adequacy and Essential Community Providers (ECPs)
ACAP supports CMS’ proposal to return network adequacy review, including for ECPs, to states operating on the Federal platform (SBE-FPs). Similarly, we support CMS proposal to allow FFEs to rely on State review of network adequacy standards where the States have an adequate review process.
Navigator Program Standards
ACAP does not support CMS’ proposal to remove the requirement that an Exchange must have a consumer-focused non-profit group serving as a navigator entity. While we appreciate the desire to improve flexibility in the navigator program, we do believe navigators—particularly those that are consumer-focused—play an important, non-biased role. Other entities, such as brokers working for commissions or navigators working for a hospital system may not be entirely unbiased. We do, however, believe there is room for both non-profit, consumer-facing navigators as well as brokers. Additionally, to whatever extent CMS permits brokers to fill the role historically played by navigators, we encourage CMS to develop strict audit and regulatory requirements to address whether and how brokers steer consumers toward particular products (i.e. tiered commissions based on metal level, on versus off exchange, etc.) to ensure that consumers are matched up with a product that best meets their needs.
Special Enrollment Periods (SEPs)
ACAP supports CMS’ proposal to permit women who lose access to health care services they were receiving through CHIP coverage for their unborn child to qualify for a loss-of-coverage SEP, even if such coverage does not qualify as minimum essential coverage (MEC).
ACAP also supports CMS’ proposal to waive the MEC requirement for individuals otherwise eligible for an SEP except that they lived in a coverage area where they were unable to obtain coverage.
CHIP Buy-In Coverage
ACAP plans are strong supporters of the CHIP program and provide coverage to nearly half a million enrollees in stand-alone CHIP programs and many additional enrollees in Medicaid-CHIP coverage. However, as CMS notes, CHIP coverage may not qualify as MEC and we urge CMS to proceed with caution in determining whether CHIP coverage should be certified as MEC in cases where benefits are not equivalent. To the extent that only children are covered through buy-in programs, the full set of adult benefits offered by a QHP may not be necessary. However, to the extent that such buy-in programs were to proliferate, we believe there is a potential for significant degradation of the single risk pool for QHPs.
If healthy consumers—particularly healthy children—are siphoned away from the individual market single risk pool, it could lead to adverse selection in the individual market, leading to increased premiums for QHPs. This is most likely to happen in cases where buy-in premiums are lower than otherwise available from QHPs in the individual market. Similarly, we would have potential concern with other buy-in programs being certified as MEC for the same reason. Any buy-in programs must be set up so as to ensure there is not a negative effect on the single risk pool. Accordingly, we believe CMS should perform a thorough review and consideration of any such buy-in program prior to certifying it as MEC; automatic MEC designation could have significant unintended consequences and as such we believe CMS should proceed with caution.
Quality Rating System
ACAP is pleased with CMS’ recognition of the role social risk factors play in health. As predominantly-Medicaid plans, ACAP plans are inherently attuned to the impact of social determinants of health and have numerous programs in place to mitigate them. ACAP supports inclusion of low income subsidies, race and ethnicity, and geographic area of residence as appropriate social risk factors. ACAP urges CMS to also consider housing stability as an additional social risk factor to be included.
MassHealth, for example, has created a risk adjustment framework to better account for numerous social risk factors, which may be worth consideration by CMS in this context as well. This methodology specifically looks at housing instability and neighborhood stress as risk factors. We urge CMS to consider these social risk factors and others both in the context of QRS and risk adjustment.
ACAP thanks CMS for its willingness to consider the aforementioned issues and discuss these issues with us. If you have any additional questions or comments, please do not hesitate to contact Heather Foster (202-204-7508 or hfoster at communityplans.net).
Margaret A. Murray
Chief Executive Officer