By Sara Rosenbaum

Introduction

On March 14, 2014 the Centers for Medicare and Medicaid Services (CMS) published its 2015 letter to issuers selling qualified health plans in the federally facilitated Exchange Marketplace (FFM). The issuers letter is designed to provide federal guidance on the qualified health plan certification process to health insurance issuers and states that use the FFM while also maintaining plan management partnerships with the federal government (AL, AK, AZ, AR, DE, FL, GA, IL, IN, IA, KS, LA, ME, MI, MS, MO, MT, NE, NJ, NY, NC, ND, OH, OK, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY). This Update reviews highlights of the final 2015 letter (we reviewed the draft letter in a prior Update.

Highlights in the Final 2015 Issuers Letter

The final letter covers many issues of special importance to health care access, both generally and in medically underserved communities. The final letter also has implications for benefit design discrimination, including limitations, exclusions, and cost-sharing requirements that disproportionately affect members with significant health conditions or disabilities.

Network Adequacy

The draft 2015 letter required plans to submit their actual network membership for sufficiency review. The final letter omits this requirement, although a story reported on March 25 suggests that CMS has indicated to issuers orally that they will in fact be required to submit provider lists.^[1] In the final letter, CMS states that its review will focus on “those areas which historically have raised network adequacy concerns”: hospital systems, mental health providers, oncology providers, and primary care providers. CMS does not offer evidence regarding why other specialty health care needs have not raised similar network adequacy concerns.

The final letter indicates that CMS will conduct reasonable access reviews, but depending on whether actual network membership does or does not have to be submitted, it is not clear how these reviews will proceed or the standards that the agency will use. The agency notes, as it did in the draft letter, that accreditation will not be sufficient. CMS further states that it “will share information and analysis and coordinate with states which are conducting network adequacy reviews.” It also states that “additional technical guidance regarding the collection method for a plan’s provider list” will be forthcoming, suggesting that at some point actual provider participation information will be required. For the time being however, how exactly the review process will work under CMS’ reasonable access review standard remains a mystery. The reasonable access review standard^[2] requires that a network must be “sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to assure that all services will be accessible to enrollees without unreasonable delay”.

Transitional fills for non-formulary prescribed drugs for new enrollees

In its draft Letter, CMS stated the following:

CMS . . . intends to propose through rulemaking that Marketplaces may require that issuers temporarily cover non-formulary drugs, including drugs that are on the issuer’s formulary but require prior authorization or step therapy, as if they were on the issuer’s formulary during the first 30 days of coverage, for coverage beginning on January 1 of each year, starting with the 2015 plan year. This proposed policy would also allow those newly enrolled in a QHP to receive coverage for a non-formulary drug during this time period without using the exceptions process. This would prevent disruptions in treatment for new enrollees . . . As stated in the interim final rule published on December 17, 2013 at 78 FR 76212, we encourage issuers to accommodate the needs of new enrollees by covering a transitional fill of non-formulary drugs to new enrollees. We are also contemplating policies to help with transitions for other types of care (e.g., continuity of access to specialists for individuals in the midst of a course of cancer treatment).

The final Letter says nothing about a forthcoming proposed rule but continues to encourage issuers to cover transitional fills for non-formulary drugs for new enrollees.

Essential community providers

The final letter maintains unchanged the 30% participation test for essential community providers set forth in the draft letter. Under this higher standard, a plan that achieves a 30% participation rate among available ECPs will be deemed to meet the ECP standard. CMS has adopted this standard even though the statute directs the Secretary to set a standard that “includes those essential community providers where available,”^[3] (not some of the providers that are available).

Non-discrimination in the design of health plans covering essential health benefits (EHBs)

The ACA bars the Secretary from employing benefit designs in plans covering essential health benefits – regardless of whether the plans are sold inside or outside the Marketplace – that discriminate against enrollees based on age, disability, or expected length of life.^[4] In addition to not setting federal non-discrimination standards (see 45 C.F.R. §156.225, which simply repeats the statute), the final 2015 letter also clarifies that CMS will play virtually no role in market-wide enforcement activities related to all plans covering the EHB package. The agency does not indicate how this issue will be approached in situations in which states have expressly informed CMS that they do not intend to enforce federal law. Furthermore, CMS clarifies in the final letter that the agency will limit its oversight to cost sharing design aspects of qualified health plans sold in the exchange Marketplace and will not consider limitations and exclusions, discriminatory benefit definitions, or discriminatory definitions of key over-arching terminology such as the plan’s medical necessity definition:

EHB Discriminatory Benefit Design: Non-discrimination in benefit design with respect to EHB is a market-wide consumer protection that applies inside and outside of Marketplaces. Accordingly, the enforcement of this standard is largely conducted by states. CMS encourages states that are enforcing the Affordable Care Act to consider a number of strategies for assessing compliance with this standard including, but not limited to: analysis of information entered in the “explanations” and “exclusions” sections of the QHP Plans and Benefits Template.

For purposes of QHP certification, CMS will collect an attestation that issuers’ QHPs will not discriminate against individuals on the basis of health status, race, color, national origin disability, age, sex, gender identity or sexual orientation, consistent with 45 C.F.R. 156.200(e). CMS will continue to assess compliance through issuer monitoring and compliance reviews, including analysis of appeals and complaints. . . [emphasis added].

ii. QHP Discriminatory Benefit Design

In addition to complying with EHB non-discrimination standards, QHPs must not employ market practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs (see 45 C.F.R. 156.225). To ensure non-discrimination in QHP benefit design, CMS will perform an outlier analysis on QHP cost sharing (e.g., co-payments and co-insurance) as part of the QHP certification application process. QHPs identified as outliers may be given the opportunity to modify cost sharing for certain benefits if CMS determines that the cost sharing structure of the plan that was submitted for certification could have the effect of discouraging the enrollment of individuals with significant health needs. [The outlier review will focus specifically but not exclusively on] Inpatient hospital stays, Inpatient mental/behavioral health stays, Specialist visits, Emergency room visits, and Prescription drugs.

With respect to prescription drugs, CMS intends to review plans that are outliers based on an unusually large number of drugs subject to prior authorization and/or step therapy requirements in a particular category and class. We encourage states performing plan management functions in an FFM to implement this type of review [emphasis added].

CMS does not provide a review methodology or define what is “unusually large”.

[1] Inside Health Policy, “CMS Backtracks on Provider Lists, Now Tells Health Plans They are Required for 2015” (March 25, 2014).
[2] 45 C.F.R. §156.230(a)(2)
[3] PPACA §1311(c)(10(C))
[4] PPACA §1302(b)(4)(B)