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In the HHS Notice of Benefit and Payment Parameters for 2024 final rule released today, the Centers for Medicare & Medicaid Services (CMS) finalized standards for issuers and Marketplaces, as well as requirements for agents, brokers, web-brokers, and Assisters that help consumers with enrollment through Marketplaces that use the Federal platform. These changes further the Biden-Harris Administration’s goals of advancing health equity by addressing the health disparities that underlie our health system. The final policies build on the Affordable Care Act’s promise to expand access to quality, affordable health coverage and care by increasing access to health care services, simplifying choice and improving the plan selection process, making it easier to enroll in coverage, strengthening markets, and bolstering program integrity.
Increasing Access to Health Care Services
Network Adequacy and Essential Community Providers
CMS finalizes revisions to the network adequacy and essential community provider (ECP) regulations to provide that, subject to the limited exception described below, all individual market qualified health plans (QHPs), including stand-alone dental plans (SADPs), and all Small Business Health Option Program (SHOP) plans, including SHOP SADPs, across all Marketplace-types must use a network of providers that complies with the network adequacy and ECP standards in those sections, and to remove the exception that these sections do not apply to plans that do not use a provider network. CMS finalizes a limited exception to this requirement for certain SADP issuers that sell plans in areas where it is prohibitively difficult for the issuer to establish a network of dental providers. Specifically, under this exception, an area is considered “prohibitively difficult” for a SADP issuer to establish a network of dental providers based on attestations from State Departments of Insurance in states with at least 80% of their counties classified as Counties with Extreme Access Considerations that at least one of the following factors exists in the area of concern: a significant shortage of dental providers, a significant number of dental providers unwilling to contract with Marketplace issuers, or significant geographic limitations impacting consumer access to dental providers. Requiring all QHPs, except as indicated, to use a provider network will better ensure consumer access to a sufficient choice of providers and will guarantee consumers have access to information on the availability of in-network providers.
Further, in response to public comments, CMS also finalizes amendments to the regulations to delay the application of the appointment wait time standards until plan year (PY) 2025. Accordingly, QHP issuers in the Federally Facilitated Marketplaces (FFMs) will have one additional plan year before being required to attest to meeting appointment wait time standards. As CMS noted in the 2023 Payment Notice, specific guidelines for complying with appointment wait time standards will be released in later guidance. This will allow CMS additional time to develop specific guidelines for how issuers should collect the requisite data from providers, how the metrics should be interpreted, and for public comment on the proposed guidance. We are also aware of other HHS initiatives to define and implement appointment wait times standards for other program areas. The additional year delay will allow HHS to ensure that these wait time standards are implemented in a holistic, logical way across programs.
In addition, CMS finalizes changes to expand access to care for low-income and medically underserved consumers by establishing two additional major ECP categories for PY 2024 and beyond, 1) Mental Health Facilities and 2) Substance Use Disorder Treatment Centers, and adding rural emergency hospitals as a provider type in the Other ECP Category. Additionally, for PY 2024 and beyond, CMS will retain the overall 35% provider participation threshold, and also extend the 35% threshold to two major ECP categories: Federally Qualified Health Centers and Family Planning Providers. These changes will increase provider choice and access to care for low-income and medically underserved consumers.
Simplifying Choice and Improving the Plan Selection Process
Standardized Plan Options
CMS finalizes several minor updates with respect to standardized plan options. In particular, CMS will no longer include a standardized plan option for the non-expanded bronze metal level. Accordingly, for PY 2024 and subsequent PYs, issuers offering QHPs through the FFMs and State-based Marketplaces on the Federal platform (SBM-FP) must offer standardized QHP options designed by CMS at every product network type, at every metal level except the non-expanded bronze level, and throughout every service area that they offer non-standardized QHP options. CMS believes maintaining the highest degree of continuity possible in designing these standardized plan options is critical to reduce the risk of disruption for consumers enrolled in these plans.
CMS is not finalizing its proposal that issuers of standardized plan options must (1) place all covered generic drugs in the standardized plan options’ generic drug cost-sharing tier, or the specialty drug tier if there is an appropriate and non-discriminatory basis, and (2) place all covered brand name drugs in either the standardized plan options’ preferred brand or non-preferred brand drug cost-sharing tiers, or the specialty drug cost-sharing tier if there is an appropriate and non-discriminatory basis.
This is because although CMS agrees that this proposal could potentially enhance predictability for consumers, comments regarding the importance of continuing to permit issuer flexibility in designing formularies to manage increasing costs, the changing nature of the relative costs of generic and brand name drugs, and the risk of decreased medication adherence that could arise from changing the tiering placement for particular prescription drugs has led CMS to determine that it should further investigate the potential impact of this proposal.
Non-Standardized Plan Option Limits
CMS finalizes a limit on the number of non-standardized plan options that issuers of QHPs can offer through Marketplaces on the Federal platform (including SBM-FPs) to four non-standardized plan options per product network type, metal level (excluding catastrophic plans), and inclusion of dental and/or vision benefit coverage, in any service area, for PY 2024 and two for PY 2025 and subsequent plan years.
CMS is finalizing this limit due to the continuing trend of plan proliferation, which increases the risk of plan choice overload as well as the risk of suboptimal plan selection and unexpected financial harm for consumers. Specifically, the average number of plans available to consumers on the Marketplace has increased from 25.9 in PY 2019 to 113.7 in PY 2023. Such plan choice overload limits consumers’ ability to make a meaningful selection when comparing plan offerings.
Under the limit on the number of non-standardized plan options that issuers can offer (for both PY 2024 and PY 2025), CMS will permit additional flexibility specifically for plans with additional dental and/or vision benefit coverage. In the final rule, CMS clarifies the specific dental and/or vision benefit coverage a non-standardized plan option would need to include in order to qualify for this additional flexibility.
By modifying the proposed policy to increase the limit of non-standardized plan options that issuers can offer to four instead of two for PY 2024, and by modifying the proposed policy to also factor the inclusion of dental and/or vision benefit coverage into this limit, CMS estimates (based on PY 2023 enrollment and plan offering data) that the weighted average number of total plans (which includes both standardized and non-standardized plan options) available to each consumer will be reduced from approximately 113.7 in PY 2023 to 90.5 in PY 2024. As explained further in the final rule, CMS is unable to provide meaningful estimates for the impacts of the limit of two non-standardized plan options for PY 2025 and subsequent plan years due to PY 2024 plan offering and enrollment data limitations.
Similar to the approach taken with respect to standardized plan options in the 2023 Payment Notice and in this final rule, CMS will not apply this requirement to issuers in State-based Marketplaces (SBMs). Further, consistent with the approach taken with respect to standardized plan options in the 2023 Payment Notice and in this final rule, since SBM-FPs use the same platform as the FFMs, CMS will apply this requirement equally on FFMs and SBM-FPs. Finally, also in alignment with the approach taken with respect to standardized plan options in the 2023 Payment Notice as well as the approach taken in this final rule, this requirement would not apply to plans offered through the SHOPs or to SADPs.
Finally, CMS is not finalizing a meaningful difference standard since it believes that directly limiting the number of non-standardized plan options that issuers can offer would be a more effective and straightforward approach to reducing the risk of plan choice overload.
Stand-Alone Dental Plans (SADPs)
CMS finalizes changes to require issuers of SADPs, as a condition of Marketplace certification, to use age on effective date as the sole method to calculate an enrollee’s age for rating and eligibility purposes beginning with Marketplace certification for PY 2024. This requirement will apply to Marketplace-certified SADPs, whether they are sold on- or off-Marketplace. We believe requiring SADPs to use the age on effective date methodology to calculate an enrollee’s age as a condition of QHP certification, and consequently removing the less commonly used and more complex age calculation methods, will reduce consumer confusion and promote operational efficiency.
CMS also finalizes changes to require issuers of SADPs, as a condition of Marketplace certification, to submit guaranteed rates beginning with Marketplace certification for PY 2024. This requirement will apply to Marketplace-certified SADPs, whether they are sold on- or off-Marketplace. We believe this policy change will help reduce the risk of incorrect advance payments of the premium tax credit (APTC) calculation for the pediatric dental essential health benefit portion of premiums, thereby reducing the risk of consumer harm.
CMS finalizes changes to allow Marketplaces to modify their automatic re-enrollment hierarchies such that enrollees who are eligible for cost-sharing reductions (CSRs) and are currently enrolled in a bronze level QHP, and who would otherwise be automatically re-enrolled in a bronze-level QHP, are instead automatically re-enrolled in a silver-level QHP (with CSRs) in the same product with the same provider network and with a premium after the application of APTC that is lower or equivalent to the premium of the bronze level QHP into which the enrollee would have otherwise been re-enrolled, (referred to as the “bronze to silver crosswalk policy”). Marketplaces have the option to implement the bronze to silver crosswalk policy as soon as plan year 2024, and CMS will implement this policy in Marketplaces on the Federal platform for plan year 2024. Furthermore, for enrollees whose current QHP or product will no longer be available in the coming year, CMS is also amending the Marketplace re-enrollment rules to require all Marketplaces (Marketplaces on the Federal platform and SBMs) to incorporate network similarity into the auto re-enrollment criteria. Marketplaces (including Marketplaces on the Federal platform and SBMs) must implement re-enrollment changes for enrollees whose QHP is no longer available beginning with the open enrollment period for PY 2024 coverage. As discussed in the final rule, we will implement this policy in PY 2024 for Exchanges on the Federal platform by incorporating plan network ID into the auto re-enrollment process, while continuing to take into account enrollees’ current year product. We will also work with issuers and State regulators to learn how we may improve methods to analyze and ensure network continuity in future years.
Establish Requirements for Qualified Health Plan and Plan Variant Marketing Names
CMS finalizes changes to require that QHP plan and plan variant marketing names include correct information, without omission of material fact, and do not include content that is misleading. This policy will help consumers applying for coverage to understand references to benefit information in plan and plan variant marketing names, and to use this information to make an informed plan selection.
CMS will review plan and plan variant marketing names during the annual QHP certification process in close collaboration with State regulators in States with Marketplaces on the Federal platform.
Making It Easier to Enroll in Coverage
Special Enrollment Periods
CMS finalizes that beginning January 1, 2024, Marketplaces have the option to implement a new special rule for consumers losing Medicaid or Children’s Health Insurance Program (CHIP) coverage that is also considered minimum essential coverage (MEC), under which consumers will have up to 90 days after their loss of Medicaid or CHIP coverage to select a plan for Marketplace coverage via a Special Enrollment Period (SEP). This change aligns the Medicaid or CHIP SEP period with the 90-day Medicaid or CHIP reconsideration period, which allows consumers the opportunity to have their eligibility for Medicaid or CHIP coverage reconsidered without having to resubmit a new application with their State Medicaid Agency. Marketplaces will have the flexibility to decide whether to offer this special rule or not. SBMs will also be able to provide consumers losing Medicaid or CHIP coverage with more time to select a QHP, up to the number of days provided for during the applicable Medicaid or CHIP reconsideration period, if the State Medicaid Agency allows or provides a longer Medicaid or CHIP reconsideration. SBMs will also have the option to implement this special rule as soon as the final rule takes effect, instead of on January 1, 2024, if they so choose. CMS believes that this new special rule will help mitigate coverage gaps when consumers lose Medicaid or CHIP while allowing for a more seamless transition into Marketplace coverage.
CMS also finalizes changes to the current coverage effective date requirements so that Marketplaces have the option to offer earlier coverage effective dates for consumers attesting to a future loss of MEC which may avoid gaps in coverage, effective as of the effective date of the final rule. CMS believes that these changes will ensure qualifying individuals are able to seamlessly transition from other forms of coverage to Marketplace coverage as quickly as possible with minimal coverage gaps. For example, when a consumer attests between May 16 and June 30 that they will lose other MEC on July 15 and selects a plan on or before June 30, coverage will be effective on July 1. If that consumer selects a plan between July 1 and July 15, coverage would be effective as of August 1 and if they select a plan between July 16 and September 15 (60 days after their loss of coverage on July 15), coverage would be effective the first of the month after plan selection; if a plan selection is made in August, coverage will be effective on September 1 and if a plan selection is made in September, coverage will be effective on October 1.
CMS also finalizes changes to the regulation related to the SEP for plan display errors to remove the burden on the consumer to demonstrate that the consumer has been influenced by a material error related to plan benefits, service area, cost-sharing, or premium . This change aligns the policy of the Marketplaces on the Federal platform with current SEP operations. Currently, the regulation requires the qualified individual or enrollee, or their dependent, to adequately demonstrate to the Marketplace that a material error related to plan benefits, service area, or premium influenced their decision to purchase a QHP through the Marketplace. However, we have found that consumers may benefit when other interested parties can demonstrate to the Marketplace that a material plan display error influenced the consumer’s enrollment in a QHP through the Marketplace. Thus, we are removing the burden currently placed on consumers to demonstrate to the Marketplace that a material plan display error influenced the consumer’s decision to purchase a QHP. We are also including cost-sharing in the list of plan display errors that may entitle enrollees to this SEP.
Income Data Matching Issues
CMS finalizes changes to accept the household’s income attestation when the Marketplace requests tax return data from the Internal Revenue Service to verify attested projected annual household income but such data is not available. Such cases often occur when household composition changes across tax years (marriage, divorce, birth of a child) or if individuals were previously below the filing threshold. All individuals receiving APTC are required to file taxes and to reconcile those payments with final annual income. Additionally, CMS finalizes the requirement that enrollees with income inconsistencies will receive an automatic 60-day extension in addition to the 90 days currently provided to allow applicants sufficient time to provide documentation to verify household income. These changes will reduce administrative burden, increase access, and have a positive impact on health equity.
Allow Door-to-Door Enrollment by Navigators and Other Assisters
CMS finalizes a policy permitting Assisters to conduct direct door-to-door enrollment assistance to increase consumer engagement and advance health equity. Assisters currently conduct direct outreach, education, and schedule follow-up appointments, but are prohibited from providing enrollment assistance upon an initial interaction at the consumers’ residence. The prohibition on direct enrollment assistance during the first contact burdens the consumer and Assisters and creates access barriers for consumers to receive timely enrollment assistance.
Failure to File and Reconcile Process
CMS finalizes that, as of the effective date of the final rule,
Marketplaces may not determine consumers ineligible for APTC due to having failed to file a Federal income tax return and reconcile their past APTC for only one tax year. Instead,
Marketplaces will determine enrollees ineligible for APTC after a taxpayer has failed to file a Federal income tax return and reconcile their past APTC for two consecutive tax years. Notwithstanding this regulation change, the current pause on operations related to failure to file and reconcile will continue until the IRS is able to notify HHS, and HHS is able to notify the Marketplace, that a tax filer has failed to file and reconcile, which is anticipated to be for plan year 2025 eligibility determinations.
Under this change, Marketplaces on the Federal platform will continue to send notices to consumers for any year in which they have failed to reconcile APTC as an initial warning to inform and educate consumers that they need to file and reconcile or risk being determined ineligible for APTC if they fail to file and reconcile for a second consecutive tax year and CMS recommends that SBMs take similar action. CMS is making this change as a result of analysis indicating that data lags in reporting from the IRS likely cause inappropriate coverage loss. CMS believes this change will help consumers avoid gaps in coverage by increasing retention in Marketplaces and will also help protect consumers from accruing large tax liabilities over multiple years. These changes will allow Marketplaces to maintain program integrity by denying APTC to consumers who have, over the course of two years, been given notification of their obligation to file and reconcile and failed to do so. This rule does not change the requirement for consumers receiving APTC to file taxes and reconcile their tax credits received.
FFM and SBM-FP User Fees
For the 2024 benefit year, CMS is finalizing a user fee rate of 2.2% of premium for QHPs sold on the FFMs, and a user fee rate of 1.8% of premium for QHPs sold on the SBM-FPs. We anticipate these user fee rate decreases may exert downward pressure on insurance premiums for consumers.
HHS-Operated Risk Adjustment Program
For the 2024 benefit year risk adjustment models, CMS finalizes the use of 2018, 2019, and 2020 enrollee-level EDGE data for model recalibration for all coefficients, with no exceptions. Consistent with prior benefit model recalibrations, this involves the use of the three most recent consecutive years of enrollee-level EDGE data that were available for the applicable benefit year. The model coefficients for the 2024 benefit year listed in Tables 1 through 6 of the final rule are based on a blend of separately solved, equally weighted coefficients from the 2018, 2019, and 2020 benefit years of enrollee-level EDGE data for all coefficients. Using the three most recent consecutive years for recalibration of the risk adjustment models provides stability and minimizes volatility in changes to risk scores between benefit years due to differences in the dataset’s underlying populations, while reflecting the most recent years’ claims experience available. Additionally, CMS will continue to apply a market pricing adjustment to the plan liability associated with Hepatitis C drugs in the risk adjustment models for the 2024 benefit year.
CMS also finalizes, beginning with the 2023 benefit year, the proposal to collect and extract from issuers’ EDGE servers a new data element, a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) indicator, including the phased implementation approach, as well as to extract plan ID and rating area data elements issuers have submitted to their EDGE servers from certain benefit years prior to the 2021 benefit year. We also finalize a risk adjustment user fee for the 2024 benefit year of $0.21 per member per month.
Finally, we finalize repealing the ability of prior participant states to request a reduction in risk adjustment state transfers calculated by HHS under the state payment transfer formula in all state market risk pools starting with the 2025 benefit year. We also approve the request submitted by Alabama to reduce risk adjustment state transfers by 50 percent in its individual (including catastrophic and non-catastrophic risk pools) and small group markets for the 2024 benefit year.
HHS Risk Adjustment Data Validation
CMS finalizes further refinements to HHS Risk Adjustment Data Validation (HHS-RADV) to promote the goals of HHS-RADV and support the timely release of HHS-RADV results. Beginning with the 2021 benefit year of HHS-RADV, CMS finalizes no longer exempting exiting issuers from adjustments to risk scores and risk adjustment transfers when they are a negative error rate outlier in the applicable benefit year’s HHS-RADV results. Additionally, CMS finalizes changing the materiality threshold for random and targeted sampling for HHS-RADV participation from $15 million in total annual premiums Statewide to 30,000 total billable member months Statewide, beginning with the 2022 benefit year of HHS-RADV. CMS also finalizes shortening the window to confirm the findings of the Second Validation Audit (SVA) or file a discrepancy report, to within 15 calendar days of the notification by HHS, beginning with the 2022 benefit year of HHS-RADV. Further, CMS is discontinuing the use of the lifelong permanent condition list and the use of non-EDGE claims in HHS-RADV beginning with the 2022 benefit year of HHS-RADV, to better align HHS-RADV policies and the EDGE Server Business Rules used for EDGE data submissions.
Premium Adjustment Percentage and Payment Parameters
CMS issued the 2024 benefit year premium adjustment percentage, the maximum annual limitation on cost sharing, the reduced maximum annual limitation on cost sharing, and the required contribution percentage (payment parameters) in guidance on December 12, 2022, consistent with policy finalized in the 2022 Payment Notice (86 FR 24140, 24237 through 24238).
Bolstering Program Integrity
Establish Improper Payment Pre-Testing and Assessment for State Marketplaces
CMS finalizes the Improper Payment Pre-Testing and Assessment (IPPTA) program under which State Marketplaces will be required to participate in pre-audit activities that will prepare State Marketplaces for complying with the audits required under the Payment Integrity Information Act of 2019 (PIIA). CMS is extending the pre-testing and assessment period for each IPPTA group from one to two years, which will begin in either 2024 or 2025. The IPPTA will prepare State Marketplaces for the planned measurement of improper payments of APTC by testing processes and procedures that support HHS’s review of determinations of APTC made by State Marketplaces. IPPTA will also provide a mechanism for HHS and State Marketplaces to share information that will aid in developing a measurement process in future years.
Provisions Related to Agents, Brokers, or Web-brokers
CMS finalizes allowing HHS additional time to review evidence submitted by agents, brokers, or web-brokers to rebut allegations that led to suspension of their Marketplace agreement(s) or to request reconsideration of termination of their Marketplace agreement(s). HHS will have an additional 15 calendar days, or a total of up to 45 calendar days, to review evidence submitted by agents, brokers, or web-brokers to rebut allegations that led to the suspension of their Marketplace agreement(s) and notify the submitting agents, brokers, or web-brokers of HHS’ determination regarding the suspension of their Marketplace agreement(s). HHS will have an additional 30 calendar days, or a total of up to 60 calendar days, to review reconsideration requests and notify the submitting agents, brokers, or web-brokers of HHS’ reconsideration decision related to the termination of their Marketplace agreement(s). These extended review windows will be beneficial as the review process can involve parsing complex technical information and data, revisiting consumer complaints, and conducting outreach to consumers.
CMS also finalizes a requirement that agents, brokers, and web-brokers document that eligibility application information has been reviewed by and confirmed to be accurate by the consumer or the consumer’s authorized representative prior to application submission. This requirement will help with enforcement activities related to agents, brokers, and web-brokers and help expedite the adjudication of consumer complaints related to the provision of incorrect information on their eligibility applications. We are also finalizing the requirement that this documentation be retained by the agent, broker, or web-broker for a minimum 10 years and be produced upon request in response to monitoring, audit, and enforcement activities.
In addition, CMS finalizes a requirement that agents, brokers, or web-brokers document the receipt of consent from the consumer or the consumer’s authorized representative prior to providing assistance. This requirement will help with enforcement and help resolve disputes between enrolling entities and consumers, or between multiple enrolling entities. We are also finalizing the requirement that that this documentation be retained by the agent, broker, or web-broker for a minimum of 10 years and be produced upon request in response to monitoring, audit, and enforcement activities.
This communication was printed, published, or produced and disseminated at U.S. taxpayer expense.
 Assisters includes Navigators, Non-Navigator Assistance Personnel, and Certified Application Counselors (CACs).
 Available at https://www.cms.gov/files/document/2024-papi-parameters-guidance-2022-12-12.pdf
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