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The 2020 Final Payment Notice, Part 1: Insurer and Exchange Provisions

On April 18, 2019, the Centers for Medicare and Medicaid Services (CMS) released its final 2020 Notice of Benefit and Payment Parameters rule. The final rule was accompanied by a fact sheet, the final letter to insurers in the federal marketplace, and key dates for the calendar year 2019.

This is the latest that a payment rule has ever been finalized. From here, insurers can develop their products for 2020 and get these products reviewed and approved by state regulators or CMS.

The complexity of rules changes requires almost one year to process. The process if nothing else traces a route through providers, hospitals, and patients.  There is a public commentary period.

Overall, CMS made very few major changes from its proposed rule, which was released on January 17. Where the final rule deviates from the proposed rule, CMS mostly opted not to implement certain proposed changes. The final rule does not, for instance, require the sale of “mirror” abortion plans, adopt many significant changes to prescription drug standards, or allow navigators and other assisters to use web broker websites. In terms of significant changes that were adopted, the final rule allows insurers to adopt accumulator adjustment programs in limited circumstances and maintains an increase in the 2020 premium adjustment percentage as proposed. The latter is described as a “technical” change to the methodology that will result in higher consumer costs, reduced access to premium tax credits, and more uninsured people.

There were more than 26,000 comments on the proposed rule, about 500 of which were unique. Most of the remaining 25,000 comments were like one of eight different letters and focused on the rule’s abortion coverage proposal. This post addresses final changes in plan benefits, eligibility, and enrollment changes. A second post will consider the final changes to the risk adjustment program.

The “payment notice” is issued on an annual basis to adopt a variety of major changes that CMS intends to implement for the next plan year in areas such as the marketplaces, the risk adjustment program, and the market reforms. Historically, the payment rule has been issued in early fall and finalized in early spring (typically late February or early March) to give insurers, states, and other stakeholders time to understand the rules for the next year as new products are developed and approved for sale. 

This is the latest that a payment rule has been finalized and reduces the window of time for insurers and state regulators or CMS to develop, adjust, review, and approve plans for 2020. This delay notwithstanding, CMS did not alter its timeline for qualified health plan (QHP) certification for 2020: insurers must submit their 2020 QHPs  to CMS by June 19, 2019, for approval. CMS has already released its final rate filing timeline for 2020.

Much of the rule is devoted to changes regarding direct enrollment and risk adjustment, but the 401-page final rule addresses the following topics:

Changes in plan benefits and qualified health plan provisions;
Eligibility and enrollment changes, such as a new special enrollment period, changes to navigator requirements, and new standards for direct enrollment;
The 2020 payment parameters, such as the federal exchange user fee, annual limits on cost-sharing, and a new way of determining premium growth; and
Changes to the risk adjustment program.

In 2018 large increases were prevented by "silver loading" premiums.  How 'silver-loading' helped save the ACA's exchanges in 2018

In contrast to the 2019 payment rule, CMS proposes very few changes regarding the essential health benefits (EHB) and plan design. For 2019, CMS allowed states to choose from among many more EHB-benchmark plan options on an annual basis, deferred additional responsibility to state regulators, and eliminated standardized plan options and meaningful difference standards, among other changes. The 2020 final rule maintains these changes and makes no additional changes beyond laying out new timelines and providing additional background on discriminatory benefit design.

Toll-Free Hotline for SHOPs
The final rule includes a very minor change to the SHOP program. This is because the 2019 payment rule (and guidance before that) essentially wound down the SHOP exchanges after CMS concluded it is no longer cost-effective for the federal government to maintain a SHOP website and functionality. Thus, small employers no longer enroll using the SHOP platform and, instead, enroll through a SHOP-registered agent or broker or directly with an insurer.

CMS did, however, retain some SHOP standards, including a requirement that SHOPs continue to provide a call center to answer SHOP-related questions. Noting that SHOP call center volume has been extremely low, CMS will allow “leaner” SHOPs to operate a toll-free hotline in lieu of a call center. (CMS explained the difference between a hotline and a call center in the 2017 payment rule.) The toll-free hotline must allow for automated messages, pre-recorded responses to common questions, ways to reach local agents and brokers, and the option to leave a message.

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