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What if you disagree with an exchange?

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The Centers for Medicare & Medicaid Services (CMS) has released draft regulations that could govern disputes involving the new health insurance exchanges.

The draft regulations, “Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes for Medicaid and Exchange Eligibility Appeals, etc.” (CMS-2334-P), are set to appear in the Federal Register Jan. 22.

Comments are due Feb. 13.

The packet in a nutshell
Two major sections of the draft regulations cover the benefits that state Medicaid plans would offer, and how exchanges would work together with state Medicaid and Children’s Health Insurance Program (CHIP) plans.

CMS — an arm of the U.S. Department of Health and Human Services (HHS) — proposes, for example, that it would create a new category of advisors, ” Certified Application Counselors” (CACs), to help low-income consumers sign up for Medicaid and CHIP plans.

The application counselors would provide “the same core application assistance service that is also available directly through the exchange,” and through independent exchange ombudsmen to be known as “Navigators.”

The application counselors also would provide services similar to the services provided by licensed agents and brokers, officials said in the preamble to the proposed regulations.

“The distinction between these entities is that application counselors are not funded through the exchange, through grants or directly, or licensed by states as agents or brokers,” officials said. “We believe that this separate class of application counselors is important to ensure that skilled application assistance is available from entities like community health centers and community-based organizations that may not fit in to the other categories.”

For the commercial health insurance market, the section with the most impact may be a section that would establish dispute resolution systems both for users of exchanges that serve individuals and the Small Business Health Options Program (SHOP) exchanges that serve small businesses.

The Patient Protection and Affordable Care Act of 2010 (PPACA) requires state and federal agencies to make exchanges, or health insurance supermarkets, available to individuals and small groups by Oct. 1, with the coverage sold through the exchanges set to take effect by Jan. 1, 2014.

PPACA opponents continue to try to kill or block the law.

If the law takes effect on schedule and works as drafters expect, individuals who are completely uninsured may be able to sign up for Medicaid coverage or CHIP plan coverage through an exchange. Low-income and moderate-income uninsured individuals may be able to get free coverage, discounts on coverage and out-of-pocket costs, and tax credits they can use to help pay for coverage.

Individuals with access to group health plans may still be able to enroll in government health programs, or get subsidies they can use to buy coverage through an exchange, if they can show that the employee’s share of the premiums for bare-bones, “Bronze level” coverage exceeds 9.5 percent of their family income.

A large employer is supposed to pay a penalty if it offers no health coverage and its workers end up using an exchange, or a worker uses an exchange and the employer provides coverage designed in such a way that the worker’s share of the cost of Bronze-level, worker-only coverage exceeds 9.5 percent of the worker’s W-2 pay from that employer.

PPACA lets states choose whether to run their own exchange programs or turn the job over to HHS.

HHS officials say they have tried to set flexible rules for the states that run their own exchanges.

Exchange appeals programs
CMS officials said in the preamble to the proposed regulations that states could decide whether to create internal review and appeals programs and how to structure the programs.

The appeals system could be part of the exchange or part of another state entity.

If a state had no exchange, or no exchange appeals system, appeals would go directly to HHS, officials said.

Even if a state had an appeals system, individuals or employer could appeal final state system decisions to HHS, officials said.

For individual consumers, an exchange would have to set up appeal-handling agreements with Medicaid, CHIP and other entities involved in appeals.

An exchange would have to take appeal requests from individuals over the telephone, via e-mail, via the Internet, and, when possible, through in-person office visits, officials said.

Individuals could be eligible for expedited appeals in some cases, and they would remain eligible for benefits in some cases while appeals were under way.

An employer might file appeals if an exchange determined that an employer was offering no benefits, or skimpy benefits, and the employer would have to pay a tax penalty because a worker was getting coverage through an exchage.

The entity in charge of employer appeals would have to consider cases “de novo” – from scratch, officials said.

Exchange coverage determinations and Internal Revenue Service penalty determinations might be different, officials noted.

“Our goal is to work closely with the IRS to educate and develop notices that help employers understand their potential tax liabilities and the consequences of a successful appeal,” officials said. “We seek comment on these provisions.”

CMS is still thinking about how to design employer appeal options, officials said.

CMS did not set specific appeal turnaround times for SHOP exchanges, because it wants to give the exchanges flexibility, but it does want the SHOP exchanges to handle appeals promptly, officials said. 

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