How will CCIIO police the PPACA risk programs?

Making the payment programs work is important to making other PPACA programs and rules work, according to officials. “These programs are designed to make insurance and health care affordable and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as market forms and exchanges begin,” officials say.

The Centers for Medicare & Medicaid Services (CMS) — an arm of the U.S. Department of Health and Human Services (HHS) — set up the Center for Consumer Information and Insurance Oversight (CCIIO) to oversee PPACA rules and programs that affect commercial health insurance. CCIIO, in turn, set up the payment policy group to police:

• The advanced premium tax credits that help moderate-income consumers pay for “qualified health plan” (QHP) coverage, or private exchange plans.
• A cost-sharing reduction program that cuts out-of-pocket costs for lower-income QHP users.
• A temporary risk corridors program that protects QHP issuers with poor underwriting results. (HHS is supposed to use a combination of insurer payments and, possibly, government money to pay for this program.)
• A reinsurance program that will protect issuers of non-grandfathered individual health insurance against enrollees who had very high claims costs in the previous year. (HHS is supposed to use insurers’ payments to pay for this program.)
• A permanent risk-adjustment program that’s supposed to use “risk scoring” to compensate insurers for covering high-risk enrollees while the year is still under way. (This program is supposed to send cash from plans with low-risk enrollees to plans with high-risk enrollees.)

The risk corridors, reinsurance and risk-adjustment programs are known as the “three R’s” risk-management programs.

The payment policy group will help with running the risk-adjustment program by identifying all issuers required to participate in the program, working with state insurance departments to get data out of insurers, and validating the data the insurers submit, officials say. Similarly, the group will help get data and payments out of insurers for the reinsurance program.