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Feds toughen CO-OP plan reporting rules

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The Centers for Medicare & Medicaid Services (CMS) seem to be taking a stern approach to requiring Consumer Operated and Oriented Plan (CO-OP) insurers to shift to a monthly reporting schedule.

See also: CMS updates CO-OP paperwork packet

Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the nonprofit, member-owned plans in an effort to increase the level of competition in state individual and small-group health insurance markets.

The insurers cannot raise money by selling stock or getting support from existing health insurers and, at least, one has collapsed.

See also: Guaranty funds start paying CoOportunity claims

CO-OPs have been reporting their results every quarter.

CMS, an arm of the U.S. Department of Health and Human Services (HHS), recently began putting the shift to a monthly reporting schedule through a routine paperview review process.

Federal agencies add and change many reporting processes without getting any comments.

For the CO-OP reporting frequency change, CMS received comments from Meredith Johnson of Health Republic Insurance of Oregon and Jeff Kerscher of InHealth Mutual of Ohio. Both sent their comments to Nicole Gordon, a CMS official.

Johnson said the increase in reporting frequency would be expensive for CO-OPs that use outside actuaries, and that the proposed end-of-the-month reporting dates would conflict with National Association of Insurance Commissioners (NAIC) filing dates.

Johnson asked CMS to consider reducing the number of extra reports that CO-OPs need to file, and at least adjusting the deadlines to reduce overload.

Kerscher suggested that life would be easier for CO-OPs if CMS would at least let CO-OPs format the reports in a vertical format that would fit on one ordinary typewriter page, rather than in a horizontal format.

CMS did agree to adjust the filing deadlines to reduce CO-OP overload. The due dates for the quarterly submission of pro forma financial statements will now be 30 days following the NAIC filing due dates.

But CMS declined to reduce the filing frequency.

“CMS has often observed a high level of variability in CO-OP performance relative to projections from quarter to quarter,” CMS officials write in their response. “Given this variability, a more frequent collection of the pro forma financial statement is necessary for CMS to actively monitor each CO-OP’s financial viability and sustainability.”

See also: More states license CO-OPs

CMS also rejected the request for letting CO-OPs shift to a vertical reporting format. CMS’ officials said they want to keep the new data reporting format consistent with the old format.