State insurance regulators are growling at the rules the Centers for Medicare & Medicaid Services (CMS) has proposed for commercial health insurance benefits and rate rules for 2017.
Monica Lindeen, the president of the National Association of Insurance Commissioners (NAIC), and other top NAIC leaders have described their concerns in a comment letter sent to CMS and posted on the NAIC website.
CMS officials drafted the rules to implement major provisions of the Patient Protection and Affordable Care Act (PPACA). Some apply only to the HealthCare.gov public exchange system. Others apply to both the HealthCare.gov system and state-based exchanges, and others apply solely to off-exchange coverage, or to all coverage subject to the PPACA rules.
The NAIC officials have expressed horror about many of the CMS proposals, and about a sense that officials at CMS and the other key PPACA implementation agencies, the Internal Revenue Service (IRS) and the Employee Benefits Security Administration (ERISA), are continuing to fail to understand and respond to state insurance regulators’ advice.
“We are also concerned about the growing interference of the federal agencies into the oversight of health insurance plans and producers,” officials say.
The proposed rules would affect many different areas of state insurance regulation, including rate review processes, student health plan regulation, and state benefits mandates, officials say.
The officials are objecting strongly, for example, to an annual eligibility redetermination provision that would authorize exchanges to shift customers into new plans automatically, to help them continue to get the lowest out-of-pocket premium bills.
“Changing plans can result in significant changes in networks, formularies and cost-sharing,” NAIC officials say in the letter. “While a consumer may think it is a good idea to allow such changes to be made to make sure they have the lowest-cost plan, state regulators know this should not be the primary goal in all cases.”
The officials are also objecting strongly to a lack of rules in some areas, such as eligibility for special enrollment periods (SEPs), or moves to apply for major medical coverage outside of the enrollment calendar system regulators set up to keep consumers from waiting until they get sick to pay for coverage.
CMS has not yet set any documentation rules for some types of SEPs, such as SEPs related to domestic violence, and some SEP rules seem to reward consumers for gaming the system, officials say.
“There are instances where consumers have missed the open enrollment period and then applied for Medicaid and know that they will be rejected so that they can apply for private coverage under the SEP,” officials say. “We also know of many cases where individuals with serious medical conditions purchased coverage mid-year by simply checking the right box or using the right language, and their eligibility was not questioned.”
For a look at three other 2017 PPACA rules issues that got on NAIC officials’ nerves — including one that affects how HealthCare.gov governs insurance agents and brokers — read on.
1. The NAIC wishes CMS had given it more to think about the proposed 2017 rules.
CMS published the 381-page draft of the PPACA rules in the Federal Register on Dec. 2. They set Dec. 21 as the deadline for public comments.
NAIC officials have complained about unrealistic CMS deadlines, and what NAIC officials view as unreasonable CMS resistance to taking NAIC advice, in connection with efforts to develop a new PPACA Summary of Benefits and Coverage (SBC) template and some other PPACA regulations and guidelines.
In the comment letter on the 2017 draft rules, officials say CMS should have provided a comment period of at least 60 days.
“The draft notice includes hundreds of policy and process changes that must be carefully considered not only for their own merits, but also for their impact on other regulations,” officials say.
Officials note the regulations include complicated provisions relating to exchange plan issuer solvency, and the mechanics of how the PPACA reinsurance, PPACA risk adjustment and PPACA risk corridors programs will work.
Regulators need more time to think about those changes, officials say.
2. The NAIC thinks the proposed CMS provider network adequacy rules would backfire.
The NAIC and the National Conference of Insurance Legislators (NCOIL) have been working on their own network adequacy standards, and NAIC officials say the network adequacy provisions included in the CMS proposed rules fail to reflect the input from interested parties that helped shape the NAIC proposal.
The CMS proposal would create a one-size-fits-all standard that will not work in some states, officials say.
Officials say a balance billing provision in the CMS proposal, which would govern the rules that apply when the amount a provider wants to charge a patient is greater than the amount a plan is willing to pay, “falls short.”
The CMS balance billing proposal “would actually encourage providers not to contract with carriers,” officials say. “We urge you to withdraw the proposal and allow states to act.”
See also: Provider network storm gains strength
3. The NAIC thinks the proposed CMS approach to handling HealthCare.gov agent and broker misconduct would be unfair.
A major section of the draft of CMS 2017 rules would let HealthCare.gov pull the exchange certification for 90 days of any exchange agent or broker accused of wrongdoing.
The current CMS proposal would let the exchange system withdraw agent/broker certification for, roughly, the entirety of the exchange open enrollment period without providing due process for the agent/brokers, NAIC officials say.
“We object to the provisions in the draft notice that would establish a separate federal system of oversight and discipline,” NAIC officials say. ”There is also no mention of the state regulators being notified of any suspicions or federal disciplinary actions,” officials say.
If HealthCare.gov has concerns about a producer, it should forward the complaints to state regulators, officials say.
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