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CMS schedules PPACA risk-adjustment clash

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The Centers for Medicare & Medicaid Services (CMS) is gearing up for what could be a fierce battle over future rules for the Patient Protection and Affordable Care Act (PPACA) risk-adjustment program.

CMS, an arm of the U.S. Department of Health and Human Services (HHS), says it will publish a white paper on possible risk-adjustment methods in the next few months and holding a meeting on the topic in Baltimore on March 25. [After press time, CMS pushed the date back to March 31.]

CMS is preparing to publish a meeting notice in the Federal Register Monday.

The meeting will let insurers, states and other interested parties discuss the contents of the white paper, CMS officials say in the notice.

“This meeting will also provide an opportunity for participants to ask clarifying questions,” officials say. “The comments and information HHS obtains through this meeting may be used in future policy making for the HHS risk-adjustment program.”

See also: UnitedHealth Says N.Y. PPACA risk-adjustment program could be in trouble

Participants can either go to Baltimore or appear via a webinar system. An organization can send two representatives to the in-person meeting or have three representatives logging into the webinar.

CMS is registering the organizations that want to participate on a first-come, first-serve basis.

The registration deadline is March 18 for in-person participants and March 23 for webinar participants. 

The in-person version of the meeting “will be held in a federal government building,” officials say. “Therefore, federal security measures are applicable.” 

An in-person meeting attendee will have to show government-issued photographic ID to the guards and allow guards to inspect the interior and trunk of any vehicle the attendee parks on the grounds.

The PPACA risk-adjustment program is one of the three “3 R’s” PPACA risk management programs. A temporary PPACA reinsurance program is supposed to use cash from a broad fee to help insurers cover the costs of individual coverage enrollees with catastrophic claims in 2014, 2015 and 2016.

And a temporary PPACA risk corridors program is supposed to use cash from PPACA public exchange plan issuers with thriving operations in 2014, 2015 and 2016 to help issuers with disappointing results for those years.

The risk-adjustment program is supposed to be a permanent part of the PPACA commercial health insurance system. It’s supposed to assign a health risk score to each health plan enrollee. Plans with enrollees with low risk scores are supposed to send cash to plans with high risk scores.

PPACA now forbids individual major medical coverage issuers from using personal health factors other than location in decisions on whether to issue coverage, and it forbids issuers from using health factors other than location, age and, in some states tobacco use, when setting prices.

The risk-adjustment program is supposed to help insurers offer coverage without worrying about applicants’ health status, and it’s supposed to encourage them to develop effective condition management programs, by letting them get and keep more money when enrollees who appear to be high risk have low medical claims costs.

CMS already runs a risk-adjustment program for the Medicare Advantage and Medicare Part D prescription drug plan market. The issuers in that program send cash to CMS, and CMS distributes adjustment payments. In the Medicare plan market, one CMS concern has been the possibility that some coverage issuers may be trying to game the system by making enrollees look sicker than they really are.

In the PPACA risk-adjustment program, the issuers in each state’s market put in the cash that helps the other issuers in that state. In that program, questions have come up about what issuers should do when they believe competitors have misrepresented enrollees’ risk scores, and what remedies issuers have when some competitors either leave a specific market, or shut down entirely.

See also:

PPACA World: Legal work heats up

How sick is everyone? A vast PPACA tracking system takes shape

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