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CMS: Doc loss notices to cost average plan $16,000 per year

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Federal regulators are predicting that it will be quick and easy for a exchange plan issuer to let enrollees know when their provider has left the plan’s provider network.

Analysts at the Centers for Medicare & Medicaid Services (CMS) talk about the possible financial impact of a new provider network change notice requirement in a routine paperwork review filing.

CMS, an arm of the U.S. Department of Health and Human Services (HHS), runs — the system that HHS set up to handle Patient Protection and Affordable Care Act (PPACA) public exchange enrollment in states that are unable or unwilling to handle enrollment themselves.

See also: Lawmakers propose Medicare plan network stability standards

In a new regulation that sets 2017 benefit and payment parameters for PPACA mandates and programs, CMS recently created the network change notice requirements.

Starting in 2018, CMS will require a plan issuer to “make a good faith effort to provide written notice of discontinuation of a provider 30 days prior to the effective date of the change or otherwise as soon as practicable.” The issuer will have to try to send the notice to any enrollee who gets primary care from the departing provider, or who sees the departing provider on a regular basis.

The issuer can send the notice either electronically or through the mail.

CMS paperwork burden analysts estimate that about 475 issuers sell qualified health plans (QHPs) through, and that each of the QHP issuers has an average of about 7,500 providers in its network.

CMS analysts are assuming the provider loss notice team will get the information about the provider departures from the provider network contracting team.

The analysts say:

  • The average QHP network loses about 5 percent of its 7,500 providers per year, meaning that the issuer may have to send enrollees provider loss notices about 375 times per year. 

  • Sending out a batch of notices for a departing provider should take an average of about one hour of database administrator and administrative assistant time per departing issuer.

  • The average QHP issuer will use about 375 hours of staff time per year to send the provider loss notices, and that the value of the 375 hours of employee time will average about $16,000 per issuer.

CMS posted the paperwork review analysis Tuesday. Comments on whether the burden estimates are realistic are due within 30 days from the publication date.

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