The Centers for Medicare and Medicaid Services has issued a final rule that promotes the adoption of insurance plan benefit design for insurers to offer lower premiums.
The final Notice of Benefit and Payment Parameters for the 2021 benefit year contains several provisions intended to promote affordable insurance coverage, CMS said.
For example, under such a design, an issuer can offer a plan that provides high-value services, such as blood pressure monitoring or cardiac rehabilitation, with zero cost sharing. The rule also makes it easier for plans in the individual market to offer wellness incentives to enrollees by recognizing certain incentives as quality improvement activities.
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In addition, the final rule maintains the lower user fee rates set in the 2020 payment notice for issuers participating in the federal exchanges. Federal and state-based user fees for the 2021 benefit year will be maintained at 3% of premium and 2.5% of premium, respectively.
The savings to insurers are intended to be passed on to consumers in lower premiums, CMS said.
In response to the coronavirus pandemic, CMS is also announcing a one-week extension for plans to finalize 2021 exchange plan applications, giving them additional time to analyze the effect of COVID-19 in setting premiums.
The rule also includes provisions aimed at improving consumer access to health coverage. Special enrollment periods will allow consumers to make their coverage effective sooner starting in January 2022. For example, plans can shorten the time between a plan's selection and its start date.
For state-based exchanges that operate their own eligibility and enrollment platforms, CMS is offering greater flexibility to customize information for consumers by either displaying quality-rating data provided by the agency or quality-rating data from their state.
In addition, the rule strengthens policy around the annual reporting of state-required benefits that are mandated in addition to essential health benefits.
Finally, the rule takes a number of steps to improve program integrity and safeguard taxpayer dollars, including finalizing enhancements to the periodic data-matching processes to reduce the risk of incorrect advance payments of the premium tax credit payments to enrollees determined to be deceased or dually enrolled in Medicare.
CMS issued the Final 2021 Annual Letter to Issuers which provides guidance to issuers that want to offer qualified health plans on a federally-facilitated exchange. It also issued the final key-dates calendar for the 2020 calendar year and the revised rate review bulletin.
WHY THIS MATTERS
Value-based insurance plan design empowers consumers to receive high-value services at lower costs, CMS said.
Offering a value-based plan is voluntary, and these plans will not be preferentially displayed on HealthCare.gov.
Issuers will have flexibility in adopting some, all or none of the value-based cost-sharing designs detailed in the rule.
REBATES AND MEDICAL LOSS RATIOS
CMS finalized changes to the policy regarding how direct drug-manufacturer support, including coupons, may accrue towards the annual limitation on cost sharing. This is in response to stakeholder feedback indicating confusion about the regulatory requirement finalized in the 2020 payment notice.
CMS is allowing insurers to exclude drug manufacturer coupons from counting towards a member's out-of-pocket limit. Issuers will be permitted, but not required, to count toward the annual limitation on cost-sharing amounts paid toward reducing out-of-pocket costs using any form of direct support offered by drug manufacturers to enrollees for specific prescription drugs.
CMS also finalized amendments to the medical loss ratio regulations to require issuers to deduct from incurred claims not only prescription-drug rebates received, but also any price concessions by pharmacy benefit managers beginning with the 2022 MLR reporting year.
Insurers must report prescription drug rebates and other price concessions from an entity providing pharmacy benefit management services as non-claims costs.
CMS further clarified that issuers must report expenses for outsourced services in the same manner as expenses for non-outsourced services. These changes will help lower premiums by helping ensure that consumers' premiums reflect the full benefit of prescription drug rebates and are not artificially inflated by outsourcing expenses, CMS said.
CMS also amended the MLR regulations to explicitly allow issuers to report certain wellness incentives as quality improvement activities in the individual market for medical loss ratio reporting and calculation purposes.
THE LARGER TREND
On March 27, CMS issued a bulletin for single risk pool coverage effective January 1, 2021.
This revised bulletin amends some of the submission deadlines.
ON THE RECORD
"When the Trump Administration took office, the individual market was in crisis. Premiums had doubled and even tripled in some states, and choices had plummeted as issuers fled the market. Our policies delivered a sorely needed course correction, prioritizing competition and flexibility over prescriptiveness. The result was lower premiums and more options. Today's rule delivers more of the same, and American consumers will continue to reap the benefits," said CMS Administrator Seema Verma.
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