Exchange-Sold Health Plans

January 18, 2016
On December 23rd, the Centers for Medicare and Medicaid Services (CMS) issued its draft 2017 Letter to Issuers in the Federally-facilitated Marketplaces, laying out the Agency’s intended requirements for plans sold on the federal health insurance exchange (healthcare.gov) established by the Affordable Care Act (ACA). CMS, the agency empowered by the ACA to oversee the health insurance exchanges, is accepting public comments on this letter through January 17th.  

This letter is a follow up to a recent proposed rule for plans sold on the exchanges in 2017.

Most of the document outlines technical, insurer-specific provisions such as the dates for the different steps in the plan and rate approval process. However, the letter does contain various substantive provisions of note. For example, the letter details the administration’s recently proposed ―standardized option to be offered on the exchanges. 

This new plan option would be an optional addition for each insurer to their plan offerings.

Under this new provision, insurers would offer a standardized plan option at each metal level that would be standardized in terms of in-network cost sharing, network make up, and premiums. Standardized Plan Options could easily be featured on the exchange websites for consumers to select. 

As usual, the letter discusses the network adequacy standards for plans in the upcoming plan year. As stated in its proposed rule, CMS will essentially defer to each state’s network adequacy standards as long as they approve of each state’s ―quantifiable network adequacy metric which must be a commonly used metric by the health insurance industry. Two metrics listed in the letter as an example include are: 



  • The State prospectively enforces time and distance standards at least as stringent as the FFM standard. This metric is elaborated on in the draft letter by specialty and type of demographic area (i.e. Large, Metro, Micro, Rural, and CEAC). 
  • The State prospectively verifies a minimum provider to covered person ratio for the specialties with the highest utilization rate for its State. 


The letter also describes the provision from the proposed rule on network communication when a provider leaves a network. CMS is proposing to require plans to provide consumers with written notice (30 days or as soon as practicable) if a provider who is seen by the beneficiary on a regular basis or provides primary care to that beneficiary is leaving the network. If plans fail to provide such notice, they would be required to allow the beneficiary to continue seeing that provider for the continuation of a course of treatment for 90 days or until the treatment is complete (whichever is shorter) as if it were an in-network visit. This would only apply for cases where the beneficiary is in active treatment. 


Additionally, plans would have to provide beneficiaries with at least 10 days written notice for certain cases where the beneficiary could receive out-of-network care for an essential health benefit at an in-network facility. Failure to provide such notice would result in the plan having to consider the cost sharing for that out-ofnetwork service(s) as in-network cost-sharing that counts towards the beneficiary’s deductible and annual limitation on cost sharing. 

CMS announces in the letter that the agency intends to label each QHP network’s breadth as compared to other QHP networks on HealthCare.gov. This information will be available to consumers when they are considering which plan to enroll in, and would include a designation that indicates the network’s relative breadth based on the number of specific providers and facilities that are highly utilized by consumers in that market. The purpose of the labeling is to provide transparency to enrollees about the type of coverage they are selecting. 

The proposed rule and draft letter also discuss altering some of the out-of-network cost sharing requirements. Currently, cost sharing for out-of-network services does not count towards a patient’s deductible and corresponding annual limitation on out-of-pocket spending. Only in-network cost-sharing counts this way. For 2017, CMS intends to allow out-of-network cost sharing on essential health benefits (EHB) count towards their deductible as if it was in-network spending. 

CMS also intends to update its requirements for Essential Community Providers (ECP), strengthening standards for ensuring plans sold by the same insurer are meaningfully different from each other, and requiring insurers to accept third party premium payments from federal, state and local government programs. The letter also outlines how CMS intends to regulate decision support tools used to help consumers select plans such as provider directory links and provider look up tools, formulary prescription drug coverage lists which describe cost-sharing tiers, and out-of-pocket cost comparison tools. 

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