Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2014

SUMMARY: This proposed rule provides further detail and parameters related to: the risk adjustment, reinsurance, and risk corridors programs; cost-sharing reductions; user fees for a Federally-facilitated Exchange; advance payments of the premium tax credit; a Federally-facilitated Small Business Health Option Program; and the medical loss ratio program. The cost-sharing reductions and advanced payments of the premium tax credit, combined with new insurance market reforms, will significantly increase the number of individuals with health insurance coverage, particularly in the individual market. The premium stabilization programs--risk adjustment, reinsurance, and risk corridors--will protect against adverse selection in the newly enrolled population. These programs, in combination with the medical loss ratio program and market reforms extending guaranteed availability (also known as guaranteed issue) protections and prohibiting the use of factors such as health status, medical history, gender, and industry of employment to set premium rates, will help to ensure that every American has access to high-quality, affordable health insurance.

EFFECTIVE DATE: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on December 31, 2012.

ADDRESSES: In commenting, please refer to file code CMS-9964-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (please choose only one of the ways listed):

1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the "Submit a comment" instructions.

2. By regular mail. You may mail written comments to the following address ONLY:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9964-P, P.O. Box 8016, Baltimore, MD 21244-8016.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments to the following address ONLY:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9964-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4. By hand or courier. Alternatively, you may deliver (by hand or courier) your written comments ONLY to the following addresses prior to the close of the comment period:

a. For delivery in Washington, DC--

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD--

Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members.

Comments erroneously mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Sharon Arnold at (301) 492-4286, Laurie McWright at (301) 492-4311, or Jeff Wu at (301) 492-4305 for general information.

Adrianne Glasgow at (410) 786-0686 for matters related to reinsurance.

Michael Cohen at (301) 492-4277 for matters related to the methodology for determining the reinsurance contribution rate and payment parameters.

Grace Arnold at (301) 492-4272 for matters related to risk adjustment, the HHS risk adjustment methodology, or the distributed data collection approach for the HHS-operated risk adjustment and reinsurance programs.

Adam Shaw at (410) 786-1091 for matters related to risk corridors.

Johanna Lauer at (301) 492-4397 for matters related to cost-sharing reductions, advance payments of the premium tax credits, or user fees.

Rex Cowdry at (301) 492-4387 for matters related to the Small Business Health Options Program.

Carol Jimenez at (301) 492-4457 for matters related to the medical loss ratio program.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to view public comments.

Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.

Table of Contents

I. Executive Summary

II. Background

III. Provisions of the Proposed HHS Notice of Benefit and Payment Parameters for 2014

A. Provisions for the State Notice of Benefit and Payment Parameters

B. Provisions and Parameters for the Permanent Risk Adjustment Program

1. Approval of State-Operated Risk Adjustment

2. Risk Adjustment User Fees

3. Overview of the Risk Adjustment Methodology HHS Would Implement When Operating Risk Adjustment on Behalf of a State

4. State Alternate Methodology

5. Risk Adjustment Data Validation

C. Provisions and Parameters for the Transitional Reinsurance Program

1. State Standards Related to the Reinsurance Program

2. Contributing Entities and Excluded Entities

3. National Contribution Rate

4. Calculation and Collection of Reinsurance Contributions

5. Eligibility for Reinsurance Payments Under Health Insurance Market Rules

6. Reinsurance Payment Parameters

7. Uniform Adjustment to Reinsurance Payments

8. Supplemental State Reinsurance Parameters

9. Allocation and Distribution of Reinsurance Contributions

10. Data Collection Standards for Reinsurance Payments

D. Provisions for the Temporary Risk Corridors Program

1. Definitions

2. Risk Corridors Establishment and Payment Methodology

3. Risk Corridors Data Requirements

4. Manner of Risk Corridor Data Collection

E. Provisions for the Advance Payment of the Premium Tax Credit and Cost-Sharing Reduction Programs

1. Exchange Responsibilities With Respect to Advance Payments of the Premium Tax Credit and Cost-Sharing Reductions

2. Exchange Functions: Certification of Qualified Health Plans

3. QHP Minimum Certification Standards Relating to Advance Payments of the Premium Tax Credit and Cost-Sharing Reductions

4. Health Insurance Issuer Responsibilities With Respect to Advance Payments of the Premium Tax Credit and Cost-Sharing Reductions

F. Provisions on User Fees for a Federally-Facilitated Exchange (FFE)

G. Distributed Data Collection for the HHS-Operated Risk Adjustment and Reinsurance Programs

1. Background

2. Issuer Data Collection and Submission Requirements

3. Risk Adjustment Data Requirements

4. Reinsurance Data Requirements

H. Small Business Health Options Program

I. Medical Loss Ratio Requirements Under the Patient Protection and Affordable Care Act

1. Treatment of Premium Stabilization Payments, and Timing of Annual MLR Reports and Distribution of Rebates

2. Deduction of Community Benefit Expenditures

3. Summary of Errors in the MLR Regulation

IV. Collection of Information Requirements

V. Response to Comments

VI. Regulatory Impact Analysis

A. Statement of Need

B. Overall Impact

C. Impact Estimates of the Payment Notice Provisions

D. Regulatory Flexibility Act

E. Unfunded Mandates

F. Federalism

G. Congressional Review Act Regulations Text

Acronyms

--This is a summary of a Federal Register article originally published on the page number listed below--

Proposed rule.

CFR Part: "45 CFR Parts 153, 155, 156, 157 and 158"

RIN Number: "RIN 0938-AR51"

Citation: "77 FR 73118"

Document Number: "CMS-9964-P"

Federal Register Page Number: "73118"

"Proposed Rules"