American Physical Therapy Association Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, Dec. 25 -- Sharon L. Dunn, president of the American Physical Therapy Association, Alexandria, Virginia, has issued a public comment on the Centers for Medicare and Medicaid Services proposed rule entitled "Patient Protection and Affordable Care Act: HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards". The comment was written on Dec. 22, 2020, and posted on Dec. 23, 2020:

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On behalf of our more than 100,000 member physical therapists, physical therapist assistants, and students of physical therapy, the American Physical Therapy Association appreciates the opportunity to submit comments in response to the US Department of Health and Human Services' and US Department of Treasury's Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards; Updates To State Innovation Waiver (Section 1332 Waiver) Implementing Regulations.

APTA is dedicated to building a community that advances the physical therapy profession to improve the health of society. As experts in rehabilitation, prehabilitation, and habilitation, physical therapists play a unique role in society in prevention, wellness, fitness, health promotion, and management of disease and disability for individuals across the age span, helping individuals improve overall health and prevent the need for avoidable health care services.

Physical therapists' roles include education, direct intervention, research, advocacy, and collaborative consultation. These roles are essential to the profession's vision of transforming society by optimizing movement to improve the human experience.

APTA is committed to advancing the safety and quality of health care and is eager to work collaboratively with the departments and states to promote access to affordable comprehensive health coverage for all Americans. While APTA supports affording greater flexibility to states in implementing the Patient Protection and Affordable Care Act, we urge the departments to maintain the important consumer protections that are central to the intent of the law.

State Exchange Direct Enrollment Options

APTA opposes the proposal to allow a state using the federally facilitated exchange, a state-based exchange that uses the federal platform, or a state-based exchange to elect a new exchange direct enrollment option by which they can request to allow private sector entities, including qualified health plans issuers, web brokers, agents and brokers, to operate enrollment pathways in lieu of using a centralized, exchange-run website. Under this proposal, private entities, often with a financial stake in which plan a consumer selects, would be operating the enrollment pathways where consumers would shop, select a plan, and enroll in coverage. While the exchange would ultimately be responsible for important decisions on whether an applicant is eligible for Qualified Health Plans, advanced premium tax credits, and cost-sharing reductions, private sector-operated websites would ultimately control what a consumer sees and considers when selecting a plan.

While APTA supports increasing options for consumers to enroll in coverage, such as exchange direct enrollment, we strongly encourage the departments to withdraw this proposal and require all states to maintain healthcare.gov or a state-based exchange. A neutral, nonprofit marketplace is the most reliable and consumer-friendly way to purchase health coverage. The majority of consumers use a centralized enrollment system such as healthcare.gov or a state-based exchange to enroll and will be expecting to continue to do so to maintain their coverage. Eliminating the use of HealthCare.gov and replacing it with a decentralized enrollment system of web brokers and insurers will not only cause considerable consumer confusion but may also lead to consumers making poor decisions on their health coverage. Because there will be no "apples to apples" comparison provided by a neutral source, consumers will be forced to do considerably more research to ensure that they are making an informed choice.

Exchange direct enrollment entities will be incentivized to promote plans for which they receive a commission, or, in the case of insurers, their own plans, and limit promotion of direct competitors.

Additionally, many consumers will be steered away from comprehensive health coverage and toward misleadingly cheap and dangerously inadequate short-term limited duration insurance, which does not qualify for subsidies and does not have to meet the consumer protection requirements of the ACA. Many consumers may not even know other options exist.

Furthermore, direct enrollment in one form or another has been in operation for years but has not decreased the uninsured rate. Considering the great risk of harm to consumers and the low likelihood of any measurable benefit, we recommend that this proposal be dropped.

Reducing the User Fee

The proposed rule would cut the federal marketplace user fee by 25 percent, from 3 percent to 2.25 percent and would cut the user fee for state-based marketplaces that use the federal platform from 2.5 percent to 1.75 percent. We oppose this provision. The marketplace user fee ― a fixed percentage of premium revenue paid by insurers ― supports critical functions, including the operation and improvement of the HealthCare.gov website, the Marketplace call center, the Navigator program, consumer outreach, and advertising.

APTA cannot support further reductions in marketplace funding. The proposed rule's rationale for the cut is that the lower user fee would be sufficient to fund current marketplace activities. But current activities are inadequate. Under the current Administration, CMS has virtually ceased marketing and outreach and has slashed funding for Navigators, core marketplace functions funded by user fees. Rather than cutting the user fee, it should be increased to 3.5 percent (the level in effect prior to 2020) to restore outreach and enrollment assistance programs and to fund continued improvements to HealthCare.gov, including technological enhancements and improved customer service.

Section 1332 Application, Monitoring and Compliance, and Periodic Evaluations

APTA also opposes the incorporation of section 1332 guidance, published in the Federal Register in 2018 (83 FR 53575), in existing regulations governing section 1332 waiver application procedures, monitoring and compliance, and periodic evaluation requirements. APTA opposed this guidance when it was first issued and continues to believe it is a misinterpretation of the ACA's statutory requirements, and it potentially endangers consumers' ability to obtain and afford comprehensive health coverage, as outlined below.

Statutory Requirements

Section 1332 of the ACA, as codified in 42 U.S.C. Sec. 18052, permits states to apply for State Innovation Waivers in order to implement innovative programs that may not meet all of the specific requirements of the ACA but still achieve the same end: providing Americans with comprehensive, affordable coverage.

Accordingly, the statute establishes clear and strict standards for those waivers. Per 42 U.S. Code Sec. 18052(1)(B), states are required to provide a comprehensive description of how their waiver meets the requirements laid out in 42 U.S. Code Sec. 18052(a)(2). Those requirements include the most basic protections and requirements of the ACA, including the establishment of qualified health plans (Secs. 18021 to 18024); consumer choices and insurance competition through health benefit exchanges (Secs. 18031 to 18033); reduced cost-sharing for individuals enrolling in qualified health plans (42 U.S. Code Sec. 18071); refundable credit for coverage under a qualified health plan (26 U.S. Code Sec. 36B); and the requirement to maintain minimum essential coverage (26 U.S. Code Sec. 5000A). As these provisions are requirements of Section 1332, they may not be waived, and the Secretary of HHS is prohibited from approving any waiver application that violates these requirements.

The statute further imposes ACA protections on waiver programs by limiting the HHS Secretary's power to approve a state's application. In addition to enforcing the ACA, as is the constitutional obligation of the Secretary, the statute mandates that a waiver be approved only if additional statutory criteria are met (42 U.S. Code Sec. 18052(b)(1)). Waiver programs must provide coverage that is at least as comprehensive in its benefit structure and at least as affordable in its cost-sharing and out-of-pocket costs; they also must cover at least a comparable number of residents, all while not increasing the federal deficit (42 U.S. Code Sec. 18052(b)(1)(A)-(D)). These requirements are intended to be taken together to ensure that state residents receive affordable, comprehensive coverage.

Out of Pocket Costs

The proposed rule also continues the Administration's 2019 change in the formula used to calculate premium tax credits, which cut financial assistance for millions of people. If continued, the formula change will have an even greater impact in 2022, raising premiums by an estimated 4.7 percent for most subsidized marketplace consumers after accounting for their tax credits (compared to about 2.7 percent this year). That amounts to a $360 annual premium increase for a family of four with $80,000 in income.

The same formula change also increases the limit on consumers' total out-of-pocket expenses, which applies to both marketplace and employer plans. In 2022, that limit will be $400 higher for an individual, and $800 higher for families, than if the 2019 change were reversed. Accordingly, APTA strongly encourages the Departments to revise this formula.

2018 Guidance "State Relief and Empowerment Waivers"

The 2018 guidance issued by the departments, now incorporated by reference into the 2022 notice, encourages states to implement and seek funding for programs not in compliance with Section 1332.

While APTA appreciates the desire to grant states the flexibility needed to regulate their own market to the benefit of each state's residents, the 2018 guidance not only failed has in this regard, but also forces consumers to choose between robust coverage that is not financially feasible or affordable or "skinny" health insurance with limited benefits that subject consumers to major, unpredictable financial risk to address their health care needs. For the following reasons, we encourage the departments to reexamine this guidance.

Comprehensiveness and Affordability

Availability Standard

The departments indicated that they now consider the criteria on comprehensiveness and affordability met if access to coverage that is as affordable and comprehensive as coverage forecasted to have been available in the absence of the waiver is projected to be available to a comparable number of people under the waiver. The intent of the ACA is not to make coverage available, but to provide actual coverage to Americans who need it. As such, 1332 waivers are intended and statutorily designed to allow states to implement innovative programs that achieve the same objectives as does the ACA. Using the availability standard undermines the legislative intent of the ACA and of Section 1332, creating a gaping loophole for states to skirt and undercut statutory requirements.

Furthermore, the availability standard fails to account for the fact that the number of people actually covered is directly and inseparably tied to the affordability of the plans available due to the single-risk pool, which is the foundation of the ACA. Insurers price their plans based on the number of consumers who will actually enroll, not the number of consumers who have the option to enroll. Measuring availability is a nebulous and speculative endeavor, as opposed to an actual head count of Americans who have comprehensive health care. The departments cannot accurately predict the market effects of the waiver if they measure availability while insurers measure actual enrollment. Accordingly, although a waiver may appear to be successful in its initial year, the miscalculation of availability of coverage versus purchased coverage has the potential to cause adverse selection in the marketplace, leading to extremely unaffordable comprehensive coverage in subsequent years.

Number of State Residents Covered (Coverage)

An additional criterion of the statute is that coverage must be provided to at least as many residents as would be covered absent the waiver. Under the new guidance, states will be permitted to provide access to less-comprehensive coverage as an option. We recognize that the goal is to enable state flexibility and to promote choice of a wide range of coverage for consumers. It is concerning, however, that previously when comprehensiveness and affordability were measured, coverage equated to ACA-compliant marketplace plans. Now when calculating the number of persons actually covered, plans not subject to ACA requirements are included.

For example, under the new guidance, consumers who purchase short-term limited-duration insurance would be counted as covered. This type of insurance is subject to none of the protections of the ACA, such as preexisting condition coverage, essential health benefits, single-risk pool pricing, cost-sharing protections, guaranteed availability of coverage, guaranteed renewability, and protections on sudden cancellations -- all of which are required for a plan to meet the comprehensiveness standard. The departments are picking and choosing which plans to measure and where to measure them in order to undermine the protections of the ACA.

2018 Section 1332 State Relief and Empowerment Waiver Concepts Discussion Paper

In November 2018, the Centers for Medicare & Medicaid Services issued a discussion paper intended to foster discussion with states by illustrating how states might take advantage of new flexibilities provided in the 2018 guidance. In particular, CMS offered four waiver concepts for states to consider.

State-Specific Premium Assistance

Under the first option, states are encouraged to develop a new state subsidy structure that changes the distribution of subsidy funds from that of the current premium tax credit structure. A state may design a subsidy structure that meets the unique needs of its population in order to provide more affordable health care options to a broader range of individuals in their state or to address structural issues that create perverse incentives, such as the subsidy cliff. APTA supports this framework generally if certain consumer protection assurances are met.

As has been previously discussed, APTA supports waiver concepts that deliver comprehensive health coverage that complies with all of the protections of the ACA. Accordingly, we support this concept to the extent that the state-specific subsidy structure facilitates the purchase of this coverage rather than of substandard coverage such as short-term limited-duration insurance.

We encourage the departments to consider proposals that take unconventional measures to achieve these goals. For instance, combining a 1115 waiver and a 1332 waiver could ensure that all persons under a certain percent of the federal poverty level receive subsidies to participate in the Marketplace, while simultaneously expanding Medicaid coverage to certain high-risk portions of the population. Such strategies not only could help address the subsidy cliff and increase access to premium tax credits, but could also improve the overall health of the Marketplace's risk pool, thereby lowering premiums for all, including unsubsidized consumers, and reducing costs for the federal government due to lower premium tax credit obligations. The strategy of combining the two waivers also could ensure that the deficit neutrality guardrail is met.

Adjusted Plan Options

Under the Adjusted Plan Options waiver concept, states would have the flexibility to provide state financial assistance for non-Qualified Health Plans or expand coverage for catastrophic plans on the marketplace. APTA's concerns with this proposal arise from both a legal and consumer welfare perspective:

First, APTA disagrees with the departments' interpretation of Section 1332 in the 2018 guidance stating that the criteria on comprehensiveness and affordability is met if access to coverage that is as affordable and comprehensive as coverage forecasted to have been available in the absence of the waiver is projected to be available to a comparable number of people under the waiver. As has been previously discussed, to be granted a 1332 waiver, a plan must provide coverage at least as comprehensive and affordable, not ensure it is available. Accordingly, we respectfully disagree with the legality of allowing pass-through funding to subsidize coverage less comprehensive than that mandated by the ACA.

Furthermore, expanding access to non-QHPs and catastrophic coverage would likely derail any waiver application's chances being within the four guardrails when taken as a whole. Those guardrails -- comprehensive, affordable coverage, to a comparable number of people, without increasing the deficit -- are, by statute, intended to be considered together. Should a state seek to drive consumers away from QHPs, the most likely consequence is that the price of QHPs will increase, as only less-healthy consumers will remain in Marketplaces.

Account-Based Subsidies

Under an account-based subsidies waiver, states could potentially direct public subsidies into a defined-contribution, consumer-directed account that an individual uses to pay health insurance premiums or other health care expenses. The account could also allow individuals to aggregate funding from additional sources, including individual and employer contributions. APTA supports measures that increase funding streams for consumers to purchase comprehensive health coverage. As we expressed in our comments to the proposed rule on Health Reimbursement Arrangements and Other Account-Based Group Health Plans (REG-136724-17), we encourage the departments to seek innovative methods by which consumers can purchase health insurance, so long as that health insurance contains all of the consumer protections of the ACA.

Risk-Stabilization Strategies

Risk stabilization has always been a cornerstone of the ACA and has proven to be the most successful option for states under section 1332. We encourage the departments to continue to allow states to administer reinsurance programs, high-risk pools, and similar strategies to the extent states feel they are necessary in their marketplaces.

Inclusion of Short-Term Limited-Duration Insurance

APTA opposes the inclusion of STLDI in any 1332 waiver. The basic requirements for a waiver mandate compliance with the sections concerning QHPs (Secs. 18021 to 18024); consumer choices and insurance competition through health benefit exchanges (Secs. 18031 to 18033); reduced cost-sharing for individuals enrolling in QHPs (42 U.S. Code Sec. 18071); refundable credit for coverage under a QHP (26 U.S. Code Sec. 36B); and the requirement to maintain minimum essential coverage (26 U.S. Code Sec. 5000A). STLDI neither satisfies the requirements to be considered a QHP nor provides minimum essential coverage.

STLDI also does not qualify for advance payments of the premium tax credits. Accordingly, it should not be incorporated into a program funded by the pass-through of these tax credits.

Further, due to the lack of coverage afforded by STLDI, we recommend that the departments undertake efforts to steer consumers away from such plans. Efforts should include developing and disseminating consumer resources on the role of STLDI, which is generally available only for healthy consumers and comes with high deductibles. Without such information, many consumers who purchase STLDI but who require access to health care services not covered by such a plan are likely to experience significant financial hardship. APTA has serious concerns that the departments' guidance will further push the healthiest consumers out of the Marketplaces and into uncomprehensive health plans with few consumer protections. Ultimately, this will lead to higher premiums for consumers remaining in the individual market single-risk pools, particularly the most vulnerable patient populations. There will be little recourse for consumers with short-term plans who experience unexpected health care needs.

Conclusion

APTA thanks the Department of Health and Human Services and Department of the Treasury for the opportunity to offer feedback in response to the Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards; Updates To State Innovation Waiver (Section 1332 Waiver) Implementing Regulations. We look forward to working with you and the states to ensure that consumers have equal access to affordable and high-quality coverage, which includes the patient protections afforded to all individuals under current law. Should you have any questions regarding our comments, please contact Kate Gilliard, senior regulatory affairs specialist, at 703-706-8549 or [email protected].

Sincerely,

Sharon L. Dunn, PT, PhD

Board-Certified Orthopaedic Clinical Specialist

President

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The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2020-0151-0005

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