UPMC Health Plan Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, Oct. 23 -- Caleb Wallace, vice president for health policy and regulatory affairs at UPMC Health Plan, Pittsburgh, Pennsylvania, has issued a public comment on the Centers for Medicare and Medicaid Services proposed rule entitled "Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement". The comment was written on Oct. 18, 2021, and posted on Oct. 19, 2021:

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UPMC Health Plan and the integrated companies of the UPMC Insurance Services Division (collectively, "UPMC") are pleased to submit the following comments in response to the Department of Health and Human Services (HHS) Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement Proposed Rule, as published in the Federal Register at 86 FR 51730 (the "Proposed Rule").

UPMC offers a wide range of commercial group and individual, Medicare, Medicaid, CHIP, and ancillary coverage products to consumers in Pennsylvania, West Virginia, and Ohio. Since beginning operations in 1996, UPMC has been recognized for its dedication to quality and the provision of outstanding customer service across its product lines, which collectively provide commercial or government programs coverage to more than 4 million members. UPMC has offered consumers a variety of coverage options as a QHP issuer since the launch of the Marketplace in 2014, and currently provides coverage to approximately 113,000 Marketplace enrollees. In several Pennsylvania counties, UPMC is the only QHP issuer currently offering a product through the Marketplace.

We thank HHS for providing QHP issuers and other stakeholders an opportunity to comment on the proposed implementation of certain provisions of the Consolidated Appropriations Act, 2021 (CAA). UPMC supports HHS in its ongoing efforts to improve transparency in the individual market for all stakeholders, while also minimizing unnecessary administrative burdens for States and issuers. It is with this support in mind that we respectfully offer the following comments on selected provisions of the Proposed Rule.

Air Ambulance Data Reporting

The Proposed Rule would require plans and issuers to submit data for air ambulance services that includes specific information from associated claims. While we appreciate that several of the reporting elements identified in the Proposed Rule are directly derived from statutory language, we are nonetheless concerned that some of the elements call for reporting of information that plans and issuers do not have. Effectively all systematically reportable data associated with air ambulance claims is limited in scope to that which is or can be submitted in a standard claim transaction. As such, even to the extent plans and issuers may have certain secondary indicators regarding a possibility or likelihood of a particular characteristic (e.g., inpatient treatment records following an emergent transport) being associated with a given claim based on information from other record systems, there generally is not a standardized data element or claim line field for systematically collecting and reporting this information; in some cases, providers are a more reliable source for certain information. That said, we recognize the statutory imperative of comprehensive claims reporting and we look forward to working with HHS as it seeks to maximize efficient reporting of relevant and reliable air ambulance claims data. In furtherance of this goal, we offer the following brief notes regarding elements of reporting identified in the Proposed Rule:

(1) Whether the services were provided on an emergent or non-emergent basis; This information is generally not indicated on a standard claim line or contained within a typical claim form image.

(2) Whether the provider of such services is part of a hospital-owned or sponsored program, municipality-sponsored program, hospital independent partnership (hybrid) program, independent program, or tribally operated program in Alaska;

This information is not included in air ambulance claims data and generally is not otherwise recorded as a data element even for contracted air ambulance providers. Providers are in a better position then plans and issuers to know and submit their organizational affiliation/designation to HHS.

(3) Whether the transport originated in a rural or urban area;

We believe this information is reportable based on the "pick-up" zip code designated by the air ambulance provider.

(4) The type of aircraft used for the transport (fixed-wing or rotary-wing air ambulance);

We believe this information is reportable based on the provider use of specific billing codes (A0430: Fixed Wing / A0431: Rotary Wing).

(5) Whether the provider of the air ambulance service has a contract with the plan or issuer to provide air ambulance services;

We believe this information is reportable based on existing claim system records regarding provider contracting status, but note that some limitations regarding conclusive classification may exist for providers with multiple-entity structures (e.g., a provider entity that is contracted with a given plan in certain states or regions but maintains separate parent, subsidiary or affiliated entities with billable operations in others).

Broker Disclosure Requirements

HHS proposes to codify provisions of the CAA that require health insurance issuers offering individual health insurance coverage or short-term, limited-duration insurance (STLDI), to disclose to potential or existing policyholders any direct or indirect compensation provided by the issuer to an agent or broker associated with enrolling individuals in such coverage. For new, initial enrollments, this disclosure would be required to be made prior to when potential policyholders finalize their plan selection and also be included on any documentation confirming the initial enrollment. UPMC supports requiring issuers to disclose to a potential or existing policyholder the amount of direct and indirect compensation provided to an agent or broker associated with enrolling the policyholder. We believe that this requirement will grant potential or existing policyholders greater insight into financial arrangements between issuers and agents or brokers that could potentially influence their selection of coverage.

We also support the requirement that for initial enrollments, the disclosure be made prior to a potential policyholder finalizing their plan selection. However, we note that under certain circumstances, it will be extremely challenging for issuers to prospectively quantify the amount of indirect compensation provided to an agent or broker and provide it to a potential policyholder prior to plan selection. For example, issuers often offer brokers an opportunity to participate in bonus programs throughout the year in order to incentivize broker performance. The structure of these bonus programs may be subject to modification based upon the needs of the issuer or the market, and the payment of bonuses is usually conditioned on the agent or broker meeting a certain specific target or performance goal. In many cases, it is only after a set performance period has passed that issuers will be able to confirm whether an agent or broker is eligible to receive a bonus payment under the terms of a given bonus program. This makes it difficult to identify a clear path to compliance with the requirement that all indirect compensation be disclosed to a potential policyholder prior to final plan selection, as it may well be impossible for issuers to accurately determine a broker's actual or even potential bonus compensation on a prospective basis.

Although historical bonus information is likely available at the time of plan selection, requiring issuers to provide these payment amounts to potential policyholders would provide little or no relevant insight regarding payments associated with a consumer's pending enrollment. Bonus payments may vary substantially on a year-to-year basis, and a broker's historical bonus performance is unlikely to be indicative of future bonus payment amounts. We recommend that in instances where it is not possible for issuers to quantify indirect compensation, such as future bonus payments, HHS allow issuers to provide potential policyholders a statement explaining the indirect compensation arrangement in general terms without requiring the disclosure of exact figures. This policy would give potential policyholders access to pertinent information on indirect compensation relationships between issuers and brokers, while avoiding unfairly penalizing issuers for not providing information that they do not have. We ask that HHS adopt this policy in final rulemaking.

Disclosure of Commission Schedules

HHS proposes that issuers be required to disclose the commission schedule used to determine the compensation owed to an agent or broker as part of the appointment contract between an agent or broker and the health insurance issuer offering individual health insurance coverage. UPMC supports requiring the disclosure of a universal commission schedule providing comprehensive information on broker type and applicable commission levels. However, requiring issuers to provide a more detailed, individualized commission schedule containing additional and specific broker information as proposed implicates practical challenges for achieving compliance.

Existing and potential policyholders have the ability to select and switch brokers at will, and it is often not possible for an issuer to know which broker a potential policyholder is working with until after coverage has been selected. This generally makes it impractical to require issuers to provide an individualized commission schedule tailored to a specific broker prior to the policyholder finalizing their plan selection. Issuers also typically engage brokers across a class of appointment contracts with individual brokers being associated with an agency in some cases and acting as independent agents in others; brokers in some tiers may receive volume-based compensation that cannot be definitively calculated until a retrospective reconciliation of enrollments has been completed at the end of a month, quarter, or year. All of these factors can affect the net compensation paid to a broker or agent. Additionally, allowances for issuers to prospectively adjust commissions in response to market conditions during the year further complicate the timing of disclosure relative to the dates of plan selection and enrollment, which themselves can vary based on consumer preference. Requiring issuers to provide a universal base commission schedule reflecting the range of compensation available to all broker types would more accurately reflect the possible compensation paid to an agent or broker, and could support further dialogue between the broker and the consumer regarding the particular commission class or tier to which the broker belongs. We request the HHS adopt this approach in final rulemaking.

Form and Format of Disclosure

The Proposed Rule does not prescribe a specific format in which issuers must provide the commission schedule or other required documents detailing direct or indirect broker compensation, and HHS indicates that an issuer's disclosure obligation can be satisfied by the agent or broker making the required disclosure on the issuer's behalf. UPMC supports granting issuers flexibility to determine the most appropriate format to use for disclosure of the commission schedule and other required documents to potential and existing policyholders. Issuers' commission schedules are typically reviewed and verified by state insurance departments and permitting issuers to determine the format for disclosure will reduce unnecessary administrative burden by allowing issuers to choose a format that is both aligned with state regulatory submissions and is suitable to address the individual needs of their policyholders. UPMC also supports allowing an issuer to satisfy their disclosure obligation by having an agent or broker make the required disclosure on the issuer's behalf. We agree with HHS that issuers are in the best position to determine the most advisable method for disclosing the required information to ensure that potential and existing policyholders have easy access to the required information. We ask that HHS adopt these policies in final rulemaking.

We also ask that HHS provide additional clarification concerning issuers' obligation to provide physical copies of the required disclosures. It is our understanding that the Proposed Rule would allow issuers to satisfy their reporting obligation by providing the consumer the required information in a digital format, and that printed disclosures need to be provided only upon the request of the potential or existing policyholder. Requiring issuers to provide the required information in printed format only upon request allows policyholders to receive the disclosure in a format that is convenient for them while also reducing waste and avoiding unnecessary printing costs; as consumers increasingly opt for digital enrollment and coverage documents, we believe that printed copies of these and other plan materials will soon become truly uncommon. We ask that HHS confirm that issuers are required to provide a physical copy of the required disclosure only upon the request of the potential or existing policyholder in the final rule.

Applicability

HHS proposes to apply agent and broker compensation disclosure requirements for contracts executed on or after December 27, 2021. Integrating the compensation disclosure requirements into an issuer's existing sales documentation and reporting processes is a complicated procedure and will require sustained action on the part of the issuer to operationalize; it is also possible that in some cases technology or software vendors may need to be engaged in order to systematically classify and aggregate this data once reporting specifications have been finalized. While UPMC has been preparing to implement the broker compensation disclosure requirements since the CAA was enacted into law, our ability to create and implement the relevant changes to policies, procedures, and data systems necessary to comply with the new disclosure rules has been constrained by the lack of a final rule outlining all of the requirements of the new policy.

As the compensation disclosure requirements will go into effect in less than three months, once the final rule has been published in the Federal Register, there will be only a short amount of time for issuers to come into compliance with the provisions specified in the final rule. Given the limited timeframe in which issuers will need to come into compliance with the finalized regulation and the considerable complexity involved in doing so, we ask that HHS apply a good faith compliance standard during the first year the new rules are in effect. Issuers should be considered to be in compliance with the disclosure requirements so long as it is evident that an issuer is making a reasonable effort to provide potential and existing policyholders documentation showing known or reasonably calculable direct and indirect compensation provided to an agent or broker associated with enrolling the policyholder. We ask that HHS adopt this standard in the final rule.

We again thank HHS for affording issuers and other stakeholders the opportunity to provide input on the proposed implementation of provisions of the CAA requiring health insurance issuers to disclose direct or indirect compensation provided to an agent or broker. We appreciate your consideration of our comments and look forward to continued collaboration with HHS in the future.

Respectfully Submitted,

Vice President, Health Policy & Regulatory Affairs

Assistant Counsel

UPMC Health Plan

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The proposed rule can be viewed at: https://www.regulations.gov/document/CMS-2021-0147-0001

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