CMS may impose minimum provider-network standards for ACA plans

By Bob Herman and Virgil Dickson
November 20, 2015 - Modern Healthcare

The CMS has proposed mandating minimum network standards for health plans sold on the federal insurance marketplace in 2017 as part of an effort to handle the broad shift toward narrow provider networks.

The Affordable Care Act requires that all medical policies on the exchanges have enough in-network hospitals and doctors for members so that “all services will be accessible without unreasonable delay.” In addition, ACA-compliant plan networks must update their provider directories monthly and include at least 30% of essential providers.

However, the 381-page proposed rule (PDF) released Friday goes a step further, asking states to establish a quantitative measure to ensure ACA policyholders have sufficient access to healthcare providers. If states don't choose a standard, the CMS proposed a default setting that would measure network adequacy by maximum travel times or distances to providers. Those minimum criteria would be established at a later date, the agency said.

“HHS would discuss with states their selection in advance of the start of the certification cycle to determine whether the state's network adequacy standard would be acceptable,” the proposed rule states. “We would thereafter notify issuers via subregulatory guidance whether the state standards or federal default standards apply.”

More health insurers have built narrow-network products as a means to control costs. People who select plans with a more limited set of providers generally have lower monthly premiums compared with those who choose broader network plans. But narrower networks have raised the ire of many patients across the country, some of whom have been confused of which hospitals and doctors are actually considered in-network.

The network adequacy proposal is a departure from the model legislation drafted by the National Association of Insurance Commissioners, which is expected to be ratified this weekend. The NAIC draft does not mandate those quantitative standards and instead leaves it up to state insurance regulators. Consumer groups have urged tighter standards like what CMS is proposing.

“We will continue to monitor the NAIC work and look forward to partnering with states and the NAIC in developing and promulgating network adequacy protections,” the CMS said. “In the interest of furthering this work, we are proposing standards related to network adequacy … but will take into consideration the NAIC's final recommendation as we assess these policies.”

Other major components of the rule include the actual open-enrollment period for 2017. It will run from Nov. 1, 2016, through Jan. 31, 2017, according to the proposal. The CMS reverted back to that time period because it more closely overlaps with the annual enrollment periods for Medicare and employer-sponsored coverage.

Further, the CMS said it was seeking comment and data from stakeholders about the ACA's special-enrollment period, which allows people to enroll in coverage outside of the open enrollment if they have some kind of major life event, such as having a child. Insurers have complained that people are abusing this option, allowing them to hop on and off exchange coverage based on their health status.

The CMS wants to make health plan shopping easier for individuals and proposed more "standardized options" for each metal tier. For example, all 2017 bronze options would have a $6,650 deductible, all 2017 silver plans would have a $3,500 deductible and all 2017 gold plans would have a $1,250 deductible. Currently, deductibles and other cost-sharing mechanisms can vary widely within each metal tier, and this would simplify those options for consumers.

“That's something today we've only seen in state-based exchanges,” Elizabeth Carpenter, a vice president at consulting firm Avalere Health, said of the proposed standardized options. “This would make it more like the California or New York models where there are a set of benefits that are the same.”

The Obama administration is also looking to entice more people to use the small business health options program, also known as the SHOP exchanges. Starting Jan. 1, 2017, the CMS proposed employers would be able to offer all plans across all levels of coverage from one insurance company. Right now, employers participating in the federal SHOP marketplace can offer their employees either one health plan and/or one dental plan, or all health and dental plans across one metal level.

“We anticipate that this vertical choice option would be appealing to employers because it gives employees greater flexibility across coverage levels,” the agency said.

The change could also be a boon for payers. By offering multiple plans to an employer, the insurer may be more likely to enroll a greater share of the employer's group.

In addition, HHS proposed the federal SHOP begin sending advance notices to qualified employees before their dependents age off of their plan at age 26. This notice would be sent 90 days in advance of the date when the child dependent enrollee is no longer eligible for coverage.

On the cost-sharing front, HHS is proposing an out-of-pocket annual limit of $7,150 for individuals, up from $6,850 in 2016, and $14,300 a year for families, which is up from next year's rate of $13,700.

A summary of the proposed rule can be found on the CMS website. Comments are due by Dec. 21.