[Federal Register Volume 79, Number 48 (Wednesday, March 12, 2014)]
[Rules and Regulations]
[Pages 14112-14151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05299]
[[Page 14111]]
Vol. 79
Wednesday,
No. 48
March 12, 2014
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 600
45 CFR Part 144
Basic Health Program: State Administration of Basic Health Programs;
Eligibility and Enrollment in Standard Health Plans; Essential Health
Benefits in Standard Health Plans; Performance Standards for Basic
Health Programs; Premium and Cost Sharing for Basic Health Programs;
Federal Funding Process; Trust Fund and Financial Integrity; Final Rule
Federal Register / Vol. 79 , No. 48 / Wednesday, March 12, 2014 /
Rules and Regulations
[[Page 14112]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 600
Office of the Secretary
45 CFR Part 144
[CMS-2380-F]
RIN 0938-AR93
Basic Health Program: State Administration of Basic Health
Programs; Eligibility and Enrollment in Standard Health Plans;
Essential Health Benefits in Standard Health Plans; Performance
Standards for Basic Health Programs; Premium and Cost Sharing for Basic
Health Programs; Federal Funding Process; Trust Fund and Financial
Integrity
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule establishes the Basic Health Program (BHP), as
required by section 1331 of the Affordable Care Act. The BHP provides
states the flexibility to establish a health benefits coverage program
for low-income individuals who would otherwise be eligible to purchase
coverage through the Affordable Insurance Exchange (Exchange, also
called Health Insurance Marketplace). The BHP complements and
coordinates with enrollment in a QHP through the Exchange, as well as
with enrollment in Medicaid and the Children's Health Insurance Program
(CHIP). This final rule also sets forth a framework for BHP eligibility
and enrollment, benefits, delivery of health care services, transfer of
funds to participating states, and federal oversight. Additionally,
this final rule amends another rule issued by the Secretary of the
Department of Health and Human Services (Secretary) in order to clarify
the applicability of that rule to the BHP.
DATES: Effective Date: These regulations are effective on January 1,
2015.
FOR FURTHER INFORMATION CONTACT: Jessica Schubel (410) 786-3032; or
Carey Appold (410) 786-2117.
SUPPLEMENTARY INFORMATION:
Table of Contents
To assist readers in referencing sections contained in this
document, we are providing the following table of contents.
I. Executive Summary
II. Background
III. Summary of Proposed Provisions and Analysis of the Responses to
Public Comments
A. General Provisions and Definitions
B. Establishment of the Basic Health Program
C. Federal Program Administration
D. Eligibility and Enrollment
E. Standard Health Plan
F. Enrollee Financial Responsibilities
G. Payment to States
H. BHP Trust Fund
IV. Provisions of the Final Regulations
A. General Provisions and Definitions
B. Establishment and Certification of State Basic Health
Programs
C. Federal Program Administration
D. Eligibility and Enrollment
E. Standard Health Plan
F. Enrollee Financial Responsibilities
G. Payments to States
H. BHP Trust Fund
V. Collection of Information Requirements
VI. Regulatory Impact Statement
A. Overall Impact
B. Unfunded Mandates Reform Act
C. Regulatory Flexibility Act
D. Federalism
Regulation Text
Acronyms
Because of the many organizations and terms to which we refer by
acronym in this final rule, we are listing these acronyms and their
corresponding terms in alphabetical order below:
[the] Act Social Security Act
Affordable Care Act The collective term for the Patient Protection
and Affordable Care Act (Pub. L. 111-148) and the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152))
APTC Advance Payments of the Premium Tax Credit
BHP Basic Health Program
CHIP Children's Health Insurance Program
CMS Centers for Medicare & Medicaid Services
[the] Code Internal Revenue Code of 1986
EHBs Essential Health Benefits
FEHBP Federal Employees Health Benefits Program (5 U.S.C. 8901, et
seq.)
FPL Federal poverty line
HCERA Health Care and Education Reconciliation Act of 2010 (Pub. L.
111-152, enacted March 30, 2010)
HHS [U.S. Department of] Health and Human Services
IHS Indian Health Service
MEC Minimum Essential Coverage
MAGI Modified adjusted gross income
PHS Act Public Health Service Act
PRA Paperwork Reduction Act of 1995
QHP Qualified Health Plan
SHOP Small Business Health Options Program
I. Executive Summary
This final rule implements section 1331 of the Patient Protection
and Affordable Care Act (Pub. L. 111-148, enacted on March 23, 2010)
and the Health Care and Education Reconciliation Act of 2010 (Pub. L.
111.152, enacted on March 30, 2010), which are collectively referred to
as the Affordable Care Act. Section 1331 of the Affordable Care Act
directs the Secretary to establish the Basic Health Program (BHP). In
addition, this final rule amends certain other federal regulations,
clarifying their applicability to the new program.
For coverage effective beginning on January 1, 2014, qualified
individuals and small businesses will be able to purchase private
health insurance coverage through competitive marketplaces, also termed
``Exchanges'' (or the Health Insurance Exchange). The premium tax
credit and cost-sharing reductions are available to help lower income
qualified individuals purchase and secure coverage and services through
the plans operating on the Exchange. At the same time, states provide
coverage under Medicaid for low-income individuals and other
individuals, including certain individuals with significant medical
needs. New administrative procedures discussed in prior rulemaking
establish a system for coordinating coverage across all insurance
affordability programs (IAP) which includes coverage obtained through
an Exchange with the associated premium tax credit and cost-sharing
reductions, Medicaid, and the Children's Health Insurance Program.
Beginning January 1, 2015, under this final rule, states will have an
additional option to establish a BHP to provide coverage for certain
individuals who are not eligible for Medicaid and would otherwise be
eligible to obtain coverage through the Exchange.
This final rule establishes: (1) The requirements for certification
of state submitted BHP Blueprints, and state administration of the BHP
consistent with that Blueprint; (2) eligibility and enrollment
requirements for standard health plan coverage offered through the BHP;
(3) the minimum requirements for the benefits covered by such standard
health plans; (4) the availability of federal funding of certified
state BHPs; (5) the purposes for which states can use such federal
funding; (6) the parameters for enrollee financial participation; and
(7) the requirements for state and federal administration and oversight
of BHP funds. The specific methods for calculating and providing
payment to states, consistent with this rule, will be issued separately
in a final payment notice.
II. Background
Section 1331 of the Affordable Care Act provides states with a new
coverage option, the Basic Health Program (BHP),
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for specified individuals who do not qualify for Medicaid but whose
income does not exceed 200 percent of the federal poverty level (FPL).
This final rule also implements statutory provisions of the BHP and
other provisions necessary to ensure coordination with the other
coverage options that, along with BHP, are collectively referred to as
insurance affordability programs. Coordination is necessary to ensure
that consumers are determined eligible for the appropriate program
through a streamlined and seamless process and are enrolled in
appropriate coverage without unnecessary paperwork or delay. This final
rule describes standards for state administration and federal oversight
of the BHP.
In the September 25, 2013 Federal Register (78 FR 59122), we
published a proposed rule to provide states the opportunity to
establish a BHP in coordination with other insurance affordability
programs. Rather than establish new and different rules for the BHP,
when possible, we align BHP rules with existing rules governing
coverage through the Exchange, Medicaid, or CHIP. This approach is
supported by the statutory linkage between the minimum benefit
coverage, maximum cost sharing, and overall funding for the BHP with
the Exchange. Where necessary to accommodate unique features of the
BHP, we adapted existing regulations or established specific rules for
the new program. Recognizing that states may choose different ways to
structure their BHP, when possible, we offer states flexibility in
choosing to administer the program in accordance with Exchange rules or
those governing Medicaid or CHIP. In those sections in which we offer
states the choice, states must adopt all of the standards in the
referenced Medicaid or Exchange regulations.
For a detailed description of the background of this rule, please
refer to ``Basic Health Program: State Administration of Basic Health
Programs; Eligibility and Enrollment in Standard Health Plans;
Essential Health Benefits in Standard Health Plans; Performance
Standards for Basic Health Programs; Premium and Cost Sharing for Basic
Health Programs; Federal Funding Process; Trust Fund and Financial
Integrity'' proposed rule published in the September 25, 2013 Federal
Register (78 FR 59122).
III. Summary of Proposed Provisions and Analysis of the Responses to
Public Comments
For a complete and full description of the BHP proposed provisions
as required by the statute, see the September 25, 2013 proposed rule
(78 FR 59122).
We received a total of 132 timely comments from state agencies,
groups advocating on behalf of consumers, health care providers,
employers, health insurers, health care associations, Tribes, tribal
organizations, and the general public. In addition, we held an all-
state/advocate consultation session on November 6, 2013 as well as a
tribal consultation session on November 7, 2013 to provide an overview
of the BHP proposed rule where interested parties were afforded an
opportunity to ask questions and make comments. We continued to meet
during this time with interested states through the ``learning
collaborative'' that was established prior to the publication of the
proposed rule to solicit input related to program operations and
coordination between all insurance affordability programs. At the
consultation and learning collaborative sessions, participating parties
were reminded to submit written comments before the close of the public
comment period that was specified in the BHP proposed rule.
The following sections, arranged by subject area, include a summary
of the public comments that we received, and our responses.
A. General Provisions and Definitions
In the September 25, 2013 proposed rule, we proposed in Sec. 600.1
the general authority for the BHP regulation as specified in section
1331 of the Affordable Care Act. The statute specifies that a state
electing to implement a BHP must enter into contracts for the provision
of standard health plan coverage, which must, at a minimum include the
essential health benefits (EHB). A state implementing BHP will receive
federal funding based on the amount of premium tax credit and cost-
sharing reductions that would have otherwise been available to
enrollees had they obtained coverage in the Exchange. We did not
receive specific comments on this section and are finalizing the
provision as proposed.
In Sec. 600.5, we proposed the definitions and use of terms that
apply to BHP. For specific definitions, please see the September 25,
2013 proposed rule (78 FR 59142).
We received several public comments for this section, which we
discuss below. In addition to changes resulting from comments on this
section, we have added a definition of ``interim certification'' in
conformance with a change made to Sec. 600.110. Interim certification
is an approval status for the initial design of a state's BHP. It does
not confer any permission to begin enrollment or authority to seek
funding from the federal government for BHP expenditures.
Comment: Several commenters requested that the BHP use the Medicaid
definition of Indian that is set forth in 42 CFR 447.51 for purposes of
Medicaid premium and cost sharing reductions. The Affordable Care Act
defines Indians for purposes of premium and cost sharing reductions in
Exchange plans using the definition set out in section 4(d) of the
Indian Self-Determination Act and Education Assistance Act, (25 U.S.C.
450b(d)). The referenced Medicaid regulatory definition of Indian is
broader.
Response: We appreciate the commenters' recommendation; however,
because a BHP is required by statute only to provide that premium and
cost sharing liability will not exceed such liability under Exchange
coverage, the regulation adopts the Exchange definition.
Comment: One commenter recommended that HHS define the term
``network of providers.''
Response: We have revised the list of definitions to include a
definition of ``network of healthcare providers.''
B. Establishment of the Basic Health Program
In Sec. 600.100 to Sec. 600.170, we proposed the administrative
structure for BHP. Within this structure, we proposed that the BHP
Blueprint would be the vehicle for BHP certification and specified the
operational principles required to implement a BHP.
In Sec. 600.110(a), we proposed that the BHP Blueprint would be
the comprehensive document submitted by states to the Secretary to
receive certification of proposed BHP programs. For specific
discussions on the proposed content of the Blueprint, refer to the
September 25, 2013 proposed rule (78 FR 59142).
In Sec. 600.110(b), we proposed that the BHP Blueprint be
accompanied by a funding plan that provides enrollment and cost
projections for the first 12 months of operation as well as additional
funding sources if the state expects to use any non-federal funding.
The funding plan must demonstrate that the federal funds will only be
used to reduce premiums or cost-sharing or to provide additional
benefits. In Sec. 600.110(c), we proposed that HHS post the state's
BHP Blueprint on-line.
The following sections, arranged by subject area, include a summary
of the public comments that we received, and our responses.
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1. General
Comment: We received a variety of supportive comments. One
commenter supported the adoption of the Exchange approach of a
Blueprint as opposed to utilizing a vehicle similar to a Medicaid state
plan. A couple of commenters expressed support for the provision
requiring Secretarial certification prior to implementation. We
received several comments supporting the requirement that HHS post the
Blueprint submitted by the state on-line.
Response: We are finalizing the proposed provisions with some
modifications.
We are clarifying that HHS will post on line the Blueprint
submitted by the state, and will update it to reflect subsequent
amendments by the state (including amendments made to ensure
certification by HHS).
Comment: Several commenters shared concerns related to the timing
of the Blueprint requirements, and provided several suggestions in how
to address this issue. One suggestion was to permit an abridged
Blueprint in the first year of implementation, to permit greater
flexibility in establishing contracts for standard health plans and
making administrative arrangements. The abridged Blueprint would be
required to include a few key areas in the Blueprint, such as its
eligibility and enrollment processes as well as the standard health
plan benefit package. Another suggestion included the use of an
``interim certification'' to outline basic program parameters until the
contracting process concluded. One final suggestion was to permit a
state to include contingencies in its Blueprint.
Response: We have carefully considered the commenters' concern that
we were requiring too much detail and certainty in the initial
Blueprint submission, because that level of detail would not be
operationally feasible. In response to these comments, we are modifying
the certification process to include an interim certification level,
which we have defined in the definitions section. We expect that states
will be able to provide their basic program design choices and we will
be able to approve the structure of the program through the interim
certification process, which will involve the submission of a limited
set of Blueprint elements. We anticipate that interim certification
will give states more certainty as they seek legislative and budget
authority for their programs, with the understanding that full
certification would be granted only when the Blueprint was fleshed out
with additional detail. Full certification would still be required
before states enroll individuals in a BHP.
Comment: We received several comments expressing concern regarding
the required content of the Blueprint. Several commenters, for example,
requested that we make clear that we would not require exact premium
amounts in the Blueprint (information that would not be available until
later in implementation), but would only require a description of the
process the state would use to establish premiums (information that
would be available earlier.)
Response: In our proposed rule we created some inconsistency which
has now been corrected, at Sec. Sec. 600.110(a)(6) and 600.505. Now
both are consistent, requiring that the Blueprint contain only
assurances that the premiums would be calculated in such a way that BHP
enrollees would not pay more than they would have been required to pay
if they had been enrolled in the applicable benchmark plan, taking into
account any premium tax credit that would have been available.
Comment: On later sections of the regulation, we received many
comments suggesting that we need to allow greater flexibility for
states around the start-up and establishment of the program. As with
other aspects of program operations, this flexibility would need to be
addressed in the Blueprint.
Response: We appreciate the commenters' interest in ensuring smooth
and efficient BHP implementation, and as such, we have included a 15th
content area for the Blueprint in Sec. 600.110(a). We will require a
transition plan if a state requests to phase in enrollment, which would
include information about coordination of such a transition with the
Exchange operating in the state. This additional Blueprint requirement
corresponds to modifications made to Sec. 600.145.
2. Development and Submission of the BHP Blueprint (Sec. 600.115)
In Sec. 600.115(a), we proposed that the Blueprint must be
submitted by the Governor or the Governor's designee, and in Sec.
600.115(b) we proposed that the state must identify the agency and
officials, by position or title, responsible for program
administration, operations, and financial oversight.
In Sec. 600.115(c), we proposed that the state must seek public
comment on the BHP Blueprint content before submission to the Secretary
for certification, and ensure the comment process included federally
recognized tribes located in the state. Additionally, we proposed that
the state must seek comment on significant revisions which are those
that alter core program operations required by Sec. 600.145(e).
In Sec. 600.115(d), we proposed that states may not implement BHP
prior to receiving full certification. The date of implementation for
this purpose is proposed as the first day that enrollees would receive
coverage under BHP.
Comment: We received many comments on the public comment process.
One commenter supported the flexibility that is afforded to states by
not having a federally prescribed list of required public notice
participants in the public notice standard. Another commenter expressed
the opposite view and would like HHS to require a specific list of
stakeholders that must be included in the public comment process,
including consumer, health care and safety net advocacy groups. Another
commenter suggested that the prescribed list of stakeholders should be
the same as the Exchange.
Response: We recognize that BHP will have a significant impact on
consumers, providers, plans and other stakeholders, and we appreciate
the commenters' interest in ensuring the public is afforded the
opportunity to provide meaningful comment. While ensuring appropriate
public participation in the comment process is important, we are not
mandating the participation of certain stakeholders because the
circumstances in different states in serving low income populations are
not the same. Moreover, such a requirement could be viewed as giving
particular weight to those stakeholders over others. But we do not
preclude any state from adopting such a procedure based on the
circumstances in that state. Nor do we specify a calendar a state must
use when soliciting public comment; the opportunity to comment,
however, must be meaningful. We believe states will build on existing
programs and approaches currently in place, and we want to provide the
flexibility for them to do so.
Comment: Some commenters specifically recommended that we should
borrow the section 1115 Medicaid demonstration transparency
requirements under title XIX of the Act and apply those standards to
BHP. The commenters expressed the sentiment that the level of rigor in
the 1115 standards would be appropriate for BHP.
Response: Section 1115 transparency requirements are specified in
statute in detail. Moreover, section 1115 demonstration authority is
used when states are requesting permission to depart from otherwise
applicable federal law but nevertheless achieving the
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objectives of federal law, and public input is essential to informing
the federal decision whether to approve the demonstration request. In
that circumstance, it is particularly important to have a full
opportunity for public comment to determine if there would be any
unforeseen or adverse impact. In contrast, there is no statutory public
input requirement for the development of a BHP. Moreover, when
developing a BHP Blueprint, the need and purpose for public comment is
different. A state is not departing from federal law but rather
engaging the public in the state's political process to assist in
choices the state is making in establishing or modifying a program
within a set of options. The opportunity for public input will help to
ensure that the state has fully considered whether its BHP approach
will meet all statutory requirements and has given due consideration to
the required factors in its processes to contract with standard health
plans. Interested parties typically are already involved in those
processes, and do not need formal notice and comment periods to provide
input to states on these choices. It may be appropriate for states to
adjust public input processes to reflect these circumstances. For these
reasons, we are not accepting the commenters' recommendation to provide
a rigid structure for the public input process for a BHP Blueprint and
Blueprint amendments.
Comment: We received several comments recommending that HHS
strengthen the definition of ``significant revisions'' in Sec.
600.115(c)(1) beyond the proposed reference to those that alter ``core
program operations required by Sec. 600.145(e).''
Response: We thank the commenters for their recommendation and we
are modifying the regulatory text to reflect this definition change and
clarify when an amendment to a BHP Blueprint is necessary.
Comment: Several commenters expressed concern that the timeline for
BHP Blueprint submission and certification should be constructed to
give sufficient notice to Qualified Health Plans (QHP) prior to the
submission of Exchange premiums, QHP applications and the annual
contract review process.
Response: We appreciate that there are many timing decisions to
make with regard to the submission and certification of a BHP Blueprint
that will impact, and be impacted, by many variables in any given
state. States must synchronize legislative and funding authority with
contracting timelines and federal approval. Given the legislative and
contracting calendar differences between states, we do not believe it
would be appropriate to mandate a specific timetable, or calendar for
the public notice process. However, we expect states to take the QHP
issuer bidding timeframe into account and to work with issuers to avoid
unnecessary disruption and uncertainty in the individual market,
particularly as issuers look to set rates for the next year.
With these considerations in mind, we are finalizing the provisions
in this section as proposed except that in Sec. 600.115(c)(1). We are
adding to the definition of ``significant revisions'' which will
therefore, require an opportunity for public comment to ``those that
alter core program operations required by Sec. 600.145(f), as well as
changes that alter the BHP benefit package, enrollment, disenrollment
and verification policies.''
3. Certification of a BHP Blueprint (Sec. 600.120)
In, Sec. 600.120(a), we proposed to establish the effective date
of certification of the BHP Blueprint as the date of signature by the
Secretary.
In Sec. 600.120(b), we proposed that the certification date is
established as the first date for which any payments may be transmitted
to the state for BHP operations.
Under Sec. 600.120(c), we proposed the period in which a certified
Blueprint remains in effect. For specific discussions on this time
period, refer to the September 25, 2013 proposed rule (78 FR 59143).
Under Sec. 600.120(d), we proposed Blueprint standards for
certification. For specific discussions on the standards, refer to the
September 25, 2013 proposed rule (78 FR 59143).
Comment: One commenter was concerned with our proposed Blueprint
standard in Sec. 600.120(d)(3) specifying that the Blueprint be free
of contingencies or reserved decisions on operational features. The
commenter noted that, at times, contingencies are appropriate and
contribute to operational success.
Response: We agree with the commenter regarding the need for
contingencies and we will strive to develop a Blueprint template
permissive of appropriate contingencies. We are deleting the word
``contingencies'' from paragraph (d). However, as the Blueprint will
only collect information necessary for approval and oversight, we do
not foresee being able to allow reserved decisions.
Comment: We received one comment requesting state flexibility in
program development through 2016, particularly with respect to
transitioning of populations.
Response: We have responded in other sections (Sec. Sec. 600.110
and 600.145) regarding the need for flexibility around transitioning
populations giving states with the shortest planning window, those that
start in 2015, greater flexibility in planning for enrollment and
service delivery needs.
4. Revisions to a Certified BHP Blueprint (Sec. 600.125)
In Sec. 600.125(a), we proposed that a state seeking to make
changes to its BHP Blueprint must submit those changes, if altering
core program operations, to the Secretary for review and certification.
In Sec. 600.125(b), we proposed that the state must continue to
operate under the existing certification unless and until a revised
Blueprint is certified.
5. Withdrawal of a BHP Blueprint Prior to Implementation (Sec.
600.130)
In Sec. 600.130, we proposed a process for a state deciding to
terminate a BHP before enrolling participants. For specific
discussions, refer to the September 25, 2013 proposed rule (78 FR
59143).
Comment: We received several comments expressing concern regarding
the broad state authority to terminate its BHP at any time.
Response: We appreciate the commenters' concerns regarding this
state authority; however, because BHP is an alternative health coverage
program available at the state's option, we do not believe we can
prohibit a state from electing to terminate its program.
Comment: Several commenters suggested that states be required to
provide advance notification to standard health plan offerors and QHPs
when they voluntarily withdraw Blueprints, to enable these entities the
opportunity to adjust their offerings. Other commenters recommended
Blueprint submission timelines to be specifically aligned with Exchange
timeframes to enable the most accurate pricing of products.
Response: We agree that states should make decisions about BHP
operations in a timely manner, to allow orderly transitions for
beneficiaries and ensure proper coordination with the Exchange,
including the ability of QHPs to price their products properly.
However, the standard that the commenter is suggesting is very
significant in that it would have to be lengthy notice in advance of
the annual QHP pricing process. Given that BHP is a voluntary program,
we do not believe we can force continued participation on the part of
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the state beyond that required for orderly shutdown.
6. Notice and Timing of HHS Action on BHP Blueprint (Sec. 600.135)
In Sec. 600.135, we proposed that HHS respond to submissions in a
timely manner and identify in writing impediments to certification if
they exist.
Comment: We received comments recommending that Blueprints should
be deemed certified and states should be able to proceed if they have
not been acted upon within 60 days of state submission. Other
commenters requested an expedited review process in the first year. A
further request was that we institute a conditional approval and make
retrospective payment available to states. We also received comments
that we should have an administrative review process to resolve
disputes over certification or potential decertification.
Response: We have carefully considered these comments and we are
finalizing this section with the addition of a state option to request
a reconsideration of an adverse certification decision. We believe this
change, coupled with the addition of interim certification status
discussed earlier and the requirement for HHS to respond timely to
state submissions, will be sufficient to ensure responsiveness and
opportunity for states to work effectively with HHS to secure necessary
approvals to proceed with their programs. We have not included the
request for a 60 day ``clock'' because we wish to allow for maximum
flexibility in working with states to achieve certification of
Blueprints for this new program.
7. State Termination of a BHP (Sec. 600.140)
In Sec. 600.140, we proposed a process for states to terminate a
BHP program with active enrollees. The state must submit written notice
to the Secretary 120 days in advance along with a transition plan to
assist enrollees switching to other coverage, submit written notice to
participating standard health plan offerors and enrollees 90 days in
advance, and transmit all information provided as part of an
application to other state agencies administering insurance
affordability programs. Additionally, the state must fulfill
contractual obligations to standard health plans, fulfill data
reporting to HHS, complete the annual financial reconciliation process,
and refund the remaining balance in the BHP trust fund.
Comment: We received several comments requesting that the
notification requirement for standard health plans be the same as it is
for the Secretary (120 days). We also received a comment recommending
that we require notification be sent to providers contracting with
standard health plans.
Response: We are finalizing this section as proposed, because we
believe there is value in a Secretarial review of the state's
transition plan before others are notified. We also anticipate that the
state's transition plan will include specifications about plan and
provider notification.
8. HHS Withdrawal of Certification and Termination of a BHP (Sec.
600.142)
In Sec. 600.142, we proposed the process by which HHS would
withdraw certification of a BHP Blueprint based on findings of non-
compliance or significant beneficiary harm, financial malfeasance or
fraud. This process is only invoked after notice to the state and a
reasonable period (at least 120 days) for the state to address
findings.
Comment: We received one comment requesting an appeal process for
disagreement over findings of non-compliance or significant beneficiary
harm, financial malfeasance or fraud.
Response: Similar to Sec. 600.135, we have decided to finalize
this section as proposed with the addition of the right of the state to
a reconsideration of the decision to withdraw certification if there is
disagreement over findings that form the basis for that decision.
9. State Program Administration and Operation (Sec. 600.145)
In Sec. 600.145, we proposed that a state must operate a BHP
according to the certified Blueprint and all applicable law and
regulations. This section also contains our proposed core operational
features of a BHP beginning in paragraph (b) through (d). For
additional discussions on the core operational features of a BHP, refer
to the September 25, 2013 proposed rule (78 FR 59144).
Comment: We received many comments on this section in support of
the establishment of BHP without the limitations characteristic of more
limited programs such as waivers or demonstrations. Similarly, we
received a comment commending the Department for including
nondiscrimination provisions assuring equal access to services through
BHP.
Response: We appreciate the support for the content of this
section.
Comment: Several commenters questioned the operational reality of
being able to implement a program for every eligible individual on day-
one of operations.
Response: We understand the concern raised by the commenters
regarding day-one operations, particularly in 2015, the first
operational year, for which states have a limited amount of time to
coordinate with their Exchange and Medicaid programs. To address this
comment, we are adding paragraph (e) providing states implementing in
2015 the option to identify a transition period during initial
implementation. These states will be required to submit a transition
plan as part of their Blueprint describing their proposed alternative
enrollment strategies.
10. Enrollment Assistance and Information Requirements (Sec. 600.150)
In Sec. 600.150, we proposed that states make information
available to potential applicants and enrollees about the BHP coverage
option, including benefits and coverage, in a manner that is consistent
with the requirements of the Exchange. Additionally, states must
require standard health plans to provide information on premiums and
covered services, including any limitations, cost-sharing, as well as
other information conforming to the requirements of the Exchange.
Finally, states must require participating standard health plans to
provide current and complete information on the names and locations of
participating providers.
Comment: One commenter suggested a requirement that we have
application materials designed with individuals who have limited
English proficiency in mind and that we should encourage marketing to
younger individuals. Other commenters want states to be required to
conduct outreach highlighting BHP availability to non-citizens or for
individuals with limited English proficiency. Several of these
commenters request applying Medicaid managed care requirements (42 CFR
438.10(c)) around enrollees with limited English proficiency to BHP.
Response: We agree with the commenters' request for application
materials that serve individuals with limited English proficiency. We
further clarify that states must satisfy rules concerning accessibility
requirements for persons with disabilities. We also agree that Medicaid
standards are appropriate to address these populations and have applied
them in Sec. 600.310.
Comment: Other commenters supported the requirement to make
provider lists available to enrollees. One commenter specifically
requested the inclusion of facility providers such as clinics and
health centers, another
[[Page 14117]]
commenter wants the requirement to be strengthened by including a
quarterly update standard because of churn between QHPs and Standard
Health Plans.
Response: We also agree that information requirements are only
valuable if kept current so we have added ``at least quarterly'' to the
requirement in paragraph (a)(5) that states must require participating
plans to publicize and keep current their participating providers.
Because this requirement is not limited to any classes or types of
providers, we believe it is inclusive as written for all providers.
11. Tribal Consultation (Sec. 600.155)
In Sec. 600.155, we proposed that states are required to consult
with Indian tribes located in the state on the development and
execution of the BHP Blueprint using the state or federal tribal
consultation policy approved by the state or federal Exchange as
applicable.
Comment: We received a comment recommending the removal of the word
``federal'' from the requirement to follow the approved state or
federal tribal consultation policy. Also the commenter urges CMS to use
the Washington State Exchange tribal consultation policy as the model.
Response: We agree that it is not necessary to identify in this
rule whether the state exchange was established by the state or federal
government, or whether the tribal consultation policy was based on a
state or federal policy. It is only necessary to make clear that the
BHP should comply with the state Exchange's tribal consultation policy.
Therefore we will remove ``State or Federal'' as descriptors of the
tribal consultation policy. We appreciate the reference to Washington
State's Exchange tribal consultation policy but because each state has
a different tribal makeup and relationship, it is important to maintain
state flexibility in determining an appropriate consultation policy.
Thus, we are not specifying adoption of any specific state's policy.
12. Protections for American Indians and Alaska Natives (Sec. 600.160)
In Sec. 600.160, we proposed specific protections for American
Indians and Alaska Natives. Specifically, we required the extension of
the special enrollment status applicable in the Exchange, we require
states to permit Indian tribes and tribal organizations to pay premiums
on behalf of BHP enrolled individuals, cost-sharing is prohibited, and
we require standard health plans to pay primary to health programs
operated by the Indian Health Service or tribal organizations for
services covered under the standard health plan. Because we realized
that the proposed policy with respect to premium payment should not be
limited to tribes, tribal organizations and urban Indian organizations,
we are broadening that requirement and moving it into Sec. 600.520 as
discussed below.
Comment: We received a comment requesting that we further protect
Indian health providers operating within standard health plans by
prohibiting the offerors from reducing the payments to providers by the
amount of any cost-sharing that would be due from Indians but for the
prohibition on cost-sharing. This prohibition is equivalent to that
extended to Indian health providers providing services to Indians
enrolled in a QHP in the individual market through an Exchange at 45
CFR 156.430(g).
Response: We agree with the commenter that, if the cost of
protecting Indians from cost sharing was placed on providers, it would
have the result of reducing access to care and would frustrate the
purpose of the cost sharing protection. Therefore, we have added this
protection as paragraph (c).
13. Nondiscrimination Standards (Sec. 600.165)
We proposed, in Sec. 600.165 that the state and standard health
plans must comply with all applicable civil rights statutes which are
delineated in the proposed rule (78 FR 59145) as well as the non-
discrimination provision applicable to the Exchange.
Comment: One commenter specifically appreciated that the standards
in this section clarify that BHP falls under protections of both
Affordable Care Act and the Civil Rights Act bolstering the ability of
the HHS Office for Civil Rights and individuals to hold states and
contractors accountable.
Response: We are finalizing the language as proposed without
change.
14. Annual Report Content and Timing (Sec. 600.170)
In Sec. 600.170, we proposed specific requirements for the content
and timing of the BHP annual report. The report must include content
establishing compliance with statutory requirements including
eligibility verification, limitations on the use of federal funds, and
quality and performance measures from participating standard health
plans. Additionally, states are required to submit any evidence of
fraud, waste, or abuse known to the state and any follow up that had
been specified in findings from a federal review or audit.
Comment: Several commenters made specific reference to the
requirement to report quality and performance measures and requested
the ability to align with reporting for other insurance affordability
programs. A commenter further recommended the use of NCQA, HEDIS and
CAHPs standards. Two commenters made specific suggestions for measures
or offered assistance in the development of measures that would be
appropriate for this purpose. Several commenters offered that 2 full
years of data should be available before quality measures are
collected. A commenter requested that we limit the use of measures
based on patient surveys.
Response: We agree that this standard warrants attention and that
the Department should take into account the desirability of aligning
measures across insurance affordability programs. As indicated in the
preamble of the proposed rule, we intend to issue future subregulatory
guidance on the quality and performance standards taking into account
these comments.
Comment: Several commenters questioned the timing of the annual
report, pointing out that the data available to the state 60 days
before the end of the operational year would be limited and perhaps of
poor quality.
Response: We agree that the timing of the annual report as proposed
will prove problematic for states in that it will not enable the
submission of complete data. In response to this concern, we are
changing the timing to 60 days following the end of the operational
year. With this change, we are reserving the right to request
information in advance specifically needed to substantiate the release
of funds. Otherwise, the section is being finalized as proposed.
C. Federal Program Administration
1. Federal Program Reviews and Audits (Sec. 600.200)
In Sec. 600.200(a), we proposed that HHS review each state BHP as
needed, but no less frequently than annually, to determine state
compliance with federal requirements and provisions of its BHP
Blueprint. For additional discussions on specific reports and other
documentation, refer to the September 25, 2013 proposed rule (78 FR
59126). We did not receive specific comments on this section and are
finalizing the provision as proposed.
In Sec. 600.200(b), we proposed the types of action items that may
result from such review. For specific discussions on the action items,
see the September 25, 2013 proposed rule (78 FR 59126). We
[[Page 14118]]
received specific comments on this section which are discussed below.
In Sec. 600.200(c), we proposed the HHS Office of Inspector
General (OIG) may periodically audit state operations and standard
health plan practices. For specific discussions on the periodically
conducted OIG audit, see the September 25, 2013 proposed rule (78 FR
59126). We did not receive specific comments on this section and are
finalizing the provision as proposed.
We received the following comments as they relate to federal
program reviews and audits:
Comment: One commenter recommended that the section title be
renamed to ``Federal program compliance reviews and audits.'' In
addition, the commenter noted that Sec. 600.200(b)(3) may be missing
an ``and.''
Response: We appreciate the commenter's recommended changes, which
reflect the underlying intent of the provision. The final rule has been
revised to include these changes.
Comment: One commenter expressed concern regarding the provision
that permits HHS to withhold approval of Blueprint revisions in the
event that the state has not resolved action items in which the state
appears to be out of compliance. Specifically, the commenter expressed
that withholding approval of Blueprint revisions that otherwise comply
with federal requirements is inappropriate and potentially arbitrary
given that the action to deny or disapprove a Blueprint revision should
be directly related to the subject matter of that revision; therefore,
the commenter recommended that we should delete paragraph (b)(3) under
this section.
Response: We believe that maintaining this provision in the final
rule is appropriate as it provides a compliance remedy that permits the
state the opportunity and necessary time to resolve compliance issues
while maintaining its BHP certification. Removing this provision would
result in having only one compliance remedy--the withdrawal of a
state's BHP certification--in the event that identified action items
were not immediately resolved. We believe that this alternative is not
in the best interest of the state, or in the best interest of the BHP
enrollees, as it would result in program termination as well as
coverage disruptions for BHP enrollees.
Comment: We received a request to define the standard of review,
especially as it relates to the use of BHP trust funds.
Response: The standard of review for federal program reviews and
audits is defined in Sec. 600.200(a). Specifically, this standard of
review includes all applicable laws, regulation, and interpretive
guidance as it relates to federal BHP requirements as well as the
provisions of the state's certified BHP Blueprint. The standard of
review with respect to the use of BHP trust funds includes all
applicable laws, regulation, and interpretive guidance as it relates to
BHP trust funds, with a focus on the requirements specified in Sec.
600.705. We have modified the language in Sec. 600.200(b)(4) to
clarify this standard.
D. Eligibility and Enrollment
The proposed content of Subpart D includes all eligibility and
application, screening and enrollment standards and procedures.
1. Basis, Scope and Applicability (Sec. 600.300)
In proposed Sec. 600.300 we provided the citation for the
statutory basis for subpart D of this rule as section 1331(e) of the
Affordable Care Act, which sets forth eligibility standards for the BHP
and prohibits eligible individuals from being treated as qualified
individuals for purposes of enrolling in QHPs through the Exchange. We
did not receive specific comments on proposed Sec. 600.300 and are
finalizing the provision as proposed.
2. Eligible Individuals (Sec. 600.305)
In Sec. 600.305(a), we proposed that an individual is eligible for
BHP if the individual:
Resides in the state offering the BHP, and is not eligible
for coverage under the state's Medicaid program that includes at least
the essential health benefits (EHB) described in 45 CFR Part 156;
Has household income that exceeds 133 percent of the
federal poverty level (FPL) and does not exceed 200 percent of the FPL
for the applicable family size, or for a lawfully present non-citizen
ineligible for Medicaid due to citizenship status, with household
income not exceeding 200 percent of the FPL; and
Is not eligible to enroll in minimum essential coverage
(MEC), including Medicaid coverage that covers the EHBs described above
(individuals enrolled in Medicaid or CHIP that does not constitute MEC,
or individuals eligible only for unaffordable employer sponsored
insurance as determined under section 5000A(e)(1) of the Internal
Revenue Code would meet this criterion);
Is under age 65;
Is a citizen, or lawfully present non-citizen; and
Is not incarcerated (other than during a period pending
disposition of charges).
In Sec. 600.305(b), we proposed that a state may not impose
limitations on eligibility through the imposition of waiting lists,
caps on enrollment, restrictions based on geographic area or any other
conditions.
We are finalizing the provisions of this section as proposed but
have made some changes in response to the comments described below. In
addition, we have made several revisions for clarity.
In Sec. 600.305(a)(1) we have modified the standard to read ``are
residents of the state.'' In Sec. 600.305(a)(2), we changed the term
``non-citizen'' to ``immigration'' status clarifying that it is
immigration status that is a determinant for eligibility. Additionally
we clarified that this same immigration status may apply to CHIP as
well as Medicaid. In the proposed Sec. 600.305(a)(1), the standard
also referenced not being eligible for Medicaid consisting of at least
the EHBs. Because this requirement is entirely subsumed under Sec.
600.305(a)(3) requiring ineligibility for MEC, we have deleted it from
this section; this does not change the meaning of the regulations but
rather makes the regulation more clear. Additionally, in Sec.
600.305(a)(3) we have removed the word ``affordable'' to more closely
reflect the underlying statutory language that connects affordability
to employer sponsored insurance. In addition, we have also deleted the
reference to CHIP in Sec. 600.305(a)(3)(i), and have limited the
reference to ``such other programs'' only to Medicaid, because the
Department of Treasury's final rule on MEC (78 FR 53646) now clarifies
that all CHIP coverage is MEC (in contrast to Medicaid, which for some
individuals may be limited and therefore not MEC).
Comment: We received many comments supporting the proposed
eligibility standards for BHP, including the provision permitting
individuals in limited-benefit Medicaid programs to remain in such
programs while also being determined eligible for BHP. Commenters
expressed the importance of this provision as it relates to family
planning, pregnancy related services, and HIV treatments.
Response: We are finalizing the proposed provisions.
Comment: We received one comment requesting that HHS provide an
exception to the eligibility standards in states that do not expand
Medicaid coverage citing the gap in coverage in those states that do
not cover low
[[Page 14119]]
income adults under 133 percent of the FPL.
Response: We share the commenter's concern regarding the gap in
coverage in states that have not elected to expand Medicaid to cover
low income adults under 133 percent FPL; however, we have no authority
to provide an exception as requested by the commenter given that the
statute specifies the household income standard in BHP (that is,
individuals with household income that exceeds 133 percent of the FPL
and does not exceed 200 percent of the FPL).
Comment: Several commenters requested clarification that legally
married same-sex couples will be recognized as married for purposes of
BHP eligibility, in line with the Department's policy in the Exchanges.
Response: Marriage recognition is not a policy subject to federal
regulation under either the Exchange or Medicaid, but it is necessary
for the determination of household composition, which is a key element
of calculating household income using the modified adjusted gross
income (MAGI) methodology. Under section 1331(h) of the Affordable Care
Act, BHP terms such as income, including the element of household
composition, are required to have the same meaning as such terms have
under section 36B of the Internal Revenue Code. Pursuant to September
2013 guidance on this issue from the IRS in Revenue Ruling 2013-17, a
marriage of same-sex individuals validly entered into is recognized for
purposes of the Internal Revenue Code even if the state in which the
individuals are domiciled does not recognize the validity of same sex
marriages. Because BHP is required to use the same definitions as are
applicable under the Internal Revenue Code and because it would promote
consistency across federal programs, we agree that this same policy is
applicable to BHP. We intend to address this issue in subregulatory
interpretive guidance similar to the guidance issued under the Exchange
and Medicaid on BHP implications of United States v. Windsor, 570 U.S.
-------- (2013). Using interpretive guidance will allow a more specific
and nuanced consideration of the issues raised.
Comment: Several commenters requested flexibility in BHP to provide
coverage for spouses affected by the affordability test for employer
based insurance. Some spouses are not eligible for a premium tax credit
because they would be considered eligible for affordable employer based
insurance. Some commenters suggested that CMS provide a state option to
cover such spouses but not to require such coverage, so as not to force
states to cover individuals for whom there would be no federal
reimbursement. The commenters urged CMS to revise the regulation to
permit states the option for such spouses to enroll in BHP and for
states to have as much flexibility in funding as possible.
Response: To explain the changes made to the regulation in response
to these comments, it is necessary to point out that there is a
statutory error in section 1331 of the Affordable Care Act, which as
part of the eligibility standards, sets the BHP standard of
affordability of employer sponsored insurance by referencing section
5000A(e)(2) of the Internal Revenue Code. Section 5000A(e)(2) is not an
affordability test. Compounding the error, we cited the affordability
test in the proposed rule as section 5000A(e)(1) which is not the
statutory reference, but is an affordability test. Resolving this
double error, we are clarifying that the affordability test that should
have been cited in BHP is to the premium tax credit standard at section
36B(c)(2)(C) of the Code. As the commenters correctly point out,
including the affordability test at 5000A(e)(1) creates a difference in
eligibility between BHP and the PTC which does not seem to be supported
by other sections of the statute and amounts to an unfunded mandate.
These comments refer to statutory provisions concerning eligibility
for the premium tax credit. Under current IRS rules, spouses are not
eligible for the premium tax credit if the worker's offer of individual
coverage requires a contribution less than a certain percentage of
household income, because they would be considered eligible for
affordable coverage. Since we are applying the same affordability test
for BHP eligibility that applies for the premium tax credit, the same
policies concerning spousal eligibility would apply. The statutory
definition of an eligible individual for purposes of BHP expressly
excludes individuals who are eligible for affordable coverage.
Comment: We received a comment recommending that HHS revise
language regarding standards for non-citizens' BHP eligibility to be
more clear about the applicable income standard.
Response: We have clarified the BHP eligibility standards for
lawfully-present non-citizens ineligible for Medicaid by specifying the
full income range (that is, lawfully present non-citizens who have
household incomes from 0 to 200 percent of the FPL).
Comment: A few commenters supported, but wanted further clarity,
regarding the provision in the proposed rule that a state must
determine an individual eligible for BHP when they are enrolled in
Medicaid or CHIP coverage that does not provide MEC. In particular, one
commenter would like verification that pregnancy-related services
provided through Medicaid, whether comprehensive or not, continue to be
excluded under Department of Treasury rules regarding MEC and would not
preclude eligibility for BHP.
Response: The definition of MEC is outside the scope of this rule.
Section 1331(e) of the Affordable Care Act sets out two standards that
are relevant to determining if individuals with household incomes from
133 up through 200 percent of the FPL, who are eligible for Medicaid,
can enroll in BHP. First, such an individual may not be eligible for
Medicaid benefits that consist of EHBs (as described in section 1302(b)
of the Affordable Care Act). In addition, to be eligible for BHP,
individuals may not be eligible for MEC. MEC is defined in the Internal
Revenue Code and implementing regulations. In general, Medicaid
coverage is considered to be MEC and Medicaid coverage consisting of
the EHBs would be MEC. A recent rule issued by the Department of
Treasury (78 FR 53646), however, now provides that some limited-
benefits categories of coverage under title XIX are not MEC.
Additionally, HHS has miscellaneous MEC authority to determine Medicaid
programs to be MEC on an individual basis.
Comment: Another commenter wanted clarity that an individual may be
eligible to enroll in a standard health plan through BHP if the
individual has access to employer sponsored coverage that fails to meet
the minimum value standards.
Response: As noted above, the standard for eligibility for BHP is
based on statutory language in section 1331(e)(1) of the Affordable
Care Act, which specifies that only individuals ineligible for MEC or
individuals eligible for an employer-sponsored plan that is not
affordable coverage are eligible for BHP. Minimum value is not a
standard authorized by the statute.
Comment: We received two comments requesting greater flexibility in
states that implement a BHP for individuals who wish to remain in QHPs.
The commenters expressed interest in providing such individuals with
the choice to enroll in BHP, or remain enrolled in the Exchange with
their premium tax credit and cost-sharing reductions.
Response: We appreciate the commenters' interest in providing
flexibility to individuals eligible for BHP who wish to continue to
receive
[[Page 14120]]
coverage through QHPs. Such individuals may continue to receive
coverage through QHPs; however, the statute specifies that individuals
eligible for BHP are not eligible to receive the premium tax credit or
cost-sharing reductions. If an individual elects to remain enrolled in
QHP coverage, and is determined to be eligible for the state's BHP, no
federal subsidies will be available to purchase the QHP coverage.
Comment: One commenter expressed concern about Medicaid serving as
a secondary payer to BHP, because the commenter believed Medicaid will
likely be the better payer. The commenter recommended that HHS ensure
that individuals have easy access to comparison information between
Medicaid and BHP to help facilitate choice.
Response: If a person has eligibility for both Medicaid that is not
MEC and for BHP, the Medicaid statute at section 1902(a)(25) of the
Social Security Act and implementing Medicaid regulations require that
Medicaid pay secondary to BHP. The provider is required to bill BHP
primary to Medicaid; the individual is not given choice about who is
the primary payer.
Comment: A commenter requested clarification on whether a state
implementing a BHP between open enrollment periods in the Exchange can
allow any QHP enrollees with the premium tax credit to be transitioned
to the BHP at the next open enrollment with no impact on the enrollees'
advance payments of the premium tax credits (APTCs).
Response: We are finalizing Sec. 600.305(b) as proposed except
that we have added language to conform with a change made in subpart B
of this rule permitting states implementing BHP in 2015 to seek
approval for a transition plan enabling the state to propose
alternative initial enrollment strategies for eligible individuals.
This would address the commenters concern if the state implements BHP
in 2015. After 2015, we are requiring alignment of BHP with open
enrollment in the Exchange at Sec. 600.115(d). Following the 2015
initial implementation year, a state implementing a BHP must coordinate
implementation with open enrollment of the state's Exchange.
3. Application (Sec. 600.310)
In Sec. 600.310, we proposed that any state operating a BHP must
use the single streamlined application or the state's approved
alternative. Additionally, we proposed that application assistance be
made available to individuals applying for BHP equal to that which is
available in Medicaid. We also proposed that if a state uses authorized
representatives, it would follow the standards of either Medicaid or
the Exchange. We noted in the preamble that call centers required by
the Exchange at 45 CFR 155.205(a) are encouraged under those
regulations to provide information on all insurance affordability
programs including BHP.
Comment: Several commenters requested that we require that
application assistance be conducted in a manner accessible to those
with limited English proficiency or individuals with disabilities. A
commenter suggested requiring call center staff to refer consumers in
real time to community resources if they are unable to answer questions
about BHP. Another commenter wanted call centers to be required to
provide information on BHP rather than encouraged to do so.
Response: After consideration of the comments received, we are
finalizing this section as proposed. We have required application
assistance for BHP equal to that provided in the Medicaid program,
which requires accommodation for individuals with limited English
proficiency and for persons with disabilities. Additionally, the call
center requirements set forth at 45 CFR 155.205(a) are outside of the
scope of this rule-making; therefore, we cannot make the suggestions
proposed by the commenters. While we are unable to include specific
call center requirements in this final rule, we expect that, in
accordance with Sec. 600.330, the state will enter into an agreement
with the state Exchange to ensure coordination of BHP and Exchange
application and enrollment mechanisms. Since call centers are part of
those mechanisms, we expect that the agreement will require that
coordination will include call center activities. We expect that call
centers will support all insurance affordability programs, including
BHP.
4. Certified Application Counselors (Sec. 600.315)
In Sec. 600.315, we proposed that if, a state chooses to use
certified application counselors (CACs), the state must apply either
the certification standards and processes of Medicaid or the Exchange.
Comment: One commenter requested clarification on whether a state
must use certified application counselors.
Response: We are not mandating the use of certified application
counselors.
Comment: We received several comments requesting clarification on
who can serve as certified application counselor. Specifically,
commenters recommended that HHS permit health plans to serve as
certified application counselors. The commenters noted that it would be
desirable to have plans assist as ``issuer customer service
representatives.''
Response: Certified application counselors are individuals who meet
certain qualifications, not entities. To the extent that employees of
health plans or any other entities meet the applicable qualifications,
they would not be precluded from serving as CACs. These qualifications
would be based on the certification standards of either Medicaid at 42
CFR 435.908 or the Exchange at 45 CFR 155.225 (at state option). We
note that employees of health plans acting as CACs would need to be
able to maintain confidential records, and would need to ensure that
they will not operate with a conflict of interest (for example, they
could not receive bonuses based on how many new enrollees sign up for
the employing health plan).
Comment: We also received a comment that the certification process
should include specific training components on how to provide
accessible services to individuals with disabilities and culturally and
linguistically appropriate services. Commenters suggested that training
should include components on how to access and work with interpreters
as well as how to access and use augmentative and assistive
communication devices. The commenter recommended that application
counselors have access to population level data to assist in
determining the needs of the population being served. A commenter
recommended the inclusion of language directing assistance in the form
of pre-enrollment outreach and education.
Response: We share the commenter's interest in ensuring that
certified application counselors have sufficient training to assist
individuals seeking health insurance coverage; however, we believe that
the content of such training is best determined at the state-level
given the state-specific needs and unique market features within the
state. We anticipate that states will use a variety of application
assistance techniques relying heavily on the strength of current
operations in each state. Such state training still must be in
accordance with 45 CFR 155.225 (accessibility requirements for persons
with disabilities), or 42 CFR 435.908 (accessibility requirements for
persons with disabilities and for individuals with limited English
proficiency.)
[[Page 14121]]
5. Determination of Eligibility for and Enrollment in a BHP (Sec.
600.320)
In Sec. 600.320, we proposed that determining eligibility for BHP
is a governmental function that must be done by a state or local
governmental entity, including at state choice, an Exchange that is a
government entity. Further, we proposed that the timeliness standards
for making modified adjusted gross income (MAGI) based eligibility
determinations under Medicaid apply equally to BHP. Regarding
establishment of the effective date of eligibility, we proposed that
states must establish a uniform method of determining the effective
date for purposes of enrollment in standard health plans using either
the Exchange standards or Medicaid rules. Likewise, we proposed that
the state must offer either the enrollment and special enrollment
periods of the Exchange or the state may choose to follow the
continuous open enrollment standard of Medicaid.
We received several comments on this section, which we have
carefully considered and we offer a variety of modifications, as
described below.
Comment: One commenter offered endorsement of the policy of having
eligibility determinations made by governmental agencies. With regard
to enrollment, we also received general support for offering the choice
between the enrollment policies of the Exchange or Medicaid; however,
some commenters suggested we narrow the Medicaid option to be exclusive
of Sec. 435.915(a), which establishes retroactive coverage.
Response: In Sec. 600.320(c) we have removed applicability of
Sec. 435.915(a) to eliminate retroactive coverage from the Medicaid
enrollment policies that would be required if the state elects the
Medicaid model; states can still provide retroactive eligibility in BHP
following the Medicaid rules if they so choose but it is not required.
Comment: A few commenters requested clarification on whether tax
filing is required for enrollment.
Response: Tax filing is not an eligibility standard for BHP; the
eligibility standards for BHP eligible individuals are set forth in
Sec. 600.305. This section's focus is on the processes, not the
standards, for determining eligibility and enrollment. These processes
should be used to determine eligibility against the standards given in
Sec. 600.305(a). In Sec. 600.305(b) we have made it clear that states
may not add to the list of eligibility standards. Therefore, we have
not altered the regulation text.
Comment: A commenter suggested that we permit presumptive
eligibility in BHP and that we permit hospitals to delegate authority
to another entity, such as an eligibility service vendor.
Response: There is no statutory provision that authorizes
presumptive eligibility under BHP. As discussed above, states may elect
to provide for retroactive effective dates for eligibility. This option
may ensure that coverage is not delayed because of the eligibility and
enrollment process.
Comment: We received a comment advising us to state the goal of
real-time eligibility determinations.
Response: We agree with the commenters' position that insurance
affordability programs, including BHP, should be moving towards real-
time eligibility determinations. Achieving this goal is dependent on
the development and maintenance of effective systems and procedures,
which may take a substantial investment and time.
Comment: One commenter suggested that we not use the term
``continuous eligibility'', which the commenter noted could be confused
with other eligibility policies. The commenter encouraged us to
describe enrollment as continuing on a rolling basis throughout the
year.
Response: In response to the comment we have added the phrase
``continuous open enrollment throughout the year'' to Sec. 600.320(d)
to clarify the Medicaid choice of enrollment.
Comment: Several commenters raised concern that the Exchange
standard does not include a special enrollment period for pregnancy and
asked that we specifically address that in BHP.
Response: We have modified the text to clarify that states choosing
the Exchange enrollment policy must establish enrollment periods no
more restrictive than those permitted by the Exchange, enabling states
to add special enrollment periods based on pregnancy as suggested.
6. Coordination With Other Insurance Affordability Programs (Sec.
600.330)
In Sec. 600.330, we proposed carrying over several of the
coordination provisions from the Exchange and Medicaid regulations to
BHP, including having agreements delineating lines of authority for
making coordinated eligibility determinations. We have proposed that
individuals applying to any insurance affordability program not be
required to duplicate information already provided for purposes of
applying for BHP, and that the state accomplish this through
electronically transferring accounts between the BHP and other agencies
as well as accepting determinations and assessments made by other
insurance affordability programs and enrolling eligible individuals
into coverage without delay. When accounts are transferred to the BHP
from other agencies, we proposed a requirement that the BHP agency must
notify the referring agency of any final determination. Also, we
proposed that every application for BHP will result in a final
determination of eligibility or ineligibility and that notices to
applicants be coordinated with other insurance affordability programs.
Comment: We received many comments supporting coordination between
IAPs, some of the comments particularly pointed out the importance of
having agreements between IAPs. No comments requesting change were
received on this section.
Response: We are finalizing this section as proposed.
7. Appeals (Sec. 600.335)
Section 1331 of the Affordable Care Act does not confer a federal
level appeal for the BHP program. Therefore, we proposed in Sec.
600.335 that states follow the Medicaid appeals rules and processes.
Under these processes, there would be no direct appeal to the
Department of Health and Human Services. Further, we proposed that
eligibility determinations must include notice of the right to appeal
and instructions for how to engage the appeals process. We proposed
that this process must be conducted in a manner accessible to
individuals with limited English proficiency and persons with
disabilities.
Comment: While we received a few comments commending the decision
to use the Medicaid appeals process, we received several comments
expressing concern about this section. Commenters favored the ability
to choose the Marketplace (Exchange) appeals process to decrease
variability within a given state. One commenter acknowledged that
notices would have to specify that there is no federal level appeal for
BHP.
Response: We understand the commenters' desire to have the Exchange
appeals rules and processes available to BHP, decreasing variability in
states with state-based Exchanges. (We note the Federally Facilitated
Exchange will only have a federal process, and we do not anticipate
that this federal process will be available for BHP.) Therefore, as in
many other areas of the regulation, we are changing this provision to
give states the choice of using the appeals rules of Medicaid or the
Exchange.
[[Page 14122]]
8. Periodic Renewal of BHP Eligibility (Sec. 600.340)
In Sec. 600.340(a), we proposed a 12-month period of eligibility
unless redetermination is warranted based on new information.
Additionally, we proposed that states require individuals to report
changes in circumstances at least equivalent to that which is required
by the Exchange. In Sec. 600.340(b), we proposed that enrollees who
remain eligible be given notice of a reasonable opportunity to change
plans. Further, we proposed that enrollees will remain in the plans
selected for the previous year if they choose not to take action on
such notices and such plans remain available. In paragraphs (c) and
(d), we proposed that states apply the redetermination procedures of
either the Exchange or Medicaid and that states are required to verify
information in accordance with Sec. 600.345. Finally, in Sec.
600.340(e) we require states to provide an enrollee with an annual
notice of redetermination of eligibility which includes all current
information used as the basis of the individual's eligibility. The
enrollee is required to report changes within 30 days and the state
must verify the information.
Comment: Many comments were received on this section, with the vast
majority urging us to allow 12 month continuous eligibility. Commenters
frequently cited that half the individuals in the eligible income
bracket for BHP are expected to experience changes in income within a
12 month period that would cause them to shift from BHP to Medicaid or
the Exchange. Many commenters were concerned with the administrative
burden this would place on a state.
Response: We have carefully considered the comments received and we
are sympathetic to the request for 12 month continuous eligibility
because we share the concern of the commenters both with regard to the
shifts between different insurance affordability programs that could be
experienced by the BHP enrollees and the administrative burden on
states. Therefore, we are extending to states the option of only
redetermining eligibility every 12 months, regardless of any changes in
income or other circumstances, as long as the enrollee is under age 65,
is not otherwise enrolled in MEC, and remains a resident of the state.
We have singled out those exceptions because they are situations in
which BHP coverage would either be duplicative or outside its overall
scope. However, enrollees must report changes impacting eligibility
within 30 days regardless. Additionally, to clarify the relationship
between this new provision and the 12 month periodic review of
eligibility (provision (a)) we have replaced the language that an
individual is ``determined eligible for a period of'' with ``subject to
periodic review of eligibility every'' 12 months in provision (a).
States will not receive additional funding to account for any higher
BHP enrollment under this state option.
Comment: One comment requested clarification that enrollees must
report all changes within 30 days.
Response: The 30 day standard specified in 45 CFR 155.330(b) is
applied by reference.
9. Eligibility Verification (Sec. 600.345) and Privacy and Security of
Information (Sec. 600.350)
In Sec. 600.345, we proposed that states verify the eligibility of
an applicant or enrollee in BHP using either the standards and
procedures of Medicaid or the Exchange. In Sec. 600.350 we proposed
that states are required to comply with standards and procedures
protecting the privacy and security of eligibility information set
forth by the Exchange. We did not receive specific comments on these
sections and are finalizing the provisions as proposed.
E. Standard Health Plan
1. Basis, Scope and Applicability (Sec. 600.400)
Proposed Sec. 600.400 under subpart E specified the general
statutory authority for, and the scope of, standards proposed in this
subpart, which sets forth the minimum coverage standards under BHP and
delivery of such coverage, including the competitive contracting
process required for the provision of standard health plans. For
specific discussions, see the September 25, 2013 proposed BHP rule (78
FR 59128 and 59129). We did not receive specific comments on this
section and are finalizing the provision as proposed.
2. Standard Health Plan Coverage (Sec. 600.405)
In Sec. 600.405(a), we proposed that standard health plan coverage
must include, at a minimum, the EHBs as determined and specified under
45 CFR 156.110, and 45 CFR 156.122 regarding prescription drugs. We
also proposed that states be able to select more than one base
benchmark option from the reference plans specified at 45 CFR 156.100
when establishing EHBs for standard health plans. Additionally, we
proposed that states comply with 45 CFR 156.122(a)(2) by requiring
participating standard health plans to submit a list of covered
prescription drugs under the plan to the state.
In proposed Sec. 600.405(b), the state is required to adopt the
determination of the Exchange at 45 CFR 155.170(a)(3) in determining
which benefits subject to state insurance mandates enacted after
December 31, 2011 are in addition to the EHBs.
In proposed Sec. 600.405(c) and (d), we required EHBs to include
changes made through periodic review and prohibited discrimination in
benefit design.
Proposed Sec. 600.405(e) is the prohibition on federal funding for
abortion prescribed in section 1303 of the Affordable Care Act that
applies in the same manner to BHP and standard health plans as it does
to QHPs.
Comment: We received several comments in support of requiring
coverage for preventive services without cost-sharing.
Response: We are finalizing the proposed provisions.
Comment: We received several commenters requesting that states have
the ability to use the alternative benefit plan in Medicaid as the
reference or base-benchmark plan for BHP in order to incorporate EPSDT
and other child specific benefits in the event that CHIP does not
continue beyond 2019. Another group of commenters request that we
require the state to use the same base-benchmark or reference plan that
the state uses for either the Exchange or the Medicaid benchmark.
Response: Sections 1331(a)(2)(B) and 1331(b)(2) of the Affordable
Care Act provide that the benefits offered through BHP must contain at
least EHBs, which is determined by a comparison to a base benchmark
plan set forth at 45 CFR 156.100 using the processes set forth in 45
CFR 156.110 and 45 CFR 156.122. The statute does not require benefits
equivalent to a Medicaid alternative benefit plan. That said, states
have the ability to negotiate for additional benefits through the
competitive procurement process required by section 1331(c)(1) of the
Affordable Care Act and can also provide additional benefits for BHP
enrollees in addition to the standard health plan benefits, using BHP
trust funds.
Comment: Other commenters recommend additional benefits outside of
the EHBs in the standard health plan. They also expressed concern that
requiring the state to offer at least the EHBs ``at a minimum'' is
insufficient to mean the state, at its option, may provide additional
benefits to the standard health plan.
Response: We have carefully considered the comments for this
[[Page 14123]]
section and we are finalizing without change. We believe that this
regulation is explicit in establishing that states must provide EHBs as
a minimum level of benefits, can negotiate with standard health plans
in the competitive procurement process for more benefits, and can
supplement those benefits with additional benefits for BHP enrollees,
using BHP trust fund dollars.
Comment: We received one comment requesting that HHS provide
examples of additional benefits a state could provide. Another
commenter requested clarification that a state must provide coverage of
plasma protein therapies.
Response: We hesitate to provide examples in this area where states
are extended complete latitude because examples are often viewed as
recommendations. For benefits coverage policy, we are requiring the
statutory floor of the EHBs, and each state is free to add to the
benefits as the state decides is appropriate. We are leaving this
provision unchanged.
Comment: Several commenters expressed concern that the preamble
language concerning the abortion services standard appeared to be
misleading in that it may be read to mean that states out of compliance
with this requirement would not receive any federal funding for BHP,
rather than just federal funding for abortion.
Response: The regulation text requires compliance with the rules on
abortion coverage applicable to Exchanges at 45 CFR 156.280. The
preamble explained that, consistent with that regulation, any abortion
coverage for which public funding is prohibited could only be provided
using segregated non-federal funding. If a state or standard health
plan does not segregate funding for such abortion coverage, the state
would be out of compliance with BHP requirements, and could lose
program certification. Or the state could face disallowance of
improperly spent funds.
Comment: Another commenter requested the inclusion of additional
guidance on substitution and supplementation of benefits.
Response: Supplementation and substitution are policies that were
developed for use by plans in the individual and group markets, and
were adopted with some minor variations by Medicaid, for alternative
benefit plans. In general, these policies are part of the determination
of the scope of EHBs. Section 1302 of the Affordable Care Act sets
forth 10 required EHBs, and then indicates that the full scope of EHBs
should be based on the scope of benefits provided by a typical employer
plan. To implement this requirement, under applicable regulations at 45
CFR 156.100 et seq., states must select a base benchmark plan from
among several options. While the state selects one base benchmark for
individual and group plans, the state may select different and multiple
base benchmarks for Medicaid. Supplementation allows a plan offeror to
add to the base benchmark a required EHB that is missing, and
substitution allows a plan offeror to substitute an actuarially
equivalent essential health benefit into a reference plan. (In
Medicaid, because the state acts as the plan offeror, it determines the
supplementation and substitution procedures.) These flexibilities were
created to make the definition of EHBs possible from existing
commercial products. For BHP, we propose the same process to define
EHBs, except that the state could select different and multiple base
benchmarks for BHP. Any subregulatory guidance put forward by the
Exchange will be made equally available under BHP.
Comment: One commenter requested that HHS ensure payment for out-
of-network providers for emergency services and the extension of
protections in section 1932(b)(2) of the Act, the prudent laypersons
standard for emergency care, to BHP.
Response: With respect to the provider rates, we do not believe
that statute provides the authority to establish rate-setting standards
in BHP. States are free to contract with standard health plan offerors
to provide coverage which may take many forms including networks, fee-
for-service or other models. States may impose additional requirements
including mandatory benefits, rate structures, or delivery system
limitations through law or contract.
Regarding the prudent layperson standard for emergency services,
EHBs are required by statute to be offered in BHP. Emergency services
is an EHB, to which the prudent layperson standard is applied at 45 CFR
147.138(b)(4). Therefore, any base benchmark plan will necessarily
include emergency services based on the prudent layperson standard.
Comment: We received one comment expressing concern that the United
States Phamacopeia (USP) classification system as specified in 45 CFR
156.122 is not designed to be used with plans requiring EHBs, and are
inadequate in providing for women's health care needs.
Response: This issue is not within the scope of this regulation.
3. Competitive Contracting Process (Sec. 600.410)
Under Sec. 600.410(a), we propose that a state must assure in its
BHP Blueprint that it meets the requirements of this section.
We propose in Sec. 600.410(b) elements required in the competitive
contracting process for the provision of standard health plans. For the
specific elements, see the September 25, 2013 proposed rule (78 FR
59147).
In Sec. 600.410(c), we proposed an exception to the competitive
contracting process for program year 2015. For specific requirements
associated with this exception, see the September 25, 2013 proposed
rule (78 FR 59130).
We proposed in Sec. 600.410(d) the specific negotiation criteria
that the state must assure is included in its competitive contracting
process. For the specific criteria, see the September 25, 2013 proposed
rule (78 FR 59147).
In Sec. 600.410(e), we proposed additional considerations
specified in statute that a state must include in its competitive
contracting process for the provision of standard health plans. For
specific discussions, see the September 25, 2013 proposed rule (78 FR
59147). We received the following comments on the competitive
contracting process:
Comment: We received several comments supporting the proposed
competitive contracting process.
Response: We are finalizing the competitive contracting process
provisions with some modifications as discussed further below.
Comment: We received several comments requesting clarification on
whether a state could use its Medicaid, or QHP, contracting process for
BHP if that process was competitive in nature. Two commenters
specifically asked whether Medicaid managed care organizations
currently under contract could provide standard health plans to allow
the alignment of BHP with existing benefits offered to Medicaid
beneficiaries, or would the state need to begin a new procurement
process for BHP. Another commenter requested that CMS waive the
competitive contracting process if the state's Medicaid or Exchange-
based contracting process aligns with the BHP requirements.
Response: With respect to how the state executes its procurements
(that is, the manner in which the state solicits for bids and
effectuates a contract award), a state may use an already established
competitive contracting process, such as the Medicaid or QHP process,
to enter into contracts with standard health plan offerors as long as
the process provides for negotiation and
[[Page 14124]]
consideration of each of the statutorily required factors for BHP
procurement. This may require some adjustment to those established
processes, since, for example, a Medicaid managed care procurement
would not necessarily include negotiation or consideration of those
required elements. Although the procurement process might have many
standard elements, the state would have to adjust its solicitation of
bids to reflect the differing requirements of each separate program,
and contractors would likely need to adjust their offerings to meet the
requirements of each separate program. In addition, the procurement
process would have to ensure that there was no cross-subsidization
between programs. Except for program year 2015, in which a state may
request an exception to the competitive contracting process, the
procurement process used to contract for the provision of standard
health plans, whether it is a joint or standalone procurement, must
include and comply with all of the statutorily required elements of
competitive bidding for BHP standard health plans codified in Sec.
600.410.
We understand the commenters' interest in ensuring rapid and
efficient implementation of BHP and, as a result, we have provided a
state implementing BHP in program year 2015 with the option to request
an exception to the competitive process. As specified in Sec.
600.410(c), the state must include a justification as to why it cannot
meet this requirement and describe the process it will use to enter
into contracts for the provision of standard health plans in 2015. This
process can include, but is not limited to, amending existing Medicaid
or Exchange-based contracts for the purpose of promoting coordination
and efficiency in procurements. After the exception period has expired
(that is, beginning for coverage effective in program year 2016),
simply amending an existing contract to include BHP, after the
competition process is complete, is not permissible. The statute
requires the use of a competitive contracting process, and we do not
believe we have the authority to exempt states from the process beyond
the startup year for the program.
Comment: Several commenters requested clarification regarding the
procurement bidding process. Specifically, commenters asked if a state
is required to open the bidding to all interested parties, or whether
the state has the ability to impose criteria that limits the number of
eligible bidders. Another commenter suggested that the bidding process
ensure the participation of local health plans.
Response: The statute specifies that a state must establish a
competitive contracting process for the provision of standard health
plans. In order to meet this statutory requirement, we proposed that a
state may establish such a process under state procedures that are
consistent with the standards set out in section 45 CFR 92.36(b)
through (i). These standards provide states considerable flexibility in
the solicitation and evaluation of bids as well as in the awarding of
contracts; therefore, to the extent that the state's solicitation
complies with such standards as well as ensures that the qualified
bidders can provide standard health plan coverage in all contexts, the
state has the flexibility to determine the criteria for eligible
standard health plan bidders, including the participation of local
health plans.
Comment: We received many comments encouraging HHS to ensure the
participation of Administrative Service Organizations (ASOs) in the
competitive contracting process. They felt that permitting ASO
participation would enable more states to implement BHP as it would
allow interested states to build off of their existing Medicaid
programs thereby reducing the administrative burden associated with
implementing a new program.
Response: The statute requires states to contract for the provision
of standard health plans under BHP. Neither the statute, nor our
regulations, specifically prescribe or restrict the participation of
certain kinds of entities as standard health plan offerors. Rather,
standard health plan offerors must meet the requirements delineated out
in Sec. 600.415(a). ASOs may participate in the competitive
contracting process to the extent that they can meet the criteria of a
standard health plan offeror in Sec. 600.415(a). ASOs (who
traditionally only offer administrative support) may expand their
capabilities and practices to meet those requirements, or partner with
other entities who do so.
Comment: While we received several comments supporting the
competitive contracting process exception for program year 2015, many
commenters recommended that HHS extend this exception through 2016, or
alternatively, provide this exception to states during their first year
of implementation even if that occurs after 2015.
Response: We are finalizing the proposed provisions providing an
exception only for 2015. Given the short time period in which states
have to establish a BHP in time for the January 1, 2015 effective date,
we believe that the one year exception will not only help states
quickly and efficiently implement BHP by leveraging existing contracts
that may not have been procured consistent with the finalized
regulation, but also promote coordination and continuity of care during
the initial implementation of BHP in 2015. For states that elect to
implement BHP after 2015, we believe that these states will have
sufficient time between the issuance of these final rules and a post-
2015 implementation to establish a competitive contracting process for
the procurement of standard health plans. The statute requires such a
process and we do not believe we have the authority to exempt states
from the process beyond the startup year for the program.
Comment: We received many comments recommending that we allow
states to utilize a primary care case management (PCCM) delivery of
care model under BHP. Many commenters expressed that the PCCM model not
only meets the statutory requirement to use a process with as many
attributes of managed care as possible, but that it would also
encourage BHP implementation as it would allow interested states to
build off of their existing Medicaid programs.
Response: The statute requires states to contract for the provision
of standard health plans under BHP. Neither the statute, nor our
regulations, specifically prescribe or restrict the participation of
certain kinds of entities as standard health offerors. Rather, standard
health offerors must meet the requirements delineated in 600.415(a).
Standard health plan offerors have the discretion to determine and
utilize a delivery of care model, such as the PCCM model, of their
choice. As such, standard health plan offerors electing to operate a
PCCM delivery of care model may participate in the competitive
contracting process to the extent that they can meet the criteria of a
standard health plan offeror in Sec. 600.415(a). Entities that
traditionally only provide some of the services delineated in section
600.410(c) and (d) may expand their capabilities and practices to meet
those requirements, or partner with other entities who do so. While we
appreciate commenters' suggested language changes throughout Sec.
600.410 to include the use of PCCM, we are not including those
suggested language changes into the final regulation.
Comment: One commenter requested that CMS consider broadening the
definition of what constitutes competitive contracting to permit fewer
than two standard health plans to serve
[[Page 14125]]
a local health care market. The commenter believes this would encourage
the development of innovative models of care delivery that coordinates
care throughout a locality, without a division between standard health
plan offerors. Specifically, the commenter recommended that providing
additional flexibility in competitive contracting would encourage
states interested in establishing local community-based coordinated
care models to pursue such models.
Response: We have considered the commenter's request, but we
believe that, as proposed, the regulation already affords a state with
considerable flexibility and opportunity for state innovation as it
establishes its competitive contracting process. The standards set
forth simply require the state to be consistent with those found in 45
CFR 92.36(b) which provide a basic framework to the required
procurement process. We believe that standard health plan offerors also
have considerable flexibility in developing innovative models of care
delivery, and encourage states to promote innovations in delivery
system and payment reforms during the contracting process. Given that
innovations in care coordination, utilization of preventive care
services and patient-centered health decision making are specified in
statute, we hope that states will make such innovations a high-ranking
criterion in the solicitation process. A state interested in pursuing
innovations that extend beyond the parameters of BHP and into other
insurance affordability programs has the option, beginning in 2017, to
request a waiver for state innovation as specified in section 1332 of
the Affordable Care Act. Finally, as described below, we are clarifying
the provision of the proposed regulation which requires availability of
at least two standard health plan offerors; we do not believe that this
provision will limit innovation. We view the choice of standard health
plan offerors as an essential enrollee protection that is consistent
with the requirement in section 1331(c)(3) to provide multiple plans to
the maximum extent feasible.
Comment: We received many comments recommending that the final
regulation strengthen the network adequacy requirements in the
competitive contracting process. Specifically, many commenters
suggested that the standard health plan offerors be required to
demonstrate that their provider networks not only have a sufficient
number of providers, especially specialty providers, but also have a
sufficient geographic distribution such that enrollees in rural areas,
for example, have sufficient access to providers. In addition, to
strengthen the overall network adequacy requirements, many commenters
also recommended that states ensure the standard health plan offerors
include essential community providers; federally qualified health
centers (FQHCs), pediatric primary care providers and other specialists
in their networks.
Response: We appreciate and share the commenters' interest in
ensuring that BHP enrollees have sufficient access to providers;
therefore, we have revised the language in Sec. 600.410(e)(2)
regarding access to providers. States will have some flexibility to
determine the specific nature of the standards; however, we believe
that at a minimum, the state should ensure that the standard health
plan offerors maintain a network of providers that is sufficient in
number, mix, and geographic distribution to meet the needs of the
anticipated number of enrollees in the service area to the same extent
that would be required under the standards applicable either to managed
care providers in Medicaid under 42 CFR Part 438, Subpart D or to
coverage offered through the Exchange under 45 CFR 156.230 and 156.235.
With respect to requiring states to ensure that standard health plan
offerors contract with certain provider types, the strengthened
language requiring that states ensure that standard health plans comply
with either Medicaid or Exchange access standards should address this
issue. While these access standards do not require that plans contract
with any particular essential community providers, they address the
inclusion of essential community providers in provider networks to
ensure access to care. As a result of these stronger network adequacy
standards, we anticipate that standard health plan offerors will need
to include other providers, such as I/T/Us, FQHCs, OB/GYNs, pediatric
primary care providers and other specialists in their networks to
ensure that there is a sufficient number, mix and geographic
distribution of providers for BHP enrollees to access. Finally, we
would also like to note that the consideration of access concerns for
states that have Indian populations should include consideration of
access to providers that serve such populations.
Comment: Several commenters recommended that the final regulation
require that as a condition of participating in BHP, a standard health
plan offeror participate in either the state's Medicaid program or in
the state's Exchange. Commenters offering this recommendation believe
that participating in BHP, Medicaid and/or the Exchange would help
mitigate any disruptions in care in the event that a BHP enrollee
transitions from BHP into Medicaid or the Exchange as the individual
could potentially stay with the same health plan during the transition
out of BHP.
Response: We share the commenters' interest in having strategies in
place between states and standard health plan offerors to promote
continuity of care for BHP enrollees transitioning into, or out of, the
program. States have the discretion to include standards and criteria
in their competitive procurement process to further the goals of
continuity of care that the commenters are expressing. We do not
believe, however, that limiting competition to plan offerors who
participate in other IAPs is the only method to assure continuity of
care, and in fact, could prevent BHP enrollees from having access to a
range of qualified standard health plan offerors and their networks of
providers. The commenters' concerns are addressed in part by the
requirement specified in Sec. 600.425 that states must coordinate the
continuity of care for enrollees across the insurance affordability
programs, and describe in their Blueprints how they will do so. We
anticipate that these descriptions will address how the state will
ensure minimal disruptions in care for those who transition between
insurance affordability programs.
Comment: Many commenters expressed concern that the provisions
regarding the negotiation of benefits, premiums and cost sharing in the
proposed rule precluded a state from developing a standard benefit
package, premium amount, and/or cost-sharing amount and including such
a standard in its solicitation. One commenter asked if it was
permissible for a state to establish a standard benefit package as well
as standard premium and cost-sharing amounts and accept any willing
providers that agree to meet such standards issued in the solicitation.
Many commenters felt that the final regulation should clarify that such
an approach (that is, establishing standard benefits, premiums and cost
sharing) would satisfy the ``negotiation of'' requirement specified in
statute.
Response: While the statute specifies that there must be a
negotiation of benefits, premiums and cost sharing during the
competitive contracting process, nothing precludes a state from
establishing standards that will serve as the starting point for
negotiations with standard health plans offerors. Such negotiations
around benefits, premiums,
[[Page 14126]]
cost sharing and other required elements specified in statute may
include, but are not limited to price, the provision of benefits in
addition to those specified in the state's solicitation, lower premium
and cost-sharing amounts than those specified in the state's
solicitation, or any other aspects of the state's program that were
included in its solicitation. While the state may propose a
``standard'' set of benefits, premiums and cost sharing, the state, at
a minimum, must permit some level of negotiation, such as on price, or
on additional benefits for enrollees, with the standard health plan
offeror.
Comment: Many commenters requested that HHS include additional
negotiation criteria in Sec. 600.410(d) and (e) that a state must
include in its competitive contracting process. Recommendations
included: (1) Requiring states to consider similarities between BHP
enrollees, Medicaid beneficiaries, and Exchange consumers; (2)
requiring the inclusion of specific quality and performance measures;
(3) specifying that standard health plan offerors provide documentation
that they can bear risk and meet the state's financial solvency
requirements; (4) including the negotiation of provider reimbursement
rates; and (5) require standard health plan offerors to provide proof
that they meet all of the negotiation criteria and other considerations
specified in Sec. 600.410(d) and (e) as well as all of the contract
requirements specified in Sec. 600.415(b).
Response: We appreciate the commenters' recommendations; however,
we believe that the statute specifies the minimum requirements that a
state must assure are included in its competitive contracting and
leaves considerable flexibility for states to include additional
negotiation criteria. Therefore, the requirements specified in Sec.
600.410(d) and (e) are the minimum federal requirements that the state
must assure are included in its competitive contracting process. A
state can, at its option, include additional criteria, such as those
recommended by the commenters, to establish sound negotiating standards
and criteria to ensure the ability of offerors to provide standard
health plans in such a manner that promotes affordable, high quality
health care coverage to BHP enrollees.
4. Contracting Qualifications and Requirements (Sec. 600.415)
We proposed in Sec. 600.415(a) the entities that a state may
contract with for the administration and provision of standard health
plans. For specific discussions, see the September 25, 2013 proposed
rule (78 FR 59130).
In Sec. 600.415(b), we proposed the general contract requirements
that must be included in the state's standard health plan contracts.
For specific discussions on these requirements as well as the proposed
``safe harbor'' approach, see the September 25, 2013 proposed rule (78
FR 59130 and 59131).
We proposed in Sec. 600.415(c) that a state must include in its
BHP Blueprint the standard set of contract requirements it will include
in its standard health plan contracts.
We received the following comments on contract qualifications
requirements:
Comment: We received several comments in support of the proposed
``safe harbor'' approach enabling states to select either Medicaid or
Exchange contracting provisions for their standard health plan
contracts.
Response: We thank the commenters for their support and we are
finalizing the provisions as proposed.
Comment: We received several comments in support of our proposed
rule permitting states to contract with non-licensed health maintenance
organizations participating in Medicaid and/or CHIP.
Response: We thank the commenters for their support and we are
finalizing the provisions as proposed.
Comment: Several commenters recommended that HHS apply a standard
set of qualification standards, specifically the QHP certification and
licensure standards, to standard health plan offerors.
Response: We appreciate the commenters' recommendations; however,
we are not requiring such an approach, in part because it may undermine
the state's efforts to encourage Medicaid managed care organizations
and other health insurance issuers to participate in BHP. This, in
turn, could undermine state efforts to promote coordination between all
the insurance affordability programs. As commenters rightly pointed
out, there are different standards applied to Medicaid managed care
organizations relative to the standards applied to QHPs (for example,
licensure and accreditation standards). In order to ensure that a state
has the ability to contract with health maintenance organizations that
operate in Medicaid and the Exchange, we believe that it is appropriate
to impose a minimum standard at the federal level and permit state
flexibility in determining whether the application of additional
qualification standards are appropriate and in the best interest of the
state's goals and objectives.
Comment: We received several comments requesting that HHS consider
including safety net health plans, as defined in section 9010(c)(2)(C)
of the Affordable Care Act, in the list of eligible standard health
plan offerors.
Response: We appreciate the commenter's concern, and have modified
the language in Sec. 600.415(a) to clarify that states are not limited
to contracting with the entities specified in this section for the
provision of standard health plans. A state has the flexibility to
establish the criteria included in its BHP solicitation, including
specific qualifications of the standard health plan offeror. Assuming a
safety net health plan, or another entity, meets both the federal
requirements, as well as those specified in a state's BHP solicitation,
the state may enter into contracts with such entities for the provision
of standard health plans.
Comment: Several commenters requested that HHS require that a state
include specific requirements in its standard health plan contracts.
Specific recommendations include: (1) Requiring that payment rates to
standard health plan offerors are actuarially sound; (2) inclusion of
specific providers; (3) specific provider reimbursements, such as the
prospective payment system rate used for payment to FQHCs; (4) specific
provider performance and quality measures; and (5) prohibition on the
inclusion of ``all-products'' clauses in physician contracts.
Response: We appreciate the commenters' recommendations; however,
we believe that federal standard health plan contract requirements
should reflect the competitive contracting requirements specified in
statute rather than specific requirements that are not specified in the
statute. We believe this approach promotes maximum flexibility for
states that may wish to pursue different contracting approaches in BHP,
or to blend elements from Medicaid and the Exchange. We are finalizing
the proposed provision at Sec. 600.415(b), which sets forth the
minimum contract requirements that must be included in a state's
standard health plan contract. Because these are the minimum
requirements and a state has the flexibility to include additional
requirements based on its negotiation criteria, a state must assure and
include in its BHP Blueprint the standard set of contract provisions
that it intends to incorporate into its contracts. A state can, at its
option, include additional contract requirements, such as those
recommended by the commenters, to promote affordable, high quality
health care coverage to BHP enrollees.
Comment: We received several comments recommending that HHS
[[Page 14127]]
apply the 85 percent medical loss ratio requirement to all standard
health plan offerors, and not just those that qualify as health
insurance issuers.
Response: We appreciate the commenters' recommendation; however, we
are finalizing the proposed provisions. The statute specifies the
application of the medical loss ratio (MLR) requirement only to
standard health plan offerors that are also health insurance issuers.
As discussed above, this standard is the minimum standard that a state
must adhere to. A state has the discretion to apply this MLR
requirement to all standard health plan offerors if it determines that
such a requirement furthers the objectives and goals of its program.
However, we do not believe we have the authority to require the
application of this standard to entities beyond those described by
statute.
Comment: One commenter requested clarification about ongoing
eligibility to offer a standard health plan in the event that a
standard health plan offeror does not comply with the MLR requirement.
The commenter also asked what standard, or calculation methodology,
would be used in determining whether the standard health plan offeror
met the MLR requirement.
Response: A standard health plan offeror that is also a health
insurance issuer would not qualify for a contract award if that offeror
was not able to comply with the MLR requirement. The statute as
specified in section 1331(b)(3) of the Affordable Care requires that
standard health plan offerors that are also health insurance issuers
comply with the 85 percent MLR requirement. As described above, to the
extent that the standard health plan offeror is, for example, a
Medicaid managed care organization or a network of providers, the
offeror would not need to meet the 85 percent MLR requirement as a
condition for contract award unless a state chose to impose that
requirement. With respect to the MLR calculation, the same calculation
used in the individual and small group market will be used in BHP.
5. Enhanced Availability of Standard Health Plans (Sec. 600.420)
We proposed in Sec. 600.420(a) that a state must assure that at
least two standard health plans are offered under BHP.
In Sec. 600.420(b), we proposed standards for a state entering
into a joint procurement, or regional compact, with another state for
the provision of standard health plans. For specific discussions on the
regional compact, see the September 25, 2013 proposed rule (78 FR
59131).
We received the following comments on enhancing the availability of
standard health plans:
Comment: While we received several comments in support of ensuring
choice of standard health plans, the majority of the comments we
received on this provision requested that HHS clarify whether states
must ensure the availability of at least two standard health plans, or
the availability of at least two standard health plan offerors.
Response: After carefully considering this issue, we are adding
clarifying language to require that states assure the availability of
at least two standard health plan offerors. This standard is consistent
with the Medicaid requirement set forth in 42 CFR 438.52(a), which
requires states to give Medicaid managed care beneficiaries a choice of
at least two ``entities.'' We believe that requiring a state to
contract with at least two standard health plan offerors will afford
BHP applicants and enrollees the opportunity to compare and select
their health coverage in a manner comparable to selecting health
coverage from different health insurance issuers in the Exchange. In
addition, we believe that requiring at least two standard health plan
offerors to participate in BHP will lead to more robust competition,
which could lead to better offered standard health plans and lower
costs. BHP enrollees will also have the assurance that standard health
plan coverage will always be available in the event that the
participation of one of the two standard health plan offerors in the
program is affected (that is, if one of the two offerors stopped
participating in BHP).
We believe that, in certain circumstances, the availability of two
standard health plan offerors may not be feasible. For example, after
completing its competitive contracting process, a state may only have
one eligible standard health plan offeror qualified to award a standard
health plan contract, or there may be an area within a state that only
one standard health plan offeror provides coverage. As such, we have
added an exception to the choice of standard health plan offerors in
Sec. 600.420(a)(2). In its exception request, the state must include a
justification as to why it cannot assure choice of standard health plan
offeror as well as demonstrate that it has reviewed all its contract
requirements and qualifications to determine whether they are required
under the federal framework for BHP, determined whether additional
negotiating flexibility would be consistent with the minimum statutory
requirements and available BHP funding, and reviewed the information
provided to bidders was sufficient to encourage participation in the
BHP competitive contracting process.
Comment: One commenter requested that states entering a regional
compact ensure that certified registered nurse anesthetists (CRNAs) are
used to their full scope of practice.
Response: We appreciate the commenter's interest in ensuring the
issue of full scope of practice is addressed in regional compacts;
however, we believe states entering into the regional compact have
discretion in addressing this issue through the competitive contracting
process. States entering into a regional compact must ensure that the
standard health plans offered through the compact meet all of the
required negotiation criteria set forth in Sec. 600.415(d) and (e),
including ensuring the sufficient number, mix and geographic
distribution of providers that is sufficient to ensure the proper
provision of standard health plan coverage.
6. Coordination With Other Insurance Affordability Programs (Sec.
600.425)
In Sec. 600.425, we proposed that a state must ensure the
coordination of health care services to promote continuity of care
between Medicaid, CHIP, Exchange and other state-administered health
insurance programs. The state must include in its BHP Blueprint a
description of how it will assure such coordination. We received the
following comments on insurance affordability program coordination:
Comment: We received several comments expressing support for the
requirement that a state in its Blueprint describe how it will
coordinate the provision of services to ensure continuity of care
between insurance affordability programs.
Response: We thank the commenters for their support and are
finalizing the provisions as proposed.
Comment: Several commenters recommended that states submit detailed
coordination plans to ensure continuity of care as well as require
states to specifically include ``churn'' mitigation strategies for
pregnant women and children.
Response: We appreciate the commenters' concerns regarding the
scope and level of detail of the coordination descriptions; however, we
believe that the language as proposed sufficiently addresses and
incorporates the commenters concern. These descriptions will be
reviewed and considered during the certification approval process
thereby permitting
[[Page 14128]]
HHS to ask additional questions as needed to ensure the state has
addressed this requirement and reflected it in its Blueprint.
Comment: One commenter recommended that HHS include stronger
continuity of care requirements under this section.
Response: We share the commenter's interest in ensuring continuity
of care between the insurance affordability programs. We are not,
however, revising the regulation because we believe that states have
several strategies available to them to promote continuity of care and
reduce disruptions in care. As such, we believe that the state should
have the discretion to select the strategies that best fit within the
confines of its program. Examples of how states can ensure coordination
across the insurance affordability programs were included in the
September 25, 2013 proposed rule (78 FR 59131).
F. Enrollee Financial Responsibilities
1. Basis, Scope and Applicability (Sec. 600.500)
Proposed Sec. 600.500 under subpart F specified the general
statutory authority for and scope of standards proposed in this
subpart, which sets forth the calculation and imposition of monthly
premiums and cost sharing for BHP enrollees. For specific discussions,
see the September 25, 2013 proposed rule (78 FR 59131 and 59132). We
did not receive specific comments on this section and are finalizing
the provision as proposed.
2. Premiums (Sec. 600.505)
In Sec. 600.505(a), we proposed that a state must assure that the
monthly premiums imposed on BHP enrollees do not exceed what they would
have been required to pay had he or she enrolled in the Exchange. The
state must include this assurance along with several other premium
requirements in its BHP Blueprint. For specific discussions on monthly
BHP premiums, see the September 25, 2013 proposed rule (78 FR 59132).
We received the following comment on BHP monthly premiums:
Comment: Several commenters recommended that HHS ensure that the
American Indian and Alaska Native (AI/AN) population is not at a
disadvantage with respect to premiums. In the Exchange, this population
receives 100 percent of the cost-sharing reduction subsidy regardless
of the metal level of the QHP that the individual enrolls in.
Consequently, many commenters believe that premiums, and not cost
sharing, will be the primary factor when selecting QHP coverage, which
may result in many individuals in this population selecting bronze-
level QHP coverage as these QHPs will have the lowest premiums. As
such, commenters recommended that HHS require that states set premium
levels for this population in BHP such that they do not exceed the
lowest cost bronze plan premium in the state. If HHS is not able to
afford this protection to the American Indian and Alaska Native
population, many of the commenters requested that this population have
the ability to opt out of BHP.
Response: We appreciate and understand the commenters' point
regarding the premium levels for the American Indian and Alaska Native
population. However, the statute does not support requiring the bronze
plan premiums as a minimum standard nor does such a premium protection
exist in the Exchange. We have, however, applied the Exchange's cost-
sharing protections afforded to this population to BHP. We would also
note that states have the flexibility to use BHP trust funds (or state
funds) to lower premiums for individuals eligible for BHP, and we
encourage the commenters to work with their respective states on this
issue.
With respect to the commenter's second recommendation that HHS
permit this population to opt out of BHP, if individuals opt out of
BHP, they would not be eligible to receive federal subsidies to
purchase coverage in the Exchange. The statute specifies that
individuals eligible for BHP are ineligible to receive the premium tax
credit and cost-sharing reductions. As noted, states may lower premiums
for BHP enrollees or decide not to charge premiums.
3. Cost Sharing (Sec. 600.510)
In Sec. 600.510(a), we proposed that a state must assure
compliance with the cost-sharing standards specified in Sec.
600.520(c). The state must include this assurance, along with a
description of several elements as they relate to cost sharing in BHP,
in the state's BHP Blueprint. For specific discussions on BHP cost
sharing, see the September 25, 2013 proposed rule (78 FR 59132).
We proposed in Sec. 600.510(b) that a state may not impose cost
sharing on preventive health services or items as defined in 45 CFR
147.130. We received the following comments on cost sharing in BHP:
Comment: We received comments in support of the identification of
BHP enrollees subject to cost sharing.
Response: We thank the commenters for their support, and are
finalizing the provisions as proposed.
Comment: We received several comments recommending that HHS
establish BHP cost-sharing amounts for specific services. In
particular, one commenter suggested that cost sharing for dental
services should not exceed levels imposed in CHIP for children and
pregnant women. Another commenter opposed higher cost-sharing amounts
for non-emergency use of the emergency department.
Response: We appreciate the commenters' interest in BHP cost-
sharing amounts; however, we do not believe it is advisable to mandate
the cost-sharing amounts for specific services in BHP. But we note that
these regulations apply to BHP the Exchange's cost-sharing protections,
including the prohibition of cost sharing for preventive health
services, as specified in Sec. Sec. 600.510(b) and 600.520.
Furthermore, providing states with discretion subject to these
protections when establishing the cost-sharing levels for particular
services; may encourage competition and could ultimately lower costs
for BHP enrollees.
Comment: One commenter expressed concern that permitting standard
health plans to include varying cost-sharing amounts for prescription
drugs (that is, through the use of drug tiers) would negatively affect
access to such drugs.
Response: We appreciate the commenter's concern regarding the
variation in cost-sharing amounts for prescription drugs and the
potential effect this may have on their availability; however, we
believe that such variation in benefit design and cost sharing is
consistent with the practices of QHPs offering coverage in the
Exchange. Specifically, we believe that the Exchange's benefit and
cost-sharing standards, which we apply to BHP as specified in Sec.
600.405(a) and Sec. 600.520(c), afford BHP enrollees the same
protections that they would have otherwise received in the Exchange.
These protections serve as the minimum benefit and cost-sharing
standards for states when establishing their program. In addition,
states have the option to set additional limits on cost sharing not
included in the final regulation.
4. Public Schedule of Enrollee Premium and Cost Sharing (Sec. 600.515)
We proposed in Sec. 600.515(a) that the state must ensure that
applicants and BHP enrollees have access to information related to
premiums and cost sharing under BHP. For specific discussions, see the
September 25, 2013
[[Page 14129]]
proposed rule (78 FR 59132). We did not receive specific comments on
this section and are finalizing the provision as proposed.
5. General Cost-Sharing Protections (Sec. 600.520)
In Sec. 600.520(a), we proposed that a state may vary premiums and
cost sharing based on income only in a manner that does not favor
enrollees with higher income over enrollees with lower income. We did
not receive specific comments on this section and are finalizing the
provision as proposed.
We proposed in Sec. 600.520(b) that the state must ensure standard
health plans meet the cost-sharing standards applicable to Indians in
accordance with 45 CFR 156.420(b)(1) and (d). We did not receive
specific comments on this section and are finalizing the provision as
proposed.
In Sec. 600.520(c), we proposed to apply the Exchange cost-sharing
standards in BHP. For specific discussions, see the September 25, 2013
proposed rule (78 FR 59132 and 59133).
We also proposed in 600.160(b) that states must permit payment of
premiums for Indians by Indian tribes, tribal organizations and urban
Indian organizations. In our further consideration of that provision,
we determined that this protection should be more broadly extended to
all premiums and cost-sharing for all beneficiaries of state and
federal programs. This will ensure coordination of benefits between
these programs and BHP. As such, this protection is more logically
located in the regulatory section governing general cost-sharing
protections. Thus, in this final rule, we are including in 600.520(d)
that states must permit payment of premiums and cost sharing by such
programs for individuals by Indian tribes, tribal organizations, urban
Indian organizations, Ryan White HIV/AIDS programs under title XXVI of
the Public Health Service Act and other federal and state programs.
We received the following comments related to cost-sharing
protections:
Comment: While we received many comments supporting our proposed
provision to apply the Exchange's cost-sharing standards (which
establish the maximum annual limitation on cost sharing, among other
provisions) to BHP, we also received several comments expressing
concern that the Exchange standards would result in high BHP cost-
sharing amounts making BHP unaffordable to its enrollees.
Response: We thank the commenters that submitted comments in
support of the proposed cost-sharing standards, and are finalizing the
proposed provisions. With respect to the other commenters' concern that
BHP cost-sharing amounts will be high, we believe that the application
of the Exchange's cost-sharing standards, as specified in Sec.
600.520(c), to BHP will help prevent such an occurrence. These
standards afford BHP enrollees the same cost-sharing protections that
they would have otherwise received had they enrolled in QHP coverage in
the Exchange. Furthermore, while these protections set the minimum
standards for permissible cost-sharing amounts, states have the
discretion to include additional standards when contracting with
standard health plan offerors and the negotiation process with standard
health plan offerors may further reduce cost-sharing amounts for BHP
enrollees.
Comment: We received one comment expressing opposition to the
application of the Exchange's cost-sharing standards as the commenter
felt that this should be left to the discretion of the state. Approval
of the state's approach to its BHP design is already subject to
Secretarial approval, and as such, the commenter believes that HHS does
not need to impose minimum requirements.
Response: We appreciate the commenter's concern; however, statute
requires that, at a minimum, the same protections individuals would
have otherwise received had they enrolled in a QHP in the Exchange
apply to BHP.
Comment: Several commenters recommended that BHP enrollees should
not be required to pre-pay the full amount of cost sharing, including
the value of the cost-sharing reduction subsidy, and seek reimbursement
for the subsidy at a later date. Commenters suggested that this process
be ``invisible'' to the enrollee.
Response: The standard health plan offered to BHP enrollees will
account for the value of the cost-sharing subsidy, which will be
represented by the actuarial value of the standard health plan.
Specifically, standard health plans offered to individuals with
household income below 150 percent of the FPL must have an actuarial
value of 94 percent, which, consistent with the Exchange's standard, is
subject to a de minimis standard of 1 percent. For BHP enrollees with
income above 150 percent of the FPL, the actuarial value must be 87
percent which, consistent with the Exchange's standard, is subject to a
de minimis standard of 1 percent. In this manner, the application of
the cost-sharing reduction subsidy will be ``invisible'' to the BHP
enrollee as it will be accounted for in the design of the standard
health plan that is offered to them. Any cost-sharing amounts that the
enrollees would be required to pay would already include the
consideration of the subsidy and any further negotiation between the
state and the standard health plan offeror.
6. Disenrollment Procedures and Consequences for Nonpayment of Premiums
(Sec. 600.525)
In Sec. 600.525(a), we proposed the disenrollment procedures for
nonpayment of premiums. For specific discussions, see the September 25,
2013 proposed rule (78 FR 59133).
In Sec. 600.525(b), we proposed the consequences of nonpayment of
premiums and reenrollment into BHP. For specific discussions, see the
September 25, 2013 proposed rule (78 FR 59133).
We received the following comments on the disenrollment procedures
and consequences for nonpayment of premiums:
Comment: Several commenters expressed concern that providers will
incur uncompensated care costs during the second and third months of
the 3-month grace period as standard health plan offerors are not
required to pay claims for services rendered during the last two months
of the grace period.
Response: We understand that pended claims increase uncertainty for
providers and can potentially increase the amount of uncompensated
care, and we share the concerns of the commenters regarding claims
incurred during the grace period that are not ultimately paid. In
accordance with 45 CFR 156.270(d)(3), standard health plan offerors
must notify providers of the possibility for denied claims for services
incurred during months two and three of the grace period for enrollees
who owe past due premiums. Similar to our expectation with issuers
operating in the Exchange, we expect that standard health plan offerors
will provide this notice within the first month of the grace period and
throughout months two and three.
Comment: We received several comments expressing concern that
individuals would be disenrolled from BHP who failed to pay a de
minimis amount of their premium, and suggested that the final
regulation protect individuals from being disenrolled in such an
instance.
Response: We do not believe that the statute provides authority for
CMS to require this type of protection in BHP. As with many other
programmatic designs, states have the discretion to establish
disenrollment policies that further the goals and objectives of their
programs which may include not
[[Page 14130]]
terminating individuals for failure to pay de minimis amounts.
Comment: Several commenters also offered an alternative to the 30-
day premium grace period. Specifically, they recommended that HHS
consider permitting a reinstatement period in which an individual is
able to reinstate BHP coverage without a break in such coverage by
paying the premium arrears by the 20th business day.
Response: We appreciate the commenters' alternative to the 30-day
premium grace period; however, in keeping with our policy to adopt
policies existing in other insurance affordability programs to ensure
program consistencies, we are finalizing the proposed provision. As
noted elsewhere, states have the discretion to establish additional
standards that best fit the designs of their programs.
Comment: We received one comment recommending that HHS only permit
a 90-day premium grace period rather than give states the option to
select the grace period that most closely aligns with their enrollment
policies.
Response: We believe that providing states with the option to
select the grace period that most closely aligns with their enrollment
policies ensures program consistency and can help consumers understand
program rules.
G. Payment to States
1. Basis, Scope and Applicability (Sec. 600.600)
Proposed Sec. 600.600 under subpart G specified the general
statutory authority for and scope of standards proposed in this
subpart, which sets forth provisions relating to the methodology used
to calculate the federal BHP payment to a state in a given fiscal year
and the process and procedures by which the Secretary establishes such
amount for each state operating a BHP. For specific discussions, see
the September 25, 2013 proposed BHP rule (78 FR 59133). We did not
receive specific comments on this section and are finalizing the
provision as proposed.
2. BHP Payment Methodology (Sec. 600.605)
We proposed in Sec. 600.605(a) the two components that comprise
the BHP payment methodology--the premium tax component and the cost-
sharing reduction component. For specific discussions, see the
September 25, 2013 proposed rule (78 FR 59133).
In Sec. 600.605(b), we proposed the factors specified in statute
that the Secretary must consider when determining the federal BHP
payment methodology. For specific discussions, see the September 25,
2013 proposed rule (78 FR 59133 and 59134).
We proposed in Sec. 600.605(c) that the Secretary will adjust the
payment methodology on a prospective basis.
We received the following comments regarding the BHP payment
methodology:
Comment: We received a comment supporting the relevant factors
included in the BHP payment methodology as specified in Sec.
600.605(b).
Response: We thank the commenter for their support, and are
finalizing the proposed provisions.
Comment: One commenter expressed concern that the information
regarding the BHP payment methodology in the proposed rule did not
address how a state's BHP could be financially self-sustainable, such
as the authority to asses an administrative charge on standard health
plan offerors.
Response: We appreciate the commenter's concern; however, we
believe that the state has considerable flexibility to ensure the
sustainability of its program through program design and market
competition. In addition to the federal BHP deposits, the state has the
option to also supplement its program with non-federal funding sources.
Comment: We received many comments requesting that HHS reconsider
applying 100 percent of the cost-sharing reduction that would have been
available in the Exchange to the BHP payment methodology, as opposed to
95 percent. Many commenters argued that the statute provides for this
interpretation given the placement of the comma in section
1331(d)(3)(i) of the Affordable Care Act.
Response: We appreciate the commenters' concern regarding this
issue, and we have carefully considered and reviewed the commenters'
arguments. We have interpreted the 95 percent specified in statute to
refer to both the premium tax credit and the cost-sharing reduction
component of the BHP payment methodology. We believe that applying the
95 percent to both components of the methodology represents the best
reading of the statute and the intent of the drafters, and we are
therefore finalizing the proposed provision.
Comment: We received a comment recommending that the premium tax
credit component of the methodology use an overall average for the
state so that all geographic variations are accounted for in the
calculation rather than over-weighting geographic areas with fewer
individuals receiving the premium tax credit.
Response: We appreciate the commenter's suggestion; however,
geographic variations are accounted for in the proposed payment
methodology as we are proposing to use the second lowest cost silver
plan premium, which may vary in amount by county, as the basis for the
calculation of the premium tax credit component. Please refer to the
final 2015 BHP Federal Funding Methodology for additional information
on how we propose to calculate the premium tax credit component for
program year 2015.
Comment: One commenter expressed concern that the BHP payment
methodology will result in narrower provider networks as states will
only receive 95 percent of both the premium tax credit and cost-sharing
reduction that an individual would have otherwise received had he or
she enrolled in a QHP in the Exchange.
Response: We appreciate the commenter's concern, although we do not
agree that this is necessarily the result. States, for example, that
combine their contracting for BHP with Medicaid and/or CHIP will have
significant market power to drive efficiencies. In any event, network
adequacy is essential, and we have required, as specified in Sec.
600.410(e)(2), that network adequacy must be considered during the
state's competitive contracting process. States must ensure that
standard health plan offerors have a network of providers sufficient in
number, mix, and geographic distribution to meet the needs of the
anticipated number of enrollees in the service area of the standard
health plan, at least consistent with the access standards under
Medicaid or the Exchange.
Comment: We received comments asserting that, to the extent that
BHP eligibility exceeds the scope of eligibility for a PTC because the
affordability test applied under BHP is less stringent than the
affordability test for PTCs, there could be an unfunded mandate. These
commenters explained that because federal BHP payment is limited to 95
percent of the amount of the PTCs and cost sharing reductions that
would be paid if the individual was enrolled in coverage through the
Exchange, there would be no federal BHP payment with respect to
individuals eligible for BHP but not eligible for a PTC. One commenter
suggested that, in light of the absence of funding, states should be
given the option to restrict eligibility.
Response: We understand the possibility raised by the commenters;
however, as discussed in the eligibility section above, we believe this
possibility was created through a statutory error which we are
correcting
[[Page 14131]]
in this rule. We believe congressional intent was to align BHP
eligibility seamlessly with premium tax credit eligibility, which
eliminates the possibility of an unfunded mandate. The payment
methodology has been aligned with this interpretation.
Comment: We received several comments requesting that HHS ensure
that BHP payment methodology adequately address the issue of risk
adjustment.
Response: Please refer to the final 2015 BHP Federal Funding
Methodology for additional discussions related to the population health
factor in the BHP payment methodology for program year 2015, as well as
the optional risk adjustment reconciliation process as both sections in
the Funding Methodology address the issue of risk adjustment.
Comment: One commenter requested that we include the relevant
factors, their weight and applicability in the proposed payment notice.
Response: We have included additional detail on the relevant
factors, including their values and data sources, in the final 2015 BHP
Federal Funding Methodology.
Comment: Several commenters recommended that the BHP payment
methodology include state-specific market factors to account for issues
such as low premiums offered in the Exchange.
Response: Please refer to the final 2015 BHP Federal Funding
Methodology for additional details on the option we are providing to
states to use either 2014 premium data (trended forward) or actual 2015
premium data as the basis for calculating their 2015 federal BHP
payment rates.
Comment: One commenter noted that the methodology specifies the use
of factors much like those for adjusted community rating, but requested
clarification whether that standard health plan offeror must also use
adjusted community rating, or any other particular form of rating.
Response: We believe that this is an issue to be determined, and
resolved, through the competitive contracting process between the state
and the standard health plan offeror. There are minimum negotiation
criteria and other considerations specified in statute that the state
must include in its process; however, the state has the discretion to
add additional qualifications and standards to its solicitation that
would further the objectives of its program.
Comment: While we received several comments in support of the
proposed provision to exclude BHP from the individual market's risk
pool, other commenters requested that HHS consider providing states
with the option to include BHP in its individual market's risk pool.
Commenters also requested the HHS permit states to have the ability to
apply aspects of the individual market's reinsurance and risk
adjustment programs to BHP.
Response: We have carefully considered this issue and have
determined that BHP should be excluded from the individual market
because the market reform rules under the Public Health Service Act
that were added by Title I, Subtitles A and B of the Affordable Care
Act, such as the requirements for guaranteed issue, and premium rating
do not apply to standard health plans participating in BHP. Moreover,
in accordance with 45 CFR 153.234 and 45 CFR 153.20, standard health
plans operating under a BHP are not eligible to participate in the
reinsurance program and the federally-operated risk adjustment program.
With respect to the risk corridor program, the statute, under section
1342 of the Affordable Care Act, precludes standard health plans from
participation. To the extent that a state operating a BHP determines
that, because of the risk-profile of its BHP population, standard
health plans should be included in mechanisms that share risk, the
state would need to use other methods for achieving this goal. But we
are providing an opportunity in 2015 for states to elect to include in
the BHP federal payment methodology a retroactive adjustment to reflect
the effect of the different health status of the BHP population on PTC
and CSRs if the BHP population had been enrolled in coverage through
the Exchange, and we will consider in future years whether data
supports a prospective adjustment.
Comment: Several commenters requested clarification regarding a
state's ability to implement a risk corridor-like mechanism in BHP.
Response: We appreciate the commenters' interest in the
implementation of risk corridors in BHP; to the extent that a state
operating a BHP determines that, because of the risk-profile of its BHP
population, standard health plans should be included in mechanisms that
share risk, the state would need to establish state-specific methods
for achieving this goal. Because section 1342 of the Affordable Care
Act specifically limits the risk corridor program to QHPs, standard
health plans operating under BHP are not eligible to participate.
3. Secretarial Determination of BHP Payment Amount (Sec. 600.610)
We proposed in Sec. 600.610(a) that each year in October the
Secretary will publish the BHP payment methodology for the upcoming
program year in a proposed payment notice in the Federal Register. We
did not receive specific comments on this section and are finalizing
the provision as proposed.
In Sec. 600.610(b), we proposed that the Secretary will publish
the final BHP payment methodology and BHP payment amounts annually in
February in a Federal Register notice. We did not receive specific
comments on this section and are finalizing the provision as proposed.
We proposed in Sec. 600.610(c) that states will receive a
prospective aggregate BHP payment amount on a quarterly basis. For
specific discussion, see the September 25, 2013 proposed rule (78 FR
59135).
We received the following questions related to the quarterly
prospective BHP payment deposits:
Comment: We received several comments expressing support for the
proposed provision to make quarterly prospective deposits into a
state's BHP trust fund and for not making any retrospective adjustments
that could cause a state to have to return federal BHP funding.
Response: We thank commenters for their support. We generally do
not anticipate making any retrospective adjustments in the certified
per enrollee payment methodology that would cause a state to return
federal BHP funding. But we would provide for retrospective adjustments
to ensure that this methodology is applied based on actual enrollment.
To the extent that actual enrollment is lower than the state's
projected enrollment, CMS will reduce the state's next quarterly BHP
deposit by the difference amount. Another instance in which a
retrospective adjustment may occur is if a mathematical ``error'' was
made during the calculation process. For specific discussions on what
constitutes a mathematical ``error,'' please refer to the September 25,
2013 proposed notice (78 FR 59134). Finally, to the extent that the
prevailing BHP funding methodology for a given program year permits
adjustments to a state's BHP payment amount due to insufficient data
that is necessary for the Secretary to prospectively determine the
relevant factors specified in the payment notice, retrospective
adjustments to the state's BHP payment amount may occur. For example,
in light of the absence of any data in 2015 to prospectively take into
account
[[Page 14132]]
variance of the BHP population health status from the Exchange
population, in the accompanying final payment methodology for 2015, we
permit a state to elect to develop a protocol to support a
retrospective adjustment for this factor.
Comment: We received several comments requesting clarification on
the timing of the deposits, as well as when any necessary adjustments
in payment are to be made based on differences between actual and
projected enrollment numbers. Some commenters also expressed concern
that data used to determine some of the factors included in the payment
methodology would negatively affect payment to states.
Response: We anticipate providing future guidance on the specific
timeframes for deposits made to state BHP trust funds; however, we
anticipate that deposits will be made at the beginning of each fiscal
year quarter assuming the state has submitted its projected enrollment
data at least 60 days prior to the beginning of each fiscal year
quarter. For example, the deposit for fiscal year quarter one would
occur on October 1st using enrollment data submitted by the state by
July 31st. As stated in Sec. 600.620(c)(2)(i), a retrospective
adjustment will be made 60 days after the end of each fiscal year
quarter to account for any differences between projected and actual
enrollment.
With respect to the commenters' concerns regarding the potential
effect on the timing of payment and the release of data needed to
calculate the factors included in the BHP payment methodology, we are
generally not making any retrospective adjustment to the BHP payment
methodology in a given year unless the payment notice specifies the
availability of a retrospective adjustment due to the lack of
sufficient data necessary for the Secretary to prospectively determine
one or more relevant factors in the BHP funding methodology. We
anticipate using new data, or adjustments to previously released data,
to refine future prospective BHP funding methodologies, which will be
published annually through a proposed notice process.
Comment: We received several comments recommending that after the
first or second year of BHP implementation, HHS adjust the aggregate
federal BHP payment amounts upward should actual experience support
such an adjustment. Commenters felt that such an adjustment would be
similar to a risk corridor approach.
Response: We appreciate the commenter's concern, and have addressed
the issue raised by the commenters in further detail in the Final BHP
Federal Funding Methodology for Program Year 2015. As described in
greater depth in the final methodology, we are providing states with
the option to propose, and implement, a retrospective adjustment
protocol to the extent that such a protocol is approved as part of the
certified payment methodology by the CMS Chief Actuary
Comment: We received several comments requesting clarification on
the proposed retrospective adjustments. One commenter recommended that
HHS revise language in the regulation text to clarify that HHS will not
make retrospective adjustments to a state's quarterly deposit based on
enrollee income changes.
Response: As explained elsewhere, HHS will not make any
retrospective adjustments to a state's quarterly deposit except for in
three instances. The first instance in which HHS will adjust the
payment is in the event that a mathematical error occurred during the
calculation of the payment amount. For example, if HHS multiplied the
payment rate to the incorrect number of enrollees associated with that
payment rate, HHS would then make a retrospective adjustment to correct
the mathematical error. The second instance occurs when there is a
difference in projected and actual enrollment for a given fiscal year
quarter. For example, if the state projected that there would be 10,000
enrollees in payment rate cell A, but enrollment in payment rate cell A
was actually 12,000, HHS would add the additional federal funds to the
state's upcoming quarterly deposit to account for the difference
between the projected and actual enrollment. Finally, the third
instance occurs only when the prevailing payment notice in a given
program year permits retrospective adjustment to a state's BHP federal
payment amount to the extent that data necessary for the Secretary to
prospectively determine the relevant factors included in the BHP
funding methodology was not available. We believe that the regulation
text at Sec. 600.605(c) and revised Sec. 600.610(c)(2) sufficiently
describes this policy.
4. Deposit of Federal BHP Payment (Sec. 600.615)
In Sec. 600.615, we proposed that HHS will make a quarterly
deposit into a state's trust fund based on the aggregate quarterly
payment amount described in Sec. 600.610(c). We did not receive
specific comments on this section and are finalizing the provision as
proposed.
H. BHP Trust Fund
1. Basis, Scope and Applicability (Sec. 600.700)
Proposed Sec. 600.700 under subpart G specified the general
statutory authority for and scope of standards proposed in this
subpart, which sets forth a framework for BHP trust funds and
accounting, establishing sound fiscal policies and accountability
standard and procedures for the restitution of unallowable BHP trust
fund expenditures. For specific discussions, see the September 25, 2013
proposed rule (78 FR 59135). We did not receive specific comments on
this section and are finalizing the provision as proposed.
2. BHP Trust Fund (Sec. 600.705)
In Sec. 600.705(a), we proposed requirements for the BHP trust
fund, including where to establish the trust fund and the
identification of trustees and their authorities.
We proposed in Sec. 600.705(b) that states may deposit non-federal
funds into its BHP trust fund; however, once deposited, those funds
must meet the standards described in paragraphs (c) and (d) of this
section.
In Sec. 600.705(c), we proposed that trust funds may only be used
to reduce premiums and cost sharing and/or provide additional benefits
to individuals eligible for BHP.
We proposed in Sec. 600.705(d) the limitations in expending BHP
trust funds. For the specific limitations, see the September 25, 2013
proposed rule (78 FR 59150).
In Sec. 600.705(e), we proposed that a state may maintain a
surplus of funds in its trust through the carryover of unexpended funds
from year-to-year. We received a comment supporting this provision, and
are subsequently finalizing the provision as proposed. We received the
following comments related to the BHP trust fund:
Comment: We received several comments in general support of using
BHP trust funds, as specified in Sec. 600.705(c), to further reduce
premiums and cost sharing and to provide additional benefits to
individuals eligible for BHP.
Response: We thank the commenters for their support, and are
finalizing the provision as proposed.
Comment: One commenter requested clarification on the establishment
of the state's BHP trust fund. Specifically, the commenter requested
that the BHP trust fund be established at either an independent entity
or in a segregated
[[Page 14133]]
account within a state's fund structure rather than in a subset account
to the state's general fund. The commenter indicated that there are
sufficient legal boundaries through various state laws with respect to
the integrity of federal funding streams.
Response: We appreciate the commenter's suggestion, and have
clarified the language in the final rule to reflect the suggested
language change.
Comment: We received a comment requesting that HHS further clarify
the role of BHP trustees.
Response: There are two fundamental activities required of the BHP
trustees. One is to provide trust fund oversight to ensure that trust
fund expenditures are made in an allowable manner, and the second is to
specify individuals with the authority to make withdrawals from the
fund to make allowable expenditures. The state, as specified in Sec.
600.110(a)(12), must describe any additional responsibilities, outside
of these two activities, that the trustees may have. Specifically,
Sec. 600.110(a)(12) requires the state to describe the process by
which the trustees will be appointed, the qualifications used to
determine trustee appointment, and any arrangements used to insure or
indemnify such trustees against claims for breaches of their fiduciary
responsibilities.
Comment: One commenter requested clarification that BHP trust funds
are available to reduce premiums for American Indians and Alaska
Natives.
Response: Yes. The state has the option to further reduce premiums
for eligible BHP enrollees that are American Indian and Alaska Natives
with its trust funds. This is a permissible expenditure.
Comment: Several commenters expressed support for the limitations
on BHP trust fund expenditures; however, some emphasized that it was
important to ensure that the limitations are applied consistently
across functions and organizations.
Response: We appreciate the commenters' support, and are finalizing
the proposed provisions.
Comment: We received many comments expressing concern regarding the
limitations on the use of BHP trust funds. Specifically, commenters
requested that HHS permit trust funds to pay for program implementation
and start-up costs as well as for administrative costs. Commenters
argued that without the authority to use trust funds to pay for
implementation and administrative costs, states would not be able to
implement BHP. We received one comment requesting that HHS provide
states with options for paying administrative costs, including some of
the user-fee assessments built into the Exchange carrier rates. Another
commenter suggested that HHS develop a funding formula similar to
Medicaid, or set a ``flat fee'' to pay for administrative costs.
In addition, several other commenters also expressed concern that
these limitations do not permit states to finance consumer assistance
programs with BHP trust funds, or promote payment innovations, quality
improvement activities or pay-for-performance incentives under BHP.
Response: We understand the concerns that the commenters have
raised with respect to the use of trust funds to cover administrative
costs; however, the statute prohibits the expenditure of BHP trust
funds for any activities except for lowering premiums and cost sharing
and providing additional benefits to individuals eligible for BHP.
Through its competitive contracting process, a state can establish
parameters for quality improvement projects and delivery system and
payment reform innovations that it believes will further the objectives
of its BHP. The state can then evaluate the innovation proposals
submitted by standard health plan offerors in their BHP bids thereby
including the negotiated projects into the contract awards.
While the statute has limited the use of federal trust funds to
lowering premiums and cost sharing as well as for the provision of
additional benefits, states have the option to establish sources of
non-federal funding to help offset administrative costs associated with
BHP. Non-federal resources can include assessments imposed on BHP
participating plans. A state with a state-based Exchange has the
ability to apply a portion of the fee assessed to QHPs in its Exchange
to BHP; however, this ability does not extend to states in which the
Federally-Facilitated Exchange is operating. In accordance with OMB
Circular No. A-25 Revised (Circular No. A-25R), which establishes
federal policy regarding user fees, the Federally-Facilitated Exchange
user fee is collected from issuers to recover the cost to the federal
government of providing special benefits to QHP issuers participating
in a Federally-Facilitated Exchange; those funds are not available to
fund BHP as it is not a special benefit provided to issuers by the
federal government. Non-federal resources can either remain outside of
the BHP trust fund, such as in a state's General Fund, or be deposited
into the BHP trust fund. Should the state deposit these non-federal
funds into the state's BHP trust fund, all standards applied to federal
sources of funding will also apply to the non-federal funds. While we
are finalizing our proposed provision, we will continue to review this
issue and publish additional guidance upon concluding our review.
Comment: One commenter requested that we clarify whether enrollee
premiums collected outside of the trust fund are subject to the
limitations in Sec. 600.705(d).
Response: If enrollee premiums are not deposited into the state's
trust fund, then they are not considered to be BHP trust funds and are
therefore not subject to the limitations specified in Sec. 600.705(d).
3. Fiscal Policies and Accountability (Sec. 600.710)
We proposed in Sec. 600.710(a) that the state maintain an
accounting system and supporting fiscal records to assure the proper
use of BHP trust funds. We did not receive specific comments on this
section and are finalizing the provision as proposed.
In Sec. 600.710(b), we proposed that the state obtain an annual
certification certifying the proper expenditure and maintenance of BHP
trust funds. For the specific certification elements, see the September
25, 2013 proposed rule (78 FR 59150).
We proposed in Sec. 600.710(c) that the state conduct an
independent audit of BHP trust funds over a 3-year period to determine
whether the expenditures during this period were allowable. For
specific standards of this audit, see the September 25, 2013 proposed
rule (78 FR 59150). We did not receive specific comments on this
section and are finalizing the provision as proposed.
In Sec. 600.710(d), we proposed that the state publish an annual
report on the use of funds. We did not receive specific comments on
this section and are finalizing the provision as proposed.
We proposed in Sec. 600.710(e) that the state establish and
maintain BHP trust fund restitution procedures. We did not receive
specific comments on this section and are finalizing the provision as
proposed.
In Sec. 600.710(f) we proposed that the state maintain records for
3 years from the date of submitting its final expenditure report. We
did not receive specific comments on this section and are finalizing
the provision as proposed.
We proposed in Sec. 600.710(g) that the state retain all records
beyond the 3-year retention period in the event litigation begins prior
to the expiration of the retention period. We did not receive specific
comments on this section and are finalizing the provision as proposed.
[[Page 14134]]
We received the following comment regarding the annual
certification process in Sec. 600.710(b):
Comment: We received several comments requesting that HHS require
that the annual certification include a certification that the payment
rates made to the standard health plan offerors are actuarially sound.
Response: As noted in the contract requirements section, the
statutory actuarial soundness requirement found in Medicaid does not
apply in BHP; therefore, we are not requiring that a state certify that
its standard health plan offeror rates are actuarially sound. We
anticipate that the competitive contracting process will help to ensure
that the rates paid to the standard health plan offerors are reflective
of the costs associated in the provision of standard health plans.
4. Corrective Action, Restitution, and Disallowance of Questioned BHP
Transactions (Sec. 600.715)
In Sec. 600.715(a), we proposed that a state review and develop
written responses to questions identified concerning the authority for
BHP trust fund expenditures. To the extent necessary, the state shall
implement changes to fiscal procedures to ensure proper use of BHP
trust funds. We did not receive specific comments on this section and
are finalizing the provision as proposed.
We proposed in Sec. 600.715(b) that state must ensure restitution
to its BHP trust fund such funds that have not been properly spent. We
did not receive specific comments on this section and are finalizing
the provision as proposed.
In Sec. 600.715(c), we proposed that the restitution period may
not exceed a 2-year period, and that restitution may occur in a lump
sum amount, or in equal installment amounts. We did not receive
specific comments on this section and are finalizing the provision as
proposed.
We proposed in Sec. 600.715(d) that HHS may disallow the improper
BHP trust fund expenditures in the event that no restitution has been
made back to the state's trust fund. For specific discussions on the
disallowance procedures, see the September 25, 2013 proposed rule (78
FR 59151). We did not receive specific comments on this section and are
finalizing the provision as proposed.
In Sec. 600.715(e), we proposed the administrative reconsideration
procedures in the event of a disallowance. For specific discussions on
such procedures, see the September 25, 2013 proposed rule (78 FR
59151).
We proposed in Sec. 600.715(f) that disallowed federal BHP funding
must be returned to HHS within 60 days after the disallowance notice,
or the final administrative reconsideration upholding the disallowance.
Such repayment cannot be made from BHP trust funds. We did not receive
specific comments on this section and are finalizing the provision as
proposed.
We received the following comments on the administrative procedures
in the event of a disallowance of questioned BHP transactions:
Comment: We received a comment requesting clarification on the
administrative process for reconsideration. The commenter suggested
that HHS consider using either the Medicaid procedures found in 42 CFR
430.42(f) for disallowances, or the procedures at 42 CFR 430.38 which
provides for judicial review without further administrative process.
Response: We appreciate the commenter's suggestions; however, given
the numerous processes available to the state prior to the corrective
action stage, we believe that requiring the additional administrative
reconsideration procedures found in 42 CFR 430.42(f) or in 42 CFR
430.38 is unnecessary. Therefore, we are finalizing the proposed
provisions.
Comment: We received several comments in general support of the
proposed provisions as they relate to benefits, premiums, cost sharing
and expanding coverage to low-income individuals.
Response: We thank the commenters for their support, and are
finalizing the proposed provisions.
Comment: Several commenters expressed support for the various
market reforms authorized under the Affordable Care Act, such as the
ability to remain on a parent's health insurance policy and the
expansion of health insurance coverage to all those that are uninsured.
Response: While we appreciate the support for these important
reforms, this comment is beyond the scope of this rulemaking.
Comment: We received one comment requesting more information on BHP
in order for states to decide whether to implement the program.
Response: We hope that the clarifications provided in this
rulemaking as well as the BHP Final Federal Funding Methodology for
program year 2015 have provided sufficient information for states
during their decision making process. We also anticipate continuing to
work closely with states as they contemplate their options and
responding in writing to questions posed about implementation.
Comment: We received several comments on how, and when, individuals
can enroll in BHP.
Response: States that elect to implement a BHP will determine the
effective date for their programs, which will be no earlier than
January 1, 2015. As indicated in Sec. 600.145, initial implementation
in 2015 may involve an alternate enrollment strategy as a transition to
BHP operation. In order to enroll, individuals must complete the single
streamlined application and be determined eligible for a state BHP. As
discussed elsewhere in these regulations, states have the option to use
a limited open enrollment period approach or to allow applications to
be submitted throughout the year.
Comment: One commenter requested that HHS delay the implementation
of BHP until January 1, 2017 in order to provide the Exchange
sufficient time to ensure efficient and effective operability before
additional coverage programs are launched.
Response: We appreciate the commenter's interest in ensuring the
operability of the Exchange. We are committed to ensuring the
availability of this insurance affordability coverage option to states
effective January 1, 2015. To comply with BHP requirements, however,
states will need to coordinate the BHP with Exchange, Medicaid and
CHIP. As the commenter noted, in determining an implementation date,
states need to consider the time and resources needed to achieve such
coordination by January 1, 2015.
Comment: Several commenters expressed interest in how BHP will
affect costs associated with emergency department care. Specifically,
commenters hoped that BHP would reduce such costs.
Response: We share the commenters' interest in lowering the costs
associated with emergency department care. Although this comment is
beyond the scope of this rulemaking, we will be interested to observe
the impact of BHP over time.
Comment: One commenter recommended that HHS design BHP in such a
fashion as to ensure appropriate coverage for children who may lose
CHIP coverage in the event that CHIP is not authorized in 2019.
Response: We appreciate the commenter's recommendation. We believe
that the BHP statute provides states with a vehicle to provide such
coverage without any change in design or administrative requirements.
[[Page 14135]]
Comment: We received several comments expressing concern that the
implementation of BHP will increase the temporary shifting of low-
income individuals from one insurance affordability program to another
(``churn'').
Response: While BHP does introduce an additional insurance
affordability program, the amount of churn is not clear at this time.
It is our understanding that many states and other observers believe
that BHP will reduce churn between BHP and Medicaid. Regardless of how
a state might establish its BHP, as specified in Sec. 600.425, states
are required describe how they will ensure coordination for the
provision of health care services to promote enrollee continuity of
care among the insurance affordability programs. In addition, and as
described further above, another feature in BHP that can promote
continuity of coverage and care is the provision specified in Sec.
600.340 permitting states to adopt a policy of limited redeterminations
during a 12 month period, reducing churn based on fluctuations in
income.
Comment: Several commenters expressed concern regarding the effect
of BHP on Exchange enrollment as well as the risk profile of those
enrolled in Exchange coverage.
Response: Because the BHP population is the lower income range of
the population that would otherwise be enrolled in coverage through the
Exchange, states that elect to implement BHP will experience somewhat
lower enrollment in coverage through the Exchange. We do not believe
the reduction will impair the Exchange's ability to operate
effectively. With respect to the commenters' concerns on the Exchange's
risk profile, it is unclear at this time the effect BHP will have (that
is, whether healthier, or sicker, individuals will enroll in BHP
relative to those enrolled in the Exchange). We anticipate that this
will be the subject of research once all of the programs are
operational.
Comment: We received one comment requesting that standard health
plan offerors be subject to the annual insurer fee.
Response: The annual insurer fee is administered by the Department
of the Treasury and its applicability is beyond the scope of this
rulemaking.
IV. Provisions of the Final Regulations
For the most part, this final rule incorporates the provisions of
the proposed rule. Those provisions of this final rule that differ from
the proposed rule are as follows:
A. General Provisions and Definitions
We have amended Sec. 600.5 to add two new definitions: interim
certification and network of providers to reflect clarifications made
in subsequent sections of this final rule.
We have clarified, in this section, the definition of Essential
Health Benefits to include the citation to the implementing
regulations.
We have clarified in the reference plan definition that
``reference'' is synonymous to ``base'' benchmark by adding the word
``base.''
B. Establishment and Certification of State Basic Health Programs
We are amending Sec. 600.110(a)(6) to clarify the BHP Blueprint
content to align with the premium standards specified in Sec. 600.505.
We are adding Sec. 600.110(a)(15) to conform with a later change
to Sec. 600.145. The change adds a requirement for the inclusion of a
transition plan as a required element of the Blueprint if a state
participating in 2015 plans to propose an alternative enrollment
strategy. Additionally, the transition plan must include a plan for the
coordination of any proposed implementation strategies with the
Exchange operating in the state.
We amended Sec. 600.110(c) to include the requirement that HHS
post revisions to Blueprints on line.
We amended Sec. Sec. 600.115(c)(1) and 600.125(a) clarifying that
significant change includes changes that alter the BHP benefit package,
enrollment, disenrollment and verification policies.
To conform the addition of an interim certification level, we
amended Sec. 600.115(a) and (d) as well as Sec. 600.120(a) and (b).
To Sec. 600.115(a) we added the sentence, ``A State may choose to
submit its BHP Blueprint in two parts: the first limited submission to
secure interim certification and the second full submission to secure
full certification.'' To Sec. 600.115(d) we added the word ``full'' to
indicate that states must receive full certification to implement a
program. To Sec. 600.120(a) we clarified that the effective date of
interim certification is also the date of signature of the Secretary,
and to Sec. 600.120(b) we clarified that full certification is needed
before payments may be made.
We further amended Sec. 600.115(d) to require states implementing
after 2015 to coordinate with open enrollment of the state's Exchange.
We amended Sec. 600.120(d) by deleting the word ``contingencies''.
We added Sec. 600.135(c) to require HHS to accept a state request
for reconsideration and to provide an impartial review against the
certification standards if requested. We also extended the state's
ability to request reconsideration for termination decisions made by
the Secretary in Sec. 600.142.
We added Sec. 600.145(e) providing states implementing BHP in 2015
the opportunity to create a transition plan for approval delineating
any proposed alternative enrollment strategies.
We amended Sec. 600.150(a)(5) to include a minimum timeliness
standard of at least quarterly regarding standard health plans
provision of updated provider lists.
We amended Sec. 600.155 to remove the qualifying language ``State
or Federal'' describing the tribal consultation policy.
We amended Sec. 600.160 to include a new paragraph (c) prohibiting
BHP offerors from reducing the payments to providers by the amount of
cost-sharing that would be due from Indians if it was not prohibited.
Additionally, we are amending Sec. 600.520 to add paragraph (d)
incorporating and broadening the protection set forth in the proposed
rule at Sec. 600.160(b), to require that states permit payment of
premiums and cost-sharing for individuals in Indian tribes, tribal
organizations, urban Indian organizations, Ryan White HIV/AIDS
programs, and other federal and states programs. We have renamed the
proposed paragraphs to reflect these changes.
We have amended the timeliness standard in Sec. 600.170(b) to be
60 days after the end of each operational year for the submission of
the state's required annual report.
C. Federal Program Administration
We amended the section title to ``Federal program compliance review
and audits'' to better represent the nature of this section.
In Sec. 600.200(b)(3) we made an editorial revision to add the
word ``add'' to the paragraph.
We amended Sec. 600.200(b)(4) by clarifying that the standards of
review during federal program reviews and audits for the improper use
of BHP trust funds are the provisions specified in Sec. 600.705.
We amended Sec. 600.200(c) to clarify that all paragraphs, and not
only paragraph (a), under Sec. 430.33 apply. We have also clarified
the language in this paragraph to clarify the timing of the final
report and state opportunity for correction.
D. Eligibility and Enrollment
We amended Sec. 600.305(a)(1) to limit it to requiring residency.
[[Page 14136]]
We amended Sec. 600.305(a)(2) to clarify that lawfully present
non-citizens, ineligible for Medicaid, must have household income
between zero and 200 percent of the FPL. We further clarified this
standard by changing ``non-citizen'' status to ``immigration'' status
to increase technical accuracy and we clarified that a person may also
be ineligible for CHIP due to immigration status.
We amended Sec. 600.305(a)(3) by removing the word ``affordable''
to more closely reflect the underlying statutory language connecting
affordability to employer sponsored insurance. We also added a
parenthetical to conform to our definition of MEC, clarifying that an
individual may not have access to MEC other than a standard health
plan.
We deleted the reference to CHIP in Sec. 600.305(a)(3)(i) and have
limited the proposed reference to ``such other programs'' only to
Medicaid to conform with Department of Treasury rules on MEC.
We changed the parenthetical in Sec. 600.305(a)(3)(ii) to tie the
definition of affordable employer sponsored insurance to section
36B(c)(2)(C) of the Internal Revenue Code.
We amended Sec. 600.305(b) to provide a conforming exception for a
change made in Sec. 600.145 permitting states to submit a transition
plan in certain circumstances.
We amended Sec. 600.310(b) to include the requirements of Sec.
435.907(g) of this chapter regarding accessibility of written
applications in addition to the other standards of accessibility for
individuals with limited English proficiency and individuals with
disabilities.
We amended Sec. 600.320(a) to clarify that states permitting local
government entities to make eligibility determinations do so through
delegation.
We amended Sec. 600.320(c) to be exclusive of Sec. 435.915(a).
We amended Sec. 600.320(d) to clarify the Medicaid choice of
enrollment as being ``continuous open enrollment throughout a year''
and the Exchange choice of enrollment policy as being no ``more''
restrictive than that used by the Exchange.
We have amended Sec. 600.335(b) to give the states the choice of
following the appeals process or either Medicaid or the Exchange.
We amended Sec. 600.340(a) to remove the reporting requirement
exception clause ``Except as provided in paragraph (d)'' because
paragraph (d) did not include reporting requirements.
We added language to Sec. 600.340(b) to clarify that the
opportunity to change plans must be offered ``at least annually,'' and
that enrollees in plans that are no longer available will be given a
reasonable opportunity to select a new plan.
Finally, we have added Sec. 600.340(f) to offer states the option
of not redetermining eligibility for a 12-month period as long as
enrollees are under age 65, are not otherwise enrolled in MEC and
remain residents of the state. Additionally, we have further amended
Sec. 600.340(a) to draw the distinction between it and the new
paragraph (f). We have replaced the proposed language that an
individual is ``determined eligible for a period of'' with ``subject to
periodic review of eligibility every'' 12 months.
E. Standard Health Plan
We are amending Sec. 600.415(a) to clarify that a state can
contract with an entity for one standard health plan rather than
contracting with at least two or more standard health plans. This
clarification is needed to conform to the changes made in Sec. 600.420
regarding choice of standard health plan offeror. Ensuring choice of
standard health plan offeror is a beneficiary protection not a
contracting issue, and not related to the eligibility of the offeror;
therefore, we have removed the reference to choice in this paragraph.
We are amending Sec. 600.415(e)(2) to clarify that a state must
consider the local availability and access to providers to ensure a
sufficient number, mix and geographic distribution to meet the needs of
enrollees in a service area, including but not limited to services
provided by essential community providers as defined in 45 CFR 156.235
so that access to services is least be sufficient to meet the access
standards applicable under 42 CFR Part 438, Subpart D, or 45 CFR
156.230 and 156.235.
We are amending Sec. 600.420(a)(1) to clarify that a state must
ensure choice of at least two standard health plan offerors. We are
also amending this section to clarify that the state must assure to
choice of standard health plan offeror and that this assurance be
reflected in the state's BHP Blueprint along with a description of how
it will further enrollee choice of standard health plans.
We are also adding a new paragraph to Sec. 600.420(a) to provide
an exception to the choice of standard health plan offeror requirement
set forth in paragraph (a)(1). This new paragraph provides the
procedural steps for a state to submit a request for such an exception.
We are adding a new paragraph to Sec. 600.420(b) to clarify that a
state entering into a regional compact with another state for the
provision of a geographically specific standard health plan must assure
that enrollees, regardless of residency within the state, continue to
have choice of at least two standard health plans. This new requirement
is specified in Sec. 600.420(b)(2).
We are amending Sec. 600.420(b)(3)(ii)(A) to clarify that a state
entering into a regional compact for the provision of a geographically
specific standard health plan, must continue to assure that enrollees,
regardless of location, continue to have choice of at least two
standard health plan offerors.
In Sec. 600.425, we have revised the regulatory text to clarify
that the state must ensure coordination between all other insurance
affordability programs. We are also clarifying that the state's BHP
Blueprint must describe how it will ensure such coordination.
F. Enrollee Financial Responsibilities
We are amending Sec. 600.505(a) to clarify the premium
requirements that the state must assure to and that such an assurance
must be included in the state's BHP Blueprint along with the other
requirements specified in Sec. 600.505(a)(2).
In Sec. 600.510(a), we are clarifying the cost-sharing
requirements that the state must assure to and that such an assurance
must be included in the state's BHP Blueprint along with the other
requirements specified in Sec. 600.510(a)(2).
We have added Sec. 600.520(d) to broaden the protection in the
proposed rule under Sec. 600.160(b) as described above and we have
modified Sec. 600.510(a)(ii) to reflect the inclusion of the new
paragraph (d).
We are amending Sec. 600.525(a) to clarify that the state must
assure that it is in compliance with the disenrollment procedures
described in 45 CFR 155.430. We are also clarifying that this assurance
is reflected in the state's BHP Blueprint.
G. Payments to States
We are amending Sec. 600.605(c) to clarify the Secretary will
adjust the payment methodology on a prospective basis to adjust for any
changes in the calculation of the premium tax credit and cost-sharing
reduction components that to the extent that necessary data is
available for the Secretary to prospectively determine all relevant
factors, as specified in paragraph (b) of this section.
[[Page 14137]]
We are adding new paragraph Sec. 600.610(c)(2)(iii) to reflect
that to the extent that the final payment notice permits retrospective
adjustments to the state's BHP payment amount (due to the lack of
necessary data for the Secretary to prospectively determine the
relevant factors comprising the premium tax credit and cost-sharing
reductions components of the BHP funding methodology), the Secretary
will recalculate the state's BHP payment amount and make any necessary
adjustments in accordance with paragraph (c)(2)(iv) of this section,
which was previously (c)(2)(iii).
H. BHP Trust Fund
In Sec. 600.705(a), we have amended this provision by deleting the
option for the state to establish its BHP trust fund in a subset
account within its General Fund and replaced it with the option to
establish it in a segregated account within the state's fund structure
to provide states with the opportunity to utilize state financial
management services while maintaining accountability. The option to
establish the trust fund at an independent entity remains. We believe
this change will provide states with more flexibility given the unique
features each state may have in its accounting and fiscal structures.
We are amending Sec. 600.710 to clarify that the state must assure
to the fiscal policies and accountability standards set forth in that
section. We are also clarifying that this assurance must be reflected
in the state's BHP Blueprint.
V. Collection of Information Requirements
The information collection requirements/burden that were set out in
the September 25, 2013, proposed rule estimated one respondent per
year. Based on comments received, we continue to estimate one
respondent in this final rule. Since we estimate fewer than the
Paperwork Reduction Act's 10 respondent per year threshold, the
information collection requirements/burden that are associated with
this final rule are not subject to the requirements of the Paperwork
Reduction Act (5 CFR 1320.3(c)).
VI. Regulatory Impact Statement
A. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). The Basic Health Program provides states the flexibility to
establish an alternative coverage program for low-income individuals
who would otherwise be eligible to purchase coverage through Exchange.
The effects of this rulemaking will be ``economically significant'' as
measured by the $100 million threshold, and hence a major rule under
the Congressional Review Act. We did not receive any public comments on
the impact analysis section of the proposed rule. We received a variety
of comments from six states on other sections of the rule. These
comments did not provide further information that would contribute to
the assessment of economic impact. We have received a solid commitment
of participation from one state and we expect that a mid-range
participation estimate over the first 5 years would be 3 states. In
accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
The aggregate economic impact of this rule of this final rule is
estimated to be -$900 million from CY 2015 to 2019 (measured in real
2015 dollars). The federal government is expected to reduce its overall
expenditures, as the payments to the states for BHP are anticipated to
be less than the payments that would have been made to qualified health
plans (QHPs) for PTCs and CSR, if persons had been enrolled in those
plans instead of in BHP. In general, we expect that federal payments to
states for BHP would be 5 percent less than the federal payments for
PTCs and CSR to QHPs if persons had been enrolled in those plans
through the exchange.
CMS' Office of the Actuary (OACT) developed estimates for the
impact of this section of the Affordable Care Act, which were initially
published in April 2010, (https://www.cms.gov/ActuarialStudies/downloads/PPACA_2010-04-22.pdf ). These estimates are consistent with
the assumptions and projections in the President's FY 2014 Budget. In
particular, these estimates rely on many of the same data and
assumptions used to project the federal costs related to the health
insurance Exchanges. (The original estimates that appeared in the April
2010 estimates were based off of the President's Fiscal Year 2010
Budget Mid-Session Review.)
To determine the impact of BHP on federal expenditures, OACT
developed estimates of the number of persons who would enroll in BHP if
the program were implemented in all states. In general, this estimate
was based on projections of the number of people who would be eligible
for BHP based on their household income and other eligibility criteria,
and the number of people who would enroll in BHP. The percentage of
people who would enroll in BHP among those eligible is affected by
estimates of the likelihood of persons having other forms of health
insurance (in particular, for persons who have employer sponsored
insurance) and the estimated participation rate of those without other
forms of coverage. The participation rate may be affected by a number
of factors, which include the health status and expected health care
costs of eligible persons (in general, persons with higher expected
health care costs are assumed to be more likely to enroll), the cost to
the enrollee for participating (in general, lower premiums and fewer
cost sharing requirements are assumed to lead to greater
participation), and the effectiveness of enrollment systems and
outreach efforts. These assumptions are consistent with those used to
estimate
[[Page 14138]]
the number of people that would enroll in QHPs through the Exchanges.
OACT also developed estimates of health care costs and the amounts
of PTCs and CSR that the federal government would pay for persons who
would enroll in BHP. These estimates relied on historical health care
cost expenditure data for eligible persons, adjusted for the effect
that having health insurance would have on health care costs. (For
persons who were previously uninsured, their costs were adjusted to
reflect that having health insurance is expected to lead to greater
utilization of health care services than compared to not having
insurance. In addition, for persons who were previously uninsured or
had different forms of health insurance, their costs were adjusted to
reflect differences in cost sharing requirements on health care
expenditures, and differences in provider payment rates between types
of insurance.
To determine the impact of BHP, OACT has developed estimates
compared to those of the impacts of the Exchanges (CMS-9989-F). As the
implementation of BHP would result in a decrease in the number of
persons enrolled through the Exchange, and thus the amount of PTCs and
CSR that would be paid by the federal government, we believe it is
appropriate to develop the impact analysis using the net effects of BHP
relative to the previously estimated impacts of the Exchanges.
For the purpose of this analysis, OACT has assumed that 3 states
would implement BHP between 2015 and 2019. This assumption is based off
of information on states' preliminary interest in BHP; however, in
actuality more or fewer states may decide to implement BHP, and may
decide to implement BHP after 2015. Accordingly, more or fewer states
implementing BHP would increase or decrease the impact of the program,
and the particular number of enrollees and the costs of the BHP may
vary state to state. These estimates are not specific to any 3
particular states.
OACT has also assumed that persons would be enrolled in BHP plans
at the same participation rate as they would have been expected to
enroll in QHPs through the Exchanges. The participation rate may depend
on a number of factors (including the amount of premium and cost
sharing a person would be required to pay in BHP, the choice of BHP
plans, and the benefits offered in BHP), and in actuality could vary
from the participation rate of persons eligible for QHPs. OACT has
assumed that BHP plans would have similar premium and cost-sharing
requirements as QHPs on the Exchange (net of the effects of PTCs and
CSR) and would offer similar benefits to QHPs. Thus, the effects of
implementing BHP on enrollees would be no different than the effects of
the Exchanges; however, to the extent that BHP plans offer additional
benefits or further reduce the amount of costs enrollees would pay for
their health care, enrollees may experience some additional benefit.
Lastly, OACT has assumed that states would not contribute any other
state funds to BHP and that federal BHP payments and enrollees'
premiums and cost sharing would be sufficient to pay for the required
benefits under BHP. To the extent that a state contributes additional
funds (possibly to provide additional benefits or reduce enrollees'
premiums or cost sharing), the state would experience an increase in
expenditures.
The estimated effects of BHP on federal government are shown in
Table 1.
Table 1--Estimated Federal Impacts for the Basic Health Program
[Millions of 2015 dollars]
----------------------------------------------------------------------------------------------------------------
2015 2016 2017 2018 2019 Total
----------------------------------------------------------------------------------------------------------------
BHP Expenditures.................. $2,610 $3,000 $3,410 $4,000 $4,170 $17,190
PTC and CSR Expenditures.......... -$2,750 -$3,160 -$3,590 -$4,210 -$4,390 -$18,100
Net Federal Impact................ -$140 -$160 -$180 -$210 -$220 -$900
----------------------------------------------------------------------------------------------------------------
The estimated number of BHP enrollees is shown in Table 2.
Table 2--Estimated Number of Basic Health Program Enrollees
----------------------------------------------------------------------------------------------------------------
2015 2016 2017 2018 2019
----------------------------------------------------------------------------------------------------------------
BHP Enrollment............................ 460,000 550,000 710,000 970,000 1,020,000
----------------------------------------------------------------------------------------------------------------
B. Accounting Statement and Table
As required by OMB's Circular A-4 (available at http://www.whitehouse.gov/omb//circulars_a004_a-4/), in Table 3 we have
prepared an accounting statement illustrating the classification of the
federal and state expenditures associated with this final rule.
Table 3--Accounting Statement: Classification of Estimated Expenditures for Basic Health Program During Calendar
Years 2015 Through 2019
[Millions of 2015 dollars]
----------------------------------------------------------------------------------------------------------------
Category Transfers
----------------------------------------------------------------------------------------------------------------
Discount rate
Annualized monetized transfers ---------------------------------------- Period covered
7% 3%
----------------------------------------------------------------------------------------------------------------
Primary Estimate...................... $3,561 $3,594 CYs 2015-2019
-------------------------------------------------------------------------
[[Page 14139]]
From/To............................... Qualified Health Plans to Federal Government
----------------------------------------------------------------------------------------------------------------
Primary Estimate...................... $3,382 $3,414 CYs 2015-2019
-------------------------------------------------------------------------
From/To............................... Federal Government to State Governments
----------------------------------------------------------------------------------------------------------------
1. Need for the Rule
Section 1331 of the Affordable Care Act (codified at 42 U.S.C.
18051) requires the Secretary to establish a Basic Health Program. This
final rule implements that section.
2. Benefits
We anticipate that the Basic Health Program will provide benefits
to both consumers and states.
a. Benefits to Consumers
The Basic Health Program (BHP) targets low-income individuals who
would be eligible for premium and cost-sharing reductions, if they
purchased health insurance through an Exchange. These individuals may
have variable income that causes them to move between insurance
programs. For example, if their income drops, they may be eligible for
Medicaid, and when their income rises, they would be eligible to
purchase insurance (with premium and cost-sharing reductions) on an
Exchange. This phenomenon is known as ``churning.'' Because Medicaid
health plans and health plans offered on Exchanges vary in terms of
benefits, provider networks, cost-sharing, and administration, churn
can be disruptive. Researchers have estimated that the Basic Health
Program will significantly reduce the number of individuals that churn
between Medicaid and Exchanges \1\. We have modified the rule to
include the option of 12 month continuous eligibility. This option will
further reduce churn in states that adopt it, by enabling those
enrolled to remain eligible for a full 12 months regardless of income
fluctuation. However, we are not adjusting the payment methodology and
have clarified in the response to comment that states will bear the
associated financial burden to the extent there is one.
---------------------------------------------------------------------------
\1\ Hwang, A., S. Rosenbaum, and B. D. Sommers. ``Creation Of
State Basic Health Programs Would Lead To 4 Percent Fewer People
Churning Between Medicaid And Exchanges.'' Health Affairs 31.6
(2012): 1314-1320.
Buettgens, M., A. Nichols, and S. Dorn. ``Churning Under the ACA
and State Policy Options for Mitigation: Timely Analysis of
Immediate Health Policy Issues.'' Urban Institute (2012). Available
at http://www.urban.org/UploadedPDF/412587-Churning-Under-the-ACA-and-State-Policy-Options-for-Mitigation.pdf.
---------------------------------------------------------------------------
b. Benefits to States
Several states currently operate health insurance programs for low-
income adults with income above Medicaid eligibility levels. These
states believe that the programs confer benefit to their residents
beyond what those individuals could obtain by purchasing health
insurance on an Exchange. The Basic Health Program established by this
rule will give states the option to maintain these programs rather than
having those individuals purchase insurance through the Exchange.
3. Costs
The provisions of this rule were designed to minimize regulatory
costs. It minimizes new administrative structures, because the Basic
Health Program does not include administrative funding and because of
the need for states to coordinate with other insurance affordability
programs. To the extent possible, we borrowed structures from existing
programs. In finalizing the rule, we further extended the use of
existing administrative infrastructure by permitting the use of the
Exchange appeals process for BHP. Additionally, we created an interim
certification level to mitigate the risk associated with state
expenditure of start- up funding prior to receiving any conceptual
approval for the program.
4. Transfers
The provisions of this rule are designed to transfer funds that
will be available to individuals for premium and cost-sharing
reductions for coverage purchased on an Exchange to states to offer
coverage through a Basic Health Program. In states that choose to
implement a Basic Health Program, eligible individuals will not be able
to purchase health insurance through the Exchange. As a result, fewer
individuals will use the Exchange to purchase health insurance.
Depending on the profile of the people in BHP, this may result in
adjustments to the risk profile of the Exchange.
5. Regulatory Alternatives
Many of the structures of the Basic Health Program are set out in
statute, and therefore we were limited in the alternatives we could
consider. When we had options, we attempted to limit the number of new
regulatory structures we created. To make the program easier for states
to implement, we adopt or adapt regulations from existing programs--
Medicaid, the Children's Health Insurance Program, and the Exchanges--
whenever possible, rather than create new structures. Two areas in
which we had choices are reporting compliance with federal rules and
contracting with standard health plans.
a. Reporting Compliance With Federal Rules to HHS
We followed the paradigm of adopting or adapting existing
structures when creating a process for reporting state compliance with
federal rules. Two existing structures we considered were the Exchange
model of Blueprints and the Medicaid model of state plans. We chose to
use the Blueprint model, which we believe will be less burdensome to
states than the state plan model. Additionally, we indicated in the
final rule that we would be accepting a limited set of data elements
from the Blueprint to establish and interim level of certification
giving states design approval before further investment.
b. Contracting Requirements
Similarly when choosing how to regulate state contracts with
standard health plans, we looked to models in the Exchange and Medicaid
rather than creating new regulatory schemes. We have adopted, where
possible, existing
[[Page 14140]]
procurement requirements in order to minimize the burden on states. In
addition, we have allowed states the option to seek an exemption from
competitive contracting requirements for program year 2015 if they are
unable to meet the requirements in the first year of the program.
C. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation, by state,
local, or tribal governments, in the aggregate, or by the private
sector. In 2014, that threshold is approximately $141 million. States
have the option, but are not required, to establish a BHP. Thus, this
final rules does not mandate expenditures by state governments, local
governments, or tribal governments
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA)
requires agencies to prepare an initial regulatory flexibility analysis
to describe the impact of the final rule on small entities, unless the
head of the agency can certify that the rule will not have a
significant economic impact on a substantial number of small entities.
The Act generally defines a ``small entity'' as (1) a proprietary firm
meeting the size standards of the Small Business Administration (SBA);
(2) a not-for-profit organization that is not dominant in its field; or
(3) a small government jurisdiction with a population of less than
50,000. Individuals and states are not included in the definition of a
small entity.
We have clarified in the final rule that we do not have statutory
authority to mandate the inclusion or exclusion of particular
providers. This final rule is focused on eligibility and enrollment in
public programs, and it sets out broad contracting standards but it
does not contain provisions that would have a significant direct impact
on hospitals, and other health care providers that are designated as
small entities under the RFA. However, the provisions in this final
rule may have a substantial, positive indirect effect on hospitals and
other health care providers due to the substantial increase in the
prevalence of health coverage among populations who are currently
unable to pay for needed health care, leading to lower rates of
uncompensated care at hospitals. The Department determines that this
final rule will not have a significant economic impact on a substantial
number of small entities.
Section 1102(b) of the Act requires us to prepare a regulatory
impact analysis if a proposed rule may have a significant economic
impact on the operations of a substantial number of small rural
hospitals. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
metropolitan statistical area and has fewer than 100 beds. As indicated
in the preceding discussion, there may be indirect positive effects
from reductions in uncompensated care, but we have concluded that there
is not a direct economic impact of these facilities.
E. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a final rule that imposes
substantial direct effects on States, preempts State law, or otherwise
has Federalism implications. The BHP is entirely optional for states,
and if implemented in a state, provides access to a pool of funding
that would not otherwise be available to the state.
We conclude that there is not an impact on Federalism by this
voluntary state program.
List of Subjects
42 CFR Part 600
Administrative practice and procedure, Health care, Health
insurance, Penalties, and Reporting and recordkeeping requirements,
State and local governments.
45 CFR Part 144
Health care, Health insurance, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, under the authority at
section 1331(a)(1) of the Affordable Care Act, the Centers for Medicare
& Medicaid Services and the Office of the Secretary amends 42 CFR
chapter IV and 45 CFR subtitle A, respectively, as set forth below:
Title 42--Public Health
0
1. Subchapter I, consisting of part 600, is added to chapter IV to read
as follows:
Subchapter I-- Basic Health Program
PART 600--ADMINISTRATION, ELIGIBILITY, ESSENTIAL HEALTH BENEFITS,
PERFORMANCE STANDARDS, SERVICE DELIVERY REQUIREMENTS, PREMIUM AND
COST SHARING, ALLOTMENTS, AND RECONCILATION
Subpart A--General Provisions and Definitions
Sec.
600.1 Scope.
600.5 Definitions and use of terms.
Subpart B--Establishment and Certification of State Basic Health
Programs
600.100 Program description.
600.105 Basis, scope, and applicability of subpart B.
600.110 BHP Blueprint.
600.115 Development and submission of the BHP Blueprint.
600.120 Certification of a BHP Blueprint.
600.125 Revisions to a certified BHP Blueprint.
600.130 Withdrawal of a BHP Blueprint prior to implementation.
600.135 Notice and timing of HHS action on a BHP Blueprint.
600.140 State termination of a BHP.
600.142 HHS withdrawal of certification and termination of a BHP.
600.145 State program administration and operation.
600.150 Enrollment assistance and information requirements.
600.155 Tribal consultation.
600.160 Protections for American Indian and Alaska Natives.
600.165 Nondiscrimination standards.
600.170 Annual report content and timing.
Subpart C--Federal Program Administration
600.200 Federal program compliance reviews and audits.
Subpart D--Eligibility and Enrollment
600.300 Basis, scope, and applicability.
600.305 Eligible individuals.
600.310 Application.
600.315 Certified application counselors.
600.320 Determination of eligibility for and enrollment in a
standard health plan.
600.330 Coordination with other insurance affordability programs.
600.335 Appeals.
600.340 Periodic determination and renewal of BHP eligibility.
600.345 Eligibility verification.
600.350 Privacy and security of information.
Subpart E--Standard Health Plan
600.400 Basis, scope, and applicability.
600.405 Standard health plan coverage.
600.410 Competitive contracting process.
600.415 Contracting qualifications and requirements.
600.420 Enhanced availability of standard health plans.
600.425 Coordination with other insurance affordability programs.
[[Page 14141]]
Subpart F--Enrollee Financial Responsibilities
600.500 Basis, scope, and applicability.
600.505 Premiums.
600.510 Cost-sharing.
600.515 Public schedule of enrollee premium and cost sharing.
600.520 General cost-sharing protections.
600.525 Disenrollment procedures and consequences for nonpayment of
premiums.
Subpart G--Payment to States
600.600 Basis, scope, and applicability.
600.605 BHP payment methodology.
600.610 Secretarial determination of BHP payment amount.
600.615 Deposit of Federal BHP payment.
Subpart H--BHP Trust Fund
600.700 Basis, scope, and applicability.
600.705 BHP trust fund.
600.710 Fiscal policies and accountability.
600.715 Corrective action, restitution, and disallowance of
questioned BHP transactions.
Authority: Section 1331 of the Patient Protection and
Affordable Care Act of 2010 (Pub. L. 111-148, 124 Stat. 119), as
amended by the Health Care and Education Reconciliation Act of 2010
(Pub. L. 111-152, 124 Stat 1029).
Subpart A--General Provisions and Definitions
Sec. 600.1 Scope.
Section 1331 of the Affordable Care Act, provides for the
establishment of the Basic Health Program (BHP) under which a State may
enter into contracts for standard health plans providing at least
essential health benefits to eligible individuals in lieu of offering
such individuals the opportunity to enroll in coverage through an
Affordable Insurance Exchange. States that elect to operate a BHP will
receive federal funding based on the amount of the premium tax credit
and cost-sharing reductions that would have been available if enrollees
had obtained coverage through the Exchange.
Sec. 600.5 Definitions and use of terms.
For purposes of this part, the following definitions apply:
Advance payments of the premium tax credit means payment of the tax
credit authorized by 26 U.S.C. 36B and its implementing regulations,
which are provided on an advance basis to an eligible individual
enrolled in a QHP through an Exchange in accordance with sections 1402
and 1412 of the Affordable Care Act.
Affordable Care Act is the Patient Protection and Affordable Care
Act of 2010 (Pub. L. 111-148) as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152).
Basic Health Program (BHP) Blueprint is the operational plan that a
State must submit to the Secretary of Health and Human Services (HHS)
for certification to operate a BHP.
Certification means authority to operate the program which is
required for program operations but it does not create an obligation on
the part of the State to implement a BHP.
Code means the Internal Revenue Code of 1986.
Cost sharing means any expenditure required by or on behalf of an
enrollee with respect to covered health benefits; such term includes
deductibles, coinsurance, copayments, or similar charges, but excludes
premiums, balance billing amounts for non-network providers and
spending for non-covered services.
Enrollee means an eligible individual who is enrolled in a standard
health plan contracted to operate as part of a BHP.
Essential health benefits means the benefits described under
section 1302(b) of the Affordable Care Act, as determined in accordance
with implementing regulations at 45 CFR 156.100 through 156.110 and
156.122 regarding prescription drugs.
Family and family size is as defined at 26 CFR 1.36B-1(d).
Federal fiscal year means the time period beginning October 1st and
ending September 30th.
Federal poverty level or FPL means the most recently published
Federal poverty level, updated periodically in the Federal Register by
the secretary of Health and Human Services under the authority of 42
U.S.C. 9902(2).
Household income is as defined in 26 CFR 1.36B-1(e)(1) and is
determined in the same way as it is for purposes of eligibility for
coverage through the Exchange.
Indian means any individual as defined in section 4 (d) of the
Indian Self-Determination and Education Assistance Act (Pub. L 93-638).
Interim certification is an approval status for the initial design
of a state's Basic Health Program. It does not confer any permission to
begin enrollment or seek federal funding.
Lawfully present has the meaning given in 45 CFR 152.2.
Minimum essential coverage has the meaning set forth at 26 CFR
1.5000A-2, including coverage recognized by the Secretary as minimum
essential coverage pursuant to 26 CFR 1.5000A-2(f). Under that
authority, the Secretary recognizes coverage through a BHP standard
health plan as minimum essential coverage.
Modified adjusted gross income is as defined in 26 CFR 1-36B-
1(e)(2).
Network of health care providers means an entity capable of meeting
the provision and administration of standard health plan coverage,
including but not limited to, the provision of benefits, administration
of premiums and applicable cost sharing and execution of innovative
features, such as care coordination and care management, and other
requirements as specified under the Basic Health Program. Such entities
may include but are not limited to: Accountable Care Organizations,
Independent Physician Associations, or a large health system.
Premium means any enrollment fee, premium, or other similar charge
paid to the standard health plan offeror.
Preventive health services and items includes those services and
items specified in 45 CFR 147.130(a).
Program year means a calendar year for which a standard health plan
provides coverage for eligible BHP enrollees.
Qualified health plan or QHP means a health plan that has in effect
a certification that it meets the standards described in subpart C of
45 CFR part 156 issued or recognized by each Exchange through which
such plan is offered in accordance with the process described in
subpart K of 45 CFR part 156, except that such term must not include a
qualified health plan which is a catastrophic plan described in 45 CFR
155.20.
Reference plan is a synonym for the EHB base benchmark plan and is
defined at 45 CFR 156.100.
Regional compact means an agreement between two or more States to
jointly procure and enter into contracts with standard health plan
offeror(s) for the administration and provision of a standard health
plan under the BHP to eligible individuals in such States.
Residency is determined in accordance with 45 CFR 155.305(a)(3).
Single streamlined application has the same meaning as application
defined at 42 CFR 431.907(b)(1) of this chapter and 45 CFR 155.405(a)
and (b).
Standard health plan means a health benefits package, or product,
that is provided by the standard health plan offeror.
Standard health plan offeror means an entity that is eligible to
enter into contracts with the State for the administration and
provision of a standard health plan under the BHP.
State means each of the 50 states and the District of Columbia as
defined by section 1304 of the Act.
[[Page 14142]]
Subpart B--Establishment and Certification of State Basic Health
Programs
Sec. 600.100 Program description.
A State Basic Health Program (BHP) is operated consistent with a
BHP Blueprint that has been certified by the Secretary to meet the
requirements of this part. The BHP Blueprint is developed by the State
for certification by the Secretary in accordance with the processes
described in this subpart.
Sec. 600.105 Basis, scope, and applicability of subpart B.
(a) Statutory basis. This subpart implements the following sections
of the Act:
(1) Section 1331(a)(1) which defines a Basic Health Program.
(2) Section 1331(a)(2) which requires the Secretary to certify a
Basic Health Program before it may become operational.
(3) Section 1331(f) which requires Secretarial oversight through
annual reviews.
(b) Scope and applicability. (1) This subpart sets forth provisions
governing the administration of the BHP, the general requirements for
development of a BHP Blueprint required for certification, for program
operations and for voluntary program termination.
(2) This subpart applies to all States that submit a BHP Blueprint
and request certification to operate a BHP.
Sec. 600.110 BHP Blueprint.
The BHP Blueprint is a comprehensive written document submitted by
the State to the Secretary for certification of a BHP in the form and
manner specified by HHS which will include an opportunity for states to
submit a limited set of elements necessary for interim certification at
the state option. The program must be administered in accordance with
all aspects of section 1331 of the Affordable Care Act and other
applicable law, this chapter, and the certified BHP Blueprint.
(a) Content of a Blueprint. The Blueprint will establish compliance
with applicable requirements by including a description, or if
applicable, an assurance of the following:
(1) The minimum benefits offered under a standard health plan that
assures inclusion of essential health benefits as described in section
1302(b) of the Affordable Care Act, in accordance with Sec. 600.405.
(2) The competitive process, consistent with Sec. 600.410, that
the State will undertake to contract for the provision of standard
health plans.
(3) The standard contract requirements, consistent with Sec.
600.415, that the State will incorporate in its standard health plan
contracts.
(4) The methods by which the State will enhance the availability of
standard health plan coverage as described in Sec. 600.420.
(5) The methods by which the State will ensure and promote
coordination with other insurance affordability programs as described
in Sec. 600.425.
(6) The premium standards set forth in Sec. 600.505.
(7) The cost sharing imposed under the BHP, consistent with the
standards described in Sec. 600.510.
(8) The disenrollment procedures and consequences for nonpayment of
premiums consistent with Sec. 600.525, respectively.
(9) The standards, consistent with Sec. 600.305 used to determine
eligibility for the program.
(10) The State's policies regarding enrollment, disenrollment and
verification consistent with Sec. Sec. 600.320 and 600.345, along with
a plan to ensure coordination with and eliminate gaps in coverage for
individuals transitioning to other insurance affordability programs.
(11) The fiscal policies and accountability procedures, consistent
with Sec. 600.710.
(12) The process by which BHP trust fund trustees shall be
appointed, the qualifications and responsibilities of such trustees,
and any arrangements to insure or indemnify such trustees against
claims for breaches of their fiduciary responsibilities.
(13) A description of how the State will ensure program integrity,
including how it will address potential fraud, waste, and abuse and
ensure consumer protections.
(14) An operational assessment establishing operating agency
readiness.
(15) A transition plan if a state participating in 2015 plans to
propose an alternative enrollment strategy for initial implementation
consistent with Sec. 600.145. Such a transition plan must include a
plan for coordination of this initial implementation strategy with the
Exchange operating in the state, and if beneficiaries will be
transitioning from Medicaid, with the Medicaid agency.
(b) Funding plan. (1) The BHP Blueprint must be accompanied by a
funding plan that describes the enrollment and cost projections for the
first 12 months of operation and the funding sources, if any, beyond
the BHP trust fund.
(2) The funding plan must demonstrate that Federal funds will only
be used to reduce premiums and cost-sharing or to provide additional
benefits.
(c) Transparency. HHS shall make a State's BHP Blueprint available
on line after it is submitted for certification, and will update the
posted Blueprint to the extent that it is later revised by the state.
Sec. 600.115 Development and submission of the BHP Blueprint.
(a) State authority to submit the State Blueprint. A State BHP
Blueprint must be signed by the State's Governor or by the official
with delegated authority from the Governor to sign it. A State may
choose to submit its BHP Blueprint in two parts: The first limited
submission to secure interim certification and the second full
submission to secure full certification.
(b) State Basic Health Program officials. The State must identify
in the BHP Blueprint the agency and officials within that agency, by
position or title, who are responsible for program administration,
operations, and financial oversight.
(c) Opportunity for public comment. The State must provide an
opportunity for public comment on the BHP Blueprint content described
in Sec. 600.110 before submission to the Secretary for certification.
(1) The State must seek public comment on any significant
subsequent revisions prior to submission of those revisions to the
Secretary for certification. Significant revisions are those that alter
core program operations required by Sec. 600.145(f), as well as
changes that alter the BHP standard health plan benefit package, or
enrollment, disenrollment and verification policies.
(2) The process of seeking public comment must include Federally
recognized tribes as defined in the Federally Recognized Indian Tribe
List Act of 1994, 25 U.S.C. 479a, located in the State.
(d) Submission and timing. The BHP Blueprint must be submitted in a
manner and format specified by HHS. States may not implement the BHP
prior to receiving full certification. The date of implementation for
this purpose is the first day enrollees would receive coverage under
the BHP. Following the 2015 initial implementation year, a state
implementing a BHP must coordinate implementation with open enrollment
of the state's exchange.
Sec. 600.120 Certification of a BHP Blueprint.
(a) Effective date of certification. The effective date of either
interim or full certification is the date of signature by the
Secretary.
(b) Payments for periods prior to certification. No payment may be
made
[[Page 14143]]
under this part for periods of BHP operation prior to the date of full
certification.
(c) Period in which a certified Blueprint remains in effect. The
certified Blueprint remains in effect until:
(1) The Blueprint is replaced by Secretarial certification of
updated Blueprint containing revisions submitted by the State.
(2) The State terminates the program consistent with Sec. 600.140.
(3) The Secretary makes a finding that the BHP Blueprint no longer
meets the standards for certification based on findings in the annual
review, or reports significant evidence of beneficiary harm, financial
malfeasance, fraud, waste or abuse by the BHP agency or the State
consistent with Sec. 600.142.
(d) Blueprint approval standards for certification. The Secretary
will certify a BHP Blueprint provided it meets all of the following
standards:
(1) The Blueprint contains sufficient information for the Secretary
to determine that the BHP will comply with the requirements of section
1331 of the Affordable Care Act and this Part.
(2) The BHP Blueprint demonstrates adequate planning for the
integration of BHP with other insurance affordability programs in a
manner that will permit a seamless, coordinated experience for a
potentially eligible individual.
(3) The Blueprint is a complete and comprehensive description of
the BHP and its operations, demonstrating thorough planning and a
concrete program design, without reserved decisions on operational
features.
Sec. 600.125 Revisions to a certified BHP Blueprint.
(a) Submission of revisions. In the event that a State seeks to
make significant change(s) that alter program operations the BHP
benefit package, enrollment, disenrollment and verification policies
described in the certified BHP Blueprint, the State must submit a
revised Blueprint to the Secretary for review and certification.
(b) Continued operation. The State is responsible for continuing to
operate under the terms of the existing certified Blueprint until and
unless a revised Blueprint is certified.
Sec. 600.130 Withdrawal of a BHP Blueprint prior to implementation.
To the extent that a State has not enrolled eligible individuals
into the BHP:
(a) The State may submit a written request to stop any further
consideration of a previously submitted BHP Blueprint, whether
certified or not.
(b) The written request must be signed by the governor, or the
State official delegated to sign the BHP Blueprint by the governor.
(c) HHS will respond with a written confirmation that the State has
withdrawn the Blueprint.
Sec. 600.135 Notice and timing of HHS action on a BHP Blueprint.
(a) Timely response. HHS will act on all certification and revision
requests in a timely manner.
(b) Issues preventing certification. HHS will notify the State in
writing of any impediments to certification that arise in reviewing a
proposed BHP Blueprint.
(c) Reconsideration of decision. HHS will accept a State request
for reconsideration of a certification decision and provide an
impartial review against the standards for certification if requested.
Sec. 600.140 State termination of a BHP.
(a) If a State decides to terminate its BHP, the State must
complete all of the following prior to the effective date of the
termination or the indicated dates:
(1) Submit written notice to the Secretary no later than 120 days
prior to the proposed termination date accompanied by a proposed
transition plan that describes procedures to assist consumers with
transitioning to other insurance affordability programs.
(2) Resolve concerns expressed by the Secretary and obtain approval
by the Secretary of the transition plan.
(3) Submit written notice to all participating standard health plan
offerors, and enrollees that it intends to terminate the program at
least 90 days prior to the termination date. The notices to enrollees
must include information regarding the State's assessment of their
eligibility for all other insurance affordability programs in the
State. Notices must meet the accessibility and readability standards at
45 CFR 155.230(b).
(4) Transmit all information provided as part of an application,
and any information obtained or verified by the State or other agencies
administering insurance affordability programs via secure electronic
interface, promptly and without undue delay to the agency administering
the Exchange and the Medicaid agency as appropriate.
(5) Fulfill its contractual obligations to participating standard
health plan offerors including the payment of all negotiated rates for
participants, as well as plan oversight ensuring that participating
standard health plan offerors fulfill their obligation to cover
benefits for each enrollee.
(6) Fulfill data reporting requirements to HHS.
(7) Complete the annual financial reconciliation process with HHS
to ensure full compliance with Federal financial obligations.
(8) Refund any remaining balance in the BHP trust fund.
(b) [Reserved]
Sec. 600.142 HHS withdrawal of certification and termination of a
BHP.
(a) The Secretary may withdraw certification for a BHP Blueprint
based on a finding that the BHP Blueprint no longer meets the standards
for certification based on findings in the annual review, findings from
a program review conducted in accordance with Sec. 600.200 or from
significant evidence of beneficiary harm, financial malfeasance, fraud,
waste or abuse.
(b) Withdrawal of certification for a BHP Blueprint shall occur
only after the Secretary provides the State with notice of the proposed
finding that the standards for certification are not met or evidence of
harm or misconduct in program operations, a reasonable period for the
State to address the finding (either by substantiating compliance with
the standards for certification or submitting revisions to the
Blueprint, or securing HHS approval of a corrective action plan), and
an opportunity for a hearing before issuing a final finding.
(c) The Secretary shall make every reasonable effort to resolve
proposed findings without requiring withdrawal of BHP certification and
in the event of a decision to withdraw certification, will accept a
request from the State for reconsideration.
(d) The effective date of an HHS determination withdrawing BHP
certification shall not be earlier than 120 days following a final
finding of noncompliance with the standards for certification.
(e) Within 30 days following a final finding of noncompliance with
the standards for certification, the State shall submit a transition
plan that describes procedures to assist consumers with transitioning
to other insurance affordability programs, and shall comply with the
procedures described in Sec. 600.140(a)(2) through (8).
Sec. 600.145 State program administration and operation.
(a) Program operation. The State must implement its BHP in
accordance with the approved and fully certified State BHP Blueprint,
any approved modifications to the State BHP Blueprint and the
requirements of this chapter and applicable law.
(b) Eligibility. All persons have a right to apply for a
determination of
[[Page 14144]]
eligibility and, if eligible, to be enrolled into coverage that
conforms to the regulations in this part.
(c) Statewide program operation. A state choosing to operate a BHP
must operate it statewide.
(d) No caps on program enrollment. A State implementing a BHP must
not be permitted to limit enrollment by setting an income level below
the income standard prescribed in section 1331 of the Affordable Care
Act, having a fixed enrollment cap or imposing waiting lists.
(e) Transition plan. States implementing in 2015 may identify a
transition period following initial implementation during which the
state may propose alternative enrollment strategies for approval. The
transition plan is required to be submitted as part of the state's BHP
Blueprint consistent with Sec. 600.110.
(f) Core operations. A State operating a BHP must perform all of
the following core operating functions:
(1) Eligibility determinations as specified in Sec. 600.320.
(2) Eligibility appeals as specified in Sec. 600.335.
(3) Contracting with standard health plan offerors as specified in
Sec. 600.410.
(4) Oversight and financial integrity including, but not limited
to, operation of the Trust Fund specified at Sec. Sec. 600.705 and
600.710, compliance with annual reporting at Sec. 600.170, and
providing data required by Sec. 600.610 for Federal funding and
reconciliation processes.
(5) Consumer assistance as required in Sec. 600.150.
(6) Extending protections to American Indian/Alaska Natives
specified at Sec. 600.160, as well as comply with the Civil Rights and
nondiscrimination provisions specified at Sec. 600.165.
(7) Data collection and reporting as necessary for efficient and
effective operation of the program and as specified by HHS to support
program oversight.
(8) If necessary, program termination procedures at Sec. 600.145.
Sec. 600.150 Enrollment assistance and information requirements.
(a) Information disclosure. (1) The State must make accurate,
easily understood information available to potential applicants and
enrollees about the BHP coverage option along with information about
other insurance affordability programs.
(2) The State must provide accessible information on coverage,
including additional benefits that may be provided outside of the
standard health plan coverage, any tiers of coverage it has built into
the BHP, including who is eligible for each tier.
(3) The State must require participating standard health plans to
provide clear information on premiums; covered services including any
limits on amount, duration and scope of those services; applicable
cost-sharing using a standard format supplied by the State, and other
data specified in, and in accordance with, 45 CFR 156.220.
(4) The State must provide information in a manner consistent with
45 CFR 155.205(c).
(5) The State must require participating standard health plans to
make publicly available, and keep up to date (at least quarterly), the
names and locations of currently participating providers.
(b) [Reserved]
Sec. 600.155 Tribal consultation.
The State must consult with Indian tribes located in the State on
the development and execution of the BHP Blueprint using the tribal
consultation policy approved by the State Exchange.
Sec. 600.160 Protections for American Indian and Alaska Natives.
(a) Enrollment. Indians must be extended the same special
enrollment status in BHP standard health plans as applicable to
enrollment in a QHP through the Exchange under 45 CFR 155.420(d)(8).
Indians will be allowed to enroll in, or change enrollment in, standard
health plans one time per month.
(b) Cost sharing. No cost sharing may be imposed on Indians under
the standard health plan.
(c) Payments to providers. Equal to the protection extended to
Indian health providers providing services to Indians enrolled in a QHP
in the individual market through an Exchange at 45 CFR 156.430(g), BHP
offerors may not reduce the payment for services to Indian health
providers by the amount of any cost-sharing that would be due from the
Indian but for the prohibition in paragraph (b) of this section.
(d) Requirement. Standard health plans must pay primary to health
programs operated by the Indian Health Service, Indian tribes, tribal
organizations, and urban Indian organizations for services that are
covered by a standard health plan.
Sec. 600.165 Nondiscrimination standards.
(a) The State and standard health plans, must comply with all
applicable civil rights statutes and requirements, including Title VI
of the Civil Rights Act of 1964, Title II of the Americans with
Disabilities Act of 1990, Section 504 of the Rehabilitation Act of
1973, the Age Discrimination Act of 1975, Section 1557 of the
Affordable Care Act, and 45 CFR part 80, part 84, and part 91 and 28
CFR part 35.
(b) The State must comply with the nondiscrimination provision at
45 CFR 155.120(c)(2).
Sec. 600.170 Annual report content and timing.
(a) Content. The State must submit an annual report that includes
any evidence of fraud, waste, or abuse on the part of participating
providers, plans, or the State BHP agency known to the State, and a
detailed data-driven review of compliance with the following:
(1) Eligibility verification requirements for program participation
as specified in Sec. 600.345.
(2) Limitations on the use of Federal funds received by the BHP as
specified in Sec. 600.705.
(3) Requirements to collect quality and performance measures from
all participating standard health plans focusing on quality of care and
improved health outcomes as specified in sections 1311(c)(3) and (4) of
the Affordable Care Act and as further described in Sec. 600.415.
(4) Requirements specified by the Secretary at least 120 days prior
to the date of the annual report as requiring further study to assess
continued State compliance with Federal law, regulations and the terms
of the State's certified Blueprint, based on a Federal review of the
BHP pursuant to Sec. 600.200, and/or a list of any outstanding
recommendations from any audit or evaluation conducted by the HHS
Office of Inspector General that have not been fully implemented,
including a statement describing the status of implementation and why
implementation is not complete.
(b) Timing. The annual reports, in the format specified by the
Secretary, are due 60 days after the end of each operational year.
Information that may be required to secure the release of funding for
the subsequent year may be requested in advance.
Subpart C--Federal Program Administration
Sec. 600.200 Federal program compliance reviews and audits.
(a) Federal compliance review of the State BHP. To determine
whether the State is complying with the Federal requirements and the
provisions of its BHP Blueprint, HHS may review, as needed, but no less
frequently than annually, the compliance of the State
[[Page 14145]]
BHP with applicable laws, regulations and interpretive guidance. This
review may be based on the State's annual report submitted under Sec.
600.170, or may be based on direct Federal review of State
administration of the BHP Blueprint through analysis of the State's
policies and procedures, reviews of agency operation, examination of
samples of individual case records, and additional reports and/or data
as determined by the Secretary.
(b) Action on compliance review findings. The compliance review
will identify the following action items:
(1) Requirements that need further study or data to assess
continued State compliance with Federal law, regulations and the terms
of the State's certified Blueprint. Such findings must be addressed in
the next State annual report due no more than 120 days after the date
of the issuance of the Federal compliance review.
(2) Requirements with which the State BHP does not appear to be in
compliance that could be the basis for withdrawal of BHP certification.
Such findings must be resolved by the State (either by substantiating
compliance with the standards for certification or submitting revisions
to the Blueprint). If not resolved, such action items can be the basis
for a proposed finding for withdrawal of BHP certification.
(3) Requirements with which the State BHP does not appear to be in
compliance and are not a basis for withdrawal of BHP certification but
require revision to the Blueprint must be resolved by the State. If not
resolved, such action items can be the basis for denial of other
Blueprint revisions.
(4) Improper use of BHP trust fund resources. The State and the BHP
trustees shall be given an opportunity to review and resolve concerns
regarding improper use of BHP trust funds, including failure to use
these funds as specified in Sec. 600.705. As indicated in Sec.
600.715(a) through (c), the state may do this either by substantiating
the proper use of trust fund resources as specified in Sec. 600.705(c)
or by taking corrective action, which include changes to procedures to
ensure proper use of trust fund resources, and restitution of
improperly used resources to the trust fund.
(c) The HHS Office of Inspector General (OIG) may periodically
audit State operations and standard health plan practices as described
in Sec. 430.33 of this chapter. Final reports on those audits shall be
transmitted to both the State and the Secretary for actions on
findings. The State and the BHP trustees shall be given an opportunity
to resolve concerns about improper use of BHP trust funds as indicated
in Sec. 600.715(a) through (c): either by substantiating the proper
use of trust fund, or by taking corrective action that includes changes
to procedures to ensure proper use of trust fund resources, and
restitution of improperly used resources to the trust fund.
Subpart D--Eligibility and Enrollment
Sec. 600.300 Basis, scope, and applicability.
(a) Statutory basis. This subpart interprets and implements section
1331(e) of the Affordable Care Act, which sets forth eligibility
standards for the BHP and prohibits eligible individuals from being
treated as qualified individuals under section 1312 of the Affordable
Care Act and enrolling in qualified health plans offered through the
Exchange.
(b) Scope and applicability. This subpart sets forth the
requirements for all BHPs established under section 1331 of the
Affordable Care Act regarding eligibility standards and application
screening and enrollment procedures.
Sec. 600.305 Eligible individuals.
(a) Eligibility standards The State must determine individuals
eligible to enroll in a standard health plan if they:
(1) Are residents of the State.
(2) Have household income which exceeds 133 percent but does not
exceed 200 percent of the FPL for the applicable family size, or, in
the case of an individual who is a lawfully present non-citizen,
ineligible for Medicaid or CHIP due to such immigration status, whose
household income is between zero and 200 percent of the FPL for the
applicable family size.
(3) Are not eligible to enroll in minimum essential coverage (other
than a standard health plan). If an individual meets all other
eligibility standards, and--
(i) Is eligible for, or enrolled in, coverage that does not meet
the definition of minimum essential coverage, including Medicaid that
is not minimum essential coverage, the individual is eligible to enroll
in a standard health plan without regard to eligibility or enrollment
in Medicaid; or
(ii) Is eligible for Employer Sponsored Insurance (ESI) that is
unaffordable (as determined under section 36B(c)(2)(C) of the Internal
Revenue Code), the individual is eligible to enroll in a standard
health plan.
(4) Are 64 years of age or younger.
(5) Are either a citizen or lawfully present non-citizen.
(6) Are not incarcerated, other than during a period pending
disposition of charges.
(b) Eligibility restrictions. With the exception of during an
approved implementation period specified in a transition plan in
accordance with Sec. 600.145, the State may not impose conditions of
eligibility other than those identified in this section, including, but
not limited to, restrictions on eligibility based on geographic
location or imposition of an enrollment cap or a waiting period for
individuals previously eligible for or enrolled in other coverage.
Sec. 600.310 Application.
(a) Single streamlined application. The State must use the single
streamlined application used by the State in accordance with Sec.
435.907(b) of this chapter and 45 CFR 155.405(a) and (b).
(b) Opportunity to apply and assistance with application. The terms
of Sec. Sec. 435.906, 435.907(g) and 435.908 of this chapter,
requiring the State to provide individuals the opportunity to apply and
receive assistance with an application in the Medicaid program, apply
in the same manner to States in the administration of the BHP.
(c) Authorized representatives. The State may choose to permit the
use of an authorized representative designated by an applicant or
beneficiary to assist with the individual's application, eligibility
renewal and other ongoing communication with the BHP. If the State
chooses this option, the State must follow the standards set forth at
either 45 CFR 155.227 or 42 CFR 435.923.
Sec. 600.315 Certified application counselors.
The State may have a program to certify application counselors to
assist individuals to apply for enrollment in the BHP and other
insurance affordability programs. If the State chooses this option, the
State must follow the procedures and standards for such a program set
forth in the regulations at either 45 CFR 155.225 or 42 CFR 435.908.
Sec. 600.320 Determination of eligibility for and enrollment in a
standard health plan.
(a) Determining eligibility to enroll in a standard health plan may
be performed by a State or through delegation to a local governmental
entity, including a governmental entity that determines eligibility for
Medicaid or CHIP, and may be delegated by the State to an Exchange that
is a government agency.
(b) Timely determinations. The terms of 42 CFR 435.912 (relating to
timely determinations of eligibility under the Medicaid program) apply
to eligibility determinations for enrollment in a
[[Page 14146]]
standard health plan exclusive of Sec. 435.912(c)(3)(i). The standards
established by the State must be included in the BHP Blueprint.
(c) Effective date of eligibility. The State must establish a
uniform method of determining the effective date of eligibility for
enrollment in a standard health plan following either the Exchange
standards at 45 CFR 155.420(b)(1) or the Medicaid process at 42 CFR
435.915 exclusive of Sec. 435.915(a).
(d) Enrollment periods. The State must either offer enrollment and
special enrollment periods no more restrictive than those required for
an Exchange at 45 CFR 155.410 and 155.420 or follow the Medicaid
process permitting continuous open enrollment throughout the year.
Sec. 600.330 Coordination with other insurance affordability
programs.
(a) Coordination. The State must establish eligibility and
enrollment mechanisms and procedures to maximize coordination with the
Exchange, Medicaid and CHIP. The terms of 45 CFR 155.345(a) regarding
the agreements between insurance affordability programs apply to a BHP.
The State BHP agency must fulfill the requirements of 42 CFR
435.1200(d) and (e) and, if applicable, paragraph (c) for BHP eligible
individuals.
(b) Coordinated determinations of eligibility. The agency
administering BHP must establish and maintain processes to make income
eligibility determinations using modified adjusted gross income, and to
ensure that applications received by the agency, to the extent
warranted and permitted under delegations from other agencies
administering insurance affordability programs, also result in
eligibility assessments or determinations for those other programs. The
BHP must also accept applications transferred from other agencies
administering insurance affordability programs, and ensure that
individuals assessed or determined eligible for BHP by such other
agencies are afforded the opportunity to enroll in a standard health
plan without undue delay. Individuals submitting applications to any of
the aforementioned agencies must not be required to duplicate the
submission of information.
(c) Account transfers. The agency administering the BHP must
participate in the secure exchange of information with agencies
administering other insurance affordability programs, using the
standards set forth under 45 CFR 155.345(h) regarding electronic
account transfers.
(d) Notification to referring agency. The terms in Sec.
435.1200(d)(5) regarding the notification to other programs of the
final determination of eligibility apply equally to States
administering a BHP.
(e) Notice of decision concerning eligibility. Every application
for BHP shall result in a determination of eligibility or
ineligibility, unless the application has been withdrawn, the applicant
has died, or the applicant cannot be located. Written notices of
eligibility determinations shall be provided and shall be coordinated
with other insurance affordability programs and Medicaid. Electronic
notices shall be provided to the extent consistent with Sec.
435.918(b).
Sec. 600.335 Appeals.
(a) Notice of eligibility appeal rights. Eligibility determinations
must include a notice of the right to appeal the determination, and
instructions regarding how to file an appeal.
(b) Appeals process. Individuals must be given the opportunity to
appeal BHP eligibility determinations through the appeals rules of the
state's Medicaid program or the Exchange. However, this process may not
include an appeal to the federal Department of Health and Human
Services.
(c) Accessibility. Notices must be provided and the appeals process
must be conducted in a manner accessible to individuals with limited
English proficiency and persons with disabilities.
Sec. 600.340 Periodic redetermination and renewal of BHP eligibility.
(a) Periodic review of eligibility. An individual is subject to
periodic review of eligibility every 12 months unless the eligibility
is redetermined sooner based on new information received and verified
from enrollee reports or data sources. The State must require enrollees
to report changes in circumstances, at least to the extent that they
would be required to report such changes if enrolled in coverage
through the Exchange, consistent with 45 CFR 155.330(b).
(b) Renewal of coverage. If an enrollee remains eligible for
coverage in the BHP, the enrollee will be afforded notice of a
reasonable opportunity at least annually to change plans to the extent
the BHP offers a choice of plans, and shall remain in the plan selected
for the previous year unless such enrollee terminates coverage from the
plan by selecting a new plan or withdrawing from a plan, or the plan is
no longer available as a standard health plan in BHP. Enrollees in
plans that are no longer available will be given a reasonable
opportunity to select a new plan, and if they do not select a new plan
will be enrolled in another plan pursuant to a methodology set forth in
the State's Blueprint.
(c) Procedures. The State shall choose to apply equally all the
redetermination procedures described in either 45 CFR 155.335 or 42 CFR
435.916(a) in administering a BHP.
(d) Verification. The State must verify information needed to
redetermine and renew eligibility in accordance with Sec. 600.345 and
comply with the requirements set forth in Sec. 600.330 relating to
screening individuals for other insurance affordability programs and
transmitting such individuals' electronic accounts and other relevant
information to the other program, as appropriate.
(e) Notice to enrollee. The State must provide an enrollee with an
annual notice of redetermination of eligibility. The annual notice
should include all current information used for the most recent
eligibility determination. The enrollee is required to report any
changes with respect to information listed within the notice within 30
days of the date of the notice. The State must verify information in
accordance with Sec. 600.345.
(f) Continuous eligibility. The state is not required to
redetermine eligibility of BHP enrollees more frequently than every 12
months, regardless of changes of circumstances, as long as the
enrollees are under age 65, are not otherwise enrolled in minimum
essential coverage and remain residents of the State.
Sec. 600.345 Eligibility verification.
(a) The State must verify the eligibility of an applicant or
beneficiary for BHP consistent either with the standards and procedures
set forth in--
(1) Medicaid regulations at Sec. Sec. 435.945 through 435.956 of
this chapter; or
(2) Exchange regulations at 45 CFR 155.315 and 155.320.
(b) [Reserved]
Sec. 600.350 Privacy and security of information.
The State must comply with the standards and procedures set forth
in 45 CFR 155.260(b) and (c) as are applicable to the operation of the
BHP.
Subpart E--Standard Health Plan
Sec. 600.400 Basis, scope, and applicability.
(a) Statutory basis. This subpart implements sections 1331(b), (c),
and (g) of the Affordable Care Act, which set forth provisions
regarding the minimum coverage standards under BHP, as well as the
delivery of such coverage,
[[Page 14147]]
including the contracting process for standard health plan offerors
participating in the BHP.
(b) Scope and applicability. This subpart consists of provisions
relating to all BHPs for the delivery of, at a minimum, the ten
essential health benefits as described in section 1302(b) of the
Affordable Care Act, the contracting process by which States must
contract for the provision of standard health plans, the minimum
requirements States must include in their standard health plan
contracts, the minimum coverage standards provided by the standard
health plan offeror, and other applicable requirements to enhance the
coordination of the provision of standard health plan coverage.
Sec. 600.405 Standard health plan coverage.
(a) Essential Health Benefits (EHB). Standard health plan coverage
must include, at a minimum, the essential health benefits as determined
and specified under 45 CFR 156.110, and 45 CFR 156.122 regarding
prescription drugs, except that States may select more than one base
benchmark option from those codified at 45 CFR 156.100 for establishing
essential health benefits for standard health plans. Additionally,
States must comply with 45 CFR 156.122(a)(2) by requiring participating
plans to submit their drug list to the State.
(b) Additional required benefits. Where the standard health plan
for BHP is subject to State insurance mandates, the State shall adopt
the determination of the Exchange at 45 CFR 155.170(a)(3) in
determining which benefits enacted after December 31, 2011 are in
addition to EHB.
(c) Periodic review. Essential health benefits must include any
changes resulting from periodic reviews required by section
1302(b)(4)(G) of the Affordable Care Act. The provision of such
essential health benefits must meet all the requirements of 45 CFR
156.115.
(d) Non-discrimination in benefit design. The terms of 45 CFR
156.125 applies to standard health plans offered under the BHP.
(e) Compliance. The State and standard health plans must comply
with prohibitions on federal funding for abortion services at 45 CFR
156.280.
Sec. 600.410 Competitive contracting process.
(a) General requirement. In order to receive initial HHS
certification as described in Sec. 600.120, the State must assure in
its BHP Blueprint that it complies with the requirements set forth in
this section.
(b) Contracting process. The State must:
(1) Conduct the contracting process in a manner providing full and
open competition consistent with the standards of 45 CFR 92.36(b)
through (i);
(2) Include a negotiation of the elements described in paragraph
(d) of this section on a fair and adequate basis; and
(3) Consider the additional elements described in paragraph (e) of
this section.
(c) Initial implementation exceptions. (1) If a State is not able
to implement a competitive contracting process described in paragraph
(b) of this section for program year 2015, the State must include a
justification as to why it cannot meet the conditions in paragraph (b),
as well as a description of the process it will use to enter into
contracts for the provision of standard health plans under BHP.
(2) The State must include a proposed timeline that implements a
competitive contracting process, as described in paragraph (b) of this
section, for program year 2016.
(3) Initial implementation exceptions are subject to HHS approval
consistent with the BHP Blueprint review process established in Sec.
600.120, and may only be in effect for benefit year 2015.
(d) Negotiation criteria. The State must assure that its
competitive contracting process includes the negotiation of:
(1) Premiums and cost sharing, consistent with the requirements at
Sec. Sec. 600.505 and 600.510(e);
(2) Benefits, consistent with the requirements at Sec. 600.405;
(3) Inclusion of innovative features, such as:
(i) Care coordination and care management for enrollees, with a
particular focus on enrollees with chronic health conditions;
(ii) Incentives for the use of preventive services; and
(iii) Establishment of provider-patient relationships that maximize
patient involvement in their health care decision-making, including the
use of incentives for appropriate health care utilization and patient
choice of provider.
(e) Other considerations: The State shall also include in its
competitive process criteria to ensure:
(1) Consideration of health care needs of enrollees;
(2) Local availability of, and access, to health care providers to
ensure the appropriate number, mix and geographic distribution to meet
the needs of the anticipated number of enrollees in the service area
(including but not limited to services provided by essential community
providers, as defined in 45 CFR 156.235) so that access to services is
at least sufficient to meet the access standards applicable under 42
CFR Part 438, Subpart D, or 45 CFR 156.230 and 156.235;
(3) Use of a managed care process, or a similar process to improve
the quality, accessibility, appropriate utilization, and efficiency of
services provided to enrollees;
(4) Performance measures and standards focused on quality of care
and improved health outcomes as specified in Sec. 600.415;
(5) Coordination between other health insurance affordability
programs to ensure enrollee continuity of care as described in Sec.
600.425; and
(6) Measures to prevent, identify, and address fraud, waste and
abuse and ensure consumer protections.
(f) Discrimination. Nothing in the competitive process shall permit
or encourage discrimination in enrollment based on pre-existing
conditions or other health status-related factors.
Sec. 600.415 Contracting qualifications and requirements.
(a) Eligible offerors for standard health plan contracts. A State
may enter into contracts for the administration and provision of
standard health plans under the BHP with, but not limited to, the
following entities:
(1) Licensed health maintenance organization.
(2) Licensed health insurance insurer.
(3) Network of health care providers demonstrating capacity to meet
the criteria set forth in Sec. 600.410(d).
(4) Non-licensed health maintenance organizations participating in
Medicaid and/or CHIP.
(b) General contract requirements. (1) A State contracting with
eligible standard health plan offerors described in paragraph (a) of
this section must include contract provisions addressing network
adequacy, service provision and authorization, quality and performance,
enrollment procedures, disenrollment procedures, noticing and appeals,
provisions protecting the privacy and security of personally
identifiable information, and other applicable contract requirements as
determined by the Secretary to the extent that the service delivery
model furthers the objectives of the program.
(2) All contracts under this part must include provisions that
define a sound and complete procurement contract, as required by 45 CFR
92.36(i).
(3) To the extent that the standard health plan is health insurance
coverage offered by a health insurance issuer, the
[[Page 14148]]
contract must provide that the medical loss ratio is at least 85
percent.
(c) Notification of State election. To receive HHS certification,
the State must include in its BHP Blueprint the standard set of
contract requirements described in paragraph (b) of this section that
will be incorporated into its standard health plan contracts.
Sec. 600.420 Enhanced availability of standard health plans.
(a) Choice of standard health plans offerors. (1) The State must
assure that standard health plans from at least two offerors are
available to enrollees under BHP. This assurance shall be reflected in
the BHP Blueprint, which if applicable, shall also include a
description of how it will further ensure enrollee choice of standard
health plans.
(2) If a State is not able to assure choice of standard health plan
offerors, the State may request an exception to the requirement set
forth in paragraph (a)(1) of this section, which must include a
justification as to why it cannot assure choice of standard health plan
offeror as well as demonstrate that the State has reviewed its
competitive contracting process to determine the following:
(i) Whether all contract requirements and qualifications are
required under the federal framework for BHP;
(ii) Whether additional negotiating flexibility would be consistent
with the minimum statutory requirements and available BHP funding: and
(iii) Whether potential bidders have received sufficient
information to encourage participation in the BHP competitive
contracting process.
(b) Use of regional compacts. (1) A State may enter into a joint
procurement with other States to negotiate and contract with standard
health plan offerors to administer and provide standard health plans
statewide, or in geographically specific areas within the States, to
BHP enrollees residing in the participating regional compact States.
(2) A State electing the option described in paragraph (b)(1) of
this section that also contracts for the provision of a geographically
specific standard health plan must assure that enrollees, regardless of
residency within the State, continue to have choice of at least two
standard health plans.
(3) A State electing the option described in paragraph (b)(1) of
this section must include in its BHP Blueprint all of the following:
(i) The other State(s) entering into the regional compact.
(ii) The specific areas within the participating States that the
standard health plans will operate, if applicable.
(A) If the State contracts for the provision of a geographically
specific standard health plan, the State must describe in its BHP
Blueprint how it will assure that enrollees, regardless of location
within the State, continue to have choice of at least two standard
health plan offerors.
(B) [Reserved]
(iii) An assurance that the competitive contracting process used in
the joint procurement of the standard health plans complies with the
requirements set forth in Sec. 600.410.
(iv) Any variations that may occur as a result of regional
differences between the participating states with respect to benefit
packages, premiums and cost sharing, contracting requirements and other
applicable elements as determined by HHS.
Sec. 600.425 Coordination with other insurance affordability
programs.
A State must ensure coordination for the provision of health care
services to promote enrollee continuity of care between Medicaid, CHIP,
Exchange and any other state-administered health insurance programs.
The State's BHP Blueprint must describe how it will ensure such
coordination.
Subpart F--Enrollee Financial Responsibilities
Sec. 600.500 Basis, scope, and applicability.
(a) Statutory basis. This subpart implements section 1331(a) of the
Affordable Care Act, which sets forth provisions regarding the
establishment of the BHP and requirements regarding monthly premiums
and cost sharing for enrollees.
(b) Scope and applicability. This subpart consists of provisions
relating to the imposition of monthly premiums and cost-sharing under
all state BHPs.
Sec. 600.505 Premiums.
(a) Premium requirements. (1) For premiums imposed on enrollees,
the State must assure that the monthly premium imposed on any enrollee
does not exceed the monthly premium that the enrollee would have been
required to pay had he or she enrolled in a plan with a premium equal
to the premium of the applicable benchmark plan, as defined in 26 CFR
1.36B-3(f). The State must assure that when determining the amount of
the enrollee's monthly premium, the State took into account reductions
in the premium resulting from the premium tax credit that would have
been paid on the enrollee's behalf.
(2) This assurance must be reflected in the BHP Blueprint, which
shall also include:
(i) The group or groups of enrollees subject to premiums.
(ii) The collection method and procedure for the payment of an
enrollee's premium.
(iii) The consequences for an enrollee or applicant who does not
pay a premium.
(b) [Reserved]
Sec. 600.510 Cost-sharing.
(a) Cost-sharing requirements. (1) For cost sharing imposed on
enrollees, the State must assure the following:
(i) The cost sharing imposed on enrollees meet the standards
detailed in Sec. 600.520(c).
(ii) The establishment of an effective system to monitor and track
the cost-sharing standards consistent with Sec. 600.520(b) through
(d).
(2) This assurance must be reflected in the BHP Blueprint, which
shall also include the group or groups of enrollees subject to the cost
sharing.
(b) Cost sharing for preventive health services. A State may not
impose cost sharing with respect to the preventive health services or
items, as defined in, and in accordance with 45 CFR 147.130.
Sec. 600.515 Public schedule of enrollee premium and cost sharing.
(a) The State must ensure that applicants and enrollees have access
to information about all of the following, either upon request or
through an Internet Web site:
(1) The amount of and types of enrollee premiums and cost sharing
for each standard health plan that would apply for individuals at
different income levels.
(2) The consequences for an applicant or an enrollee who does not
pay a premium.
(b) The information described in paragraph (a) of this section must
be made available to applicants for standard health plan coverage and
enrollees in such coverage, at the time of enrollment and reenrollment,
after a redetermination of eligibility, when premiums, cost sharing,
and annual limitations on cost sharing are revised, and upon request by
the individual.
Sec. 600.520 General cost-sharing protections.
(a) Cost-sharing protections for lower income enrollees. The State
may vary premiums and cost sharing based on household income only in a
manner that does not favor enrollees with higher income over enrollees
with lower income.
(b) Cost-sharing protections to ensure enrollment of Indians. A
State must ensure that standard health plans meet
[[Page 14149]]
the standards in accordance with 45 CFR 156.420(b)(1) and (d).
(c) Cost-sharing standards. A State must ensure that standard
health plans meet:
(1) The standards in accordance with 45 CFR 156.420(c) and (e); and
(2) The cost-sharing reduction standards in accordance with 45 CFR
156.420(a)(1) for an enrollee with household income at or below 150
percent of the FPL, and 45 CFR 156.420(a)(2) for an enrollee with
household income above 150 percent of the FPL.
(3) The State must establish an effective system to monitor
compliance with the cost-sharing reduction standards in paragraph (c)
of this section, and the cost-sharing protections to ensure enrollment
of Indians in paragraph (b) of this section to ensure that enrollees
are not held responsible for such monitoring activity.
(d) Acceptance of certain third party payments. States must ensure
that standard health plans must accept premium and cost-sharing
payments from the following third party entities on behalf of plan
enrollees:
(1) Ryan White HIV/AIDS Programs under title XXVI of the Public
Health Service Act;
(2) Indian tribes, tribal organizations or urban Indian
organizations; and
(3) State and federal government programs.
Sec. 600.525 Disenrollment procedures and consequences for nonpayment
of premiums.
(a) Disenrollment procedures due to nonpayment of premium. (1) A
State must assure that it is in compliance with the disenrollment
procedures described in 45 CFR 155.430. This assurance must be
reflected in the state's BHP Blueprint.
(2) A State electing to enroll eligible individuals in accordance
with 45 CFR 155.410 and 155.420 must comply with the premium grace
period standards set forth in 45 CFR 156.270 for required premium
payment prior to disenrollment.
(3) A State electing to enroll eligible individuals throughout the
year must provide an enrollee a 30-day grace period to pay any required
premium prior to disenrollment.
(b) Consequences of nonpayment of premium. (1) A State electing to
enroll eligible individuals in accordance with 45 CFR 155.410 and
155.420 may not restrict reenrollment to BHP beyond the next open
enrollment period.
(2) A State electing to enroll eligible individuals throughout the
year must comply with the reenrollment standards set forth in Sec.
457.570(c) of this chapter. If applicable, the State must define the
length of its premium lockout period in its BHP Blueprint.
Subpart G--Payment to States
Sec. 600.600 Basis, scope, and applicability.
(a) Statutory basis. This subpart implements section 1331(d)(1) and
(3) of the Affordable Care Act regarding the transfer of Federal funds
to a State's BHP trust fund and the Federal payment amount to a State
for the provision of BHP.
(b) Scope and applicability. This subpart consists of provisions
relating to the methodology used to calculate the amount of payment to
a state in a given Federal fiscal year for the provision of BHP and the
process and procedures by which the Secretary establishes a State's BHP
payment amount.
Sec. 600.605 BHP payment methodology.
(a) General calculation. The Federal payment for an eligible
individual in a given Federal fiscal year is the sum of the premium tax
credit component, as described in paragraph (a)(1) of this section, and
the cost-sharing reduction component, as described in paragraph (a)(2)
of this section.
(1) Premium tax credit component. The premium tax credit component
equals 95 percent of the premium tax credit for which the eligible
individual would have qualified had he or she been enrolled in a
qualified health plan through an Exchange in a given calendar year,
adjusted by the relevant factors described in paragraph (b) of this
section.
(2) Cost-sharing reduction component. The cost-sharing reduction
component equals 95 percent of the cost of the cost-sharing reductions
for which the eligible individual would have qualified had he or she
been enrolled in a qualified health plan through an Exchange in a given
calendar year adjusted by the relevant factors described in paragraph
(b) of this section.
(b) Relevant factors in the payment methodology. In determining the
premium tax credit and cost-sharing reduction components described in
paragraph (a) of this section, the Secretary will consider the
following factors to determine applicable adjustments:
(1) Age of the enrollee;
(2) Income of the enrollee;
(3) Self-only or family coverage;
(4) Geographic differences in average spending for health care
across rating areas;
(5) Health status of the enrollee for purposes of determining risk
adjustment payments and reinsurance payments had the enrollee been
enrolled in a qualified health plan through an Exchange;
(6) Reconciliation of the premium tax credit or cost-sharing
reductions had such reconciliation occurred if an enrollee had been
enrolled in a qualified health plan through an Exchange;
(7) Marketplace experience in other states with respect to Exchange
participation and the effect of the premium tax credit and cost-sharing
reductions provided to residents, particularly those residents with
income below 200 percent of the FPL; and
(8) Other factors affecting the development of the methodology as
determined by the Secretary.
(c) Annual adjustments to payment methodology. The Secretary will
adjust the payment methodology on a prospective basis to adjust for any
changes in the calculation of the premium tax credit and cost-sharing
reduction components to the extent that necessary data is available for
the Secretary to prospectively determine all relevant factors, as
specified in paragraph (b) of this section.
Sec. 600.610 Secretarial determination of BHP payment amount.
(a) Proposed payment notice. (1) Beginning in FY 2015 and each
subsequent year thereafter, the Secretary will determine and publish in
a Federal Register document the next fiscal year's BHP payment
methodology. The Secretary will publish this document annually in
October upon receiving certification from the Chief Actuary of CMS.
(2) A State may be required to submit data in accordance with the
published proposed payment document in order for the Secretary to
determine the State's payment rate as described in paragraph (b) of
this section.
(b) Final payment notice. (1) The Secretary will determine and
publish the final BHP payment methodology and BHP payment amounts
annually in February in a Federal Register document.
(2) Calculation of payment rates. State payment rates are
determined by the Secretary using the final BHP payment methodology,
data requested in the proposed payment notice described in paragraph
(a) of this section, and, if needed, other applicable data as
determined by the Secretary.
(c) State specific aggregate BHP payment amounts. (1) Prospective
aggregate payment amount. The Secretary will determine, on a quarterly
basis, the prospective aggregate BHP payment amount by multiplying the
[[Page 14150]]
payment rates described in paragraph (b) of this section by the
projected number of enrollees. This calculation would be made for each
category of enrollees based on enrollee characteristics and the other
relevant factors considered when determining the payment methodology.
The prospective aggregate BHP payment amount would be the sum of the
payments determined for each category of enrollees for a State.
(2) Retrospective adjustment to state specific aggregate payment
amount for enrollment and errors. (i) Sixty days after the end of each
fiscal year quarter, the Secretary will calculate a retrospective
adjustment to the previous quarter's specific aggregate payment amount
by multiplying the payment rates described in paragraph (b) of this
section by actual enrollment for the respective quarter. This
calculation would be made for each category of enrollees based on
enrollee characteristics and the other relevant factors considered when
determining the payment methodology. The adjusted BHP payment amount
would be the sum of the payments determined for each category of
enrollees for a State.
(ii) Upon determination that a mathematical error occurred during
the application of the BHP funding methodology, the Secretary will
recalculate the state's BHP payment amount and make any necessary
adjustments in accordance with paragraph (c)(2)(iv) of this section.
(iii) To the extent that the final payment notice described in
paragraph (b) of this section permits retrospective adjustments to the
state's BHP payment amount (due to the lack of necessary data for the
Secretary to prospectively determine the relevant factors comprising
the premium tax credit and cost-sharing reductions components of the
BHP funding methodology), the Secretary will recalculate the state's
BHP payment amount and make any necessary adjustments in accordance
with paragraph (c)(2)(iv) of this section.
(iv) Any difference in the adjusted payment and the prospective
aggregate payment amount will result in either:
(A) A deposit of the difference amount into the State's BHP trust
fund; or
(B) A reduction in the upcoming quarter's prospective aggregate
payment as described in paragraph (c)(1) of this section by the
difference amount.
Sec. 600.615 Deposit of Federal BHP payment.
HHS will make quarterly deposits into the state's BHP trust fund
based on the aggregate quarterly payment amounts described in Sec.
600.610(c).
Subpart H--BHP Trust Fund
Sec. 600.700 Basis, scope, and applicability.
(a) Statutory basis. This subpart implements section 1331(d)(2) of
the Affordable Care Act, which set forth provisions regarding BHP trust
fund expenditures, fiscal policies and accountability standards and
restitution to the BHP trust fund for unallowable expenditures.
(b) Scope and applicability. This subpart sets forth a framework
for BHP trust funds and accounting, establishing sound fiscal policies
and accountability standards and procedures for the restitution of
unallowable BHP trust fund expenditures.
Sec. 600.705 BHP trust fund.
(a) Establishment of BHP trust fund. (1) The State must establish a
BHP trust fund with an independent entity, or in a segregated account
within the State's fund structure.
(2) The State must identify trustees responsible for oversight of
the BHP trust fund.
(3) Trustees must specify individuals with the power to authorize
withdrawal of funds for allowable trust fund expenditures.
(b) Non-Federal deposits. The State may deposit non-Federal funds,
including such funds from enrollees, providers or other third parties
for standard health plan coverage, into its BHP trust fund. Upon
deposit, such funds will be considered BHP trust funds, must remain in
the BHP trust fund and meet the standards described in paragraphs (c)
and (d) of this section.
(c) Allowable trust fund expenditures. BHP trust funds may only be
used to:
(1) Reduce premiums and cost sharing for eligible individuals
enrolled in standard health plans under BHP; or
(2) Provide additional benefits for eligible individuals enrolled
in standard health plans as determined by the State.
(d) Limitations. BHP trust funds may not be expended for any
purpose other than those specified in paragraph (c) of this section. In
addition, BHP trust funds may not be used for other purposes including
but not limited to:
(1) Determining the amount of non-Federal funds for the purposes of
meeting matching or expenditure requirements for Federal funding;
(2) Program administration of BHP or any other program;
(3) Payment to providers not associated with BHP services or
requirements; or
(4) Coverage for individuals not eligible for BHP.
(e) Year-to-year carryover of trust funds. A State may maintain a
surplus, or reserve, of funds in its trust through the carryover of
unexpended funds from year-to-year. Expenditures from this surplus must
be made in accordance with paragraphs (b) and (c) of this section.
Sec. 600.710 Fiscal policies and accountability.
The BHP administering agency must assure the fiscal policies and
accountability set forth in paragraphs (a) through (g) of this section.
This assurance must be reflected in the BHP Blueprint.
(a) Accounting records. Maintain an accounting system and
supporting fiscal records to assure that the BHP trust funds are
maintained and expended in accord with applicable Federal requirements,
such as OMB Circulars A-87 and A-133.
(b) Annual certification. Obtain an annual certification from the
BHP trustees, the State's chief financial officer, or designee,
certifying all of the following:
(1) The State's BHP trust fund financial statements for the fiscal
year.
(2) The BHP trust funds are not being used as the non-Federal share
for purposes of meeting any matching or expenditure requirement of any
Federally-funded program.
(3) The use of BHP trust funds is in accordance with Federal
requirements consistent with those specified for the administration and
provision of the program.
(c) Independent audit. Conduct an independent audit of BHP trust
fund expenditures, consistent with the standards set forth in chapter 3
of the Government Accountability Office's Government Auditing
Standards, over a 3-year period to determine that the expenditures made
during the 3-year period were allowable as described in Sec.
600.705(b) and in accord with other applicable Federal requirements.
The independent audit may be conducted as a sub-audit of the single
state audit conducted in accordance with OMB Circular A-133, and must
follow the cost accounting principles in OMB Circular A-87.
(d) Annual reports. Publish annual reports on the use of funds,
including a separate line item that tracks the use of funds described
in Sec. 600.705(e) to further reduce premiums and cost sharing, or for
the provision of additional benefits within 10 days of approval by the
trustees. If applicable for the reporting year, the annual report must
also contain the findings for the
[[Page 14151]]
audit conducted in accordance with paragraph (c) of this section.
(e) Restitution. Establish and maintain BHP trust fund restitution
procedures.
(f) Record retention. Retain records for 3 years from date of
submission of a final expenditure report.
(g) Record retention related to audit findings. If any litigation,
claim, financial management review, or audit is started before the
expiration of the 3-year period, the records shall be retained until
all litigation, claims or audit findings involving the records have
been resolved and final action taken.
Sec. 600.715 Corrective action, restitution, and disallowance of
questioned BHP transactions.
(a) Corrective action. When a question has been raised concerning
the authority for BHP trust fund expenditures in an OIG report, other
HHS compliance review, State audit or otherwise, the BHP trustees and
the State shall review the issues and develop a written response no
later than 60 days upon receipt of such a report, unless otherwise
specified in the report, review or audit. To the extent determined
necessary in that review, the BHP trustees and State shall implement
changes to fiscal procedures to ensure proper use of trust fund
resources.
(b) Restitution. To the extent that the State and BHP trustees
determine that BHP trust funds may not have been properly spent, they
must ensure restitution to the BHP trust fund of the funds in question.
Restitution may be made directly by the BHP trustees, by the State, or
by a liable third party. The State or the BHP trustees may enter into
indemnification agreements assigning liability for restitution of funds
to the BHP trust fund.
(c) Timing of restitution. Restitution to the BHP trust fund for
any unallowable expenditure may occur in a lump sum amount, or in equal
installment amounts. Restitution to the BHP trust fund cannot exceed a
2-year period from the date of the written response in accordance with
paragraph (a) of this section.
(d) HHS disallowance of improper BHP trust fund expenditures. The
State shall return to HHS the amount of federal BHP funding that HHS
has determined was expended for unauthorized purposes, when no
provision has been made to restore the funding to the BHP trust fund in
accordance with paragraph (b) of this section (unless the restitution
does not comply with the timing conditions described in paragraphs (c)
of this section). When HHS determines that federal BHP funding is not
allowable, HHS will provide written notice to the state and BHP
Trustees containing:
(1) The date or dates of the improper expenditures from the BHP
trust fund;
(2) A brief written explanation of the basis for the determination
that the expenditures were improper; and
(3) Procedures for administrative reconsideration of the
disallowance based on a final determination.
(e) Administrative reconsideration of BHP trust fund disallowances.
(1) BHP Trustees or the State may request reconsideration of a
disallowance within 60 days after receipt of the disallowance notice
described in paragraph (d)(1) of this section by submitting a written
request for review, along with any relevant evidence, documentation, or
explanation, to HHS.
(2) After receipt of a reconsideration request, if the Secretary
(or a designated hearing officer) determines that further proceedings
would be warranted, the Secretary may issue a request for further
information by a specific date, or may schedule a hearing to obtain
further evidence or argument.
(3) The Secretary, or designee, shall issue a final decision within
90 days after the later of the date of receipt of the reconsideration
request or date of the last scheduled proceeding or submission.
(f) Return of disallowed BHP funding. Disallowed federal BHP
funding must be returned to HHS within 60 days after the later of the
date of the disallowance notice or the final administrative
reconsideration upholding the disallowance. Such repayment cannot be
made from BHP trust funds, but must be made with other, non-Federal
funds.
Title 45--Public Welfare
PART 144--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE
0
2. The authority citation for part 144 continues to read as follows:
Authority: Secs. 2701 through 2763, 2791, and 2792 of the
Public Health Service Act, 42 U.S.C. 300gg through 300gg-63, 300gg-
91, and 300gg-92.
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3. Section 144.103 is amended by revising the definition of
``individual market'' to read as follows:
Sec. 144.103 Definitions.
* * * * *
Individual market means the market for health insurance coverage
offered to individuals other than in connection with a group health
plan, or other than coverage offered pursuant to a contract between the
health insurance issuer with the Medicaid, Children's Health Insurance
Program, or Basic Health programs.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
Dated: February 19, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
Approved: February 21, 2014.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2014-05299 Filed 3-7-14; 4:15 pm]
BILLING CODE 4120-01-P