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Washington Highlights

CMS Issues Notice on Benefit and Payment Parameters for 2014 to Implement ACA Marketplace Reforms

The Centers for Medicare and Medicaid Services (CMS) Mar. 1 issued a final rule: HHS Notice of Benefit and Payment Parameters for 2014.  This final rule provides further information on the permanent risk adjustment, transitional reinsurance and temporary risk corridors programs, advance payments of the premium tax credit, cost-sharing reductions, medical loss ratio, and the Small Business Health Options Program (SHOP). 

AAMC's comments on the notice of benefit and payment parameters proposed rule focused on cost sharing reductions at the point-of-service, the proposed risk adjustment methodology, and other requirements related to student health insurance [see Washington Highlights, Jan. 4]. 

The final rule includes the following:

  • CMS finalized a proposal requiring issuers to provide cost-sharing reductions at the point-of-service for eligible individuals and that HHS directly reimburse issuers for the value of these reductions.
  • CMS explained that the agency used criteria and methods from Medicare when appropriate, but customized the HHS risk adjustment methodology to mitigate adverse selection based on projections of the 2014 marketplace.  CMS plans to make future adjustments to the model and will engage with stakeholders throughout the process. 
  • CMS clarified that the agency will treat student health insurance plans as a separate group that would not be subject to risk adjustment charges and would not receive risk adjustment payments.


Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499

Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Telephone: 202-862-6085

Jane Eilbacher
Policy and Regulatory Specialist
Telephone: 202-828-0896


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806