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Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

CMS Issues Final HHS Notice on Benefit and Payment Parameters for 2016

February 27, 2015—The Centers for Medicare and Medicaid Services (CMS) Feb. 20 issued a final rule on benefit and payment parameters included in the Affordable Care Act (ACA, P.L., 111-148 and P.L. 111-152). The rule sets forth 2016 payment parameters and provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost-sharing reductions; and use fees for federally facilitated exchanges.

Most notable in the final rule, the Department of Health and Human Services (HHS) clarifies that insurance coverage is required to include substantial coverage of inpatient hospital services and physician services to meet the ACA’s minimum value (MV) threshold, which is consistent with recently published CMS guidance.

The MV threshold, designed to protect enrollees from substandard coverage and financial liability for substantial unanticipated health care expenses, requires coverage of at least 60 percent of expected costs for an enrollee. 

Previously an MV calculator created by HHS was certifying plans as meeting the 60 percent coverage standard, despite plans having minimal inpatient hospital coverage. If employer coverage is certified as meeting the MV threshold, then employees are not eligible to receive subsidies to buy insurance through the online marketplaces.  The final rule clarification of the “minimum value” necessary to meet the 60 percent standard furthers the ACA intent of deterring employers from offering inadequate coverage to their employees.

The final rule also: 

  • Codifies network adequacy requirements so that qualified health plans on the Federally Facilitated Marketplaces must offer provider contracts to at least one essential community provider in ten provider categories (including hospitals) in each county within the service area, where a provider in that category is available;
  • Finalizes a proposal to reduce the maximum annual limitation on cost-sharing for self-only coverage in 2016 to $2,250 for individuals with a household income between 150-200 percent of the Federal Poverty Level (FPL); and $5,450 for individuals with a household income between 200-250 percent of the FPL; and
  • Amends the special rule for network plans to clarify that issuers have the option to count cost sharing for out-of-network services toward the annual limitation on cost sharing.

Furthermore, the rule finalizes standards for the open enrollment period for the individual market; essential health benefits; quality improvement strategies; the Small Business Health Options Program (SHOP); guaranteed availability; guaranteed renewability; the rate review program; the medical loss ratio program; and other ACA health insurance marketplace reforms. 

Most regulations are effective April 26, 2015, except for amendments to regulations pertaining to Essential Community Providers, enrollment of employees under SHOP, and reporting of federal and state taxes, which are effective January 1, 2016.

Contact:

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

Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Telephone: 202-862-6085
Email: acohen@aamc.org

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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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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org