Insurers dislike CMS plans for network adequacy, plan design

Insurers are pushing back on proposed changes to network adequacy standards, essential health benefits and standardized offerings for plans on the federal health insurance exchanges, saying the new policies could stymie innovation and have negative effects on consumers.

CMS puts out an annual rule governing exchange plans, known as the Notice of Benefit and Payment Parameters. In its proposed rule for the 2023 plan year, CMS announced its intent to reverse a Trump-era policy and effectively stop exchanges, insurance issuers, agents and brokers from discriminating against consumers for their sexual orientation or gender identity. Trade organizations for insurers and providers alike urged CMS to finalize the policy reversal in formal comments on the rule.

But insurers are butting heads with the agency—and provider associations—over several other proposals in CMS’ behemoth rule.

“We are concerned that some of the policies proposed in this Payment Notice may take large steps backward, undermining this hard-won stability and significantly limiting innovation and competition,” AHIP, a large lobbying organization for insurers, wrote in a letter to the agency.

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CMS wants to require insurers to offer standardized plan options for every non-standardized plan they run. Standardized plans have a uniform cost-sharing structure, and CMS thinks this will help consumers better compare plans.

The policy builds off an Obama-era initiative that was later undone by the Trump CMS, though the Biden administration goes a step further to actually require standardized plan offerings where insurers have non-standard options. CMS also says the policy change would support President Joe Biden’s 2021 executive order on promoting competition in the economy.

AHIP says this policy would stifle innovation among plans. Requiring standardized plan options for every non-standardized plan would only exacerbate consumers’ “choice overload,” and CMS should instead improve the tools consumers can use to make decisions about plans, AHIP argues in its letter. Other insurance trade groups including the Association for Community Affiliated Plans and the Alliance of Community Health Plans agreed.

Instead, AHIP says CMS could require only one silver level standardized plan option in each service area as a test to see whether standardized plan options meet consumer needs.

The Blue Cross Blue Shield Association writes in its own letter that CMS should instead revert back to the previous policy that allowed but didn’t require standardized plan offerings.

CMS said in the proposed rule that it also is considering resuming meaningful difference standards, meant to help consumers better understand differences between plans. The standards were initially finalized in the 2015 rule and removed in the 2019 policy. Insurers said this would be a more appropriate policy move than requiring standardized plan offerings.

But provider associations like the American Hospital Association and the American Medical Association want both stronger meaningful difference standards and required standardized plan offerings.

Required standardized plan offerings “will benefit consumers by making their coverage easier to understand and use, as well as better enable them to compare across plans,” AHA ??wrote in a letter to the agency.

Additionally, CMS proposes conducting network adequacy reviews for qualifying health plans in states that use the federal exchanges, except states that perform their own reviews that are as stringent as the federal governments’. The federal government conducted these reviews from plan years 2015 through 2017, but CMS later decided states had the authority to examine provider networks. However, a district court judge decided in March 2021 that this policy couldn’t stand.

CMS said in the proposed rule that reviews would be based on time and distance standards and appointment wait time standards, and they’d occur before a qualified health plan earns certification. Plans that divide providers into tiers associated with different cost-sharing will have to contract with providers on the lowest cost-sharing tier in order to meet network adequacy requirements.

But AHIP says CMS should defer to state regulators in states that already use quantitative standards in their adequacy reviews, develop an alternative standard for rural areas with fewer providers and make sure quantitative tools reflect market dynamics. And requiring insurers to contract with plans in the lowest cost-sharing tier could hamper affordable plan offerings, AHIP argues.

For ACHP, reducing appointment wait times seems like an appropriate network adequate goal. But adding the measure isn’t practical during the current public health emergency, the group wrote in its letter. ACHP also believes CMS should reconsider adding time and distance to network adequacy standards.

Insurers agree that if CMS does finalize these policy changes, they should at least be delayed until 2024.

Meanwhile, AMA said it strongly supports CMS’ proposed network adequacy changes. In fact, the agency could go further to make sure provider networks properly serve consumers by measuring hours of operation of network providers, their capacity to accept new patients, their geographic accessibility and more. AHA also supports the network adequacy changes but recognizes that workforce shortages impact insurers’ ability to create strong networks currently.

CMS proposed changes to essential health benefit requirements, as well. Exchange plans must cover a minimum set of health benefits, per the ACA. CMS wants to clarify in the essential benefits’ nondiscrimination policy that these benefits have to be designed based on clinical evidence.

While AHA and AMA strongly support the provision, AHIP says the proposal is too broad and could create a “slippery slope.”

“While we agree nondiscrimination protections are appropriate and necessary to prevent clearly discriminatory benefit designs, the proposed policy would restrain issuers’ efforts to create evidence-based plan designs and exceptions processes,” AHIP wrote.

AHIP wants CMS to clarify that plans would still be able to impose coverage limits that are based in clinical evidence. CMS should also provide a complete list of what constitute discriminatory benefit designs and a cost study that examines the impact of this framework on premium costs. If CMS does finalize the policy, it should delay implementation, AHIP continues. ACHP and BCBSA also ask for more clarity on the proposals and what, specifically, would count as discriminatory design.

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