Rule2024-07274
Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2025; Updating Section 1332 Waiver Public Notice Procedures; Medicaid; Consumer Operated and Oriented Plan (CO-OP) Program; and Basic Health Program
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 15, 2024
Effective
June 4, 2024
Issuing agencies
Treasury DepartmentHealth and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This final rule includes payment parameters and provisions related to the HHS-operated risk adjustment program, as well as 2025 user fee rates for issuers offering qualified health plans (QHPs) through federally facilitated Exchanges (FFEs) and State-based Exchanges on the Federal platform (SBE-FPs). This final rule also includes requirements related to the auto re-enrollment hierarchy; essential health benefits; failure to file Federal income taxes to reconcile advance payments of the premium tax credit (APTC); non- standardized plan option limits in the FFEs and SBE-FPs and a related exceptions process; standardized plan options in the FFEs and SBE-FPs; special enrollment periods (SEPs); direct enrollment (DE) entities supporting Exchange applications and enrollments; the Insurance Affordability Program enrollment eligibility verification process; requirements for agents, brokers, web-brokers, and DE entities assisting Exchange consumers; network adequacy; public notice procedures for section 1332 waivers; prescription drug benefits; updates to the Consumer Operated and Oriented Plan (CO-OP) Program; and State flexibility on the effective date of coverage in the Basic Health Program (BHP).
Full Text
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<title>Federal Register, Volume 89 Issue 73 (Monday, April 15, 2024)</title>
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[Federal Register Volume 89, Number 73 (Monday, April 15, 2024)]
[Rules and Regulations]
[Pages 26218-26426]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-07274]
[[Page 26217]]
Vol. 89
Monday,
No. 73
April 15, 2024
Part II
Department of the Treasury
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31 CFR Part 33
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 Parts 153, 155, and 156
Patient Protection and Affordable Care Act, HHS Notice of Benefit and
Payment Parameters for 2025; Updating Section 1332 Waiver Public Notice
Procedures; Medicaid; Consumer Operated and Oriented Plan (CO-OP)
Program; and Basic Health Program; Final Rule
Federal Register / Vol. 89, No. 73 / Monday, April 15, 2024 / Rules
and Regulations
[[Page 26218]]
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DEPARTMENT OF THE TREASURY
31 CFR Part 33
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 600
Office of the Secretary
45 CFR Parts 153, 155, and 156
[CMS-9895-F]
RIN 0938-AV22
Patient Protection and Affordable Care Act, HHS Notice of Benefit
and Payment Parameters for 2025; Updating Section 1332 Waiver Public
Notice Procedures; Medicaid; Consumer Operated and Oriented Plan (CO-
OP) Program; and Basic Health Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS); Department of the Treasury.
ACTION: Final rule.
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SUMMARY: This final rule includes payment parameters and provisions
related to the HHS-operated risk adjustment program, as well as 2025
user fee rates for issuers offering qualified health plans (QHPs)
through federally facilitated Exchanges (FFEs) and State-based
Exchanges on the Federal platform (SBE-FPs). This final rule also
includes requirements related to the auto re-enrollment hierarchy;
essential health benefits; failure to file Federal income taxes to
reconcile advance payments of the premium tax credit (APTC); non-
standardized plan option limits in the FFEs and SBE-FPs and a related
exceptions process; standardized plan options in the FFEs and SBE-FPs;
special enrollment periods (SEPs); direct enrollment (DE) entities
supporting Exchange applications and enrollments; the Insurance
Affordability Program enrollment eligibility verification process;
requirements for agents, brokers, web-brokers, and DE entities
assisting Exchange consumers; network adequacy; public notice
procedures for section 1332 waivers; prescription drug benefits;
updates to the Consumer Operated and Oriented Plan (CO-OP) Program; and
State flexibility on the effective date of coverage in the Basic Health
Program (BHP).
DATES: These regulations are effective on June 4, 2024.
FOR FURTHER INFORMATION CONTACT: Jeff Wu, (301) 492-4305, Rogelyn
McLean, (301) 492-4229, Grace Bristol, (410) 786-8437, for general
information.
Debbie Noymer, (301) 448-3755, and John Barfield, (301) 492-4433
for matters related to HHS-operated risk adjustment.
John Barfield, (301) 492-4433, or Aaron Franz, (410) 786-8027, for
matters related to user fees.
Brian Gubin, (410) 786-1659, for matters related to agent, broker,
and web-broker guidelines.
Marisa Beatley, (301) 492-4307, for matters related to the
verification process related to eligibility for insurance affordability
programs and current sources of income.
Carolyn Kraemer, (301) 492-4197, for matters related to auto re-
enrollment in the Exchanges.
Zarin Ahmed, (301) 492-4400, for matters related to enrollment of
qualified individuals into QHPs and termination of Exchange enrollment
or coverage for qualified individuals.
Claire Curtin, (301) 492-4400, for matters related to the monthly
150 percent Federal poverty level special enrollment period.
Alexandra Gribbin, (667) 290-9977, for matters related to dental
coverage.
Nikolas Berkobien, (667) 290-9903, for matters related to
standardized plan options and non-standardized plan option limits.
LeAnn Brodhead, (667) 290-8805, for matters related to the
essential health benefits prescription drug benefit.
Carolyn Sabini, (667) 290-9750, for matters related to the
essential health benefits benchmark plan policy.
Ken Buerger, (410) 786-1190, for matters related to mandates in
addition to the essential health benefits.
Emily Martin, (301) 492-4423, Deborah Hunter, (443) 386-3651, or
Emma Vasilak, (774) 551-6157, for matters related to establishment of
Exchange network adequacy standards and ECPs.
Shilpa Gogna, (301) 492-4257, or Jenny Chen, (301) 492-5156, for
matters related to approval of a State Exchange and State Exchange
Blueprint requirements.
Joe Fitzpatrick, (410) 786-2761, for matters related to
establishment of additional minimum standards for Exchange call center
operations.
John Allison, (828) 513-1323, for matters related to Exchange
operation of a centralized eligibility and enrollment platform.
Courtney De La Mater, (301) 492-4400, for matters related to the
Failure to Reconcile process.
Robert Yates, (301) 492-5151, for matters related to State Exchange
annual open enrollment periods.
Daniel Rosinsky-Larsson, (301) 492-4400, for matters related to SEP
effective dates of coverage.
Lina Rashid, (443) 902-2823, or Kimberly Koch (202) 381-6934, for
matters related to section 1332 waivers.
Jacquelyn Rudich, (301) 492-5211, for matters related to netting of
payments.
Kevin Kendrick, (301) 509-6612, for matters related to the CO-OP
program.
Carrie Grubert, (410) 786-8319, for matters related to the Basic
Health Program (BHP) provision.
Gene Coffey, (410) 786-2234, for matters related to Medicaid
eligibility.
Arshdeep Dhanoa, (301) 492-4400, for matters related to
incarceration verification for QHP eligibility and periodic data
matching for dual and deceased enrollees.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Executive Summary
II. Background
A. Legislative and Regulatory Overview
B. Summary of Major Provisions
III. Summary of the Provisions of the Proposed Regulations
A. 31 CFR Part 33 and 45 CFR part 155--Section 1332 Waivers
B. 42 CFR Parts 435 and 600--Medicaid Eligibility for the
States, District of Columbia, the Northern Mariana Islands and
American Samoa, and Administrative Practice and Procedure, Health
Care, Health insurance, Intergovernmental Relations, Penalties,
Reporting and Recordkeeping Requirements.
C. 45 CFR Part 153--Standards Related to Reinsurance, Risk
Corridors, and HHS Risk Adjustment
D. 45 CFR Part 155--Exchange Establishment Standards and Other
Related Standards under the Affordable Care Act
E. 45 CFR Part 156--Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges
IV. Collection of Information Requirements
A. Wage Estimates
B. ICRs Regarding Proposed Amendments to Normal Public Notice
Requirements (31 CFR 33.112, 31 CFR 33.120 and 45 CFR part 155.1312,
and 45 CFR 155.1320)
C. ICRs Regarding Basic Health Program Regulations (42 CFR
600.320)
D. ICRs Regarding Election to Operate an Exchange After 2014 (45
CFR 155.106)
E. ICRs Regarding Adding and Amending Language To Ensure Web-
Brokers Operating in State Exchanges Meet Certain Requirements
Applicable in the FFEs and SBE-FPs (45 CFR 155.220)
[[Page 26219]]
F. ICRs Regarding Establishing Requirements for DE Entities
Mandating <a href="http://HealthCare.gov">HealthCare.gov</a> Changes to Be Reflected on DE Entity Non-
Exchange Websites Within a Notice Period Set by HHS (45 CFR
155.221(b)(6))
G. ICRs Regarding Ensuing DE Entities Operating in State
Exchanges Meet Certain Standards Applicable in the FFEs and SBE-FPs
(45 CFR 155.221)
H. ICRs Regarding Failure To File and Reconcile Process (45 CFR
155.305(f)(4))
I. ICRs Regarding Verification Process Related to Eligibility
for Enrollment in a QHP Through the Exchange (45 CFR 155.315(e))
J. ICRs Regarding Eligibility Redetermination During a Benefit
Year (45 CFR 155.330(d))
K. ICRs Regarding Establishment of Exchange Network Adequacy
Standards (45 CFR 155.1050)
L. ICRs Regarding the State Selection of EHB-Benchmark Plans for
Plan Years Beginning on or After January 1, 2026 (45 CFR 156.111)
M. ICRs Regarding Non-Standardized Plan Option Limits (45 CFR
156.202)
N. Summary of Annual Burden Estimates for Proposed Requirements
V. Response to Comments
VI. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Impact Estimates of the Payment Notice Provisions and
Accounting Table
D. Regulatory Alternatives Considered
E. Regulatory Flexibility Act (RFA)
F. Unfunded Mandates Reform Act (UMRA)
G. Federalism
I. Executive Summary
We are finalizing changes to the provisions and parameters
implemented through prior rulemaking to implement the Patient
Protection and Affordable Care Act (ACA).\1\ These proposals are
published under the authority granted to the Secretary by the ACA and
the Public Health Service (PHS) Act.\2\ In this final rule, we are
finalizing changes related to some of the ACA provisions and parameters
we previously implemented and are implementing new provisions. Our goal
with these requirements is to provide consumers access to quality,
affordable coverage, while minimizing administrative burden and
ensuring program integrity. The changes finalized in this rule are also
intended to help increase transparency, advance health equity, and
mitigate health disparities.
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\1\ The Patient Protection and Affordable Care Act (Pub. L. 111-
148) was enacted on March 23, 2010. The Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and
revised several provisions of the Patient Protection and Affordable
Care Act, was enacted on March 30, 2010. In this rulemaking, the two
statutes are referred to collectively as the ``Patient Protection
and Affordable Care Act,'' ``Affordable Care Act,'' or ``ACA.''
\2\ See sections 1311, 1312, 1313, 1321, 1332, and 1343 of the
ACA and section 2792 of the PHS Act.
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II. Background
A. Legislative and Regulatory Overview
Title I of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) added a new title XXVII to the Public Health Service
(PHS) Act to establish various reforms to the group and individual
health insurance markets.
These provisions of the PHS Act were later augmented by other laws,
including the ACA. Subtitles A and C of title I of the ACA reorganized,
amended, and added to the provisions of part A of title XXVII of the
PHS Act relating to group health plans and health insurance issuers in
the group and individual markets. The term ``group health plan''
includes both insured and self-insured group health plans.
Section 2702 of the PHS Act, as added by the ACA, establishes
requirements for guaranteed availability of coverage in the group and
individual markets.
Section 1301(a)(1)(B) of the ACA directs all issuers of qualified
health plans (QHPs) to cover the essential health benefit (EHB) package
described in section 1302(a) of the ACA, including coverage of the
services described in section 1302(b) of the ACA, adherence to the
cost-sharing limits described in section 1302(c) of the ACA, and
meeting the Actuarial Value (AV) levels established in section 1302(d)
of the ACA. Section 2707(a) of the PHS Act, which is effective for plan
or policy years beginning on or after January 1, 2014, extends the
requirement to cover the EHB package to non-grandfathered individual
and small group health insurance coverage, irrespective of whether such
coverage is offered through an Exchange. In addition, section 2707(b)
of the PHS Act directs non-grandfathered group health plans to ensure
that cost sharing under the plan does not exceed the limitations
described in section 1302(c)(1) of the ACA.
Section 1302 of the ACA provides for the establishment of an EHB
package that includes coverage of EHBs (as defined by the Secretary of
HHS), cost-sharing limits, and AV requirements. The law directs that
EHBs be equal in scope to the benefits provided under a typical
employer plan, and that they cover at least the following 10 general
categories: ambulatory patient services; emergency services;
hospitalization; maternity and newborn care; mental health and
substance use disorder services, including behavioral health treatment;
prescription drugs; rehabilitative and habilitative services and
devices; laboratory services; preventive and wellness services and
chronic disease management; and pediatric services, including oral and
vision care. Section 1302(d) of the ACA describes the various levels of
coverage based on AV. Consistent with section 1302(d)(2)(A) of the ACA,
AV is calculated based on the provision of EHB to a standard
population. Section 1302(d)(3) of the ACA directs the Secretary of HHS
to develop guidelines that allow for de minimis variation in AV
calculations. Sections 1302(b)(4)(A) through (D) of the ACA establish
that the Secretary must define EHB in a manner that: (1) reflects
appropriate balance among the 10 categories; (2) is not designed in
such a way as to discriminate based on age, disability, or expected
length of life; (3) takes into account the health care needs of diverse
segments of the population; and (4) does not allow denials of EHBs
based on age, life expectancy, disability, degree of medical
dependency, or quality of life.
Section 1311(c) of the ACA provides the Secretary the authority to
issue regulations to establish criteria for the certification of QHPs.
Section 1311(c)(1)(B) of the ACA requires, among the criteria for
certification that the Secretary must establish by regulation, that
QHPs ensure a sufficient choice of providers. Section 1311(e)(1) of the
ACA grants the Exchange the authority to certify a health plan as a QHP
if the health plan meets the Secretary's requirements for certification
issued under section 1311(c) of the ACA, and the Exchange determines
that making the plan available through the Exchange is in the interests
of qualified individuals and qualified employers in the State. Section
1311(c)(6)(C) of the ACA directs the Secretary of HHS to require an
Exchange to provide for special enrollment periods and section
1311(c)(6)(D) of the ACA directs the Secretary of HHS to require an
Exchange to provide for a monthly enrollment period for Indians, as
defined by section 4 of the Indian Health Care Improvement Act.
Section 1311(d)(3)(B) of the ACA permits a State, at its option, to
require QHPs to cover benefits in addition to EHB. This section also
requires a State to make payments, either to the individual enrollee or
to the issuer on behalf of the enrollee, to defray the cost of these
additional State-required benefits.
Section 1312(c) of the ACA generally requires a health insurance
issuer to consider all enrollees in all health plans (except
grandfathered health plans) offered by such issuer to be members of
[[Page 26220]]
a single risk pool for each of its individual and small group markets.
States have the option to merge the individual and small group market
risk pools under section 1312(c)(3) of the ACA.
Section 1312(e) of the ACA provides the Secretary with the
authority to establish procedures under which a State may allow agents
or brokers to (1) enroll qualified individuals and qualified employers
in QHPs offered through Exchanges and (2) assist individuals in
applying for advance payments of the premium tax credit (APTC) and
cost-sharing reductions (CSRs) for QHPs sold through an Exchange.
Section 1312(f)(1)(B) of the ACA provides that an individual shall
not be treated as a qualified individual for enrollment in a QHP if, at
the time of enrollment, the individual is incarcerated, other than
incarceration pending the disposition of charges.
Sections 1313 and 1321 of the ACA provide the Secretary with the
authority to oversee the financial integrity of State Exchanges, their
compliance with HHS standards, and the efficient and non-discriminatory
administration of State Exchange activities. Section 1313(a)(5)(A) of
the ACA provides the Secretary with the authority to implement any
measure or procedure that the Secretary determines is appropriate to
reduce fraud and abuse in the administration of the Exchanges. Section
1321 of the ACA provides for State flexibility in the operation and
enforcement of Exchanges and related requirements.
Section 1321(a) of the ACA provides broad authority for the
Secretary to establish standards and regulations to implement the
statutory requirements related to Exchanges, QHPs and other components
of title I of the ACA, including such other requirements as the
Secretary determines appropriate. When operating an FFE under section
1321(c)(1) of the ACA, HHS has the authority under sections 1321(c)(1)
and 1311(d)(5)(A) of the ACA to collect and spend user fees. Office of
Management and Budget (OMB) Circular A-25 Revised establishes Federal
policy regarding user fees and specifies that a user charge will be
assessed against each identifiable recipient for special benefits
derived from Federal activities beyond those received by the public.
Section 1321(d) of the ACA provides that nothing in title I of the
ACA must be construed to preempt any State law that does not prevent
the application of title I of the ACA. Section 1311(k) of the ACA
specifies that Exchanges may not establish rules that conflict with or
prevent the application of regulations issued by the Secretary.
Section 1322 of the ACA establishes the Consumer Operated and
Oriented Plan (CO-OP) program, which is a loan program that funds the
establishment of private, non-profit, consumer-operated, consumer-
oriented health plan issuers of QHPs. The ACA requires, among other
requirements, that substantially all of a CO-OP's activities consist of
issuing QHPs in the individual and small group markets, and that a CO-
OP be governed by a board of directors where a majority is elected by
members covered by policies issued by the CO-OP.
Section 1331 of the ACA provides States with the option to operate
a Basic Health Program (BHP).
Section 1332 of the ACA provides the Secretary of HHS and the
Secretary of the Treasury (collectively, the Secretaries) with the
discretion to approve a State's proposal to waive specific provisions
of the ACA, provided the State's section 1332 waiver plan meets certain
requirements. Section 1332(a)(4)(B) of the ACA requires the Secretaries
to issue regulations regarding procedures for the application and
approval of section 1332 waivers.
Section 1343 of the ACA establishes a permanent risk adjustment
program to provide payments to health insurance issuers that attract
higher-than-average risk populations, such as those with chronic
conditions, funded by charges collected from those issuers that attract
lower-than-average risk populations, thereby reducing incentives for
issuers to avoid higher-risk enrollees. Section 1343(b) of the ACA
provides that the Secretary, in consultation with States, shall
establish criteria and methods to be used in carrying out the risk
adjustment activities under this section. Consistent with section
1321(c) of the ACA, the Secretary is responsible for operating the HHS
risk adjustment program in any State that fails to do so.\3\
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\3\ In the 2014 through 2016 benefit years, HHS operated the
risk adjustment program in every State and the District of Columbia,
except Massachusetts. Beginning with the 2017 benefit year, HHS has
operated the risk adjustment program in all 50 States and the
District of Columbia.
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Section 1401(a) of the ACA added section 36B to the Internal
Revenue Code (the Code), which, among other things, requires that a
taxpayer reconcile APTC for a year of coverage with the amount of the
premium tax credit (PTC) the taxpayer is allowed for the year.
Section 1402 of the ACA provides for, among other things,
reductions in cost sharing for EHB for qualified low- and moderate-
income enrollees in silver level QHPs offered through the individual
market Exchanges. This section also provides for reductions in cost
sharing for Indians enrolled in QHPs at any metal level.
Section 1411(c) of the ACA requires the Secretary to submit certain
information provided by applicants under section 1411(b) of the ACA to
other Federal officials for verification, including income and family
size information to the Secretary of the Treasury. Section 1411(d) of
the ACA provides that the Secretary must verify the accuracy of
information provided by applicants under section 1411(b) of the ACA,
for which section 1411(c) of the ACA does not prescribe a specific
verification procedure, in such manner as the Secretary determines
appropriate.
Section 1411(f) of the ACA requires the Secretary, in consultation
with the Secretary of the Treasury and the Secretary of Homeland
Security, and the Commissioner of Social Security, to establish
procedures for hearing and making decisions governing appeals of
Exchange eligibility determinations. Section 1411(f)(1)(B) of the ACA
requires the Secretary to establish procedures to redetermine
eligibility on a periodic basis, in appropriate circumstances,
including eligibility to purchase a QHP through the Exchange and for
APTC and CSRs.
Section 1411(g) of the ACA allows the use of applicant information
only for the limited purpose of, and to the extent necessary for
ensuring the efficient operation of the Exchange, including by
verifying eligibility to enroll through the Exchange and for APTC and
CSRs, and limits the disclosure of such information.
Section 1413 of the ACA directs the Secretary to establish, subject
to minimum requirements, a streamlined enrollment process for
enrollment in QHPs and all insurance affordability programs.
Section 5000A of the Code, as added by section 1501(b) of the ACA,
requires individuals to have minimum essential coverage (MEC) for each
month, qualify for an exemption, or make an individual shared
responsibility payment. Under the Tax Cuts and Jobs Act, which was
enacted on December 22, 2017, the individual shared responsibility
payment is reduced to $0, effective for months beginning after December
31, 2018. Notwithstanding that reduction, certain exemptions are still
relevant to determine whether individuals aged 30 and above qualify to
enroll in catastrophic coverage under Sec. Sec. 155.305(h) and
156.155(a)(5).
Section 1902(r)(2)(A) of the Social Security Act (the Act), which
permits
[[Page 26221]]
States to apply less restrictive methodologies than cash assistance
program methodologies in determining eligibility for certain
eligibility groups.
1. Premium Stabilization Programs
The premium stabilization programs refer to the HHS risk
adjustment, risk corridors, and reinsurance programs established by the
ACA.\4\ For past rulemaking, we refer readers to the following rules:
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\4\ See ACA section 1341 (transitional reinsurance program), ACA
section 1342 (risk corridors program), and ACA section 1343 (HHS
risk adjustment program).
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<bullet> In the March 23, 2012 Federal Register (77 FR 17219)
(Premium Stabilization Rule), we implemented the premium stabilization
programs.
<bullet> In the March 11, 2013 Federal Register (78 FR 15409) (2014
Payment Notice), we finalized the benefit and payment parameters for
the 2014 benefit year to expand the provisions related to the premium
stabilization programs and set forth payment parameters in those
programs.
<bullet> In the October 30, 2013 Federal Register (78 FR 65046), we
finalized the modification to the HHS risk adjustment methodology
related to community rating States.
<bullet> In the November 6, 2013 Federal Register (78 FR 66653), we
published a correcting amendment to the 2014 Payment Notice to address
how an enrollee's age for the risk score calculation would be
determined under the HHS risk adjustment methodology.
<bullet> In the March 11, 2014 Federal Register (79 FR 13743) (2015
Payment Notice), we finalized the benefit and payment parameters for
the 2015 benefit year to expand the provisions related to the premium
stabilization programs, set forth certain oversight provisions, and
establish payment parameters in those programs.
<bullet> In the May 27, 2014 Federal Register (79 FR 30240), we
announced the 2015 fiscal year sequestration rate for the HHS-operated
risk adjustment program.
<bullet> In the February 27, 2015 Federal Register (80 FR 10749)
(2016 Payment Notice), we finalized the benefit and payment parameters
for the 2016 benefit year to expand the provisions related to the
premium stabilization programs, set forth certain oversight provisions,
and establish the payment parameters in those programs.
<bullet> In the March 8, 2016 Federal Register (81 FR 12203) (2017
Payment Notice), we finalized the benefit and payment parameters for
the 2017 benefit year to expand the provisions related to the premium
stabilization programs, set forth certain oversight provisions, and
establish the payment parameters in those programs.
<bullet> In the December 22, 2016 Federal Register (81 FR 94058)
(2018 Payment Notice), we finalized the benefit and payment parameters
for the 2018 benefit year, added the high-cost risk pool parameters to
the HHS risk adjustment methodology, incorporated prescription drug
factors in the adult models, established enrollment duration factors
for the adult models, and finalized policies related to the collection
and use of enrollee-level External Data Gathering Environment (EDGE)
data.
<bullet> In the April 17, 2018 Federal Register (83 FR 16930) (2019
Payment Notice), we finalized the benefit and payment parameters for
the 2019 benefit year, created the State flexibility framework
permitting States to request a reduction in risk adjustment State
transfers calculated by HHS, and adopted a new error rate methodology
for HHS-RADV adjustments to transfers.
<bullet> In the May 11, 2018 Federal Register (83 FR 21925), we
published a correction to the 2019 HHS risk adjustment coefficients in
the 2019 Payment Notice.
<bullet> On July 27, 2018, consistent with 45 CFR 153.320(b)(1)(i),
we updated the 2019 benefit year final HHS risk adjustment model
coefficients to reflect an additional recalibration related to an
update to the 2016 enrollee-level EDGE data set.\5\
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\5\ CMS. (2018, July 27). Updated 2019 Benefit Year Final HHS
Risk Adjustment Model Coefficients. <a href="https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2019-Updtd-Final-HHS-RA-Model-Coefficients.pdf">https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2019-Updtd-Final-HHS-RA-Model-Coefficients.pdf</a>.
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<bullet> In the July 30, 2018 Federal Register (83 FR 36456), we
adopted the 2017 benefit year HHS risk adjustment methodology as
established in the final rules published in the March 23, 2012 (77 FR
17220 through 17252) and March 8, 2016 (81 FR 12204 through 12352)
editions of the Federal Register. The final rule set forth an
additional explanation of the rationale supporting the use of Statewide
average premium in the State payment transfer formula for the 2017
benefit year, including the reasons why the program is operated by HHS
in a budget-neutral manner. The final rule also permitted HHS to resume
2017 benefit year HHS risk adjustment payments and charges. HHS also
provided guidance as to the operation of the HHS-operated risk
adjustment program for the 2017 benefit year in light of the
publication of the final rule.
<bullet> In the December 10, 2018 Federal Register (83 FR 63419),
we adopted the 2018 benefit year HHS risk adjustment methodology as
established in the final rules published in the March 23, 2012 (77 FR
17219) and the December 22, 2016 (81 FR 94058) editions of the Federal
Register. In the rule, we set forth an additional explanation of the
rationale supporting the use of Statewide average premium in the State
payment transfer formula for the 2018 benefit year, including the
reasons why the program is operated by HHS in a budget-neutral manner.
<bullet> In the April 25, 2019 Federal Register (84 FR 17454) (2020
Payment Notice), we finalized the benefit and payment parameters for
the 2020 benefit year, as well as the policies related to making the
enrollee-level EDGE data available as a limited data set for research
purposes and expanding the HHS uses of the enrollee-level EDGE data,
approval of the request from Alabama to reduce HHS risk adjustment
transfers by 50 percent in the small group market for the 2020 benefit
year, and updates to HHS-RADV program requirements.
<bullet> On May 12, 2020, consistent with Sec. 153.320(b)(1)(i),
we published the 2021 Benefit Year Final HHS Risk Adjustment Model
Coefficients on the CCIIO website.\6\
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\6\ CMS. (2020, May 12). Final 2021 Benefit Year Final HHS Risk
Adjustment Model Coefficients. <a href="https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2021-Benefit-Year-Final-HHS-Risk-Adjustment-Model-Coefficients.pdf">https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2021-Benefit-Year-Final-HHS-Risk-Adjustment-Model-Coefficients.pdf</a>.
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<bullet> In the May 14, 2020 Federal Register (85 FR 29164) (2021
Payment Notice), we finalized the benefit and payment parameters for
the 2021 benefit year, as well as adopted updates to the HHS risk
adjustment models' hierarchical condition categories (HCCs) to
transition to ICD-10 codes, approved the request from Alabama to reduce
HHS risk adjustment transfers by 50 percent in the small group market
for the 2021 benefit year, and modified the outlier identification
process under the HHS-RADV program.
<bullet> In the December 1, 2020 Federal Register (85 FR 76979)
(Amendments to the HHS-Operated Risk Adjustment Data Validation Under
the Patient Protection and Affordable Care Act's HHS-Operated Risk
Adjustment Program (2020 HHS-RADV Amendments Rule)), we adopted the
creation and application of Super HCCs in the sorting step that assigns
HCCs to failure rate groups, finalized a sliding scale adjustment in
HHS-RADV error rate calculation, and added a constraint for negative
error rate outliers with a negative error rate. We also established a
transition from the prospective application of HHS-RADV adjustments to
apply HHS-RADV results to risk
[[Page 26222]]
scores from the same benefit year as that being audited.
<bullet> In the September 2, 2020 Federal Register (85 FR 54820),
we issued an interim final rule containing certain policy and
regulatory revisions in response to the COVID-19 public health
emergency (PHE), wherein we set forth HHS risk adjustment reporting
requirements for issuers offering temporary premium credits in the 2020
benefit year.
<bullet> In the May 5, 2021 Federal Register (86 FR 24140) (part 2
of the 2022 Payment Notice), we finalized a subset of proposals from
the 2022 Payment Notice proposed rule, including policy and regulatory
revisions related to the HHS-operated risk adjustment program,
finalization of the benefit and payment parameters for the 2022 benefit
year, and approval of the request from Alabama to reduce HHS risk
adjustment transfers by 50 percent in the individual and small group
markets for the 2022 benefit year. In addition, this final rule
established a revised schedule of collections for HHS-RADV and updated
the provisions regulating second validation audit (SVA) and initial
validation audit (IVA) entities.
<bullet> On July 19, 2021, consistent with Sec. 153.320(b)(1)(i),
we released Updated 2022 Benefit Year Final HHS Risk Adjustment Model
Coefficients on the CCIIO website, announcing some minor revisions to
the 2022 benefit year final HHS risk adjustment adult model
coefficients.\7\
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\7\ See CMS. (2021, July 19). 2022 Benefit Year Final HHS Risk
Adjustment Model Coefficients. <a href="https://www.cms.gov/files/document/updated-2022-benefit-year-final-hhs-risk-adjustment-model-coefficients-clean-version-508.pdf">https://www.cms.gov/files/document/updated-2022-benefit-year-final-hhs-risk-adjustment-model-coefficients-clean-version-508.pdf</a>.
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<bullet> In the May 6, 2022 Federal Register (87 FR 27208) (2023
Payment Notice), we finalized revisions related to the HHS-operated
risk adjustment program, including the benefit and payment parameters
for the 2023 benefit year, HHS risk adjustment model recalibration, and
policies related to the collection and extraction of enrollee-level
EDGE data. We also finalized the adoption of the interacted HCC count
specification for the adult and child models, along with modified
enrollment duration factors for the adult model models, beginning with
the 2023 benefit year.\8\ We also repealed the ability for States,
other than prior participants, to request a reduction in HHS risk
adjustment State transfers starting with the 2024 benefit year. In
addition, we approved a 25 percent reduction to 2023 benefit year HHS
risk adjustment transfers in Alabama's individual market and a 10
percent reduction to 2023 benefit year HHS risk adjustment transfers in
Alabama's small group market. We also finalized further refinements to
the HHS-RADV error rate calculation methodology beginning with the 2021
benefit year.
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\8\ On May 6, 2022, we also published the 2023 Benefit Year
Final HHS Risk Adjustment Model Coefficients at <a href="https://www.cms.gov/files/document/2023-benefit-year-final-hhs-risk-adjustment-model-coefficients.pdf">https://www.cms.gov/files/document/2023-benefit-year-final-hhs-risk-adjustment-model-coefficients.pdf</a>.
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<bullet> In the April 27, 2023 Federal Register (88 FR 25740) (2024
Payment Notice), we finalized the benefit and payment parameters for
the 2024 benefit year, amended the EDGE discrepancy materiality
threshold and data collection requirements, and reduced the risk
adjustment user fee. For the 2024 benefit year, we repealed the State
flexibility policy, including for prior participant States, and
approved 50 percent reductions to HHS risk adjustment transfers for
Alabama's individual and small group markets. In addition, we finalized
several refinements to HHS-RADV program requirements, such as
shortening the window to confirm SVA findings or file a discrepancy
report, changing the HHS-RADV materiality threshold for random and
targeted sampling, and no longer exempting exiting issuers from
adjustments to risk scores and HHS risk adjustment transfers when they
are negative error rate outliers. We also announced the discontinuance
of the Lifelong Permanent Condition List (LLPC) and Non-EDGE Claims
(NEC) in HHS-RADV beginning with the 2022 benefit year.
2. Program Integrity
We have finalized program integrity standards related to the
Exchanges and premium stabilization programs in two rules: the ``first
Program Integrity Rule'' published in the August 30, 2013 Federal
Register (78 FR 54069), and the ``second Program Integrity Rule''
published in the October 30, 2013 Federal Register (78 FR 65045). We
also refer readers to the 2019 Patient Protection and Affordable Care
Act; Exchange Program Integrity final rule (2019 Program Integrity
Rule) published in the December 27, 2019 Federal Register (84 FR
71674).
In the April 27, 2023 Federal Register (88 FR 25740) (2024 Payment
Notice), we finalized a policy to implement improper payment pre-
testing and assessment (IPPTA) requirements for State Exchanges to
ensure adherence to the Payment Integrity Information Act of 2019. In
addition, we finalized allowing additional time for HHS to review
evidence submitted by agents and brokers to rebut allegations
pertaining to Exchange agreement suspensions or terminations. We also
introduced consent and eligibility documentation requirements for
agents and brokers.
3. Market Rules
For past rulemaking related to the market rules, we refer readers
to the following rules:
<bullet> In the April 8, 1997 Federal Register (62 FR 16894), HHS,
with the Department of Labor and Department of the Treasury, published
an interim final rule relating to the HIPAA health insurance reforms.
In the February 27, 2013 Federal Register (78 FR 13406) (2014 Market
Rules), we published the health insurance market rules.
<bullet> In the May 27, 2014 Federal Register (79 FR 30240) (2015
Market Standards Rule), we published the Exchange and insurance market
standards for 2015 and beyond.
<bullet> In the December 22, 2016 Federal Register (81 FR 94058),
we provided additional guidance on guaranteed availability and
guaranteed renewability.
<bullet> In the April 18, 2017 Federal Register (82 FR 18346)
(Market Stabilization final rule), we further interpreted the
guaranteed availability provision.
<bullet> In the April 17, 2018 Federal Register (83 FR 17058) (2019
Payment Notice), we clarified that certain exceptions to the special
enrollment periods only apply to coverage offered outside of the
Exchange in the individual market.
<bullet> In the June 19, 2020 Federal Register (85 FR 37160) (2020
section 1557 final rule), in which HHS discussed section 1557 of the
ACA, HHS removed nondiscrimination protections based on gender identity
and sexual orientation from the guaranteed availability regulation.
<bullet> In part 2 of the 2022 Payment Notice, in the May 5, 2021
Federal Register (86 FR 24140), we made additional amendments to the
guaranteed availability regulation regarding special enrollment periods
and finalized new special enrollment periods related to untimely notice
of triggering events, cessation of employer contributions or government
subsidies to COBRA continuation coverage, and loss of APTC eligibility.
<bullet> In the September 27, 2021 Federal Register (86 FR 53412)
(part 3 of the 2022 Payment Notice), which was published by HHS and the
Department of the Treasury, we finalized additional amendments to the
guaranteed availability regulations regarding special enrollment
periods.
<bullet> In the May 6, 2022 Federal Register (87 FR 27208), we
finalized a revision
[[Page 26223]]
to our interpretation of the guaranteed availability requirement to
prohibit issuers from applying a premium payment to an individual's or
employer's past debt owed for coverage and refusing to effectuate
enrollment in new coverage.
4. Exchanges
We published a request for comment relating to Exchanges in the
August 3, 2010 Federal Register (75 FR 45584). We issued initial
guidance to States on Exchanges on November 18, 2010. In the March 27,
2012 Federal Register (77 FR 18310) (Exchange Establishment Rule), we
implemented the Affordable Insurance Exchanges (Exchanges), consistent
with title I of the ACA, to provide competitive marketplaces for
individuals and small employers to directly compare available private
health insurance options on the basis of price, quality, and other
factors. This included implementation of components of the Exchanges
and standards for eligibility for Exchanges, as well as network
adequacy and essential community provider (ECP) certification
standards.
In the August 17, 2011, Federal Register (76 FR 51201) we published
a proposed rule regarding eligibility determinations, including the
regulatory requirement to verify incarceration status. In the March 27,
2012, Federal Register (77 FR 18309) we finalized the regulatory
requirement to verify incarceration attestation using an approved
electronic data source that is current and accurate, and when
attestations are not reasonably compatible with information in an
approved data source, to resolve the inconsistency.
In the 2014 Payment Notice and the Amendments to the HHS Notice of
Benefit and Payment Parameters for 2014 interim final rule, published
in the March 11, 2013 Federal Register (78 FR 15541), we set forth
standards related to Exchange user fees. We established an adjustment
to the FFE user fee in the Coverage of Certain Preventive Services
under the Affordable Care Act final rule, published in the July 2, 2013
Federal Register (78 FR 39869) (Preventive Services Rule).
In the 2016 Payment Notice, we also set forth the ECP certification
standard at Sec. 156.235, with revisions in the 2017 Payment Notice in
the March 8, 2016 Federal Register (81 FR 12203) and the 2018 Payment
Notice in the December 22, 2016 Federal Register (81 FR 94058).
In an interim final rule, published in the May 11, 2016 Federal
Register (81 FR 29146), we made amendments to the parameters of certain
special enrollment periods (2016 Interim Final Rule). We finalized
these in the 2018 Payment Notice, published in the December 22, 2016
Federal Register (81 FR 94058).
In the Market Stabilization final rule, published in the April 18,
2017 Federal Register (82 FR 18346), we amended standards relating to
special enrollment periods and QHP certification. In the 2019 Payment
Notice, published in the April 17, 2018 Federal Register (83 FR 16930),
we modified parameters around certain special enrollment periods. In
the April 25, 2019 Federal Register (84 FR 17454), the 2020 Payment
Notice established a new special enrollment period.
We published the final rule in the May 14, 2020 Federal Register
(85 FR 29164) (2021 Payment Notice).
In the January 19, 2021 Federal Register (86 FR 6138) (part 1 of
the 2022 Payment Notice), we finalized only a subset of the proposals
in the 2022 Payment Notice proposed rule. In the May 5, 2021 Federal
Register (86 FR 24140), we published part 2 of the 2022 Payment Notice.
In the September 27, 2021 Federal Register (86 FR 53412) (part 3 of the
2022 Payment Notice), in conjunction with the Department of the
Treasury, we finalized amendments to certain policies in part 1 of the
2022 Payment Notice.
In the May 6, 2022 Federal Register (87 FR 27208), we finalized
changes to maintain the user fee rate for issuers offering plans
through the FFEs and maintain the user fee rate for issuers offering
plans through the SBE-FPs for the 2023 benefit year. We also finalized
various policies to address certain agent, broker, and web-broker
practices and conduct. We also finalized updates to the requirement
that all Exchanges conduct special enrollment period verifications.
In the April 27, 2023 Federal Register (88 FR 25740) (2024 Payment
Notice), we revised Exchange Blueprint approval timelines, lowered the
user rate fee for QHPs in the FFEs and SBE-FPs, and amended re-
enrollment hierarchies for enrollees. We also finalized policies to
update FFE and SBE-FP standardized plan options; further reduce the
risk of plan choice overload on the FFEs and SBE-FPs by lowering the
limit on non-standardized plan options that issuers may offer from four
to two; introduce an exceptions process to the limitation on non-
standardized plan options in FFEs and SBE-FPs; and ensure correct QHP
information. In addition, to prevent gaps in coverage, we amended
coverage effective date rules, lengthened the special enrollment period
from 60 to 90 days to those who lose Medicaid coverage, and prohibited
QHPs on FFEs and SBE-FPs from terminating coverage mid-year for
dependent children who reach the applicable maximum age. We also
finalized policies on verifying consumer income and permitting door-to-
door assisters to solicit consumers. To ensure provider network
adequacy, we finalized provider network and ECP policies for QHPs.
5. Essential Health Benefits
We established requirements relating to EHBs in the Standards
Related to Essential Health Benefits, Actuarial Value, and
Accreditation Final Rule, which was published in the February 25, 2013
Federal Register (78 FR 12834) (EHB Rule). In the 2019 Payment Notice,
published in the April 17, 2018 Federal Register (83 FR 16930), we
added Sec. 156.111 to provide States with additional options from
which to select an EHB-benchmark plan for plan year (PY) 2020 and
subsequent plan years. In the 2023 Payment Notice, published in the May
6, 2022 Federal Register (87 FR 27208), we revised Sec. 156.111 to
require States to notify HHS of the selection of a new EHB-benchmark
plan by the first Wednesday in May of the year that is 2 years before
the effective date of the new EHB-benchmark plan, otherwise the State's
EHB-benchmark plan for the applicable plan year will be that State's
EHB-benchmark plan applicable for the prior year. We displayed the
Request for Information; Essential Health Benefits (EHB RFI), published
in the December 2, 2022 Federal Register (87 FR 74097) to solicit
public comment on a variety of topics related to the coverage of
benefits in health plans subject to the EHB requirements of the ACA.
6. State Innovation Waivers
In the March 14, 2011 Federal Register (76 FR 13553), HHS and the
Department of the Treasury (collectively, the Departments) published
the ``Application, Review, and Reporting Process for Waivers for State
Innovation'' proposed rule to implement section 1332(a)(4)(B) of the
ACA.
In the February 27, 2012 Federal Register (77 FR 11700), the
Departments published the ``Application, Review, and Reporting Process
for Waivers for State Innovation'' final rule (2012 Final Rule).
In the October 24, 2018 Federal Register (83 FR 53575), the
Departments issued the 2018 Guidance, which superseded the previous
guidance published in the December 16, 2015 Federal Register (80 FR
78131) (2015 Guidance) and set forth requirements that States must meet
for waivers,
[[Page 26224]]
application review procedures, pass-through funding determinations,
certain analytical requirements, and operational considerations.
In the November 6, 2020 Federal Register (85 FR 71142), the
Departments issued an interim final rule (November 2020 IFC), which set
forth flexibilities for waivers under section 1332 during the COVID-19
Public Health Emergency.
In the December 4, 2020 Federal Register (85 FR 78572), the
Departments published the ``Patient Protection and Affordable Care Act;
HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy
Benefit Manager Standards; Updates to State Innovation Waiver (Section
1332 Waiver) Implementing Regulations'' proposed rule (2022 Payment
Notice proposed rule) which proposed to codify certain policies and
interpretations of the 2018 Guidance.
In the January 19, 2021 Federal Register (86 FR 6138), the
Departments published the ``Patient Protection and Affordable Care Act;
HHS Notice of Benefit and Payment Parameters for 2022; Updates to State
Innovation Waiver (Section 1332 Waiver) Implementing Regulations''
final rule (part 1 of the 2022 Payment Notice) which codified many of
the policies and interpretations of the 2018 Guidance.
In the September 27, 2021 Federal Register (86 FR 53412), part 3 of
the 2022 Payment Notice, the Departments published the ``Patient
Protection and Affordable Care Act; Updating Payment Parameters,
Section 1332 Waiver Implementing Regulations, and Improving Health
Insurance Markets for 2022 and Beyond'' final rule (September 2021
Final Rule), which superseded and rescinded the policies and
interpretations outlined in the 2018 Guidance and repealed the previous
codification of the interpretations of statutory guidelines in part 1
of the 2022 Payment Notice. The Departments also finalized
flexibilities in the public notice requirements and post-award public
participation requirements for section 1332 waivers under certain
emergent situations and processes and procedures for amendments and
extensions for approved waiver plans.
7. Consumer Operated and Oriented Plans (CO-OPs)
In the December 13, 2011 Federal Register (76 FR 77392), we
published the ``Patient Protection and Affordable Care Act;
Establishment of Consumer Operated and Oriented Plan (CO-OP) Program''
final rule (2011 CO-OP Rule), which established the rules governing the
CO-OP program to make loans to capitalize eligible prospective CO-OPs.
In the May 11, 2016 Federal Register (81 FR 29146), we amended several
CO-OP standards related to governance requirements to provide greater
flexibility, and to facilitate private market transactions that would
assist efforts of CO-OPs to arrange access to new sources of needed
capital.
8. Basic Health Program (BHP)
In the March 12, 2014, Federal Register (79 FR 14111), we published
a final rule entitled ``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,'' implementing section 1331 of the ACA, which governs the
establishment of BHPs.
9. State Flexibility in the Use of Income and Resource Disregards in
Medicaid Eligibility
In the January 19, 1993 Federal Register (58 FR 4929), we published
a final rule with comment period entitled ``Medicaid Program;
Eligibility and Coverage Requirements,'' in which we prescribed, at 42
CFR 435.601, the financial methodologies State Medicaid agencies must
apply in determining eligibility for Medicaid, with options to apply
less restrictive income and resource methodologies for the eligibility
groups specified in section 1902(r)(2) of the Act.
In the August 22, 1994 Federal Register (59 FR 43052), we published
a final rule entitled ``Medicaid Program; Eligibility and Coverage
Requirements,'' in which we amended 42 CFR 435.601(f)(1) to delete
cross-references to other regulatory provisions that had been removed
from the CFR.
In the November 30, 2016 Federal Register (81 FR 86456), we
published a final rule entitled ``Medicaid and Children's Health
Insurance Programs: Eligibility Notices, Fair Hearing and Appeal
Processes for Medicaid and Other Provisions Related to Eligibility and
Enrollment for Medicaid and CHIP,'' in which we amended 42 CFR
435.601(b) to confirm that its provisions govern only individuals who
are excepted from application of modified adjusted gross income
financial methodologies (MAGI) in accordance with 42 CFR 435.603(j)
(relating to ``Eligibility Groups for which MAGI-based methods do not
apply''). We also established in 42 CFR 435.601(d)(1) the authority for
States to apply less restrictive methodologies for medically needy
individuals whose income eligibility is determined under 42 CFR
435.831(b)(1) (including medically needy individuals whose eligibility
is determined under MAGI-based methodologies that comply with certain
rules relating to the financial responsibility of relatives and other
individuals described in 42 CFR 435.602).
B. Summary of Major Provisions
The regulations outlined in this final rule will be codified in 31
CFR part 33, 42 CFR part 600, and 45 CFR parts 153, 155, and 156.
1. 31 CFR Part 33 and 45 CFR Part 155
This final rule amends section 1332 Waivers for State Innovation
(referred to throughout this final rule as section 1332 waivers)
implementing regulations regarding State public notice and comment
procedures. The Departments are finalizing changes in 31 CFR part 33
and 45 CFR part 155 to allow States the flexibility to hold a State
public hearing or post-award forum in a virtual format, or hybrid
format, which would be considered as the equivalent of holding an in-
person meeting. Specifically, the Departments are finalizing changes to
31 CFR 33.112(c) and 45 CFR 155.1312(c) and 31 CFR 33.120(c) and 45 CFR
155.1320(c). These changes are effective immediately upon publication
of this final rule.
2. 42 CFR Part 435
We are not finalizing the proposed amendment to 42 CFR 435.601(d)
to remove paragraph (d)(4) at this time. The removal of this paragraph
would have provided States with greater flexibility to adopt income
and/or resource disregards in determining Medicaid financial
eligibility for individuals excepted from the application of financial
methodologies based on MAGI (``non-MAGI'' methodologies). States are
already permitted to expand eligibility for individuals who are subject
to non-MAGI methodologies by disregarding income and resources that
would otherwise be required to be considered in determining an
individual's eligibility. However, under current rules, States must
apply such income and resource disregards to all individuals within
each Medicaid eligibility group. Removing paragraph (d)(4) would have
allowed States, when considering expanding eligibility for non-MAGI
individuals, to target disregards at discrete individuals within an
eligibility group. As described more fully below, many commenters
raised
[[Page 26225]]
concerns about this proposal and recommended that we impose
``safeguards,'' ``guardrails,'' or ``no-harm'' requirements in
expanding the States' disregard-related flexibility. These commenters
asserted that such requirements are necessary to ensure that States do
not use the flexibility to reduce eligibility or harm beneficiaries. We
are not finalizing this proposal at this time to allow for further
consideration of commenter concerns.
3. 42 CFR Part 600
We are finalizing the amendment, with modifications, to 42 CFR
600.320(c) to allow States a third option when choosing the effective
date of eligibility for enrollment for BHP applicants. Under current
rules, States have the option to choose between following: either the
Medicaid rules at 42 CFR 435.915 or the Exchange rules at 45 CFR
155.420(b)(1). We are finalizing to add an option to the effective date
of coverage rules that would allow States to start coverage on the
first day of the month following the date of application. In addition,
we are adding another option under 42 CFR 600.320(c) that, subject to
HHS approval, a State may establish its own effective date of
eligibility for enrollment policy.
4. 45 CFR Part 153
In accordance with the OMB Report to Congress on the Joint
Committee Reductions for Fiscal Year 2024, the HHS-operated risk
adjustment program is subject to the fiscal year 2024 sequestration.\9\
Therefore, the HHS-operated risk adjustment program will sequester
payments made from fiscal year 2024 resources (that is, funds collected
during the 2024 fiscal year) at a rate of 5.7 percent.
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\9\ OMB. (2023, March 13). OMB Report to the Congress on the
BBEDCA 251A Sequestration for Fiscal Year 2024. <a href="https://www.whitehouse.gov/wp-content/uploads/2023/03/BBEDCA_Sequestration_Report_and_Letter_3-13-2024.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/03/BBEDCA_Sequestration_Report_and_Letter_3-13-2024.pdf</a>.
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We are finalizing the recalibration of the 2025 benefit year HHS
risk adjustment models using the 2019, 2020, and 2021 benefit year
enrollee-level EDGE data. For the 2025 benefit year, we are finalizing
the continued application of a market pricing adjustment to the plan
liability associated with Hepatitis C drugs in the HHS risk adjustment
models (see, for example, 84 FR 17463 through 17466). We are finalizing
a modification to the adjustment factors for the receipt of CSRs in the
HHS risk adjustment models to improve predictive accuracy for the
American Indian and Alaska Native (AI/AN) subpopulation who are
enrolled in zero and limited cost-sharing plans and retaining the other
CSR adjustment factors in HHS risk adjustment. We are also finalizing a
risk adjustment user fee for the 2025 benefit year of $0.18 per member
per month (PMPM). Additionally, we are finalizing that in certain
cases, we may require a corrective action plan to address an
observation identified in an HHS risk adjustment audit.
5. 45 CFR Part 155
In part 155, we are finalizing the amendment to Sec. 155.105(b) to
require that a State seeking to operate a State Exchange must first
operate an SBE-FP for at least one plan year, including its open
enrollment period. We believe this requirement will give States
sufficient time to create, staff, and structure a State Exchange that
could transition to operating its own platform and establish
relationships with interested parties critical to a State Exchange's
success in operating a Navigator and consumer outreach program,
assuming plan management responsibilities, and communicating
effectively with consumers to support enrollment and avoid health care
coverage gaps.
We are finalizing the revision to Sec. 155.106(a)(2) as it
pertains to Exchange Blueprint requirements for States transitioning to
a State Exchange. Specifically, we are finalizing the addition that we
may require that a State submitting a Blueprint application seeking to
operate a State Exchange provide, upon request, supplemental
documentation to HHS detailing the State's implementation of its State
Exchange functionality, including information regarding the State's
ability to implement and comply with Federal requirements for operating
an Exchange, as laid out in the State Exchange Blueprint. This could
include a State submitting detailed plans regarding its State Exchange
consumer assistance programs and activities, such as information on its
direct outreach plans. Further, we are finalizing a requirement that a
State applying to transition to a State Exchange must provide the
public with a notice and copy of its State Exchange Blueprint
application, as well as conduct periodic public engagements whereby
interested parties can learn about the status of a State's transition
to a State Exchange and provide input on that transition.
We are finalizing the amendment to Sec. 155.170(a)(2) to codify
that benefits covered in a State's EHB benchmark plan will not be
considered in addition to EHB, even if they had been required by State
action taking place after December 31, 2011, other than for purposes of
compliance with Federal requirements. Under this policy, there would be
no obligation for the State to defray the cost of a State mandate
enacted after December 31, 2011, that requires coverage of a benefit if
that benefit is included in the State's EHB-benchmark plan. Benefits
that are covered in a State's EHB-benchmark plan will not be considered
in addition to EHB and will remain subject to the various rules
applicable to the EHB, including the prohibition on discrimination in
accordance with Sec. 156.125, limitations on cost sharing in
accordance with Sec. 156.130, and restrictions on annual or lifetime
dollar limits in accordance with Sec. 147.126. We believe that this
change would promote consumer protections and facilitate compliance
with the defrayal requirement by making the identification of benefits
in addition to EHB more intuitive.
At Sec. 155.205(a), we are finalizing, with modifications, the
establishment of additional minimum standards for Exchange call center
operations. Specifically, we are finalizing the requirement that all
Exchange call centers, other than those of SBE-FPs and Small Business
Health Options Program (SHOP) Exchanges that do not provide for
enrollment in SHOP coverage through an online SHOP enrollment platform,
provide consumer access to a live call center representative during an
Exchange's published hours of operation to assist with submitting their
Exchange application. We believe speaking to a live representative will
help troubleshoot consumer Exchange application issues, provide a real
time opportunity for a live representative to explain Exchange
application terminology to a consumer, ensure the consumer provides the
most correct information for the Exchange application, alleviate
unnecessary follow-up, and provide greater overall consumer
satisfaction.
We are finalizing the amendment to Sec. 155.205(b)(4) to require
that an Exchange operate a centralized eligibility and enrollment
platform on the Exchange's website (or, for an SBE-FP, the Federal
eligibility and enrollment platform) such that the Exchange allows for
the submission of the single, streamlined application for enrollment in
a QHP and insurance affordability programs through the Exchange's
website and performs eligibility determinations for all consumers based
on submissions of the single, streamlined application. Further, we are
finalizing the amendment to Sec. 155.302(a)(1) to clarify that the
Exchange, through the centralized
[[Page 26226]]
eligibility and enrollment platform operated on the Exchange's website
(or, for an SBE-FP, the Federal eligibility and enrollment platform),
is the entity that is responsible for making all determinations
regarding the eligibility for QHP coverage and insurance affordability
programs regardless of whether an individual files an application for
enrollment in a QHP on the Exchange's website (or, for SBE-FPs, on the
Federal eligibility and enrollment platform), or on a website operated
by a non-Exchange website allowed for under Sec. 155.220 or Sec.
155.221. We are also clarifying that only entities that an Exchange
elects to contract with to operate its centralized eligibility and
enrollment platform can perform this function on behalf of an Exchange,
such that Exchanges will not be able to solely rely on non-Exchange
entities, including a web-broker (defined at Sec. 155.20) or other
entities under Sec. 155.220 or Sec. 155.221, to make such eligibility
determinations on behalf of the Exchanges.
We are also finalizing the amendment to Sec. 155.205(b)(5) to
require that an Exchange operate a centralized eligibility and
enrollment platform on the Exchange's website (or, for an SBE-FP, the
Federal eligibility and enrollment platform) so that the Exchange (or,
for an SBE-FP, the Federal eligibility and enrollment platform) meets
the requirement under Sec. 155.400(c) to maintain record of all
effectuated enrollments in QHPs, including changes in effectuated QHP
enrollments.
We are finalizing the amendment to Sec. 155.220(h) specifying that
the CMS Administrator, who is a principal officer, is the entity
responsible for handling requests by agents, brokers, and web-brokers
for reconsideration of HHS' decision to terminate their Exchange
agreement(s) for cause. This amendment will improve transparency by
specifying who would review reconsideration requests under Sec.
155.220(h).
We are finalizing changes to Sec. Sec. 155.220 and 155.221 to
apply certain standards to web-brokers and Direct Enrollment (DE)
entities assisting consumers and applicants across all Exchanges,
including State Exchanges, for both the State Exchange's Individual
Exchange and SHOP. We seek to ensure that certain current minimum HHS
standards applicable in the FFEs and SBE-FPs, related to web-broker
website display of standardized QHP comparative information, disclaimer
language, information on eligibility for APTC/CSRs, operational
readiness, and access by downstream agents and brokers, also apply to
web-brokers in State Exchanges. Similarly, we are finalizing the
extension of certain DE entity requirements applicable in the FFEs and
SBE-FPs related to marketing and display of QHPs, providing consumers
with correct information and refraining from certain conduct, marketing
of non-QHPs, website disclaimer language, and operational readiness to
DE entities across all Exchanges, to newly apply to DE entities in
State Exchanges. These policies will help establish greater general
uniformity with respect to these requirements for web-brokers and DE
entities operating in the Exchanges and establish minimum Federal
consumer protections in all States, regardless of the Exchange model.
We are finalizing updates to Sec. 155.221(b) to require that
<a href="http://HealthCare.gov">HealthCare.gov</a> changes be reflected and prominently displayed on DE
entity non-Exchange websites assisting consumers in FFEs and SBE-FPs
within a notice period \10\ set by HHS. We are also finalizing the
requirement that DE entities make these display changes in a manner
consistent with display changes made by HHS to <a href="http://HealthCare.gov">HealthCare.gov</a> by
meeting standards communicated and defined by HHS within a time period
set by HHS, unless HHS approves a deviation from those standards. This
approach codifies our existing practice of communicating important
changes to the <a href="http://HealthCare.gov">HealthCare.gov</a> display to EDE entities to ensure their
EDE websites conform to those changes and provide the same vital
information to consumers, expands our existing change request processes
to permit entities to request deviations from the required display
changes, and requires DE entities that do not participate in EDE to
also comply with this practice. Additionally, this approach will also
require that all display changes which affect the visual aspects of the
website that users see and interact with must be prominently displayed
on the non-Exchange websites. Finally, we are also finalizing the
extension of this policy to require State Exchanges that choose to
implement a DE program to require their DE entities to implement and
prominently display website changes in a manner that is consistent with
display changes made by State Exchanges to State Exchanges' websites on
their non-Exchange websites, unless the State Exchange approves a
deviation from those standards should the State Exchange elect to
permit deviation requests.
---------------------------------------------------------------------------
\10\ ``Notice period'' refers to the time period that DE
entities have to reflect and prominently display <a href="http://HealthCare.gov">HealthCare.gov</a>
changes communicated to them by HHS pursuant to this proposal.
---------------------------------------------------------------------------
We are finalizing, in connection with the failure to file and
reconcile process at Sec. 155.305(f)(4), that Exchanges be required to
send notices to tax filers for the first year in which they have been
determined to have failed to reconcile APTC as an initial warning to
inform and educate tax filers that they need to file and reconcile, or
risk being determined ineligible for APTC if they fail to file and
reconcile for a second consecutive year. We clarify in the rule that an
Exchange must either send a direct notice to a tax filer as described
above or send a more general notice to an enrollee or their tax filer
explaining that they are at risk of losing APTC. Currently, the
regulation does not detail notification procedures for tax filers who
have failed to reconcile for 1 year. We intend to provide
implementation guidance and sample notices prior to the restart of FTR
processes. We are finalizing the requirement that all Exchanges be
required to send informative notices for the first year in which tax
filers have been identified as failing to file and reconcile.
We are finalizing the amendment to Sec. 155.315(e) to provide that
all Exchanges can accept applicant incarceration status attestations
without further verification, and Exchanges may verify applicant
incarceration status using an HHS-approved verification data source.
HHS would approve an alternative electronic data source for State
Exchanges to use for incarceration verification if it provides data
that are current and accurate, and if its use minimizes administrative
costs and burdens.
We are finalizing the proposal to reinterpret State Exchange and
State Medicaid and Children's Health Insurance Program (CHIP) agency
use of the Federal Data Services Hub to access and use the income data
provided by the Verify Current Income (VCI) Hub service as a State
Exchange or a State Medicaid and CHIP agency function because these
State entities use this optional service to implement eligibility
verification requirements applicable to them. More specifically, State
Exchanges and State Medicaid and CHIP agencies have the option to use
this information to verify a tax household's annual income attestation
for Exchange QHP eligibility and the Medicaid applicant's current
household income as required to make insurance affordability program
eligibility determinations. We are also finalizing that these State
agencies must pay for their use of the VCI Hub Service, and HHS will
invoice
[[Page 26227]]
them monthly for the amount they must pay to reimburse HHS for the
costs of their access and actual utilization of CSI income data from
the prior month, including an administrative fee amount. In accordance
with these policies, we are finalizing the amendment to Sec.
155.320(c) to reflect this reinterpretation for the Exchanges but did
not propose to amend the Medicaid regulations as the Medicaid
regulations already address Medicaid agency verification requirements
and are not typically used to delineate Medicaid agency operations in
this manner.
We are finalizing the revision to Sec. 155.330(d) to require
Exchanges to conduct periodic checks for deceased enrollees twice
yearly and subsequently end deceased enrollees' QHP coverage.
Additionally, we are finalizing the revision to Sec. 155.330(d)(3) to
grant the Secretary the authority to temporarily suspend the periodic
data matching (PDM) requirement during certain situations or
circumstances that lead to the limited availability of data needed to
conduct PDM or of documentation needed for an enrollee to notify the
Exchange that the result of PDM is inaccurate, as described in Sec.
155.330(e)(2)(i)(C). These policies will align Sec. 155.330(d) with
current Federal Exchange policy and operations, prevent overpayment of
QHP premiums, and accurately capture household QHP eligibility based on
household size.
We are finalizing, as proposed, the amendment to Sec.
155.335(j)(1) and (2) to require Exchanges to re-enroll individuals who
are enrolled in catastrophic coverage, as defined in section 1302(e) of
the ACA, into a new QHP for the coming plan year, except that we are
amending the new language that we proposed at Sec. 155.335(j)(1)(v)
and (j)(2)(iv) to incorporate the phrase, ``to the extent permitted by
applicable State law.'' Incorporating these individuals enrolled in
catastrophic coverage into the auto re-enrollment hierarchy rules at
Sec. 155.335(j) will help ensure continuity of coverage in cases where
the issuer does not continue to offer a catastrophic plan for the new
plan year, or these individuals are no longer eligible for enrollment
in a catastrophic plan for the new year, and these individuals do not
actively select a different QHP. We are also finalizing the addition of
a new paragraph (j)(5) to Sec. 155.335 to establish that an Exchange
may not newly auto re-enroll into catastrophic coverage an enrollee who
is currently enrolled in coverage of a metal level as defined in
section 1302(d) of the ACA. This change reflects our current practice
for Exchanges on the Federal platform.
We are finalizing the amendment to Sec. 155.400(e)(2) to codify
that the flexibility for issuers experiencing billing or enrollment
problems due to high volume or technical errors is not limited to
extensions of the binder payment.
We are finalizing, with modifications, the amendment to Sec.
155.410(e)(4)(ii) to revise parameters around the adoption of an
alternative open enrollment period by a State Exchange. Specifically,
we are finalizing that for benefit years beginning on or after January
1, 2025, State Exchanges must adopt an open enrollment period that
begins on November 1 of the calendar year preceding the benefit year
and ends January 15 of the applicable benefit year or later.
Additionally, as a modification, we are finalizing new paragraph
(e)(4)(iii), which provides flexibility for any State Exchange that
held an open enrollment period that began before November 1, 2023, and
ended before January 15, 2024, for the 2024 benefit year to continue to
begin open enrollment before November 1 for consecutive future benefit
years, so long as the open enrollment period continues uninterrupted
for at least 11 weeks. If the State Exchange changes the dates of the
annual open enrollment period after the effective date of this rule, it
must comply with paragraphs (e)(4)(i) and (ii) for all future annual
open enrollment periods. Finally, we have also finalized a modification
to amend Sec. 155.410(e)(4)(i) to reference new paragraph (e)(4)(iii).
We believe these policies will give consumers ample time to enroll in
coverage; provide Navigators, certified application counselors, and
agents and brokers ample time to assist all interested applicants;
balance consistency against providing State Exchanges with additional
flexibility; reduce disruption to current Exchange operations; reduce
consumer confusion; and improve access to health coverage.
At Sec. 155.420(b), we are finalizing aligning the effective dates
of coverage after selecting a plan during certain special enrollment
periods across all Exchanges, including State Exchanges. We are
requiring all State Exchanges to provide coverage that is effective on
the first day of the month following plan selection, or an earlier
date, if a consumer enrolls in a QHP during special enrollment periods
that follow the regular effective dates of coverage in 45 CFR
155.420(b). This policy will prevent coverage gaps, particularly for
consumers transitioning between different Exchanges or from other
insurance coverage.
We are finalizing the amendment to paragraph Sec. 155.420(d)(16)
to revise the parameters around the availability of a special
enrollment period for APTC-eligible qualified individuals with a
projected annual household income no greater than 150 percent of the
Federal Poverty Level (FPL). Specifically, we are finalizing to remove
the limitation that this special enrollment period is only available to
a consumer whose applicable taxpayer's applicable percentage, which is
used to determine the amount of the consumer's premium not covered by
APTC, is 0 percent, and to give Exchanges the option to permanently
provide this special enrollment period. We believe this policy will
provide affordable coverage to more uninsured people and additional
enrollment opportunities to low-income consumers.
We are finalizing the addition of Sec. 155.430(b)(1)(iv)(D) to
permit an enrollee to retroactively terminate the enrollee's enrollment
in a QHP through an Exchange on the Federal platform when the enrollee
enrolls in Medicare Parts A or B (including enrollment in Parts A and B
through a Medicare Advantage plan). The effective date of the
retroactive termination must be no earlier than the later of (1) the
day before the first day of coverage under Medicare Parts A or B or a
Medicare Advantage plan, and (2) the day is 6 months before retroactive
termination of QHP coverage is requested. Enrollees must request
retroactive termination of coverage within 60 days of the date they
retroactively enroll in Medicare (the date the enrollment occurs, not
the Medicare coverage effective date). We are also finalizing that
retroactive terminations are not permitted for stand-alone dental plans
(SADPs). This policy will allow consumers to avoid overlapping coverage
and paying unnecessary premiums. HHS has the option to elect whether to
implement this provision for Exchanges on the Federal platform, and
State Exchanges will have the option of implementing this policy.
Under Sec. 155.1050(a)(2)(i)(A), we are finalizing that for plans
years beginning on or after January 1, 2026, State Exchanges and SBE-
FPs must establish and impose quantitative time and distance network
adequacy standards for QHPs that are at least as stringent as standards
for QHPs participating on the FFEs under Sec. 156.230(a)(2)(i)(A).
Additionally, we are finalizing that, for plans years beginning on or
after January 1, 2026, State Exchanges and SBE-FPs must conduct
quantitative network adequacy reviews prior to certifying any plan as a
QHP, consistent
[[Page 26228]]
with the reviews conducted by the FFEs under Sec. 156.230.
Specifically, we are finalizing at Sec. 155.1050(a)(2)(i)(B) that, for
plans years beginning on or after January 1, 2026, State Exchanges and
SBE-FPs must conduct network adequacy reviews to evaluate a plan's
compliance with network adequacy standards under Sec.
156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying
any plan as a QHP, while providing QHP certification applicants the
flexibilities described under Sec. 156.230(a)(2)(ii) and (a)(3) and
(4). We are also finalizing Sec. 155.1050(a)(2)(ii) to provide that,
for plan years beginning on or after January 1, 2026, HHS may grant an
exception to the requirements described under Sec. 155.1050(a)(2)(i)
to a State Exchange or SBE-FP that demonstrates with evidence-based
data, in a form and manner specified by HHS, that (1) the Exchange
applies and enforces alternate quantitative network adequacy standards
that are reasonably calculated to ensure a level of access to providers
that is as great as that ensured by the Federal network adequacy
standards established for QHPs under Sec. 156.230(a)(1)(iii),
(a)(2)(i)(A), and (a)(4); and (2) the Exchange evaluates whether plans
comply with applicable network adequacy standards prior to certifying
any plan as a QHP. Lastly, we are finalizing Sec. 155.1050(a)(2)(i)(C)
to provide that, for plan years beginning on or after January 1, 2026,
State Exchanges and SBE-FPs must require that all issuers seeking
certification of a plan as a QHP submit information to the Exchange
reporting whether or not network providers offer telehealth services.
6. 45 CFR Part 156
In part 156, after reviewing the public comments and revising our
projections based on newly available data that impacted our enrollment
projections, we are finalizing an FFE user fee rate of 1.5 percent of
total monthly premiums and an SBE-FP user fee rate of 1.2 percent of
total monthly premiums. On November 15, 2023, we issued the 2025
benefit year premium adjustment percentage index and related payment
parameters in guidance, consistent with the policy finalized in part 2
of the 2022 Payment Notice.\11\
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\11\ <a href="https://www.cms.gov/files/document/2025-papi-parameters-guidance-2023-11-15.pdf">https://www.cms.gov/files/document/2025-papi-parameters-guidance-2023-11-15.pdf</a>.
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For benefit years beginning on or after January 1, 2026, we are
finalizing three revisions to the standards for State selection of EHB-
benchmark plans at Sec. 156.111. First, we are finalizing our proposal
to consolidate the options for States to change EHB-benchmark plans at
Sec. 156.111(a) to reduce the burden on States to decide between three
functionally identical choices. Second, we are finalizing revisions to
the typicality standard at Sec. 156.111(b)(2) so that, in
demonstrating that a State's new EHB-benchmark plan provides a scope of
benefits that is equal to the scope of benefits of a typical employer
plan in the State, the scope of benefits of a typical employer plan in
the State will be defined as any scope of benefits that is as or more
generous than the scope of benefits in the State's least generous
typical employer plan (supplemented by the State as necessary to
provide coverage within each EHB category at Sec. 156.110(a)), and as
or less generous than the scope of benefits in the State's most
generous typical employer plan (supplemented by the State as necessary
to provide coverage within each EHB category at Sec. 156.110(a)),
among the typical employer plans currently defined at Sec.
156.111(b)(2)(i)(A) and (B). We are also finalizing the removal of the
generosity standard at Sec. 156.111(b)(2)(ii) and a technical revision
to the language regarding supplementation at Sec. 156.111(b)(2)(i).
Third, we are finalizing revisions to Sec. 156.111(e)(3) to require
States to submit a formulary drug list as part of their application to
change EHB-benchmark plans only if the State is seeking to change its
prescription drug EHB.
We are finalizing the removal of the regulatory prohibition at
Sec. 156.115(d) on issuers from including routine non-pediatric dental
services as an EHB beginning with PY 2027, which would provide States
the option to add routine adult dental services as an EHB by updating
their EHB-benchmark plans pursuant to Sec. 156.111.
We are finalizing the amendment to Sec. 156.122 to codify that
prescription drugs in excess of those covered by a State's EHB-
benchmark plan are considered EHB. As a result, they would be subject
to requirements including the annual limitation on cost sharing and the
restriction on annual and lifetime dollar limits, unless the coverage
of the drug is mandated by State action and is in addition to EHB
pursuant to Sec. 155.170, in which case the drug will not be
considered EHB. In addition, for plan years beginning on or after
January 1, 2026, we are finalizing the amendment to Sec. 156.122 to
provide that the Pharmacy & Therapeutics (P&T) committee must include a
patient representative. We also sought and received comments on a
possible future policy proposal to replace the United States
Pharmacopeia (USP) Medicare Model Guidelines (MMG) with the USP Drug
Classification system (DC) to classify the prescription drugs required
to be covered as EHB under Sec. 156.122(a)(1).
For PY 2025, we are finalizing the proposal to follow the approach
finalized in the 2024 Payment Notice concerning standardized plan
option metal levels, and to otherwise maintain continuity with our
approach to standardized plan options finalized in the 2023 and 2024
Payment Notices.\12\ We are finalizing only minor updates to the plan
designs for PY 2025 to ensure these plans have AVs within the
permissible de minimis range for each metal level. Our updates to plan
designs for PY 2025 are detailed in the discussion of Sec. 156.201 in
the preamble of this final rule, specifically in Tables 12 and 13.
---------------------------------------------------------------------------
\12\ This includes continuation of the differential display of
standardized plan options on <a href="http://HealthCare.gov">HealthCare.gov</a> and enforcement of the
standardized plan options display requirements for approved web-
brokers and QHP issuers using a direct enrollment pathway to
facilitate enrollment through an FFE or SBE-FP--including both the
Classic Direct Enrollment (Classic DE) and Enhanced Direct
Enrollment (EDE) Pathways.
---------------------------------------------------------------------------
We are finalizing an exceptions process at Sec. 156.202 that will
allow issuers in the FFEs and SBE-FPs to offer additional non-
standardized plan options per product network type, metal level,
inclusion of dental and vision benefit coverage, and service area for
PY 2025 and subsequent plan years, if the issuer can demonstrate that
these additional non-standardized plans have specific design features
that will substantially benefit consumers with chronic and high-cost
conditions and meet other requirements.
We are finalizing a new regulatory provision that would permit us
to allow a CO-OP loan recipient to voluntarily terminate its loan
agreement with us and cease to constitute a qualified non-profit health
insurance issuer (QNHII), for the purpose of pursuing innovative
business plans that are not otherwise consistent with the governance
requirements and business standards applicable to a CO-OP borrower.
Under the new regulatory provision, we will be able to consider a
request by a CO-OP to voluntarily terminate its loan agreement for
reasons other than financial viability, provided all outstanding CO-OP
loans issued to the loan recipient are repaid in full prior to
termination, and we believe granting the request would meaningfully
enhance consumer access to quality, affordable, member-focused, non-
profit health care options in affected markets.
We are finalizing conforming amendments to the payment and
collections process set forth at
[[Page 26229]]
Sec. 156.1215 to align with the policies and regulations proposed in
the Federal Independent Dispute Resolution Operations proposed rule (88
FR 75744) and that are contingent on their finalization. This provision
will provide that administrative fees for utilizing the No Surprises
Act Federal independent dispute resolution (IDR) process for health
insurance issuers that participate in financial programs under the ACA
would be subject to netting as part of HHS' integrated monthly payment
and collections cycle. Additionally, we are finalizing the amendment to
Sec. 156.1215 to provide that any amount owed to the Federal
Government by an issuer and its affiliates for unpaid administrative
fees due to the Federal Government from these issuers and their
affiliates for utilizing the Federal IDR process in accordance with
Sec. 149.510(d)(2), after HHS nets amounts owed by the Federal
Government under these programs, would be the basis for calculating a
debt owed to the Federal Government.
III. Summary of the Provisions of the Proposed Regulations
A. 31 CFR Part 33 and 45 CFR Part 155--Section 1332 Waivers
1. Background
Section 1332 of the ACA permits States to apply for a section 1332
waiver to pursue innovative strategies for providing their residents
with access to higher value, more affordable health insurance coverage.
To allow for greater flexibility in communicating with the public, we
are finalizing updates to the public hearing process requirements for
section 1332 waivers.
Under section 1332(b) of the ACA, the Secretary of HHS and the
Secretary of the Treasury (collectively, the Secretaries) may exercise
their discretion to approve a request for a section 1332 waiver only if
the Secretaries determine that the proposal for the section 1332 waiver
meets the following four requirements, referred to as the statutory
guardrails: (1) the proposal provides coverage that is at least as
comprehensive as coverage defined in section 1302(b) of the ACA and
offered through Exchanges established under title I of the ACA, as
certified by the Office of the Actuary of CMS, based on sufficient data
from the State and from comparable States about their experience with
programs created by the ACA and the provisions of the ACA that would be
waived; (2) the proposal provides coverage and cost-sharing protections
against excessive out-of-pocket spending that are at least as
affordable for the State's residents as would be provided under title I
of the ACA; (3) the proposal provides coverage to at least a comparable
number of the State's residents as would be provided under title I of
the ACA; and (4) the proposal does not increase the Federal deficit.
The Secretaries retain their discretionary authority to deny requested
section 1332 waivers when appropriate given consideration of the
application, as a whole, even if a proposal for a section 1332 waiver
meets the four statutory guardrails.
The Departments are responsible for monitoring an approved section
1332 waiver's compliance with the statutory guardrails and for
conducting evaluations to determine the impact of the section 1332
waiver. Specifically, section 1332(a)(4)(B)(v) of the ACA requires the
Secretaries to promulgate regulations that provide for a process for
the periodic evaluation of approved section 1332 waivers. The
Secretaries must also promulgate regulations that provide for a process
under which States with approved section 1332 waivers submit to the
Secretaries periodic reports concerning the implementation of the
State's waiver program.\13\
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\13\ See ACA section 1332(a)(4)(B)(iv).
---------------------------------------------------------------------------
2. Finalized Amendments to Normal Public Notice Requirements (31 CFR
33.112, 31 CFR 33.120, 45 CFR 155.1312, and 45 CFR 155.1320)
Sections 1332(a)(4)(B)(i) and (iii) of the ACA provide that the
Secretaries shall promulgate regulations that provide for a process for
public notice and comment at the State level, including public
hearings, and a process for providing public notice and comment at the
Federal level after the section 1332 waiver application is received by
the Secretaries, respectively, that are both sufficient to ensure a
meaningful level of public input. Current regulations at 31 CFR 33.112
and 45 CFR 155.1312 specify State public notice and comment period and
participation requirements for proposed section 1332 waiver requests,
and 31 CFR 33.116(b) and 45 CFR 155.1316(b) specify the public notice
and comment period and approval requirements under the accompanying
Federal process.
In the November 2020 IFC (85 FR 71142), the Departments revised
regulations to set forth flexibilities in the public notice
requirements and post-award public participation requirements for
section 1332 waivers during the COVID-19 PHE. In the September 2021
Final Rule (86 FR 53502), the Departments extended those changes beyond
the COVID-19 PHE to allow similar flexibilities in the event of future
natural disasters; PHEs; or other emergent situations that threaten
consumers' access to health insurance coverage, consumers' access to
health care, or human life. Currently, in such an event, States may
submit a request to the Departments to modify, in part, the State
public notice requirements specified in 31 CFR 33.112(a)(1), (b), (c),
and (d) and 45 CFR 155.1312(a)(1), (b), (c), and (d), and the Federal
public notice requirement specified in 31 CFR 33.116(b) and 45 CFR
155.1316(b), pursuant to 31 CFR 33.118(a) and 45 CFR 155.1318(a).
The criteria to request a modification from the normal public
notice requirements during an emergent situation are set forth in 31
CFR 33.118(b)(1) through (5) and 45 CFR 155.1318(b)(1) through (5).
Pursuant to 31 CFR 33.118(b)(3) and 45 CFR 155.1318(b)(3), the State's
request to modify normal public notice procedures is required to
include: the justification for the requested modification from the
State public notice procedures as it relates to the emergent situation
and the alternative public notice procedures, including public
hearings, that it proposes to implement at the State level and that are
designed to provide the greatest opportunity for and level of
meaningful public input from impacted interested parties that is
practicable given the emergent circumstances motivating the State's
request for a modification.
Since the finalization of the flexibilities in 31 CFR 33.118(b)(1)
through (5) and 45 CFR 155.1318(b)(1) through (5), almost all States
with approved section 1332 waivers (``section 1332 waiver States'')
submitted requests that were granted by the Departments to conduct
their annual post-award forums virtually instead of in-person during
the COVID-19 PHE to reduce the risk of transmission of COVID-19.
Similarly, during the COVID-19 PHE, States submitting new section 1332
waiver applications, waiver extension requests, or waiver amendment
requests also requested to host their State public hearings virtually
and these requests were also granted by the Departments. However, with
the recent expiration of the Federal COVID-19 PHE \14\ (and many State
COVID-19 PHEs) \15\ and in
[[Page 26230]]
line with the requirements of 31 CFR 33.120(c) and 45 CFR 155.1320(c)
and 31 CFR 33.112(c) and 45 CFR 155.1312(c), the Departments have
ceased granting States' requests to hold public hearings or post-award
forums virtually instead of in-person on the basis of the Federal
COVID-19 PHE.
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\14\ The Federal COVID-19 PHE ended on May 11, 2023. https://
www.hhs.gov/about/news/2023/05/09/fact-sheet-end-of-the-covid-19-
public-health-
emergency.html#:~:text=That%20means%20with%20the%20COVID,the%20expira
tion%20of%20the%20PHE.
\15\ For example, in Alaska the State's PHE ended on July 1,
2022 (<a href="https://health.alaska.gov/PHE/Pages/default.aspx">https://health.alaska.gov/PHE/Pages/default.aspx</a>); in Colorado
the Disaster Recovery Order ended on April 27, 2023 (<a href="https://hcpf.colorado.gov/covid-19-phe-planning">https://hcpf.colorado.gov/covid-19-phe-planning</a>); in Georgia the State of
Emergency ended on May 11, 2023 (<a href="https://dph.georgia.gov/press-releases/2023-05-11/dph-news-release-end-public-health-emergency-declaration">https://dph.georgia.gov/press-releases/2023-05-11/dph-news-release-end-public-health-emergency-declaration</a>); and in Rhode Island the State's COVID-19 Disaster
Emergency ended on May 11, 2023 (<a href="https://governor.ri.gov/executive-orders/executive-order-23-05">https://governor.ri.gov/executive-orders/executive-order-23-05</a>).
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Upon review and consideration of the lessons learned during the
COVID-19 PHE, the Departments have determined that some current
provisions regarding normal State public notice procedures are outdated
given the increased accessibility that technology has provided for
virtual and telephonic meetings. States have shared that their
residents benefitted from the States' opportunity to host public
hearings and post-award forums virtually, and that they would like to
continue doing so to facilitate attendance. States have also reported
to the Departments that hosting meetings virtually during the COVID-19
PHE did not decrease the amount or quality of meaningful input
received. States' experiences during this time demonstrated that
interested parties were able to virtually attend meetings and submit
public comments verbally or in-writing, and States did not report any
significant issues relating to virtual platforms that impeded public
attendance or participation. States continued to share with the
Departments summaries of their post-award forums, as well as all public
comments received and actions taken in response to concerns or
comments, in accordance with section 1332 waiver annual reporting
requirements. In States' new waiver applications, waiver extension
requests, and waiver amendment requests, States also shared with the
Departments summaries of virtually conducted hearings from their State
public comment periods and addressed public comments or concerns
received.
Beyond mitigating the spread of COVID-19, information shared by
section 1332 waiver States has demonstrated that the opportunity to
host post-award forums and public hearings on virtual platforms
facilitated comparable or higher levels of public attendance when
compared to previously held in-person meetings. For example, at
Maryland's annual post-award forums held in 2019 (in-person) and 2020-
2022 (virtual), the State saw comparable participation across the years
from interested parties. Minnesota also reported comparable attendance
at its post-award forums across the years: 4 attendees in 2018 (in-
person), 1 in 2019 (in-person), 4 in 2020 (virtual), 9 in 2021
(virtual),\16\ and 2 in 2022 (virtual). Likewise, Wisconsin had 6
attendees at its post-award forum in 2019 (in-person), 24 in 2020
(virtual),\17\ 11 in 2021 (virtual), and 7 in 2022 (virtual). Wisconsin
noted that using a virtual format has allowed individuals who would
otherwise not be able to attend in-person to view the State's
presentation and that this has proven to be a convenient means for
individuals to attend the forum.
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\16\ Note that this post-award hearing was also a hearing for
the State's waiver extension application, which likely increased
attendance.
\17\ Note that attendance was relatively higher in 2020 likely
due to the forum following the State's first full year of
implementing its reinsurance program.
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States that began waiver implementation after the start of the
COVID-19 PHE have also reported successfully hosting virtual post-award
forums. For example, Colorado conducted its first post-award forum
entirely virtually in 2020 and reported 79 attendees.\18\ Pennsylvania
had 2 attendees at its first post-award forum in 2021 (virtual) and 4
in 2022 (virtual). Pennsylvania noted that due to the expansiveness of
the State's geography, there has historically been low in-person
attendance, as observed at its in-person public hearings in 2019 for
its waiver application, where no members of the public attended the
first meeting, and two members of the public attended the second
meeting.
---------------------------------------------------------------------------
\18\ Note that this post-award forum was also a hearing for the
State's waiver extension application, which likely increased
attendance.
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States submitting new waiver applications, waiver extension
requests, or waiver amendment requests during the COVID-19 PHE also
reported successfully conducting their public hearings on virtual
platforms. For example, in January 2022, Alaska held a combined post-
award forum and State public hearing for its waiver extension
application both in-person and with a telephonic option, which 3
members of the public attended either in-person or virtually. In April
2022, Washington held two State public hearings virtually, in which 9
representatives from organizations attended and shared public comments.
There are other Federal programs and agencies that permitted a
virtual option in place of in-person public hearings prior to the
COVID-19 PHE or that have more recently amended their policies for
public input to continue virtual and telephonic options that were first
implemented during the COVID-19 PHE. For example, States that are
applying for Medicaid section 1115 demonstrations are permitted to use
telephonic and web-based conference capabilities for public meetings.
In fact, per 42 CFR 431.408(a)(3), a State must use telephonic and/or
web conference capabilities for at least one of the two required public
hearings to ensure Statewide accessibility to the public hearing,
unless it can document it has afforded the public throughout the State
the opportunity to provide comment, such as holding the two public
hearings in geographically distinct areas of the State.
As another example, during the COVID-19 PHE, the Internal Revenue
Service (IRS) began holding public hearings on notices of proposed
rulemaking telephonically instead of in-person. Following the end of
the Federal COVID-19 PHE, the IRS recently announced that, for proposed
regulations published in the Federal Register after May 11, 2023,\19\
public hearings would be conducted in-person but that a telephonic
option would remain available for those who prefer to attend or testify
by telephone.
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\19\ Internal Revenue Service, Public Hearings on Proposed
Regulations to Be Conducted in Person with Telephone Options
Available, Announcement 2023-16. Accessed at <a href="https://www.irs.gov/pub/irs-drop/a-23-16.pdf">https://www.irs.gov/pub/irs-drop/a-23-16.pdf</a>.
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The Departments considered whether to propose requiring States to
hold at least one of the required public hearings for waiver
applications in-person. However, as explained above, States have
successfully hosted post-award forums and public hearings for section
1332 waiver applications virtually to allow for meaningful public input
over the last several years. Furthermore, by allowing States the
ability to hold all of their meetings virtually, States may better
allow for input across different geographies, communities, and
populations. We also considered proposing the standard under section
1115 demonstrations where one hearing is required to be done virtually.
However, given the successful hosting of virtual meetings with public
participation by States for section 1332 waivers, it does not seem
necessary to continue to require in-person meetings to solicit public
input on section 1332 waivers.
The Departments believe that by allowing States the opportunity to
hold post-award forums and public hearings virtually and through
digital platforms, States would be able to continue
[[Page 26231]]
facilitating attendance and participation from interested parties and
the public to provide meaningful input. As such, the Departments are of
the view that updating the State public notice procedures would enhance
public participation in the section 1332 waiver review and monitoring
process. This approach would help remove barriers to participation and
increase opportunities for engagement in policymaking for communities
and local partners who may face barriers to in-person participation
(for example, those in rural areas). This approach is also consistent
with Executive Order 14094, Executive Order on Modernizing Regulatory
Review, as it would affirm States' abilities to be inclusive in seeking
public input from interested or affected parties, including members of
underserved communities, and promote best practices for information
accessibility and engagement with interested or affected parties
through the use of alternative platforms and media for engaging the
public.\20\ Further, this approach may improve States' abilities to
understand and eliminate barriers experienced by underserved or under-
represented communities, and identify opportunities to advance health
equity, while diminishing administrative burden related to the
integration of in-person and virtual formats.
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\20\ 88 FR 21879. <a href="https://www.govinfo.gov/content/pkg/FR-2023-04-11/pdf/2023-07760.pdf">https://www.govinfo.gov/content/pkg/FR-2023-04-11/pdf/2023-07760.pdf</a>.
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Therefore, in this final rule, the Departments are finalizing as
proposed that a virtual (that is, one that uses telephonic, digital,
and/or web-based platforms) or hybrid (that is, one that provides for
both in-person and virtual attendance) public hearing or forum be
considered as the equivalent of holding an in-person meeting. In the
2012 Final Rule (77 FR 11700), the Departments noted that as set forth
in 31 CFR 33.112(c)(1) and (2) and 45 CFR 155.1312(c)(1) and (2), a
State must hold at least two public hearings in distinct locations.
Under this policy, States would still need to hold at least two public
hearings in distinct locations. For example, the Departments clarify
that under this final rule, a State would not be permitted to count a
public hearing in which there is simultaneously an in-person location
and virtual platform as two hearings (or two locations). Instead, one
virtual or hybrid meeting would still count as one public hearing, and
two virtual or hybrid meetings would count as two public hearings.
In this final rule, we are finalizing as proposed in the 2025
Payment Notice proposed rule (88 FR 82510, 82520), to amend 31 CFR
33.112(c) and 45 CFR 155.1312(c) and 31 CFR 33.120(c) and 45 CFR
155.1320(c). More specifically, the Departments are finalizing
modifications to 31 CFR 33.112(c) and 45 CFR 155.1312(c) to permit
States to conduct public hearings in a virtual or hybrid format in lieu
of conducting an in-person meeting. The Departments also finalize as
proposed amending 31 CFR 33.120(c) and 45 CFR 155.1320(c) to provide
that for a State's annual post-award forum, the public forum shall be
conducted in an in-person, virtual (that is, one that uses telephonic,
digital, and/or web-based platforms), or hybrid (that is, one that
provides for both in-person and virtual attendance) format. These
changes will go into effect upon publication of this final rule.
This policy is limited to allowing flexibility to host required
meetings virtually. States would still be required to continue to abide
by all other public notice requirements, including public notice
procedural requirements for waiver applications, waiver extension and
waiver amendment requests, and post-award forums. For example, States
would still be required to have a process to consult and collaborate
with Federally-recognized tribes,\21\ as applicable, as well as take
reasonable steps to provide meaningful access for individuals with
limited English proficiency (LEP) (for example, language assistance
services that may include interpretation in non-English languages
provided in-person or remotely by a qualified interpreter, translated
written content in paper or electronic form into or from languages
other than English, and written notice of availability of language
assistance services), and appropriate steps to ensure effective access
for and communication with individuals with disabilities (for example,
accessibility of information and communication technology).\22\ States
should recognize that virtual meetings may present additional
accessibility challenges for people with communications and other
disabilities, as well as to those who lack broadband access. Complying
with the requirement to ensure effective communication may entail
providing American Sign Language interpretation and real-time
captioning, as well as ensuring that the virtual platform is
interoperable with assistive technology for people with disabilities.
---------------------------------------------------------------------------
\21\ See 31 CFR 33.112(a)(2) and 45 CFR 155.1312(a)(2).
\22\ See Title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d, 45 CFR part 80), Section 1557 of the ACA (42 U.S.C. 18116, 45
CFR part 92), Section 504 of the Rehabilitation Act of 1973 (29
U.S.C 794, 45 CFR part 84), and Title II of the Americans with
Disabilities Act (42 U.S.C. 1213 et seq., 28 CFR part 35).
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Finally, the Departments clarify that under this final rule, States
shall have a process by which members of the public can request in-
person meetings for the annual post-award forum or State public
hearings on waiver applications, waiver extension requests, or waiver
amendments requests, and that States shall accommodate those requests
whenever possible. In addition, States with approved section 1332
waivers and States seeking approval for proposed waivers would continue
to have flexibility to submit requests to the Departments during
emergent situations to modify certain public participation requirements
as set forth in 31 CFR 33.118(b)(1) through (5) and 45 CFR
155.1318(b)(1) through (5).
The Departments sought comment on these proposals and received 29
comments on the section 1332 waiver proposals from various interested
parties, including States, health and disease advocacy organizations,
general advocacy organizations, health care provider organizations, and
research organizations. All comments generally expressed support for
the proposed changes, though some raised additional considerations
related to accessibility.
After consideration of comments and for the reasons outlined in the
proposed rule and our responses to comments, we are finalizing these
provisions as proposed. We summarize and respond to public comments
received on the proposed amendments to normal public notice
requirements (31 CFR 33.112, 31 CFR 33.120, 45 CFR 155.1312, and 45 CFR
155.1320) below.
Comment: The Departments received comments supporting the
additional flexibilities for States to conduct public hearings and
post-award forums in a virtual or hybrid format. Commenters agreed that
these updates would facilitate public participation on section 1332
waivers by increasing access to meetings for people who would otherwise
face barriers to attending in-person meetings (for example, due to
geographic distance, transportation, childcare, limited mobility,
chronic health conditions). Commenters also agreed with the
Departments' clarification that one meeting held in a hybrid format
does not meet the existing requirement that States hold at least two
such events in separate locations, and that States would still need to
hold at least two public hearings in distinct locations (for example,
one virtual or hybrid meeting counts as one meeting, and two virtual or
hybrid meetings count as two meetings).
[[Page 26232]]
Several comments from States shared their own positive experiences
with hosting public hearings and post-award forums virtually during the
COVID-19 pandemic. They explained that public participation did not
suffer because the meetings were held virtually. These States also
noted that the ability to hold virtual public hearings and post-award
forums without needing to request a modification from the normal public
notice requirements due to an emergent situation (as they would have
done under previous guidance) would reduce administrative hurdles.
However, one State asserted that there is no benefit from requiring
States to hold public forums in-person and that it is an inefficient
use of State resources.
Response: The Departments appreciate the support and have finalized
the rule as proposed.
Comment: We received several comments expressing concern that
virtual or hybrid meetings may simultaneously pose additional
challenges for States to comply with Federal civil rights protections
and requirements for accessibility. These commenters voiced concern
that people with disabilities, people with LEP, and people with limited
broadband access may experience barriers to participation. These
commenters encouraged the Departments to issue additional subregulatory
guidance to States that clarify related Federal civil rights
protections and requirements and to provide examples of compliance
strategies to ensure that people with accessibility needs can
meaningfully participate in the public comment process. Similarly, one
commenter recommended that CMS include in the final rule accessibility
standards for virtual and hybrid meetings, such as practices related to
pre-event information, live captioning, assistive technology, and
document and platform accessibility; and another commenter proposed
that the Departments codify essential accessibility practices in the
final rule, such as closed captioning, simultaneous interpretation,
option to dial in to meetings, and ensuring that the technology used is
compatible with assistive technologies used by people with
disabilities. Finally, one commenter recommended that the Departments
require States to include a virtual option when public hearings are
held in-person, which would allow for participation from people who
cannot safely attend in-person (for example, people who are
immunocompromised). This commenter also requested that States posting
public notice for these meetings should ensure the notices are easily
accessible and prominently displayed on their websites.
Response: The Departments agree with commenters that despite the
additional flexibilities for States to host meetings in a virtual or
hybrid format, it continues to be important for States to comply with
applicable Federal civil rights law and ensure accessibility in the
public notice and comment process. Regarding commenters' suggestion
that the Departments issue additional subregulatory guidance and
provide examples of compliance strategies, or to codify accessibility
standards and practices into the final rule, we emphasize that the
finalization of these provisions does not change requirements for
States to ensure Federal civil rights protections and meet applicable
accessibility needs. Indeed, in the 2021 Final Rule, the Departments
reiterated that any public participation processes must comply with
applicable Federal civil rights laws.\23\ The Departments expect that
States will continue to take accessibility considerations into account
to ensure a meaningful level of public input during State notice and
comment periods and post-award forums. States may reference the HHS
Office for Civil Rights for information on Federal civil rights laws
and protections.\24\ Additionally, comments on issuing subregulatory
guidance and codifying accessibility standards and practices are not
directly in response to the proposed rule and are out-of-scope. As such
we have finalized this rule as proposed.
---------------------------------------------------------------------------
\23\ Patient Protection and Affordable Care Act; Updating
Payment Parameters, Section 1332 Waiver Implementing Regulations,
and Improving Health Insurance Markets for 2022 and Beyond (86 FR
53412, 53457) <a href="https://www.govinfo.gov/content/pkg/FR-2021-09-27/pdf/2021-20509.pdf">https://www.govinfo.gov/content/pkg/FR-2021-09-27/pdf/2021-20509.pdf</a>.
\24\ <a href="https://www.hhs.gov/civil-rights/for-individuals/index.html">https://www.hhs.gov/civil-rights/for-individuals/index.html</a>.
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Finally, the Departments remind States that they must publish the
date, time, and location of the public forum in a prominent location on
the State's public website, at least 30 days prior to the date of the
planned public forum. Consistent with Federal civil rights law,
including section 1557 of the ACA, section 504 of the Rehabilitation
Act of 1973, and Title II of the Americans with Disabilities Act,
section 1332 waiver applications must be accessible to individuals with
disabilities, including when such applications are posted online. To
assist with ensuring website accessibility, States may look to national
standards issued by the Architectural and Transportation Barriers
Compliance Board (often referred to as ``section 508 standards''),\25\
or alternatively, to standards issued by the World Wide Web
Consortium's (W3C).\26\
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\25\ For more information on section 508 standards, see <a href="https://www.section508.gov/develop/web-content/">https://www.section508.gov/develop/web-content/</a>.
\26\ For more information, see <a href="https://www.w3.org">https://www.w3.org</a>.
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Comment: One commenter who supported the proposed provisions also
encouraged the Departments to consider the benefits of in-person
meetings by gathering feedback from States to provide guidance on best
practices, as in-person meetings may offer a greater level of
participant engagement compared to virtual meetings (for example, in-
person public testimonies during the State legislative process can have
more meaningful impact than virtual testimonies).
Response: As noted in the proposed rule, the Departments considered
whether to propose requiring States to hold at least one of the
required public hearings for waiver applications in-person. Some States
had previously expressed to the Departments and in public comments on
this proposed rule that they appreciated the flexibility to virtually
conduct public hearings and forums. As demonstrated over the last
several years, States have successfully hosted post-award forums and
public hearings for section 1332 waiver applications virtually to allow
for meaningful public input. Furthermore, States continue to have the
option to conduct all public hearings or post-award forums in-person.
We encourage States to consider where other opportunities for consumer
involvement exist. We believe that the proposed State and Federal
public notice and comment processes, along with the post-award public
forum provision, ensure meaningful opportunities for participation.
Comment: One commenter suggested that the Departments provide
flexibility on whether or not to conduct post-award forums due to what
the commenter asserts is a lack of statutory authority, a history of
low attendance at post-award forums, the belief that this input could
be gathered at a much lower cost with written comments, and the view
that the forums are duplicative of other State evaluation processes.
Response: The Departments require post-award forums under their
authority under section 1332 (a)(4)(B)(iv) and (v), 31 CFR 33.120, and
45 CFR 155.1320 to require States to submit periodic reports and
conduct periodic evaluations to monitor States' compliance with Federal
and regulatory requirements for section 1332 waivers. Further, we
believe that the public should have an opportunity
[[Page 26233]]
to comment at a post-award public forum as reflected in 31 CFR
33.120(c) and 45 CFR 155.1320(c) and note that the requirement for a
post-award forum is part of the periodic monitoring and evaluation of
waivers. This comment is outside the scope of this rulemaking.
B. 42 CFR Parts 435 and 600
1. Increase State Flexibility in the Use of Income and Resource
Disregards for Non-MAGI Populations (42 CFR 435.601)
In the proposed rule, we proposed to provide States with greater
flexibility to adopt income and/or resource disregards in determining
financial eligibility under section 1902(r)(2) of the Act for
individuals excepted from application of modified adjusted gross income
financial methodologies (``MAGI-based methodologies'').
Specifically, we proposed to remove the current 42 CFR
435.601(d)(4), which was first adopted in 1993. As explained in the
preamble to the proposed rule, the current rule describes the
eligibility groups to which States may apply less restrictive
methodologies and requires that any less restrictive methodologies
elected by a State be ``comparable for all persons within each category
of assistance within an eligibility group.'' As further explained in 42
CFR 435.601(d)(4), for example, if the agency chooses to apply a less
restrictive income or resource methodology to an eligibility group of
aged individuals, it must apply that methodology to all aged
individuals within the selected group.
In the preamble to the proposed rule, we noted that, upon further
review, we recognize that section 1902(r)(2)(A) of the Act does not
expressly impose a comparability mandate, and that we did not identify
a specific legal rationale for the mandate when we originally proposed
and finalized 42 CFR 435.601(d)(4), 54 FR 39421, 39433 (September 26,
1989); 58 FR 4908, 4919 (January 19, 1993). We thus concluded that the
inclusion of the mandate was a policy choice. We further considered
that section (3)(b) of the Sustaining Excellence in Medicaid Act of
2019, Public Law 116-39, permits States to target income and/or
resource disregards to people who need home and community-based
services (HCBS).\27\ In light of this analysis, and given that States
over the years have expressed interest in targeting income and/or
resource disregards to subpopulations within eligibility groups, we
proposed to eliminate paragraph (4) from 42 CFR 435.601(d).
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\27\ For further information, see CMS State Medicaid Director
Letter 21-004, ``State Flexibilities to Determine Financial
Eligibility for Individuals in Need of Home and Community-Based
Services.'' <a href="https://www.medicaid.gov/sites/default/files/2021-12/smd21004_0.pdf">https://www.medicaid.gov/sites/default/files/2021-12/smd21004_0.pdf</a>.
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We explained that we believed that eliminating this provision
would: increase State flexibility; provide States more options to
extend eligibility to specific populations based on a State's
circumstances; and enable States to achieve targeted expansions of
coverage that best meet their needs, in contrast to the all-or-nothing
approach for income and resource disregards that is effectively
required by 42 CFR 435.601(d)(4). We acknowledged, however, that it was
possible that eliminating the comparability requirement from 42 CFR
435.601(d)(4) might enable a State to narrow an existing disregard that
is broadly available to an eligibility group at present to discrete
members of the group instead. We indicated that we had not received
inquiries from States on the permissibility of such an approach, and
that we believed States would utilize the elimination of 42 CFR
435.601(d)(4) to expand eligibility. We invited comment on our
proposal.
Comment: We received many comments on our proposal. A majority of
the commenters expressed either conditional or outright support for the
proposal. Commenters agreed that the proposal would increase State
flexibility and facilitate targeted expansions of Medicaid coverage.
Commenters also indicated that the proposal would foster State
development of innovative pathways to Medicaid eligibility and help
low-income and vulnerable populations. Many commenters also agreed that
States would most likely use the flexibility to increase Medicaid
eligibility.
However, many commenters who expressed support for the proposal
(and some who opposed it) emphasized that, as the proposal leaves open
the possibility that States could use the offered flexibility to narrow
existing disregards, CMS should impose ``safeguards,'' ``guardrails,''
or ``no-harm'' requirements that would effectively prohibit the States'
use of the flexibility in this manner. Some of these commenters noted
that the proposal should not be finalized without these requirements. A
number of commenters suggested that States' exercise of the flexibility
be closely monitored, with one recommending that the proposal, if
finalized, should be reexamined if States use it in a manner that
adversely affects beneficiaries. A few commenters suggested that we
were underestimating the likelihood of States using the additional
flexibility to reduce eligibility, and that, as an example, such a
course of action might be attractive for States facing budget pressure.
Response: We appreciate the support we received for the general
concept of providing States with additional flexibility in this area.
However, given the significant concerns and comments that we received,
we have decided that we should consider this proposal further and any
necessary beneficiary protections, and we are not finalizing it at this
time. As we indicated in the preamble to the proposed rule, we believe
the proposal would provide States more options to extend eligibility.
It is not our intent, however, to offer methods by which States may be
likely to reduce it in practice or otherwise harm beneficiaries. We
therefore intend to further evaluate the comments regarding the
additional flexibility we proposed for States. We will consider the
commenters' recommendations regarding the use of ``guardrails,'' or
other beneficiary protections as well as the need for other
modifications to our proposal that would address these commenters'
concerns regarding adequate beneficiary protections in a proposal in
the future.
Comment: Many commenters who supported the proposal specifically
noted its potential to benefit ``at-risk'' or ``vulnerable''
populations, people 65 years old and older, people with blindness or
disabilities, ``dually eligible'' individuals, and prospective
medically needy individuals. Commenters also indicated that the
proposal could: allow States to develop innovative pathways to Medicaid
eligibility; potentially ease the application process for applicants
and thereby allow access to coverage more quickly; stabilize coverage
for individuals who may experience minor changes in income and/or
resources that might otherwise render them ineligible; and possibly
produce important information about current eligibility barriers that
could lead to broader reforms. One commenter suggested that the
flexibility offered by the proposal would be a ``commonsense change''
that would allow States both to improve care for non-MAGI populations
and address ``nonsensical, unintended situations that have resulted
from different eligibility groups having different income and resource
limits.''
Response: We agree that the proposal could benefit the various
populations described in these comments. We also agree that the
proposal could facilitate State innovation in expanding Medicaid
eligibility pathways and support more seamless transitions between
eligibility groups. As explained above, however,
[[Page 26234]]
we are continuing to consider the comments we received and are not
finalizing the proposal at this time.
Comment: We received many comments that raised concerns with States
using the additional flexibility offered by the proposal to reduce
existing disregards. Nearly all commenters who raised these concerns
recommended that, if we finalized the proposal, we should prohibit
States from reducing or narrowing existing disregards for portions of
eligibility groups. Some commenters also suggested that the regulatory
text, if the proposal is finalized, should require that any targeting
criteria be both grounded on a sound rationale and not discriminate
based on race, gender, sexual orientation, disability, age, or health
condition. A few other commenters recommended that, at the very least,
we should include in the regulation a requirement that individuals who
may lose eligibility due to a State reducing or narrowing existing
disregards be offered a ``transitional period'' so that they are not
immediately terminated and instead have time to potentially conform to
new eligibility rules. A few commenters questioned the legal basis for
our proposed change.
Response: We appreciate this input. As we noted in the preamble to
the proposed rule, State inquiries on the scope of the comparability
rule in 42 CFR 435.601(d)(4) have generally centered on ideas on how to
expand eligibility instead of reducing it. However, as we explained
above, we are not finalizing our proposal at this time in order to
further consider our proposal in light of these comments.
Comment: A few commenters raised operational concerns about
implementation of our proposal. A few others expressed concern that we
should obtain additional input from interested parties before moving
forward with our proposal. We also received comments not directly
related to the proposal, such as comments asserting a need for periodic
adjustments in resource standards and for working with States to
identify the most appropriate resource standards for different Medicaid
populations.
Response: We appreciate this input. As explained above, we are not
finalizing our proposal at this time to further consider our proposal
considering the comments received on the proposal.
2. Changes to the Basic Health Program Regulations (42 CFR 600.320)
Section 1331 of the Patient Protection and Affordable Care Act, as
amended by the Health Care and Education Reconciliation Act of 2010
(Pub. L. 111-152, enacted March 30, 2010), provides States with the
option to operate a Basic Health Program (BHP). In the States that
elect to operate a BHP, the State's BHP makes affordable health
benefits coverage available for lawfully present individuals under age
65 with household incomes between 133 and 200 percent of the Federal
poverty level (FPL) (or in the case of a lawfully present non-citizen,
ineligible for Medicaid or the Children's Health Insurance Program
(CHIP) due to immigration status, with household incomes between zero
and 200 percent of the FPL) who are not eligible for Medicaid, CHIP, or
other minimum essential coverage. As of the date of this final rule,
only Minnesota is implementing a BHP. Oregon has submitted a Blueprint
with a proposed BHP implementation date of July 1, 2024.
Under current 42 CFR 600.320(c), States must establish a uniform
method of determining the effective date of eligibility for enrollment
in a standard health plan followingeitherthe Medicaid process at42 CFR
435.915exclusive of42 CFR 435.915(a) or the Exchange standards at45 CFR
155.420(b)(1).
Although the current BHP regulation provides States with some
flexibility in establishing an effective eligibility date for
enrollment, it does not permit a State to select an effective date of
coverage standard for eligible individuals as of the first day of the
month following the month of application or eligibility determination
regardless of when they apply or are found eligible to enroll in a
standard health plan in the BHP. We believe eligible individuals should
have access to coverage as soon as feasible.
While the Medicaid process at 42 CFR 435.915,exclusive of paragraph
(a), allows for a State operating a BHP to have the earliest possible
effective date for its enrollees, we understand that some States may
have operational or regulatory constraints that do not allow them to
follow the Medicaid process, but may be able to implement an effective
date for all eligible applicants the first day of the month after the
month in which the eligibility determination is made, regardless of
which day of the month such determination occurs.
We are finalizing the proposed rule to revise Sec. 600.320(c) to
add a third option at paragraph (c)(3) that would allow a State
operating a BHP to establish an effective date of eligibility for
enrollment for all enrollees on the first day of the month following
the month in which BHP eligibility is determined. Under Sec.
600.320(c)(1), States would continue to have the option to follow the
Exchange standards at 45 CFR 155.420(b)(1), and under 42 CFR
600.320(c)(2), a State may follow Medicaid standards at 42 CFR 435.915
exclusive of paragraph (a).
We sought comment on the proposed additional option for determining
the effective date of eligibility for enrollment in a standard health
plan as well as an alternative option of allowing a State to establish
its own uniform effective date policy.
After consideration of comments and for the reasons outlined in the
proposed rule and our responses to comments, we are finalizing this
provision with the following modifications: we are adding Sec.
600.320(c)(4) to specify that subject to HHS approval, a State may
establish its own effective date of eligibility for enrollment policy
as long as it is (1) no later than the first day of the second month
following the date that an individual has been determined BHP-eligible;
and (2) no more restrictive than Sec. 600.320(c)(1) through (3). We
summarize and respond to public comments received on the proposed BHP
effective date policy below.
Comment: Many comments supported the additional flexibility for
States operating a BHP to follow an effective date of eligibility for
enrollment on the first day of the month following the month in which
BHP eligibility is determined.
Response: We appreciate the comments supporting our proposal, and
for reasons discussed below, we are finalizing the regulation changes
as proposed with only minor modifications.
Comment: A few commenters supported an option to allow a State to
establish its own effective date of eligibility policy, which we had
sought comment on.
Response: We appreciate the comments and agree that individual
States' needs should be taken into account. Therefore, we are adding an
option that allows a State to establish its own effective date of
eligibility for enrollment policy. We have added Sec. 600.320(c)(4),
which specifies that subject to HHS approval, a State may establish its
own effective date of eligibility policy. We specify that a State-
developed effective date must be no later than the first date of the
second month following the date that an individual has been determined
BHP-eligible. In addition, the effective date of eligibility for
enrollment must be no more restrictive than Sec. 600.320(c)(1) through
(3). This effective date policy should provide greater flexibility for
a State to meet its own population's needs
[[Page 26235]]
and not cause delays in coverage. We expect this request to be
submitted via a Blueprint revision.
Comment: One commenter questioned our discussion of the
intersection of premium payments and enrollment in a BHP. The commenter
was concerned that we were suggesting that the proposed option at Sec.
600.320(c)(3) would require enrollment after an eligibility
determination was made, regardless of whether a premium payment was
received.
Response: This regulation sets out the allowable effective dates of
coverage but does not describe all of the processes surrounding
enrollment of an individual into coverage. The lack of mention of
premium payment was not intended to preclude a State from requiring
premium payments prior to enrollment. States may require payment of
premiums prior to enrolling an individual into BHP. A State that wishes
to be particularly clear about its enrollment policies may adopt the
option under Sec. 600.320(c)(4) and specify in the BHP Blueprint that
it is providing additional time to account for a BHP-individual to pay
a premium.
C. 45 CFR Part 153--Standards Related to Reinsurance, Risk Corridors,
and HHS Risk Adjustment
In subparts A, B, D, G, and H of part 153, we established standards
for the administration of the risk adjustment program. The risk
adjustment program is a permanent program created by section 1343 of
the ACA that transfers funds from lower-than-average risk, risk
adjustment covered plans to higher-than-average risk, risk adjustment
covered plans in the individual, small group markets, or merged
markets, inside and outside the Exchanges. In accordance with Sec.
153.310(a), a State that is approved or conditionally approved by the
Secretary to operate an Exchange may establish a risk adjustment
program or have HHS do so on its behalf.\28\ HHS did not receive any
requests from States to establish and operate a risk adjustment program
for the 2025 benefit year. Therefore, HHS will operate risk adjustment
in every State and the District of Columbia for the 2025 benefit year.
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\28\ See also 42 U.S.C. 18041(c)(1).
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1. Sequestration
In accordance with the OMB Report to Congress on the Joint
Committee Reductions for Fiscal Year 2024, the HHS-operated risk
adjustment program is subject to the fiscal year 2024
sequestration.\29\ The Federal Government's 2024 fiscal year began on
October 1, 2023. Therefore, the HHS-operated risk adjustment program
will be sequestered at a rate of 5.7 percent for payments made from
fiscal year 2024 resources (that is, funds collected during the 2024
fiscal year).
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\29\ Office of Management and Budget. (2023, March 13). OMB
Report to the Congress on the BBEDCA 251A Sequestration for Fiscal
Year 2024. <a href="https://www.whitehouse.gov/wp-content/uploads/2023/03/BBEDCA_Sequestration_Report_and_Letter_3-13-2024.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/03/BBEDCA_Sequestration_Report_and_Letter_3-13-2024.pdf</a>.
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HHS, in coordination with OMB, has determined that, under section
256(k)(6) of the Balanced Budget and Emergency Deficit Control Act of
1985,\30\ as amended, and the underlying authority for the HHS-operated
risk adjustment program, the funds that are sequestered in fiscal year
2024 from the HHS-operated risk adjustment program will become
available for payment to issuers in fiscal year 2025 without further
Congressional action. If Congress does not enact deficit reduction
provisions that replace the Joint Committee reductions, the program
would be sequestered in future fiscal years, and any sequestered
funding would become available in the fiscal year following that in
which it was sequestered.
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\30\ Public Law 99-177 (1985).
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Additionally, we note that the Infrastructure Investment and Jobs
Act \31\ amended section 251A(6) of the Balanced Budget and Emergency
Deficit Control Act of 1985 and extended sequestration for the HHS-
operated risk adjustment program through fiscal year 2031 at a rate of
5.7 percent per fiscal year.\32\
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\31\ Public Law 117-58, 135 Stat. 429 (2021).
\32\ 2 U.S.C. 901a.
---------------------------------------------------------------------------
After consideration of the comment and for the reasons outlined in
the proposed rule, the HHS-operated risk adjustment program will
sequester payments made from fiscal year 2024 resources at a rate of
5.7 percent. We summarize and respond to the public comment received on
the fiscal year 2024 sequestration rate below.
Comment: One commenter acknowledged the sequestration rate for the
HHS-operated risk adjustment program.
Response: The HHS-operated risk adjustment program will sequester
payments made from fiscal year 2024 resources at a rate of 5.7 percent.
2. HHS Risk Adjustment (Sec. 153.320)
The HHS risk adjustment models predict plan liability for an
average enrollee based on that person's age, sex, and diagnoses (also
referred to as hierarchical condition categories (HCCs)), producing a
risk score. The HHS risk adjustment methodology utilizes separate
models for adults, children, and infants to account for clinical and
cost differences in each age group. In the adult and child models, the
relative risk assigned to an individual's age, sex, and diagnoses are
added together to produce an individual risk score. Additionally, to
calculate enrollee risk scores in the adult models, we added enrollment
duration factors beginning with the 2017 benefit year,\33\ and
prescription drug categories (RXCs) beginning with the 2018 benefit
year.\34\ Starting with the 2023 benefit year, we removed the severity
illness factors in the adult models and added interacted HCC count
factors (that is, additional factors that express the presence of a
severity or transplant HCC in combination with a specified number of
total payment HCCs or HCC groups on the enrollee's record) to the adult
and child models \35\ applicable to certain severity and transplant
HCCs.\36\
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\33\ For the 2017 through 2022 benefit years, there is a set of
11 binary enrollment duration factors in the adult models that
decrease monotonically from one to 11 months, reflecting the
increased annualized costs associated with fewer months of
enrollments. See, for example, 81 FR 94071 through 94074. These
enrollment duration factors were replaced beginning with the 2023
benefit year with HCC-contingent enrollment duration factors for up
to 6 months in the adult models. See, for example, 87 FR 27228
through 27230.
\34\ For the 2018 benefit year, there were 12 RXCs, but starting
with the 2019 benefit year, the two severity-only RXCs were removed
from the adult models. See, for example, 83 FR 16941.
\35\ See Table 1 for a list of factors in the adult models, and
Table 2 for a list of factors in the child models.
\36\ See 87 FR 27224 through 27228.
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Infant risk scores are determined by inclusion in one of 25
mutually exclusive groups, based on the infant's maturity and the
severity of diagnoses. If applicable, the risk score for adults,
children, or infants is multiplied by a cost sharing reduction (CSR)
adjustment factor. The enrollment-weighted average risk score of all
enrollees in a particular risk adjustment covered plan (also referred
to as the plan liability risk score (PLRS)) within a geographic rating
area is one of the inputs into the State payment transfer formula,\37\
which determines the State transfer payment or charge that an issuer
will receive or be required to pay for that plan for the applicable
State market risk pool for a given benefit year. Thus, the HHS risk
[[Page 26236]]
adjustment models predict average group costs to account for risk
across plans, in keeping with the Actuarial Standards Board's Actuarial
Standards of Practice for risk classification.
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\37\ The State payment transfer formula refers to the part of
the Federally certified risk adjustment methodology that applies in
States where HHS is responsible for operating the program. The
formula calculates payments and charges at the State market risk
pool level (prior to the calculation of the high-cost risk pool
payment and charge terms that apply beginning with the 2018 benefit
year). See, for example, 81 FR 94080.
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a. Data for HHS Risk Adjustment Model Recalibration for the 2025
Benefit Year
In the HHS Notice of Benefit and Payment Parameters for 2025
proposed rule (88 FR 82510, 82527), we proposed to recalibrate the 2025
benefit year HHS risk adjustment models with the 2019, 2020, and 2021
enrollee-level EDGE data. In the proposed rule, we explained the
history of recalibrating the risk adjustment models with enrollee-level
EDGE data and why we use three years of blended data for
recalibration.\38\ Given this history and reasoning, we proposed to
determine coefficients for the 2025 benefit year based on a blend of
separately solved coefficients from the 2019, 2020, and 2021 benefit
years' enrollee-level EDGE data, with the costs of services identified
from the data trended between the relevant year of data and the 2025
benefit year.\39\ The coefficients listed in Tables 1 through 6 reflect
the use of trended 2019, 2020, and 2021 benefit year enrollee-level
EDGE data, as well as other HHS risk adjustment model updates finalized
in this final rule (including, for example, the pricing adjustment for
Hepatitis C drugs).
---------------------------------------------------------------------------
\38\ 88 FR 82510 at 82527 through 82528.
\39\ As described in the 2016 Risk Adjustment White Paper
(<a href="https://www.cms.gov/cciio/resources/forms-reports-and-other-resources/downloads/ra-march-31-white-paper-032416.pdf">https://www.cms.gov/cciio/resources/forms-reports-and-other-resources/downloads/ra-march-31-white-paper-032416.pdf</a>) and the 2017
Payment Notice (81 FR 12218), we subdivide expenditures into
traditional drugs, specialty drugs, medical services, and preventive
services and determine trend factors separately for each category of
expenditure. In determining these trend factors, we consult our
actuarial experts, review relevant Unified Rate Review Template
(URRT) submission data, analyze multiple years of enrollee-level
EDGE data, and consult National Health Expenditure Accounts (NHEA)
data as well as external reports and documents published by third
parties. In this process, we aim to determine trends that reflect
changes in cost of care rather than gross growth in expenditures. As
such, we believe the trend factors we used for each expenditure
category for the 2025 benefit year are appropriate for the most
recent changes in cost of care that we have seen in the market.
---------------------------------------------------------------------------
We sought comment on the proposal to determine 2025 benefit year
coefficients for the HHS risk adjustment models based on a blend of
separately solved coefficients from the 2019, 2020, and 2021 enrollee-
level EDGE data.
After consideration of comments and for the reasons outlined in the
proposed rule and our responses to comments, we are finalizing this
approach as proposed. We summarize and respond to public comments
received on the proposed enrollee-level EDGE data to be used for HHS
risk adjustment model recalibration for the 2025 benefit year below.
Comment: A few commenters supported utilizing the 2019, 2020, and
2021 enrollee-level EDGE data to recalibrate the risk adjustment models
for the 2025 benefit year as proposed. Other commenters opposed using
these years of enrollee-level EDGE data due to concerns about the
impact of the COVID-19 PHE on 2020 and 2021 benefit year enrollee-level
EDGE data.
Response: We are finalizing the use of the 2019, 2020, and 2021
enrollee-level EDGE data to recalibrate the 2025 risk adjustment models
as proposed. As detailed further below, our analyses found the 2020 and
2021 benefit year enrollee-level EDGE data is sufficiently similar to
prior years of enrollee-level EDGE data such that exclusion of these
data years from the risk adjustment model recalibration is not
warranted.
We recognize that if a benefit year of enrollee-level EDGE data has
significant changes that differentially impact certain conditions or
populations relative to others or is sufficiently anomalous relative to
expected future patterns of care, we should carefully consider what
impact that benefit year of data could have if it is used in the annual
model recalibration for the HHS-operated risk adjustment program.\40\
This includes consideration of whether to exclude or adjust that
benefit year of data to increase the models' predictive validity or
otherwise limit the impact of anomalous trends. For this reason, we
conducted extensive analysis on the 2020 benefit year enrollee-level
EDGE data to consider its inclusion in the recalibration of the 2024
benefit year risk adjustment models. In the 2024 Payment Notice
proposed rule \41\ and final rule \42\ we discussed our analysis of the
2020 benefit year data to identify possible impacts of the COVID-19
PHE.\43\ Likewise, when we were developing the proposal for
recalibration of the 2025 benefit year risk adjustment models, we
conducted similar analyses on the 2021 benefit year enrollee-level EDGE
data as we did to the 2020 benefit year enrollee-level EDGE data to
examine the potential impact of the COVID-19 PHE. We did not find any
notable anomalous trends, especially when considering that every year
of data can be unique, and therefore, some level of deviation from year
to year is expected. Specifically, our analysis found:
---------------------------------------------------------------------------
\40\ Since the start of model calibration for the HHS risk
adjustment models in benefit year 2014, the COVID-19 PHE has been
the only such situation to date. Other events and policy changes
have not risen to the same level of uniqueness or impact.
\41\ 87 FR 78214 through 78218.
\42\ 88 FR 25749 through 25754.
\43\ This analysis included assessing how the 2020 benefit year
enrollee-level EDGE recalibration data compares to 2019 benefit year
enrollee-level EDGE recalibration data.
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<bullet> The total sample size in the recalibration data set was
similar between the 2019, 2020, and 2021 benefit years, with the
individual market at the national level seeing an increase in
enrollment in the 2021 benefit year and the small group market at the
national level seeing a slight decrease in enrollment in the 2021
benefit year.
<bullet> In the 2021 EDGE enrollee-level recalibration data set,
PMPM spending increased substantially relative to the 2020 benefit
year. The increased percentage was similar for institutional and
professional services, preventive services, and drugs. While the year-
over-year increase was larger than usual, the 2-year increase in
spending between 2019 and 2021 was more consistent with historical
trends. For both 2020 and 2021, year-over-year spending changes were
consistent across enrollee risk factors and thus did not skew the
relative factors used in the HHS risk adjustment models.
<bullet> Across all data submitted through issuer's EDGE servers
between 2019 to 2020 benefit years for enrollees in our recalibration
sample, there was a 3,681 percent increase in claims with telehealth
services, whereas between the 2020 and 2021 benefit years, we observed
a 1.25 percent increase in claims with telehealth services. Thus, use
of telehealth services remained much higher in the 2021 benefit year
than in the 2019 benefit year. While it is likely the continued higher
use of telehealth services in 2021 was in part a response to the
ongoing COVID pandemic in 2021, it is also at least in part due to
changes in patterns of care that can be expected to continue into
future benefit years. We therefore expect that the use of telehealth
services may continue at a level somewhere between the higher levels
observed in the 2020 and 2021 benefit years and the lower 2019 benefit
year levels in the 2025 benefit year, as would be appropriately
reflected by including all three data years in the 2025 EDGE data
recalibration.
<bullet> The percentage of enrollees with one or more HCCs was
similar between the 2019 and 2020 benefit year enrollee-level EDGE
recalibration data. The percentage of enrollees with one or more HCC
increased slightly between the 2020 and 2021 benefit year enrollee-
level EDGE recalibration data sets in
[[Page 26237]]
both the recalibration and full data sets, as is the usual historical
trend.
<bullet> Individual HCC frequencies and costs generally remained
stable between the 2019, 2020, and 2021 benefit year enrollee-level
EDGE recalibration data sets, even for the HCCs related to the severe
manifestations of COVID-19. One exception was a notable increase in
frequency for HCC 127 Cardio-Respiratory Failure and Shock, Including
Respiratory Distress Syndromes, which was likely coded for cases in
which acute respiratory distress syndrome (ARDS) was a manifestation of
COVID-19, but relative allowed charges, and therefore, risk adjustment
model coefficients, for HCC 127 (Cardio-Respiratory Failure and Shock,
Including Respiratory Distress Syndromes) remained similar in 2021
compared to 2019 and 2020. We expect that as least some severe
manifestations of COVID-19 are likely to continue to occur through the
2025 benefit year and those enrollees would continue to receive HCC 127
(Cardio-Respiratory Failure and Shock, Including Respiratory Distress
Syndromes).
<bullet> RXC frequencies and costs were generally stable between
the 2019, 2020, and 2021 benefit year enrollee-level EDGE recalibration
data sets, with the exception of RXC 10 Cystic Fibrosis Agents, for
which a new drug was introduced that increased costs in the 2020 and
2021 data compared to the 2019 data. We expect the continued use of
this new drug to cause RXC 10 (Cystic Fibrosis Agents) costs to remain
at the higher levels reflected in the 2020 and 2021 benefit years
through the 2025 benefit year.
<bullet> The coefficients for the 2021 benefit year enrollee-level
EDGE recalibration data are similar to the 2019 and 2020 benefit year's
coefficients and are consistent with typical changes in coefficients
for new years of data. A major benefit of blending separately solved
models across three benefit years of data (that is, 2019, 2020, and
2021) is that unique features specific to one benefit year are captured
but not over-emphasized.
Thus, after analyzing our results, we concluded there were no
significant anomalies in the 2021 benefit year enrollee-level EDGE data
to warrant precluding its inclusion from the 2025 benefit year HHS risk
adjustment model recalibration. This is consistent with how we
ultimately concluded there were no significant anomalies in the 2020
benefit year enrollee-level EDGE data to warrant precluding its
inclusion from risk adjustment model recalibration.\44\ In fact, the
analysis we conducted confirmed that its inclusion was within the range
of previous year-to-year coefficient changes, and that many of the
changes observed are likely to persist through the 2025 benefit year,
as intended when transitioning to more recent years of data in model
recalibration. Further, the blending of the coefficients from the
separately solved models for benefit years 2020 and 2021, with benefit
year 2019, also helps promote stability and we believe would
sufficiently account for any differences resulting from the COVID-19
PHE.
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\44\ 87 FR 25749 through 25754.
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After consideration of comments and for the reasons outlined in the
proposed rule and our responses to comments above, we are finalizing
the approach for recalibrating the HHS risk adjustment models for the
2025 benefit year as proposed. The model coefficients for the 2025
benefit year listed in Tables 1 through 6 of this final rule are based
on a blend of equally-weighted, separately solved coefficients from the
2019, 2020, and 2021 benefit years of enrollee-level EDGE data for all
coefficients.
b. Pricing Adjustment for the Hepatitis C Drugs
For the 2025 benefit year, we proposed to continue applying a
market pricing adjustment to the plan liability associated with
Hepatitis C drugs in the HHS risk adjustment models.\45\ Since the 2020
benefit year HHS risk adjustment models, we have been making a market
pricing adjustment to the plan liability associated with Hepatitis C
drugs to reflect future market pricing prior to solving for
coefficients for the models.\46\ The purpose of this market pricing
adjustment is to account for significant pricing changes between the
data years used for recalibrating the models and the applicable benefit
year of risk adjustment as a result of the introduction of new and
generic Hepatitis C drugs.\47\
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\45\ See, for example, 84 FR 17463 through 17466.
\46\ The Hepatitis C drugs market pricing adjustment to plan
liability is applied for all enrollees taking drugs mapped to RXC 2:
Anti-Hepatitis C (HCV) Agents, Direct Acting Agents in the data used
for recalibration.
\47\ Silseth, S., & Shaw, H. (2021). Analysis of prescription
drugs for the treatment of hepatitis C in the United States.
Milliman White Paper. <a href="https://www.milliman.com/-/media/milliman/pdfs/2021-articles/6-11-21-analysis-prescription-drugs-treatment-hepatitis-c-us.ashx">https://www.milliman.com/-/media/milliman/pdfs/2021-articles/6-11-21-analysis-prescription-drugs-treatment-hepatitis-c-us.ashx</a>.
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We sought comment on our proposal to apply a market pricing
adjustment to the plan liability associated with Hepatitis C drugs for
the 2025 benefit year.
After consideration of comments and for the reasons outlined in the
proposed rule and our responses to comments, we are finalizing this
adjustment as proposed. We summarize and respond to public comments
received on the proposed pricing adjustment for Hepatitis C drugs
below.
Comment: A few commenters supported the proposed Hepatitis C
pricing adjustment in the risk adjustment models and noted that a
pricing adjustment was still warranted for Hepatitis C drugs. Other
commenters expressed concern about the Hepatitis C pricing adjustment
and cautioned against reducing the Hepatitis C RXC coefficient more
than the expected decrease in cost as reducing the coefficient in such
a manner may incentivize issuers to reduce the availability of
treatment.
Response: We agree with commenters that continuing to apply the
Hepatitis C pricing adjustment in the 2025 benefit year HHS risk
adjustment models remains appropriate and are finalizing the Hepatitis
C pricing adjustment as proposed. As discussed in the proposed rule, as
part of the 2025 benefit year model recalibration analysis, we
reassessed the cost trend for Hepatitis C drugs using available
enrollee-level EDGE data (including 2021 benefit year data) to consider
whether the adjustment was still needed and if it is still needed,
whether it should be modified. Specifically, although generic Hepatitis
C drugs became available on the market in 2019, and therefore were
available for all 3 years of data (2019-2021) used for the 2025 benefit
year model recalibration, our analysis of the data continued to observe
that costs for Hepatitis C drugs are not increasing at the same rate as
other drug costs between the recalibration data years and the
applicable benefit year of risk adjustment, likely due to continued
increases in the proportion of Hepatitis C drug prescriptions for
generic versions of the drugs. As such, we do not believe that the
trends used to reflect growth in the prescription drug costs due to
inflation and related factors for recalibrating the models would
appropriately reflect the average cost of Hepatitis C treatments
expected in the 2025 benefit year. Therefore, we believe a market
pricing adjustment specific to Hepatitis C drugs in the HHS risk
adjustment models for the 2025 benefit year is necessary to account for
the lack of growth in Hepatitis C drug prices relative to other
prescription drugs in the market between the data years used for
recalibrating the models and the
[[Page 26238]]
applicable benefit year of risk adjustment due to the introduction of
new and generic Hepatitis C drugs in recent years. In making this
determination, HHS consulted its actuarial experts and analyzed the
most recent enrollee-level EDGE data available to further assess the
changing costs associated with Hepatitis C enrollees. In developing the
Hepatitis C RXC pricing adjustment for the 2025 benefit year, we
considered that we had moved into the data years (2019-2021) under
which the generic Hepatitis C drugs were available in the market for
all of the data years used for model recalibration, and therefore, to
avoid over-adjusting the Hepatitis C RXC, our pricing adjustment for
the 2025 benefit year does not reduce the coefficient as much as prior
benefit years. Instead, our pricing adjustment trends the Hepatitis C
drugs at a lower rate than the other prescription drugs in the risk
adjustment models to reflect the lack of cost increases observed in the
Hepatitis C drugs in 2021.
Thus, we believe that the Hepatitis C pricing adjustment we are
finalizing accurately captures the anticipated costs of Hepatitis C
drugs for the 2025 benefit year using the most recently available
enrollee-level EDGE data, balances the need to deter gaming practices
with the need to ensure that issuers are adequately compensated, and
does not undermine recent progress in the treatment of Hepatitis C. We
intend to continue to reassess this pricing adjustment as part of
future benefit years' model recalibrations using additional years of
available enrollee-level EDGE data and plan to propose phasing out the
market adjustment if and when appropriate.
c. List of Factors To Be Employed in the HHS Risk Adjustment Models
(Sec. 153.320)
The 2025 benefit year HHS risk adjustment model factors resulting
from the equally weighted (averaged) blended factors from separately
solved models using the 2019, 2020, and 2021 enrollee-level EDGE data
are shown in Tables 1 through 6. The adult, child, and infant models
have been adjusted to account for the high-cost risk pool payment
parameters by removing 60 percent of costs above the $1 million
threshold.\48\ Table 1 contains factors for each adult model, including
the age-sex, HCCs, RXCs, RXC-HCC interactions, interacted HCC counts,
and enrollment duration coefficients. Table 2 contains the factors for
each child model, including the age-sex, HCCs, and interacted HCC
counts coefficients. Table 3 lists the HCCs selected for the interacted
HCC counts factors that would apply to the adult and child models.
Table 4 contains the factors for each infant model. Tables 5 and 6
contain the HCCs included in the infant models' maturity and severity
categories, respectively.
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\48\ We did not propose any changes to the high-cost risk pool
parameters for the 2025 benefit year. Therefore, we are maintaining
the $1 million attachment point and 60 percent coinsurance rate for
the 2025 benefit year.
Table 1--Adult HHS Risk Adjustment Model Factors for the 2025 Benefit Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCC or RXC No. Factor Platinum Gold Silver Bronze Catastrophic
--------------------------------------------------------------------------------------------------------------------------------------------------------
Demographic Factors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Age 21-24, Male.......................... 0.189 0.128 0.086 0.057 0.056
Age 25-29, Male.......................... 0.197 0.133 0.088 0.056 0.055
Age 30-34, Male.......................... 0.230 0.160 0.110 0.073 0.072
Age 35-39, Male.......................... 0.249 0.174 0.119 0.077 0.076
Age 40-44, Male.......................... 0.282 0.203 0.143 0.095 0.094
Age 45-49, Male.......................... 0.312 0.228 0.164 0.112 0.111
Age 50-54, Male.......................... 0.381 0.290 0.218 0.161 0.160
Age 55-59, Male.......................... 0.428 0.330 0.254 0.191 0.189
Age 60-64, Male.......................... 0.472 0.365 0.282 0.212 0.210
Age 21-24, Female........................ 0.285 0.196 0.127 0.078 0.076
Age 25-29, Female........................ 0.308 0.212 0.137 0.082 0.081
Age 30-34, Female........................ 0.370 0.268 0.188 0.126 0.125
Age 35-39, Female........................ 0.428 0.323 0.239 0.174 0.172
Age 40-44, Female........................ 0.482 0.372 0.284 0.211 0.209
Age 45-49, Female........................ 0.481 0.369 0.277 0.200 0.198
Age 50-54, Female........................ 0.519 0.404 0.307 0.226 0.224
Age 55-59, Female........................ 0.482 0.368 0.271 0.191 0.189
Age 60-64, Female........................ 0.475 0.358 0.261 0.179 0.176
HCC001....................... HIV/AIDS................................. 0.342 0.265 0.234 0.197 0.196
HCC002....................... Septicemia, Sepsis, Systemic Inflammatory 9.075 8.875 8.830 8.740 8.739
Response Syndrome/Shock.
HCC003....................... Central Nervous System Infections, Except 8.379 8.276 8.229 8.151 8.149
Viral Meningitis.
HCC004....................... Viral or Unspecified Meningitis.......... 8.328 8.217 8.161 8.071 8.068
HCC006....................... Opportunistic Infections................. 8.532 8.478 8.419 8.333 8.330
HCC008....................... Metastatic Cancer........................ 23.002 22.629 22.616 22.506 22.506
HCC009....................... Lung, Brain, and Other Severe Cancers, 12.575 12.312 12.271 12.156 12.155
Including Pediatric Acute Lymphoid
Leukemia.
HCC010....................... Non-Hodgkin Lymphomas and Other Cancers 5.705 5.535 5.473 5.362 5.360
and Tumors.
HCC011....................... Colorectal, Breast (Age < 50), Kidney, 3.651 3.476 3.405 3.283 3.280
and Other Cancers.
HCC012....................... Breast (Age 50+) and Prostate Cancer, 2.424 2.295 2.230 2.129 2.127
Benign/Uncertain Brain Tumors, and Other
Cancers and Tumors.
HCC013....................... Thyroid Cancer, Melanoma, 0.967 0.875 0.785 0.677 0.674
Neurofibromatosis, and Other Cancers and
Tumors.
HCC018....................... Pancreas Transplant Status............... 6.320 6.253 6.239 6.228 6.219
HCC019....................... Diabetes with Acute Complications........ 0.259 0.214 0.172 0.130 0.128
HCC020....................... Diabetes with Chronic Complications...... 0.259 0.214 0.172 0.130 0.128
HCC021....................... Diabetes without Complication............ 0.259 0.214 0.172 0.130 0.128
HCC022....................... Type 1 Diabetes Mellitus, add-on to 0.311 0.282 0.244 0.180 0.178
Diabetes HCCs 19-21.
HCC023....................... Protein-Calorie Malnutrition............. 11.342 11.221 11.179 11.105 11.104
HCC026....................... Mucopolysaccharidosis.................... 23.821 23.642 23.619 23.556 23.556
HCC027....................... Lipidoses and Glycogenosis............... 23.821 23.642 23.619 23.556 23.556
HCC029....................... Amyloidosis, Porphyria, and Other 6.512 6.413 6.373 6.305 6.303
Metabolic Disorders.
[[Page 26239]]
HCC030....................... Adrenal, Pituitary, and Other Significant 1.314 1.237 1.184 1.108 1.104
Endocrine Disorders.
HCC034....................... Liver Transplant Status/Complications.... 6.014 6.070 6.119 6.189 6.189
HCC035_1 \a\................. Acute Liver Failure/Disease, Including 7.464 7.288 7.254 7.181 7.184
Neonatal Hepatitis.
HCC035_2..................... Chronic Liver Failure/End-Stage Liver 2.319 2.160 2.125 2.042 2.041
Disorders.
HCC036....................... Cirrhosis of Liver....................... 0.613 0.534 0.490 0.417 0.416
HCC037_1..................... Chronic Viral Hepatitis C................ 0.514 0.454 0.403 0.348 0.347
HCC037_2..................... Chronic Hepatitis, Except Chronic Viral 0.514 0.454 0.403 0.348 0.347
Hepatitis C.
HCC041....................... Intestine Transplant Status/Complications 6.014 6.070 6.119 6.189 6.189
HCC042....................... Peritonitis/Gastrointestinal Perforation/ 11.053 10.907 10.903 10.857 10.857
Necrotizing Enterocolitis.
HCC045....................... Intestinal Obstruction................... 5.038 4.837 4.783 4.669 4.668
HCC046....................... Chronic Pancreatitis..................... 2.467 2.298 2.253 2.167 2.166
HCC047....................... Acute Pancreatitis....................... 2.467 2.298 2.251 2.147 2.146
HCC048....................... Inflammatory Bowel Disease............... 1.108 1.023 0.944 0.820 0.816
HCC054....................... Necrotizing Fasciitis.................... 8.617 8.468 8.446 8.388 8.388
HCC055....................... Bone/Joint/Muscle Infections/Necrosis.... 4.567 4.401 4.381 4.321 4.322
HCC056....................... Rheumatoid Arthritis and Specified 1.082 0.993 0.930 0.845 0.843
Autoimmune Disorders.
HCC057....................... Systemic Lupus Erythematosus and Other 0.399 0.329 0.249 0.146 0.142
Autoimmune Disorders.
HCC061....................... Osteogenesis Imperfecta and Other 1.924 1.801 1.740 1.639 1.637
Osteodystrophies.
HCC062....................... Congenital/Developmental Skeletal and 1.924 1.801 1.740 1.639 1.637
Connective Tissue Disorders.
HCC063....................... Cleft Lip/Cleft Palate................... 0.922 0.819 0.759 0.678 0.676
HCC066....................... Hemophilia............................... 72.761 72.491 72.466 72.379 72.380
HCC067....................... Myelodysplastic Syndromes and 11.237 11.118 11.090 11.024 11.020
Myelofibrosis.
HCC068....................... Aplastic Anemia.......................... 11.237 11.118 11.090 11.024 11.020
HCC069....................... Acquired Hemolytic Anemia, Including 11.237 11.118 11.090 11.024 11.020
Hemolytic Disease of Newborn.
HCC070 \b\................... Sickle Cell Anemia (Hb-SS) and 1.690 1.607 1.553 1.479 1.477
Thalassemia Beta Zero.
HCC071 \b\................... Sickle-Cell Disorders, Except Sickle-Cell 1.690 1.607 1.553 1.479 1.477
Anemia (Hb-SS) and Thalassemia Beta
Zero; Beta Thalassemia Major.
HCC073....................... Combined and Other Severe 4.065 3.975 3.947 3.887 3.885
Immunodeficiencies.
HCC074....................... Disorders of the Immune Mechanism........ 4.065 3.975 3.947 3.887 3.885
HCC075....................... Coagulation Defects and Other Specified 2.148 2.068 2.020 1.947 1.946
Hematological Disorders.
HCC081....................... Drug Use with Psychotic Complications.... 1.602 1.472 1.377 1.233 1.229
HCC082....................... Drug Use Disorder, Moderate/Severe, or 1.602 1.472 1.377 1.233 1.229
Drug Use with Non-Psychotic
Complications.
HCC083....................... Alcohol Use with Psychotic Complications. 0.902 0.788 0.716 0.612 0.610
HCC084....................... Alcohol Use Disorder, Moderate/Severe, or 0.902 0.788 0.716 0.612 0.610
Alcohol Use with Specified Non-Psychotic
Complications.
HCC087_1..................... Schizophrenia............................ 2.227 2.063 1.986 1.864 1.862
HCC087_2..................... Delusional and Other Specified Psychotic 2.190 2.030 1.951 1.820 1.818
Disorders, Unspecified Psychosis.
HCC088....................... Major Depressive Disorder, Severe, and 0.969 0.871 0.786 0.672 0.669
Bipolar Disorders.
HCC090....................... Personality Disorders.................... 0.663 0.586 0.492 0.379 0.376
HCC094....................... Anorexia/Bulimia Nervosa................. 2.000 1.894 1.827 1.722 1.719
HCC096....................... Prader-Willi, Patau, Edwards, and 8.590 8.557 8.527 8.484 8.481
Autosomal Deletion Syndromes.
HCC097....................... Down Syndrome, Fragile X, Other 0.938 0.875 0.826 0.764 0.763
Chromosomal Anomalies, and Congenital
Malformation Syndromes.
HCC102....................... Autistic Disorder........................ 0.718 0.641 0.553 0.455 0.452
HCC103....................... Pervasive Developmental Disorders, Except 0.663 0.586 0.492 0.379 0.376
Autistic Disorder.
HCC106....................... Traumatic Complete Lesion Cervical Spinal 9.112 8.957 8.905 8.806 8.805
Cord.
HCC107....................... Quadriplegia............................. 9.112 8.957 8.905 8.806 8.805
HCC108....................... Traumatic Complete Lesion Dorsal Spinal 6.380 6.241 6.187 6.089 6.087
Cord.
HCC109....................... Paraplegia............................... 6.380 6.241 6.187 6.089 6.087
HCC110....................... Spinal Cord Disorders/Injuries........... 5.153 4.975 4.928 4.826 4.824
HCC111....................... Amyotrophic Lateral Sclerosis and Other 5.090 4.946 4.876 4.755 4.753
Anterior Horn Cell Disease.
HCC112....................... Quadriplegic Cerebral Palsy.............. 0.730 0.629 0.565 0.467 0.465
HCC113....................... Cerebral Palsy, Except Quadriplegic...... 0.424 0.355 0.299 0.219 0.217
HCC114....................... Spina Bifida and Other Brain/Spinal/ 1.205 1.120 1.063 0.972 0.969
Nervous System Congenital Anomalies.
HCC115....................... Myasthenia Gravis/Myoneural Disorders and 5.216 5.134 5.117 5.076 5.076
Guillain-Barre Syndrome/Inflammatory and
Toxic Neuropathy.
HCC117....................... Muscular Dystrophy....................... 1.393 1.304 1.236 1.136 1.134
HCC118....................... Multiple Sclerosis....................... 2.218 2.101 2.042 1.944 1.941
HCC119....................... Parkinson's, Huntington's, and 1.393 1.304 1.236 1.136 1.134
Spinocerebellar Disease, and Other
Neurodegenerative Disorders.
HCC120....................... Seizure Disorders and Convulsions........ 1.040 0.948 0.884 0.792 0.789
HCC121....................... Hydrocephalus............................ 9.585 9.491 9.440 9.362 9.360
HCC122 \c\................... Nontraumatic Coma, Except Diabetic, 10.181 10.044 9.986 9.886 9.884
Hepatic, or Hypoglycemic; Nontraumatic
Brain Compression/Anoxic Damage.
HCC123....................... Narcolepsy and Cataplexy................. 4.533 4.405 4.340 4.237 4.235
HCC125....................... Respirator Dependence/Tracheostomy Status 21.869 21.665 21.623 21.532 21.534
HCC126....................... Respiratory Arrest....................... 8.558 8.341 8.300 8.210 8.209
HCC127....................... Cardio-Respiratory Failure and Shock, 8.558 8.341 8.300 8.210 8.209
Including Respiratory Distress Syndromes.
HCC128....................... Heart Assistive Device/Artificial Heart.. 17.404 17.301 17.262 17.214 17.224
HCC129....................... Heart Transplant Status/Complications.... 17.404 17.301 17.262 17.214 17.224
[[Page 26240]]
HCC130....................... Heart Failure............................ 1.896 1.809 1.773 1.707 1.705
HCC131....................... Acute Myocardial Infarction.............. 4.955 4.737 4.720 4.652 4.653
HCC132....................... Unstable Angina and Other Acute Ischemic 3.690 3.489 3.452 3.355 3.355
Heart Disease.
HCC135....................... Heart Infection/Inflammation, Except 8.848 8.756 8.695 8.602 8.599
Rheumatic.
HCC137....................... Hypoplastic Left Heart Syndrome and Other 2.122 2.033 1.975 1.895 1.893
Severe Congenital Heart Disorders.
HCC138....................... Major Congenital Heart/Circulatory 2.122 2.033 1.975 1.895 1.893
Disorders.
HCC139....................... Atrial and Ventricular Septal Defects, 2.122 2.033 1.975 1.895 1.893
Patent Ductus Arteriosus, and Other
Congenital Heart/Circulatory Disorders.
HCC142....................... Specified Heart Arrhythmias.............. 1.921 1.819 1.752 1.645 1.645
HCC145....................... Intracranial Hemorrhage.................. 10.648 10.490 10.444 10.356 10.355
HCC146....................... Ischemic or Unspecified Stroke........... 1.428 1.314 1.282 1.212 1.212
HCC149....................... Cerebral Aneurysm and Arteriovenous 2.218 2.102 2.044 1.944 1.941
Malformation.
HCC150....................... Hemiplegia/Hemiparesis................... 3.309 3.190 3.178 3.134 3.134
HCC151....................... Monoplegia, Other Paralytic Syndromes.... 2.494 2.386 2.342 2.264 2.262
HCC153....................... Atherosclerosis of the Extremities with 7.988 7.837 7.849 7.827 7.828
Ulceration or Gangrene.
HCC154....................... Vascular Disease with Complications...... 5.128 4.989 4.949 4.869 4.868
HCC156....................... Pulmonary Embolism and Deep Vein 7.621 7.535 7.461 7.345 7.341
Thrombosis.
HCC158....................... Lung Transplant Status/Complications..... 11.099 10.994 10.963 10.924 10.930
HCC159....................... Cystic Fibrosis.......................... 4.156 4.021 3.969 3.883 3.881
HCC160....................... Chronic Obstructive Pulmonary Disease, 0.643 0.567 0.491 0.395 0.392
Including Bronchiectasis.
HCC161_1..................... Severe Asthma............................ 0.643 0.567 0.491 0.395 0.392
HCC161_2..................... Asthma, Except Severe.................... 0.643 0.567 0.491 0.395 0.392
HCC162....................... Fibrosis of Lung and Other Lung Disorders 1.615 1.529 1.476 1.391 1.388
HCC163....................... Aspiration and Specified Bacterial 7.187 7.124 7.105 7.067 7.067
Pneumonias and Other Severe Lung
Infections.
HCC174....................... Exudative Macular Degeneration........... 1.224 1.097 1.010 0.878 0.874
HCC183....................... Kidney Transplant Status/Complications... 6.320 6.253 6.239 6.228 6.219
HCC184....................... End Stage Renal Disease.................. 20.669 20.237 20.330 20.158 20.046
HCC187....................... Chronic Kidney Disease, Stage 5.......... 0.773 0.689 0.685 0.645 0.633
HCC188....................... Chronic Kidney Disease, Severe (Stage 4). 0.773 0.689 0.685 0.645 0.633
HCC203....................... Ectopic and Molar Pregnancy.............. 1.850 1.673 1.534 1.319 1.314
HCC204....................... Miscarriage with Complications........... 0.646 0.565 0.439 0.260 0.254
HCC205....................... Miscarriage with No or Minor 0.646 0.565 0.439 0.260 0.254
Complications.
HCC207....................... Pregnancy with Delivery with Major 3.756 3.470 3.289 2.991 2.985
Complications.
HCC208....................... Pregnancy with Delivery with 3.756 3.470 3.289 2.991 2.985
Complications.
HCC209....................... Pregnancy with Delivery with No or Minor 2.769 2.554 2.335 1.972 1.962
Complications.
HCC210....................... (Ongoing) Pregnancy without Delivery with 0.815 0.714 0.561 0.370 0.363
Major Complications.
HCC211....................... (Ongoing) Pregnancy without Delivery with 0.530 0.454 0.318 0.170 0.166
Complications.
HCC212....................... (Ongoing) Pregnancy without Delivery with 0.018 0.005 0.000 0.000 0.000
No or Minor Complications.
HCC217....................... Chronic Ulcer of Skin, Except Pressure... 1.557 1.464 1.433 1.375 1.374
HCC218....................... Extensive Third-Degree Burns............. 23.714 23.524 23.474 23.384 23.383
HCC219....................... Major Skin Burn or Condition............. 2.604 2.484 2.428 2.345 2.344
HCC223....................... Severe Head Injury....................... 18.201 18.057 17.990 17.882 17.879
HCC226....................... Hip and Pelvic Fractures................. 8.018 7.783 7.765 7.688 7.688
HCC228....................... Vertebral Fractures without Spinal Cord 4.277 4.116 4.047 3.925 3.922
Injury.
HCC234....................... Traumatic Amputations and Amputation 4.861 4.706 4.682 4.619 4.618
Complications.
HCC251....................... Stem Cell, Including Bone Marrow, 18.571 18.584 18.547 18.531 18.535
Transplant Status/Complications.
HCC253....................... Artificial Openings for Feeding or 5.697 5.584 5.563 5.511 5.511
Elimination.
HCC254....................... Amputation Status, Upper Limb or Lower 0.936 0.835 0.799 0.738 0.736
Limb.
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Interacted HCC Counts Factors
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Severe illness, 1 payment HCC............ -6.014 -6.070 -6.119 -6.189 -6.189
Severe illness, 2 payment HCCs........... -5.733 -5.806 -5.833 -5.886 -5.886
Severe illness, 3 payment HCCs........... -4.904 -4.952 -4.891 -4.846 -4.844
Severe illness, 4 payment HCCs........... -4.190 -4.178 -4.033 -3.871 -3.865
Severe illness, 5 payment HCCs........... -3.522 -3.432 -3.216 -2.954 -2.945
Severe illness, 6 payment HCCs........... -3.024 -2.835 -2.557 -2.202 -2.192
Severe illness, 7 payment HCCs........... -2.432 -2.116 -1.780 -1.330 -1.318
Severe illness, 8 payment HCCs........... -2.179 -1.784 -1.416 -0.910 -0.896
Severe illness, 9 payment HCCs........... -0.287 0.253 0.676 1.279 1.294
Severe illness, 10 or more payment HCCs.. 7.398 8.299 8.836 9.657 9.679
Transplant severe illness, 4 payment HCCs 3.792 3.704 3.651 3.531 3.516
Transplant severe illness, 5 payment HCCs 7.054 6.949 6.906 6.792 6.775
Transplant severe illness, 6 payment HCCs 12.584 12.463 12.431 12.324 12.304
Transplant severe illness, 7 payment HCCs 15.636 15.506 15.473 15.364 15.346
Transplant severe illness, 8 or more 31.955 31.916 31.908 31.845 31.825
payment HCCs.
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Enrollment Duration Factors
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Enrolled for 1 month, at least one 11.208 9.742 8.808 7.844 7.818
payment HCC.
Enrolled for 2 months, at least one 5.197 4.458 3.958 3.479 3.466
payment HCC.
Enrolled for 3 months, at least one 3.378 2.898 2.549 2.224 2.216
payment HCC.
Enrolled for 4 months, at least one 2.129 1.799 1.545 1.313 1.307
payment HCC.
Enrolled for 5 months, at least one 1.586 1.340 1.143 0.959 0.955
payment HCC.
Enrolled for 6 months, at least one 1.039 0.857 0.705 0.560 0.556
payment HCC.
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[[Page 26241]]
Prescription Drug Factors
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RXC 01....................... Anti-HIV Agents.......................... 5.097 4.612 4.345 3.920 3.908
RXC 02....................... Anti-Hepatitis C (HCV) Agents, Direct 8.273 7.809 7.812 7.711 7.714
Acting Agents.
RXC 03 \d\................... Antiarrhythmics.......................... 0.080 0.072 0.064 0.051 0.036
RXC 04....................... Phosphate Binders........................ 0.901 1.115 1.007 1.206 1.390
RXC 05....................... Inflammatory Bowel Disease Agents........ 1.324 1.227 1.105 0.941 0.936
RXC 06....................... Insulin.................................. 1.366 1.193 1.018 0.844 0.838
RXC 07....................... Anti-Diabetic Agents, Except Insulin and 0.800 0.702 0.582 0.409 0.403
Metformin Only.
RXC 08....................... Multiple Sclerosis Agents................ 15.175 14.409 14.206 13.774 13.767
RXC 09 \e\................... Immune Suppressants and Immunomodulators. 12.005 11.495 11.478 11.335 11.337
RXC 10....................... Cystic Fibrosis Agents................... 17.441 17.041 17.022 16.903 16.902
RXC 01 x HCC001.............. Additional effect for enrollees with RXC 2.467 2.521 2.790 3.101 3.115
01 and HCC 001.
RXC 02 x HCC037_1, 036, Additional effect for enrollees with RXC -0.514 -0.454 -0.403 -0.348 -0.347
035_2, 035_1, 034. 02 and (HCC 037_1 or 036 or 035_2 or
035_1 or 034).
RXC 03 x HCC142.............. Additional effect for enrollees with RXC 0.000 0.000 0.000 0.000 0.000
03 and HCC 142.
RXC 04 x HCC184, 183, 187, Additional effect for enrollees with RXC 0.000 0.000 0.000 0.000 0.000
188. 04 and (HCC 184 or 183 or 187 or 188).
RXC 05 x HCC048, 041......... Additional effect for enrollees with RXC -0.688 -0.631 -0.570 -0.471 -0.468
05 and (HCC 048 or 041).
RXC 06 x HCC018, 019, 020, Additional effect for enrollees with RXC 0.402 0.444 0.532 0.544 0.546
021. 06 and (HCC 018 or 019 or 020 or 021).
RXC 07 x HCC018, 019, 020, Additional effect for enrollees with RXC -0.258 -0.213 -0.172 -0.130 -0.128
021. 07 and (HCC 018 or 019 or 020 or 021).
RXC 08 x HCC118.............. Additional effect for enrollees
[…truncated; see source link]Indexed from Federal Register on April 15, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.