HHS Finalizes Exchange Program Integrity Rule

The Department of Health and Human Services (HHS) has issued a final rule that implements provisions of the Patient Protection and Affordable Care Act (ACA), with respect to the health insurance exchanges, or marketplaces. Specifically, the final rule outlines financial integrity and oversight standards with respect to the exchanges, qualified health plan (QHP) issuers in federally-facilitated exchanges (FFEs), and states with regard to the operation of risk adjustment and reinsurance programs. It also establishes additional standards for special enrollment periods, survey vendors that may conduct enrollee satisfaction surveys on behalf of QHP issuers, and issuer participation in an FFE, and makes certain amendments to definitions and standards related to the market reform rules. The final rule was published in the October 30 Federal Register.

The HHS noted that the final rule is largely unchanged from previous proposed rules and guidance documents. Proposed rules were issued in June 2013. Here are some highlights from the final rule:

Oversight of state-operated premium stabilization programs. The risk adjustment and reinsurance programs help guarantee affordable health insurance to consumers by helping to ensure a level playing field and the stabilization of premiums. To protect the financial integrity of these programs, the final rule establishes standards for the oversight of states that operate risk adjustment or reinsurance programs. The rule requires that states keep an accurate accounting for the programs, submit to the HHS and make public reports on operations, and take other steps to ensure the soundness and transparency of the programs.

Program integrity for advance payments of the premium tax credit and cost-sharing reductions. To ensure that eligible enrollees receive the correct tax credit and cost-sharing reductions, the HHS has established timeframes for refunds to eligible enrollees and providers when an issuer or marketplace incorrectly applies advance payments of the premium tax credit or cost-sharing reductions, or incorrectly assigns an individual to a plan variation (or a standard plan without cost-sharing reductions). The final rule also establishes general standards necessary for the oversight of these payments, including standards governing the maintenance of records, annual reporting of summary statistics, and audits.

Program integrity of state marketplaces. The final rule establishes standards for the oversight of state marketplaces through monitoring, reporting, and oversight of financial activities and marketplace activities. These mechanisms ensure that consumers are properly given their choices of coverage available, that consumers receive the full amount of advance payments of the premium tax credit and cost-sharing reductions for which they qualify, and that marketplaces are meeting the standards of the ACA in a transparent manner.

Oversight of QHP issuers in federally-facilitated marketplaces. To protect consumers and the financial integrity of FFMs, the final rule provides for oversight of health insurance issuers. This includes ensuring compliance with marketplace requirements, such as the maintenance of records requirement and participation in investigations and compliance reviews.

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