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CMS Releases Proposed Notice of Benefit and Payment Parameters Rule for 2021

CMS Releases Proposed Notice of Benefit and Payment Parameters Rule for 2021
Proposed rule promotes greater stability, lower premiums, and choice in the health insurance markets

Today, the Centers for Medicare & Medicaid Services (CMS) issued the proposed annual Notice of Benefit and Payment Parameters Rule for 2021, also known as the Proposed 2021 Payment Notice. This proposed rule would update regulatory and financial standards applied to issuers and Exchanges, as well as set parameters for the risk adjustment program. Similar to Payment Notices issued in prior years, the Proposed 2021 Payment Notice contains a number of other provisions that support the Trump Administration’s ongoing commitment to lowering premiums, protecting taxpayer dollars and strengthening the health insurance markets to deliver more competition and choice for consumers.

“From day one, President Trump has been committed to providing more affordable health coverage choices to Americans who can’t afford Obamacare’s sky-high premiums,” said CMS Administrator Seema Verma. “His bold measures to promote competition on the individual market have delivered consumers a previously unheard of two consecutive years of lower premiums and increased choice for health plans. That said, premiums remain too high for those without subsidies, and we are dedicated to bringing them down.”

This proposed rule includes various provisions specifically targeted at delivering lower premiums. The rule would maintain the user fee rate charged to issuers participating on the Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal Platform (SBE-FPs). CMS is also requesting comment on whether to further reduce the user fee rate. A decrease would add to the one half of one percentage point reduction finalized for the 2020 benefit year. Savings from CMS’ ongoing efforts to improve the efficiency of the Exchanges using HealthCare.gov may make further reductions in the user fee possible and these reductions would be passed on to consumers through lower premiums.

Protecting taxpayer dollars is a top priority for the Trump Administration and this proposed rule includes a number of provisions aimed at guaranteeing premium tax credits go to the right people and pay for the right benefits. Under the proposed rule:

• Periodic data matching standards would be amended to help ensure premium subsidies are not inappropriately paid to enrollees who are determined to be deceased, or dually eligible for Medicare. 
• States would also be required to annually notify CMS of any state-required benefit mandates for which the Affordable Care Act (ACA) requires states to pay certain costs. There has been limited information collected on such mandates, which has created a potential risk where taxpayers and consumers may inappropriately be footing the bill for such mandates.
• Furthermore, CMS solicits public comment on new automatic re-enrollment processes for enrollees whose share of the premium after applying premium subsidies is $0, in order to reduce the risk of incorrect expenditures on subsidies that cannot be recovered through reconciliation.

The Proposed 2021 Payment Notice would continue to strengthen and stabilize the insurance market by updating the risk adjustment program, an important program that seeks to prevent issuers from avoiding high-cost, high-risk individuals. These technical changes would continue our ongoing efforts to improve the reliability of the risk adjustment program, which is critical to strengthening the insurance market and encouraging broader issuer participation and more choice for consumers.

In conjunction with the release of the Proposed 2021 Payment Notice, CMS published a bulletin to extend, for one additional year, the non-enforcement policy that gives states the flexibility to allow issuers to continue offering plans that do not meet all mandates and restrictions in the ACA. These plans, often called “grandmothered” plans, can be more affordable for people who choose to renew coverage with them and offers another example of this Administration’s commitment to ensure access to affordable coverage options and consumer choice.

Today, CMS also issued the Proposed 2021 Annual Letter to Issuers which provides guidance to issuers that want to offer qualified health plans (QHPs) on an FFE; the proposed Key Dates Charts for the 2020 Calendar Year; and the ICD-10 Crosswalk for potential updates to the HHS-HCC Risk Adjustment Model.

To view the proposed rule, click here: https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-02021.pdf

To view the fact sheet on the proposed rule, please click here: https://www.cms.gov/files/document/proposed-2021-hhs-notice-benefit-and-payment-parameters-fact-sheet.pdf

To view the proposed 2021 Letter to Issuers, click here: https://www.cms.gov/files/document/2021-draft-letter-issuers-clearance-version-final-13120.pdf

To view the proposed Key Dates for Calendar Year 2020 for QHP Certification, Rate Review, and Risk Adjustment, click here: https://www.cms.gov/files/document/proposed-key-dates-tables-cy2020.pdf

To view the Draft ICD-10 Crosswalk for Potential Updates to HHS-HCC Risk Adjustment Model for the 2021 Benefit Year, click here: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/index.html#Premium-Stabilization-Programs

To view the bulletin on non-enforcement of certain ACA plan requirements with respect to certain non-grandfathered health insurance coverage in the individual and small group health insurance markets, click here: https://www.cms.gov/files/document/extension-limited-non-enforcement-policy-through-calendar-year-2021.pdf

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