Stakeholder Perspectives on CMS’s 2023 Notice of Benefit and Payment Parameters: State Insurance Departments and Marketplaces

The Affordable Care Act’s (ACA) marketplaces will enter their tenth plan year in 2023. The Centers for Medicare & Medicaid Services (CMS) recently proposed a new set of rules governing the marketplaces and health insurance standards for next year.

The rule received several hundred comments from stakeholders during the 30-day comment period. CHIR reviewed a sample of comments from three stakeholder groups to better understand the impact of the proposed rules. The first two blogs in our series summarized comments from consumer advocates and insurers and brokers. This third blog in our series looks at comments submitted by state departments of insurance (DOI) and state-based marketplaces (SBMs):

Standardized Benefit Design and Plan Choice Limitation

CMS has proposed requiring insurers selling qualified health plans (QHP) on HealthCare.gov to offer standardized benefit designs beginning in 2023. These “standardized QHP options,” featuring defined benefit and cost-sharing structures, aim to help consumers with the plan selection process and prevent discriminatory benefit designs. CMS also requested feedback on mitigating “plan choice overload” given the significant growth in options available on Healthcare.gov, such as gradually limiting the number of plans insurers can offer on the federal marketplace.

While most states in our sample would not be impacted by this requirement because their marketplace does not rely on HealthCare.gov, a majority provided feedback on the standardized plan proposal. SBMs approved of the flexibility to adopt the proposed plan designs, continue requiring their own design, or opt not to require standardized plans at all. States that already require insurers to offer standardized plans were generally supportive of the proposal, though some offered suggestions for improving the federal plan design; DC’s marketplace recommended providing more services pre-deductible in standardized bronze plans and greater utilization of copayments, while California’s marketplace suggested eliminating or restricting non-standardized plans.

Oregon, which operates an SBM that uses HealthCare.gov and currently requires standardized plans, appreciated the ability to stick with its existing requirements rather than the federal standardized options. However, Oregon opposed capping the number of plans insurers can offer on HealthCare.gov. New Jersey’s DOI and Rhode Island’s marketplace echoed this sentiment; Rhode Island suggested that such restrictions only be implemented in areas with high insurer participation. The NAIC advocated for a “cautious approach” to limiting plan choice, indicating insurers should have the opportunity to market plans that relatively few consumers enroll in if they provide desired features and urging federal regulators to consult with state regulators when making determinations about whether insurers are offering too many plans.

Past-due Premiums and Guaranteed Issue

Another CMS proposal would reverse a policy that allows insurers to deny coverage to consumers with past-due premiums. Half of the states in our sample commented on this proposal, expressing unanimous support for reversing the Trump-era policy. Some state entities, including Minnesota’s marketplace, highlighted the importance of reducing barriers to coverage during the COVID-19 pandemic, and others, such as California’s DOI, noted the new policy would be particularly beneficial for low-income individuals. Oregon, while supportive of the change, suggested federal monitoring of uncollected premiums to see if additional policies are needed to protect against potential fraud.

Changes to Essential Health Benefits

The proposed rules would update several requirements related to the ACA’s essential health benefits (EHB). These changes include ending annual reporting of state-required benefits that exceed the EHB, and updating EHB nondiscrimination parameters, including (1) a new requirement to base benefit designs on clinical evidence, and (2) providing states with illustrations of “presumptively discriminatory” practices.

Almost every state DOI comment in our sample, including the NAIC, provided feedback on some aspect of the EHB proposals, with most focusing on state reporting and changes to the EHB nondiscrimination protections. DOIs strongly supported ending required reporting of state-mandated benefits. DOIs also praised the new nondiscrimination parameters, applauding the additional clarity and codification of more exacting requirements to give regulators more firm footing for enforcement efforts.

A couple of SBMs also commented on the EHB proposals. Notably, DC urged CMS to consider the potential for the clinical basis requirement to increase discriminatory benefit design due to the systemic racism and biases present in the clinical research used to justify benefit designs. For example, DC points to underrepresentation of female, Black, and Latino patients in clinical trials, as well as insufficient data on certain populations due to their exclusion from medical research. Further, the marketplace expressed concern that the new requirements could inhibit states’ health equity initiatives, such as DC’s efforts to improve access to conditions that disproportionately impact communities of color, which may not be allowed under the new standards. Based on these concerns, DC recommended additional protections against benefit designs grounded in biased clinical guidelines and requested that CMS continue allowing states’ “reasonably designed” health equity improvement efforts.

Requirements for Broker-facilitated Enrollment

Citing evidence that some brokers have been submitting marketplace applications without a consumer’s consent, CMS proposed new requirements for broker-facilitated enrollments via HealthCare.gov. These requirements include ensuring contact information provided in the application is that of the consumer or an authorized representative, getting a consumer’s consent to submit a request for a special enrollment period (SEP), and prohibiting automated interactions with the federal marketplace absent advanced written consent by CMS.

Only a handful of state representatives in our sample commented on this proposal, but those that did supported the provisions while providing recommendations for refinement. The NAIC urged CMS to consider additional protections against access to consumer accounts, such as requiring entry of a partial social security number, and recommended collaborating with state regulators and other federal agencies to prevent improper marketing of non-QHP health insurance and products outside of major medical coverage. Oregon, while supportive of the proposal, noted that the new standards should allow consumers to use a community organization’s address, alternate mailing address or phone number (as long as they are not fraudulent), or an email address created by a broker with the consumer’s permission (as long as the consumer maintains control over the email address); Oregon emphasized that using an alternate email, mailing address, or phone number is common among consumers who are new to the U.S. or lacking English proficiency. New Jersey’s DOI, which operates that state’s marketplace, indicated they “will likely explore similar standards” for broker-facilitated enrollments.

Adding Health Disparities Topic Area for Quality Improvement

Insurers offering QHPs are required to develop “quality improvement strategies” (QIS), payment incentives like increased provider reimbursements for activities related to a defined set of health care topics. Exchanges are responsible for implementing QIS requirements as part of their QHP certification processes. CMS proposed a new QIS requirement for insurers to tackle health care disparities beginning in 2023.

Roughly half of the comments in our sample provided feedback on this proposal. State responses to the new requirement were generally supportive. Pennsylvania’s DOI suggested that adding health disparities as a QIS metric will hold carriers accountable for evaluating enrollees’ health needs and identifying gaps in care delivery, and Colorado’s marketplace emphasized that the policy would help insurers focus on health disparities. Oregon, though supportive of the proposal, called for additional policies to encourage the collection and reporting of race and ethnicity data. California’s marketplace suggested stratifying associated quality measures in current QIS requirements by race and ethnicity.

Network Adequacy

CMS has proposed new standards and oversight processes for QHP provider networks. The new requirements include quantitative network access standards, such as maximum travel times and distances between enrollees and providers; new requirements for tiered networks; and prospective network adequacy reviews. Further, CMS has increased the proportion of “essential community providers” (ECPs) insurers must contract with. While the requirements would apply in FFM states, CMS is considering whether there should be “greater alignment” between network adequacy standards in SBMs and the federal marketplace.

Most DOI comments in our sample (including the NAIC) offered feedback on the proposed network adequacy changes. The Pennsylvania DOI supported improving network adequacy oversight for both SBMs and states on the federal marketplace, but also approved of CMS’s stated intent to avoid preempting state network adequacy authority, noting the significance of local geography to network development. The NAIC, while supportive of ensuring sufficient provider networks, voiced concern that uniform federal standards could “complicate enforcement, increase burden, and raise the possibility for plan withdrawal in certain areas.” They instead advocated for giving state assessments greater weight (even if they do not perform network adequacy reviews), more deference to states that have quantitative standards “comparable to” (though not “as stringent as”) the federal standard, and asked for additional details on how federal network adequacy reviews would operate, such as how travel time would be calculated or how different providers would be classified. The NAIC also asked for delayed implementation of the new standards until plan year 2024.

A few SBMs also submitted comments on this proposal. For example, New York’s marketplace asked CMS to grant SBMs flexibility to calculate and implement appropriate ECP participation in their respective states, while Pennsylvania’s marketplace, in addition to echoing the state DOI’s sentiments about preserving state network adequacy authority, supported increasing the ECP participation requirement.

Flexibility for Verifying Employer Coverage and Special Enrollment Period Eligibility

The proposed rules would give SBMs more flexibility to verify access to employer-sponsored coverage (ESI), directing them to establish a “risk-based” process (such as relying on consumer attestation without manual verification when there is a low likelihood of improper APTC payment). A majority of SBMs commented on this proposal, and all supported the new policy. Some SBMs, including DC’s marketplace, asked CMS to revise the regulations so they more clearly state that SBMs can use consumers’ self-attestation—which the federal marketplace plans to use—for ESI verification. Pennsylvania’s marketplace, while supportive of the flexibility, wanted clarification on who bears responsibility for conducting the required risk assessment, indicating CMS’s preexisting national assessment should suffice for SBMs and arguing that putting the onus on states amounts to an unfunded mandate without justification.

CMS also proposed giving SBMs greater flexibility on pre-enrollment verification for SEPs, and only requiring such verification on HealthCare.gov for the loss of minimum essential coverage (MEC) SEP. Comments on this proposal unanimously supported the additional flexibility for SBMs. Nevada suggested the “consumer friendly approach” CMS proposed will help prevent adverse selection by removing barriers to enrollment for young and healthy consumers. DC cited experience with SEP verifications garnering “nearly no positive results” and “huge backlogs,” and asked CMS to prohibit pre-enrollment verification by SBMs unless the marketplace can demonstrate that the process would not disproportionately impact communities of color. Oregon, which operates an SBM on HealthCare.gov, supported continuing pre-enrollment verification for new consumers enrolling through the loss of MEC SEP.

A Note on Our Methodology

This blog is intended to provide a summary of comments submitted by SBMs and state DOIs. This is not intended to be a comprehensive review of all comments on every provision in the Notice of Benefit and Payment Parameters proposed rule, nor does it capture every component of the reviewed comments. To view more stakeholder comments, please visit https://www.regulations.gov/.

Our next blog on the 2023 Notice of Benefit and Payment Parameters will summarize responses to CMS’s request for comments on advancing health equity and climate health.