By Victoria Moran, J.D., M.H.A.
CMS issued a final manual to issuers of qualified health plans (QHPs) laying out the process for reconciling the cost-sharing reduction (CSR) component of the advance payments paid to QHP issuers through the September 2017 payment cycle against the CSR amounts provided to enrollees for the entire 2017 benefit year to determine any charges owed to CMS. The manual includes instructions on the methodologies for calculating CSRs, including the standard methodology. It also discusses reporting requirements and the discrepancy and appeals process. Notable changes for benefit year 2017 include: no testing window, updated data submission timeline, incorporation of guidance and regulations from 2016, and elimination of the outdated methodology selection process (Manual for Reconciliation of the Cost-Sharing Reduction Component of the Advance Payments for Benefit Year 2017, March 29, 2018).
Background. Pursuant to the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), issuers of QHPs are required to provide reduced cost sharing for essential health benefits (EHBs) to eligible health care exchange enrollees. This may include deductibles, copays, and coinsurance. A CSR plan offers identical benefits and providers as a standard plan, but the enrollee’s out-of-pocket costs for EHBs are reduced based on eligibility. Reduced cost sharing must be available to those enrolled in a silver level plan through the Exchange, or Indians enrolled in any metal level plan through the Exchange.
Overview of reconciliation of advance payment of CSR. QHPs are required to report CSRs provided on behalf of eligible enrollees to HHS. Prior to October 12, 2017, the QHPs were reimbursed for the value of the reductions. Since October 12, 2017, CSR payments have been discontinued until a valid appropriation exists, but CSR benefits continue for enrollees. CMS reconciles the CSR portion of advance payment amounts by comparing the amount paid by an enrollee in a CSR plan variation to the amount the enrollee would have paid under a standard plan. To facilitate reconciliation, issuers must report for the entire 2017 benefit year the amount paid for each eligible medical claim, amount enrollees paid for the claims, and amount of cost sharing that would have been paid for the same services under the standard plan.
Methodology. Issuers must use the CMS standard methodology to calculate CSRs provided to enrollees for the 2017 benefit year. The standard methodology requires issuers to "re-adjudicate actual claims incurred by each enrollee in a cost-sharing reduction plan as if he or she had been enrolled in the associated standard plan, to determine differences in deductible, copay, coinsurance, and other out-of-pocket expenses." The difference equals the CSR provided by the issuer. The data submission for reconciliation of CSRs for the 2017 benefit year begins on April 2, 2018, and ends on June 1, 2018. Unlike prior years, there will not be a testing window and issuers are encouraged to submit data files early.
Restatements. CMS has also included guidance on the restatement process for prior-year CSRs, which should also be used for current-benefit year restatements. Issuers must immediately notify CMS if they identify an issue in data or calculations that results in the issuer owing additional amounts to CMS. CMS will provide further guidance on the process, and the issuer may be required to submit a restated file.
CMS does not anticipate that issuers will be able to restate benefit year 2017 CSRs provided in the benefit year 2018 submission cycle, which would occur during 2019. Therefore, issuers "should make every effort to include all benefit year 2017 claims in the regular data submission cycle in 2018."
Advance payment reconciliation. Although CSR payments were discontinued in October 2017, CMS will reconcile 2017 benefit year advance payments for purposes of identifying overpayments, and issuer will be charged for any excess amounts paid.
Reporting requirements. Issuers receiving CSR portions of advance payments are required to report the actual value of CSRs for all enrollees on a unique policy, calculated for each policy (the issuer summary report). On this report, the QHP issuer reports: the total number of subscriber IDs in any plan variation they are submitting a policy report, total actual CSRs provided to enrollees in all plan variations, and methodology used to establish claims costs. The value of CSRs for each policy must be reported, but submission of data at the plan level is optional. Issuers restating 2016 benefit year CSRs must follow CSM guidance on the proper methodology to use in cases of mergers or acquisitions.
Discrepancies and appeals. Issuers have 30 days from the date they are notified of the results of the CSR reconciliation to file a discrepancy to correct errors. If CMS accepts the discrepancy report, they will issue a correction, which will vary depending on the error. Issuers are encouraged to maintain their data file submission for modification and resubmission, if necessary. Failure to file a discrepancy will be deemed acceptance of the CSR reconciliation. CMS intends to provide additional information about deadlines and the discrepancy process in spring/summer 2018.
Issuers have 60 days from notification of the CSR reconciliation discrepancy resolution decision to request reconsideration. An appeal cannot be filed unless an issuer has filed a discrepancy.
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