In a draft manual, issued by CMS’ Center for Consumer Information & Insurance Oversight (CCIIO), the agency is providing qualified health plan (QHP) issuers with information on the process for reconciling the cost-sharing reduction (CSR) component of the advance payments that the issuers have been paid to reflect the CSR amounts those issuers provided to eligible marketplace enrollees. Comments on the draft must be submitted no later than 5:00 P.M. on December 2, 2016. CMS plans to publish the final version of the manual prior to data submission for the benefit year (BY) 2016 (CCIIO Draft Manual, November 2, 2016).
Pursuant to the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), QHP issuers must provide reduced cost sharing—deductibles, copays, and coinsurance—for essential health benefits to eligible enrollees enrolled in a marketplace silver plan, or to Indians enrolled in any marketplace plan. Issuers notify HHS of CSRs made on behalf of enrollees. Advance periodic and timely payments equal to the value of those reductions are made to issuers. Issuers report to CMS the amount they paid for each eligible medical claim, the amount enrollees paid for the claims, and the amount of cost sharing that would have been paid for the same services under the corresponding standard plan, allowing CMS to reconcile the CSR portion of advance payment amounts by comparing what the enrollee in a CSR plan variation paid in cost sharing to what the enrollee would have paid if enrolled in a standard plan.
Data submission for reconciliation of CSRs provided to enrollees in the BY 2016 is expected to begin April 3, 2017. Issuers may include late claims from services provided in the BY 2016 as close to the June 2, 2017 data submission deadline as is practical, provided the issuer recalculates and restates all claims for the associated policy prior to a final re-adjudication of such claims for reconciliation. However, claims incurred in the BY 2016 that cannot be submitted prior to the June 2, 2017 CSR reconciliation data submission deadline—due to late payment, the issuer’s inability to timely re-adjudicate the claim, or because the cost-sharing amount changed due to new information unavailable to the issuer at the time of CSR reconciliation data submission—may be submitted in the following year reconciliation cycle (June 2018). Restatements of BY 2016 CSRs will not be permitted after the 2018 reconciliation cycle.
Issuers may select either the standard or simplified methodology for BYs prior to 2017, but all issuers must use the standard methodology beginning in BY 2017. Following the standard methodology, issuers re-adjudicate the complete set of claims incurred by an enrollee in the CSR plan variation as if they had been enrolled in the associated standard plan to determine the difference the enrollee would have paid in deductible payments, copays, coinsurance, and other out-of-pocket expenses for EHBs. The difference equals the amount of CSRs provided by the issuer. The simplified methodology allows issuers to first calculate estimated or effective cost-sharing parameters for their standard plans and apply these to a policy’s total allowed EHB claims to determine the value of CSRs provided to enrollees.
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