Chris Cadena

The Centers for Medicare and Medicaid Services (CMS) published its final Notice of Benefit and Payment Parameters for 2015 (Final Rule), altering parameters for premium stabilization programs established by the Affordable Care Act (ACA). The Final Rule primarily concerns the risk adjustment, reinsurance, and risk corridors programs.

The Final Rule completes provisions related to the advance payments of the premium tax credit, cost sharing reductions, and premium stabilization programs, including certain oversight provisions for the premium stabilization programs and key payment parameters for the 2015 benefit year. Using the methodology set forth in the 2014 payment notice, the Final Rule establishes a 2015 uniform reinsurance contribution rate of $44 annually per capita, as well as the 2015 uniform reinsurance parameters—a $70,000 attachment point, a $250,000 reinsurance cap, and a 50 percent coinsurance rate. The Final Rule also decreases the attachment point from $60,000 to $45,000. To maximize the impact of the reinsurance program, CMS provides that for reinsurance contributions collected for a benefit year exceeding total requests for reinsurance payments for the benefit year, CMS will increase the coinsurance rate on its reinsurance payments up to 100 percent.

The Final Rule also finalizes cost sharing provisions. For example, CMS establishes a methodology for estimating per capita premium and calculating the premium adjustment percentage. CMS is also establishing a reduced maximum annual limitations cost sharing for the 2015 benefit year for cost sharing reduction plan variations, relaxing the requirement that a QHP and its plan variations have the same out-of-pocket spending for non-essential health benefits (EHBs). The Final Rule adopts the proposal to modify the methodology for calculating advance payments for cost sharing reductions for the 2015 benefit year and it finalizes parameters for updating the AV Calculator.

Regarding the federally-facilitated exchange user fee rate, the Final Rule finalizes the rate at 3.5 percent of premium, and the user fee adjustment finalizes an allowance for administrative costs and margin associated with the payment for contraceptive services.

CMS states that the premium stabilization programs depend on the oversight program, so the final rule expands on the 2014 provisions by finalizing HHS’s authority to audit State-operated reinsurance programs, contributing entities, and issuers of risk adjustment covered plans and reinsurance eligible-plans.

The Final Rule also updates the methodology for the HHS-operated risk adjustment data validation process. CMS’s adopted standards include a sampling methodology for the initial validation audit and detailed audit standards. These new standards will be used and evaluated for 2 years before being used as a basis for payment adjustments.

The rule reduces the time that a State electing to operate an Exchange after 2014 must have in effect an approved, or conditionally approved, Exchange. The rule also finalizes provisions regarding the privacy and security of personally identifiable information in the Exchange, the Exchange annual open enrollment period for 2015, and the annual limitation on cost sharing for dental plans.