Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

On December 1, 2010, the Department of Health and Human Services (HHS) is publishing an interim final rule with comment period implementing ACA medical loss ratio requirements. Under the rule, beginning in 2011, insurance companies in the individual and small group markets must spend at least 80% of the premium dollars they collect on medical care and quality improvement activities, and insurance companies in the large group market must spend at least 85% of premium dollars on medical care and quality improvement activities. Insurance companies that do not meet the medical loss ratio standard will be required to provide rebates to their consumers beginning in 2012. The rule also requires insurance companies to publicly report how they spend premium dollars, beginning in 2011. For background information, see the HHS website.  Comments on the rule will be accepted until January 31, 2011. 

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This post was written by Debra A. McCurdy and Jacqueline B. Penrod.

CMS published a proposed rule on November 8, 2010 that would provide additional federal funding for certain Medicaid eligibility determination and enrollment activities under the ACA and update regulations to reflect other Medicaid eligibility and business process changes. Specifically, Medicaid eligibility systems potentially will be eligible for an enhanced 90% federal matching rate for design and development of new systems and a 75% federal matching rate for maintenance and operations (compared to the current 50% match). To qualify for enhanced funding, states must meet a set of performance standards and conditions, including seamless coordination with Health Insurance Exchanges to be established under the ACA. The 90% rate will be available until December 31, 2015, and the 75% match will be available beyond that date if certain conditions are met. CMS will accepts comments on the proposed rule until January 7, 2011.  CMS and the Office of Consumer Information and Insurance Oversight (OCIIO) also issued separate guidance November 3, 2010 designed to assist states “as they design, develop, implement, and operate technology and systems projects” relating to establishing and operating Exchanges and Medicaid coverage expansions. It also seeks to help states to achieve interoperability with federal entities so that state and federal entities can work together to provide health insurance coverage through the Exchange, Medicaid or CHIP programs.

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The HHS Office of Consumer Information and Insurance Oversight (OCIIO) has released subregulatory guidance on the process for health plans to apply for a waiver of restricted annual limits on the dollar value of essential health benefits if such a waiver is necessary to prevent a significant decrease in access to benefits or a significant increase in premiums. 

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On August 26, 2010, the Internal Revenue Service, Employee Benefits Security Administration (EBSA), and the HHS Office of Consumer Information and Insurance Oversight published a notice announcing the availability of guidance detailing interim procedures for the federal external review process and model notices both for internal claims and appeals and for external review processes under the Patient Protection and Affordable Care (Affordable Care Act or ACA). Among other things, the guidance (EBSA Technical Release No. 2010-01) provides an interim enforcement safe harbor for non-grandfathered self-insured group health plans not subject to a state external review process, and therefore subject to the federal external review process. 

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On August 3, 2010, the Office of Consumer Information and Insurance Oversight (OCIIO) published a notice soliciting comments regarding ACA state insurance exchange provisions to inform future rulemaking and grant solicitations. OCIIO requests comments on number of specific questions in the following areas: state exchange planning and establishment grants; implementation timeframes and considerations; exchange operations; qualified health plans; quality; an exchange for non-electing states; enrollment and eligibility; outreach; rating areas; consumer experience; employer participation; risk adjustment, reinsurance, and risk corridors; and economic analysis, Paperwork Reduction Act, and Regulatory Flexibility Act considerations. Comments will be accepted until October 4, 2010.

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The OCIIO has published an interim final rule with comment period implementing the ACA's temporary high risk health insurance pool program. This program, which is intended to provide affordable health insurance coverage to uninsured individuals with pre-existing conditions, will continue until January 1, 2014, when health insurance exchanges are operational. Key issues addressed in the rule include administration of the program, eligibility and enrollment, benefits, premiums, funding, and appeals and oversight rules. The rule is effective July 30, 2010, and comments will be accepted until September 28, 2010. 

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The Obama Administration continues to issue guidance documents and summary information regarding the ACA, including the following: 

• The OCIIO has posted "Questions and Answers on Enrollment of Children Under 19 Under the New Policy That Prohibits Pre-Existing Condition Exclusions."
• CMS has issued a memo to state Medicaid directors providing guidance on provisions of the ACA designed to remove barriers to offering home and community-based services through Medicaid state plans.
• CMS released a report entitled “Affordable Care Act Update: Implementing Medicare Cost Savings." 
• CMS has issued an educational article on the ACA’s timely filing standards for Medicare fee-for-service claims, under which Medicare claims for dates of service on or after January 1, 2010 received later than one calendar year beyond the date of service will be denied.

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