August 18, 2015

A First Step on a Long Road: CMS Begins Implementation of ACA Transparency Standards

On August 11, 2015, the Centers for Medicare and Medicaid Services (CMS) posted for public comment notice of a new required data collection for health insurers. Its purpose is to begin the implementation of section 1311 of the Affordable Care Act, the so-called Transparency Requirements. According to the agency, the purpose of the data collection is to “aid consumers in efficiently selecting a health plan and using their benefits.” The agency further states that “these new standards will lead to greater transparency for consumers and assist in the decision-making process.”

Section 1311 of the ACA requires health insurers to provide data on roughly a dozen topics and operational areas, including claims, rating practices and company financials. CMS further defines some of these topics to include specific operational functions where health plan-enrollee friction can occur, including medical coverage determinations and exceptions requests, grace periods for enrollee payments, and other enrollee responsibilities. The agency distinguishes between data that it will actually collect and other data where the insurer can satisfy the requirement by publicly posting the data on its own website. CMS is relying on a decidedly low-tech approach for receiving the transparency data — email — rather than requiring insurers to adapt to a new federal portal. CMS will pull much of the required data from existing insurer submissions, such as rate filings and summary of benefit forms. The collected data will be displayed separately from other consumer-facing data on www.healthcare.gov.

For 2016 at least, the data collection and resulting data display is modest. While the transparency standards will ultimately apply to nearly all health insurers, this initial data collection is limited only to insurers with products on exchanges that use www.healthcare.gov. But given the agency’s ACA authority and general program direction, it is easy to envision how CMS might build out the transparency requirements in the near future, dovetailing them with star ratings, increased oversight and a more rigorous health plan certification process. CMS foreshadows that the 2016 data collection will be expanded in the future. Absent a fundamental shift in the agency’s direction, such as a change made through the political process, insurers should expect the agency to seek to grow the transparency requirements, and advocates and industry-watchers should expect the complexity and utility of the resulting data to expand accordingly.

The public comment period is 60 days.

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