By RaeAnn Grossman
On April 18, 2019, CMS Administrator Seema Verma said, “the rule issued today will give consumers immediate premium relief for 2020 by reducing the federal exchange user fees thanks to successful efforts to improve the efficiency of the exchange. At CMS we have improved the operations of the exchange to deliver a better consumer experience at a lower cost.” The Centers for Medicare and Medicaid Services finalized payment, risk adjustment, and drug policies in its annual Notice of Benefit and Payment Parameters for the 2020 benefit year. The 2020 payment notice is intended to encourage the use of generic drugs, to lower the cost of Affordable Care Act premiums, and ensure the risk adjustment methodology is credible and accurately represents the needed payments to health plans and insurers.
Checking in on prescription drug impacts. The final rule makes changes to the prescription drug benefit that allows individual, small group, large group, and self-insured group health plans to use drug manufacturer coupons against maximum out of pocket limit costs. Under the final rule, when a drug has an appropriate, generic equivalent, the coupons can no longer be applied towards an enrollee’s maximum out-of-pocket costs.
Checking in on risk adjustment revisions. The final rule revises the risk adjustment methodology to improve data accuracy used to calculate the weighting structure and payments to health plans. The rule finalizes the validation of the accuracy of diagnosis codes, prescription drug data, and classifies several exemptions.
With the revision, CMS would use the CMS Office of the Actuary estimates of projected health insurance premiums for both the private individual and group market. This revision would replace the current methodology, which uses only employer-sponsored group market insurance premiums, which do not reflect the situation of the individual market premiums. This technical change in the premium adjustment percentage methodology will provide a more comprehensive and accurate measure of private market premiums.
Checking in on federal and state exchange user fees. The final rule lowers the user fee rate for health plans sold on the Affordable Care Act federal exchanges from 3.5 to 3 percent of premiums. It also lowers the user fee rate for plans on state-based exchanges that use the federal platform from 3 to 2.5 percent. As we know, exchange user fees are passed directly on to the consumer in the form of higher premiums; this reduction allows issuers to pass along savings to consumers in 2020.
To read the entire final announcement, click here: