Rate review under the Patient Protection and Affordable Care Act will take effect September 1, and many states still have a great deal of groundwork to do. States will have the primary responsibility for reviewing rate increases, while the Department of Health and Human Services will serve in a backup role.
Rate review under the Patient Protection and Affordable Care Act will take effect September 1, and many states still have a great deal of groundwork to do. States will have the primary responsibility for reviewing rate increases, while the Department of Health and Human Services will serve in a backup role.
“The Centers for Medicare and Medicaid Services has a whole laundry list of things states need to do in order to be deemed effective reviewers,” said Randi F. Reichel, an attorney with Mitchell, Williams, Selig, Gates & Woodyard. “The real key is that any determination the state makes must be made under some type of statutory or regulatory authority.”
The states vary considerably in their current processes for insurance review, so it’s not clear how many of them will have appropriate authority in place.
“Right now the information flow is in flux,” Reichel said. “How CMS will make these determinations this summer, in order to be ready for September 1, is at this point still an open question.”
In states that have been deemed to have an effective state review program, MCOs will need to file specific information with both the state and CMS.
“They will file part one information, which includes specific data such as projected claims and trends-the key data the state needs in order to make its determination about rates,” Reichel said. “Part two information will be a written narrative that explains significant factors leading to planned rate increases, including historical and projected expenses and loss ratios.”
Meanwhile, in states that have not been deemed to be effective reviewers, CMS will be the primary rate reviewer. In those states, in addition to part one and part two information, MCOs will also need to file a third piece.
“The first version of the rule described 10 specific things that would be included in part three,” he said. “CMS has now removed those specifics, and says they will discuss this in later guidance. What we now know about what will go into part three is pretty much nothing.”
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