CMS-10595 - Supporting Statement - Third Party Payment

Supporting Statement for Information Collection Requirements for Third Party Payment of
QHP Premiums and Additional Notices for QHP Issuers
A. Background
On March 23, 2010, the President signed into law the Patient Protection and Affordable Care
Act (P.L. 111-148). On March 30, 2010, the Health Care and Education Reconciliation Act of
2010 (P.L.111-152) was signed into law. The two laws are collectively referred to as the
Affordable Care Act. The Affordable Care Act (ACA) established new competitive private
health insurance markets called Marketplaces, or Exchanges, which gave millions of
Americans and small businesses access to QHPs and SADPs—private health and dental
insurance plans that have been certified as meeting certain standards.
In the proposed rule, the Patient Protection and Affordable Care Act; HHS Notice of Benefit
and Payment Parameters for 2017 (CMS-9937-P), we propose to amend 45 CFR 156.1250 to
make clarifications on standards related to the acceptance of third party payments. As part of
these revisions, we propose to require entities that make third party payments of premiums
under this section to notify HHS, in a format and timeline specified in guidance. We expect
that the notification would reflect information like the entity’s intent to make payments of
premiums under this section and the number of consumers for whom it intends to make
payments, or the number of consumers served in prior years. CMS will use the information to
assess changes to insurance risk pools resulting from third party payments.
In §156.1256, we are also proposing to require QHP issuers, in the case of a plan or benefit
display error included in 45 CFR 155.420(d)(4), to notify their enrollees within 30 calendar
days after the error is identified, if directed to do so by the FFE. This new requirement will
provide notification to QHP enrollees of errors that may have impacted their QHP selection
and enrollment and any associated monthly or annual costs, as well as the availability of a
special enrollment period, under §155.420(d)(4), for the enrollee to select a different QHP, if
desired.
The Centers for Medicare and Medicaid Services (CMS) is creating a new information
collection request (ICR) in connection with these standards. The burden estimate for this new
ICR included in this package reflects the additional time and effort for third party payer entities
to provide this information to HHS and for QHP issuers to provide notifications to enrollees.
B. Justification
1 . Need and Legal Basis
Under proposed §156.1250, we are proposing to require entities that make third party
payments of premiums on behalf of Qualified Health Plan enrollees to notify HHS, in a format
and timeline specified in guidance. We expect that the notification would reflect the entity’s
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intent to make payments of premiums under this section and the number of consumers for
whom it intends to make payments. We are considering whether we should expand the list of
entities from whom issuers are required to accept payment under §156.1250 to include notfor-profit charitable organizations, beginning in 2018. In making this determination, we
intend to carefully review the data provided by entities currently making third party premium
payments to better understand the impact of these payments. We anticipate that any
requirement to accept payments from not-for-profit charitable organizations would be limited
to organizations that satisfy several criteria designed to minimize adverse selection.
Under proposed §156.1256, a QHP issuer on a Federally-facilitated Exchange must, in the
case of a plan or benefit display error included in §155.420(d)(4), notify their enrollees within
30 calendar days after the error is identified, if directed to do so by the FFE. We believe that
enrollees should be made aware of any error that may have impacted their QHP selection and
enrollment and any associated monthly or annual costs. Therefore, we are proposing a
requirement for issuers to notify their enrollees of such error, should such error occur, as well
as the availability of a special enrollment period, under §155.420(d)(4), for the enrollee to
select a different QHP, if desired.
2.

Information Users
The notifications that the third party payers will be required to send under this information
collection will be used by HHS to determine future third party payment policy.
The notifications that the QHP issuers will be required to send under this information
collection will be sent to the QHP issuers’ enrollees who may be adversely affected by an
error in plan or benefit data displayed during their QHP selection. The notifications are
intended to inform the consumer about his or her health insurance coverage to make choices
based on accurate plan data.

3.

Use of Information Technology
CMS anticipates that third party payers will send this information electronically or by mail to
HHS. CMS anticipates that QHP issuers will use their claims data systems to identify
enrollees that need to be notified. The notification can be sent to the enrollee electronically or
by mail.

4.

Duplication of Efforts
Where Ryan White HIV/AIDS Program (RWHAP) grantees elect to make third party
payments for insurance premiums and/or cost-sharing, their annual reporting requirements to
HRSA include the number of consumers served and the amount of grant funds allocated to
such payments. To avoid potential burden and duplication that the proposed “notice of
intention” may cause for the RWHAP grantees, the data collection would exempt third party
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payer entities that are already providing the information to other HHS agencies, such as to the
Health Resources and Services Administration (HRSA) or to the Indian Health Service (IHS).
5.

Small Businesses
We do not anticipate that small businesses will be significantly burdened by this data
collection.

6.

Less Frequent Collection
The burden associated with this information collection consists of entities that make third party
payments of premiums under this section to notify HHS, in a format and timeline specified in
guidance. We are proposing to require each entity to send this information annually in order for
HHS to assess the annual impact on premiums and changes to insurance risk pools resulting
from third party payments.
QHP issuers in the FFE notifying enrollees about the plan’s incorrect plan display, and
accurate plan data need to make this information available to the plan’s enrollees. We
recognize that the notification of the plan display error is a good faith effort as there are certain
situations that the issuer cannot anticipate. For these reasons, the regulation requires the
notification 30 days after the FFE directs the issuer that the error has been identified as
entitling affected enrollees to a special enrollment period.

7.

Special Circumstances
There are no anticipated special circumstances.

8.

Federal Register/Outside Consultation
In the proposed rule, the Patient Protection and Affordable Care Act; HHS Notice of Benefit
and Payment Parameters for 2017 (CMS-9937-P), CMS is proposing 45 CFR 156.1250 and
156.1256 and will consider comments received on the proposed rule. We will also amend this
information collection to align with any changes in the final rule. CMS will also receive
comments during the 60-day comment period for this information collection.

9.

Payments/Gifts to Respondents
No payments and/or gifts will be provided.

10. Confidentiality
To the extent of the applicable law and HHS policies, we will maintain consumer privacy with
respect to the information disclosed.
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11. Sensitive Questions
No sensitive questions are included in these notice requirements.
12. Burden Estimates (Hours & Wages)
We estimate that to comply with proposed §156.1250(b), it would take an entity
approximately four hours to analyze the number of consumers the entity intends to make
payments of premiums on behalf of, draft a notification and send the proposed information by
a mid-level health policy analyst (at an hourly wage rate of $ 54.87). Assuming 500 entities
exist that make third party payments and each would send one notice, we estimate a total
annual burden of 2,000 hours resulting in an annual cost of $109,740.
Labor
Category

Health Policy
Analyst

Hourly Labor
Costs (Hourly
rate
+ 35% Fringe
benefits
$54.87

Total Annual
Burden
Hours

Number of
Notices

Total Annual
Burden

2,000

500

$109,740

Proposed §156.1256 would require that, in the event of a plan or benefit display error, QHP
issuers notify their enrollees within 30 calendar days after the error is identified, both of the
plan or benefit display error and of the opportunity to enroll in a new QHP under a special
enrollment period at §155.420(d)(4), if directed to do so by the FFE. This provision would
apply to all QHPs in the FFEs, which includes 475 issuers. We estimate it would take
approximately 30 minutes to amend a form notice, add SEP language provided by the FFE,
and send the proposed information by an issuer’s mid-level health policy analyst (at an hourly
wage rate of $54.87). We estimate that approximately 4 percent of enrollees would receive
such a notice. Assuming approximately 7 million FFE enrollees, we estimate QHPs in the
FFEs would send approximately 280,000 total notices, for a total hours of 140,000, with a
total cost of $7,681,800.
Labor
Category

Health Policy
Analyst

Hourly Labor
Costs (Hourly
rate
+ 35% Fringe
benefits
$54.87

Total Annual
Burden
Hours

Number of
Notices

Total Annual
Burden

140,000

280,000

$7,681,800

13. Capital Costs
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There are no additional capital costs.
14. Cost to Federal Government
$2,263.04
15. Changes to Burden
There are no changes to burden.
16. Publication/Tabulation Dates
Not applicable.
17. Expiration Date
This collection does not lend itself to the displaying of an expiration date.

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