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CMS moving to neutralize state control over exchange navigators


By Virgil Dickson
Posted: April 25, 2014 - 4:00 pm ET
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The CMS wants to tighten the rules for navigators—those who assist people in signing up for insurance on various state and federal exchanges. Its proposed rule would pre-empt recent state efforts to regulate, and some would say hobble, navigators. Stakeholders commenting on the proposal raised concerns about whether the CMS is overstepping its authority in the matter.

Throughout 2013, numerous, mostly GOP-led states passed laws limiting navigator activities. Those laws included stringent restrictions on the advice they can offer consumers, with some states banning navigators from providing information about the benefits, terms and features of a particular health plan.

The CMS' push to take more control over navigator activities is “a way of making sure that navigators and other assisters can do their jobs,” said Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities. It also “protects the consumer to make sure they are providing accurate information.”

The CMS proposal suggests imposing civil monetary penalties (CMPs) on navigators in states with federally facilitated exchanges, and on others who provide similar services, if they don't comply with federal law.

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Infractions that could trigger penalties would include providing false or fraudulent information to a consumer, encouraging a consumer to provide false information on his or her application, or disclosing or misusing personally identifiable information. Navigator penalties could amount to as much as $100 per day for each individual directly affected by the navigator's non-compliance.

The stronger standards for navigators and other consumer-assistance entities were outlined in a nearly 300-page proposed rule released by the CMS (PDF) on March 14. The rule also included suggested policy updates for: health insurance discontinuation and renewal; quality reporting and enrollee-satisfaction surveys; the Small Business Health Options Program; and adjustments to risk corridors and medical-loss ratios in light of transitional policies.

Under CMS' proposed rule, state laws, or portions of them, would be pre-empted because they “prevent the application of the provisions of Title I of the Affordable Care Act,” the CMS said.

The agency should have taken this step much sooner, Tim Jost, a Washington & Lee University School of Law professor said in an analysis of the rule.

“It is very unfortunate that CMS has waited until now to move on this issue,” Jost said. “Had CMS laid out the rules on this issue clearly when it promulgated the original navigator, assister, and CAC (certified application counselors) regulations, it is possible that far more Americans could have been signed up for coverage during the 2014 open-enrollment period.”

But some stakeholders believe that the CMS may be going too far in stepping up their oversight of navigator activities.

“The problem with several of the proposals, and the accompanying discussion of these items in the notice, is that they ignore the limitations on federal power contained in the Act and improperly restrict the ability of state officials to oversee and regulate the insurance marketplace,” according to the Independent Insurance Agents and Brokers of America, a national trade group.

The group was most concerned about HHS' attempt to pre-empt state laws that require navigators to refer consumers to agents or brokers when they request help in choosing an exchange plan. The CMS wants to make the change because navigators are required by law to provide consumers with impartial advice, while other entities like brokers are not bound by the same requirement, the group noted.

Florida's insurance commissioner Kevin McCarty stood by his state's requirement that requires navigators to send consumers to brokers and insurance agents, because he said “navigators are not sufficiently prepared with the knowledge necessary to provide the requisite accurate advice.”

Insurance heavyweights like Kaiser Permanente generally supported pre-empting many of the more restrictive state laws, but are against completely stripping state oversight. For instance, the proposed rule would block navigators and other health-coverage assisters from being compensated on a per-application, per-individual assistance, or on a per-enrollment basis. CMS made that decision because it is concerned that such compensation might encourage assisters “to rush through sessions with consumers, or not to provide them with complete information,” the agency said.

Kaiser countered that “a blanket prohibition on assister compensation will impede outreach efforts in the communities.” CMS should only consider such a move if it received meaningful complaints about abuses resulting from compensation, the insurer said.

Hospitals are concerned about the penalties proposal as outlined, since they often act as CACs and would also be subject to penalties if the rule is finalized.

“Applying CMPs to individual and institutional assisters, especially voluntary CACs, would have a chilling effect on some hospitals continuing to serve in that role,” the American Hospital Association said. The organization also noted that if hospitals were no longer supported in their CAC role, next year's enrollments could suffer since they “contributed significantly to the level of enrollment that was achieved.”

Instead, the AHA suggested that the CMS limit penalties to instances constituting egregious violations. Under the CMS proposal, assisters could be dinged for simple human errors, such as presenting a patient with an outdated list of plans with which a hospital contracts.

Follow Virgil Dickson on Twitter: @MHvdickson


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