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March 14, 2014 01:00 AM

CMS orders insurers to accept Ryan White premium assistance

Joe Carlson
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    The CMS ordered all insurance companies selling plans through insurance exchanges to accept premium payments and co-payment assistance from federal programs like the Ryan White HIV/AIDS program. But the government continued to urge insurers to reject premium assistance provided by hospitals, drug companies and devicemakers.

    Underscoring the CMS' concern about the issue, the agency opted to waive the normal public comment period and enforce the rules upon their publication (PDF).

    Any insurance company that flouts the requirement to accept premium assistance from state or federal programs will be subject to penalties of $100 per day per beneficiary affected by payment denials, effective immediately. And beneficiaries who lost coverage because an insurer didn't follow the newly clarified rules may qualify for an exception to the normal enrollment deadlines for 2014 plans.

    The rules should resolve a legal dispute brewing in Louisiana, where the state's largest insurer was sued for rejecting Ryan White funds to cover hundreds of low-income people living with HIV or AIDS. That lawsuit was put on hold last week pending publication of the rule.

    The Ryan White program paid about $400 million in premium assistance last year on behalf of 52,568 people. All of the money was paid directly to insurance companies on behalf of the beneficiaries.

    However, for open enrollment in 2014, Blue Cross and Blue Shield of Louisiana announced it would no longer accept Ryan White funds or any other “third-party” payments out of a fear that the payments would tend to add sicker, more expensive patients to the insurers' risk pools.

    “We have received the federal Center for Medicare and Medicaid Services' interim final rule, and we intend to comply with the requirements,” said John Maginnis, spokesman for Blue Cross and Blue Shield of Louisiana.

    The rule published Friday, however, also noted the government's continued concern that premium assistance coming from hospitals or other commercial entities that have a financial incentive to buy coverage for sick patients could in fact “skew the insurance risk pool and create an unlevel competitive field in the insurance market.”

    The CMS reiterated that insurers should reject payments from those entities, while also clarifying that the admonition does not apply to assistance from state and federal programs and from Indian tribes and tribal organizations.

    “The way forward is clear—lower-income people with HIV in Louisiana should go sign up for insurance. This is great news–we are so pleased with this result,” said Kenneth Upton Jr., senior counsel in Lambda Legal's Southern regional office based in Dallas.

    Follow Joe Carlson on Twitter: @MHJCarlson

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