Consumer advocates are cheering the Obama administration's plans to strengthen transparency rules (PDF) for provider networks and drug formularies so that insurance exchange customers will be able to make informed choices.
“There are a lot of good things in here that are increasing transparency and adding to access for people with chronic conditions,” Eric Gascho, assistant vice president of government affairs with the National Health Council, said of the draft regulations issued Friday for enrollment in marketplace plans for 2016 and beyond.
Katherine Hempstead, who directs coverage activities for the Robert Wood Johnson Foundation, said it appears that the “CMS really took to heart a lot of things that people were saying.”
Still, the proposal is not without controversy. Plans to scrap the administration's current policy of automatic re-enrollments and to stick with a fall sign-up season have received less enthusiastic responses.
The CMS said it planned to change the rules that health plans must follow to establish that their drug formularies provide adequate access to pharmaceuticals. The agency wants to require insurers to establish “pharmacy and therapeutics” committees that would meet at least four times a year to review drug formularies. More than half of the panel would have to be made up of healthcare professionals and at least 20% would need to be free of any financial conflicts with insurers or pharmaceutical companies.
“This is a really major improvement,” said Carl Schmid, deputy executive director of the AIDS Institute, which has filed a complaint with the CMS charging that some exchange plans sold in Florida discriminate against customers with HIV. “The only bad thing is that that they're not proposing it until 2017.”
The CMS is also planning to revise the process for exchange customers to seek exceptions to which drugs are covered by a health plan. If an insurer rejects a customer's request, under the proposed rule the individual would have the right to appeal that decision to an independent panel.
In addition, the agency offered more insight into what might constitute discrimination when it comes to drug formularies. For example, if a health plan places most or all drugs that treat a specific condition on the highest cost tier, the CMS warned that it would likely constitute discrimination.
Schmid points out that just such a scenario is what triggered the discrimination complaint in Florida. “We're really pleased that they defined that as discrimination,” Schmid said. “But now they have to enforce it.”
The CMS indicated that it is also considering a requirement that plans post data on provider networks and drug formularies in a “machine-readable file.” That would allow third parties to extract the data and use it to create tools to help consumers make informed choices about what products will meet their needs.
In addition, the agency is asking health plans to provide a 30-day window for new customers to make adjustments to their treatment regimens before triggering higher costs for out-of-network providers or higher-tier drugs. The agency suggested that it might adopt such a requirement if plans don't do so voluntarily.
Not all the proposals put forth by the CMS are drawing praise. A plan to scrap the agency's current policy of automatically re-enrolling customers in the same plan for the next year if they fail to take action is being greeted guardedly. The CMS is proposing that customers be moved to a different plan if they'd be subject to a significant spike in premiums. Under the draft rule, state-based exchanges would be able to try out this policy in 2016 and the states utilizing the federal exchange would follow course in 2017.
Hempstead and others expressed uncertainty about how this would work given that premiums aren't the only metric by which customers pick plans. “I have a feeling once the market settles down more people are going to want to keep their plan than switch,” Hempstead said, comparing it to the attachment individuals often have to cellphone plans. “I think that's a very, very interesting issue.”
Another area where the CMS is likely to encounter resistance is the proposed open-enrollment period, which would run from Oct. 1 to Dec. 15 in 2016 and beyond. That aligns with the typical sign-up window for employer-based coverage and Medicare. But it also coincides with the end of the calendar year, a period when many of the low-income households that are supposed to benefit from the Patient Protection and Affordable Care Act often find themselves under economic stress.
A study published in Health Affairs earlier this year looked at nearly a decade's worth of Google searches to scrutinize when households are experiencing economic stress (e.g., searching for “payday loans”) and when they seek out information about healthcare options. Based on that data, the authors concluded that a more productive sign-up period would run from Feb. 15 to April 15. That's because many low-income households receive tax refunds during that window and are likely to have more disposable income, bolstering the chances that they'll be willing to spend money on health insurance coverage.
“It was really the end of the year when people are really starting to feel pinched financially,” said John Graves, an assistant professor at Vanderbilt University's medical school and a co-author of the study. “That basically aligns with open enrollment.”
Comments on the proposed rules are due Dec. 26.
Follow Paul Demko on Twitter: @MHpdemko