The CMS is pressing pause on two initiatives to automate how it pays tax and subsidy payments to plans on the insurance marketplace and how consumers appeal denials of coverage eligibility.
In two under-the-radar notices released this week, the federal agency announced that it will continue a paper-based process for eligibility appeals until the end of the year. In a separate notice, it announced a month-long delay in its plan to automate processing of payments the CMS makes for tax credits.
The Affordable Care Act indicates that consumers should be able to file appeals for marketplace eligibility decisions by phone or internet. However, nearly three years after HealthCare.gov opened for business, consumers still only have the option to either mail or fax an appeal, and the agency has up to 90 days to respond.
The paper-based appeals process was supposed to end in 2014, but the CMS extended it for a year and in a March 22 notice extended it until the end of this year.
“We understand that in their third year of operation, appeals entities are compliant with a number but not all of the requirements in the regulations governing the acceptance of Internet-based appeal requests,” the CMS said in the notice, adding that the extensions allow organizations who hear appeals on behalf of HealthCare.gov and state based exchanges the time to implement technology to allow online appeals.
It's unclear where state-based exchanges are in making the appeals process more automated as the matter hasn't been studied.
The appeals process has improved greatly from the early days of open enrollment. Most get decisions on their appeals within 90 days, said Kate Ende, legal program coordinator at Consumers for Affordable Health Care, a Maine-based advocacy consumer advocacy organization.
Mara Youdelman, managing attorney with the National Health Law Program argues some consumers have had to wait longer. She is pushing for an internet-based appeals option while maintaining the paper option.
The Government Accountability Office recently found that the CMS does not effectively address inconsistencies in individuals' applications. Last year, about 470,000 people completely lost their healthcare coverage, and more than 1 million lost at least part of their subsidies because they had difficulty proving eligibility.
The CMS also announced a small delay in its efforts to pay premium and cost-sharing subsidies to exchange plans through an automated electronic process for some plans.
The CMS was using a manual process to make monthly payments. Issuers submitted monthly excel workbooks with plan-level information regarding premium tax credits and cost-sharing reductions. The new process was supposed to kick off at the beginning of this year, but there was a three-month grace period between January 2016 and March 2016 for issuers who were not ready for the adoption of the automated method.
In memo this month, the CMS announced it was extending the grace period until April 2016.
“Then it's bringing the hammer down starting in May – all issuers will transition to the (automated) process,” said Katherine Hempstead, a health insurance policy director at the Robert Wood Johnson Foundation.
In December, the CMS announced that it will withhold 25% of payments owed to plans that aren't prepared for the new method.