The American Hospital Association has expressed concern about CMS' proposed revisions to the Patient Protection and Affordable Care Act three-year temporary reinsurance program.
AHA Executive Vice President Rick Pollack wrote a letter to CMS Administrator Marilyn Tavenner in response to a proposed rule the agency released concerning benefit and payment parameters related to insurance elements of the healthcare reform law.
The PPACA established the reinsurance program to help stabilize the new health insurance exchanges by offsetting high-cost outliers among health plan members. It requires all group health insurance issuers or third-party administrators on behalf of self-insured health plans to make per capita contributions to fund the program. CMS has proposed a $44 per capita rate for the 2015 transitional reinsurance fee, down from $63 in 2014.
Mr. Pollack wrote the AHA takes issue with three proposed revisions to the program. The first exempts certain self-funded, self-administered plans from contributing to the reinsurance pool, starting in 2015.
"The ACA clearly intended that all group health plans, whether fully insured or self-funded, contribute to the temporary reinsurance fund," he wrote.
The second involves distributing all excess annual reinsurance pool funds to health plans at the end of each year on a pro rata basis, even if the distributions are beyond current attachment point and cost-sharing regulations. Mr. Pollack wrote the AHA recommends that CMS retain the current policy, which would roll excess funds to the next year. Any funds left over at the end of the three-year program should be redistributed back to the contributing entities (which will include AHA member hospitals and health systems), according to the AHA.
Finally, the AHA objects to CMS' proposed lowering of the 2014 attachment point — the point when reinsurance begins to cover a portion of claims. Initially, the attachment point was set at $60,000, with an 80 percent reinsurance payment rate to cover claims expenses that exceed the attachment point. After deciding original estimates of 2014 claims costs were overstated, CMS has proposed lowering the attachment point to $45,000.
"Given the current enrollment uncertainty in the marketplaces, the AHA does not believe that CMS should lower the 2014 attachment point, thus ensuring that enough funding is available to pay eligible high cost claims and stabilize the markets." Mr. Pollack wrote.
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