February 18, 2013 Artia Advisor

» On Monday, January 14, the Department of Health and Human Services (HHS) released a 472- page proposed rule which addressed coordination of eligibility determination and appeals processes between Medicaid and the newly created Exchanges. It also addressed cost-sharing parameters, giving states more latitude in designing benefit plans to reach low- income populations. The rule also updated provisions related to the Children’s Health Insurance Program (CHIP). » The rule was officially published in the Federal Register on Tuesday, January 22. » Comments were due by Wednesday, February 13. Artia Advisor

 The Affordable Care Act (ACA) conferred some flexibility to state Medicaid programs amend their Medicaid state plans to provide four benefit packages other than the standard Medicaid plan benefit package, referred to as “alternative benefit plans.” These plans can fall under four categories: 1. Benefit package provided by Federal Employees Health Insurance Benefit plan (FEHB) Standard Blue Cross/Blue Shield Preferred Provider Option; 2. State employee health coverage that is offered and generally available to state employees; 3. Health insurance plan offered through the Health Maintenance Organization (HMO) with the largest insured commercial non- Medicaid enrollment in the state; and 4. Secretary-approved coverage, which is a benefit package the Secretary (of the Department of Health and Human Services) has determined to provide coverage appropriate to meet the needs of the population provided that coverage. Artia Advisor

 The proposed rule allows states to update cost-sharing for drugs in their Medicaid programs along the following parameters:  States may set differential cost sharing for preferred and non-preferred drugs for all income levels  States may impose a maximum cost sharing amount of up to $8 for non-preferred drugs for individuals with income equal to or less than 150% federal poverty level (FPL), who would otherwise be exempt from cost sharing  For individuals with income greater than 150% FPL, cost sharing may not exceed 20% of the cost the agency pays for the drug  If the agency does not differentiate between preferred and non-preferred, the drug will be assumed as preferred. Artia Advisor

 The rule also proposed to allow for some cost-sharing latitude for states in the following areas: Emergency Department (ED) Visits » Non-emergency visits: Individuals with income <150% federal poverty level (FPL) : $8 Individuals with income >150% FPL: no cost-sharing limit Outpatient Care » Flat copays of $4 Inpatient Care » HHS is accepting suggestions for revisions to the current amount of 50% of cost of first day of stay. » Any revision would involve a transitional period to permit changes on payment rate schedules Artia Advisor

9 FunctionResponsibility  Application enters exchange  Data collected to support application (i.e., citizenship, residency, income)  System screens based on data and determines subsidy level  Health Benefit Exchange  Consumer is notified of his/her subsidy level  Based on subsidy level, consumer is directed towards a selection of plans  Health Benefit Exchange  If Medicaid/CHIP, consumer is further directed  Medicaid / CHIP  Consumer chooses plan  Consumer is notified that selection has been received  Health Benefit Exchange  Selected health plan receives enrollment data  Individual Plan  Consumer is enrolled and coverage is activated  Individual Plan Subsidy Eligibility Data Collection, Screening and Determination Notice of Subsidy Eligibility to Consumer Medicaid / CHIP Basic Health Plan (if available) SubsidyNo Subsidy Non MAGI Medicaid / CHIP Fee for Service Medicaid Managed Care / PCCM CHIP Managed Care Choose Plan Enrollment and Coverage Activation Notice to Consumer Social Services Notice to Consumer Notice and Data Transmission To Health Plan Data Sharing* Artia Advisor

 In the proposed rule, the Agency addresses concerns of potential overlapping efforts and confusion among state Medicaid agencies, HHS, and state Exchange boards related to the application and appeals process for determining eligibility for Medicaid coverage or premium subsidies to purchase coverage in the Exchange.  Noting the technological & data barriers involved in complying with the “combined eligibility determination” provision, this requirement will not be effective until CMS’s goal is to arrive at a “combined eligibility determination” or a single, combined notice that includes information related to both the approval of Medicaid eligibility and denial of eligibility for advance payments of the premium subsidy and cost-sharing reductions. Artia Advisor

State-based Exchanges would have the flexibility to implement their own appeals processes in accordance with the NPRM’s standards, with individuals retaining the right to a federal appeal at HHS after exhausting the state-based appeals process Appeal of*: 1. Level of subsidy eligibility 2. Denial of Medicaid Exchange Entity: subsidy level determination may delegate authority to Exchange appeals entity, or request waiver State Medicaid Authority Medicaid “fair hearing” may delegate authority to state- based exchange; may be issued 45 days after Exchange notice Exchange notifies Medicaid authority of appeal Exchange appeal notice rendered Petitioner may appeal to HHS *HHS plans to treat an appeal of determination of eligibility in a QHP and for an advance payment premium subsidy as a denial of Medicaid Artia Advisor

 If projected annual household income is in excess of attestation by a significant amount, the Exchange will utilize current income data to verify the applicant’s attestation.  The exchange will consider the attestation verified if it is no more than 10% below annual household income computed from HHS sources. Attestation » Premium subsidies are not available to purchase coverage in catastrophic plans Catastrophic Plans Annual eligibility determinations » The Exchange will re-determine eligibility on an annual basis for all qualified individuals Verification of employer- sponsored coverage » HHS will be the final decision-maker in determining if an employer offers “affordable” health coverage. » The proposed rule also outlines the approach to reconcile discrepancies in the verification of enrollment in and eligibility for minimum essential coverage through an eligible employer-sponsored plan, with multiple procedures for correcting inconsistencies. Artia Advisor

Application Counselors CHIP Artia Advisor

 Staff and volunteers of both Exchange-designated organizations and organizations designated by state Medicaid and CHIP agencies will be certified to act as application counselors, exemplifying competency for the following functions: 1.Providing information to individuals and employees on insurance affordability programs and coverage options; 2.Assisting individuals and employees in applying for coverage in a QHP through the Exchange and for insurance affordability programs; and 3.Facilitating enrollment in QHPs and insurance affordability programs.  HHS proposed the following updates to the CHIP program: ◦ Limiting the waiting period for children in the CHIP program to 90 days ◦ Elimination of premium lockout periods in CHIP Artia Advisor