Mar. 17—In new rules, federal regulators urged insurers not to accept premium assistance from hospitals and other providers, even as they required health plans to accept premium assistance from other entities.

Interim final rules issued by the Centers for Medicare & Medicaid Services (CMS) on March 14 required plans offered through new government-run marketplaces to accept premium and cost-sharing assistance from the Ryan White HIV/AIDS Program and other government and tribal assistance programs.

The rules, which go into effect immediately without a chance for public comment, also urge marketplace plans not to accept premiums or cost-sharing assistance from “hospitals, other healthcare providers, and other commercial entities due to concerns that such practices could skew the insurance risk pool and create an unlevel field in the exchanges.”

Some insurers have raised similar concerns that providers could pay the premiums for high-cost indigent patients in their facilities for the duration of their care.

The latest rules re-state similar CMS guidance to insurers on provider premium assistance that was first issued Nov. 4, 2013. That subregulatory guidance noted “significant concerns” with hospitals providing insurance subsidies for those in need and discouraged hospitals from providing the subsidies or insurers from accepting such assistance.

Penalties Added

The new rules place penalties behind previous guidance issued on Feb. 7 that similarly urged marketplace plans, referred to as qualified health plan (QHP) issuers, to accept the Ryan White funds and other government-provided assistance and tribal assistance.

“We have become aware that, despite related policy clarifications, some QHP issuers continue to reject payments of premium and cost sharing by the Ryan White HIV/AIDS Program,” the rules stated. “In particular, this QHP-issuer practice is causing access problems for persons who rely on the Ryan White HIV/AIDS Program for assistance.”

Mixed Messages

The recent CMS rule on marketplace plan assistance was the latest move away from a conflicting opinion on the practice issued late last year by officials in the U.S. Department of Health and Human Services (HHS). 

In an Oct. 30 letter to a member of Congress, U.S. Department of Health and Human Services Secretary Kathleen Sebelius wrote that the federal anti-kickback statute barring assistance to patients covered by federal health programs did not apply to federally subsidized private plans sold under the new federal marketplaces, also known as exchanges. The apparent result, according to health policy experts, was that the anti-kickback statute would not prohibit hospitals and health systems from subsidizing marketplace policies.

The Obama administration’s latest effort to block financial assistance from hospitals to people obtaining exchange coverage came even as the administration continues to seek hospital help in enrolling eligible beneficiaries for coverage through either the marketplaces or Medicaid. Hospitals have explored the financial assistance as one more way to ensure coverage of local uninsured residents, who may have trouble affording premiums or cost-sharing requirements—even with federal assistance.

The Feb. 7 CMS guidance also clarified that payments are allowed by a private, nonprofit foundations for marketplace enrollees who are selected for assistance based on their financial needs. Insurance financial assistance may not be based on the health status of marketplace plan enrollees, according to guidance. Additionally, such financial help should cover premium and cost-sharing costs for the entire policy year.

Hospitals have undertaken a variety of approaches to address concerns that their assistance could be improperly targeted at people likely to seek care at their facilities. For instance, some have donated to a third-party not-for-profit organization that provides uses the fund to help all local residents afford heir marketplace coverage.

“Unfortunately, even after the interim final rule there remains a level of uncertainty as to whether providers can subsidize exchange coverage for indigent and near indigent individuals,” said Chad Mulvany, director of healthcare finance policy, strategy and development for HFMA. “While the initial letter Secretary Sebelius sent Congressman McDermott in November stating that exchange subsidies are not a federal program, seems to open to the door to this, subsequent FAQs from CMS and the IFR could suggest otherwise. Providers are rightly concerned that this could be reinterpreted in the future exposing them to fraud liabilities.

HFMA plans to issue a comment letter on the recent rules urging CMS to provide clarifying guidance using with input of HFMA members.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter @rdalyhealthcare.

Publication Date: Monday, March 17, 2014