Hospitals offering financial assistance to ACA enrollees should reassess their compliance with existing guidance from CMS and OIG, advisors say.

Oct. 3—Hospital advocates recently pushed back on the latest regulatory challenge by federal policymakers to health insurance financial support initiatives.

Provider efforts to help patients afford their premium and out-of-pocket health insurance expenses have been a flashpoint between hospitals and insurers, especially on the government-run health insurance marketplaces.

After the issue receded for several years, the Centers for Medicare & Medicaid Services (CMS) revived it in August when it issued a request for information (RFI) regarding providers’ steering of Medicare- and Medicaid-eligible individuals to plans offered on the marketplaces created by the Affordable Care Act (ACA). The RFI was seen as a response to a Florida case in which a large commercial insurer challenged efforts by a dialysis provider to help Medicare- and Medicaid-eligible patients afford coverage from the insurer instead.

But some saw the RFI as taking a broader swipe at premium assistance provided by hospitals to those enrolled in the ACA marketplaces.

The RFI “reaffirmed CMS’s negative view of premium support arrangements,” Steven Hahn, an attorney at Hall, Render, Killian, Heath & Lyman, said in an interview. “It reaffirmed hospitals’ reluctance to consider providing this support to individuals at all.”

Hahn said it is too soon for hospitals offering such assistance to reconsider doing so, but those providers should ensure they are complying with guidance from CMS and the U.S. Department of Health and Human Services’ Office of the Inspector General (OIG) to avoid potential prosecution.

The American Hospital Association (AHA) pushed back on CMS’s possible use of concerns about inappropriate steerage of Medicare- and Medicaid-eligible patients to further restrict hospital premium or out-of-pocket assistance to ACA plan enrollees.

“Third-party payment of premiums—whether by a family member, a community-based organization, a government program, providers or a charitable organization—is an important tool for expanding coverage for vulnerable Americans,” Tom Nickels, executive vice president of AHA, wrote in comments on the RFI.

The need for such provider assistance was underscored by a recent Commonwealth Fund survey, which found 85 percent of uninsured individuals who explored coverage options but did not purchase a plan cited affordability as a challenge.

But insurer concerns that such assistance could undermine the risk pools of the ACA marketplaces have led regulators to issue sub-regulatory guidance that encourages such assistance for some types of ACA marketplace enrollees—such as those with HIV/AIDS—while discouraging it for others.

Hospitals that have opted to provide premium support to ACA plan enrollees have operated in a “legal gray area” amid conflicting regulatory guidance, Jennifer Breuer, a partner at Drinker Biddle & Reath, said in an interview.

Such concerns haven’t been enough to stop programs like the premium assistance program at Project Access NOW, which pays monthly premiums for low-income people in the Portland, Ore., area after their ACA marketplace subsidies are applied. The program, which has been funded by five local hospitals and health systems, had 350 clients in 2016 and is planning to expand in 2017, according to Derek Nix, a program specialist. Next year the program will cover the premiums of clients who cannot get Medicaid coverage and earn up to 300 percent of the federal poverty level (FPL), up from the current threshold of 200 percent of FPL.

“Enrollment in the program for 2017 is anticipated to increase from 350 clients to 500 clients with increasing premiums,” Nix said in emailed comments.

Instead of creating new barriers to such assistance, Nickels urged CMS to change its policies to require that insurance plans accept payments from “hospitals, hospital-affiliated foundations and other charitable organizations that seek to expand access to coverage in their communities.”

Key Considerations

Hahn, AHA, and other advisors have suggested that hospitals looking to launch such programs follow guidance CMS outlined in an FAQ issued Feb. 7, 2014:

  1. Subsidies should be awarded based on financial need
  2. Premium or cost-sharing payments should cover the entire policy year

However, the AHA pushed back on a third CMS parameter that generally prohibited third-party payers from factoring in health status when identifying individuals for assistance.

“When allocating limited resources among those with a financial need, it is appropriate and logical to also include consideration of the medical needs of each individual,” Nickels wrote.

Other legal questions remain about whether hospitals can provide such assistance through their own foundation or whether it must go through an unconnected third party. Breuer cited other CMS guidance in suggesting hospitals pursue “arm’s length” funding approaches and ensure that no information flows back to funders about people to whom the hospital provided assistance.

“Hospitals are considering whether or not providing premium support still should be part of their charity care policies and trying to figure out what protections they could put in place to do that,” Breuer said. “That’s an ongoing discussion depending on how risk-averse your facility might be.”

New Barriers

The RFI also could create new barriers to hospital assistance by suggesting future policies that would require Medicare- and Medicaid-enrolled providers to report premium assistance and cost-sharing waivers for ACA plan enrollees, according to some advocates.

The suggested new requirements would fail to capture any information concerning steerage by providers not enrolled in Medicare or Medicaid, Chip Kahn, president and CEO of Federation of American Hospitals, wrote in comments to CMS.

“The burden of a cost-sharing reporting requirement on hospitals would be substantial and might dissuade hospitals from offering cost-sharing discounts to the detriment of consumers or declining to collect on unpaid cost-sharing obligations,” Kahn stated.

Hospital-provided assistance with ACA plan costs could be especially critical in the 19 states that have not expanded Medicaid eligibility as authorized by the ACA.

“Private premium assistance and cost-sharing waivers may be the only option available to provide coverage to individuals that fall in the gap between Medicaid eligibility and the ACA’s premium assistance and cost-sharing reductions,” Kahn wrote.

He cited the example of a household enrolled in ACA coverage that was earning 300 percent of the federal poverty level and facing an unaffordable deductible.

“Cost-sharing waivers for these families constitute private financial assistance that fills the ACA’s gaps and assures that families can actually use their coverage to obtain needed care at an affordable price,” Kahn said

As hospital advocates push for expanded acceptance of the financial assistance at the federal level, new barriers have arisen at the state level, where at least two states this year implemented rules to limit situations where insurers would have to accept premium support payments, Hahn said.

“So we’re seeing it go the opposite direction at the state level,” Hahn said.

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

Publication Date: Monday, October 03, 2016