HHS Issues Final Rule on Benchmarking EHBs for Insurance Exchanges

The final rule for identifying potential benchmark plans to support the definition of essential health benefits as well the process for recognizing accrediting entities to certify qualified health plans for state health insurance exchanges, was quietly released earlier this week by the Department of Health and Human Services.

While this rule puts many of the components of EHBs in place, full implementation will require some additional rulemaking. HHS indicates within this rule that it will issue future rules to set criteria for health plan accreditation, as well as to "to align with the timeframe of other quality reporting requirements, including establishing a quality rating system."

The timeline for these additional rules is unknown at this time, although it’s clear that HHS is on a fast track to provide EHB details. This final rule was released only 11 days after the end of its comment period. HHS is committed to having EHBs in place in time for insurance issuers to use the information for plan design and rate setting for initial enrollment in Fall 2013.

According to this rule, data from insurers that offer the three largest small group products will be used to identify the benchmark plan for each state for establishing EHBs that must be offered beginning in 2014 by health plans in the online exchange marketplace as well as in individual and small group health insurance policies.  Insurer size is gauged by total enrollment as of March 31, 2012.

The rule also establishes the two-phase approach to be used in the quality health plan accreditation process. Phase one identifies the National Committee for Quality Assurance and the URAC as interim accrediting agencies. The two are already responsible for most health plan accreditations.

Phase two, which will be detailed in another rule, will establish the criteria-based review process to be used.

The Patient Protection and Affordable Care Act requires HHS to define EHBs, which are 10 general categories of service that must be offered beginning in 2014 by health insurance exchanges, as well as individual and small group health insurance policies. In December, 2011,  HHS announced that it would leave that job up to the individual states.

HHS, however, reserved the right to establish the process that states must use to identify their EHBs. According to the final rule, "HHS will also publish the state-specific benchmarks for notice and comment" and make final approval of the EHBs.

The EHB categories are

• ambulatory patient services,
• emergency services,
• hospitalization,
• maternity and newborn care,
• mental health and substance use disorder services (including behavioral health treatment), prescription drugs,
• rehabilitative and habilitative services and devices,
• lab services,
• preventive and wellness services and chronic disease management, and
• pediatric services (including oral and vision care

In response to comments received when this rule was first proposed, HHS has made several changes in the final rule, including:

• Clarifiying that riders (optional or required benefits available for an added premium) should be included in data collected to identify benchmarks.
• Excluding collecting data on prior authorization and/or step therapy for drug coverage.
• Amending the definition of treatment limitations and data collection to include only quantitative limits.
• Permitting NCQA and URAC to review policies and procedures at the issuer level provided they are uniform across the issuer's product line.
• Clarifiying that network adequacy and access accreditation standards include "maintaining a network that is sufficient in number and types of providers to assure that services are accessible without unreasonable delay."
• Removing essential community providers from the network adequacy standards for accreditation.
• Modifiying data sharing requirements between accrediting entities and exchanges to specifically exclude personally identifiable data.
• Establishing Sept. 4, 2012 as the submission deadline for insurers that are eligible to be the benchmark plan for EHBs.

Health insurance exchanges remain a political hot potato as some states balk at the federal mandate. Under PPACA, states must have insurance exchanges in place by 2014. According to the Kaiser Family Foundation at least 15 states are participating in the process while 18 are still studying their options.

If a state declines to set up its own exchanges, then HHS will step in and run the exchange. Alaska, Florida, and Texas are among a handful of states that plan not to operate their own exchanges.