By Joe Touschner
This week’s final exchange rule from HHS is unlikely to be the last large package of rules implementing ACA that we will see in the coming weeks–we still expect regulations on Medicaid eligibility, premium tax credits, and risk adjustment, not to mention more on the essential health benefits and other key topics at some point in the future. But before those other regs arrive to compete for our attention and yours, we wanted to at least begin to summarize what we’ve seen in the exchange rule. I’m taking the first look at the lengthy rules in this post. Look for future posts from my colleagues to unpack more on the regs–we may not get to them all before the next round hits, but we’ll do our best to read them all so you don’t have to (you still can if you want!).
The rules announced this week (to be published in the Federal Register on March 27) deal with the process for states to establish their exchanges, the basic functions that exchanges will perform, the guidelines for exchanges in making eligibility determinations, and the certification standards for plans offered through exchanges. This first post will focus just on the rules for states establishing exchanges.
Overall, the final rule is similar to the proposal from last summer. In order to have its exchange approved by HHS, a state or exchange must submit and receive approval for an Exchange Blueprint as well as pass a readiness assessment. Conditional approval is possible if HHS determines a state is likely to be fully operationally ready by October 31, 2013. While the proposed regs had referred to an Exchange Plan rather than a Blueprint, HHS seems to have changed the terminology to distinguish the exchange document from State Plans under Medicaid and CHIP. Rather than a formal State Plan Amendment process as occurs in Medicaid and CHIP, exchanges will only need to apply to HHS for approval of “significant changes” to their Exchange Blueprints. HHS will have 60 days to consider such changes–if it does not deny the change within that period (or extend it with good cause by another 30 days), the state’s change will go into effect.
The regulations provide some further guidance on exchange governance. They specify that an exchange must serve both individuals and small employers, but a state may establish a separate governance and administrative structure for the small business exchange. This means that states that wish to run only an individual or a small business exchange will not have an approved state exchange–they will have to pursue “partnership” options.
One change from the proposed regulation that moves the rule in a positive direction is a requirement that state exchange governing boards (if the exchange is an independent state agency or a non-profit) must include at least one consumer representative. Unchanged is the rule that individuals who have a conflict of interest (those affiliated with an insurer, agent, or broker) may serve on the board, but may not make up a majority of the board.
The final rules also require exchange boards to make publicly available certain “governance principles” that include ethical standards, conflict of interest policies, transparency and accountability standards, and a procedure for disclosing relevant financial interests of board members.
These rules provide some helpful guidelines for states that have established or are moving to create their own exchanges. Many states, though, seem to be preparing for a federally-facilitated exchange, at least for 2014. This week’s regulations don’t provide more information on what the federally-facilitated exchange will look like–they only promise future guidance on the topic. They also mention coming guidance on how states can transition from a federally-facilitated exchange to a state-run exchange. These transition procedures will be particularly important for states that choose to establish their own exchange, but cannot meet the deadlines to have it up and running in time to provide coverage starting in January 2014.
Some of this week’s exchange regulations will be published in interim final status, meaning they remain open to comments from the public. But none of the exchange establishment provisions mentioned here are in that status–they are final rules. In the days ahead, we’ll look at the remaining provisions of the exchange regulations and highlight where it makes sense for child and family advocates to comment.
