ModifiedMedicarePolicy CMS-9926-F

HHS Notice of Benefit and Payment Parameters for 2020 (FFEs and SBE-FPs)

Final rule establishing 2020 payment parameters and provisions for Exchanges, including risk adjustment, data validation, user fees, Navigator and direct enrollment flexibilities; applies to issuers and Exchanges under the PPACA.

Policy Summary

PayerMedicare

PolicyHHS Notice of Benefit and Payment Parameters for 2020 (FFEs and SBE-FPs)

Policy CodePolicy CMS-9926-F

Change TypeRecalibration & operational updates (risk adjustment, data validation, user fees, EDGE data)

Effective DateJun 24, 2019

Next Review DateN/A

Key ActionUse the published 2020 risk adjustment coefficients and comply with the updated risk adjustment data validation procedures, including required auditor participation and sample requirements.

SourceLink

POLICY UPDATE CHANGES

Finalizes recalibrated parameters for the HHS-operated risk adjustment methodology and changes to the risk adjustment data validation program.

User fee rate for 2020 set at 3.0% of premiums for FFEs and 2.5% for SBE-FPs.

Navigator program duties and training requirements streamlined to provide greater flexibility and reduce burden.

Allows creation of a limited data set using masked enrollee-level EDGE data for research purposes only; not available for public health or health care operations.

Proposals to allow issuers to adopt mid-year formulary changes and to not count certain cost sharing toward annual limitation when brand selected over generic are not finalized.

Maintained high-cost risk pool parameters: $1 million threshold and 60% coinsurance rate for 2018-2020 benefit years and finalized applying same for 2020 and beyond unless changed via notice-and-comment rulemaking.

Finalized a pricing adjustment to the Hepatitis C RXC coefficient to reflect expected lower 2020 drug prices and to limit overcompensation and potential overprescribing incentives.

For the 2020 benefit year, Alabama's request to reduce small group market risk adjustment transfers by 50 percent is approved and will be applied to plan PMPM transfer amounts for that market.

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

3.0%FFE user fee

2.5%SBE-FP user fee

2019-06-24Effective date

$1,000,000High-cost pool threshold

$2.16Risk adj. user fee PMPY

50%Alabama small group reduction

Coverage, Risk Adjustment, and Data Use

Risk adjustment factors (informational) — Adult, Child, Infant model factor tables

Risk adjustment factor tables (informational) — The final rule includes tabulated factor values for demographic, diagnosis (HCC), prescription drug (RXC), enrollment duration, and other model components used to compute enrollee risk scores for the 2020 benefit year. These tables are informational and provide the numeric factor values by metal level (Platinum, Gold, Silver, Bronze, Catastrophic) used in the HHS-operated risk adjustment models for adults, children, and infants.

Table 1 — Adult risk adjustment model factors for 2020 benefit year: demographic factors by age/sex and metal level; diagnosis (HCC) factor values by HCC and metal level; prescription drug (RXC) factor values by RXC and metal level (examples: RXC 01 Anti-HIV Agents, RXC 02 Anti-Hepatitis C (HCV) Agents, RXC 03 Antiarrhythmics, RXC 04 Phosphate Binders, RXC 05 Inflammatory Bowel Disease Agents, RXC 06 Insulin, etc.); interaction terms (RXC x HCC) and other model components; enrollment duration factors (per month factors for 1, 2, 3, etc. months of enrollment); special severe-illness multipliers and enrollment duration factors. See final rule tables for complete numeric values.

Risk adjustment factors (informational) — Child and Infant tables

Child and infant model factor tables — The final rule includes full factor tables for the child and infant risk adjustment models for the 2020 benefit year.

Table 3 — Child risk adjustment model factors for 2020 benefit year: demographic factors by age/sex and metal level; diagnosis factor values (HCCs) with per-metal coefficients including values for high-impact pediatric conditions (examples: pervasive developmental disorders, autistic disorder, quadriplegia, traumatic spinal cord lesions, kidney transplant status, end stage renal disease, chronic kidney disease stages) and many other pediatric HCCs; numeric coefficients by metal level as published in the final rule.

Table 4 — Infant risk adjustment model factors for 2020 benefit year: maturity category and severity-level based factors with very large coefficients for highest-severity extremely immature infants and graded severity levels across metal levels.

Table 5 — HHS HCCs included in infant model maturity categories: mapping of specific HCCs into maturity category buckets (Extremely Immature, Immature, Premature/Multiples, Term, Age 1).

Table 6 — HHS HCCs included in infant model severity categories: mapping of HCCs into severity levels 1–5 and examples (Severity Level 5: End Stage Renal Disease; Stem Cell Transplant status/complications; Severe infections; severe cancers; etc.). Refer to the final rule tables for the full mappings and numeric values.

Risk adjustment factors (informational) — Notes on interpretation and use

Operational notes and uses — These tables and factors are published to allow issuers, states, and researchers to understand the coefficients used to compute plan and enrollee risk scores and the components incorporated into the 2020 benefit year HHS-operated risk adjustment models.

The published tables include demographic, diagnosis (HCC), prescription drug (RXC), enrollment duration, CSRs (cost-sharing reduction) adjustment factors (Table 7), R-squared statistics (Table 8), and other model components used in the transfer calculations.

RXC treatment and adjustments: RXC coefficients and RXC x HCC interaction terms are included in the adult model factor tables; the rule finalizes incorporation of RXCs into the adult risk adjustment models for the 2018+ benefit years, and shows RXC factor values for 2020. Specific interaction coefficients (RXC x HCC) and large interaction effects (e.g., RXC 10 x HCC159/158) are present in the full tables.

Use for recalibration and validation: HHS used a three-year blended recalibration approach (2015 MarketScan blended with 2016 and 2017 enrollee-level EDGE data) for the 2020 benefit year coefficients; these published factor tables reflect that final recalibration and pricing adjustments (for example, Hepatitis C RXC pricing adjustment).

Availability: The full numeric tables provided in the final rule are the authoritative source for per-metal factor values and HCC/RXC mappings for 2020; issuers and researchers should reference the complete tables in the final rule or HHS downloads for exact coefficients when computing risk scores or conducting analyses.

Codes, Factors, and Key Values

HHS-HCC listICD-10

HCC001	HIV/AIDS
HCC002	Septicemia, Sepsis, Systemic Inflammatory Response Syndrome/ Shock
HCC003	Shock, Central Nervous System Infections, Except Viral Meningitis
HCC006	Opportunistic Infections
HCC008	Metastatic Cancer
HCC009	Lung, Brain, and Other Severe Cancers, Including Pediatric Acute Lymphoid Leukemia
HCC011	Other Cancers and Tumors
HCC018	Pancreas Transplant Status/Complications
HCC020	Diabetes with Acute Complications
HCC135	(Included in musculoskeletal disease category groupings)

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What Issuers and Providers Must Do

Documentation Required

Navigator training streamlined; assisters authorized (not required) to give post-enrollment help

Streamlined Navigator training requirements were finalized and HHS authorized — but did not require — assisters to provide certain types of assistance, including post-enrollment assistance; direct enrollment flexibilities were expanded to permit enrollment via third‑party websites.

Note

Proposed mid‑year formulary change parameters and enrollee notice/appeals

The rule proposed allowing issuers to make mid‑year formulary changes when a generic equivalent becomes available, including adding the generic and removing or re‑tiering the brand, and proposed requiring written notice to enrollees at least 60 days before the change while preserving appeals and exception rights under §§147.136 and 156.122(c).

Proposal would permit adding a generic equivalent and removing or moving the brand to a different cost‑sharing tier.
Proposed 60‑day written notice to enrollees and preservation of appeals/exceptions under §§147.136 and 156.122(c).

Key Terms and Acronyms

inv-63: Exchanges — Exchanges (American Health Benefit Exchanges).

DefinitionExchanges (American Health Benefit Exchanges)

PurposeEntities established under the PPACA through which qualified individuals and employers can purchase QHPs

Related provisionsExchanges implemented under sections 1311/1321 of the PPACA and subject to HHS certification and oversight

inv-64: EHB — Essential Health Benefits (EHB) package categories and related statutory basis under section 1302 of the PPACA.

EHB statutory basisSection 1302 of the PPACA establishes Essential Health Benefits categories

EHB categories10 general categories including prescription drugs, hospitalization, maternity/newborn care, preventive services, pediatric services, etc.

Document Change Log

2019-06-24Final rule effective dateLatest

HHS published the final Notice of Benefit and Payment Parameters (CMS-9926-F) establishing 2020 payment parameters and program changes, effective June 24, 2019.

2019-04-25Publication of final rule

Final rule (Federal Register publication) released detailing recalibrated risk adjustment parameters and operational changes for Exchanges and risk adjustment programs for the 2020 benefit year.

2019-06-24User fee rates finalized

Policy Summary

PayerMedicare

PolicyHHS Notice of Benefit and Payment Parameters for 2020 (FFEs and SBE-FPs)

Policy CodePolicy CMS-9926-F

Change TypeRecalibration & operational updates (risk adjustment, data validation, user fees, EDGE data)

Effective DateJun 24, 2019

Next Review DateN/A

Key ActionUse the published 2020 risk adjustment coefficients and comply with the updated risk adjustment data validation procedures, including required auditor participation and sample requirements.

SourceLink

On This Page

Documentation Required

Issuer expectations for mid‑year formulary changes (preapproval, notice, appeals)

HHS is not finalizing the proposed mid‑year formulary change allowance at this time; where issuers do make mid‑year formulary changes consistent with state law, HHS expects issuers to obtain pharmacy and therapeutics committee preapproval, provide reasonable advance notice to affected individuals, and offer access to appeals (§147.136) or exceptions (§156.122(c)).

Issuers expected to use P&T committee preapproval for mid‑year changes where state law permits.
Affected individuals should have access to appeals (§147.136) or exceptions (§156.122(c)).
HHS will continue to examine the issue and may provide future guidance.

Documentation Required

Publication of finalized 2020 risk adjustment model factor tables

HHS published tables of finalized 2020 risk adjustment model factors — including demographic factors, HCCs, RXCs, RXC‑HCC interactions, and enrollment duration coefficients — and noted factors are truncated to reflect high‑cost risk pool parameters.

Tables include adult, child, and infant model factors for the 2020 benefit year.

Billing Rule

High‑cost risk pool transfer term: 60% of costs above $1,000,000

High‑cost risk pool transfer terms were finalized and added to the transfer methodology: a payment term reflecting 60% of costs above $1,000,000 (HRP_i) and a premium adjustment charge to fund the pool.

HRP payment term equals 60% of costs above a $1,000,000 threshold.
A premium adjustment charge will be applied to fund the high‑cost risk pool and maintain balance in transfers.

Documentation Required

2020 risk adjustment factor table — operational use for plan liability calculations

The published risk adjustment factor tables list model factor weights by demographic group and HCC diagnosis for the 2020 benefit year and are intended for operational use in plan liability and risk score calculations; these tables do not impose prior authorization or denial requirements on providers.

Tables show per‑metal level factor weights (Platinum/Gold/Silver/Bronze/Catastrophic).

Documentation Required

Prescription drug (RXC) factor codes and values by metal level

Prescription drug factor tables for 2020 include RXC codes (e.g., RXC01–RXC10) and factor values by metal level (examples: RXC01 Platinum = 6.528; RXC02 Platinum = 8.369).

RXC factors are listed by metal level and included in the adult model factor tables.
RXC examples shown in Table 1 (RXC01, RXC02, etc.).

Documentation Required

Enrollment duration factor multipliers (1–11 months) by metal level

Enrollment duration factors for 1–11 months are provided in the 2020 model tables with per‑metal‑level multipliers (example: 1 month Platinum = 0.316; 11 months Platinum = 0.030).

Enrollment duration factors are applied by month and metal level in risk score calculations.

Documentation Required

SEVERE × interaction and HCC group interaction multipliers

The tables list SEVERE x interaction factors and HCC group interaction multipliers by metal level (for example, many SEVERE x entries are ~7.044–7.575 across metal tiers).

SEVERE x interaction multipliers appear across multiple HCCs and metal levels in Table 1.

Documentation Required

Risk adjustment documentation and tables (operational reference)

Risk adjustment documentation tables and accompanying notes are provided in the final rule (adult, child, and infant model tables and explanatory text) for use in operational risk score computation and validation.

Documentation Required

Child risk adjustment factor table (partial) — per‑diagnosis factors by metal level

Child model factor tables for the 2020 benefit year are published (partial excerpt shown) and provide per‑diagnosis factor values by metal level for use in child risk score calculations.

Child model table entries include per‑metal factor values for pediatric diagnoses (examples shown in Table 3).

Billing Rule

CSR adjustment maintained; 1.12 multiplier for Massachusetts wrap‑around plans

HHS finalized continuation of CSR adjustment factors for 2020, maintaining the CSR factors from the 2019 Payment Notice and applying a 1.12 CSR adjustment for Massachusetts wrap‑around plans.

CSR adjustment factors from the 2019 Payment Notice are retained for 2020.
Use CSR adjustment factor = 1.12 for Massachusetts wrap‑around plans.

Billing Rule

Calculate risk adjustment transfers using state payment transfer formula after EDGE submission

Plan payments and charges under risk adjustment must be calculated using the state payment transfer formula after issuers submit EDGE data; transfers are calculated at geographic rating area level and scaled by the statewide average premium.

State payment transfer formula compares plan revenue needs based on enrollee risk to plan‑generated revenues and converts differences to dollar amounts using statewide average premium.
Transfers are calculated at each rating area for plans operating in multiple areas.

Prior Authorization

State transfer reduction requests: submit evidence by Aug 1 (two years prior); redaction rules apply

States requesting reductions to HHS‑calculated risk adjustment transfers must submit supporting evidence by August 1 two calendar years prior to the benefit year; HHS will post only non‑confidential portions and may accept redacted public versions with unredacted versions submitted to HHS.

State requests must follow §153.320(d) requirements and timing (by Aug 1, two years prior).
HHS will publish redacted supporting evidence and receive unredacted versions for review.

Documentation Required

Limited data set access: research purpose statement and DUA required; HHS approval discretionary

Qualified requestors may obtain an enrollee‑level EDGE limited data set for research if they submit a research purpose statement and sign a Data Use Agreement; HHS retains final discretion to approve requests and will follow §164.514(e) limited data set procedures.

Requestors must provide a research purpose and execute a DUA; HHS has final approval authority.
Limited data set files will not include direct identifiers, state/rating area extractions were not finalized for inclusion.

Documentation Required

HHS use of enrollee‑level EDGE data for program calibration and policy analysis

HHS will extract and use enrollee‑level EDGE data and EDGE server reports to calibrate and operationalize HHS market programs and conduct policy analysis without requiring additional issuer submissions; issuer permission is not required for these internal uses.

HHS may use EDGE data for risk adjustment, AV Calculator, out‑of‑pocket calculator, and policy analysis.
HHS will not require issuers to submit additional data elements for these internal uses.

Documentation Required

Obligation to participate in HHS risk adjustment data validation and provide sampled documentation

Issuers must participate in HHS risk adjustment data validation when HHS operates risk adjustment; each issuer must engage an independent initial validation auditor and provide sampled enrollee demographic, enrollment, and medical record documentation for HHS‑selected samples.

Initial validation audit performed by an issuer‑engaged independent auditor, followed by an HHS‑retained second validation audit.
Validation applies in all states for the 2020 benefit year where HHS operates risk adjustment.

Documentation Required

30‑day timeframe to confirm second audit findings or file discrepancy

Issuers have 30 calendar days to confirm second validation audit findings or the risk score error rate calculation results, or to file a discrepancy; HHS maintained the 30‑day window rather than shortening it to 15 days.

Two discrepancy windows exist: one beginning when second validation audit findings are issued and one when final risk score error rate results are distributed.

Billing Rule

Default data validation charge triggered by failure to engage/submit initial audit; allocation among issuers

If an issuer fails to engage an initial validation auditor or submit initial validation audit results, HHS will impose a default data validation charge calculated based on enrollment for the audited benefit year and allocate the charge among issuers in the same benefit year risk pool proportionally by market share and transfer amounts.

Default data validation charge is separate from risk adjustment transfers and may be published with the benefit year's validation report and collected via monthly payment processes.
Allocation is proportional to issuers' market share and transfer amounts in the applicable risk pool.

Documentation Required

RXC claims‑based validation: provide issuer source system pharmacy/medical claims documentation

For RXC validation during data validation, issuers must provide issuer source system documentation of pharmacy claims and medical claims showing issuer‑paid prescriptions or RXC‑eligible service payments; auditors will perform claims‑based validation and will not require the actual written prescription.

Validation focuses on whether the prescription or RXC‑eligible service was paid by the issuer as evidenced in source system claims.
Auditors will not require obtaining the original prescription to validate RXCs.

ApplicationIssuers of QHPs must cover EHBs under section 1311 and related provisions

inv-65: Navigator training and duties — The final rule streamlines 20 specific training topics into 4 broad categories and provides more flexibility.

Navigator training topics streamlined20 specific training topics consolidated into 4 broad categories

Permitted assistanceAuthorizes (but does not require) certain post-enrollment assistance for FFE Navigators

GoalReduce burden and increase flexibility for Navigator programs

inv-64: FFE/SBE-FP user fees — User fee rates: The FFE and SBE‑FP user fee rates for 2020 are finalized at 3.0% and 2.5% of premiums, respectively.

FFE user fee rate (2020)3.0% of premiums

SBE-FP user fee rate (2020)2.5% of premiums

Location in ruleFinalized in 45 CFR part 155 and discussed in Executive Summary

inv-67: product (definition as referenced in §144.103) — Product continuity criterion.

Product continuity definition referenceDefinition referenced in §144.103 (product continuity criterion)

Key pointProduct considered same only if plan-adjusted index rate variation within ±2 percentage points

Formulary change implicationMajor formulary changes causing >±2% change require issuance of new product

inv-68: plan liability risk score (PLRS) — Risk score produced by HHS risk adjustment models based on age, sex, diagnoses (HCCs), enrollment duration, and RXCs, used to calculate plan liabilities.

PLRS definitionPlan Liability Risk Score produced by HHS risk adjustment models based on age, sex, diagnoses (HCCs), enrollment duration, and RXCs

UseUsed as input to state payment transfer formula to compute plan payments/charges

Model componentsIncludes demographic, HCC, RXC, RXC-HCC interactions, and enrollment duration factors

inv-69: High-cost risk pool (HRP_i) — High-cost risk pool payment term reflecting 60% of costs above $1M used to account for exceptionally high-cost enrollees in transfer calculations.

HRP_i definitionHigh-cost risk pool payment term reflecting 60% of costs above $1,000,000

PurposeAccounts for exceptionally high-cost enrollees in transfer calculations; added as separate transfer terms

FundingFunded by a percent-of-premium adjustment applied to plans' total premiums (HRPC_m) per national pool

inv-70: RXC Crosswalk — Quarterly updated mapping of drugs to RXC categories used in adult risk adjustment models.

RXC CrosswalkQuarterly-updated mapping of drugs to RXC categories used in adult risk adjustment models

RXC examplesRXC01 (Anti-HIV Agents), RXC02 (Anti-HCV), RXC08 (MS Agents) with per-metal factor values

UpdatesHHS will continue quarterly updates to include new drugs where appropriate

inv-71: HCC — Hierarchical Condition Category; diagnosis factor codes with associated numeric factor weights by plan category shown in the table.

HCC definitionHierarchical Condition Category (HCC): diagnosis factor codes with numeric factor weights by plan metal level

Table contentsTables list per-HCC factor values for Platinum/Gold/Silver/Bronze/Catastrophic

UseHCC factors used to compute individual risk scores contributing to PLRS

inv-72: Demographic Factors — Age and sex category factor multipliers listed by plan metal level.

Demographic factorsAge and sex category multipliers listed by plan metal level (Platinum/Gold/Silver/Bronze/Catastrophic)

ExamplesAge 21-24 Male: Platinum = 0.149; Age 60-64 Male Platinum = 0.476; Female 21-24 Platinum = 0.233

RoleAdded to HCC/RXC components to produce enrollee risk score

inv-73: Severity indicator (SEVERE) — Severity illness indicator variable listing HCCs considered severe.

Severity indicator (SEVERE)Indicator variable listing HCCs considered severe (e.g., Septicemia/Sepsis; Pulmonary Embolism/DVT; Respirator Dependence)

UseUsed with SEVERE x interaction factors to adjust risk contributions for severe diagnoses

SourceTable 2 lists HCCs included in severity illness indicator

inv-74: RXC (Prescription Drug Factor) — RXC = prescription drug category factors applied in the model (e.g., RXC01 = Anti-HIV Agents).

RXC definitionPrescription Drug Factor codes (RXC) applied in adult model, e.g., RXC01 = Anti-HIV Agents

FactorsRXC codes have per-metal factor weights listed in the prescription drug factors table

ValidationRXCs incorporated into data validation beginning with 2018 as claims-based validation

inv-75: HHS HCCs listed in the severity illness indicator — Severity Illness Indicator Variable.

Severity Illness Indicator VariableList of HHS HCCs included in severity indicator used in model tables

ExamplesIncludes Septicemia/Sepsis, Pulmonary Embolism, Respirator Dependence, etc.

PurposeIdentifies HCCs for SEVERE x interaction factors and special handling in models

inv-76: Risk adjustment factor — Per-diagnosis risk adjustment factor.

Risk adjustment factorPer-diagnosis numeric factor weights (HCC/RXC/demographic/enrollment) used to compute risk scores

PresentationPublished in tables by metal level for adult, child, and infant models for 2020

RoleSummed to produce individual enrollee risk score components

inv-77: Plan metal level — Plan metal levels used: Platinum, Gold, Silver, Bronze, Catastrophic.

Plan metal levels usedPlatinum, Gold, Silver, Bronze, Catastrophic

ApplicationSeparate factor columns in all model tables correspond to these metal levels

ImplicationRisk scores and transfer calculations reflect metal-level factor differences

inv-78: Extremely Immature (infant maturity category) — Extremely Immature Newborns: newborns with birth weight <500 grams and close related low-birth-weight groupings as listed in Table 5.

Extremely Immature definitionExtremely Immature Newborns: birth weight <500 grams and related low-birth-weight groupings

Severity Level mappingInfant maturity categories mapped to severity levels in infant model (Table 5)

UseUsed to assign infant factor values (e.g., Severity Level 5 factors) in infant model

inv-79: Severity Level 5 (infant model) — Severity Level 5: highest severity grouping in the infant model that includes HCCs such as metastatic cancer, major transplants, end-stage conditions.

Severity Level 5 (infant model)Highest severity grouping in infant model including HCCs like metastatic cancer, major transplants, end-stage organ disease, respirator dependence

RoleAssigned very large factor weights in infant model tables (see Table 4 entries)

Example HCCsTransplant status/complications, ESRD, respirator dependence, metastatic cancer

inv-80: R-squared — R-squared statistic: percentage of individual variation explained by a model.

R-squared definitionPercentage of individual variation explained by a model; measures overall predictive accuracy

UseReported for model performance comparisons across datasets and metal tiers

ContextR-squared values shown in Table 8 for 2020 recalibration datasets

inv-81: Predictive ratio — Predictive ratio: ratio of weighted mean predicted plan liability to weighted mean actual plan liability for a subpopulation.

Predictive ratio definitionRatio of weighted mean predicted plan liability to weighted mean actual plan liability for a subpopulation; 1.0 = perfect prediction

UseUsed to evaluate model accuracy for subpopulations and validation groups

ReportedPredictive ratios accompany R-squared statistics in model performance assessment

inv-82: State payment transfer formula — Method to calculate payments and charges comparing plan revenue needs based on enrollee risk to revenues collected.

State payment transfer formulaCalculates PMPM transfer amount comparing plan revenue needs (based on PLRS) to plan premium revenue, scaled by statewide average premium

ScalingUses statewide average premium (P̄_S) adjusted by removing 14% administrative costs

Integration with HRPTotal transfer includes PMPM transfer (T_i · M_i) plus high-cost risk pool adjustments (HRP_i and HRPC_m terms)

inv-85: T_i / Total Transfer_i — Plan PMPM transfer amount (T_i) and total plan transfer calculation including billable member months and high-cost risk pool adjustments.

Plan PMPM transfer amount (T_i)PMPM transfer derived from state payment transfer formula (T_i)

Total Transfer calculationTotal Transfer_i = (T_i · M_i) + (HRP_i - (HRPC_m · TP_i)) where M_i = billable member months

UseMultiply T_i by plan billable member months to determine plan payment or charge

inv-86: enrollee-level EDGE data — Enrollee-level EDGE data: masked enrollee-level data collected from issuers' EDGE servers, to be used for model recalibration and potential limited data set releases.

Enrollee-level EDGE dataMasked enrollee-level data collected from issuers' EDGE servers for model recalibration and operational uses

Limited data set availabilityHHS will make annual limited data set files available to qualified requestors for research under DUA (§164.514(e))

Privacy measuresHHS creates hashed enrollee identifiers and will not include issuer/plan direct identifiers in limited data sets

inv-87: Limited data set — Limited data set: de-identified data under HIPAA §164.514(e) excluding direct identifiers but may include dates and limited fields; available to qualified requestors.

Limited data set (HIPAA §164.514(e))De-identified data excluding direct identifiers; requestors must sign Data Use Agreement and specify research purpose

ContentsMay include dates and grouped claim identifier (from 2017 benefit year onward); will not include state/rating area or issuer/plan identifiers

AvailabilityAnnual releases to qualified requestors; HHS will not provide a public use file if limited data set is finalized

inv-88: Hashed enrollee identifier — Hashed enrollee identifier: a system-generated random number created when HHS extracts enrollee-level EDGE data that cannot be linked back without HHS mapping.

Hashed enrollee identifierSystem-generated random number created when HHS extracts enrollee-level EDGE data that cannot be linked back to issuers' EDGE servers

PurposeProtect issuer and enrollee identity in limited data sets and internal HHS uses

RequirementDUAs and limited data set rules restrict recipients from attempting re-identification

inv-89: Initial validation audit sample — Initial validation audit sample.

Initial validation audit sample size200 enrollees per issuer HIOS ID (statewide)

Neyman allocationSampling methodology applied across 10 strata (including enrollees without HCCs) to optimize precision

Rationale200 chosen as midpoint of precision analyses targeting ~10% precision at 95% confidence

inv-90: Neyman allocation — Neyman allocation - method to allocate samples to strata based on strata variances to optimize precision for a fixed total sample size.

Neyman allocation definitionMethod to allocate samples to strata based on strata variances to optimize precision for a fixed total sample size

ApplicationExtended to include the 10th stratum (enrollees without HCCs) for initial validation audit sampling

Expected benefitProvides more optimal sample allocation and improved HCC representation

inv-91: default data validation charge — Default data validation charge: a charge imposed under §153.630(b)(10) when an issuer fails to engage an initial validation auditor or submit results.

Default data validation charge definitionCharge imposed when an issuer fails to engage an initial validation auditor or submit initial validation audit results

Calculation basisCalculated as PMPM amount for audited benefit year multiplied by that year's enrollment (billable member months) for the audited plans

AllocationAllocated among issuers in same benefit-year risk pool proportionally by market share/transfer amounts

inv-92: pairwise means test — Pairwise means test: statistical test using a 95% confidence interval to determine if differences between initial and second validation audit samples are significant.

Pairwise means test (definition)Statistical test using a 95% confidence interval to determine if differences between initial and second validation audit samples are significant

ProcedureSecond auditor selects subsample; if significant differences found, expand to larger subsample (up to 100) and possibly full sample (200) based on precision analysis

Standard used95% confidence (standard deviation 1.96) for pairwise means testing

inv-94: RXC — Prescription drug category code used in HHS risk adjustment models.

RXC (definition)Prescription drug category code used in HHS risk adjustment models (e.g., RXC01–RXC12)

Validation treatmentRXCs incorporated into data validation starting with 2018 pilot and validated via claims-based documentation

Impact on error estimationRXC failures treated as EDGE discrepancies (not included in HCC failure rates); adjustments apply only to discrepant issuer

inv-95: EDGE discrepancy — A materially incorrect EDGE server data submission (demographic/enrollment or RXC) that can trigger adjustment to the applicable benefit year's risk score and transfers for the discrepant issuer.

EDGE discrepancy (definition)A materially incorrect EDGE server data submission (demographic/enrollment or RXC) that can trigger adjustment to the applicable benefit year's risk score and transfers for the discrepant issuer

EffectAdjustments for RXC discrepancies reduce payments or increase charges only for the discrepant issuer; do not increase payments or decrease charges for that issuer

ImplementationRXCs validated claims-based; material RXC errors in non-pilot years may adjust issuer transfers for applicable benefit year

User fee rates for 2020 finalized at 3.0% of premiums for FFEs and 2.5% for SBE-FPs to increase affordability.

2019-06-24Risk adjustment model recalibration finalized

Final 2020 HHS risk adjustment coefficients will blend 2015 MarketScan with 2016–2017 enrollee-level EDGE data and include a Hepatitis C RXC pricing adjustment.

2019-06-24High-cost risk pool parameters maintained

Maintained high-cost risk pool threshold at $1,000,000 and 60% coinsurance rate for benefit year 2020 and beyond unless changed via rulemaking.

2019-06-24Alabama small group transfer reduction approved

HHS approved a 50% reduction to HHS-calculated risk adjustment transfers for Alabama's 2020 small group market, to be applied to plan PMPM transfer amounts.

2019-06-24Enrollee-level EDGE limited data set policy finalized

HHS will create and make available annually a limited data set of masked enrollee-level EDGE data to qualified requestors for research purposes only, with DUAs required and some elements withheld.

2019-06-24Risk adjustment user fee (per-member) finalized

Finalized risk adjustment user fee for 2020 set at $2.16 per billable member per year ($0.18 PMPM) based on estimated administrative costs.

2019-06-24Navigator training requirements streamlined

Finalized changes to streamline Navigator training and authorize (but not require) assisters to provide certain post-enrollment assistance to reduce burden.

2019-06-24Neyman allocation sampling extended

Applied Neyman allocation to all 10 strata (including enrollees without HCCs) for initial validation audit sample allocation to improve precision and HCC representation.

2019-06-24Second-audit subsampling and expansion rules finalized

Expanded second validation audit subsampling methodology allowing larger subsample (up to 100) and potential expansion to full initial sample (200) based on precision testing.

2018-2019RXC incorporation into validation phased

Incorporated RXCs into risk adjustment data validation beginning as a 2018 pilot (no adjustments for 2018) with full implementation for 2019 onward where material RXC EDGE discrepancies can adjust issuer transfers.