CurrentMedicarePolicy N/A

Guidance to States on Review of Qualified Health Plan Certification Standards in Federally-facilitated Marketplaces for Plan Years 2018 and Later

Guidance on how CMS will rely on state reviews of Qualified Health Plan (QHP) certification standards in Federally-facilitated Marketplaces (FFMs) for plan years 2018 and later, affecting CMS, state regulators, and issuers operating in FFMs.

Policy Summary

PayerMedicare

PolicyQHP certification standards review in FFMs

Policy CodePolicy N/A

Change TypeOperational guidance / deference to state reviews

Effective DateJan 1, 2018

Next Review DateN/A

Key ActionCMS will defer certain QHP certification reviews (licensure, network adequacy, and prescription drug/cost-sharing outliers) to state reviews for FFM states starting plan year 2018.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

2018+plan years covered by guidance

3primary review areas deferred

FFMsapplies to

State-Deferred QHP Certification Review Areas

Licensure & Good Standing

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Issuer holds a valid license, certificate of authority, certificate of compliance, or equivalent document authorizing it to offer the product type in its service areas (45 CFR 156.200).

State regulators maintain documentation that the issuer is licensed and in good standing.

For plan years 2018 and later in Federally-facilitated Marketplace (FFM) states, CMS will not perform active review of issuers' licensure and good standing and will instead defer to state processes; CMS will confirm licensure and good standing with state regulators before certifying plans as QHPs.

Network Adequacy

Covered when the following requirements are satisfied:

ONE of

State has an established network adequacy review process; CMS will defer network adequacy review to the state (per Market Stabilization Final Rule).
For states without authority or means to conduct network adequacy reviews, issuer provides accreditation from an HHS-recognized accrediting entity (NCQA, URAC, or AAAHC).
If accreditation is not provided for issuers in states without state review authority, issuer must submit an access plan acceptable to CMS.

Issuers must ensure provider networks are sufficient in number and type so services are accessible without unreasonable delay (45 CFR 156.230).

Service Area

Covered when ALL of the following are met:

QHP service areas meet Marketplace criteria (45 CFR 155.1055).

STATE vs CMS REVIEW

For states that perform plan management functions, CMS will not conduct active certification reviews of QHP service areas and will defer to state processes.
For FFM states that do not perform plan management functions, CMS will continue to review QHP service areas as part of certification.

States remain responsible for ensuring service areas comply with both state requirements and Marketplace requirements.

Prescription Drug & Cost Sharing Reviews

Covered when ALL of the following are met:

Issuers do not use marketing practices or benefit designs that discriminate based on individuals' significant health needs or other specified factors (45 CFR 156.125 and 156.225).

CMS previously identified prescription drug formulary outliers by finding formularies with unusually low numbers of drugs not subject to prior authorization or step therapy, and identified cost sharing outliers by comparing plan co-pays or co-insurance to other plans.

REVIEW RESPONSIBILITY

For states that perform plan management functions, CMS will not conduct active certification reviews for prescription drug formulary and cost sharing outliers and will defer to state processes.
For FFM states that do not perform plan management functions, CMS will continue to review prescription drug formulary and cost sharing outliers.

States were provided tools by CMS to conduct similar formulary and cost sharing reviews.

Coding & Review Notes

Inventorymixed

No codes listed

Prescription drug and cost sharing outlier review — CMS fallback in FFMs

Policy actionFor plan years 2018 and later, CMS will not conduct active certification reviews for prescription drug formulary and cost‑sharing outliers for states that perform plan management functions; CMS will continue these reviews in FFM states that do not perform plan management functions.

Prior CMS methodCMS identified formularies with unusually low numbers of drugs not subject to prior authorization or step therapy and identified plans with outlier co‑pays or co‑insurance compared to other plans.

State roleStates were provided tools by CMS to conduct similar prescription drug and cost‑sharing reviews themselves.

Regulatory basisRelevant authorities include 45 CFR 156.125 and 156.225 prohibiting discriminatory benefit designs and marketing practices.

Certification Decisions & Actions

Note

Final certification determinations and deference

CMS makes final QHP certification determinations for Federally-facilitated Marketplaces (FFMs). When a state performs plan management functions and conducts QHP certification reviews, CMS gives great weight to the state's certification decisions. In those states, CMS will continue to rely on the state's review for standards such as licensure, good standing, network adequacy, service area, and non-discrimination in prescription drug coverage and cost sharing. CMS will still review certain plan data related to federal responsibilities and HealthCare.gov display (for example, cost-sharing reduction structures, data integrity, and plan crosswalks). States performing QHP certification reviews may reasonably interpret applicable QHP certification standards. CMS intends to engage with state regulators, issuers, and stakeholders about potentially relying on additional state reviews to streamline the QHP certification process in future plan years and the timing for any such changes.

CMS makes final QHP certification determinations for FFMs.
When states perform plan management functions, CMS gives great weight to state certification decisions.
States' reviews cover licensure, good standing, network adequacy, service area, and non-discrimination in prescription drug coverage and cost sharing.
CMS retains review of plan data tied to federal funds or HealthCare.gov display (e.g., cost-sharing reduction structures, data integrity, plan crosswalks).
States may reasonably interpret applicable QHP certification standards.
CMS will engage stakeholders about potentially expanding reliance on state reviews in future plan years.

Key Definitions

FFM — definition and CMS role

DefinitionFederally‑facilitated Marketplace (FFM): A Marketplace where CMS performs plan management functions and certifies Qualified Health Plans (QHPs) unless states perform plan management functions in partnership with CMS.

CMS roleFor FFMs, CMS certifies a plan as a QHP if it determines the plan meets all applicable QHP certification standards.

State participationStates may assume primary responsibility for many Marketplace functions, including plan management, and may make QHP certification recommendations to CMS.

Licensure and good standing — state documentation

DefinitionLicensure and good standing: State documentation that an issuer holds a license, certificate of authority, certificate of compliance, or equivalent form or document authorizing it to offer a product type in its service areas (45 CFR 156.200).

State documentation examplesLicense, certificate of authority, certificate of compliance, or equivalent state‑issued document.

CMS practice for 2018+ in FFMsCMS will no longer review issuers' compliance with licensure and good standing standards in FFM states and will confirm licensure and good standing with state regulators instead of reviewing documentation.

Network adequacy — definition and state vs CMS review

DefinitionNetwork adequacy: Issuer provider networks must be sufficient in number and types of providers so that all services are accessible to enrollees without unreasonable delay (45 CFR 156.230).

Deference to statesCMS generally defers review of network adequacy standards to states, recognizing states' central role in assessing network adequacy market‑wide.

Fallback for non‑capable statesFor states without authority/means to conduct network adequacy reviews, CMS will rely on issuer accreditation from HHS‑recognized entities (NCQA, URAC, AAAHC); if accreditation is not provided, CMS will require issuers to submit access plans.

Service area — definition (45 CFR 155.1055)

DefinitionService area: QHP service areas are evaluated to ensure they meet specified Marketplace criteria (45 CFR 155.1055).

CMS review policy for 2018+For plan years 2018 and later, CMS will not conduct active certification reviews of QHP service areas for states that perform plan management functions and will defer to state processes.

Continued CMS reviewCMS will continue to review QHP service areas for FFM states that do not perform plan management functions.