State Medicaid, children’s health insurance programs (CHIP) and health insurance marketplaces strive to prepare for an expected increase in the demand for their services as they navigate a world roiled by COVID-19, an economic downturn and ensuing budget crises, and unpredictable federal relief efforts.
Last week, the Internal Revenue Service (IRS) released a proposed rule that would for the first time allow tax deductions for money spent for certain health care programs and arrangements, including direct primary care arrangements and health care sharing ministries.
The Department of Health and Human Services (HHS) has issued the final Notice of Benefit and Payment Parameters (NBPP) for 2021 — the annual rule governing health insurance plans and health insurance marketplaces. While the final rule contains several changes, it does not significantly alter automatic re-enrollment for individuals who purchase through the health insurance marketplaces, which the federal government had proposed earlier this year.
The annual NBPP is of particular importance to insurers, insurance regulators, and marketplace officials who rely on the rule and its regulations to set the playbook by which health plans will be required to operate in the following year. The rule also sets requirements for system changes that marketplaces may have to implement as soon as the upcoming enrollment season.
The annual rule was issued May 7, 2020, the latest date that this annual rule has ever been released. As a result, the final regulations come very close to – or for some states after – the filing deadlines by which health insurers must submit their planned offerings for 2021. The delay caused health insurers to develop plans while operating under a level of uncertainty of what might be included in the final rule. Once released, insurers had little, if any, time to adjust their proposed filings in accordance with the changes finalized by the regulation.
Acknowledging the tight timeframe for implementing changes before the 2021 plan year, HHS delayed implementation of several of the requirements imposed under this rule until 2022 – including new requirements for medical loss ratio (MLR) calculations and changes to policies related to special enrollment periods (SEPs).
Delayed implementation of changes and deadlines required of insurers and insurance marketplaces is especially pertinent as markets face ongoing uncertainty resulting from the COVID-19 pandemic. As the country works to curb the spread of the disease, many questions remain about the pandemic’s long-term effects on insurance markets.
- How will consumers who lose employer-sponsored coverage and transition to individual plans affect the commercial insurance market?
- What will be the financial impacts of COVID-19 related treatments, including a possible vaccine?
- What will be the cost of consumers’ delaying or foregoing care?
- How will greater utilization of telehealth services impact costs?
Meanwhile, the health insurance marketplaces are operating in a new environment with increased enrollment of new consumers, all while modifying their operations, which include marketing and outreach strategies that comply with enhanced social distancing standards.
Major changes included in the rule are summarized below.
Annual reporting of state-mandated benefits. Federal law requires that health insurance plans sold in the individual and small group markets cover essential health benefits (EHB) and 10 broad health benefit categories, including hospitalizations, emergency services, and prescription drugs. States may impose benefits requirements in addition to the federal EHB requirement. Typically, benefit mandates lead to increased costs for health insurance. To insulate the federal government from increased expenditures on health insurance subsidies, which are calculated based on the cost of insurance premiums, states must defray the cost of any state-mandated benefits issued after Dec. 31, 2011, either by issuing payments to enrollees or insurers to cover the cost of these mandates. State-mandated benefits are also not allowed to be considered as part of federal advance premium tax credit (APTC) calculations or as part of cost-sharing limitations imposed on qualified health plans (QHPs).
Citing concerns that states may not be defraying the costs of state-requirement benefits, beginning in July 2021, states will be required to submit an annual report on state-mandated benefits outside of EHB. In the first year, states are required to include a comprehensive list of all state benefit requirements for QHPs sold in in their individual and small group markets. This will set a baseline – going forward states will only be required to submit an update to the report to include any new, amended, or repealed benefits. If no changes are made during a given year, a state may submit the same report. The report must accurately report information available within 60 days prior to the annual submission deadline. The rule also clarifies that insurers may refer to states to produce any cost analysis associated with additional benefits, rather than perform the calculations themselves.
The new requirement comes despite a majority of comments opposed to increased reporting, noting a lack of evidence that states were not in compliance with defrayal requirements and that such a requirement would be onerous and duplicative of processes already in place to assess the effects of state-mandated benefits. HHS asserts the reporting requirement should be complimentary to work already being conducted by states to assess these benefits and will help promote a uniform approach to assuring compliance with federal requirements across all states. The rule also stipulates that HHS will be providing additional technical assistance to states to address concerns over the lack of clarity about defrayal processes and identification of state-benefits that fall outside of EHBs.
Consideration of pharmacy price concessions and wellness incentives in medical loss ratio (MLR) calculations. Beginning in 2022, insurers will be required to deduct prescription drug price concessions from incurred claims considered as part of MLR calculations. Such concessions may include drug rebates or incentive payments given directly to insurers as well as those secured and retained by entities providing pharmacy benefit management (PBM) services or PBM-like entities. This is a change from previous requirements that only mandated inclusion of concessions received directly by an insurer and aligns with MLR policies already in place under Medicare and Medicaid. The change intends to even the playing field between insurers with PBM contracts and promote a uniform standard for what factors are considered when performing MLR calculations. HHS is considering additional rulemaking to provide precise definitions for prescription drug rebates and price concessions in advance of implementation of the new requirement.
HHS has also finalized changes that individual market insurers may include the cost of certain wellness incentives as quality improvement activities (QIA), which are considered medical care for the purposes of MLR calculations. Wellness incentives include rebates, discounts, waivers of cost-sharing, or other incentives provided as part of participation in a wellness program. This change conforms with how MLR calculations are assessed in the group market.
Inclusion of drug rebates into cost-sharing calculations. The rule permits, but does not require, insurers to count direct support offered by drug manufacturers (e.g., drug rebates, coupons) toward calculation of an enrollee’s cost-sharing responsibility. The rule clarifies that neither HHS nor the departments of Labor or Treasury will take enforcement action against insurers who exclude the value of direct support from cost sharing, even in cases where supports may incentivize take-up of brand-name drugs when generic alternatives area available.
HHS notes advantages to policies that include rebates as part of calculations (e.g., cost protections for consumers who use/need brand-name drugs) as well as policies that mandate exclusion of rebates (e.g., to incentivize use of generics where available). Application of the rule ultimately defers to state law and any restrictions states may impose on how direct supports are included in cost-sharing calculations. Insurers must apply their policies on direct support uniformly across all QHPs. HHS expects that issuers “prominently include” information on websites and other educational collateral explaining how drug manufacturer rebates are included in cost-sharing calculations.
Greater flexibility on plan selection available during a special enrollment period (SEP). Current rules maintain tight restrictions on the types of plans enrollees may select if enrolling during a SEP; usually requiring that consumers enroll in a plan at the same metal tier (of the same value) as previously held coverage. This is to ensure that consumers do not take advantage of SEPs to enroll in more generous plans because of an emerging health care need, as well as to provide greater consistency for insurers operating in the market. However, in a case where a SEP is triggered by an increase in income, the income change may render a consumer ineligible for cost-sharing reductions (CSRs), an additional subsidy given to individuals earning between 100nto 250 percent of the federal poverty level to cover out-of-pocket costs of care.
Loss of CSR eligibility may significantly alter affordability of certain health plans for a consumer. To account for this change, beginning with plan year 2022, consumers who lose CSR eligibility may enroll in a plan at a different metal level. The rule also allows consumers who are newly eligible for coverage to enroll in the same QHP as any dependents who are currently enrolled in QHP coverage through a health insurance marketplace.
Expedited effective dates for coverage obtained during a SEP. Current enrollment policies can lead to significant delays in effectuation of health insurance coverage. For instance, enrollees who enroll in coverage from the day 16 through 31 of any given month typically would not start coverage until the first of the month subsequent to the month that immediately follows their enrollment (e.g., if a person enrolled on June 16, coverage would not begin until Aug. 1).
Recognizing advancements in the time it takes issuers to process enrollments, in plan year 2022 insurers participating in the federally-facilitated marketplace (FFM) will be effectuating coverage on the first of the month following enrollment, regardless of the date the individual enrolled. State that operate their own marketplaces (SBMs) have flexibility to impose their own guidelines on effectuation dates – several have already accelerated the timeline for their issuers.
Limited flexibility for consumers eligible for retroactive coverage. A consumer may be incorrectly determined ineligible for coverage, in which case they can appeal the coverage decision. In some of these cases, the person may ultimately be eligible for coverage retroactive to a certain point before a determination of the eligibility was finalized.
Earlier rules had given consumers some flexibility over the start date at which consumers could retroactively elect coverage – which gave consumers some options in case they were in need of retroactive coverage, yet had concerns about paying premiums owed to cover all the months of retroactive coverage. The new rule eliminates this flexibility, and requires consumers to either begin their coverage retroactive to the entire period for which they should have been eligible for coverage or to begin coverage prospectively. The change is expected to have minimal effect as less than .05 percent of consumers with verification issues opted for retroactive coverage in 2018 and 2019.
SEP timeframe for Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs). Current rules allow that consumers may qualify for an SEP upon becoming newly eligible for a QSEHRA, a type of health reimbursement arrangement (HRA) whereby employees can use the funds in the HRA to purchase health coverage sold through the health insurance marketplaces (for more information on QSEHRAs, read New Federal Health Reimbursement Proposal Adds New Variables to State Health Insurance Markets). The rule clarifies that the SEP applies even in cases where the QSEHRA’s plan year does follow the calendar year, the typical standard for the coverage year.
Maintains FFM user fee. Health insurers will be assessed at a rate of 3 percent to participate on the FFM, also known as healthcare.gov. For states that use a hybrid marketplace model, known as state-based marketplaces on the federal platform (SBM-FPs), HHS will retain 2.5 percent with 0.5 percent available to states to perform functions related to outreach, marketing, and plan management. Thirty-two states used the FFM in 2020, while six were SBM-FPs. (For more on health insurance marketplace models read Where States Stand on Exchanges.)
Eases process for coverage terminations and verifications. Consumers who are eligible for Minimum Essential Coverage (MEC), including most employer-sponsored coverage, Medicare, and Medicaid – are not eligible to receive federal subsidies to purchase coverage through the health insurance marketplaces. In the case where a marketplace determined that a person was dually enrolled in an exchange plan and MEC, a marketplace was required to redetermine the enrollee’s eligibility for subsidies before terminating that person’s coverage. This rule eliminates the requirement that marketplaces re-determine eligibility before termination, so long as the enrollee has opted in to be automatically terminated from coverage in this circumstance.
The rule clarifies that coverage terminations will be processed retroactive to the date of death in the case of an enrollee who has expired. The rule also clarifies that termination initiated by an enrollee will be effective retroactive to the date that the enrollee first attempted to end coverage, though SBMs are granted flexibility in how to apply this policy.
Finally, currently marketplaces must verify whether consumers are eligible for qualifying employer-coverage as part of determining whether consumers are eligible for marketplace subsidies. In some cases, insufficient data is available to perform this function, in which case marketplaces may use random sampling to verify eligibility. Due to limitations in sampling processes, including availability of adequate data, HHS is continuing its current policy to not enforce action against states that do not conduct random sampling.
Customization of QHP Quality Rating System (QRS) Display. Health insurance marketplaces are required to display quality ratings for insurance plans on their websites. The quality ratings are determined based on the federal QRS, which sets universal standards for the quality of health plans sold across all states. While the rule maintains federal governance over the QRS, it does grant SBM states flexibility in how they choose to display quality data. For example, SBMs may opt to include state-specific information related to quality in addition to QRS data.
Encouraging value-based insurance design. The rule does not explicitly mandate or incentivize adoption of value-based strategies, but does encourage insurer adoption of value-based insurance design principles consistent with policies supported by the University of Michigan Center for Value-Based Insurance Design, including benefit models that offer high-value services to consumers with little to no cost-sharing.
Adjusts factors used for risk adjustment calculations. Under the federal risk adjustment program, the federal government redistributes funds between health insurers that take on lower-risk enrollees, to those with a higher risk mix. Calculations are based on a complicated formula that computes risk based on various disease categories known as Hierarchical Condition Categories (HCCs). The rule updates the HCCs to conform with updated codes used to categorize diseases (a shift from ICD-9 to ICD-10 codes for disease classification). Other changes include a recalibration of how hepatitis C treatments factor into risk calculations and inclusion of pre-exposure prophylaxis (PReP), an HIV-prevention drug, as a preventative service. Collectively, these changes intend to ensure that risk adjustment calculations more accurately reflect current medical diagnoses and practices to ensure better assessment of risk taken on by insurers. The impact of these changes will vary by insurer and enrollee population.
State employee health plans (SEHPs), which provide health coverage for millions of public employees, their dependents, and some retirees, are making rapid changes to address the COVID-19 pandemic. This retooling of insurance plans must meet emerging federal requirements and ensure that coverage meets enrollees’ needs while managing costs and anticipating budget constraints.
During a recent teleconference convened by the National Academy for State Health Policy (NASHP), SEHP administrators shared strategies for implementing new federal mandates and highlighted ways they are making changes to other benefit offerings.
Federal mandates: The Family First Coronavirus Response Act and the Coronavirus Aid, Relief, and Assistance Act (CARES Act) added mandates to SEHP coverage, including:
- Any COVID-19 testing, preventive services, treatment, and vaccine are now covered with no member cost sharing.
- Telehealth benefits are to be made widely available and under a high-deductible health plan, these visits are excluded from deductible provisions.
These provisions are designed to reduce immediate individual cost responsibilities that can be a barrier to accessing these services. However, costs are not eliminated, so each SEHP must cover them. During their teleconference, administrators noted that language in the CARES Act requires health plans to reimburse diagnostic testing at the negotiated rate for “items and services,” which is charged by in-network providers. However, out-of-network providers should be reimbursed for the “cash price as listed on public internet websites,” which presents a potentially costly challenge.
SEHP administrators are concerned about these out-of-network claims because they could be expensive, unpredictable, and subject to change throughout the course of the pandemic. NASHP will monitor the impact this CARES Act provision has on SEHPs.
Benefit design: Plan administrators have worked with their governing structures, which in some states include trustees and boards, to make changes that help ensure that enrollees have access to needed care. North Carolina’s SEHP administrator made changes to prior authorization requirements, in addition to other changes. SEHPs across the country also adopted pharmacy refill flexibilities that include paying for refills sooner or covering a greater number of doses, etc. and lifted member non-payment penalties during the COVID-19 emergency.
Plan eligibility: Eligibility for coverage becomes an issue as public entities add temporary staff or reduce employee hours. Washington State is not only extending enrollment paperwork deadlines for new hires, but also implementing a new eligibility policy for targeted new state employees. Effective April 1, 2020, anyone hired or rehired in a specific position type and who works a minimum of eight hours is eligible for benefits with the full employer contribution for benefits. Washington defined the position types as:
- First responders (firefighters, police, EMTs, public safety personnel, etc.);
- Health care professionals (physicians, nurses, pharmacists, behavioral health specialists, etc.);
- Any medical facility position (e.g., health care professionals, lab technicians, administrative staff, sanitation workers, etc.);
- Public health officials; and
- Any COVID-19 research position.
Washington is also extending the maximum number of months for Continuation of Health Coverage (COBRA) and other self-pay coverage options until two months after the state of emergency is lifted.
Monitoring: While SEHP leaders strive to ensure enrollees have access to needed providers without delay, they are stewards of public funds and must be vigilant and aware of opportunists who may take advantage of this crisis, so they must maintain fraud prevention policies. As signature requirements for medical supplies and prescription drugs are eased to ensure access, New Jersey is exploring alternative forms of verification. For example, New Jersey’s SEHP administrator encouraged the plan’s third-party administrators to conduct follow-up phone calls or track data analytics to ensure enrollees received home deliveries of prescriptions or medical supplies.
Telehealth: Many plans are extending telehealth services beyond the requirements mandated by the CARES Act. Specifically, plans are now including mental health and physical therapy care through remote care options, as well as considering maintaining these benefit plan offerings after the pandemic, such as critical substance use services.
These changes and others that are being made as needed to meet the demands for flexibility and new services to respond to the pandemic could be costly. However, the financial impact to these plans is still evolving, and there are many unknowns. But what administrators acknowledged is that initial costs will increase for COVID-19-related hospitalizations, testing, and preventive services. Moving forward, it is anticipated that plan costs will continue to increase as a result of COVID-19 treatments and related vaccines. While COVID-19 costs increase, there has been a corresponding decrease in elective procedures, but administrators don’t know the financial impact of these delayed treatments, elective procedures, and foregone care. SEHPs have funding reserves to cover their immediate cost increases but may need to raise premiums and/or enrollee cost sharing in the future.
SEHP administrators also acknowledged the significant impact of the economic crisis and its immediate impact on reducing state revenues, which will have a serious impact on state budgets that finance SEHPs. One official noted there has already been an $11 million “withhold” from her SEHP budget in response to the dramatic loss of state revenue. NASHP and SEHP leaders will work together to analyze these impacts and will share analytic models to assist SEHPs in projecting impacts to their plan reserves, contributions, and premiums.
Meanwhile, the CARES Act’s Title VI Relief Fund authorizes the US Treasury Department to issue $150 billion in payments to states, tribal governments, and units of local government. The receipt of funds must be used for necessary expenditures due to the COVID-19 public health emergency that were not accounted for in the most recent state budgets and are incurred between March 1 and Dec. 20, 2020. SEHPs may consider working with their respective leaders and executive branch members to determine qualifications for receiving relief funds for their plans.
This new NASHP chart details the amounts and required oversight of COVID-19 federal funds allocated to hospitals, providers, and states by the Families First Act, CARES Act, and HR 266.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) includes a Pandemic Unemployment Compensation benefit of $600 a week, which supplements traditional unemployment insurance (UI) benefits and provides an important source of additional financial support for individuals who qualify for these payments.
However, as highlighted in NASHP’s April 6, 2020 blog, Federal Guidance Needed to Clarify CARES Act Health Coverage Provisions, because these supplemental payments are counted as income for determining eligibility for marketplace subsidies – but not counted when determining eligibility for Medicaid and the Children’s Health Insurance Program (CHIP) – there could be challenges for both individuals and states.
States are required to use streamlined applications across their health coverage programs and several states (CT, DC, CO, MA, MD, MN, RI, VT, and WA) have developed fully integrated eligibility systems shared by their Medicaid and state marketplaces. States must closely coordinate across these agencies as any changes to application instructions or questions could have ramifications for eligibility determinations between the programs.
The Centers for Medicare & Medicaid Services (CMS) recently released guidance that provides information on ways that states can identify the $600 weekly payments that are to be disregarded when determining Medicaid and CHIP eligibility. While the guidance gives states implementation flexibility, the options offered could be burdensome for both state Medicaid and CHIP agencies and individuals. Some of the issues include:
- Complications in coordinating with state unemployment offices: The guidance suggests that state Medicaid and CHIP agencies can work directly with their state unemployment agencies to determine which individuals will qualify for the additional payments. Yet, implementing a plan to identify these individuals in close coordination with unemployment agencies that are already significantly stressed with handling increased consumer demand is expected to be challenging for states.
- Challenges in implementing system changes: CMS notes that state unemployment agencies have the option to include the supplemental payments within their regular UI payments, or make the supplemental payments separately, which could help identify the $600 supplement for health coverage purposes. Separating the supplemental $600 payment from an individual’s regular UI may create additional work for the unemployment agency at a time when they are least able to accommodate additional work, but it could help both Medicaid and CHIP agencies (and although not referenced in the guidance, the marketplaces) to account for those separated funds in eligibility calculations.
CMS suggests that if state Medicaid and CHIP agencies can identify and document that all UI recipients will receive the additional payments, they will be able to program their eligibility systems to automatically reduce all UI income by $600 per week until the additional payments end on July 31, 2020. While the guidance indicates that states can potentially receive a higher federal match rate for making these system changes, quickly implementing them on a temporary basis will be administratively difficult for states – and it also assumes that states will have the ability to determine that all UI recipients are eligible for the additional payments.
- Relying on individuals to correctly report income could create eligibility determination complications: CMS indicates that states can choose to provide instructions in application forms or in their call center scripts to direct individuals to not report the $600 per week additional payments in their income for Medicaid and CHIP eligibility determinations. States can also ask that individuals self-attest about whether or not their UI income includes the $600 per week of additional payments. But some individuals may still mistakenly report the supplemental payments or not provide the correct information about whether their UI income includes the additional payments, which could negatively affect their Medicaid or CHIP eligibility. It could also hamper the ability of states to make accurate eligibility decisions and could result in state eligibility determination workers having to conduct extensive outreach to clarify applicants’ income information.
An important, remaining issue is that the CMS guidance does not address how states should align Medicaid and CHIP eligibility determinations with the fact the CARES Act requires the $600 supplemental payments to be counted as income when assessing eligibility for marketplace subsidies. This is particularly concerning for low-income consumers who are deemed ineligible for Medicaid and then are deemed eligible for low or zero marketplace subsidies because the inclusion of the supplemental payments has pushed them into an even higher income threshold. Concerns also remain about whether consumers might face penalties for inaccurately reporting income because of confusion caused by the different reporting requirements.
Additional federal guidance from the Center for Consumer Information and Insurance Oversight is needed to ensure that states can make accurate and timely eligibility determinations and that individuals are efficiently enrolled in health coverage.
COVID-19 has upended health care systems and states are revising health insurance rules to make sure consumers can maintain their health insurance coverage and access needed health care services during the pandemic. The chart below details recent state actions that:
- Limit consumer out-of-pocket costs for testing, treatment and out-of-network care;
- Facilitate access to and delivery of care, including rapid transfers to appropriate care settings without lengthy reviews and telehealth expansion;
- Enable consumers to maintain coverage despite economic hardship and COVID-19 diagnosis by relaxing premium payment requirements and waiving penalties; and
- Ease prescription refills and allow drug substitutes (formulary exemptions).
For more information, read the NASHP blog, States Protect Consumers’ Coverage and Improve COVID-19 Care Delivery through Insurance Reforms.
As COVID-19 diagnoses grow, states are making rapid-fire adjustments so consumers can access the care they need. One key strategy has been promoting health insurance enrollment to protect consumers from potentially exorbitant medical bills. Recognizing more protection is needed, state insurance regulators are also making sure consumers maintain their coverage, find appropriate care, and are protected from exorbitant or surprise medical bills.
Enabling Continuity of Coverage, despite Life Disruptions
Maintenance of health insurance coverage will be a challenge for many, especially for the recently unemployed who face sudden income uncertainty or even loss of employer-provided health insurance. Several states are mandating or requesting that insurers refrain from terminating health plans. While some states define specific conditions under which carriers must suspend terminations – for example, Arkansas prohibits terminations in the case of job loss or COVID-19 diagnosis – others, including Colorado, Indiana, and Maine, apply broadly in the case of non-payment of premiums during the public health emergency.
These policies do not absolve consumers of their responsibility to pay their premiums, but rather grant a needed reprieve (usually up to 60 days) during which consumers are required to contact their insurers to figure out a payment strategy. Several states also recommend that insurers consider waving any late fees or penalties for non- or late payment, recognizing that additional fees put undue burden on already strained households.
States are also working to provide flexibility to businesses to help them retain their ability to offer coverage during lean times. Such flexibilities include waiving minimum participation rates, eliminating “hours worked” and minimum contribution requirements, and opening enrollment to individuals who may have declined coverage during a company’s typical open enrollment period.
Directing Consumers to Appropriate Care and Services
As health systems become increasingly strained, it is more important that ever to ensure that consumers are directed to the most appropriate care settings. Health insurers have a direct communication channel to their enrollees and serve an important role in helping direct consumers to care. Most states have requested insurers to help keep consumers properly informed during the pandemic. Such measures include posting updated information about COVID-19 on insurer websites, establishing robust communication channels so insurers can rapidly respond to consumer inquiries, and expanding nurse help-lines to aid in triaging care.
Encouraging Remote Care via Telehealth
Both state and federal leaders have recognized the importance of telehealth to help mitigate the spread COVID-19 by enabling consumers to solicit services from home, regulators can enable immediate self-quarantine of individuals suspected of infection, while also helping preventing needless exposure for those at risk of infection. States are recommending that insurers bolster their available telehealth workforce, including staff available to handle behavioral health services. While some states already enforce parity laws for telehealth delivery, meaning that telehealth services are reimbursed at the same rate as in-person services, some states are newly requiring parity for telehealth, if only for the limited duration of this public health emergency.
To ease widespread implementation of telehealth services, the Department of Health and Human Services Office of Civil Rights (OCR) has temporarily relaxed privacy and security requirements to enable widespread access to telehealth tools during this emergency. In tandem, states have enacted or recommended policies to bolster insurer capacity to offer telehealth services. These include suggestions for how insurers could relax restrictions that normally prohibit utilization of telehealth including:
- Waiving requirements for an in-person consultation prior to rendering of telehealth services;
- Allowing services to be delivered straight to a consumers’ homes (versus a certified point of care); and
- Removing prohibitions on the use of common technologies, such as FaceTime, Skype, or telephone (without video), which are normally restricted due to privacy concerns.
Several states, including Connecticut, Delaware, and Iowa, are also encouraging insurers to offer telehealth services at reduced or zero-dollar cost sharing to further incentivize consumers to use telehealth services. Massachusetts has mandated telehealth coverage for COVID-19 related services with no cost-sharing.
Expediting Access to Necessary Services
Insurers and providers have established processes used to assess if an enrollee is receiving appropriate, covered services to treat an illness. These processes include pre-authorization requirements and utilization reviews that are conducted before a service is performed. However, these checks can impose administrative burdens and affect the timeliness of care, which together adds additional strain to health care providers. Several states have existing laws that put time limits on approvals to help expedite services, however, under the current state of emergency many are recommending that insurers waive or suspend use of these tools (e.g., prior authorizations, utilization review). For example, Colorado and Georgia explicitly call for elimination of pre-authorization requirements to transition patients to in-home or acute care settings, which would help maneuver patients out of limited hospital beds to alternative care settings. Such changes will help expedite care and alleviate strained administrative systems, which, in turn, allows systems to better serve patients.
Protecting Patients from High Medical Bills
Recognizing that even the insured are likely to face some medical costs related to COVID-19, states led the way in issuing guidance to recommend that insurers cover testing without cost sharing for consumers. The federal government followed by enacting the Families First Coronavirus Response Act that requires insurers to cover testing for COVID-19, but concerns remain that consumers may be billed for COVID-19-related treatment. A few states, including Massachusetts and New Mexico, have mandated coverage of COVID-19 treatment and others, including Florida, Georgia, and Kansas, have requested that insurers consider such steps. Several major insurers have stepped forward and announced they will cover COVID-19 treatments at low-to-no cost, even without a mandate. However, variation exists over what kind of treatments will be covered and how care delivery settings may affect coverage.
As discussed in the recent National Academy for State Health Policy (NASHP) blog, States Act to Increase Medicaid/Marketplace Coverage to Insulate Consumers from COVID-19 Care Costs, rapid evolution of health care settings and limitations on available workforces put consumers at particular risk to receive care out-of-network, which could lead to surprise medical or balance bills. For example, hospitals and new makeshift facilities are bringing in new providers to address surplus demand, but new providers may serve as contractors, in which case they may not technically be considered part of a hospital’s network. States have put forth a number of solutions to mitigate these issues – ranging from urging carriers to review and modify networks to meet increased demand to clear mandates that insurers cover out-of-network providers at in-network rates if conditions make it difficult to seek in-network care.
Massachusetts has enacted some of the strictest consumer protections, mandating in-network coverage of acute care services related to COVID-19 treatment and prohibiting providers from balancing billing consumers for the cost of out-of –network services. Massachusetts also specifies reimbursement rates for services delivered by out-of-network providers – the in-network rate when the insurer has a an existing agreement with the hospital at which the provider is practicing, and 135 percent of the Medicare rate if no such agreement exists.
Collectively, these changes will help protect consumers during this extraordinary time. However, as this crisis continues, these policies could have significant long-term ramifications for insurance markets as insurers absorb the new costs related to these mandates. NASHP will continue to monitor these changes, including long-term impact.
As unemployment rates rapidly rise and more individuals seek new health coverage options, states are preparing for an influx of new Medicaid and insurance marketplace enrollees. While the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides significant support for a broad array of services, its $600 a week in additional unemployment compensation could pose costly complications for states and individuals.
At least 11 states have acted to limit the dispensing of chloroquine and hydroxychloroquine – prescription drugs that have been cited as providing protection against coronavirus (COVID-19) without adequate clinical evidence to support that claim. To protect consumers with or at risk of COVID-19 and to prevent stockpiling of these drugs, which treat malaria, rheumatoid arthritis, and lupus, at least 10 state pharmacy boards have issued rules and recommendations that limit the use of these drugs while assuring those with non-COVID-19-related illnesses can continue to receive their medicines.
These state actions were taken before the US Food and Drug Administration’s (FDA) emergency authorization allowing the limited use of chloroquine and hydroxychloroquine. FDA stipulated that the drugs “may only be used to treat adult and adolescent patients who weigh 50 kg or more and are hospitalized with COVID-19, for whom a clinical trial is not available, or participation is not feasible.” The FDA had earlier authorized drug manufacturers to donate these drugs to the Strategic National Stockpile for distribution to hospital for these targeted populations.
FDA’s authorization is limited and may be accommodated by state regulatory guidance. Other states are expected to – and may have already implemented – similar limits on dispensing or other guidance regulating the use of these drugs in the fast-moving world of protecting consumers and the supply of drugs during the COVID-19 pandemic
To date, seven states prohibit pharmacists from dispensing these drugs unless the prescription bears a written diagnosis consistent with evidence of its use.
- New York explicitly requires prescribing of these drugs for a Food and Drug Administration-approved indication or as part of an approved trial. North Carolina, New York, and Ohio also require a confirmed positive COVID-19 test result prior to dispensing the drugs for that experimental purpose.
- Most states limit supply to 14 days and limit or prohibit refills.
- New York and Ohio explicitly prohibit use of the drugs for experimental or prophylactic purposes.
- Texas and North Carolina include additional drugs in their new rules, all of which have been cited either by social media or by limited studies to hold promise for the treatment of COVID-19.
- Pharmacy boards in Louisiana, Kansas, and Missouri have issued recommendations that encourage pharmacists and prescribers to use due diligence and professional judgement when prescribing these drugs and to limit the quantities prescribed.
At least one state insurance department has issued guidance detailing the prescribing of chloroquine and hydroxychloroquine. Last week, the Massachusetts’ Insurance Commissioner released a bulletin to all health insurers with the stated expectation that carriers directly, or through their pharmacy benefit managers, establish prior authorization systems to prevent the hoarding of these drugs and avoid inappropriate prescribing.
The National Academy for State Health Policy will continue to track and provide updates about state actions.
Across the country, every state is taking action to ensure accessible coronavirus (COVID-19) testing and treatment, engaging in cross-agency collaboration, employing unique approaches to testing, and preventing price-gouging on drugs and medical supplies. Here’s a sampling of what states are doing.
Testing and Quarantine Initiatives
Washington State: With the most coronavirus infections in the country, Washington is replicating drive-through testing practices used in South Korea and Great Britain. Employees of the University of Washington’s medical system can now get tested for coronavirus and influenza A and B without leaving their cars. The system’s medical center in Seattle turned a hospital garage lot into a drive-through clinic that can test a person every five minutes. People with symptoms register online and get an appointment for testing and typically get results within a day or so. Individuals don’t have to sit in a waiting room where they spread or contract the infection, and the ventilation of the open air reduces possible exposure for health care workers. The university also plans to work with the Bill and Melinda Gates Foundation to provide coronavirus testing kits that patients can use at home.
The state has also purchased a hotel and is converting a former youth detention center to house individuals and families placed in quarantine.
Rhode Island: Five experts from the US Centers for Disease Control and Prevention’s epidemic intelligence service are “embedded” with state health officials, according to Rhode Island’s Department of Health director to help the state build its response capacity. Specifically, the CDC officials are helping trace those who have come in contact with people who have tested positive for the virus since returning from a trip to Europe. The trip, by students and staff of a Catholic high school in Pawtucket, stopped in Italy. Gov. Gina Raimondo has also set up a 24/7 public hotline staffed with health care professionals for those with questions about the coronavirus or how to self-quarantine.
Nationwide, many states are ramping up their cross-agency state and local collaboration to spearhead efforts to control the infection by ramping up coordination among all state and local agencies. As one example, Maryland’s Institute for Emergency Medical Services Systems and its Department of Health, in partnership with the state’s hospital association, are coordinating around surge planning, including ambulance re-routing plans, suspension of voluntary admissions, and developing enhanced methods of medical monitoring for home-bound patients with mild to moderate symptoms.
Medicaid, Insurance Coverage, and Family Leave
Several states have issued some type of directive or emergency order for the insurance plans they regulate. Washington State specifically noted that short-term plans must abide by the order. States operating state-based insurance marketplaces also encouraged residents to check their insurance exchanges’ websites to see if they could be eligible for Medicaid or a special enrollment period.
Kentucky’s Medicaid enrollees will no longer be required to get prior authorizations to be tested or treated for coronavirus and, via an executive order, the state’s Department of Insurance would require private insurers to eliminate copays and other charges.
Michigan Gov. Gretchen Whitmer announced the state Medicaid program is waiving all copays and cost-sharing for testing and health care treatment related to the coronavirus.
Washington State Insurance Commissioner Mike Kreidler issued an emergency order to state health insurers requiring them to waive copays and deductibles for any consumer requiring testing. Insurers also must allow a one-time early refill for prescription drugs, and suspect prior authorization requirement for treatment or testing. In addition, if an insurer does not have enough medical providers in its network to provide testing and treatment, it must allow enrollees to be treated by another provider within a reasonable distance at no additional cost.
Nationwide, Blue Cross Blue Shield Association (BCBS) announced its 36 BCBS companies will waive prior authorizations and increase coverage for COVID-19 and increase access to prescription drugs, enhanced telehealth, and other clinical support systems. The actions will apply to fully-insured, individual, and Medicare members. It also expressed a commitment to working with state Medicaid and Children’s Health Insurance Program agencies to ensure that beneficiaries have access to needed testing and services.
California Gov. Gavin Newsom has directed commercial and Medi-Cal (Medicaid) health plans to waive cost-sharing for all medically necessary screening and testing related to the coronavirus. The California Employee Development Department announced that those unable to work due to exposure to COVID-19 may file a disability insurance claim and those caring for a family member exposed to the virus may apply for paid family leave.
Nevada Gov. Steve Sisolak adopted an emergency regulation to ensure residents with health insurance policies regulated by the state Division of Insurance can obtain medical services and prescriptions related to the coronavirus at normal costs. This emergency regulation prohibits insurers from imposing out-of-pocket costs for a provider, urgent care center, or emergency room visit testing. Insurers also cannot charge Nevadans for the test. Health insurers must provide information on patients’ available benefits, possible telehealth services and preventative measures related to the novel coronavirus.
New York Gov. Andrew Cuomo announced a directive requiring health insurers to waive cost-sharing associating with novel coronavirus testing, including emergency room, urgent care, and office visits. In addition, New Yorkers receiving Medicaid coverage will not have to pay a copay for any testing related to COVID-19. Health insurers must also keep people informed about their available benefits, offering telehealth services when possible.
California Attorney General Xavier Becerra issued a price gouging alert, reminding residents that the state’s anti-price-gouging law protects people impacted by an emergency from illegal price gouging on drugs, medical supplies, food, gas, and other essential supplies.