Health Care Reform Update: Co-Op Answers & ERRP Appeals

CMS Answers Questions on Consumer Operated and Oriented Plan Program The Center for Consumer Information and Insurance Oversight (CCIIO) of the Centers for Medicare and Medicaid Services (CMS) on Oct. 6 published a list of frequently asked questions and answers (FAQ) pertaining to the Consumer Operated and Oriented Plan (CO-OP) program, adding to a another FAQ published on Sept 7.

Among the topics the FAQs cover is clarification that after receiving Letters of Intent (LOI) to apply for CO-OP loans, CMS does not anticipate to publicly post the names or locations of organizations filing such LOIs. However, LOI applicants should remember that all materials submitted to CMS are subject to the Freedom of Information of Act (FOIA) and any FOIA request will be examined against exceptions such as trade secrets outlined in the Department's FOIA regulation. The CMS has stated that applicants may access the Department's FOIA guidelines at http://www.hhs.gov/foia/45cfr5.html.

Whether or not approval will be available for start-up loan modifications necessary to satisfy the capital requirements associated with unexpected rapid growth or high enrollment, the CMS states that applicants should estimate their funding needs as accurately as possible in the business plan submitted as a part of the application, and should not assume that loan modifications will be available to provide additional funding.

CMS also has stated that an organization may not partner with an existing health insurance issuer to develop a CO-OP, since, under the PPACA, if an organization is a health insurance issuer that existed on July 16, 2009, a related entity, or any predecessor of either, that organization is not eligible for loans under the CO-OP program and cannot become a CO-OP. Also, a third-party administrator (TPA) may not develop a CO-OP unless the TPA was also a licensed health insurance issuer on July 16, 2009.

Whether or not an existing nonprofit entity has to form a separate entity to apply for funds and become a CO-OP, the CMS reiterated that, first, as a statutory requirement under the ACA, a health insurance issuer that was in existence on July 16, 2009 cannot sponsor a CO-OP. Under the proposed rule, the applicant must be the entity that will eventually become a CO-OP. Unless the sponsor wants to become a CO-OP, it should form a separate entity.

Finally, the CMS stated that a CO-OP can be founded by a consumer-run nonprofit self-insured multiple employer welfare arrangement (MEWA) that does not have an insurance license, but that is currently licensed in its domiciliary state as a nonprofit, self-funded MEWA, because entities not licensed as issuers on July 16, 2009, may apply.

HHS Issues Guidance on Appeals Process for Early Retiree Reinsurance Program
The Department of Health and Human Services (HHS) has issued guidance regarding how plan sponsors participating in the Early Retiree Reinsurance Program (ERRP) would submit a request for appeal of an adverse reimbursement determination, and how the appeals process works.

Definition of adverse reimbursement determination

• An adverse reimbursement determination is a determination constituting a complete or partial denial of a reimbursement request.
• This includes a determination regarding whether a given individual whom the sponsor has submitted to the Centers for Medicare and Medicaid Services (CMS) as an early retiree in advance of a reimbursement request satisfies the substantive criteria for being an early retiree for the entire time period claimed by the sponsor or whether a claim submitted in advance of a reimbursement request is for a health benefit, as defined by the ERRP statute, regulation, and other ERRP guidance.

Appealable determinations are ones that CMS makes based on the plan sponsor's submissions to CMS. A plan sponsor may not appeal a reimbursement determination on the ground that:

• it neglected to include a given item or service in its reimbursement request; 
• it misstated data with respect to a given item or service; or
• CMS could not process an Early Retiree List, Summary Claim Data, a Claim List, or a reimbursement request due to the fact that it was not submitted in the correct manner or format.

The ERRP statute and regulations do not permit plan sponsors:

• to appeal CMS determinations to deny an ERRP application
• to refuse to accept an application for processing, or
• to terminate approval of an application.

The denial of an application, the refusal to accept an application, or the termination of an application approval are related to whether a plan sponsor may participate in the program, not a determination about reimbursement for participating plan sponsors.

Request for appeal

The ERRP regulations state that a sponsor has 15 calendar days from the date of receipt of an adverse reimbursement determination to submit an appeal. The 15-calendar day period does not begin to run until the sponsor receives the relevant email that notifies the plan sponsor about the adverse reimbursement determination. That email will describe the 15 calendar-day time limit for submitting an appeal.

Documentation to submit

A request for appeal must specify the findings or conclusions with which the plan sponsor disagrees and the reason(s) for the disagreement(s). In submitting a request for appeal, a plan sponsor should include all information and data necessary for the HHS Departmental Appeals Board to evaluate the request and CMS to respond to the appeal, including:

• a copy of the email notifying the plan sponsor about the adverse reimbursement determination
• the amount of reimbursement at issue
• the application ID number
• plan year
• information about the items and services at issue including dates of service, and
• information about the individuals to whom the items or services were provided

Because the Appeals Board is independent of CMS:

• the plan sponsor should not assume that the Appeals Board would have information that the plan sponsor submitted to CMS, such as the plan sponsor's Claim List
• the plan sponsor also may submit supporting documentation not previously submitted to CMS
• the plan sponsor should not submit any documentation that is related to individuals, items or services not previously included in the Early Retiree List or Claim List, to the extent the adverse reimbursement determination being appealed is directly related to the response files sent with respect to those lists

How and where to submit documentation

If a plan sponsor wishes to submit its request for appeal and/or supporting documentation electronically, the plan sponsor should call the Appeals Board at 202.565.0208 as soon as possible before the applicable deadline to ascertain whether the Board is able to accept the submission electronically and to obtain any instructions for submission. Any electronic submissions must be made using the DAB web portal. Requests for appeal and supporting documentation must be mailed to the Department of Health and Human Services Departmental Appeals Board, MS 6127 Appellate Division 330 Independence Ave., S.W. Cohen Building - Room G-644 Washington, D.C. 20201.