Transparency's Opaque Beginning: CMS Starts Implementing ACA Transparency Requirements

Based on QHP Certification instructions issued on July 22, 2016, the Centers for Medicare and Medicaid Services (CMS) will collect administrative and performance data from health insurers that participate in the federally-run health insurance exchanges. The insurers will submit their transparency data by August 15, 2016. The data collection begins the implementation of requirements under Section 1311 of the Affordable Care Act (ACA), often referred to as the “Transparency Requirements.”

The primary purpose behind the Transparency Requirements is to provide regulators and, ultimately, consumers with a means to compare health insurance issuers in performance areas that impact the member experience, such as claims denials and appeals. For now, the data collection is limited to qualified health plans (QHP) in the 38 states with a federally-run health insurance exchange, though the ACA gives CMS the authority to expand the data collection.

Health insurance issuers will need to submit data on coverage denials, appeals and grievances, and plan decisions overturned by an external reviewer. They will also have to provide links to the member information they provide on several important topics: out-of-network liability, grace periods, medical necessity and prior authorization, and drug formulary exceptions. Health insurance issuers are expected to submit required data to CMS via email.

For a decade, CMS has collected similar data from Medicare Advantage and Medicare Prescription Drug Plans. That experience suggests it may take a few years for the data to become useful—as CMS and health insurance issuers struggle to develop common definitions for complex operational processes to drive consistent data submission. For a year or two, it is likely that the transparency data will be murky.

While CMS has not yet mentioned its intentions for the transparency data, it is probable that the agency will use this data to inform its oversight activities at some point. The initial submission window for the transparency data is August 1 to August 15, 2016. CMS expects to send a first correction or non-submission notices on September 1, 2016. Revised QHP data will be due September 15, 2016.