Comparison of Consumer Protections in Three Health Insurance Markets: Medicare Advantage, Qualified Health Plans and Medicaid Managed Care Organizations
Comparison of Specific Areas of Consumer Protections
In Medicare, Medicaid, and now, Marketplace QHPs, consumers are guaranteed a base level of access to coverage and financial protection. They are likewise afforded other procedural safeguards. Across the range of consumer protections, including those pertaining to eligibility, enrollment, renewability, benefits, cost-sharing and other categories of consumer protections, there are many similarities between Medicare Advantage plans, QHPs and Medicaid MCOs, as well as some notable differences in such protections, which are highlighted below. While the comparison chart in Appendix C contains a more detailed comparison across a broader range of consumer protections, highlights are summarized below.
|Medicare Advantage (MA) plans||QHPs||Medicaid MCOs|
|Scope of Benefits||MA plans must cover what traditional Medicare covers (set out in statute). Actual scope of benefits provided will vary slightly from plan to plan.||QHPs must cover 10 essential health benefit (EHB) categories; details are determined based on the state benchmark. Generally, benefits are not defined in federal statute or regulation.Plans may substitute actuarially equivalent services within categories; as a result coverage for some services could vary significantly from plan to plan.||State Medicaid programs must cover certain mandatory and any optional benefits that the state elects (set out in statute), and states opt whether to deliver those benefits through MCOs, as specified in the MCO’s contract with the state. If the enrollee is entitled to benefits not provided by the MCO, the beneficiary must be provided the service by either FFS Medicaid or another specialized Medicaid managed care plan.|
|Prescription Drugs||Drugs required to be covered||Substantially all drugs in 6 “protected” classes must be covered.||None.||All FDA approved drugs with rebate agreements.*|
|Other coverage rules||MA plans must follow Part D rules that require coverage of at least two drugs in each US pharmacopeia category or class. Must establish Pharmacy & Therapeutics (P&T) committees to make drug coverage decisions based on scientific evidence.||QHPs must cover at least one drug per US pharmacopeia category or class OR the same number of drugs in each category and class as the state benchmark, whichever is greater.Starting in 2017, QHPs must establish Pharmacy & Therapeutics (P&T) committees (similar to those required for Part D plans) to make drug coverage decisions based on scientific evidence.||Not applicable.|
|Utilization management restrictions||Utilization management allowed, but limited with respect to 6 “protected” classes of drugs.||Utilization management allowed.||Utilization management allowed.|
* Note: This statement is true for all states that elect to cover prescription drugs, which all presently do, and if the state opts to provide prescription drugs through managed care.
Source: Authors’ analysis, 2015.
Medicare Advantage plans, QHPs and Medicaid MCOs are all required to provide a certain core set of benefits. All three markets require plans to cover a range of similar services, and have similar exclusions from coverage, but state Medicaid programs generally provide greater coverage of long-term services and supports than Medicare Advantage plans or QHPs.1 Medicare Advantage plans must provide all services covered under Parts A and B of Medicare except for hospice services (and in certain circumstances, must provide Part D prescription drug coverage). The Medicare Advantage plan benefit package is based on traditional Medicare Parts A, B and D (if applicable) which can have limitations in scope and duration of coverage in certain care settings (for example, Medicare limits coverage in a skilled nursing facility to up to 100 days in a benefit period). Medicare Advantage plans do, however, have some flexibility to loosen, but not tighten, benefit restrictions relative to traditional Medicare’s structure (e.g., Medicare Advantage plans can choose to waive coverage limits that apply under traditional Medicare; for example, MA plans can waive the 3-day prior hospital stay requirement for skilled nursing facility coverage, or extend such coverage beyond 100 days per benefit period).
QHPs are required to cover 10 categories of essential health benefits (EHBs) enumerated in statute. Detail defining EHBs is based on a benchmark plan. The default state benchmark package is based on the most popular small group plan, though states can designate other benchmark options. Federal regulation provides limited detail defining benefits within categories, and states may provide more detailed regulation. Otherwise, insurers have flexibility to determine which EHB category applies to specific services covered under the benchmark plan; further, absent state limitations, insurers then have flexibility to substitute actuarially equivalent services within EHB categories. Under federal rules, insurers are not required to report to the Marketplace or to consumers when they adopt such substitutions. As a result, coverage for some services under QHPs could vary significantly plan to plan. Examples of variations in current QHP offerings include limits on the number of home health visits, imaging services, speech therapy and organ transplantation. QHPs are also subject to a ‘nondiscrimination’ standard; benefit design and cost-sharing design cannot discriminate based on health status and other factors. To date, regulations to define the nondiscrimination standard in further detail have not been issued. For the 2016 plan year, CMS will require QHP insurers to attest that their plan design complies with the nondiscrimination standard. CMS guidance indicates it will monitor complaints data for 2016 QHP plans. Other oversight seems to be evolving; for example, CMS guidance indicates it will “consider” outlier analysis of QHP cost-sharing designs, such as whether drug treatments for given health conditions are assigned to the highest cost-sharing tier. No other compliance standards have been issued to date.
Unlike Medicare Advantage plans and Medicaid MCOs, the actual services in the ten EHB categories that QHPs must cover are not enumerated in statute or regulation. The statute requires the Secretary of Health and Human Services (HHS) to periodically review EHB standards, and HHS has indicated that it will monitor the benchmark/EHB system and may revisit the coverage requirements in 2016.
Federal law requires states participating in Medicaid to cover certain mandatory benefits, and states can choose to cover additional optional benefits. The underlying Medicaid program provides the primary public coverage of long-term services and supports, while only limited coverage for such benefits is provided through Medicare or Marketplace QHPs. States choose whether to deliver long-term care benefits through Medicaid MCOs.
Medicaid has the most comprehensive drug coverage requirements of plans in the three markets, and requires coverage of all FDA approved drugs (provided that the state opts to cover prescription drugs and to deliver that benefit through MCOs, which all currently do). Medicare drug plans are required to cover at least two drugs in each pharmacopeia class while QHPs need only cover one. Medicare plans are also required to provide enrollees with substantially all drugs in six protected classes of drugs while QHPs are not. Plans in all three markets may employ utilization management tools. Medicare Advantage plans that offer drug coverage can develop their own formularies as long as protected classes and non-discrimination requirements are honored. Protected classes include cancer medications, anti-psychotics, anti-convulsants, anti-depressants, immunosuppressants, and anti-retroviral drugs. There are no similarly protected classes of drugs within QHPs but, similar to Medicare Advantage rules, benefit and cost-sharing design cannot be discriminatory. Medicare Advantage plans must also cover at least two drugs in each US pharmacopeia class, whereas QHPs must cover at least one drug per US pharmacopeia class or the same number of drugs in each class as the benchmark, whichever is greater. The protected classes are not relevant for Medicaid since Medicaid must cover all FDA approved prescription drugs for which the manufacturer has a rebate agreement, which in practice means virtually all FDA approved drugs are covered, although states can use utilization management tools, such as preferred drug lists. Starting in 2017, QHPs will be required to establish pharmacy and therapeutics (P&T) committees, similar to those required for Part D plans, to make drug coverage decisions based on scientific evidence. P&T committees will be required to review newly approved drugs and new uses for existing drugs within 90 days of market release and make coverage decisions within 180 days of market release.
Like Medicare Advantage plans, QHPs may use tiering and other utilization management tools. As noted above, benefit and cost-sharing design cannot be applied in a discriminatory manner for QHPs, though regulatory standards have not yet been issued. Recently a complaint to the HHS Office of Civil Rights was filed by patient advocates alleging that the assignment of HIV drugs to higher cost-sharing tiers under certain QHPs violates the nondiscrimination standard.2 Unlike Medicare Advantage plans, though, QHPs are not required to limit the application of utilization management to any classes of “protected” drugs for which plans must cover all or substantially all drugs in such classes.
For Medicaid, states elect whether to deliver prescription drugs through managed care. Medicaid programs may use utilization management and clinical effectiveness guidelines in drug coverage decisions. States may use a preferred drug list and impose quantity limits although there must be a prior authorization process for exceptions. This is a feature of state Medicaid programs rather than individual Medicaid MCOs just as protected classes in Medicare Advantage plans are a feature of the Medicare program rather than Medicare Advantage.
|Medicare Advantage (MA) plans||QHPs||Medicaid MCOs|
|Cost-Sharing in Benefit Design||Must be generally actuarially equivalent to benefits covered under traditional Medicare, including equivalence in certain specific service categories, such as inpatient and skilled nursing facility care, which limits a plan’s ability to vary deductibles, co-pays and co-insurance.||QHPs must meet actuarial value based on metal level (60%, 70%, 80%, 90%) applied over the entire benefit package. Within and across metal tiers, substantial variation in structure of cost-sharing is observed.||Not applicable; see “out-of-pocket” maximum below.|
|Out-of-Pocket Maximum||Maximum out-of-pocket limit (MOOP) for medical services (Part A and Part B) is $6,700 for individual enrollees in 2015, with a separate Part D catastrophic coverage maximum of $4,700 out-of-pocket in 2015, after which beneficiaries pay 5% coinsurance, making this a soft rather than “hard cap” with respect to prescription drug costs covered by MA-PDs. Because of the separate caps, total out-of-pocket costs (for A, B and D) could be up to $11,400 beyond which enrollees may still have prescription drug costs.||Maximum out-of-pocket limit of $6,600 for individuals and $13,200 for a family in 2015, including cost-sharing for medical services and prescription drugs. For 2016, the out-of-pocket limit is $6,850 for individuals and $13,700 for a family.||Medicaid has strict limits on out-of-pocket cost-sharing set out in statute. In general, out-of-pocket costs may not exceed 5% of monthly or quarterly income.|
|Balance Billing||Enrollees are protected from balance billing by non-contract providers and are limited to in-plan cost-sharing amounts for services that are ultimately covered by the plan, including out-of-network emergency services.||Enrollees may pay in-network cost-sharing rates for out-of-network emergency services, but no balance billing protections are required for any out-of-network care in QHPs, including for emergency services.||Comprehensive cost-sharing protections for enrollees, including billing protections that prevent a participating provider from refusing to provide a service due to non-payment of cost-sharing by beneficiaries with incomes at or below 100% FPL.|
|Low-Income Assistance||Part B premium assistance available through traditional Medicare for individuals with income up to 135% FPL; asset test applies (those at or below 100% FPL are eligible for additional Part A and B cost-sharing assistance). For Part D expenses, individuals with incomes below 150% FPL and limited assets are eligible for Part D premium and cost-sharing assistance.||Enrollees with incomes between 100% and 400% FPL eligible for sliding scale premium tax credits. Enrollees with incomes from 100-250% FPL are also eligible to receive cost-sharing subsides. No asset tests apply.||In states that have expanded Medicaid under the ACA, adults with income up to 138% FPL eligible for Medicaid. No asset test applies.|
|Source: Authors’ analysis, 2015.|
Cost-sharing charged by Medicare Advantage plans is bound by actuarial equivalence with traditional Medicare – in other words, Medicare Advantage plans may impose cost-sharing that is different from that under Parts A and B, as long as total Medicare Advantage cost-sharing for Part A and B services does not exceed cost-sharing for those services in traditional Medicare. Medicare Advantage plans must also apply actuarial equivalence to certain service categories; for example, in 2015 Medicare Advantage plans must apply actuarial equivalence to inpatient care, skilled nursing facility, home health, durable medical equipment and Part B drugs. In addition, plans’ cost-sharing for some services cannot exceed cost-sharing under Parts A and B: renal dialysis, chemotherapy and skilled nursing facility care.
QHPs must conform to actuarial value (AV) based upon the plan’s “metal level” but QHPs generally have significant leeway in how they structure deductibles and other cost-sharing (except in a few states, like California and New York, which require standardized cost-sharing designs). This leads to significant variation in cost-sharing across QHPs. For example, for silver level QHPs in the federal Marketplace in 2015, just over half apply a comprehensive deductible for all services while 45 percent of silver plans have separate medical and drug deductibles. Among plans with separate deductibles, the average medical deductible is about $3,500, though some plans have medical deductibles as low as $0 or as high as $5,000.3
Medicare Advantage plans and Medicaid MCOs limit enrollees’ financial liability for out-of-network balancing billing, while QHPs are not required to include such protections. QHP cost-sharing protections are generally only applicable for in-network services. While QHPs are required to charge in-network cost-sharing for out-of-network emergency services, no balance billing protections are required for any out-of-network care in QHPs, including for emergency services. This means a provider may collect above and beyond the out-of-network cost-sharing amounts from enrollees if they so choose. By contrast, Medicare Advantage plans and Medicaid MCOs protect enrollees against balance billing by providers for emergency services used outside of the provider network.4 In general, a Medicare Advantage enrollee is protected from balance billing by non-contract providers and is limited to in-plan cost-sharing amounts for services that are covered by the plan. QHPs do not have comparable protections. Medicaid, including services offered through MCOs, offers comprehensive cost-sharing protections to enrollees, including billing protections that prevent a participating provider from refusing to provide a service due to non-payment of cost-sharing by beneficiaries with incomes at or below 100 percent of the Federal Poverty Level (FPL).
All three types of plans provide for caps on enrollees’ in-network out-of-pocket expenses. As noted above, since it is a program designed to serve individuals with low-incomes, Medicaid cost-sharing is more limited than the other two programs. Medicare Advantage plans must establish a maximum out-of-pocket liability amount (MOOP) for all Part A and B services, established annually by CMS. In 2015, the mandatory MOOP is $6,700.5 There is a separate maximum out-of-pocket or “catastrophic” threshold limit for prescription drugs of $4,700 (for 2015), after which point cost-sharing is the greater of 5 percent or $2.55 for generic or preferred drugs and the greater of 5 percent or $6.35 for all other drugs. The Medicare Advantage MOOP is not indexed to inflation and has not changed in five years, while the cost-sharing threshold under Part D plans is declining annually as the “donut hole” is gradually phased out.
For QHPs, the out-of-pocket limit for 2015 is $6,600 for an individual plan and $13,200 for a family plan. This amount includes prescription drugs. The maximum out-of-pocket limit under QHPs is adjusted each year and started at $6,350 for individuals and $12,700 for a family plan in 2014. For 2016, the maximum limit is $6,800 for individuals and $13,600 for families.
While both Medicare and QHPs provide low-income subsidies, subsidy eligibility for QHPs has higher income limits and does not impose an asset test. QHPs provide enrollees with incomes between 100 percent and 400 percent FPL ($11,770 – 47,080 in 2015) sliding scale premium tax credits which limit the amount they will pay in premiums to a set percentage of income. QHP enrollees with incomes from 100-250 percent FPL ($11,770 – 29,425 in 2015) are also eligible to receive cost-sharing subsides that lower out-of-pocket caps and deductibles.
In states that have expanded Medicaid under the ACA, adults with income up to 138% FPL ($16,242 per year for an individual in 2015) are eligible for Medicaid. Under federal law, Medicaid premiums and cost-sharing for covered services apply only to certain groups of beneficiaries and are limited in amount. Neither Marketplace financial assistance programs nor Medicaid in poverty-related (MAGI) categories, including newly eligible adults, impose an asset test.
Medicare Advantage enrollees may qualify for the same Medicare low-income programs as traditional Medicare beneficiaries. For people living below 135 percent FPL ($15,889 in 2015) with limited assets, the Medicare Savings Programs pay the Part B premium ($104.90 per month in 2015). For individuals with incomes below 150 percent FPL ($17,655 in 2015) and limited assets, the Part D low income subsidy (LIS) pays the monthly Part D prescription drug premium and lowers co-pays at the pharmacy.
Individuals who attain Medicare eligibility are no longer eligible for either Marketplace subsidies or expansion Medicaid and may face an increase in out-of-pocket costs as their insurance status, and therefore subsidy eligibility, changes. For example, a 64-year old individual with income at 200 percent FPL ($29,425 in 2015) and significant assets can access tax credits and cost-sharing subsidies to help defray the costs of QHP coverage in the Marketplace; however, no premium or cost-sharing assistance is available for the same individual through Medicare once they turn 65. Individuals with Medicaid and some with low incomes receiving Marketplace premium tax credit and cost-sharing subsides may encounter what is referred to as the Medicare “cliff” – meaning that depending upon their income and resources, they may see their out-of-pocket costs increase when they become eligible for Medicare because Medicaid for people over 65 and Medicare have more stringent eligibility requirements for cost-sharing assistance. (For more information, see Appendix B.)
|Medicare Advantage (MA) plans||QHPs||Medicaid MCOs|
|General Enrollment||Open enrollment is October 15 through December 7. Similar to Medicaid, MA has a lock-in period for one year (with some exceptions).||Open enrollment for the 2015 plan year was November 15, 2014 to February 15, 2015. Enrollment periods for the 2016 plan year (and thereafter) will align with the MA enrollment period.||No similar enrollment period; Medicaid enrollment is always open. However, if Medicaid MCO enrollment is mandatory, beneficiaries must have the choice of two plans and have 90 days after enrollment to change plans after which time they generally are “locked-in” to their plan. Enrollees must have the option to change plans after the initial 90 days at least once every 12 months.|
|Special Enrollment Periods (SEPs)||Low-income beneficiaries||Low-income individuals (receiving Medicaid, Medicare Savings Program (MSP) and/or Part D Low Income Subsidy (LIS)) have a monthly SEP to enroll in, change or dis-enroll from MA plans.||No similar requirement.||Not applicable.|
|Changes in income||No SEP, unless found newly eligible or ineligible for certain low-income benefits (e.g., Medicaid, MSP, Part D LIS).||SEP only for those already enrolled in QHP who become newly eligible for the advance premium tax credit (APTC) or cost-sharing subsidies (CSR), or for a different level of CSR. Can change plans once per qualifying event.||Not applicable.|
|Changes in life circumstances||SEP following a move or loss of certain types of other coverage.||SEP for “life circumstance” changes, such as a change in family status (e.g., marriage, having a child), a move, or other changes that trigger a loss of other minimum essential coverage.||No similar requirement.|
|Exceptional circumstances||No similar requirement (except by designation by CMS, e.g., following certain natural disasters).||SEP allowances for exceptional circumstances preventing plan selection or enrollment.||If MCO enrollment is mandatory, may dis-enroll for “good cause” at any time.|
|Changes in plan provider networks||Starting in 2015, limited SEP for “significant” network provider terminations.||No similar requirement.||MCO disenrollment allowed if termination of a residential or employment supports provider from enrollee’s MLTSS network would result in a disruption in their residence or employment.6|
Note: MLTSS is Medicaid Managed Long-Term Services and Supports
Source: Authors’ analysis, 2015.
The rules for Medicare Advantage plans, QHP, and Medicaid MCO enrollment and disenrollment partly reflect whether enrollment in managed care is mandatory, and whether an alternative source of coverage is available. Medicare Advantage enrollment, as an option for receiving Medicare services guaranteed through federal entitlement, is voluntary for Medicare beneficiaries. Correspondingly, if a person chooses to dis-enroll from a Medicare Advantage plan, or is involuntarily dis-enrolled, the default is traditional Medicare coverage. Since QHPs are not built on the foundation of a federal entitlement, if an individual is dis-enrolled from a QHP there is no default – they are left without coverage unless and until they can exercise enrollment rights and opportunities to gain new coverage. Medicaid also is a federal entitlement for those who meet eligibility requirements. States can choose to deliver Medicaid benefits through managed care and whether to make MCO enrollment voluntary or mandatory, except that CMS must approve the mandatory enrollment of certain populations.
Medicare Advantage and Marketplace rules generally restrict when during the year beneficiaries can enroll and dis-enroll from plans. Both markets provide for special enrollment periods (SEPs) triggered by certain events, while mandatory Medicaid managed care enrollees are allowed to change MCOs at least once per year after their initial enrollment and for “good cause” at any time. Special Enrollment Periods for QHPs emphasize the ability to enroll in coverage when someone loses other coverage, whereas Medicare Advantage SEPs work to allow individuals in to Medicare Advantage plans, out of Medicare Advantage and into traditional Medicare, or into another Medicare Advantage plan. As expected, differences in SEP rights between Medicare Advantage plans and QHPs partly reflect the fact that the “default” from a Medicare Advantage plan is traditional Medicare whereas there is no default for QHP enrollees. CMS sought to protect QHP plan sponsors against adverse risk selection and structured QHP SEPs accordingly. QHP SEPs are more broad than Medicare Advantage SEPs for life-changing events (e.g., marriage, since single v. family enrollment is a factor in QHP eligibility and enrollment, unlike Medicare Advantage) and exceptional circumstances preventing timely plan selection (e.g., serious medical condition and natural disaster; for more information about SEPs, see Appendix D).
One notable difference in SEPs between Medicare Advantage plans and QHPs concerns individuals enrolled in certain low-income programs. Medicare Advantage plans allow an ongoing SEP right to change plans on a monthly basis for individuals enrolled in low-income programs: Medicaid, a Medicare Savings Program and/or the Part D low-income subsidy (LIS). For Medicaid MCO enrollees, who by definition have low incomes, if states require MCO enrollment, there is an on-going SEP for the first 90 days after which time individuals are generally locked-in to their plan (for no more than 12 months). In the Marketplaces, in order to access an SEP based on a change in advance premium tax credit (APTC) or cost-sharing subsidy (CSR) eligibility, an individual must already be enrolled in a QHP. This SEP is for switching QHPs rather than enrolling in coverage for the first time.
Another notable difference in SEPs relates to changes in a managed care plan’s provider network. Starting in 2015, Medicare Advantage enrollees have a limited right to change plans based upon CMS’ finding of “significant” network provider terminations by their Medicare Advantage plans, but there is no corresponding requirement for QHPs (also see network adequacy section below). According to 2013 guidance, enrollees in Medicaid managed long-term services and supports waivers may dis-enroll from their MCO when the termination of a provider from their MLTSS network would result in disruption in their residential or employment support services.
Medical Loss Ratio (MLR)
|Medicare Advantage (MA) plans||QHPs||Medicaid MCOs|
|Medical Loss Ratio (MLR) Requirements||Plans must maintain at least 85/15 ratio.||Plans must maintain at least 80/20 ratio.||No federal requirement.|
|Source: Authors’ analysis, 2015.|
Medical loss ratio (MLR) refers to rules that limit the percentage of plan revenue that can be spent on administrative costs (claims administration, profit, etc.). Medicare Advantage plans must maintain an MLR of at least 85 percent/15 percent. Sanctions for failure to meet this standard can include rebates owed by the plan going back to the Medicare program, a prohibition on enrolling new members, and ultimately, termination of the plan’s contract with Medicare. Individual QHPs must maintain an MLR of at least 80 percent/20 percent with any rebates going back to the individual. There is no federal MLR requirement in Medicaid, although states are permitted to include such a requirement in an MCO contract.
Provider Network Requirements: Adequacy, Enforcement, and Information
|Medicare Advantage (MA) plans||QHPs||Medicaid MCOs|
|General Requirements||Federal law establishes MA network adequacy requirements which broadly require “adequate” provider networks that take into account: (1) number of providers per population size; and (2) time/distance travel requirements so enrollees are not “unduly burdened.”||Federal law requires QHPs to have “adequate” provider networks. To date, more specific federal standards, including time/distance standards, have not been required. States may apply additional requirements.||Federal law establishes general network adequacy criteria that all MCOs maintain a network of providers that is “sufficient” to provide adequate access to Medicaid services. MCOs must take into account factors like (1) projected enrollment, (2) geographic location and (3) timely access to care for enrollees.|
|Consumer Information||Enrollment information||MA plans must disclose provider network when beneficiary enrolls or renews enrollment. Plans must make provider directories available upon request and ensure that websites contain current directories at all times. Medicare.gov is not required to link to provider directories.||Links to QHP provider directories must be posted on the Marketplace website. Directories must be updated at least monthly.||State or MCO must provide enrollees with names, locations, and phone numbers of providers.|
|Termination of providers||MA plans are required to make a “good-faith effort” to notify enrollees of provider terminations. MA plans can change their provider networks at any time during the year as long as they continue to meet network adequacy standards and keep their provider directory up-to-date.||QHPs are not required to inform enrollees of provider terminations. QHPs can change their provider networks at any time during the year as long as they continue to meet network adequacy standards and keep their provider directory up-to-date.||MCOs are required to notify enrollees of provider terminations. MCOs can terminate providers at any time but must maintain continuity of care.|
|Providers speaking non-English languages||No similar requirement.||No similar requirement.||Must identify providers who speak non-English languages.|
|Providers accepting new patients||No similar requirement.||Must identify providers that are accepting new patients, effective for 2016.||Must identify providers that are not accepting new patients.|
|Compliance and Oversight||CMS uses geo-mapping software to evaluate network adequacy for new contracts; MA plans renewing annual contracts are required to attest that their network meets requirements, with no further review by CMS.||Plans are required to attest to meeting network adequacy requirements; starting in 2015, plans must submit provider network prior to certification; additional oversight by CMS is evolving.||State must ensure through contracts that each MCO gives assurances and provides supporting documentation that demonstrates that MCO has the capacity to serve expected enrollment in service area in accordance with state’s access to care standards; state must review plan documentation and certify to CMS that plan complies with state’s standards.|
|Reporting Requirements||Not required by statute to report claims from out-of-network providers.||Required by statute to report claims from out-of-network providers; this provision not yet implemented.||No similar requirement.|
|Out-of-Network Coverage for Emergency Care||Plans must cover out-of-network emergency services at in-network cost-sharing rates or a standard co-pay set by CMS ($65 in 2015), whichever is lower. Balance billing by providers is limited.||QHPs must cover out-of-network emergency services at in-network cost-sharing rates. However, balancing billing by the provider is not limited.||Medicaid MCOs must adequately and timely cover services out-of-network at no more than in-network costs to enrollee, if service cannot be provided in-network, including emergency care.|
|Source: Authors’ analysis, 2015.|
In the Medicare Advantage program, federal network adequacy standards and oversight are more developed than those for QHPs, while QHPs and Medicaid MCOs may be subject to more stringent state specific network adequacy requirements. Network adequacy generally refers to a plan’s ability to provide timely and adequate care to enrollees through a sufficient “network” of health care providers. Adequate plan provider networks are crucial to ensuring consumers have timely access to needed health care services. For Medicare Advantage plans, CMS has a mechanism for review of provider networks in all Medicare Advantage plans against minimum time/distance access standards and distribution of specialists. Actual review of such Medicare Advantage networks, however, occurs only when a plan is new to a service area, is expanding its service area, significantly changes its network, or if CMS receives many complaints about the network; in other words, there is no required annual review for plans renewing existing contracts with CMS. In the financial alignment demonstrations for dually eligible individuals, CMS will review the adequacy of plans’ networks annually beginning in 2015.
For QHPs, CMS implementation of network adequacy standards is evolving. In the first year, CMS required insurers to submit the “name” of the provider network (not the names of providers in the network) and attest to its adequacy. Since then, CMS has required QHPs to submit network directories, but agency review is ad hoc, focusing mainly on five provider types, and does not involve analysis against time/distance standards. CMS has suggested such review may take place in future years. CMS guidance also indicates the agency will analyze plan network data for the coming year with a focus on certain providers, which may include hospitals and primary care, mental health, oncology and dental providers. The ACA also requires QHPs and other private health plans to submit data to the Secretary on out-of-network claims and out-of-pocket expenses. These data could be used to develop measures of network adequacy; to-date, however, this provision of the ACA has not been implemented. Medicaid MCO network adequacy is left up to the states, within broad federal guidelines and with federal oversight, however plans must implement procedures to ensure that each enrollee has an ongoing source of primary care appropriate to individual needs, as well as identify people with special health care needs and ensure that they have direct access to specialists as appropriate.
Although Medicare Advantage network adequacy standards and oversight are more developed than that for QHPs, including a specified ratio of certain types of providers, Medicare Advantage plans are not bound by the QHP requirement to contract with a threshold number of essential community providers serving predominantly low-income and medically underserved individuals.
Notice, Appeals and Grievances
|Medicare Advantage (MA) plans||QHPs||Medicaid MCOs|
|Notice of Denial||Notice of non-coverage is a standard document developed by CMS. Must provide timely description of service denied, the action taken/to be taken, reason for action/service denial, information on rights to expedited and standard appeal, and how to seek an appeal.Notice must use approved language in a readable and understandable format (however requirements that notices be provided in languages other than English are limited).||Notice must be timely and include description of service denied, the action taken/to be taken, reason for action/service denial, and information about appeal rights. This mirrors ERISA guidelines.Under federal law, all denial notices must include brief statement that translation assistance by phone is available. Consumers who want written translation must request it for each notice. State law may apply additional notice requirements.||Notice must be timely and written in accessible language and format that explains the action taken/to be taken, the reason(s) for the action/service denial or termination, enrollee’s right to file an appeal, enrollee’s right to request state fair hearing (if state does not require exhaustion of plan appeal first) and how to exercise expedited and standard appeal processes, including the right to and process for requesting aid pending, and circumstances under which enrollee may be required to repay.|
|Appeals Process||Adverse decisions may be appealed to five-level Medicare administrative appeals process, which includes an internal plan review, an external review by an independent contracted reviewer, an Administrative Law Judge hearing, a hearing by the Medicare Appeals Council in HHS, and federal district court. There are expedited appeal rights for cases of urgent medical necessity.||Any plan decision is internally appealable. The opportunity to seek external review is reserved only for adverse determinations that involve clinical judgment. There are expedited appeal rights for cases of urgent medical necessity.Generally, for QHPs the appeals process provides for up to one mandatory internal review with other “voluntary” levels of internal review permitted, an external review, and in some states appeal to state court.||Adverse decisions may be appealed to the plan where enrollees have rights to present evidence and allegations of fact and law at plan hearing and to access documents and records considered at the hearing. They also may access the state fair hearing system which terminates in state court. There are expedited appeal rights for cases of urgent medical necessity.|
|Independent External Review||Required at consumer’s request after internal appeal completed.CMS selects the independent review organization.||Required at consumer’s request after internal appeal completed.In most states, state regulator selects the independent review organization; in 8 states where weaker state laws preempted, insurers have choice of using two federal external review systems – one run by HHS where federal government hires review organization, and one established by DOL for all self-funded employer plans where plan hires review organizations.||Required at consumer’s request. States vary as to whether exhaustion of internal plan appeal process is mandatory before accessing state fair hearing.|
|Aid Paid Pending||Not required (other than limited continued coverage when appealing discharges from hospital, skilled nursing facilities and home health coverage).||Not required.||Required for service terminations if timely requested by beneficiary.7|
|Grievances||Prescribed grievance process to express dissatisfaction about matters that are not subject to appeals, such as quality of care or failure to respect enrollee rights.||Complaints and grievance process through the Marketplace.||Similar requirement to MA.|
|Reporting requirements||Federal requirements for reporting complaints and grievances with the plans.||No federal reporting requirements or data collected, though potential for Secretary to collect data under ACA transparency authority, not yet implemented.||Similar requirement to MA.|
|Assistance with Appeals||No requirements for MA plan assistance with appeals, although State Health Insurance Assistance Programs (SHIPs) often serve this purpose.||Consumer Assistance Programs (CAPs) established in most states with federal funding to assist QHP enrollees (and other state residents) with appeals.||Medicaid MCOs must assist enrollees with appeals and provide interpreters.|
|Source: Authors’ analysis, 2015.|
All three markets require appeals processes for plan enrollees when coverage of a service is denied or terminated. However, the protection afforded to the consumer for a service denial varies widely between the three markets, with the Medicaid program offering the strongest protections for beneficiaries as a result of the property interest beneficiaries have in Medicaid benefits and the due process rights conferred on them by the Constitution.
Medicaid MCOs have very detailed notice requirements and Medicare Advantage is required to provide standardized notices created by CMS while QHPs standards mirror those for plans governed by ERISA which are less robust. Medicaid MCOs must provide written notices in accessible language and format. The notice must include detailed information, including an explanation of the adverse action with reasoning, plan appeal and state fair hearing rights, circumstances under which expedited resolution is available and how to request it. The notice must also include detailed information on the right to have services continue pending the outcome of the appeal and the circumstances under which an enrollee may be required to pay for any care received while the appeal is pending. For QHPs, notices must include a description of the service denied, reason for the denial and information about appeal rights. For denials in states with a Consumer Assistance Program (CAP), the notice must also include contact information for the CAP. Rules concerning when notice must be provided follow the Employee Retirement Income Security Act (ERISA). Medicare Advantage plans are required to issue beneficiaries a standardized notice form for all denied services which includes information on why the service was denied and appeal rights, including expedited appeals and grievances.
Because Medicaid MCOs and Medicare Advantage are built on the foundation of federal entitlement programs, their appeals processes are more federally standardized than those in QHP. The Medicare five-step administrative appeals process is uniform across the country, whereas there is variation in levels/structures of QHP appeals between states. For example, most QHP enrollees will be bound by their states’ external review laws; that is, they will be subject to state law regarding when someone other than their plan must review a service denial. State law regarding external appeals and who may serve as an external appeal body varies somewhat, though state appeals laws must meet minimum standards under the ACA or they can be preempted. In particular, ACA minimum standards require that the external reviewer must be independent, not hired by the health plan. In 8 states where the external appeals law was preempted, however, health insurers can choose on a case by case basis to use one of two federal external appeals systems – one run by HHS, where the external reviewer is hired by the federal government, or one established by the Department of Labor (DOL) for all self-funded employer plans, where the plan hires its own external review organizations.8 Similar to Medicare, Medicaid MCO baseline appeal rights, including plan appeals and state fair hearings, are in federal law, although states are permitted to make some choices within the federal framework (such as the number of days to request a hearing, or whether a beneficiary must exhaust internal plan appeals before requesting a hearing).
When a timely request is made by a beneficiary, Medicaid law requires MCO services to continue pending appeal whereas Medicare Advantage plans and QHPs are not required to do so. Medicare Advantage plans provide limited continued coverage when appealing discharges from hospital, skilled nursing facilities and home health coverage, and QHPs provide limited continued coverage pending the outcome of an internal plan level appeal.
The Medicare Advantage program has a more standardized, centralized complaint tracking system compared to QHPs and Medicaid managed care complaint tracking, which differs across states. There is a federal complaint tracking system in place for Medicare Advantage plans while grievances against QHPs are filed with plans, state departments of insurance or the Marketplace and vary from state to state – there are no federal reporting requirements or data collected. However, it should be noted that the Secretary of Health and Human Services has the authority to require reporting by plans on claims denials and appeals, but this provision of the Affordable Care Act has not yet been implemented. The basic plan grievance process for Medicaid managed care is set out in federal law and like Medicare Advantage plan’s requirements about reporting to CMS, MCOs are required to report to the state on grievances received and disposed of.
Consumer Information, Assistance and Marketing
|Medicare Advantage (MA) plans||QHPs||Medicaid MCOs|
|General Consumer Information||A Plan Finder tool on the medicare.gov website allows users to perform a personalized or generalized search of Part D and MA plans available by zip code.The Plan Finder allows users to compare certain plan features, such as covered drugs, cost-sharing for certain services, estimated out-of-pocket costs and quality ratings.The tool does not, however, include other information, such as contracted provider networks.Medicare also offers a toll-free, 24/7 national hotline to provide information, compare plans and lodge complaints (1-800-MEDICARE).||Marketplaces must make available plan rating tools reflecting differences in quality, claims payment practices, enrollee satisfaction, and other measures (not yet implemented).Other online plan comparison tools are not yet implemented in federal Marketplaces, but some states provide such tools.||If MCO enrollment is mandatory, the state must provide beneficiaries with a plan comparison chart.|
|Disclosure of Plan Information||MA plans must disclose at the time of enrollment and at least annually thereafter certain information regarding the plan, including: benefits offered under the plan, information about contracted network providers, supplemental benefits, prior authorization rules or other review requirements that could result in nonpayment, and plan grievance and appeals procedures.||Standardized description of covered benefits and cost-sharing (SBC) required of all QHPs.SBCs must include illustrations of cost-sharing that applies under standardized care scenarios to help consumers make plan comparisons (not yet fully implemented).||Information on providers taking new patients and those who speak non-English languages.|
|Consumer Assistance||Federally funded (State Health Insurance Assistance Programs – SHIPs). Funded by annual appropriation.||All Marketplaces must provide Navigators who assist with enrollment and application for Marketplace financial assistance.Navigators to be funded through marketplace operating revenue. In addition, all states may establish Consumer Assistance Programs (CAPs). CAPs serve all state residents, including QHP enrollees. CAPs provide enrollment assistance and post-enrollment assistance, including help filing external appeals. CAPs funded by federal grants, authorized at such sums necessary but not currently appropriated.||Medicaid programs may provide ombudsman programs at state option (CMS guidance requires independent advocacy or ombudsman services in MLTSS waiver programs).|
|Marketing||Oversight||Federal oversight of plans, state oversight of agents/brokers.||Some federal oversight with most delegated to states.||Oversight up to states.|
|Standards for Marketing Materials||Well-developed federal standards.||Loose federal standards; primarily state standards.||Federal standards with discretion to states to develop enhanced standards.|
|Approval of Marketing Materials||File and use (materials must be submitted to regulators but can be used after a designated time period if the regulator fails to respond).||File and use.||State approval required before distribution.|
|Source: Authors’ analysis, 2015.|
Medicare Advantage plans, QHPs and Medicaid MCOs are all required to disclose certain information to enrollees; however, Medicare Advantage plans must generally provide a broader range of information. Medicare offers a uniform plan comparison tool that provides certain information about all plans allowing for an easier side-by-side comparison (Plan Finder), including premiums, cost-sharing, supplemental benefits and quality ratings. Notably, the comparison tool does not include all information individuals may want for comparing plans, such as provider networks. While there is no comparable electronic side-by-side comparison tool for QHPs at the federal level, some state Marketplaces offer them and the standardized Summary of Benefits and Coverage (SBC) that each individual QHP is required to publish does offer consumers a uniform vehicle for plan comparison. The SBC is required of all plans (including group health plans). Each SBC must present standardized information about covered benefits and cost-sharing, as well as benefit limits and exclusions. The documents are required by law to be consumer friendly and easy to use. The SBCs also must provide consumers with standardized coverage illustrations so consumers can compare coverage under different plans for like treatment scenarios (such as an uncomplicated pregnancy). Such a standardized comparison document does not exist for Medicare Advantage; if Medicaid MCO enrollment is mandatory, the state must provide beneficiaries with a plan comparison chart.
QHPs have dedicated consumer assistance entities, including those to assist with enrollment and appeals, written into law, although limited funding has kept the programs from fully developing. Under the ACA, statewide Consumer Assistance Programs (CAPs) are established to provide comprehensive assistance to all state residents in answering questions about their health plans, determining eligibility for coverage and subsidies, enrollment, and help filing appeals of denied claims. The CAPs are required to be advocates for consumers. In addition, by law, CAPs must collect and report data to the Secretary on the types of help consumers need and the problems they encounter, and the Secretary and other state and federal regulators are to use data to enhance oversight. Funding for CAPs is subject to an appropriation and Congress has not appropriated new funds since the ACA was enacted. In addition, the ACA requires that Marketplaces provide for other consumer assistance with enrollment and eligibility through Navigator programs. Navigators must be funded on an ongoing basis through Marketplace operational funds. Navigators are not required to help non-Marketplace consumers, nor are they required to help consumers with appeals or other post-enrollment problems and questions. Rather, the ACA requires Navigators to refer consumers to CAPs in these circumstances.
The State Health Insurance Assistance Program (SHIP) provides a health insurance advisory service to assist Medicare beneficiaries with the receipt of services under Medicare, Medicaid and other health insurance programs. This includes help with enrollment and appeals. The SHIP program exists in all fifty states and is administered at the county level. Often, community non-profits, Offices for the Aging or long-term care ombudsmen serve as SHIPs although staff is primarily volunteer based. CMS is legislatively required to assess SHIP performance, and CMS uses data gathered by the SHIP National Performance Reporting (NPR) system.
The Medicare Advantage program has well-developed marketing rules that plans and their contractors must follow. For example, Medicare marketing rules articulate when CMS must approve marketing materials, outline prohibited marketing practices (including marketing through unsolicited contacts), and provide for coordination with state regulators to address inappropriate marketing practices by plans and agents/brokers. While QHP marketing standards and oversight are left largely to individual states, the creation of designated Marketplaces as centralized, regulated forums to shop for and purchase insurance can serve to reduce the potential for marketing abuses sometimes seen in the individual, non-group market. To be offered on a Marketplace website, plans must submit to uniform rules about the content and display of information. Federal Marketplace regulations sets minimum standards for all Marketplaces (and are the sole standard in the Federally Facilitated Marketplace), while state-administered Marketplaces may require additional standards. Plans must also abide by federal non-discrimination rules in their marketing practices. Medicaid MCOs must get state approval of all marketing materials to ensure they do not mislead, confuse or defraud consumers and are accurate, whereas both Medicare Advantage and QHPs in most states are subject to “file and use” rules, meaning materials must be submitted to regulators but can be used after a designated time period if the regulator fails to respond.