Fact sheet

2019 Health and Human Services Exchange Program Integrity Final Rule Fact Sheet

2019 Health and Human Services Exchange Program Integrity Final Rule

CMS released a final rule on December 20, 2019, aimed at protecting taxpayer dollars by ensuring that Exchange enrollees are accurately determined eligible for premium subsidies. The rule addresses several audit recommendations from the Office of Inspector General (OIG) and the Government Accountability Office (GAO), which identified weaknesses in the eligibility determination process for advance payments of the premium tax credit (APTC) and cost-sharing reductions (CSRs) in both State and Federal Exchanges.[1]

The final rule advances the Trump Administration’s goals to:

  • Strengthen CMS’s oversight over State Exchanges through monitoring, reporting, and auditing of State Exchange activities to, among other things, ensure State Exchanges that operate their own eligibility and enrollment platforms are correctly determining consumer eligibility for advance payments of the premium tax credit (APTC) and cost-sharing reduction (CSRs) amounts.
  • Safeguard taxpayer funds by requiring Exchanges to conduct periodic data matching (PDM) at least twice a year to check if enrollees have become eligible for or enrolled in coverage that makes them ineligible to receive APTC and CSRs.
  • Align federal regulations with statutory requirements by requiring qualified health plan (QHP) issuers to send a separate bill to consumers for the portion of the consumer’s premium attributable to coverage of certain abortion services for which public funding is prohibited (non-Hyde abortions) and to instruct consumers to separately pay for that portion of their premium.

To advance these goals, key provisions in this rule amend standards relating to oversight of State Exchanges, which include State Exchanges and State-based Exchanges on the Federal platform (SBE-FPs), and periodic data matching frequency. This rule also reinforces the Patient Protection and Affordable Care Act (PPACA) requirements related to the collection of separate payments for premiums associated with coverage of non-Hyde abortion services by better aligning the regulatory requirements for QHP issuer billing of enrollee premiums with the separate payment requirement in section 1303 of the PPACA. Implementation of the separate billing policy will not only improve statutory alignment, but will also assist in increasing transparency with regard to whether a consumer’s QHP covers non-Hyde abortion services. These changes will help strengthen Exchange program integrity, including helping stabilize Exchange premiums.

The provisions in this rule build on other actions the Administration has taken to promote Exchange program integrity. For example, CMS has fully implemented policy-based payments in the FFEs and almost all of the State Exchanges, a critical system change across Exchanges and issuers that ensures the data used to generate APTC and CSR payments to issuers are verified and associated with particular enrollees. In late 2017, CMS developed an innovative approach to notify people who failed to reconcile the APTC they received on their tax returns that they must take action to reconcile APTC they received during the previous tax year, or else have their APTC cut off. CMS continues to explore opportunities to improve program integrity and oversight by conducting comprehensive audits of Exchange processes to verify their integrity.

This fact sheet highlights certain elements of the final rule. In addition to the elements highlighted below, CMS is finalizing other changes in order to improve program integrity. For example, the rule clarifies that Exchanges are permitted to use and disclose applicant information to certain entities for program integrity efforts, such as combatting fraud.

Exchange and Qualified Health Plan Provisions:

State Exchange Oversight

CMS is finalizing changes that provide further specificity to the program reporting requirements for State Exchanges, which include SBE-FPs. In addition, State Exchanges are required to conduct and submit the results of annual programmatic audits to CMS, and we are finalizing changes that clarify the scope of such audits, which includes a new requirement to test eligibility and enrollment transactions to ensure State Exchanges that operate their own eligibility and enrollment platforms are properly determining consumer eligibility for qualified health plans, APTC and CSRs. We believe these changes will strengthen CMS’s programmatic oversight and the program integrity of State Exchanges, and better align with CMS’s program integrity priorities, providing CMS and states with greater insight into State Exchange compliance with eligibility and enrollment standards in a more cost-effective manner.

Eligibility and Enrollment Provisions:

Periodic Data Matching

Beginning with plan year 2021, the final rule requires Exchanges to conduct Medicare, Medicaid/CHIP, and, if applicable, Basic Health Plan (BHP) periodic data matching (PDM) at least twice a year. This requirement helps ensure that Exchanges are taking adequate steps to identify enrollees who have become eligible for other forms of minimum essential coverage that make them ineligible to receive APTC or CSRs.  State Exchanges that have implemented fully integrated eligibility systems would be deemed to be in compliance with the regulations related to Medicaid/CHIP and BHP PDM. Through more frequent verifications, CMS will be able to identify and correct eligibility and enrollment issues sooner. Early identification of eligibility and enrollment issues is particularly important for consumers who are eligible for or enrolled in other coverage because it can minimize the time these consumers inadvertently receive tax credits that they will have to pay back later, and mitigate risks that they are not paying premiums for a plan they no longer need.

Exchange Plan Management Provisions:

Collection of Separate Payments for Certain Abortion Services

CMS is finalizing that, beginning with an issuer’s first billing cycle that starts on or after the date that is 6 months after publication of the final rule, QHP issuers be required to: (1) send an entirely separate monthly bill to the policy holder for only the portion of premium attributable to coverage of certain abortion services, and (2) instruct the policy holder to pay the portion of their premium attributable to coverage of certain abortion services in a separate transaction from any payment the policy holder makes for the portion of their premium not attributable to such abortion coverage. QHP issuers sending paper bills will be permitted to send the separate paper bill in the same mailing as the separate bill for the rest of the enrollee’s premium. QHP issuers sending bills electronically will be required to send the separate bill in a separate email or electronic communication. We are also finalizing that QHP issuers must instruct the policy holder to pay the separate bill in a separate transaction. However, if the policy holder fails to pay the separate bill in a separate transaction as instructed by the issuer, the issuer may not terminate the policy holder’s coverage on this basis, provided the amount due is otherwise paid.

We urge issuers to state clearly on both bills that the policy holder is receiving two bills to cover the total amount of premium due for the coverage period, that the consumer’s total premium due is inclusive of the amount attributable to non-Hyde abortion coverage, and that the policy holder should make separate payments for each bill.

We also added language to the final rule that explains that CMS will not take enforcement action against a QHP issuer that (a) beginning on or after the effective date of the separate billing policies, does not place an enrollee into a grace period and does not terminate QHP coverage based solely on the policy holder’s failure to pay the separate payment for coverage of non-Hyde abortion services; OR (b) beginning on or after the effective date of the final rule, modifies the benefits of a plan either at the time of enrollment or during a plan year to effectively allow enrollees to opt out of coverage for these services by not paying the separate bill for such services.

We believe that some of the methods for billing and collection of the separate payment for abortion services noted as permissible in the 2016 Payment Notice do not adequately reflect Congress’s intent regarding the statutory requirements to collect separate payments for coverage of abortion services for which federal funding is prohibited. We instead believe that requiring issuers to separately bill the portion of the policy holder’s premium attributable to coverage of certain abortion services and instruct policy holders to make a separate payment for this amount as finalized in this rule achieves better regulatory alignment with the statutory requirement in section 1303 of the PPACA for QHP issuers to collect a separate payment for these services. QHP issuers in the FFEs will be subject to compliance reviews to monitor FFE issuer compliance with the new requirements applicable to issuers offering coverage for certain abortion services.


[1] See, e.g., Improper Payments: Improvements Needed in CMS and IRS Controls over Health Insurance Premium Tax Credit (GAO 17-467); Federal Health-Insurance Marketplace: Analysis of Plan Year 2015 Application, Enrollment, and Eligibility-Verification Process (GAO-18-169); CMS Did Not Provide Effective Oversight to Ensure that State Marketplaces Always Properly Determined Individuals’ Eligibility for Qualified Health Plans and Insurance Affordability Programs (HHS OIG, A-09-16-01002); Not All of the Federally-Facilitated Marketplace’s Internal Controls Were Effective in Ensuring that Individuals Were Properly Determined Eligible for Qualified Health Plans and Insurance Affordability Programs (HHS OIG A-09-14-01011).