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The Truven Health Blog


The latest healthcare topics from a trusted, proven, and unbiased source.


The 2016 Cost-Sharing Reduction Reconciliation Submission Deadline Has Passed – Are You Ready for Next Year?


By Marie Bowker/Monday, June 5, 2017

Under the Affordable Care Act (ACA), issuers of qualified health plans must offer cost-sharing variations of their plans, to provide options with reduced out-of-pocket expenses to eligible enrollees. The Centers for Medicare & Medicaid Services (CMS) advances funds to insurers monthly during the benefit year to offset these costs, followed by the requisite annual reconciliation.

Now that the June 2nd deadline for submitting 2016 cost-sharing reduction (CSR) reconciliations has passed, it’s important for health plans to evaluate their submission processes and decide whether they’ll need help reconciling subsidies for 2017.

Though it is unclear whether subsidies will continue -- given the uncertainty of healthcare reform and the push to eliminate the program -- America’s Health Insurance Plans (AHIP), the American Medical Association, the American Hospital Association, and a number of other business and healthcare organizations support continuing the program. In fact, several issued a joint statement calling for at least a two-year commitment to funding ACA CSR payments, and they want to see the money included in a congressional spending bill. As of this writing, CMS continues to provide CSR payments to health plans, and plans will be required to reconcile payments at the close of the 2017 benefit year.

Why you should start planning now for 2017

The CSR requirements are integral to the affordability of individual plans on the federally facilitated state marketplaces (the Marketplace), and essential for an issuer’s ability to control plan premiums. It’s vital for health plans to ensure that their advanced payments are reconciled accurately.  The law requires that health plans:

  • Utilize the Standard method (re-adjudication of 100 percent of claims) for the 2017 benefit year (as opposed to the earlier Simplified option)
  • Reconcile all advance payments and actual subsidies at the end of the year

In addition to being a complex compliance task, CSR reconciliation also carries much financial risk. According to CMS, more than half of enrollees in plans sold in the Marketplace choose CSR plans,* which means there could be a significant financial impact on health plans if subsidies aren’t reported correctly. Health plans need to reconcile accurately to be assured they receive any additional funds CMS may owe them or to return funds to CMS if their expenses were less than projected.

Health plans: If you struggled with your 2016 submissions or are worried about implementing the now-required Standard method for 2017, it’s time to select a partner for this task. Implementing the more complicated Standard method takes time, and there’s too much money at stake to be anything less than fully prepared and compliant. Contact us today for more information.

Marie Bowker, Senior Client Executive
Bryan Briegel, Healthcare Reform Solutions Strategist

* Centers for Medicare and Medicaid Services, “March 31, 2016 Effectuated Enrollment Snapshot” (CMS, June 30, 2016).




How Are Your Administrators Complying With the ACA Maximum Out-of-Pocket Limits that Started January 1?


By Marie Bowker/Tuesday, February 23, 2016

According to a recent article in Modern Healthcare, beginning in 2016, the Affordable Care Act (ACA) limits how much people have to pay out of pocket for deductibles, coinsurance and copayments across all benefit types. The maximum yearly amount is $6,850 for individuals, and $13,700 for families.

This new requirement means that your medical, mental health, and prescription drug administrators have to start sharing data to ensure your plan members don’t pay more than the maximum out-of-pocket limit across all benefit types combined. 

It’s Complicated, but Doesn’t Have to Be.

Truven Health Analytics research finds that cross-administrator integration often isn’t implemented properly. Ensure your administrators are meeting the above, and other complex requirements, with a 100 percent, post-implementation audit approximately 90 days after the date of your material change. This analysis should:

  • Re-adjudicate all claims for compliance with plan designs
  • Validate eligibility and compliance with your administrator’s policies and procedures
  • Incorporate industry best practices
  • Flag areas where you’re not, or are at risk of not, meeting ACA regulations

If you’ve recently made plan design or administrator changes, download these case studies to explore what our audits uncovered for some clients – and could uncover for you.

Marie Bowker
Senior Director, Payment Integrity


Time is Running Out for Health Plans to Meet the CMS Cost-Sharing Reduction Reconciliation Requirements


By Marie Bowker/Tuesday, October 20, 2015


Back in February, when the Centers for Medicare & Medicaid Services (CMS) announced it would delay reconciling 2014 benefit year cost-sharing reductions (CSRs) until April 2016 rather than the previously stated April 2015, many health plans breathed a sigh of relief. Now, there would be time to comply with this complicated requirement, to ensure that their reconciliation projections are accurate, and their data and processes are working correctly. Have you made the most of this extra time? 

Under the Affordable Care Act, all issuers of qualified health plans (QHPs) must provide cost-sharing reductions to eligible enrollees and will be reimbursed for the value of the CSRs. For health plans, cost-sharing reduction plans present one of the most complicated compliance tasks to come out of the ACA. The law requires that health plans:

  • Determine and make payments to approximate the value of the cost-sharing subsidy
  • Declare, before the start of a plan year, which reconciliation methodology (Simplified or Standard) they’ll use
  • Reconcile all advance payments and actual subsidies at the end of the year
  • Complete an actuarial validation process and certify all results (if using Simplified method)
  • Re-adjudicate 100 percent of claims (if using Standard method)

CMS will reconcile 2014 benefit year cost-sharing reductions for all issuers beginning on April 30, 2016, along with the 2015 plan year reconciliation. When it extended the reconciliation deadline, CMS also announced that it would allow those that had selected the Simplified methodology to switch to the more accurate Standard methodology. In announcing the move, CMS acknowledged that the Simplified methodology was yielding inaccurate CSR estimates for a number of issuers, and that many issuers using the Standard methodology were facing difficulties upgrading their systems in time for the reconciliation deadline.


Health plans that have continued to push this requirement to the back burner are running out of time. But all is not lost. You still have six months to make the switch from Simplified to the Standard method. And if you’re still struggling with the re-processing requirements of the Standard method, it’s time to select a partner to take on this important task for you. There’s too much money at risk to be anything less than fully prepared and compliant, for the April reconciliation deadline. Contact us for more information.


Marie Bowker
Senior Director, Practice Leadership 



No Organization Likes Surprises – Especially When it Comes to PBM Contracts


By Marie Bowker/Monday, August 10, 2015

CVS Health Corp., the second largest pharmacy chain in the country, is the latest company involved in a class-action lawsuit for allegedly overcharging patients for generic prescription drugs.


Though CVS has yet to make a public statement about the claim because they haven’t been officially served with the lawsuit, company spokesman Michael DeAngelis did state that co-pays are determined by a patient's prescription coverage plan, not by the pharmacy, and that a similar lawsuit in Massachusetts was dismissed.


Plan sponsors don’t always prevail in these kinds of complaints, but situations like this are exactly why you don’t want to use a pharmacy benefit manager’s (PBM’s) standard contact language.


The details around factors such as discount programs and “usual and customary” pricing can make all the difference in how much you and your plan members pay for prescription drugs.


For example, your PBM contract should include language that the PBM will charge you for the lowest of the following pharmacy network claims (less member copayments or deductibles):

  • Participating pharmacies’ usual & customary (U&C) price
  • AWP discount (ingredient cost) plus the guaranteed dispensing fee, if applicable, or
  • Maximum allowable cost (MAC) plus the guaranteed dispensing fee, if applicable

Ensure your PBM contract protects your interests.


Health Plans, download these best practices for contracting with your PBM, visit our website or contact us here


Employers, download these best practices for contracting with your PBM, visit our website or contact us here


Marie Bowker
Senior Director, Payment Integrity


The CMS Cost Sharing Reduction Reconciliation Delay: What Does It Mean For Health Plans?


By Marie Bowker/Friday, February 20, 2015


Last week, the Centers for Medicare & Medicaid Services (CMS) announced they would delay reconciling 2014 benefit year cost-sharing reductions (CSRs) until April 2016, rather than the previously stated April 2015.

Under the Affordable Care Act, all issuers of qualified health plans (QHPs) must provide cost-sharing reductions to eligible enrollees and will be reimbursed for the value of the CSRs. For health plans, cost-sharing reduction plans present one of the most complicated compliance tasks to come out of the ACA. The law requires that health plans:

·         Determine advance payments to approximate the value of the cost-sharing subsidy

·         Declare, before the start of a plan year, which reconciliation methodology (Simplified or Standard) they’ll use

·         Reconcile all advance payments and actual subsidies at the end of the year

·         Complete an actuarial validation process and certify all results (if using Simplified method)

·         Re-adjudicate 100 percent of claims (if using Standard method)

Now, CMS will reconcile 2014 benefit year cost-sharing reductions for all issuers beginning on April 30, 2016, along with the 2015 plan year reconciliation. CMS also announced that it will allow those that had selected the Simplified methodology to switch to the more accurate Standard methodology. In announcing the move, CMS acknowledged that the Simplified methodology was yielding inaccurate CSR estimates for a number of issuers, and that many issuers using the Standard methodology were facing difficulties upgrading their systems in time for the reconciliation deadline.

This news is a mixed bag for health plans, depending on where they are in their CSR process. Some health plans were ready for the April 2015 deadline, while others were still scrambling to comply.

With all of the other ACA and market pressures plans are under, pushing CSR to the back burner will certainly seem tempting in light of this change. However, as data and analytics experts partnering with a number of plans on CSR solutions and with deep knowledge of the CMS regulations, we at Truven Health advise against this.

Health plans: use this additional time to ensure that your reconciliation projections are accurate and your data and processes are working correctly.  Your CFO and finance team will want this information for accurate accounting now and going forward ― so use this time well! 

If you’ve started the process with Simplified, embrace this chance to switch to the Standard method. If you’ve yet to select a partner, use this as your chance to choose your best fit. Take this time to work out wrinkles in your reconciliation process and get it just right well before the 2016 deadline, to ensure clear vision on your financial outlook.

As always, we’ll continue to monitor these events and share information that impacts your CSR status.

Marie Bowker, Senior Director, Practice Leadership
Bryan Briegel, Director of Operations


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