The Truven Health Blog

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

By Truven Staff

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

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 

Categories: Health Plan