The State Flexibility to Stabilize the Market Grant Program (“State Flexibility Grant Program”) was developed to support states as they implement several of the market reforms and consumer protections under Title I of the Affordable Care Act (ACA). This new funding opportunity builds upon many of the efforts currently underway in states related to the Consumer Protection grant funds, which were awarded in October 2016. PCG assisted many states with projects related to those consumer protections grant funds and our team has used that experience to compile the following insights and suggested activities to help states with their grant applications for this new federal funding opportunity. Here are a few specific ways that states can build upon existing projects and capture the specific activities included in the new funding announcement.  

Implementing or enhancing policy form review

The Centers for Medicare and Medicaid Services (CMS) indicated that states may develop standard operating procedures and/or tools to review plans to identify discriminatory benefit design. This work would be done to ensure essential health benefits (EHBs) are covered appropriately through the development of review tools such as carrier filing checklists that outline federal and state mandates/coverage requirements. In addition to the currently available federal review tools, regulators would be allowed to develop state specific tools under this funding opportunity to assist reviewers with ensuring non-discrimination and parity requirements.

Formulary reviews

In addition to enhancing form review to ensure compliance and streamline the process, CMS outlined that these grant funds may be used to examine drug formularies in greater detail, including potentially creating a preferred drug list. Many states are struggling to contain rising drugs costs, and these funds could assist in the efforts to contain costs for consumers. Regulators could use these fund to examine drug formulary design to ensure the treatment of mental health and substance abuse treatment medications are in compliance with the Mental Health Parity and Additional Equity Act. For example, this scope could include picking a random sample of disorders to check for all carrier’s formularies with further follow up if issues are flagged in the initial review.

Many states do not currently have that clinical expertise in house by which to review formularies in depth, and the review has been limited to the federal tools in many cases. CMS specifically states that it would allow states to contract with a clinician to review formularies or create a standard operating procedure so regulators would guidance with clinical expertise by which to review carriers form filings. The activities outlined in this scope would allow compliance staff to be more confident and have additional guidance from which to conduct subsequent reviews of health plans.

EHB review

As states struggle to find ways to retain carriers and marketplace enrollees, reviewing the benchmark plan in place and looking to other states’ benchmark plans has emerged as a potential cost savings mechanism. CMS has proposed states use funds to find ways in which the modification or adoption of a new benchmark would reduce costs for consumers. PCG subject matter experts have advised many states on the adoption of their initial and subsequent benchmark plans, including review of preventative services coverage to ensure compliance with PHS Act’s title XXVII Part A. With a grant funding period that extends into 2020, this review would allow states to consider a new or modified benchmark plan for plan year 2020 or 2021.

Consumer education and outreach

One useful by-product of the projects underway for the Consumer Protections grants: States now have a breadth of knowledge related to how insurance carriers are covering preventative services, EHBs, mental health and substance abuse services, and have a better understanding of the misleading or confusing coverage of the above-mentioned topics. Regulators would be smart to pass along this knowledge to consumers. Through print materials or public information sessions, consumers would benefit from educational materials on topics such as no cost preventative health services, what mental health parity means in terms of accessing benefits, and understanding what providers/carriers can bill for.

Many insurance regulators are holding public information sessions for consumers to ensure widespread dissemination of the information and materials. Such sessions also allow regulators to gather information from consumers around issues such as access to mental health and substance abuse treatment services.  The flexibility provided in the grant announcement allows for creative use of funds to improve access to, and the quality of, the health plan options in a given state, with the ultimate goal of reducing costs to consumers.

For more information on specific activities related to the State Flexibility Grant applications, please contact us at healthpolicynews@pcgus.com.