CMS-10339 Supporting_Statement_Part_A

Supporting Statement – Pre-Existing Condition Insurance Plan
Program Regulation and Contract Requirements
A.

Justification

1. Circumstances Making the Collection of Information Necessary
On March 23, 2010, the President signed into law H.R. 3590, the Patient Protection and
Affordable Care Act (Affordable Care Act), Public Law 111-148. Section 1101 of the law
establishes a “temporary high risk health insurance pool program” (which has been named
the Pre-Existing Condition Insurance Plan, or PCIP) to provide health insurance coverage to
currently uninsured individuals with pre-existing conditions. The law authorizes HHS to
carry out the program directly or through contracts with states or private, non-profit entities.
HHS is now seeking a three-year approval for this collection. We are requesting renewal for
this package because this information is needed to assure that PCIP programs are established
timely and effectively. This request is being made based on regulations that have been issued
and contracts which have been executed by HHS with States or an entity on their behalf
participating in the PCIP program. PCIP is also referred to as the temporary qualified high
risk insurance pool program, as it is called in the Affordable Care Act, but we have adopted
the term PCIP to better describe the program and avoid confusion with the existing state high
risk pool programs.
CMS is requesting an extension of this currently approved collection as this information is
needed to assure that PCIP programs are able to continue to provide required program
deliverables to HHS in accordance with requirements outlined in both regulation and
contract.
2. Purpose and Use of Information Collection
The data collection in this package will include requirements outlined in both the regulation
and the contract to submit the following:
• Payment invoices;
• Reporting requirements;
• Reports of dumping;
• Audit requirements;
• Record retention requirements;
• Proposal modifications; and
• Portability requirement.
The above information will assist HHS in planning for and executing contracts to provide the
PCIP program to the public.
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3. Use of Improved Information Technology and Burden Reduction
Information collected in the package will be submitted electronically with the exception of
the written notification in accordance with the portability requirements. HHS staff will
analyze the data in the same manner by which it was submitted and communicate with States
and the District of Columbia using e-mail or telephone.
4. Efforts to Identify Duplication and Use of Similar Information
Since this is a new program that was created through the Affordable Care Act, the
information that will be collected has never been collected before by the Federal government.
5. Impact on Small Businesses or Other Small Entities
No impact on small business.
6. Consequences of Collecting the Information Less Frequent Collection
Information collected in the package will consist of both one-time data collection and regular
programmatic reporting to HHS. In order to ensure federal funds are being used correctly
and efficiently, HHS must receive monthly invoices and reports of program information to
monitor the spending of federal dollars and be best positioned to promptly address
programmatic issues such as instances of fraud, waste and abuse. Other items addressed in
this package, such as record retention requirements, will be a one-time data collection.
7. Special Circumstances Relating to the Guidelines of 5 CFR 1320.5
No special circumstance.
8. Comments in Response to the Federal Register Notice/Outside Consultation
The emergency Federal Register notice was published on January 7, 2011. This is an
extension of an existing collection with no changes in burden.
9. Explanation of any Payment/Gift to Respondents
Not applicable.
10. Assurance of Confidentiality Provided to Respondents
All information will be kept private to the extent allowed by application laws/regulations.
11. Justification for Sensitive Questions
No sensitive information will be collected.
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12. Estimates of Annualized Burden Hours (Total Hours & Wages)
Payment Invoices
Contractors will be required to submit invoices to HHS to receive actual cost reimbursement
payments from HHS for administrative and claims costs incurred in the development and
operation of the PCIP program. This burden estimate includes reviewing claims and
administrative expenses, submitting payment invoices to HHS, monitoring available funds and
notifying HHS once 75% of enrollment approved in the contract has been reached. Invoices
must be submitted on a monthly basis to HHS in a format and manner specified by HHS.
We estimate that it will take each state approximately 16 hours per month to collect information,
review and submit required invoices to HHS. We believe 1 person per applicant will be involved
in submitting payment invoices; total burden is 9,792 hours per year.
It is estimated that up to 51 respondents will submit payment invoices.
Fraud, Waste, and Abuse
Contractors will be responsible to promptly report to HHS incidences of waste, fraud, and abuse
and shall cooperate with Federal law enforcement authorities in cases involving waste, fraud, and
abuse. This estimate is based on a monthly burden of reporting such information. Once
identified, the information must be immediately submitted to HHS and/or Federal law
enforcement authorities by the contractor.
We estimate that it will take each contractor approximately 4 hours per month to collect, review
and forward the required information to HHS and/or Federal law enforcement authorities. We
believe 1 person per contractor will be involved in identifying and submitting this information;
total burden is 2,448 hours per year.
It is estimated that up to 51 respondents will report instances of fraud, waste, and abuse.
Quarterly and Monthly Reports
Contractors will be responsible to retain records of expenditures and enrollment, and submit
required information for oversight purposes. Contractors will be required to report, on a monthly
and quarterly basis, information described in the executed contract with HHS. Contractors will
be responsible to submit quarterly reports to HHS on the status of implementing and carrying out
the PCIP program and monthly reports providing information on the previous calendar month of
operations. Included in such reporting, contractors are also responsible to immediately notify
HHS of any claim or suit made or filed against contractor or its subcontractors regarding any
matter resulting from or relating to contractor’s obligations under the contract. The information
must be submitted electronically in a format to be provided by HHS. This estimate is based on
the monthly burden of reporting such information.
We estimate that it will take each contractor approximately 24 hours per month to collect, review
and forward the required information to HHS. We believe 2 people per contractor will be
involved in identifying and submitting this information; total burden is 14,688 hours per year.
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Audited Financial Report
Contractors will be responsible to obtain and submit annually an independently audited financial
report detailing the finances of the PCIP program operated by the contractor. This estimate is
based on the annual burden of reporting this information.
We estimate that it will take each contractor approximately 24 hours per year to collect, review
and forward the required information to HHS. We believe 1 person per contractor will be
involved in identifying and submitting this information; total burden is 1,224 hours per year.
Reports of Dumping
Contractors must report to HHS any health plan issuer or group health plan they have identified
as discouraging an individual from remaining enrolled in coverage offered by such issuer or
health plan based on the individual’s health status. This estimate is based on a monthly burden
of reporting this information. Once identified, the information must be immediately submitted to
HHS by the contractor.
We estimate that it will take each contractor approximately 8 hours per month to collect, review
and forward the required information to HHS. We believe 2 people per contractor will be
involved in identifying and submitting this information; total burden is 4,896 hours per year.
It is estimated that up to 51 respondents will report instances of dumping.
Audit
Contractors may be required to submit information to HHS to demonstrate they have fully
complied with all regulatory and contractual requirements. This estimate includes burden for
both a paper document review process and on-site review process. Contractors will be required
to submit all data requested to HHS in a manner specified by HHS.
We estimate that it will take each contractor approximately 40 hours to submit information to
HHS in addition to accommodating HHS during any on-site review. We believe 3 people per
contractor will be involved in satisfying this requirement; total burden is 2,040 hours per year if
such audit is executed.
It is estimated that up to 51 respondents may be audited.
Record Retention Requirement
Any state or entity selected to administer the PCIP program is required to retain all records that
they or their subcontractors create, collect or maintain while participating in the program for at
least six years following termination.
We estimate that it will take approximately 12 hours per contractor to properly store any
electronic and paper records away for safekeeping. Storing such information presents a total
one-time burden of 612 hours.
It is estimated that 51 respondents will comply with the record retention requirements.
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Contract Renewal and Proposal Modifications
Any State or entity selected to administer the PCIP program will receive written notice from
HHS of its intent to exercise the upcoming option year no later than 60 days prior to the end of
each performance period. At this time, a State may decide it is in their best interest to propose
amendments to the agreed upon contract. We estimate that while uncommon, this may occur,
and such proposed changes could be allowed in instances where they are permissible. This
estimate includes changes to all previously agreed upon proposal sections.
We estimate that it will take approximately 24 hours per contractor to submit a revised proposal
and implement any approved amendments. We believe 1 person per contractor would be
involved in submitting and executing such proposal modification; total burden is 1,224 hours per
year.
It is estimated that up to 51 respondents could request a proposal modification.
Portability Requirement
Any state or entity selected to administer the PCIP program are required to disenroll an
individual who no longer resides in its PCIP service area, which is defined as the geographic area
encompassing an entire State in which the PCIP furnishes benefits. As part of this process, a
PCIP must notify enrollees who are disenrolled because they no longer reside in the PCIP service
area that:
• The Pre-Existing Condition Insurance Plan is available in every State and the District of
Columbia.
• If you move out of the service area of a Pre-Existing Condition Insurance Plan, you don’t
have to be uninsured for another six months to be eligible to enroll in another PreExisting Condition Insurance Plan. You may apply to enroll in a Pre-Existing Condition
Insurance Plan in your new area.
• You should contact the Pre-Existing Condition Insurance Plan in your new area to find
out how to apply.
• Information about applying for the Pre-Existing Condition Insurance Plan in every State
and the District of Columbia is available at www.healthcare.gov.
Upon request by an individual, and except as noted below, a PCIP must provide a written
certificate that includes:
• The date the certificate was issued;
• The name of the PCIP that provided coverage including a clear indication that the coverage
was provided by a PCIP (and not by a state high risk pool);
• The name of the participant with respect to whom the certificate applies;
• The name, address, and telephone number of the PCIP administrator or issuer, and a
telephone number to call for further information; and
• The period of time in which the enrollee had PCIP coverage, e.g. coverage start date and
coverage end date, in the case of a former enrollee.
Such an individual may request that the certificate be sent directly to them or the PCIP in which
the individual is applying to enroll, or the PCIP that would otherwise receive the certificate may
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agree to accept the information through means other than a written certificate (such as by
telephone).
We estimate that it will take approximately 15 minutes per contractor to submit notice of
disenrollment and a certificate of coverage to the individual moving out of their PCIP service
area. There are currently 28 service areas; 27 state-administered PCIP’s and 1 federallyadministered PCIP that covers the remainder 23 states plus the District of Columbia.
Accordingly, we have calculated burden for these 28 respondents. We believe one person would
be involved in submitting and executing such request for the plan; total burden for all 28 plans
are 560 hours per year.
We estimate that it will take approximately 30 minutes per individual to submit written notice of
disenrollment and request for a certificate of coverage to the current PCIP. In calculating the
estimated number of enrollees that may move from one state to another, we looked at the 2009
US Census survey and found 2% of the population may move to a different state in the course of
one year. Assuming a PCIP population, which is comprised of individuals with pre-existing
conditions, it is less likely these individuals may move because of their health condition and/or
treatment currently being received. Therefore, we estimated that approximately 1% of PCIP
enrollees may move over the course of the year. Based on current enrollment of approximately
8,011 individuals, that would approximate 80 individuals per year (8,011 x 1% = 80) who could
require a notice of disenrollment and a certificate of coverage; total burden is 40 hours per year.

12A. Estimated Annualized Burden Hours
Forms
(If necessary)

Type of
Respondent

Payment
Invoices
Total

State
Government

Forms
(If necessary)

Type of
Respondent

Fraud, waste,
and abuse
Total

State
Government

Number of
Number of
Average
Total
Respondents Responses per Burden
Burden
Respondent
hours per
Hours
Response
51
12
16
9,792
16

9,792

Number of
Number of
Average
Total
Respondents Responses per Burden
Burden
Respondent
hours per
Hours
Response
51
12
4
2,448
4

6

2,448

Forms
(If necessary)

Type of
Respondent

Quarterly and
Monthly
Reports
Total

State
Government

Forms
(If necessary)

Type of
Respondent

Audited
Financial
Report
Total

State
Government

Forms
(If necessary)

Type of
Respondent

Reports of
Dumping
Total

State
Government

Forms
(If necessary)

Type of
Respondent

Number of
Respondents

Audit

State
Government

51

Total

24

State
Government

14,688

Number of
Number of
Average
Total
Respondents Responses per Burden
Burden
Respondent
hours per
Hours
Response
51
1
24
1,224
24

Forms
Type of
(If necessary) Respondent
Record
Retention
Total

Number of
Number of
Average
Total
Respondents Responses per Burden
Burden
Respondent
hours per
Hours
Response
51
12
24
14,688

1,224

Number of
Number of
Average
Total
Respondents Responses per Burden
Burden
Respondent
hours per
Hours
Response
51
12
8
4,896
8
Number of
Responses
per
Respondent

Number
of Respondents
51

7

1

Number of
Responses
per
Respondent
1

Average
Burden
hours per
Response

4,896
Total
Burden
Hours

40

2,040

40

2,040

Average
Burden
hours per
Response
12

Total
Burden
Hours

12

612

612

Forms
(If necessary)

Type of
Respondent

Contract
Renewal and
Proposal
Modification
Total

State
Government

Forms
(If necessary)

Type of
Respondent

Portability
Requirement
Total

Government

Forms
(If necessary)

Type of
Respondent

Portability
Requirement
Total

Individual

Number of
Number of
Average
Total
Respondents Responses per Burden
Burden
Respondent
hours per
Hours
Response
51
1
24
1,224

24
Number
of Respondents

Number of
Responses
per
Respondent
(total per
year)
28
80

Number
of Respondents
80

Number of
Responses
per
Respondent

1

Average
Burden
hours per
Response

1,224
Total
Burden
Hours

.25

Average
Burden
hours per
Response

560

Total
Burden
Hours
.5

40

12B. Cost Estimate for All Respondents
Payment Invoices
Type of
respondent
Budget Analyst
Total

Number of
Respondents

Number of Average
Responses Burden
per
Hours
Respondent
51
12
16
16
8

Wage
per
Hour

Burden Costs
All Respondents

33

$323,136
$323,136

Fraud, Waste, and Abuse
Type of
Number of
respondent
Respondents
Office Manager
Total

Number of Average
Responses Burden
per
Hours
Respondent
51
12
4
4

Quarterly and Monthly Reports
Type of
Number of
respondent
Respondents
Budget Analyst
Office Manager
Total

Number of Average
Responses Burden
per
Hours
Respondent
51
12
16
51
12
8
24

Audited Financial Report
Type of
Number of
respondent
Respondents
Auditor
Total

Number of Average
Responses Burden
per
Hours
Respondent
51
1
24
24

Reports of Dumping
Type of
Number of
respondent
Respondents
Office Manager
Fraud
Investigator
Total
Audit
Type of
respondent
Office Manager
Lawyer

Number of Average
Responses Burden
per
Hours
Respondent
51
12
4
51
12
4

Wage
per
Hour

Burden Costs
All Respondents

23

$56,304
$56,304

Wage
per
Hour

Burden Costs
All Respondents

33
23

$323,136
$112,608
$435,744

Wage
per
Hour

Burden Costs
All Respondents

32

$39,168
$39,168

Wage
per
Hour

Burden Costs
All Respondents

23
22

$56,304

8

Number of
Respondents

Number of Average
Responses Burden
per
Hours
Respondent
51
1
24
51
1
8
9

$53,856
$110,160

Wage
per
Hour

Burden Costs
All Respondents

23
60

$28,152
$24,480

Budget Analyst
Total
Record Retention
Type of
respondent

51

1

8
40

33

$13,464
$66,096

Number of Average
Responses Burden
per
Hours
Respondent
51
1
8
51
1
4

Wage
per
Hour

Burden Costs
All Respondents

Number of
Respondents

Office Manager
23
$9,384
Laborers and
12
Freight, Stock and
Material Movers
$2,448
Total
12
$11,832
(Note: The cost of a rental facility was not included under the assumption that contractors will
likely have space available on-site to store information.)
Contract Renewal and Proposal Modification
Type of
Number of Number of Average
respondent
Respondents
Responses Burden
per
Hours
Respondent
Office Manager
51
1
24
Total
24
Portability Requirement
Type of
Number of
respondent
Respondents

Office Manager
Total

Number of Average
Responses Burden
per
Hours
Respondent
(total per
year)
28
80
.25
.25

Wage
per
Hour

Burden Costs
All Respondents

23

$28,152
$28,152

Wage
per
Hour

Burden Costs
All Respondents

23

$12,880
$12,880

Salaries were taken from the Bureau of Labor Statistics website
(http://www.bls.gov/oco/ocos007.htm)
13. Estimates of other Total Annual Cost Burden to Respondents or Record Keepers
/Capital Costs
There are no additional record keeping/capital costs.

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14. Annualized Cost to Federal Government
The cost to the government based on the package is listed below.
Type Federal
employee support

Total
Burden
Hours

First level reviewers
monthly reoccurring
Total

40

Hourly
Wage Rate (GS 14
equivalent)

Total Federal
Government Costs
50

40

2000
$2,000

Salaries are based on a 14 Grade/Step 1 in Washington DC area.
15. Explanation for Program Changes or Adjustments
Not applicable.
16. Plans for Tabulation and Publication and Project Time Schedule
Information in the package is primarily collected monthly, until 2014 when the program
terminates upon transition to the American Health Benefit Exchanges, established under
sections 1311 or 1321 of the Patient Protection and Affordable Care Act. Other items
addressed in this package, such as record retention requirements, will be a one-time data
collection.
17. Reason(s) Display of OMB Expiration Date is Inappropriate
Not applicable.
18. Exceptions to Certification for Paperwork Reduction Act Submissions
There are no exceptions to the certification.
B. Collection of Information Employing Statistical Methods
Not applicable. The information collection does not employ statistical methods.

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