CMS-10594 - Supporting Statement

Supporting Statement for Information Collection Requirements
for Provider Network Coverage
CMS-10594/OMB Control Number 0938-NEW
A. Background
On March 23, 2010, the President signed into law the Patient Protection and Affordable Care
Act (P.L. 111-148). On March 30, 2010, the Health Care and Education Reconciliation Act of
2010 (P.L.111-152) was signed into law. The two laws are collectively referred to as the
Affordable Care Act. The Affordable Care Act (ACA) established new competitive private
health insurance markets called Marketplaces, or Exchanges, which gave millions of
Americans and small businesses access to affordable, quality insurance options that meet
certain requirements. These requirements include ensuring sufficient choice of providers and
providing information to enrollees and prospective enrollees on the availability of in-network
and out-of-network providers.
In the proposed rule, the Patient Protection and Affordable Care Act; HHS Notice of Benefit
and Payment Parameters for 2017 (CMS-9937-P), we propose network adequacy standards for
qualified health plan (QHP) issuers, including stand-alone dental plans (SADPs) mostly
focused on issuers in QHPs in the federally-facilitated Exchanges (FFE). This information
collection notice is for two of the standards from the rule; one applying in the FFE and one
applying to all QHPs. Specifically, under proposed 45 CFR 156.230(e) and 156.230(f), we
propose notification requirements for enrollees in cases where a provider leaves the network
and for cases where an enrollee might be seen by an out of network provider in in-network
setting. These new standards will help inform consumers about his or her health plan coverage
to better make cost effective choices. The Centers for Medicare and Medicaid Services (CMS)
is creating a new information collection request (ICR) in connection with these standards. The
burden estimate for this new ICR included in this package reflects the additional time and
effort for QHP issuers to provide these notifications to enrollees.

B. Justification
1 . Need and Legal Basis
Under proposed 45 CFR 156.230(e), a QHP issuer on a Federally-facilitated Exchange must-(1) Make a good faith effort to provide written notice of discontinuation of a provider 30 days
prior to the effective date of the change or otherwise as soon as practicable, to enrollees who
are patients seen on a regular basis by the provider or who receive primary care from the
provider whose contract is discontinuing, irrespective of whether the contract is being
discontinued due to a termination for cause or without cause, or due to a non-renewal.
Under proposed 45 CFR 156.230(f), regarding application of cost sharing to out-of-network
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EHB and notwithstanding 45 CFR 156.130(c), for a network to be deemed adequate, each
QHP issuer must count the cost sharing that it charges an enrollee for an out-of-network
essential health benefit (EHB) provided by an out-of-network provider in an in-network
setting towards the enrollee’s annual limitation on cost sharing or provide a notice to the
enrollee at least ten business days before the provision of the benefit that additional costs may
be incurred for an EHB provided by an out-of-network provider in an in-network setting,
including balance billing charges, unless such costs are prohibited under State law, and that
any additional charges may not count toward the in-network annual limitation on cost sharing.
2.

Information Users
The notifications that the QHP issuers will be required to send under this information
collection will be sent to the QHP issuers’ enrollees who are affected by a provider leaving the
network. For the second proposal, the information could be used by a consumer to understand
their cost sharing obligations if they receive care from an out-of-network provider. The
notifications are intended to inform the consumer about his or her health insurance coverage
to better make cost effective choices.

3.

Use of Information Technology
CMS anticipates that QHP issuers will use their claims data systems to identify enrollees or
use the plan’s preauthorization process. The notification can be sent to the enrollee
electronically or by mail.

4.

Duplication of Efforts
We anticipate no duplication of efforts for QHP issuers. We believe that any issuer that is
already notifying enrollees about a provider leaving the network or about an enrollee’s cost
sharing will be able to adjust their processes, timing and notification template to comply with
our requirements.

5.

Small Businesses
QHP issuers will incur costs to develop and send the notifications to enrollees. However,
CMS does not have reason to believe that any issuers are small businesses.

6.

Less Frequent Collection
The burden associated with this information collection consists of QHP issuers in the FFE
notifying enrollees about the plan’s network coverage. QHP issuers need to make this
information available to the plan’s enrollees.
We recognize that the notification of the provider leaving network is a good faith effort as
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there are certain situations that the issuer cannot anticipate. For these reasons, the regulation
requires the notification 30 days prior to the effective date of the change or otherwise as soon
as practicable.
We believe that the 10-business days’ advance notice provision may allow the enrollee to
arrange for an in-network provider to provide the EHB services. If the notices are provided
less than 10 business days, the QHP issuer is required to count the out-of-network cost sharing
towards the annual limitation on cost sharing.
7.

Special Circumstances
There are no anticipated special circumstances.

8.

Federal Register/Outside Consultation
In the proposed rule, the Patient Protection and Affordable Care Act; HHS Notice of Benefit
and Payment Parameters for 2017 (CMS-9937-P), CMS is proposing 45 CFR 156.230(e) and
(f) and will consider comments received on the proposed rule.

9.

Payments/Gifts to Respondents
No payments and/or gifts will be provided.

10. Confidentiality
To the extent of the applicable law and HHS policies, we will maintain consumer privacy with
respect to the information disclosed.
11. Sensitive Questions
No sensitive questions are included in these notice requirements.
12. Burden Estimates (Hours & Wages)
Proposed §156.230(e)(1) would require that QHP issuers make a good faith effort to provide
written notice of discontinuation of a provider 30 days prior to the effective date of the change
or otherwise as soon as practicable, to enrollees who are patients seen on a regular basis by the
provider or who receive primary care from the provider whose contract is discontinuing. This
is a third-party disclosure requirement. We estimate that a total of 475 issuers participate in
the FFE and would be required to comply with the proposed standard. We propose an estimate
of 5 percent of providers discontinue contracts per year and that an issuer in the FFE

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covers 7,500 National Provider Identifiers, which means that we estimate an issuer would
have 375 provider discontinuations in a year. For each provider discontinuation, we propose
an estimate that it will take a database administrator half of an hour for data analysis to
produce the list of effected enrollees at $55.37 an hour and an administrative assistant half of
an hour to develop the notification and send the notification to the effected enrollees, at
$29.93 an hour. The total burden per an issuer is 375 hours and the total costs per an issuer
would be $15,993.75. The total annual burden for all issuers is 178,125 hours and the total
annual costs estimate would be $7,597,031.
Labor Category Hourly Labor
Costs
(Hourly rate
+ 35% Fringe
benefits

Burden
Hours

Number of
Notices

Total Burden
Costs

Database
$55.37
Administrator
Administrative $29.93
Assistant
Total for the
475
QHP Issuers

.5

375

$10,381.875

.5

375

$5,611.875
$15,993.75

Total Burden
Cost (Per
Year)

$7,597,031

Proposed 156.230(f) would require QHP issuers to provide a notice to enrollees of the
possibility of out-of-network charges from an out-of-network provider in an in-network
setting at least 10 business days prior to the service being provided to avoid counting the outof-network costs against to the annual limitation on cost sharing. This provision would apply
to all QHPs, which includes 575 issuers. We estimate it would take approximately 6 minutes
to create a notification and send the proposed information by an issuer’s mid-level health
policy analyst (at an hourly wage rate of $54.87). We estimate that approximately 2 notices
would be sent for every 100 enrollees. Assuming approximately 9 million enrollees in QHPs
2017, we estimate QHPs would send approximately 180,000 total notices, for a total hours of
18,000, with a total cost of $987,660.
Labor
Category

Hourly Labor
Costs (Hourly
rate
+ 35% Fringe
benefits)

Health Policy $54.87
Analyst

Burden
Hours

Number of
Notices

18,000

180,000

13. Capital Costs
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Total Burden
Costs

$987,660

Total Burden
Cost (Per
Year)

$987,660

Issuers are expected to keep records of notices sent to enrollees. It is assumed that this will be done
electronically so the burden is not estimated. There are no additional capital costs.

14. Cost to Federal Government
There are no additional costs to the federal government.
15. Changes to Burden
This is a new collection of information.
16. Publication/Tabulation Dates
Not applicable.
17. Expiration Date
This collection does not lend itself to the displaying of an expiration date.
.

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