CMS-10594- Supporting Statement Provider Network Coverage FR

Supporting Statement for Information Collection Requirements for Provider
Network Coverage
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 final rule, the Patient Protection and Affordable Care Act; HHS Notice of Benefit and
Payment Parameters for 2017 (CMS-9937-P), we finalized 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 45 CFR 156.230(d) and 156.230(e), we require 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 ancillary 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 45 CFR 156.230(d), 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 45 CFR 156.230(e), beginning for the 2018 and later benefit years, ), for a network to be
deemed adequate, each QHP issuer must, notwithstanding 45 CFR 156.130(c), count the cost
sharing paid by an enrollee for an out-of-network essential health benefit (EHB) provided by an
out-of-network ancillary provider in an in-network setting towards the enrollee’s annual limitation
on cost sharing or provide a notice to the enrollee by the longer of when the issuer would typically
respond to a prior authorization request timely submitted, or 48 hours before the provision of the
benefit, that additional costs may be incurred for an EHB provided by an out-of-network ancillary
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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 notification, the information could be used by consumers to understand their cost
sharing obligations if they receive care from an out-of-network ancillary provider. These
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 as the requirements under 45 CFR
156.230(d) are not intended to, and do not, preempt State provider transition notices requirements.
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 a network is a good faith effort as 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 the advance notice provision will help provide transparency and ensure that consumers
receive notice of the possible consequences where an out-of-network ancillary provider may be
seen and are provided some mitigation of these consequences where proper, timely notice is not
provided by the issuer.
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7. Special Circumstances
There are no anticipated special circumstances.
8. Federal Register/Outside Consultation
In the proposed rule, Patient Protection and Affordable Care Act; HHS Notice of Benefit and
Payment Parameters for 2017 (CMS-9944-P), CMS sought comment on policies in 45 CFR
156.230(d) and (e). We have considered comments received to the policies in the proposed
rulemaking and did not receive any comments to the proposed ICRs.
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)
Section 156.230(d) requires 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 being discontinued, irrespective of whether the
contract is being discontinued due to a termination for cause or without cause, or due to a nonrenewal. This is a third-party disclosure requirement. The notification requirement under
§156.230(d) is a common practice in the current market as several States, Medicare Advantage,
Medicaid Managed Care, and the National Association of Insurance Commissioners’ Network
Adequacy Model Act have standards regarding enrollee notification of a provider leaving a
network. As discussed in the final rule preamble, under State laws, many QHP issuers will already
be under this obligation, and therefore, our notification requirements will apply in a more limited
fashion. Additionally, we have incorporated stand-alone dental plans (SADPs) into our
calculations, but we recognize given the requirements that SADPs may rarely meet the
requirements to send a notification.
We estimate that a total of 475 issuers participate in the FFE and would be required to comply with
the standard. We estimated that 5 percent of providers discontinue contracts per year, and that an
issuer in the FFE covers 7,500 National Provider Identifiers, which means that we estimate an
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issuer would have 375 provider discontinuations in a year.
We are clarifying that our assumption is that the database manager will receive notification from
the issuer’s contracting team that a provider contract is being discontinued. From that notification,
the database manager would aggregate the claims data associated with the provider to develop the
list of effected enrollees with associated enrollee information for the notice. This list of affected
enrollees and associated enrollee information would be sent to an administrative assistant to
aggregate into a notification template to be sent to the enrollee. Assuming 375 notifications per a
year, we believe that this task would be a routine process for the administrative assistant to
undertake that would need little to no oversight to produce. As the issuer has the discretion to
define regular basis and that the number of notifications are likely to widely varying between
scope of network and type of provider, we did not estimate based on the number of individual
notifications, but rather the number of provider discontinuations. For each provider
discontinuation, we estimate that it will take a database administrator 30 minutes for data analysis
to produce the list of affected enrollees, at $55.37 an hour, and an administrative assistant 30
minutes to develop the notification and send the notification to the affected enrollees, at $29.93 an
hour. We are also clarifying these hourly rates include 35 percent adjustment for fringe benefits
and overhead costs. The total costs per issuer would be $15,993.75. The total annual costs estimate
would be $7,597,031. Because we are already collecting information regarding network
classifications as part of the existing QHP certification process, we do not believe that this
network classification described in the preamble will result in additional information collection
requirements for issuers.
Labor Category

Database
Administrator
Administrative
Assistant
Total for the 475
QHP Issuers

Hourly
Labor
Costs
(Hourly rate
+ 35%
Fringe
benefits)
$55.37

Burden
Hours

Number
of Notices

Total Burden
Costs (Per Year)

0.5

375

$10,381.875

$29.93

.5

375

$5,611.875
$15,993.75

In §156.230(e), we require QHP issuers to provide a notice to enrollees of the possibility of outof-network charges from an ancillary out-of-network provider in an in-network setting prior to the
benefit being provided, to avoid counting the out-of-network costs against the annual limitation on
cost sharing. This provision applies to all QHPs, which includes 575 issuers, and would start in
2018. We estimate it would take an issuer’s mid-level health policy analyst (at an hourly wage rate
of $54.87) approximately 6 minutes to create a notification and send the information. We are
clarifying the hourly rates include 35 percent adjustment for fringe benefits and overhead costs.
We estimate that approximately two notices would be sent for every 100 enrollees. Assuming

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approximately 24 million enrollees in QHPs for 2018, we estimate QHPs would send
approximately 320,000 total notices annually, for a total 21,334.40 hours, at a total cost of
$1,170,619.
Labor Category

Health Policy
Analyst

Hourly
Labor
Costs
(Hourly rate
+ 35%
Fringe
benefits)
$54.87

Burden
Hours

Number
of Notices

Total Burden Cost (Per
Year)

21,334.40

320,000

$1,170,619

13. Capital Costs
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 information collection request.
16. Publication/Tabulation Dates
Not applicable.
17. Expiration Date
This collection does not lend itself to the displaying of an expiration date.

1 We used the most recent CBO estimates for enrollment from March 2015 available at
https://www.cbo.gov/sites/default/files/cbofiles/attachments/43900-2015-03-ACAtables.pdf.
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