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1313 - Financial Integrity

 
Implementation Status 
Statutory Text 

Summary

Amended by section 10104 of the Manager’s Amendment. Requires Exchanges to account for activities, receipts and expenditures, with annual reporting to HHS, and provides for HHS investigations and audits of Exchanges.

Specifies protocol for rescissions of HHS payments for serious misconduct and allows HHS to implement approaches to reduce fraud and abuse. Includes provisions regarding the application of the False Claims Act (FCA) to payments made by, through or in connection with an Exchange if those payments include any Federal funds and makes changes to the application of the FCA public disclosure bar as specified.

Also requires, by January 1, 2019, a GAO report regarding Exchange activities and Qualified Health Plan enrollees addressing such issues as the operations and administration of Exchanges and how many physicians, by area and specialty, are not taking or accepting new patients enrolled in Federal healthcare programs; the report also must include a survey of the cost and affordability of healthcare insurance provided under the Exchanges for small business owners and employees.

#Health Insurance Exchanges, #Program Integrity

Implementation Status

 
Summary 
Statutory Text 

2010

On November 18, 2010, CMS provided initial guidance to States on Exchanges, including a reference to financial accountability provisions under this section.

2012

Under “Functions of an Exchange,” the March 27, 2012, Exchange establishment final rule codifies oversight and financial integrity provisions of this section (see p. 18447). In the preamble to this rule, CMS also notes that it “intend[s] to address oversight of Exchanges through future implementation and rulemaking under section 1313 of the Affordable Care Act.”

Several section 1313-related provisions are referenced in CCIIO’s final Exchange blueprint (as revised November 16, 2012).

2013

On August 30, CCIIO published a wide-ranging final rule (also see a factsheet) on Marketplace program integrity and other provisions, noting that it “generally is finalizing previously proposed policies without change.” The rule addressed oversight of Qualified Health Plan (QHP) issuers in Federally Facilitated Marketplaces; individual and SHOP eligibility appeals, including details on a “federally-managed appeals process [that] will be available for appellants in the individual market”; HHS privacy and security-related Marketplace compliance monitoring; an option for a state to operate a State-based SHOP, while having a Federally Facilitated Individual Marketplace; standards regarding issuers’ acceptance of various payment methods from Marketplace consumers; provisions addressing agents and brokers; QHP issuer direct enrollment; and a clarification regarding certain outside-the-Marketplaces plans’ participation in the risk corridors program.

On September 18, CMS, the Department of Justice and the FTC announced an inter-agency initiative to stem fraud and privacy violations in Health Insurance Marketplaces, including the “Establishment of a rapid response mechanism for addressing privacy or cybersecurity threats.” CMS released a fact sheet for consumers on safeguarding themselves against Marketplace fraud.

On September 18, CMS sent a proposed rule to OMB for review relating to “Program Integrity: Exchange, SHOP, Premium Stabilization Programs, and Market Standards,” including wide-ranging provisions, including those relating to the risk adjustment, risk corridors and reinsurance, as well as advance payments of the premium tax credit and cost-sharing reductions, among other issues.

On October 24, CMS released a final rule (see a CCIIO fact sheet) codifying certain program integrity-related components of the ACA pertaining to Exchanges, premium stabilization programs and market standards that were delineated in a June 2013 proposed rule. The final rule also amends and adopts as final provisions delineated in the Amendments to the HHS Notice of Benefit and Payment Parameters for 2014 interim final rule with comment issued in March 2013 related to risk corridors and reconciliation of cost-sharing.

On Nov. 1, CMS published a Notice requesting comments by Dec. 31, 2013, on an information collection (see #3 on p. 2) – “Initial Plan Data Collection to Support Qualified Health Plan (QHP) Certification and Other Financial Management and Exchange Operations” – relating to revisions to data elements collected from Qualified Health Plans to support various regulatory requirements. The agency notes that “based on experience with the first year of data collection, we propose revisions to data elements being collected and the burden estimates for years two and three.” Accompanying documents are available in a Paperwork Reduction Act Package.

On Nov. 15, CMS published in the Federal Register, as part of a new information collection (see #2 on p. 2), a request for OMB approval and public comment – due by Jan. 14, 2013 – on an annual accounting-related report to be filed by State-Based Marketplaces on receipts and expenditures.

On Nov. 25, HHS issued a proposed rule establishing the CY 2015 benefit and payment parameters for the cost-sharing reductions (including the annual limitation on cost-sharing for stand-alone dental plans), advance premium tax credit, reinsurance, and risk adjustment programs as required by the ACA.  In addition, the proposed rule establishes the user fees for the Federally-facilitated Exchanges (FFEs), the annual open enrollment period for 2015, the actuarial value (AV) calculator, and other key provisions as required by the law.  Note that the rule allows for adjustments to the risk corridors and other premium stabilization programs in 2014 to account for the “transitional policy” (see the Nov. 14 CCIIO letter to Insurance Commissioners) that addressed plan cancellations, which could equate to broader risk corridors and thus higher stabilization payments to plans. Comments are due by Dec. 26, 2013.

On December. 11, 2013 ahead of formal testimony to the House Energy & Commerce Health Subcommittee, (details here), Secretary Sebelius in a blog post delineates three steps to “bette[r] understan[d] the structural and managerial policies that led to the flawed launch of HealthCare.gov,” namely: (1) request the OIG to review the development of HealthCare.gov (letter here); (2) request CMS Administrator Tavenner to create a new full-time, permanent position and appoint a CMS Chief Risk Officer to focus on mitigating risk across CMS’ programs; and (3) update and expand CMS employee training on best practices for contractor and procurement management, rules and procedures.

2014

On Feb. 27, CCIIO issued a notice explaining data collection procedures, comments on which are due on or around March 27, for State Health Insurance Exchange Incident Report through which state-based Administering Entities would report “suspected or confirmed incidents affecting loss or suspected loss of PII within one hour of discovery,” among other protocols.

Statutory Text

 
Implementation Status 
Summary 

SEC. 1313 [42 U.S.C. 18033]. FINANCIAL INTEGRITY.
(a) ACCOUNTING FOR EXPENDITURES.—
(1) IN GENERAL.—An Exchange shall keep an accurate accounting
of all activities, receipts, and expenditures and shall
annually submit to the Secretary a report concerning such accountings.
(2) INVESTIGATIONS.—The Secretary, in coordination with
the Inspector General of the Department of Health and Human
Services, may investigate the affairs of an Exchange, may examine
the properties and records of an Exchange, and may require
periodic reports in relation to activities undertaken by an
Exchange. An Exchange shall fully cooperate in any investigation
conducted under this paragraph.
(3) AUDITS.—An Exchange shall be subject to annual audits
by the Secretary.
(4) PATTERN OF ABUSE.—If the Secretary determines that
an Exchange or a State has engaged in serious misconduct
with respect to compliance with the requirements of, or carrying
out of activities required under, this title, the Secretary
may rescind from payments otherwise due to such State involved
under this or any other Act administered by the Secretary
an amount not to exceed 1 percent of such payments per
year until corrective actions are taken by the State that are determined
to be adequate by the Secretary.
(5) PROTECTIONS AGAINST FRAUD AND ABUSE.—With respect
to activities carried out under this title, the Secretary
shall provide for the efficient and non-discriminatory administration
of Exchange activities and implement any measure or
procedure that—
(A) the Secretary determines is appropriate to reduce
fraud and abuse in the administration of this title; and
(B) the Secretary has authority to implement under
this title or any other Act.
(6) APPLICATION OF THE FALSE CLAIMS ACT.—
(A) IN GENERAL.—Payments made by, through, or in
connection with an Exchange are subject to the False
Claims Act (31 U.S.C. 3729 et seq.) if those payments include
any Federal funds. Compliance with the requirements
of this Act concerning eligibility for a health insurance
issuer to participate in the Exchange shall be a material
condition of an issuer’s entitlement to receive payments,
including payments of premium tax credits and
cost-sharing reductions, through the Exchange.
[Section 10104(j)(1), p. 834, provides that subparagraph (B) is
deemed ‘‘null, void, and of no effect’’]
[(B) DAMAGES.—Notwithstanding paragraph (1) of section
3729(a) of title 31, United States Code, and subject to
paragraph (2) of such section, the civil penalty assessed
under the False Claims Act on any person found liable
under such Act as described in subparagraph (A) shall be
increased by not less than 3 times and not more than 6
times the amount of damages which the Government sustains
because of the act of that person.]
[Section 10104(j)(2),p. 834, replaced paragraph (4) of section
3730(e) of title 31, United States Code, as follows:]
(2)[sec. 10104(j)(2) of PPACA:] Section 3730(e) of title 31,
United States Code, is amended by striking paragraph (4) and inserting
the following:
‘‘(4)(A) The court shall dismiss an action or claim under
this section, unless opposed by the Government, if substantially
the same allegations or transactions as alleged in the action
or claim were publicly disclosed—
‘‘(i) in a Federal criminal, civil, or administrative hearing
in which the Government or its agent is a party;
‘‘(ii) in a congressional, Government Accountability Office,
or other Federal report, hearing, audit, or investigation;
or
‘‘(iii) from the news media,
unless the action is brought by the Attorney General or the
person bringing the action is an original source of the information.
‘‘(B) For purposes of this paragraph, ‘‘original source’’
means an individual who either (i) prior to a public disclosure
under subsection (e)(4)(a), has voluntarily disclosed to the Government
the information on which allegations or transactions
in a claim are based, or (2) who has knowledge that is independent
of and materially adds to the publicly disclosed allegations
or transactions, and who has voluntarily provided the information
to the Government before filing an action under this
section.’’.
(b) GAO OVERSIGHT.—Not later than 5 years after the first
date on which Exchanges are required to be operational under this
title, the Comptroller General shall conduct an ongoing study of
Exchange activities and the enrollees in qualified health plans offered
through Exchanges. Such study shall review—
(1) the operations and administration of Exchanges, including
surveys and reports of qualified health plans offered
through Exchanges and on the experience of such plans (including
data on enrollees in Exchanges and individuals purchasing
health insurance coverage outside of Exchanges), the
expenses of Exchanges, claims statistics relating to qualified
health plans, complaints data relating to such plans, and the
manner in which Exchanges meet their goals;
(2) any significant observations regarding the utilization
and adoption of Exchanges;
(3) where appropriate, recommendations for improvements
in the operations or policies of Exchanges;
(4) [As added by section 10104(k)(3)] a survey of the cost
and affordability of health care insurance provided under the
Exchanges for owners and employees of small business concerns
(as defined under section 3 of the Small Business Act (15
U.S.C. 632)), including data on enrollees in Exchanges and individuals
purchasing health insurance coverage outside of Exchanges;
and
(5) how many physicians, by area and specialty, are not
taking or accepting new patients enrolled in Federal Government
health care programs, and the adequacy of provider networks
of Federal Government health care programs.

Browse ACA Titles

  • I-Quality, Affordable Health Care for all Americans
  • II-Role of Public Programs
  • III-Improving the Quality and Efficiency of Health Care
  • IV-Prevention of Chronic Disease and Improving Public Health
  • V-Health Care Workforce
  • VI-Transparency and Program Integrity
  • VII-Improving Access to Innovative Medical Therapies
  • VIII-Community Living Assistance Services and Supports (CLASS ACT)
  • IX-Revenue Provisions

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