No more HSD tables?

By Mike Opich

CMS, in a recent Paper Work Reduction Act filing, proposed significant changes to the new Sponsor and service area expansion (SAE) applications.  (https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10237.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending})  Most notably, provider and facility HSD tables and exception requests are no longer required to be uploaded into HPMS with the application if this rule is finalized.

Now, before getting too excited, it is important to note that CMS made this change due to network reviews becoming part of an “operational function” as defined in CMS-10636, OMB 0938-New, which was published in November 2016.  In this proposed rule, CMS outlines the process by which all Sponsors will have a network review at least once every three years AND may have a network review as the result of certain triggering events.  The list of triggering events includes – you guessed it – an initial MA application and a service area expansion application (as well as filing for a Provider Specific Plan (PSP), significant network change, suspected or self-reported network issues, or a CMS network audit).

Taken together, this makes sense and is consistent with the increased scrutiny by CMS of network adequacy and directory accuracy audits.  CMS is responding to provider and beneficiary complaints about insufficient networks and outdated or just plain inaccurate provider directories.  Prior to CMS audits of existing provider networks, a Sponsor only had to demonstrate compliance with network adequacy at the time of the initial plan application.  As the network adequacy criteria and the process to demonstrate adequacy evolved over time, existing plans had a significant advantage over a new plan filing for the same service area because CMS did not require existing plans to demonstrate adequacy on a routine basis.  CMS’s first step to correct this imbalance was to require SAE applicants to submit the network for their entire service area at the contract level for review, rather than just the expansion area.   Now, with the new proposed regulations, CMS may review the full provider network (or a subset) upon the occurrence of a triggering event (e.g., an SAE or new application) or at least once every three years.  Existing Sponsors will no longer have an indefinite free pass on demonstrating they have a compliant and adequate network. CMS estimates that approximately 304 Sponsors would be affected by this change during Calendar Year (CY) 2019.

So, what’s the bottom line impact for a Sponsor filing an SAE or a new application? The answer is… not much. Here’s why:

  1. Applicants must attest that their contracted network meets CMS adequacy. Health plans can’t do that if they don’t verify that their network meets adequacy requirements by testing the network against the adequacy criteria. Essentially, this means plans must still create HSD tables – they just don’t have to upload them in HPMS with the application.
  2. Submitting a new application or an SAE is a triggering event which may prompt a network evaluation by CMS. It’s unclear as of this writing what CMS means by the word “may”. It could mean anything between always/almost always, to something less than that (perhaps a random sampling of applying plans).  A prudent Sponsor will follow the best practice of being prepared for a network evaluation and have all their ducks in a row.  This means verifying network adequacy and having HSD tables prepared to be filed when/if CMS asks for them.
  3. Marketability – Existing, new or expanding Sponsor’ success depends on attracting and enrolling members. Beyond the minimum CMS network requirements, health plans should establish guidelines on what a robust and marketable network means to their prospective members.  In conjunction with leadership, sales and marketing, provider network management and medical economics, the development of network standards consistent with enrollment goals and medical expense containment should be established and included as part of a Network Access & Availability Policy. We encourage our clients to go beyond the basic CMS requirements and look at the competitive landscape, locations, and attractiveness of contracted providers.  Established provider quality standards along with network adequacy standards lead to the coveted high-quality\low-cost\compliant network. We assist our client in developing adequacy standards for additional services and specialties such as urgent care, outpatient lab, and outpatient radiology, as well as evaluating more stringent standards than those from CMS based on internal stakeholder input (e.g. do you have enough PCPs in the right places?).  The medical management and sales teams will likely have constructive involvement into defining the optimal network composition to satisfy members and reduce cost (think STARS and MLR here).
  4. Potential CMS network audit. CMS is increasing its auditing of provider network adequacy and accuracy of provider directories. Our recommended best practice is to be proactive in this age of increased CMS scrutiny and develop and implement a monthly or at least quarterly process to test provider network adequacy and directory accuracy. Directory and network adequacy audits and continual self-monitoring should be integrated into the overall compliance plan. Blending both components into a cohesive operational plan is the most efficient and effective way to identify any potential network or directory issues well in advance of a CMS audit.  This approach provides time to contract alternative providers if needed and fix directory issues without CMS’s clock ticking on an audit’s short response deadline.

At first glance, CMS’s proposal to eliminate submission of HSD tables with initial and SAE applications sounds like a significant change in its oversight of networks and for the application workload; administrative burden.  Upon closer examination and reflection, the shift to an operational function requires more diligence than ensuring a one-time network adequacy exercise.

Is your health plan prepared for a network audit or considering an SAE or new application? If so, contact MCS and allow the team of network professionals to ensure you have a network management plan that meets your goals and objectives as well as the requirements outlined by CMS.

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