Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2027; and Basic Health Program

Given our network adequacy review proposals at Sec. Sec. 156.230 and 155.1050(d) (which are described in greater detail later and in section III.E.10 of this final rule), in the 2027 Payment Notice proposed rule (91 FR 6354), we proposed, for plan years beginning on or after January 1, 2027, to restore network adequacy authority back to the State Exchanges and SBE-FPs through the removal of requirements at Sec. 155.1050(a)(2)(i) and (ii), which require State Exchanges and SBE-FPs to establish and impose quantitative time and distance network adequacy standards that are at least as stringent as standards for QHPs on the FFEs. We proposed to amend Sec. 155.1050(a)(2) to return to the requirement that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards specified in Sec. 156.230(a)(1)(ii) and (iii) for network plans, or proposed Sec. 156.236(a) for non-network plans, as applicable. These proposals sought to align Sec. 155.1050 with the proposed changes in Sec. 156.230.

In the 2025 Payment Notice (89 FR 26218), we finalized Sec. 155.1050(a)(2)(i)(A) to require that, for plan years beginning on or after 2026, State Exchanges and SBE-FPs establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under Sec. 156.230. We also finalized Sec. 155.1050(a)(2)(i)(B), which requires that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs conduct quantitative network adequacy reviews to evaluate a plan's compliance with network adequacy standards under Sec. 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP, while providing a QHP certification applicant the flexibilities described under Sec. 156.230(a)(2)(ii) and (a)(3) and (a)(4).

In the proposed rule (91 FR 6355), we proposed to remove these requirements to align with our proposals to add Sec. 155.1050(d). We also proposed to revise Sec. 156.230 to include language to differentiate areas where requirements are applicable to all QHP issuers that use a provider network, and where requirements are applicable to only QHP issuers that use a provider network in FFE States, including States performing plan management, that do not elect to conduct their own provider access reviews or that HHS has determined have not demonstrated sufficient authority and the technical capacity to conduct network adequacy reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program, as described later in this section and in section III.E.10 of this proposed rule. We also proposed these changes in recognition of the longstanding authority State Exchanges and SBE-FPs previously had to develop and enforce network adequacy standards and, given this past authority and experience, their network adequacy review capabilities and expertise.

The proposal also sought to restore the authority that State Exchanges and SBE-FPs originally had in establishing network adequacy standards for their QHPs and issuers, acknowledging that State Exchanges and SBE-FPs have the experience and expertise to be the best positioned entities to develop network adequacy standards for their distinct consumer markets.

Through our recent assessment of State Exchange and SBE-FP implementation of the network adequacy policy finalized in the 2025 Payment Notice (91 FR 6355), many State Exchanges and SBE-FPs demonstrated they have network adequacy standards and reviews in place that met or exceeded the requirements finalized in the 2025 Payment Notice. We stated in the proposed rule (91 FR 6355) that we are aware that some State Exchanges made updates in the lead up to PY 2026. Throughout 2024, State Exchanges and SBE-FPs provided us with detailed answers to a survey (OMB Control Number: 0938-1341 (CMS-10592)/ Expiration date: April 30, 2027) on existing statutory, regulatory, and/or sub-regulatory authorities and policies in place to conduct network adequacy reviews that impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs. We met with each State Exchange and SBE-FP to discuss in detail what they were currently doing to assess network adequacy and any modifications they were working toward prior to PY 2026. State Exchanges and SBE-FPs described a wide variety of approaches, including assessing compliance with time and distance standards, as was required in the 2025 Payment Notice and assessing compliance with time or distance individually due to geographical considerations, appointment wait times, or provider enrollee ratios.

We stated in the proposed rule that the variety amongst the State Exchanges and SBE-FPs regarding how they chose to implement their unique approaches underscored the importance of restoring authority to State Exchanges and SBE-FPs, since these States can better take into consideration the needs of specific enrollee populations stemming from factors such as provider supply shortages and topography. Indeed, while some State Exchanges and SBE-FPs made modifications or updates to their network adequacy policies in the lead-up to implementation, we ultimately determined that most State Exchanges and SBE-FPs were either already aligned with the requirements described at Sec. 155.1050(a)(2)(i), or were granted the exception described under Sec. 155.1050(a)(2)(ii), meaning we determined that the State established and imposed time and distance standards at least as stringent as those for QHPs on the FFEs, or that the State established and enforces alternate quantitative network adequacy standards that are reasonably calculated to ensure a level of access to providers

that is comparable to the Federal network adequacy standards established for QHPs under Sec. 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4).

This proposal also sought to align with proposed Sec. 155.1050(d) and remove an unnecessary layer of Federal regulatory burden on State Exchanges and SBE-FPs while maintaining consumer protections through the existing, robust State-level processes for setting network adequacy requirements for issuers and reviewing QHP network adequacy within their respective State Exchange or SBE-FP that such State Exchanges and SBE-FPs demonstrated to us were already in place prior to PY 2026. Due to the well-established, long-existing approaches that State Exchanges and SBE-FPs demonstrated to us were already in place, we stated in the proposed rule that we have a high level of confidence that restoring Sec. 155.1050(a)(2) to the requirements in place prior to PY 2025 would not result in consumers losing reasonable access to services without unreasonable delay. Generally, most State Exchanges and SBE-FPs have demonstrated through surveys and subsequent conversations that they are conducting network adequacy reviews in compliance with Sec. 155.1050(a)(2)(i) and the remainder of State Exchanges and SBE-FPs were conducting network adequacy reviews that satisfied the criteria for an exception described at Sec. 155.1050(a)(2)(ii).

Separately, concurrent with the proposal to amend Sec. 156.230, to implement changes to reviews of network adequacy for QHP issuers in FFE States that demonstrate sufficient authority and the technical capacity to conduct such reviews and elect to do so, we proposed the addition of Sec. 155.1050(d), which would establish an Effective Provider Access Review Program.

We proposed at Sec. 155.1050(d)(1) that, beginning PY 2027, we would defer provider access reviews of QHP issuers' plans, with or without a provider network, applying for certification to be offered as a QHP through an FFE, to States that elect to conduct such provider access certification reviews, provided the State has demonstrated sufficient authority and the technical capacity to conduct these reviews by satisfying the applicable criteria to be considered to have an Effective Provider Access Review Program under proposed Sec. 155.1050(d)(2) through (d)(4). We proposed at Sec. 155.1050(d)(2) to clarify that FFE States considered to have an Effective Provider Access Review Program must ensure that a QHP issuer that uses a network of providers ensures that the in-network providers, as available to all enrollees, include essential community providers (ECPs) in accordance with Sec. 156.235, and maintains a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay. The QHP issuer's provider network must also be consistent with the rules for network plans in section 2702(c) of the PHS Act.

At Sec. 155.1050(d)(3), we proposed that FFE States considered to have an Effective Provider Access Review Program must ensure that a QHP issuer that does not use a network of providers (a non-network plan) provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full, including ECPs and providers that specialize in mental health and substance use disorder services, to ensure that services will be accessible without unreasonable delay.

At Sec. 155.1050(d)(4), we proposed the factors necessary for a State operating on the FFE to be considered to have an Effective Provider Access Review Program. We also proposed to revise Sec. 155.1050(a)(1) to clarify that an FFE State that has elected to conduct provider access reviews and has been determined to have an Effective Provider Access Review Program must ensure that each QHP provides sufficient access to providers in a manner that meets the standards specified in Sec. 156.230(a)(1)(ii) and (a)(1)(iii) for network plans, or proposed Sec. 156.236(a) for non-network plans, as applicable. A detailed discussion of this proposal can be found in section III.E.10 of this final rule. Additionally, we stated in the proposed rule that we would encourage State Exchanges and SBE-FPs to use their network adequacy authority to conduct similar provider access reviews that consider criteria consistent with those outlined at Sec. 155.1050(d)(2) through (d)(4) and described in section III.E.10. of this final rule.

In summary, we proposed to amend Sec. 155.1050(a)(2) to eliminate, for plan years beginning on or after January 1, 2027, the requirements under Sec. 155.1050(a)(2)(i) and (ii) for State Exchanges and SBE-FPs. We proposed to revise Sec. 155.1050(a)(2) to require that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards specified in Sec. 156.230(a)(1)(ii) and (a)(1)(iii) for network plans, or proposed Sec. 156.236(a) for non-network plans, as applicable (91 FR 6354). We also proposed the addition of Sec. 155.1050(d), which is described in greater detail in section III.E.10 of this final rule.

We sought comment on this proposal. We also sought comment on what level of transparency is necessary and appropriate to safeguard public trust in Effective Provider Access Review Programs. While we are not specifically contemplating any particular form of new disclosure in this space at this time, we stated in the proposed rule that we are interested in public feedback on which elements of process and which outputs of Effective Provider Access Review Programs should be subject to public disclosure.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing with modifications the proposed policy to restore network adequacy authority back to the State Exchanges and SBE-FPs through the removal of requirements at Sec. 155.1050(a)(2)(i) and (ii) and amending Sec. 155.1050(a)(2) to return to the requirement that State Exchanges and SBE-FPs ensure that each QHP provides sufficient access to providers in a manner that meets applicable standards specified in Sec. 156.230(a)(1)(ii) and (iii) for network plans, or proposed Sec. 156.236(a) for non-network plans if such plans are allowed to be offered through the Exchange, as applicable. While we finalized in section III.E.12. of this final rule to delay implementation of allowing non-network plans to receive certification to be offered as QHPs through the FFE beginning PY 2028, State Exchanges and SBE-FPs retain full discretion and authority to determine the appropriate implementation timeline for their States if allowing non-network plans to be offered through State Exchanges or SBE-FPs. Accordingly, under Sec. 155.1050(a)(2), State Exchanges and SBE-FPs may allow non-network plans to be offered through the Exchange for plan years beginning on or after January 1, 2027, as applicable. We also finalized a clarification under Sec. 155.1050(a)(2) to suggest these States may allow non-network plans to be offered through the Exchange if such plans are allowed to be offered through the Exchange to preserve the State's authority to determine whether non-network plans are appropriate for their markets. We refer readers to section III.E.12. of this final rule for a more detailed discussion of the rationale to allow State Exchanges and SBE-FPs to offer the non-network plans through their Exchanges

beginning PY 2027, as applicable. We summarize and respond to public comments received on this proposal to restore network adequacy authority back to the State Exchanges and SBE-FPs below. In section III.E.10. of this final rule, we summarize and respond to public comments received on the proposal to allow FFE States to elect to conduct provider access reviews if they meet the criteria for having an Effective Provider Access Review Program and discuss modifications we are finalizing to this proposed policy.

Comment: A number of commenters expressed support for both policies at Sec. Sec. 155.1050 and 156.230 to both restore flexibility and authority to State Exchanges in their network adequacy reviews and to allow FFE States to demonstrate they have Effective Provider Access Review Programs. These commenters agreed that States are better positioned to evaluate local provider availability and that many States (across all Exchange types) have already invested in their capacity to examine provider access in recent years. Commenters noted the “rigorous” criteria for an FFE State to qualify as an Effective Provider Access Review Program and agreed that these criteria required for States to conduct provider access reviews, detailed under Sec. 155.1050(d)(2) through (d)(4), fulfill the responsibility under the Affordable Care Act to assure plans offer sufficient access to providers. Commenters stated support for the continued data collection and offers of continued technical assistance to States as they implement Effective Provider Access Review Programs as well as other States' work to develop network adequacy standards and review processes with the intention to qualify in subsequent plan years.

Additionally, we received multiple comments stating support for the restoration of State Exchange and SBE-FP flexibility and authority to develop network adequacy standards unique to their populations. Commenters agreed that States are often better positioned to evaluate network adequacy than Federal regulators, due to their intimate knowledge of local market dynamics and geographic considerations. Several State Departments of Insurance stated their support for a restoration of the approach that emphasizes State oversight and emphasized intent to ensure consumer protections and timely, reasonable access to in-network providers.

Response: We concur that the restoration of flexibilities and authority to State Exchanges and SBE-FPs will be beneficial. With this policy change, we intend to recognize the work that State Exchanges and SBE-FPs are already doing to regulate QHP issuers and ensure consumers in their States have sufficient access to robust provider networks under Sec. 156.230(a)(1)(ii) and (iii) and under Sec. 156.236(a), should they choose to allow non-network plans to be offered on their State Exchanges or SBE-FPs. Moreover, this policy will remove duplicative oversight that is best performed by the States.

For the reasons stated earlier in this section of this final rule, we agree that the criteria for an FFE State to conduct provider access reviews through an Effective Provider Access Review Program are robust and ensure each State can protect consumers while encouraging flexibility and innovation in provider access reviews. Additionally, the continued collection of provider access data (described further in section III.E.10 of this final rule) will provide an extra layer of consumer protection through our visibility and responsiveness at the Federal level. For example, we will be able to analyze the provider data collected during the QHP certification process to assist in addressing any complaints we may receive from external interested parties; appointment wait time (AWT) secret shopper surveys will ensure we maintain a level of awareness around appointment wait times for primary care provider and behavioral health providers; and we can leverage our existing infrastructure of provider data collection to support FFE States as they develop and implement provider access reviews.

Comment: Many commenters stated opposition to removing the “Federal as a floor” approach by rescinding the requirement that State Exchanges and SBE-FPs implement quantitative network adequacy standards as stringent as those applied in FFEs, specifically the time and distance standards outlined at Sec. 156.230(a)(2)(i). Commenters supported Federal standards that included consistent benchmarks and uniform standards. The commenters stated concern that the removal of these requirements would make it difficult to objectively evaluate the adequacy of provider networks across States and may result in reductions in timely access to care. Additionally, several consumer advocacy groups commented that rescinding the requirement for State Exchanges and SBE-FPs to implement standards as stringent as those for FFEs could result in a lack of consistent oversight and accountability across Exchanges. The general consensus of comments opposing removing a “Federal floor” highlighted potential impacts on consumer access to care for mental health and substance use disorders and specialty care due to potentially narrower provider networks. This group of commenters requested retaining Federal standards as a minimum “Federal floor.”

Response: We acknowledge concerns associated with removing requirements for State Exchanges and SBE-FP States to implement quantitative time and distance standards as-stringent-as those for QHPs participating on the FFEs. While a single, uniform Federal network adequacy standard comes with certain advantages, we believe that, as it relates to State Exchanges and SBE-FPs, there is also the potential for disadvantages, including impeding States' ability to respond to their unique market needs by requiring them to dedicate their limited capacity to a one-size-fits all policy that may not best reflect the needs of that State.

In response to the 2025 Payment Notice, State Exchanges and SBE-FPs implemented various unique approaches to conform to the rule's requirements that State Exchanges and SBE-FPs implement network adequacy time and distance standards at least as stringent as standards for QHPs participating on the FFEs, or be granted an exception if the State demonstrates that the Exchange applies and enforces alternate quantitative network adequacy standards that are ensured by Federal network adequacy standards established for QHPs under Sec. 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4). Instead of requiring States to react to our policies, we believe that restoring authority to the States will enable them to proactively adapt their Exchange standards to meet their market's needs, as they will be better able to take into consideration the needs of their enrollee population related to factors such as provider supply shortages and topography. We previously determined that generally most State Exchanges and SBE-FPs were already aligned with the requirements now being rescinded at Sec. 155.1050(a)(2)(i), meaning that they had time and/or distance standards we determined to be as-stringent-as our Federal standards, or had implemented alternative network adequacy review activities that allowed them to be granted the exception, and we encourage these States to maintain these standards. The restoration of the previous flexibilities can support State Exchanges and SBE-FPs to conduct their review activities according to their local markets without requiring the State Exchange or SBE-FP to adhere to the one-size-fits-all Federal time and

distance standards. With this policy change in effect, State Exchanges and SBE-FPs now have the authority to adapt their standards as they see fit. Notably, based on interactions with States and subsequently gaining additional understanding of their existing work, we believe States will not see this change in policy as an opportunity to roll back their current programs, but rather will instead stay the course and continue to dedicate resources to refining their long-existing network adequacy reviews and adapt to State-specific needs.

Comment: A few commenters stated that removing the requirement for State Exchanges and SBE-FPs to conduct network adequacy reviews prior to QHP certification could have a negative impact on consumers if the State chooses to perform retrospective reviews (that is, reviewing network adequacy after issuers have been certified for the plan year). Furthermore, commenters stated concern that many State regulatory agencies currently lack capacity to conduct network adequacy reviews prior to certifying plans. As such, several commenters requested that we require State Exchanges and SBE-FPs to publicly report their network adequacy standards, network adequacy review results, and review methodologies to provide visibility into non-compliant networks.

Response: We acknowledge commenters' concerns that the removal of the requirement to conduct network adequacy reviews prior to certification could result in States Exchanges and SBE-FPs rolling back operations and agree there are consumer protection benefits to requiring QHP issuers be reviewed for network adequacy prior to QHP certification. However, State Exchanges and SBE-FPs are still required to ensure, per the State's authority, that each QHP provides sufficient access to providers in a manner that meets standards under Sec. Sec. 156.230(a)(1)(ii) and (iii) for network plans, or, for plan years beginning on or after January 1, 2027, Sec. 156.236(a) for non-network plans (if such plans are allowed to be offered through the Exchange), as applicable. Notably, we require a State to attest to meeting these standards as part of our approval for a State seeking to implement a State Exchange or SBE-FP. We continue to encourage State Exchanges and SBE-FPs to conduct network adequacy reviews prior to QHP certification, though we will be finalizing the policy as proposed. However, we recognize State Exchanges and SBE-FPs may choose to implement provider access review activities that may be better instituted at other times during the plan year. For example, appointment wait time reviews may be more appropriately conducted during the plan year itself with results informing mid-year corrective actions or future plan year requirements.

We are also mindful that the change we are finalizing provides a potential opportunity for State Exchanges and SBE-FPs to invest their resources in the implementation or continuation of network adequacy reviews that may be different than reviewing for time and distance standards (whether prior to QHP certification or after) but more appropriate for the consumers in that State. States Exchanges and SBE- FPs may also find value in adopting a continuous monitoring approach through “spot check” reviews conducted throughout the plan year, offering more flexible and ongoing oversight compared to relying on a single review prior to QHP certification.

Though restoring the flexibilities does technically result in removing the requirement at Sec. 155.1050 for State Exchanges and SBE- FPs to conduct reviews prior to certification, this does not mean that State Exchanges and SBE-FPs will not continue to do so. We are aware of State Exchanges and SBE-FPs that conducted network adequacy reviews prior to QHP certification even before we codified this requirement in PY 2026 and we do not have any indication that States intend to roll back operations that were in place prior to PY 2026. We are aware, based on surveys conducted in PY 2024 that prior to PY 2026, State Exchanges and SBE-FPs largely mirrored HHS' network adequacy reviews prior to QHP certification. As such, this policy change will remove redundant oversight and return authority to the States. Moreover, the increased flexibility will enable States Exchanges and SBE-FPs to conduct network adequacy reviews that fit the needs of their market, and we encourage State Exchanges and SBE-FPs to continue applying measures to assess network adequacy beyond time and distance requirements.

Additionally, we will not require State Exchanges and SBE-FPs to establish public reporting measures for QHP compliance with State network adequacy standards, as our intention is to restore flexibility to the State Exchanges and SBE-FPs and reduce burden. We believe that State Exchange and SBE-FP review of these requirements for QHP certification is sufficient and aligns with the Federal Exchange approach. We also believe that requiring public reporting of issuer network adequacy review results may risk making public proprietary business information. Publishing this information may also lack sufficient context, especially when any noted network deficiencies may be due to geographic limitations or provider availability, or when a deficiency may be in the process of remediation by the issuer.

While there are no current Federal requirements for State Exchanges or SBE-FPs to make public their network adequacy standards, operations, or results, many State Exchanges and SBE-FPs already have public-facing documentation of their network adequacy standards and requirements, though they may or may not make public the results of network adequacy reviews. We would encourage all States to refer to the resources available on the network adequacy page of the QHP certification website,\228\ including the available templates, other application resources and requirements, instructions, and frequently asked questions as they implement their programs and consider items to make publicly available. We encourage interested parties to consult directly with their State regulators concerning visibility to ensure consumer protection and sufficient access to care.

\228\ https://www.qhpcertification.cms.gov/QHP/applicationmaterials/Network-Adequacy.

Comment: Several commenters stated concern that removing the policy under Sec. 155.1050(a)(2)(i)(A) may disproportionately impact access for rural consumers, especially those seeking behavioral health or substance use disorder services. Commenters noted that States may “relax,” or eliminate network adequacy standards for time and distance thereby harming rural consumers who might lose access to providers within a reasonable distance. Commenters highlighted potential consequences if status quo network adequacy is not retained: longer travel times, fewer in-network options, delayed care, and increased out-of-network claims.

Response: We acknowledge concerns that removing the requirements at Sec. 155.1050(a)(2)(i)(A) could result in changes to provider networks, including more narrow networks in rural areas specifically. However, we believe the restoration of State authority over network adequacy standards for State Exchanges and SBE-FPs is supportive of an efficacious Exchange. Additionally, we encourage States to consider these commenters' concerns when assessing the network adequacy of QHP issuers operating in their rural markets. Moreover, State Exchanges and SBE-FPs will still be required under

Sec. 155.1050(a)(2) to ensure that each QHP meets applicable standards specified in Sec. 156.230(a)(1)(ii) and (iii) for network plans. This includes the requirement that a QHP that uses a provider network maintains a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to ensure that all services will be accessible without unreasonable delay. They will also be required to ensure non-network plans ensure access to a range of providers, including providers that specialize in mental health and substance use disorder services, that accept the non-network plan's benefit amount as payment in full, under proposed Sec. 156.236(a) for non-network plans, beginning on or after PY 2027, if the State intends to allow such plans to be offered through the Exchange.

While we seek to provide flexibility to State Exchanges and SBE-FPs in the determination of how to achieve the aforementioned access requirements, we do not agree that the removal of the requirement to implement time and distance standards as stringent as the Federal standards for QHPs in State Exchanges will directly result in further reductions in access for rural consumers. Reviewing for time and distance standards is only one way to assess a QHP for network adequacy, and removing the requirement to implement our Federal standards allows State Exchanges and SBE-FPs to innovate in their approach, acknowledging the limitation of Federal time and distance standards which may be insurmountable for a QHP to achieve in rural areas due to market factors such as provider shortages. Removing this requirement restores flexibility to the State Exchange and SBE-FP to assess and address rural access issues in ways that may be most appropriate for that particular State, beyond time and distance standards, such as through assessing provider-enrollee ratios, for example, or investing limited resources towards working directly with provider interested parties to increase numbers and types of providers located in rural areas as well as utilizing leverage with QHPs in their States to contract with more available providers in a rural area to ensure as much access as possible for their residents. State Exchanges and SBE-FPs have sufficiently demonstrated their capacity to assess the needs of their consumers across all geographies, and we believe that States are best situated to evaluate the unique network adequacy requirements necessary to ensure proper access to behavioral health and substance use disorder services. Any additional oversight from Federal regulators would be duplicative and risk misunderstanding the needs of each market.

Comment: Several commenters responded to our request for comment on the level of transparency necessary and appropriate to safeguard public trust in FFE States' Effective Provider Access Review Programs. Commenters called for strong transparency efforts and opportunity for public comment on their FFE State's ability to implement and maintain an Effective Provider Access Review Program. These included requests for public facing documentation of an FFE State's network adequacy standards, publishing issuer deficiencies and any justifications (for example, explanations of deficiencies such as insufficient numbers of providers or facilities) and exceptions (for example, allowances of certification despite deficiencies) granted by the FFE State, information around consumer complaints, information on inaccuracies in provider directories, and notifications of and updates on any proposed timelines for an FFE State to demonstrate that it will meet standards to become an Effective Provider Access Review Program.

Response: We appreciate the responses to our request for comment regarding transparency. While we will continue to consider commenters' points, at this time we will not include additional requirements concerning FFE State transparency as it relates to their election, application, development, or operation of an Effective Provider Access Review Program. Regarding requests for the publishing of issuer deficiencies, justifications, exceptions, and consumer complaints, we believe that requiring public disclosure of this information may risk detailing proprietary business information, including contracting details and network development strategies. We also believe that publishing this information may lack context and will not benefit consumers, particularly when deficiencies or complaints are due to geographic limitations or provider availability. Regarding inaccurate provider directories, we note that provider directory information is highly dynamic and changes frequently and we believe that public reporting of provider directory inaccuracies may pose significant operational burden and would not be useful as it is operationally infeasible to do so in real time.

Regarding requests for public-facing documentation of an FFE State's network adequacy standards, we believe that the criteria required under Sec. 155.1050(d)(4) that the State have their provider access standards set forth in statute or regulation, and the FFE State's provider access review process includes reporting systems for provider access metrics and documentation of methodology and the State provides descriptions of all data collection systems, resources, templates, and methodologies used by the State is sufficient for public notice and review because we believe these and the other criteria set a satisfactorily high bar to qualify provider access reviews that should instill consumer confidence in their FFE State's ability to conduct provider access reviews without risking disclosure of issuer's confidential business information, including contracting details and network development strategies, which would be inappropriate. We would refer FFE States with an Effective Provider Access Review Program to our Network Adequacy QHP Certification web page as a model for items to make publicly available regarding provider access reviews. Regarding notifications of and updates on any proposed timelines for an FFE State to demonstrate that it will meet standards to become an Effective Provider Access Review Program, we note that numerous factors may influence a State's timeline that may cause frequent revision, which may ultimately cause more confusion for the public. However, we plan to publicly share a list of States that elect to conduct provider access reviews and have been determined to have an Effective Provider Access Review Program, once that determination has been made. We will continue to evaluate the appropriate scope and format of any necessary public disclosures and highly encourage interested parties to engage with their State regulators to achieve a level of transparency that all parties find satisfactory. 19. Effective Essential Community Provider Review Program (Sec. 155.1051)

In the 2027 Payment Notice proposed rule (91 FR 6355), beginning PY 2027, we proposed to allow FFE States, including States performing plan management, to elect to conduct their own ECP certification reviews of an issuer's plans with or without a provider network in their State applying for certification as a QHP to be offered through an FFE. We stated that we would allow FFE States to conduct such ECP certification reviews provided the State demonstrates sufficient authority and the technical capacity to conduct these reviews by satisfying the

applicable criteria established by HHS to be considered to have an Effective ECP Review Program, which we proposed to implement at Sec. 155.1051. This policy and related summaries of and responses to public comments received are discussed in more detail in section III.E.11 of this final rule. 20. General Program Integrity and Oversight Requirements (Sec. 155.1200)

In the 2027 Payment Notice proposed rule (91 FR 6355), we proposed to amend Sec. 155.1200 to add new paragraph (e) to permit State Exchanges to satisfy certain requirements of the independent external programmatic audit, as outlined in paragraph (d), by completing the proposed State Exchange Improper Payment Measurement (SEIPM) process that would be established at 45 CFR part 155, subpart Q. We also proposed to amend Sec. 155.1200(d) to reduce duplication between the proposed State Exchange SEIPM program described in proposed subpart Q and the annual independent external programmatic audit requirements and standards described at Sec. 155.1200(c) and (d).

The Payment Integrity Information Act of 2019 (PIIA) (Pub. L. 116- 117) requires Federal agencies to annually estimate and report on improper payments in the programs they administer that have been determined to be susceptible to significant improper payments. Pursuant to the PIIA, we proposed to establish a SEIPM program, as we have determined that APTC payments administered by State Exchanges are susceptible to significant improper payments and are subject to additional oversight.\229\ The PIIA defines significant improper payments as those exceeding either $100 million or exceeding $10 million and 1.5 percent of the program outlays. The proposed SEIPM program requirements are set forth in new proposed subpart Q, as discussed in section III.D.21. of this final rule.

\229\ HHS has already implemented an Exchange Improper Payment Measurement (EIPM) process to review potential improper APTC payments in the FFEs.

We stated in the proposed rule that the proposed SEIPM program would specify a methodology to develop State Exchange improper payment estimates and provide for the accurate calculation, and subsequent reporting, of an improper payment rate in HHS' Agency Financial Report (AFR). To ensure the accurate and consistent calculation of improper payments via the SEIPM program, we proposed to require that State Exchanges provide HHS with access to certain State Exchange data, including eligibility determinations and enrollment information. We further proposed that State Exchanges found to have significant improper payments could, to correct improper payment root causes, be required to develop corrective action plans (CAPs).

Our authority to oversee the State Exchanges arises from the program integrity and oversight requirements they must meet that are specified at section 1313(a) of the Affordable Care Act and at Sec. Sec. 155.1200 and 155.1210. Key State Exchange reporting requirements at Sec. 155.1200(b) include the annual submission of: (1) a financial statement in accordance with generally accepted accounting principles; (2) a report showing compliance with Exchange requirements; and (3) performance monitoring data.

Pursuant to Sec. 155.1200(c) and (d), each State Exchange is also required to engage or contract with an independent qualified auditing entity that follows generally accepted government auditing standards to perform annual independent external financial and programmatic audits that address compliance with 45 CFR part 155, subparts D and E, or other 45 CFR part 155 requirements as specified by HHS. State Exchanges must provide HHS the audit results, including CAPs to address any audit-identified material weaknesses or significant deficiencies, and we monitor these CAPs until findings are resolved, pursuant to Sec. 155.1200(c)(2). These audits allow us to oversee State Exchange compliance with eligibility and enrollment standards. In sub-regulatory guidance, we specify that the scope of the audits must also include 45 CFR part 155, subparts C and K.\230\

\230\ State-based Marketplace Independent External Audit Technical Assistance. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/independent_external_audit_ta.pdf.

We proposed to amend Sec. 155.1200(d) to reduce duplication between the proposed SEIPM program described in subpart Q and the annual independent external programmatic audit requirements and standards described at Sec. 155.1200(c) and (d). We proposed to add Sec. 155.1200(e) to permit a State Exchange to satisfy certain annual independent external programmatic audit requirements, as described at Sec. 155.1200(d), by completing the proposed required annual SEIPM program process. We stated in the proposed rule that these certain audit requirements would be limited to compliance with 45 CFR part 155, subparts D and E, and would be specified in guidance we would issue. We also proposed to amend Sec. 155.1200(d) to cross-reference proposed Sec. 155.1200(e) to minimize duplication between the annual programmatic audit requirement and proposed SEIPM program. We stated that this would allow us to continue to require an annual independent programmatic audit of other subparts beyond eligibility and enrollment, while reducing duplication for oversight of eligibility and enrollment provisions.

We stated in the proposed rule that we believe this policy would reduce duplicative efforts and burden on State Exchanges that would otherwise be required to fully comply with the programmatic audit requirements and SEIPM, while also maintaining the programmatic audits for requirements not reviewed as part of SEIPM.

We sought comment on these proposals.

After consideration of comments and for the reasons outlined in the proposed rule and this final rule, including our responses to comments, we are finalizing this policy as proposed. We summarize and respond to public comments received below.

Comment: Most commenters supported the effort to reduce duplication between the proposed SEIPM program and the annual independent external programmatic audit requirements, while expressing concerns about the timeline and feasibility of SEIPM. The commenters agreed the policy would avert duplication and costly administrative inefficiencies.

Response: We appreciate the support and affirm that a central goal of the proposed amendments to Sec. 155.1200(d) and the addition of Sec. 155.1200(e) is to streamline oversight obligations for State Exchanges while maintaining program integrity safeguards. We agree that reducing duplicative audit requirements will allow State Exchanges to allocate administrative resources more efficiently without compromising the integrity of Federal oversight. The concerns raised by the commenters regarding timeline and feasibility are addressed in the SEIPM section below.

Comment: One commenter, expressing concern about the operational feasibility of SEIPM, suggested utilizing data from the existing annual independent external programmatic audit to assess improper APTC payments, in lieu of SEIPM, or, alternatively, removing APTC- verification requirements from the SMART. Another commenter also sought specific clarification on how existing audit requirements would

actually be reduced or eliminated with the introduction of SEIPM.

Response: The PIIA requires a specific methodology for developing improper payment estimates and calculating an improper payment rate for inclusion in HHS' AFR, and the existing SMART audit framework was not designed to satisfy these statutory requirements. Therefore, a distinct program, that we proposed as SEIPM, is necessary to fulfill our PIIA obligations. While the annual independent external programmatic audit will continue to be required, we will issue sub-regulatory guidance specifying the specific programmatic audit requirements that may be satisfied through SEIPM participation, including the required APTC- verification requirements within SMART. We remain committed to working collaboratively with State Exchanges to ensure that the SEIPM program is implemented in a manner that is operationally feasible, consistent with our PIIA obligations, and that minimizes any potential audit duplication.

Comment: One commenter did not agree with the proposal, stating that this will no longer be an independent evaluation and will result in inconsistencies.

Response: We clarify that proposed Sec. 155.1200(e) is designed to permit State Exchanges to satisfy certain annual independent external programmatic audit requirements through completion of the SEIPM process, while still continuing to maintain the annual independent external programmatic audit of additional subparts and requirements, separate from the SEIPM. 21. State Exchange Improper Payment Measurement (SEIPM) (Sec. Sec. 155.1600 through 155.1650)

In the 2027 Payment Notice proposed rule (91 FR 6356), we proposed to establish the SEIPM, pursuant to the PIIA,\231\ to measure improper payments of APTC administered by a State Exchange. To codify the proposed SEIPM requirements, we proposed to establish a new subpart Q at 45 CFR part 155. The PIIA requires Federal agencies to periodically review programs and activities to identify those susceptible to significant improper payments, and to report improper payment estimates for such programs. The PIIA defines significant improper payments as those exceeding $100 million or those exceeding $10 million and more than 1.5 percent of program outlays. In FY 2016, we conducted improper payment risk assessments for the Health Insurance Exchange programs and concluded that the APTC program is susceptible to significant improper payments. Between FY 2017 and FY 2019, we developed and piloted activities for measuring improper payments of APTC, which led to developing the Exchange Improper Payment Measurement Program for Exchanges administered through the FFE. Through that initiative, HHS began annual reporting of improper payment estimates in the FY 2022 Annual Financial Report (AFR) for APTC administered through the FFE.\232\ However, due to our lack of regulatory authority to collect the same information from State Exchanges, we could not do the same for APTC administered through State Exchanges.

\231\ 31 U.S.C. 3352 (2020).

\232\ CMS. Exchange Improper Payment Measurement (EIPM). Available at https://www.cms.gov/data-research/monitoring-programs/improper-payment-measurement-programs/exchange-improper-payment-measurement-eipm.

As a result, we proposed in the 2023 Payment Notice proposed rule (87 FR 584) to establish the SEIPM program, which would have required State Exchanges to submit certain information to HHS so that HHS could report an improper payment estimate of APTC administered by State Exchanges. We proposed that it would begin in calendar year 2024, but a significant volume of public comments stating that State Exchanges would need additional time and guidance to prepare for SEIPM persuaded us not to finalize that proposal. Instead, we proposed in the 2024 Payment Notice (77 FR 78206, 78213) to establish an Improper Payment Pre-Testing and Assessment Program (IPPTA) that would be mandatory for State Exchanges and where they would participate in pre-audit activities to prepare them to comply with audits required under the PIIA. We said that activities under the proposed IPPTA program would (1) prepare State Exchanges for the planned measurement of improper payments, (2) test processes and procedures that support HHS' review of determinations of APTC made by State Exchanges, and (3) provide a mechanism for HHS and State Exchanges to share information that will aid in developing an efficient measurement process. We finalized the IPPTA in the 2024 Payment Notice (88 FR 25740).

In the 2027 Payment Notice proposed rule, we stated that IPPTA was currently underway and the first cohort of eight State Exchanges had completed all of the information submission requirements for ten or more sampled tax households. We had completed the review process for the first cohort of State Exchanges and had communicated to them the findings. As of the time of publication of the 2027 Payment Notice, data collection had been completed for all ten State Exchanges in the second cohort.

The main challenge that HHS and State Exchanges have experienced with IPPTA relates to the quantity of data that the State Exchange must submit in order for HHS to accurately determine whether each payment of APTC was proper or improper. For each tax household, there may be multiple QHP policies, and multiple enrollees who were determined eligible for APTC, all of which invoke specific requirements for determining eligibility. These factors cause considerable volume and complexity in the data that would be required for SEIPM.

Additionally, in the 2027 Payment Notice proposed rule we stated that each State Exchange operates its own platform with a unique data architecture, making it challenging to develop a unified process by which State Exchanges could submit the requisite information. For the purposes of IPPTA, we developed a Data Request Form (DRF) to enable the automated collection of information that proved to be an effective tool for six of the eight State Exchanges in the first cohort. For the other two State Exchanges, however, some of the data had to be collected manually and not through the DRF because those States were unable to successfully submit all of the data required for measurement in the DRF format and structure. As a lesson learned from that data collection process, we proposed to allow a more flexible mechanism for SEIPM data collection.

To mitigate some of the challenges that exist with the data collection, we have automated the data validation process that allows us to assess each submitted DRF and to coordinate with the State Exchanges to correct data when inconsistencies are identified. For SEIPM, in the 2027 Payment Notice proposed rule we stated that we would use the DRF while also allowing flexibility in data submissions for allowing data to be submitted in native formats, which would lessen the burden on State Exchanges.

We proposed to establish a new subpart Q at 45 CFR part 155 (containing Sec. Sec. 155.1600 through 155.1650) to codify the SEIPM requirements. We proposed to require State Exchanges to annually submit to HHS the information required for HHS to produce an estimate of improper payments in accordance with OMB

Circular No. A-123 requirements.\233\ We proposed to measure all State Exchanges annually unless we specify otherwise and to report the calculated estimate of improper payments in the HHS AFR. In the proposed rule, we stated that State Exchanges already are required to conduct annual independent external programmatic audits, so we proposed to minimize duplication of those audit requirements with the proposed SEIPM program, as described in proposed Sec. 155.1200(e). We additionally proposed that any State Exchange in its first year of operation would be required to participate in a 1-year SEIPM preparation phase prior to being required to satisfy the SEIPM requirements. We stated that the proposed regulations at subpart Q would be applicable beginning in January 2027.

\233\ OMB. (2021, March 5). Transmittal of Appendix C to OMB Circular A-123, Requirements for Payment Integrity Improvement. Available at https://www.whitehouse.gov/wp-content/uploads/2021/03/M-21-19.pdf.

In the 2027 Payment Notice proposed rule, we stated that this proposal would address a critical gap in improper payment oversight, as the PIIA requires Federal agencies to estimate and report on improper payments in programs determined to be susceptible to significant improper payments. We noted that, while we have established an improper payment measurement for the FFE, (that is, the Federal Exchange Improper Payment Measure or FEIPM),\234\ State Exchanges have operated without comparable systematic measurement of APTC improper payments. The FFE's improper payment measurement is overseen by the Payment Accuracy and Reporting Group (PARG), within the CMS Office of Financial Management (OFM), which has developed comprehensive methodologies and systems to ensure accurate measurement and reporting. By extending similar measurement methodologies to State Exchanges through SEIPM, HHS would ensure consistent oversight and accountability across all exchange types, promoting parity in program integrity efforts nationwide. We solicited public comment on this proposal, and discuss in further detail below comments we received. Commenters generally supported program integrity goals but raised concerns about implementation timing, annual cadence, burden, data collection and sampling, IPPTA readiness, and overlap with existing audit requirements.

\234\ CMS. Exchange Improper Payment Measurement (EIPM). Available at https://www.cms.gov/data-research/monitoring-programs/improper-payment-measurement-programs/exchange-improper-payment-measurement-eipm.