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

As a preliminary matter, in the proposed rule (91 FR 6408), we first explained why we were revisiting our existing blanket prohibition of non-network plans as QHPs, including our approach to ensure non- network plans meet requirements to ensure a sufficient choice of providers in a manner consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act. We stated that one justification for revisiting our existing prohibition of non-network plans as QHPs is that circumstances have changed: when we finalized our blanket prohibition of non-network plans as QHPs, we had not developed an effective, administrable approach at the time we adopted the prohibition through which we could adequately measure whether non- network plans could ensure a “sufficient choice of providers” under section 1311(c)(1)(B) of the Affordable Care Act, or include ECPs through their plans, where available, under section 1311(c)(1)(C) of the Affordable Care Act. We stated that we continue to believe that consumers shopping on the Exchanges must be assured of the ability of every QHP to provide a sufficient choice of providers under section 1311(c)(1)(B) of the Affordable Care Act, and that a non-network plan should not be given a “pass” on demonstrating that it provides access to a sufficient choice of providers because it does not utilize a provider network. As described further below and in the next subpart, we proposed a new approach to measuring a non-network plan's compliance with section 1311(c)(1)(B) and (C) of the Affordable Care Act, which addresses our prior concerns. In doing so, we also revisited our original interpretation of section 1311(c)(1)(C) of the Affordable Care Act, including how our proposed approach would mitigate prior concerns over non-network plans being able to provide access to ECPs in a manner consistent with this provision.

First, we acknowledged that provider networks serve as a critical cost control tool, which has downstream impacts on a consumer's out-of- pocket costs that are important to consider when devising an alternative regulatory standard to continue to ensure broader access to care. We noted that insurers with a provider network often have different cost-sharing requirements depending on if an enrollee sees a provider that is in-network versus out-of-network. We stated that a traditional network plan typically contracts with a certain number of providers (but rarely all) in each area who agree to accept the plan's negotiated rates as payment in full for covered services, ensuring that enrollees have reasonable access to a certain number of providers who will render services at specified costs; and often,

these specified costs are lower if an enrollee sees an in-network provider since enrollees often have to pay more when seeking care from providers with whom the issuer did not contract.

We stated that, in contrast, a non-network plan sets specified benefit amounts for covered services and communicates those benefit amounts to its enrollees in advance. We stated that non-network plan enrollees use this benefit amount as a reference price for how much they should expect to pay for the receipt of covered services under the plan. We further stated that with it, they can choose any provider for their care and compare and negotiate prices among available providers to find a provider who will accept the plan's benefit amount as payment in full, such that the provider will not balance bill the enrollee for additional amounts beyond the plan's benefit amount. We noted that this interaction between the enrollee and provider before services are rendered could limit the enrollee from incurring additional unforeseen out-of-pocket costs, particularly if the enrollee decides to pursue care with the provider at a cost below or equal to the plan's benefit amount. Thus, we stated that both plan models are capable of providing a pathway for enrollees to limit out-of-pocket costs. We stated that non-network plans are capable of providing an opportunity for individual enrollees to participate in efforts to lower their health care costs through individualized price comparisons and negotiations, while network plans rely heavily on health insurers to do so.

However, we stated that while enrollees in a non-network plan can receive some benefit for covered services from virtually any provider, there is no guarantee that the plan's benefit amounts are actually sufficient to cover the provider's full charges, and there is no requirement imposed by the non-network plan on providers to accept the plan's benefit amount as payment in full. We stated that as a result, if or when these benefit amounts are too low, non-network plans can leave enrollees with additional out-of-pocket costs that make certain providers, as a practical matter, unavailable. We further stated that can be problematic for services that an enrollee could not have reasonably anticipated needing to negotiate for in advance. And we noted that it can have a particular impact on low-income, medically underserved populations who may face disproportionate challenges in paying for large out-of-pocket costs.

Furthermore, we stated that if a non-network plan's benefit amount for a covered service is so low that virtually no providers in a particular area accept the benefit amount as payment in full, the non- network plan cannot credibly claim to provide a sufficient choice of providers of those services, and the non-network plan does not provide access to a sufficient choice of providers under section 1311(c)(1)(B) of the Affordable Care Act. Conversely, we noted that if the benefit amount is sufficient such that many providers in the area accept the benefit amount as payment in full, enrollees may choose between providers in their area who will accept the non-network plan's benefit amount as payment in full without incurring additional out-of-pocket costs. We stated that in this case, a non-network plan may be able to provide access to a sufficient choice of providers for those services. In other words, we stated that the set of providers in the applicable area that would accept the plan's benefit amount as payment in full is like a network plan's network. We stated that so long as that set of providers is adequate, a non-network plan can comply with requirements to ensure a sufficient choice of providers, and we described our proposed method to measure that compliance in the next section.

As we stated in the discussions above, we raised concerns in the 2024 Payment Notice regarding the ability of a non-network plan to comply with section 1311(c)(1)(C) of the Affordable Care Act, due to our understanding that access to ECPs should be provided “within health insurance networks.” We inferred from Affordable Care Act section 1311(c)(1)(C)'s use of the word “network” that the statute meant that Exchanges could certify, as QHPs, only plans that have a contractual network of providers, not inclusive of non-network plans. Though, we recognized that the term “network” is never defined in the statute. And, as we have consistently noted, we stated that Congress never imposed a standalone requirement that QHPs structure their plans via contracts with providers nor was Congress specific on the requirements needed to constitute a network. We stated that we now interpret the statute to offer broad flexibility governing the status of a contractual relationship between a plan and provider as a precondition to constitute a network under section 1311(c)(1)(C) of the Affordable Care Act. In this regard, we stated that we believe that so long as non-network plans provide sufficient access to ECPs, where available, that serve predominately low-income, medically underserved individuals, a non-network plan could comply with requirements under section 1311(c)(1)(C) of the Affordable Care Act. We stated that this may be accomplished through a non-network plan demonstrating access to ECPs within their service area that would accept the plan's benefit amount as payment in full.

Furthermore, we stated that we have evaluated traditional networks to ensure enrollees have access to a sufficient choice of providers, consistent with section 1311(c)(1)(B) of the Affordable Care Act, and to promote access to ECPs, where available, for low-income, medically underserved individuals, consistent with section 1311(c)(1)(C) of the Affordable Care Act. To that effect, we noted that networks facilitate a multitude of different relationships between providers, insurers, and enrollees to ensure sufficient access to care, which can still be maintained through non-network plans through their greater focus on enrollees more directly participating in lowering the price of their care. Specifically, we stated that a non-network plan's “network” consists of the providers in the applicable area that would accept the plan's benefit amount as payment in full. We further stated that by establishing payment amounts that providers can choose to accept as payment in full, non-network plans are capable of creating a de facto network of providers or suppliers even without formal contractual relationships.

Thus, we stated (91 FR 6409) that a non-network plan can comply with section 1311(c)(1)(C) of the Affordable Care Act by ensuring that a sufficient number of ECPs accept the plan's benefit amounts as payment in full. However, we noted that a non-network plan would not satisfy that requirement if its benefit amount is so low that many ECPs would not accept the benefit amount as payment in full from enrollees, because section 1311(c)(1)(C) of the Affordable Care Act would still require an Exchange to consider the practical availability of services from ECPs before certifying a QHP, including ECPs, where available. We stated that it would not be sufficient for an Exchange to simply conclude that a non-network plan provides access to providers in a manner consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act because the plan provides some benefit amount for covered services rendered by any provider. Thus, we stated that the availability of providers in a particular area that accept the benefit amount as payment in full is important to constitute a sufficient choice of providers consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act.

Moreover, we stated that there are additional reasons for our reconsideration of our blanket prohibition of non-network plans as QHPs. Specifically, we stated that recent efforts to improve health price transparency and its implementation across the health care system present an opportunity to reshape how health care services are delivered, and when enrollees have easier access to health care pricing information, market forces can and often do drive down costs through increased competition among providers.\331\ We noted that because enrollees directly negotiate the cost of care in non-network plans, non-network plans can more naturally leverage price transparency principles compared to network plans. We stated that by incentivizing patient involvement in health cost comparison, these plans have potential to reduce overall health care costs by empowering their enrollees to shop for and potentially negotiate lower prices. We further stated that such efforts could lead to a more efficient market where network formation becomes less critical for ensuring affordable health care access. We also stated that because providers are not bound by pre-negotiated network agreements, enrollees in such plans may face different pricing dynamics than in network-based plans, including the need to compare costs more proactively and, in some cases, negotiate payment amounts directly with providers. We stated that this model places greater emphasis on enrollee engagement and transparency but can also offer increased flexibility and broader provider choice while maintaining predictable plan liability through the use of clear and consistently applied reimbursement formulas.

\331\ For example, see CMS. Hospital Price Transparency. Available at https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency. See also, The White House. (2025, February 25). Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information. Available at https://www.whitehouse.gov/presidential-actions/2025/02/making-america-healthy-again-by-empowering-patients-with-clear-accurate-and-actionable-healthcare-pricing-information/.

We further stated that overall, non-network plans have great potential to reduce overall health care costs. First, we stated that they can empower enrollees to use price information on benefit amounts, when available, to shop for lower prices and negotiate directly with providers, fostering increased competition and potentially driving down prices across the market. When enrollees have access to accurate, timely health care pricing information, they can make informed decisions about their health care spending and actively seek the best value for medically necessary services. We anticipated that this consumer-driven approach would create a more competitive marketplace where providers would need to consider their pricing strategies more carefully to attract and retain patients. Additionally, we stated that as more enrollees engage in shopping and direct price negotiations, providers may be incentivized to proactively offer more competitive rates to maintain their market share, potentially leading to broader market-wide price reductions that benefit many enrollees.

Second, we stated (91 FR 6410) that non-network plans eliminate substantial administrative overhead associated with traditional network management, which in turn can result in lower premiums. We stated that the administrative cost savings are realized through four key areas, based on our internal research into existing non-network plans: (1) the elimination of provider contract management costs (including legal fees, staff, and provider relationship development and maintenance); (2) the removal of provider credentialing expenses and directory maintenance; (3) reduction in claims processing complexity and network- specific prior authorization requirements; and (4) streamlined organizational structure with resources redirected to consumer support tools and education. c. Proposed Alternative Regulatory Standard for Non-Network Plans (Sec. 156.236)

Based on these legal principles, in the proposed rule (91 FR 6410), we proposed the following regulatory standards for non-network plans to demonstrate that they provide access to a sufficient choice of providers (including ECPs) to ensure compliance with section 1311(c)(1)(B) and, as relevant, section 1311(c)(1)(C) of the Affordable Care Act. First, we proposed to add a new section to part 156, Sec. 156.236, that contains the provider access sufficiency standards (including ECP access) specific to non-network plans, and to revise Sec. Sec. 156.230 and 156.235 to make clear that those sections address the provider access sufficiency standards (including ECP access) for network plans.

We proposed to add Sec. 156.236(a) to state that a non-network QHP must ensure access to a range 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. Additionally, as discussed in sections III.D.18., III.D.19., III.E.10., and III.E.11.c of the proposed rule, we proposed to allow FFE States, including States performing plan management, to conduct their own provider access and/or ECP certification reviews provided the State demonstrates 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 (for provider access reviews) and/or an Effective ECP Review Program (for ECP reviews). We stated that FFE States that elect to conduct provider access certification reviews and are determined by HHS to have an Effective Provider Access Review Program under proposed Sec. 155.1050(d) would be permitted to perform such reviews of non-network plans if the State satisfies all applicable criteria. Similarly, we stated that FFE States that elect to conduct ECP certification reviews and are determined by HHS to have an Effective ECP Review Program under proposed Sec. 155.1051 would be permitted to perform such reviews of non-network plans if the State satisfies all applicable criteria. For additional detail on the applicability of the proposed Effective Provider Access Review Program and Effective ECP Review Program to non-network plans under proposed Sec. 156.236, we referred readers to the discussions in sections III.D.18., III.D.19., III.E.10., and III.E.11.c. of the proposed rule.

Furthermore, under Sec. 156.236(b), we proposed that a non-network plan applying for certification to be offered as a QHP through an FFE must report the following information to the FFE for the FFE's determination whether a non-network plan provides 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:

(1) The non-network plan's assessed percentage of available providers in each plan's service area that accept the plan's benefit amount as payment in full; and for ECPs, whether the non-network plan meets at least a minimum percentage, as specified by HHS, of available ECPs that accept the plan's benefit amount as payment in full in each plan's service area, collectively across all ECP categories defined under Sec. 156.235(a)(2)(ii)(B), and at least a minimum percentage of available ECPs that accept the plan's benefit amount as

payment in full in each plan's service area within certain individual ECP categories, as specified by HHS;

(2) For ECPs, whether the non-network plan offers the benefit amount as payment in full to at least one ECP in each of the eight ECP categories per county in the plan's service area described in Sec. 156.235(a)(2)(ii)(B);

(3) For ECPs, whether the non-network plan offers the benefit amount as payment in full to all available Indian health care providers in the plan's service area;

(4) The non-network plan's strategy for conducting continuous outreach to available providers (including ECPs) in the plan's service area to determine whether they would accept the plan's benefit amount as payment in full;

(5) The non-network plan's strategy for making benefit amounts available to the public, including plan enrollees, potential enrollees, and providers (including ECPs), in an easily accessible and understandable format;

(6) The non-network plan's methodology for determining benefit amounts;

(7) The non-network plan's strategy for providing consumer-friendly and public information about potential balance billing scenarios and expected out-of-pocket costs, including historical data on actual out- of-pocket costs incurred by its enrollees while accessing providers (including ECPs) in the area;

(8) The availability of an exceptions process under the non-network program for enrollees who cannot find providers (including ECPs) willing to accept the benefit amount as payment in full; \332\ and

\332\ We stated in the proposed rule that such an exceptions process could, for example, ensure that the non-network plan covers any additional out-of-pocket costs incurred by an enrollee who could not locate an ECP willing to accept the plan's benefit amount as payment in full.

(9) The non-network plan's strategy for providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers (including ECPs) in their area who will accept the plan's benefit amount as payment in full.

We stated that these are among the factors that we have historically found useful in considering whether a non-network plan provides access to a sufficient choice of providers, including ECPs, to warrant the certification of non-network plans for the FFEs. We noted that HHS, as operator of the FFEs, considered the QHP application submitted by a non-network plan for PYs 2021 and 2022 in Ohio. In assessing whether the plan was in the interests of qualified individuals on the FFE in Ohio (under Sec. 155.1000(c)), we used similar factors to assess whether the non-network plan provided protection against additional out-of-pocket costs for EHB in a manner consistent with Sec. 156.130, and we believe this was appropriate because these factors provide a more complete picture of how well a non-network plan actually limits enrollees' out-of-pocket costs.

We stated that the first proposed factor, the non-network plan's assessed percentage of available providers in each plan's service area that accept the plan's benefit amount as payment in full and, for ECPs, whether the non-network plan meets separate minimum percentage requirements of available ECPs that accept the plan's benefit amount as payment in full in each plan's service area, is an important indicator of how generous the non-network plan's benefit amounts actually are. We stated that it would provide an Exchange greater assurance that enrollees can actually access a sufficient number of providers, including ECPs, who will not seek additional payment from the enrollee after receiving the benefit amount from the plan. We further stated that requiring the non-network plan to have assessed the anticipated percentage of providers in the area who would accept the plan's benefit amount as payment in full also would provide Exchanges with assurance that the non-network plan issuer performed sufficient research and analysis in advance to determine sufficient benefit amounts for a relevant area. We stated that this would help ensure benefit amounts are generally sufficient to limit unanticipated additional out-of- pocket costs for enrollees.

We stated (91 FR 6411) that the second proposed factor, whether the non-network plan offers its benefit amount as payment in full to at least one ECP in each of the eight ECP categories per county in the plan's service area described in Sec. 156.235(a)(2)(ii)(B), is an important indicator of the plan's ability to cater to enrollee needs across a wide array of priority health needs and socioeconomic factors, which is required by the Affordable Care Act as a condition of QHP certification. Section 1311(c)(1)(C) of the Affordable Care Act requires access to ECPs, where available, that serve predominately-low income, medically underserved individuals, such as health care providers defined in section 340B(a)(4) of the PHS Act and providers described in section 1927(c)(1)(D)(i)(IV) of the Act. We stated that to demonstrate that non-network plans comply with section 1311(c)(1)(C) of the Affordable Care Act and accordingly provide access to ECPs, where available, such as those under sections 340B(a)(4) of the PHS Act and 1927(c)(1)(D)(i)(IV) of the Act, Exchanges must be assured that the plan's benefit amounts are sufficient enough such that at least one ECP in each of the eight ECP categories per county within the plan's service area would accept the plan's benefit amount as payment in full.

We stated that the third proposed factor, whether the non-network plan offers its benefit amount as payment in full to all available Indian health care providers in the plan's service area, is an important indicator of the plan's ability to ensure Indian enrollees are able to receive applicable cost-sharing reductions for the plan variations described at Sec. Sec. 156.420(b)(1) and (2) without incurring additional out-of-pocket costs. Additionally, we noted that Indian health care providers are among the providers described under section 340B(a)(4) of the PHS Act, which plans must demonstrate access to under Sec. 156.235(a)(2)(ii), (b)(2)(ii), and (c), consistent with section 1311(c)(1)(C) of the Affordable Care Act.

We stated that the fourth proposed factor (91 FR 6411), the non- network plan's strategy for conducting outreach to available providers (including ECPs) in a particular area to determine whether they would accept the plan's benefit amount as payment in full, is an important indication of the non-network plan's recognition that whether any particular provider will accept a benefit amount as payment in full is a moving target. We noted that providers that are not under contract to accept a non-network plan's payment as payment in full are generally not bound by any contract or law in setting prices. We also noted that they may choose to change their charges for their services based on any multitude of factors, including changes in their operating expenses, changes in medical advancement, competitive pressure, or for no particular reason at all. And, they may choose to change this amount at any time. We stated that, as a result, it is imperative that a non- network plan have in place a strategy for conducting continuous outreach to available providers (including ECPs) in a particular area to determine whether they would accept the plan's benefit amount as payment in full, so that the plan can make adjustments to its benefit amounts to ensure that enrollees can access a sufficient number of providers.

We stated that the fifth proposed factor, the non-network plan's strategy

for making benefit amounts available to the public, including plan enrollees, potential enrollees, and providers (including ECPs), in an easily accessible and understandable format, is an important indicator of the non-network plan's ability to effectively communicate the plan's benefit amounts. We stated that making this information widely available to providers would give notice to providers that charge more than the plan's benefit amount that their charges may be too high and they should consider lowering them to attract plan enrollees. We also stated that non-network plans work best when information between the plan, the enrollee, and the provider is shared transparently; and noted that, after all, an enrollee cannot be expected to shop for care if they do not understand what the plan will actually pay the provider.

We stated that the sixth proposed factor (91 FR 6411), the non- network plan's methodology for determining benefit amounts, is an important indicator that the non-network plan is not setting arbitrary benefit amounts for covered services; and, that the benefit amounts are well-informed through various analyses and research, so that the amounts reasonably cover costs associated with a particular service.

We stated that the seventh proposed factor, the non-network plan's strategy for providing consumer-friendly information to plan enrollees and potential enrollees about potential balance billing scenarios and expected out-of-pocket costs, including historical data on actual out- of-pocket costs incurred by its enrollees while accessing ECPs in the area, is an important indicator of the plan's ability to educate its enrollees about the plan's expectations on how the plan may be best utilized to minimize additional out-of-pocket costs. We noted that non- network health plans do not currently exist in the individual and small group market, and are less commonly offered in the large group market and as excepted benefits products, so the plan design may not be immediately intuitive to enrollees. We stated that, as such, it would be imperative that non-network plans have in place a cohesive strategy for providing consumer-friendly information about how the plan may be most effectively used to limit out-of-pocket costs and the impact of seeking care from providers who charge more than the plan's benefit amount.

We stated that the eighth proposed factor, the availability of an exceptions process under the non-network plan for enrollees who cannot find providers (including ECPs) willing to accept the benefit amount as payment in full, is an important indicator of the plan's commitment to be flexible for enrollees who have little choice in providers. We stated that the provision of such an exceptions process would recognize that there may be some circumstances where a non-network plan may be unable to adequately protect consumers against out-of-pocket costs in circumstances where large numbers of providers refuse the plan's payment as payment in full. We stated that in recognition of this possibility, such an exceptions process would be able to shift the burden of paying any unavoidable, additional out-of-pocket costs from the enrollee to the non-network plan.

We stated that the ninth proposed factor, the non-network plan's strategy for providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers (including ECPs) in their area who will accept the plan's benefit amount as payment in full, is another important indicator of the plan's ability to educate its enrollees about the plan's expectations on how the plan may be best utilized to minimize additional out-of-pocket costs.

We stated (91 FR 6412) that under this proposal, non-network plans would be subject to and allowed to demonstrate that they meet all the general certification criteria at Sec. 155.1000(c), which would allow Exchanges the ability to certify non-network plans as QHPs. These general certification criteria include the minimum certification requirements outlined in subpart C of part 156,\333\ which include the requirement that each QHP must comply with benefit design standards as defined in Sec. 156.20, which requires the provision of the EHB package. Thus, we stated that under this proposal, non-network plans would be required to provide this EHB package as a condition of QHP certification, which includes the provision of EHB in accordance with Sec. 156.115, the cost-sharing requirements at Sec. 156.130, and the levels of coverage requirement at Sec. 156.140. We further stated that this requirement to provide the EHB in accordance with Sec. 156.115 would mean that the non-network plan would, among other things, provide benefits that are substantially equal to the relevant State's EHB- benchmark plan. We stated that this would require the non-network plan to ensure that any covered benefits under the plan that are not EHB in the State are not treated as EHB under the plan. We also stated that non-network plans that do not comply with these minimum certification requirements would be subject to denial of certification in accordance with Sec. 155.1000(e) and decertification in accordance with Sec. 155.1080(c).

\333\ Except for Sec. Sec. 156.230 and 156.235, which would only be applicable to network plans.

In addition, we stated that non-network plans that are applying for QHP certification or are QHPs would also be required to structure their plans so that they provide all the consumer protections that apply to individual and small group health coverage including, but not limited to, those specified in PHS Act title XXVII parts A through D, as all other plans applying for QHP certification are subject to providing. We also stated that under this proposal, a non-network plan would not be able to claim exemption from such protections merely because it does not enter into contracts with providers. We stated that failure to offer these protections would also result in denial of certification in accordance with Sec. 155.1000(e) and decertification in accordance with Sec. 155.1080(c), even though they are not explicitly included in the minimum certification requirements outlined in subpart C of part 156. We noted that under section 1311(e)(1)(B) of the Affordable Care Act and Sec. 155.1000(c)(2), Exchanges have broad discretion to determine whether a plan is in the interest of qualified individuals and qualified employers, regardless of whether the plan meets other minimum certification requirements consistent with Sec. 155.1000(c)(1). We confirmed that an Exchange may use this authority to deny certification to a non-network plan that is not structured in a manner that provides all the consumer protections that apply to individual and small group health insurance coverage including, but not limited to, those specified in PHS Act title XXVII parts A through D. We stated, for example, that the breadth of an Exchange's authority to deny certification under the interest standard extends to determinations that a non-network plan's benefit structure fails to provide protections against surprise medical bills in a manner similar to a network plan.\334\

\334\ Section 1311(e)(1)(B)(i) of the Affordable Care Act and Sec. 155.1000(c)(2)(i) prohibit Exchanges from excluding a health plan from certification on the basis that such plan is a fee-for- service plan. We confirmed that under this proposal, an Exchange may properly conclude that a non-network plan that is a fee-for-service plan may be denied certification under the interest standard for other criteria besides the fact that it is a fee-for-service plan.

We noted that the certification criteria at Sec. 155.1000(c)(2) include the requirement that the Exchange determine that making the health plan

available is in the interest of the qualified individuals and qualified employers. We stated that this proposal would not require States to approve non-network plans for sale nor would it require Exchanges to certify such plans. We stated that we have long maintained that Exchanges are free to exercise the authority at section 1311(e)(1) of the Affordable Care Act (as implemented at Sec. 155.1000(c)(2)) to refuse certification to a plan if it determines that making available such health plan through such Exchange is not in the interests of qualified individuals and qualified employers in the State,\335\ even if the plan otherwise meets all other QHP certification requirements. We noted that in the Exchange Establishment Rule (77 FR 18405), we stated that an Exchange may want to choose among one of several strategies for making this determination: (1) an Exchange may choose to utilize an “any qualified plan” strategy for certifying QHPs in its Exchange, such that an Exchange certifies all health plans as QHPs that meet and agree to comply with minimum QHP certification requirements; (2) an Exchange could undertake a competitive bidding or selective contracting process and limit QHP participation to only those plans that ranked highest in terms of certain Exchange criteria; (3) an Exchange may also choose to negotiate with health insurance issuers on a case-by-case basis and could request that an issuer, upon meeting the minimum certification standards, amend health plan offerings to further the interest of qualified individuals and qualified employers served by the Exchange; or (4) an Exchange may implement selection criteria beyond the minimum certification standards in determining whether a plan is in the interests of the qualified individuals and employers.\336\

\335\ Except that the Exchange may not exclude a health plan: (i) on the basis that such plan is a fee-for-service plan; (ii) through the imposition of premium price controls; or (iii) on the basis that the plan provides treatments necessary to prevent patients' deaths in circumstances the Exchange determines are inappropriate or too costly (77 FR 18405).

\336\ As stated in the Exchange Establishment Rule (77 FR 18405), some examples of such additional selection criteria include: (1) reasonableness of the estimated costs supporting the calculation of the health plan's premium and cost-sharing levels; (2) past performance of the health insurance issuer; (3) quality improvement activities; (4) enhancements of provider networks, including the availability of network providers to new patients; (5) service area of the QHPs (that is, the size of a service area and the amount of choice afforded to the consumers within that service area); and (6) premium rate increases from previous years and proposed rate increases.

We reaffirmed these flexibilities under this proposal; we stated (91 FR 6412) that Exchanges would be able to require non-network plans to meet additional criteria beyond those described in the approach outlined above to be certified as QHPs, and they may determine that such plans are not in the interests of qualified individuals and qualified employers in the State, regardless of whether the non-network plan otherwise meets the certification criteria at Sec. 155.1000(c)(1), and refuse them certification.

We sought comment regarding the PY 2027 effective date of this proposal. We noted that this includes comments from any QHP issuers that may be interested in submitting non-network plans for QHP certification for PY 2027, or whether PY 2028 may be the soonest that any QHP issuer could realistically consider submitting non-network plans for QHP certification.

We stated that, in connection with this proposal, we had not identified any barriers to non-network plans' participation in the HHS- operated risk adjustment program. However, we stated that because these plans are not under contractual relationships with providers, we recognize that they may have difficulty obtaining medical records from providers for the purposes of HHS-RADV, which is a requirement for risk adjustment covered plans under Sec. 153.630. We noted that EDGE- reported diagnoses for which no medical record can be obtained are considered to be non-validated diagnoses in the HHS-RADV process and would result in higher error rates and higher HHS-RADV adjustments. As such, we sought comment on considerations for non-network plans in the HHS-RADV process. d. Effective Provider Access Review Program Requirements for Non- Network Plans

Under sections III.D.18. and III.E.10. of the proposed rule, we proposed to allow FFE States, including States performing plan management, to elect to conduct their own provider access certification reviews of issuers' plans applying for certification as a QHP through an FFE, provided the State determines it has 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), as determined by HHS. We proposed that in FFE States that do not elect to conduct provider access reviews or that we determine do not have an Effective Provider Access Review Program, we would continue to conduct provider access certification reviews consistent with Sec. 156.230 for network plans.

To ensure that non-network plans would be held to similar requirements as network plans in meeting regulatory requirements to provide sufficient choice of providers under section 1311(c)(1)(B) of the Affordable Care Act, in the proposed rule (91 FR 6413), we also proposed to apply the Effective Provider Access Review Program to FFE States, including States performing plan management, that wish to conduct provider access reviews of non-network plans. We stated that this means that if an FFE State elects to conduct their own provider access certification reviews of issuers' plans applying for certification to be offered as a QHP through an FFE and we determine that the State has satisfied all the applicable criteria to be considered to have an Effective Provider Access Review Program, then the State would have the ability to conduct provider access certification reviews of non-network plans. We also stated that an FFE State would need to demonstrate that it meets applicable criteria for both network and non-network plans under proposed Sec. 155.1050(d)(2) through (d)(4) prior to HHS determining that a State has an Effective Provider Access Review Program. We stated that this would mean an FFE State would not be permitted to elect to conduct provider access certification reviews for only network plans and not non-network plans, if they certify both such plans, or vice versa. However, we noted that should an FFE State notify us that it chooses not to certify non- network plans, and so does not offer non-network plans through the FFE operating in their State (regardless of if the State or HHS conducts the review), then we would determine whether it satisfies applicable criteria to be considered to have an Effective Provider Access Review Program under proposed Sec. 155.1050(d)(2) through (d)(4) for network plans only. We sought comment on this approach. Additionally, we stated that similar to the approach for network plans, if we determine FFE States do not satisfy applicable criteria to be considered to have an Effective Provider Access Review Program, then we would conduct provider access certification reviews for non-network plans under new standards proposed at Sec. 156.236.

We proposed (91 FR 6413) that an FFE State would need to demonstrate that it meets applicable criteria for both network plans and non-network plans under proposed Sec. 155.1050(d)(2) through (d)(4), if they decide to certify such plans, to receive the designation to have an Effective Provider Access

Review Program. We stated that this would mean that an FFE State would not be permitted to elect to conduct provider access certification reviews for only network plans and not non-network plans, if they certify such plans, or vice versa. We stated that we believe this is important, as some QHP issuers may choose to offer both network and non-network plans and centralizing reviews to a single entity, whether the FFE State or HHS, for the same issuer, would reduce administrative inefficiencies that may result if the FFE State and HHS have to coordinate provider access certification review results across a range of network and non-network plans. We also stated that we believe review authority being limited to a single entity, either the FFE State or HHS, would allow both network and non-network plans to undergo consistent, standardized reviews conducted by the same reviewing entity. We stated that we believe this would ensure similar requirements and methodologies would be applied fairly across network and non-network plans and reduce potential differences in provider access review results. We noted that this may also reduce variabilities in access across the FFE State between enrollees in non-network plans versus network plans that may result if these plans undergo different levels and types of provider access certification reviews by separate review entities, and it could make it more difficult to effectively compare provider access review results between network and non-network plans during certification if alternative review methods are applied within the same FFE State. We stated that, overall, just as with network plans, non-network plans must ensure sufficient access to a range of providers in a manner consistent with section 1311(c)(1)(B) of the Affordable Care Act.

We proposed to implement requirements for non-network plans that were similar to the requirements for network plans under the Effective Provider Access Review Program at proposed Sec. 155.1050(d). We stated that an FFE State must demonstrate it has sufficient authority and the technical capacity to conduct provider access certification reviews for non-network plans by satisfying all applicable criteria to be considered to have an Effective Provider Access Review Program under proposed Sec. 155.1050(d)(2) through (d)(4), including criteria specific to non-network plans. We also stated that, just as with network plans, an FFE State determined to have an Effective Provider Access Review Program would be expected to ensure sufficient access to providers under non-network plans. We stated that in this case, the FFE State would need to ensure that a QHP would be required to ensure access to a range 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.

We also stated that, under our proposal, as with network plans, a State operating an FFE that elects to conduct its own provider access reviews, and which deems to certify non-network plans, must demonstrate it has established provider access standards that are set forth in State statute or regulation which are consistent with provider access standards set forth in Sec. 156.230(a)(1)(ii) and (iii) and are relevant to non-network plans. We stated that the FFE State would also need to demonstrate that the State's provider access review process includes reporting systems for State required provider access metrics related to non-network plans as well as documentation of methodology associated with non-network plan review; and that the State provides descriptions of all data collection systems, templates and methodologies used by the State, or the State's delegated entity, to collect and review provider access data for non-network plans and that this data and documentation received is sufficient to conduct an examination of non-network plans. We noted that the FFE State would also be required to establish and maintain clear procedures and timeline requirements for regular provider access reviews related to non-network plans, including processes that ensure reviews occur prior to each plan year's QHP certification cycle.

Additionally, we stated that the FFE State would be required to have a process for monitoring and addressing consumer-related provider access complaints for non-network plans to ensure sufficient access to providers consistent with section 1311(c)(1)(B) of the Affordable Care Act and as set forth in State statute. We further stated that the FFE State would also be required to have a process to collect and review information capable of demonstrating whether non-network plans provide access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full. We stated that we sought to understand whether the FFE State has a process for collecting and analyzing this information to demonstrate technical capacity during Effective Provider Access Review Program determinations. Additionally, we considered enumerating the information that non-network plans must submit to the FFE listed at Sec. 156.236(b)(4) through (b)(9) within Sec. 155.1050(d)(4)(vi) as requirements for FFE States with an Effective Provider Access Review Program to review non-network plans to ensure they are in alignment with HHS' proposed approach in an effort to further support consumer protectiveness in this novel plan design. We noted that these factors would include assessing a non-network plan's strategy for conducting outreach to providers in their area, making benefit amounts public to enrollees, methodologies for determining benefit amounts, strategy for publishing consumer-friendly information on balance billing and potential out-of-pocket costs, availability of exceptions processes for enrollees unable to locate providers who accept benefit amounts as payment in full, and customer services resources. However, we stated that, as HHS is seeking to broadly restore flexibilities to FFE States as a part of some QHP certification reviews and empower FFE States who understand their consumer needs and local conditions best, we opted in this proposal to provide deference to FFE States in how they will review non-network plans for a sufficient choice of providers who accept the plans benefit amount as payment in full in accordance with information listed at Sec. 156.236(b)(4) through (b)(9). We sought comment on whether HHS should better align the reviews of non-network plans for QHP certification as described above.

We stated that while these factors for assessing whether a State has an Effective Provider Access Review Program, as related to non- network provider access reviews, are comprehensive, we believe this approach would provide ample flexibility to States to determine the best methodology to assess provider access under non-network plans within the State. We anticipated that each State's approach would be dependent on available resources and population needs unique to each State and that these proposed factors would serve to appropriately evaluate overall State processes for review of non-network plans to ensure sufficient consumer protection. e. Effective Essential Community Provider Review Program Requirements for Non-Network Plans

Under sections III.D.19 and III.E.11.c. of the proposed rule, we proposed to allow FFE States, including States

performing plan management, to elect to conduct their own ECP certification reviews of issuers' plans applying for certification as a QHP through an FFE provided the State demonstrates sufficient authority and the technical capacity to conduct these reviews by meeting the applicable criteria, as determined by HHS, to be considered to have an Effective ECP Review Program under proposed Sec. 155.1051. Additionally, as discussed in section III.E.11.c of the proposed rule, we proposed that if we determine an FFE State does not have an Effective ECP Review Program, we would continue to conduct ECP certification reviews consistent with Sec. 156.235 for network plans. To ensure that non-network plans would be held to similar requirements as network plans in meeting regulatory requirements to ensure reasonable and timely access to ECPs for low-income, medically underserved individuals, we proposed (91 FR 6414) to also apply the Effective ECP Review Program under Sec. 155.1051 to FFE States, including States performing plan management, that wish to conduct ECP certification reviews of non-network plans. That is, we stated that under this proposal, if FFE States elect to conduct their own ECP certification reviews of issuers' plans applying for certification to be offered as a QHP through an FFE and the State is determined by HHS to have satisfied all the applicable criteria to be considered to have an Effective ECP Review Program, then States would have the ability to conduct ECP certification reviews of non-network plans. We stated that an FFE State would need to demonstrate that it meets applicable criteria for both network plans and non-network plans under proposed Sec. 155.1051(b) through (c), and demonstrate it has the sufficient authority and technical capacity to conduct reviews of such plans (as assessed by HHS under Sec. 155.1051(e)), prior to HHS determining that a State has as an Effective ECP Review Program. We stated that this would mean an FFE State would not be permitted to elect to conduct ECP certification reviews for only network plans and not non-network plans, if they certify such plans, or vice versa. However, we noted that if an FFE State notifies us that it does not deem to certify such non-network plans, and consequently not offer these plans altogether through the FFE operating in their State (regardless of if the State or HHS conducts the review), then we would continue to review whether a State meets all applicable criteria for only network plans during the Effective ECP Review Program determination process. We sought comment on this approach. Lastly, we stated (91 FR 6414) that similar to the approach for network plans, if FFE States do not satisfy criteria for having an Effective ECP Review Program, then we would perform ECP certification reviews for non-network plans under the proposed standards for non-network plans at Sec. 156.236 discussed in section III.E.12.c. of the proposed rule.

Furthermore, we stated that we believe HHS should primarily conduct ECP certification reviews as the default approach for issuers with non- network plans applying for certification as a QHP to be offered through an FFE, including States performing plan management, except if an FFE State elects to conduct ECP certification reviews and is determined to have an Effective ECP Review Program. We stated that we believe this is valuable for most of the same reasons that we proposed to adopt this same approach for network plans under section III.E.11.c. of the proposed rule. In addition, as we stated in discussions above describing various characteristics of non-network plans, we stated that there is no guarantee that a non-network plan's benefit amount is actually sufficient to cover the provider's full charges, which can leave enrollees with additional out-of-pocket costs that may disproportionately challenge low-income, medically underserved populations. We noted that these populations typically served by ECPs are often at a greater risk for lower health insurance coverage literacy and an increased risk for illness,\337\ which may make it more difficult for these populations to understand how to use non-network plans to meet their needs. Additionally, we noted that the health care services furnished by ECPs are much more specialized and can be very expensive for enrollees, for example, HIV/AIDs treatment furnished by Ryan White program providers, cancer care furnished by Free-standing Cancer Centers, tuberculosis treatment furnished by Tuberculosis Clinics, hemophilia treatment furnished by Hemophilia Treatment Centers, and more.\338\ Thus, we stated that if a non-network plan's benefit amount is not sufficient to cover these expensive, specialized services often furnished by ECPs, then these enrollees could potentially face larger out-of-pocket costs that are more regressive for low-income, medically underserved populations. We stated that this necessitates some minimum standard to ensure these plans are as consumer protective as possible for the low-income, medically underserved populations traditionally served by ECPs, including criteria under proposed Sec. 155.1051 to ensure FFE States have the authority and technical capacity to conduct these ECP certification reviews in a such a way that continues to ensure low-income, medically underserved populations have adequate access to ECPs through non- network plans.

\337\ Edward J, Wiggins A, Young MH, Rayens MK. Significant Disparities Exist in Consumer Health Insurance Literacy: Implications for Health Care Reform. Health Lit Res Pract. 2019 Nov 5;3(4):e250-e258. doi: 10.3928/24748307-20190923-01. Available at https://pmc.ncbi.nlm.nih.gov/articles/PMC6831506/. Karen Pollitz, Kaye Pestaina, Alex Montero, Lunna Lopes, Isabelle Valdes, Ashley Kirzinger, and Mollyann Brodie. KFF. (2023, June 15). KFF Survey of Consumer Experiences with Health Insurance. Available at https://www.kff.org/mental-health/poll-finding/kff-survey-of-consumer-experiences-with-health-insurance/. OASH, Health People 2023, Literature Review. Available at https://odphp.health.gov/ healthypeople/priority-areas/social-determinants-health/literature- summaries/ poverty#:~:text=Unmet%20social%20needs%2C%20environmental%20factors,f or%20people%20with%20lower%20incomes.&text=For%20example%2C%20people% 20with%20limit.

\338\ For example, research indicates that among commercially insured adults with HIV, the mean all-cause and HIV-related per patient per month costs were $2,657 and $1,497, and all cause costs per patient per month for adults with PrEP were $1,761. Other research shows that the estimated direct costs of 4 to 6 months of tuberculosis treatment is an estimated $23,000 per person. Lastly, a meta-analysis found the average total annual costs for hemophilia treatment can start around $200,000 per patient and be as high as $869,940. Chen CY, Donga P, Campbell AK, Taiwo B. Economic Burden of HIV in a Commercially Insured Population in the United States. JHEOR. 2023;10(1):10-19. doi:10.36469/001c.56928. PMID:36721765. Available at https://jheor.org/article/56928-economic-burden-of-hiv-in-a-commercially-insured-population-in-the-united-states. Winston CA, Marks SM, Carr W. Estimated Costs of 4-Month Pulmonary Tuberculosis Treatment Regimen, United States. Emerg Infect Dis. 2023 Oct;29(10):2102-2104. doi: 10.3201/eid2910.230314. PMID: 37735769; PMCID: PMC10521593. Available at https://pmc.ncbi.nlm.nih.gov/articles/PMC10521593/. Chen Y, Cheng SJ, Thornhill T, Solari P, Sullivan SD. Health care costs and resource use of managing hemophilia A: A targeted literature review. J Manag Care Spec Pharm. 2023 Jun;29(6):647-658. doi: 10.18553/ jmcp.2023.29.6.647. PMID: 37276036; PMCID: PMC10387983. Available at https://pmc.ncbi.nlm.nih.gov/articles/PMC10387983/.

Additionally, we stated that based on our experience conducting ECP certification reviews of network plans, we believe having adequate and accurate data on available ECPs in a geographic area, sufficient tools to collect and calculate issuer submitted ECP data, and sound methodologies to quantitatively assess this data to ensure access to ECPs in accordance with section 1311(c)(1)(C) of the Affordable Care Act would be crucial for any FFE State to demonstrate the technical capacity to also conduct their own ECP certification reviews of non- network plans. We stated that this would include

having data collection capabilities and structured analyses to measure the adequacy of a non-network plan in providing access to a sufficient number and geographic distribution of ECPs in their service area that accept the plan's benefit amount as payment in full. We noted that while existing resources (for example, the Federal ECP List, MPMS, etc.) at the Federal level can be leveraged to efficiently conduct ECP certification reviews of non-network plans, it is unknown what tools FFE States may utilize to collect ECP data from non-network plans or to assess adequate access to ECPs within these plans. Further, we stated that it is especially unclear to what extent FFE States may already have experience in conducting reviews of non-network plans and what existing requirements States may have in place to ensure these plans provide reasonable and timely access to ECPs. Thus, to broaden our knowledge in this area, we solicited comment on whether FFE States, including States performing plan management, have experience conducting reviews of non-network plans; and we welcomed any information on current State-specific requirements that would ensure these plans provide reasonable and timely access to ECPs to medically underserved and low-income populations, including those ECPs that would accept a non-network plan's benefit amount as payment in full.

Moreover, we proposed that an FFE State would need to demonstrate that it meets applicable criteria for both network plans and non- network plans under proposed Sec. 155.1051(b) through (d), and the sufficient authority and technical capacity to conduct reviews of such plans (as assessed by HHS under Sec. 155.1051(e)), to receive a designation as having an Effective ECP Review Program under proposed Sec. 155.1051, as they decide to certify such plans. We stated that this would mean that an FFE State would not be permitted to elect to conduct ECP certification reviews for only network plans and not non- network plans, or vice versa. We stated that we believe this is important for several reasons. We stated that some QHP issuers may choose to offer both network and non-network plans and centralizing the reviews to either the FFE State or HHS for the same issuer would reduce administrative inefficiencies that may result when FFE States and HHS have to coordinate ECP certification review results across a range of plans that may be offered by the same issuer.

Additionally, we stated (91 FR 6415) that we believe delegating reviews of both network and non-network plans to either the FFE State or HHS would allow both plan types to undergo consistent, standardized reviews conducted by the same reviewing entity, so that similar requirements and methodologies are applied fairly across all plan types to reduce differences in ECP certification review results. We stated that this may also reduce variabilities in access across the FFE State between enrollees in non-network plans versus network plans that may result if these plans undergo different levels and types of ECP certification reviews by separate review entities, and it could make it more difficult to effectively compare ECP review results between network and non-network plans during certification if alternative review methods are applied within the same FFE State. We noted that under our proposal, non-network plans must still ensure sufficient access to ECPs in a manner consistent with section 1311(c)(1)(C) of the Affordable Care Act and must be held in parity with network plans to provide reasonable and timely access to ECPs.

Accordingly, we proposed requirements at Sec. 155.1051 that an FFE State must meet to be considered to have an Effective ECP Review Program and conduct ECP certification reviews of non-network plans. We proposed that an FFE State must demonstrate that it has sufficient authority and the technical capacity to conduct ECP certification reviews of non-network plans by meeting all the applicable criteria to be considered to have an Effective ECP Review Program under Sec. 155.1051, including criteria specific to non-network plans. We stated that we continue to believe that to protect low-income, medically underserved populations, and to ensure that enrollees in all FFEs are provided a minimum standard of consumer protection for reasonable access to providers and that disparities in access are minimized across States, Effective ECP Review Program States must continue to demonstrate that issuers without a network of providers applying for certification as a QHP through the FFE operating in their State meet various requirements described in this section. We proposed under Sec. 155.1051(b) that FFE States with an Effective ECP Review Program must ensure that a non-network plan applying for certification to be offered as a QHP through an FFE demonstrates that it provides reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full to ensure that services will be accessible without unreasonable delay. We stated that in lieu of the requirements for network plans that are based on contracts executed with and/or offered to an ECP, non-network plans would instead be required to indicate benefit amounts as payment in full that were accepted by and/or offered to an ECP, as reflected under proposed Sec. 156.236(b)(1) through (b)(3). Thus, under Sec. 155.1051(c), we proposed that FFE States with an Effective ECP Review Program must also demonstrate that their ECP requirements are comparable to ECP requirements under proposed Sec. 156.236 for issuers' plans without a provider network so that plans: meet the minimum percentage requirements under proposed Sec. 156.236(b)(1) for non-network plans; meet the Indian health care provider requirement under proposed Sec. 156.236(b)(3) for non-network plans; and meet the category per county requirements under proposed Sec. 156.236(b)(2) for non-network plans. Similarly, we stated that our proposal under Sec. 155.1051(d) would also apply to non-network plans. Specifically, we proposed that FFE States with an Effective ECP Review Program that have alternative ECP requirements, including ECP requirements specific to non-network plans, compared to those requirements described under proposed Sec. 155.1051(c)(1) through (c)(3), must demonstrate how their requirements would continue to promote a sufficient number and geographic distribution of ECPs to ensure reasonable and timely access to ECPs, and an adequate level of service for low-income enrollees or individuals residing in Health Professional Shortage Areas. We stated that we understand that due to the newness of these plans, if this proposal were finalized, many FFE States would still be in the earlier stages of implementing new requirements for these plans. Thus, we stated that we would continue to work with FFE States to provide technical assistance to ensure any State ECP requirements (including alternative requirements) for non-network plans continue to ensure reasonable and timely access to ECPs across the State before and after making an Effective ECP Review Program determination.

Furthermore, consistent with the discussion in section III.E.11.c. of the proposed rule for network plans, we stated that we would review information submitted by the FFE State to ensure the State receives adequate issuer data and documentation to conduct an examination of ECP requirements described in proposed

Sec. 156.236 for non-network plans to demonstrate it has the authority and technical capacity to conduct effective, timely reviews of a non- network plan's ECP data. Under Sec. Sec. 155.1051(e)(1) through (10), as described in section III.E.11.c of the proposed rule, we proposed factors that we would consider in our review to determine if an FFE State has an Effective ECP Review Program, including factors related to a State's legal authority, State ECP requirements compared to ECP requirements under Sec. 156.235 and proposed Sec. 156.236, definition of an ECP, process for identifying qualified ECPs, data collection systems and methodologies to collect and review ECP data, delegation of ECP review to other entities, compliance and enforcement mechanisms, and consumer assistance. We stated that we would still consider all these criteria when determining if an FFE State has sufficient authority and the technical capacity to conduct ECP certification reviews including for non-network plans.

However, we noted that there are several additional criteria we would consider during our review of FFE States specific to only non- network plans. First, we proposed under Sec. 155.1051(e)(5) that we would consider if the FFE State utilizes the Federal ECP List or has a process they use to identify qualified ECPs that may accept a non- network plan's benefit amount as payment in full. We stated that we believe it is essential to have a means to identify the exact geographic location and distribution of ECPs that may be available within an issuer's service area that may accept a non-network plan's benefit amount as payment in full; we noted that this would ensure issuers fulfill statutory requirements under section 1311(c)(1)(C) of the Affordable Care Act to include ECPs “where available” so that enrollees have sufficient access to ECPs through their plans. Additionally, we proposed to consider under Sec. 155.1051(e)(7) whether the FFE State collects information from issuers regarding the status of offers of benefit amounts as payment in full to an ECP. We stated that we believe this type of data is an important metric to assess an issuer's compliance with the minimum percentage, category per county, and Indian health care requirements under proposed Sec. 156.236(b)(1) through (b)(3), which would be evaluated based on measurements of benefit amounts as payment in full that were offered to or accepted by an ECP.

Moreover, as we stated under section III.E.11.c of the proposed rule, we noted that States possess unique knowledge on local factors that could strengthen ECP reviews, such as on market conditions, geographic constraints, areas in the State with limited economic resources, provider shortages, workforce issues, and population demographics, and we stated that we believe States can leverage this same knowledge on local factors when conducting ECP reviews of non- network plans. However, we considered enumerating the information that non-network plans must submit to the FFE listed at Sec. 156.236(b)(4) through (b)(9) as requirements for FFE States with an Effective ECP Review Program to review non-network plans to ensure they are in alignment with HHS' proposed approach in an effort to further support consumer protectiveness in this novel plan design. We stated that information described under proposed Sec. 156.236(b)(4) through (9) is specific to non-network plans and reflect additional safeguards to ensure these plans maintain access to providers without traditional network arrangements. We noted that these factors would include assessing a non-network plan's strategy for conducting outreach to ECPs in their area and for making benefit amounts public to enrollees, methodologies for determining benefit amounts, strategy for publishing consumer-friendly information on balance billing and potential out-of- pocket costs, availability of exceptions processes for enrollees unable to locate providers who accept benefit amounts as payment in full, and customer services resources. We stated that these reflect more qualitative measures that would likely require different data collection methods compared to the more quantitative measures of minimum percentage, category per county, and Indian health care requirements under proposed Sec. 156.236(b)(1) through (b)(3). We further stated that, as HHS is seeking to broadly restore flexibilities to FFE States as a part of ECP certification reviews and empower FFE States who understand their consumer needs and local conditions best, we opted to defer to FFE States in how they wish to review non-network plans for this type of information, as applicable. Though, we sought comment on whether HHS should better align the reviews of non-network plans across the FFE, regardless of whether HHS or an FFE State is conducting ECP certification reviews, by enumerating the factors under Sec. Sec. 156.236(b)(4) through (b)(9).

Altogether, in addition to the proposal to revise Sec. Sec. 156.230 and 156.235, and add Sec. Sec. 156.236 and 155.1051, we proposed revisions to Sec. Sec. 155.1050 (including its section heading), 156.275, and 156.810 to clarify that provisions within these sections would apply to the certification of non-network plans in the same manner that they apply to network plans.

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 with a modification to delay implementation of this proposal to PY 2028. We are also modifying Sec. 156.236(b)(5) to include the non-network plan's strategy for regularly updating any changes to benefit amounts, Sec. 156.236(b)(7) to include the non-network plan's strategy for providing information on navigating episodes of care with multiple benefit amounts (including for ancillary providers and services), and Sec. 156.236(b)(9) to include the non- network plan's strategy to assist plan enrollees in receiving real-time cost estimates prior to care being furnished, as information non- network plans must submit to the FFE for a determination that it provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full.

Lastly, we clarify that the finalized non-network plan requirements under Sec. 156.236 are applicable to issuers with non-network plans seeking QHP certification to be offered on the FFE. We are not requiring FFE States to offer non-network plans on the FFE within their State, nor are we requiring States operating their own Exchanges to certify and offer these plans. States retain full discretion and authority to determine whether non-network plan designs are appropriate for their markets, consistent with applicable State laws and regulations. The requirements under Sec. 156.236 lay out a clear regulatory framework that HHS will apply to conduct certification reviews of issuers with non-network plans seeking to be certified as a QHP on the FFE. States operating their own Exchanges (State Exchanges and SBE-FPs) are welcome to use the principles of this framework but have flexibility to determine the specific parameters for non-network plan certification requirements within their State, provided they ensure issuers provide sufficient access to providers consistent with standards under Sec. 156.236(a). While HHS is delaying implementation of allowing non-network plans to receive QHP certification to be offered as QHPs through the FFE beginning PY 2028,

SBEs 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. Accordingly, and consistent with finalized requirements under Sec. 155.1050(a)(2), State Exchanges and State-based Exchanges on the Federal Platform may allow non-network plans to be offered through the Exchange for plan years beginning on or after January 1, 2027, if such plans are allowed to be offered through the Exchange, as applicable.

Comment: Multiple commenters stated support for the proposal, including an issuer that offers non-network plans, multiple consumers currently enrolled in non-network plans outside of the Exchange, and employers that offer non-network plans to their employees. These commenters believe non-network plans provide Americans an opportunity to benefit from greater provider choice, transparency, affordability, and additional innovative plan design options through the FFE. They commended HHS for revisiting the existing prohibition of non-network plans and proposing a thoughtful regulatory framework under Sec. 156.236 that addresses core statutory provisions while fostering required consumer protections. These commenters supported the proposed regulatory standard and stated the nine proposed factors (under Sec. 156.236(b)(1) through (b)(9)) under which non-network plans would be assessed for QHP certification were reasonable, comprehensive, and appropriate.

Current non-network plan enrollees shared their positive experiences in relation to finding and receiving care under their plans. These commenters appreciated that their plan offered choice of any provider without referrals and prior authorization requirements as well as transparent information on the cost, quality ratings, availability, and location of providers to support cost-conscious, informed decision-making. Some commenters shared positive experiences utilizing their non-network plans to receive specialty care (for example, cancer care), including the receipt of specialized treatments and medications without delay, denial, or restriction contingent on provider network participation. Some commenters pointed to non-network plans as a viable solution to the current limitations of existing provider networks, including narrow networks and inaccuracy in provider directory information.

Response: We thank commenters for their support and current enrollees of non-network plans for sharing their experiences.

Comment: The majority of commenters stated significant opposition to the proposal to allow non-network plans to receive QHP certification, especially if HHS does not finalize additional, enforceable consumer protections beyond those proposed under Sec. 156.236. Commenters were skeptical that a non-network plan could truly offer the comprehensive coverage required for QHP certification as a QHP. They were concerned these plans function to only discount health services, resulting in illusionary coverage that instills additional uncertainty and distrust among consumers. Some commenters stated that removing HHS' existing prohibition on non-network plans would stray from Congress' original intentions in drafting access to care provisions in the Affordable Care Act, weakening its core protections, undermining program integrity, risking market instability, and shifting additional risks to patients and providers.

Furthermore, several commenters stated that suggested savings from price transparency efforts and related policies would be small, as limited evidence demonstrates uptake of price transparency efforts by consumers and compliance against providers is limited in practice, and other systemic issues exist in the health care system that reduce the effectiveness of price transparency efforts. Commenters suggested that HHS focus on other activities to address these issues. For example, commenters urged HHS to develop stronger price transparency guidelines on “Good Faith Estimates” under the No Surprises Act and improve how providers display standard charges which often reflect an average of negotiated prices, so that price transparency information can be trusted. Commenters also urged HHS to develop a Federal all-payer claims database, so that nationwide price transparency information would be accessible across markets and to consumers enrolled in different plan types. Commenters also supported stronger legal requirements that target barriers limiting cross-data exchange on pricing information between billing departments at the provider and insurer level.

Response: We do not agree that allowing certification of non- network plans as QHPs would stray from the Congress' intent in creating access to care provisions within the Affordable Care Act, and we refer readers to discussion earlier in this section explaining why. We believe that so long as non-network plans demonstrate a sufficient choice of providers consistent with section 1311(c)(1)(B) and (C) of the Affordable Care Act and satisfy all other applicable statutory and regulatory provisions, then non-network plans would not circumvent access to care provisions and the responsibility to provide comprehensive coverage. Under section 1311(e)(1) of the Affordable Care Act, Exchanges have broad discretion to deny certification of a health plan if the Exchange determines offering the plan is not in the interest of qualified individuals and qualified employers in the State or States in which such Exchange operates. We have previously clarified we would focus denials of certification in the FFEs based on cases involving the integrity of the FFEs and the plans offered through them (81 FR 12289). In the event a non-network plan meets certification requirements, but we determine that the plan is not in the interest of qualified individuals and employers or risks the integrity of the FFEs and the plans offered through them, we have authority to deny QHP certification of the non-network plan.

Lastly, we recognize that systemic issues exist in the health care system that currently could limit the full potential of price transparency initiatives. While we appreciate commenters' suggestions of other activities we could pursue to improve pricing information for consumers, these suggestions were outside the scope of this rulemaking as they do not relate to our specific proposal. However, we do believe a combination of various solutions would have the most systemic impact on price transparency, which we believe includes the availability of non-network plans. Since non-network plans often present transparent price information to their enrollees by making benefit amounts and providers' acceptance of those benefit amounts available, these plans can promote additional price transparency if plans compete by implementing more transparent price information to attract price- sensitive consumers. Non-network plans may further encourage providers to lower prices to attract enrollees shopping for care who would have access to compare providers' acceptance of benefit amounts and health care prices in their service area. Several factors relevant to the non- network plan regulatory framework promote an ecosystem which we believe will further encourage price transparency efforts, including those under Sec. 156.236(b)(4) through (9) which include making benefit amounts publicly available, the methodology for determining benefit amounts, provider outreach to

determine whether providers would accept the benefit amount as payment in full, the strategy for providing information about potential balance billing scenarios, including historical data on actual out-of-pocket costs incurred by enrollees, and providing adequate customer services to assist consumers in finding providers who will accept the plan's benefit amount as payment in full. Overall, these factors ensure non- network plans make the cost of care more transparent to consumers. We also believe that allowing non-network plans to be certified as QHPs on the FFEs, provided they meet all applicable requirements, would provide innovative plan options to consumers who value price transparency.

Comment: One commenter suggested that instead of allowing non- network plans to be offered as QHPs, which allow the choice of any provider, HHS should strengthen network adequacy standards to ensure consumers have more choice of adequate providers through broader networks. Some commenters added that allowing these non-network plans would undercut long-standing initiatives to improve provider directory accuracy and hold issuers accountable for meeting provider network regulatory requirements. Commenters advocated for HHS to shift attention towards resolving these systemic issues instead.

Response: We agree with commenters that network adequacy requirements and the accuracy of provider directories are important. While we appreciate and will consider commenters' suggestions to focus on these efforts, we do not believe there is a single solution to improve a consumer's choice of providers. Although a number of suggestions were outside the scope of this rulemaking, we appreciate commenters' attention and feedback. We will continue to pursue efforts to improve the adequacy of plan networks, including by finalizing network adequacy policies in this final rule that will allow FFE States to apply their superior knowledge of circumstances in their States to assess the adequacy of issuer networks, and maintaining existing ECP threshold requirements. For the reasons explained earlier in this final rule, we are of the view that allowing non-network plans to be certified as QHPs, provided they meet all applicable requirements, will promote more options in the types of plan designs offered through the FFE, especially for consumers who do not prefer traditional network plans.

Comment: Commenters stated concern that non-network plans would unfairly shift administrative work from issuers to consumers--such as locating providers that accept benefit amounts as payment in full, negotiating prices, disputing charges, covering up-front costs, navigating reimbursements, handling prior authorization, and submitting supporting documentation for needed services--while issuers retain the financial benefits of reduced administrative costs that consumers assume. Commenters also were uncertain that online tools would be available to provide consumers information on locating providers and the full prices for their services.

Many commenters noted that consumers cannot predict all the medical services (for example, tests, procedures, referrals, drugs, etc.) they will need prior to the point of care, making it difficult to evaluate whether a non-network plan would meet their health care needs before enrolling in a non-network plan. Commenters explained that this uncertainty is particularly problematic for patients with serious, chronic, or disabling conditions, whose care is ongoing, expensive, and reliant on continuity of care with specific providers; and, these patients are unlikely to compare services from different providers while managing their illness.

Commenters also highlighted that the existing healthcare system is already complex, with many consumers--particularly those with language barriers, chronic conditions, low-income individuals, and caregivers-- lacking health literacy and subsequently struggling to navigate covered benefits, formularies, diagnosis and procedure codes, claims processing and utilization management. They stated a non-network plan would add further confusion to an already burdensome system and risk consumers failing to understand the fundamental differences between network and non-network plans during plan selection.

Response: While we appreciate commenters raising concerns related to potential burdens consumers may face in navigating non-network plans, this proposal neither discontinues network plans on the FFE nor encourages QHP issuers to cease offering them. We acknowledge that non- network plans may not suit every consumer and that many consumers will continue to prefer network plans. However, some consumers may prefer the flexibility of not being limited to a specific provider network and may wish to be more engaged in searching for and managing their care costs. This proposal is intended to expand plan design choices available on the FFE. As evidenced by commenters currently enrolled in and employers offering non-network plans, this plan design can offer meaningful transparency, choice, and quality for consumers, and, for those reasons and other reasons explained in this section of this final rule, should therefore be available as an option on the FFE.

Moreover, we support ensuring that clear information about non- network plans--including their benefits, risks, and how to utilize these plans to meet health needs--is available to consumers prior to enrollment. We aim to clearly identify and differentiate non-network plans during plan selection to support informed consumer decision- making and ensure consumers understand the administrative tasks they must take on should they choose to enroll in a non-network plan. To address commenters' concerns regarding the effort required to navigate these plans, potential confusion over this novel plan design, and uncertainty about meeting unpredictable medical needs, we are finalizing, with modifications, multiple provisions to promote adequate consumer support. These provisions require non-network plans to make benefit amounts for services publicly available, provide consumer- friendly and publicly-available information on expected out-of-pocket costs, make an exceptions process available to enrollees who cannot find providers willing to accept the benefit amount as payment in full, and provide adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers in their area who will accept the plan's benefit amount as payment in full. We further expect that non-network plans should provide consumers with relevant information related to claims submission, understanding costs, comparing price information, documentation requirements, and all other administrative processes consumers may expect when using a non-network plan consistent with information requested under Sec. 156.236(b). As part of the QHP certification data submission process, non-network plan issuers will also be required to provide URLs that make benefit amounts publicly available, ensuring consumers have adequate information enabling them to understand the price of services and locate providers who will accept the plan's benefit amount as payment in full.

Comment: Most commenters opposing this proposal raised concerns that non-network plans could impose additional out-of-pocket costs and balance-billing risks on consumers. Without provider networks and predetermined levels of

cost-sharing for in-network providers, commenters reasoned that enrollees in non-network plans may face unforeseen out-of-pocket costs when a provider does not accept the plan's benefit amount as payment in full. One commenter stated that simply requiring non-network plans to provide information on potential balance billing scenarios and expected out-of-pocket costs does not protect against balance-billing. Another commenter added that consumers choosing plans on the FFE should not be expected to absorb such disclosures. Commenters were concerned these balance-billing risks would be high for those with complex medical needs, limited health literacy, those that rely on ECPs, and rural residents that may have a limited subset of providers accepting the benefit amount as payment in full.

Commenters further conveyed that unforeseen medical costs could be substantive for those receiving expensive specialty therapies, seeking emergency care, and those not accounting for additional charges of ancillary providers or services that may not accept the benefit amount as payment in full (for example, assistants, anesthesiologists, surgeons, pathologists, radiologists, diagnostic imaging, outside laboratories, laboratory tests, etc.). One commenter recommended that HHS require plans to ensure that the benefit amount as payment in full is accessed across all rendered services and providers involved in a covered episode of care, as long as the primary provider agreed to accept the benefit amount as payment in full.

Commenters also requested additional clarification on how non- network plans would satisfy applicable provisions of the No Surprises Act, and some posited that non-network plans may be incompatible with provisions of the No Surprises Act. However, one issuer that currently offers non-network plans stated that these plans are indeed subject to the No Surprises Act and comply with all applicable provisions, including provisions related to emergency and air ambulance services. The issuer stated that enrollees would not be subject to balance billing for these services and that providers would have access to independent dispute resolution processes.

Response: We recognize there are situations where an enrollee may seek services from a provider that does not accept the benefit amount as payment in full, and to which the enrollee may be responsible for charges exceeding the benefit amount. These circumstances, however, are common in the individual insurance market in network plans, including if consumers knowingly receive services from out-of-network providers while receiving some benefits from their plan, in circumstances where the No Surprises Act does not apply. Nevertheless, non-network plans have a responsibility to provide sufficient resources to ensure enrollees understand out-of-pocket costs prior to receiving care to limit charges exceeding the benefit amount. We are finalizing, as proposed, that a non-network plan does not provide access to a range of providers by simply providing some benefit amount for covered services rendered by any provider without providing the Exchange any other contextual information. If a non-network plan does not offer access to range of providers that accepts the non-network plan's benefit amount as payment in full consistent with Sec. 156.236(a), including due to insufficient benefit amounts that result in out-of-pocket costs exceeding the benefit amount, then the non-network plan would not meet all the necessary certification requirements.

In addition to this provision, we proposed multiple provisions under Sec. 156.236 to ensure non-network plans provide adequate support to consumers, including by making benefit amounts publicly available (Sec. 156.236(b)(5)), providing consumer-friendly and public information on expected out-of-pocket costs (Sec. 156.236(b)(7)), making an exceptions process available to enrollees who cannot find providers willing to accept the benefit amount as payment in full (Sec. 156.236(b)(8)), and providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers in their area who will accept the plan's benefit amount as payment in full (Sec. 156.236(b)(9)). For the reasons stated earlier in this section of this final rule, we believe these additional provisions will ensure issuers provide clear information and resources so that enrollees understand potential out-of-pocket costs prior to receiving care and would be aware of any charges exceeding the benefit amount.

Furthermore, non-network plans that are applying for QHP certification will be required to structure their plans so that they provide all the consumer protections that apply to individual and small group health coverage including, but not limited to, those specified in PHS Act, title XXVII, parts A through D, as all other plans applying for QHP certification are subject to providing. A non-network plan will not be exempt from providing such protections to its enrollees merely because it does not contract with providers, and failure to offer these protections would result in denial of certification in accordance with Sec. 155.1000(e) and decertification in accordance with Sec. 155.1080(c). Additionally, as we have previously stated, HHS, as the operator of the FFE, has broad discretion to determine whether a plan is in the interest of qualified individuals and qualified employers, regardless of whether the plan meets other minimum certification requirements consistent with Sec. 155.1000(c)(1). Thus, we believe our authority to deny certification of a non-network plan applying to be offered as a QHP on the FFE under the interest standard extends to determinations that a non-network plan's benefit structure fails to provide protections against surprise medical bills in a manner like a network plan.

Moreover, commenters requested additional clarification on how non- network plans would be required to comply with applicable provisions of the No Surprises Act. The Departments of Health and Human Services, Labor, and the Treasury have previously issued guidance stating that the surprise billing provisions of the No Surprises Act apply to plans and issuers that do not have a network of providers with respect to emergency services and air ambulance services.\339\ The Departments stated that the provisions that limit cost sharing for out-of-network emergency services apply if a plan or issuer provides or covers any benefits for emergency services and the services are provided by a nonparticipating provider or nonparticipating emergency facility. Similarly, the provisions that limit cost sharing for out-of-network air ambulance services apply if a plan or issuer provides or covers any benefits for air ambulance services and those services are provided by a nonparticipating provider of air ambulance services. The Departments explained that the definitions of nonparticipating provider or nonparticipating emergency facility (as provided in 45 CFR 149.30), and the protections afforded to participants, beneficiaries, or enrollees related to emergency services and air ambulance services, are not dependent on whether the group health plan or group or

individual health insurance coverage has a network of providers.

\339\ FAQs about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 55 (Aug. 19, 2022), Q1- 2, available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-55 and https://www.cms.gov/files/document/faqs-part-55.pdf.

However, provisions of the No Surprises Act that prohibit balance billing and limit cost sharing for non-emergency services apply only to services provided by a non-participating provider with respect to a visit to a participating health care facility. A participating health care facility is health care facility that has a contractual relationship with a plan or issuer, directly or indirectly, setting forth the terms and conditions upon which the relevant item or service is furnished to the participant, beneficiary, or enrollee under the plan or coverage.\340\ Therefore, the provisions that limit cost sharing and prohibit balance billing for non-emergency services provided by nonparticipating providers with respect to a visit to certain types of participating facilities would never be triggered if a plan or coverage does not have a network of participating facilities and thus no contractual relationship with such facilities.\341\ However, we note that all non-network plans must provide all the same consumer protections that apply to individual and small group health insurance, including those in PHS Act title XXVII parts A through D. These protections include the exceptions and appeals processes for non- covered services and benefit determinations.

\340\ Id; See also 26 CFR 54.9816-3T, 29 CFR 2590.716-3, and 45 CFR 149.30.

\341\ Id; See also 86 FR 36872, 36904 (July 13, 2021).

Nevertheless, we believe that the concerns raised by commenters require additional consideration. For example, the concerns stated by commenters pertaining to episodes of care that may trigger multiple benefit amounts that consumers could not reasonably anticipate prior to receiving care warrants additional consideration. This includes care by ancillary providers (for example, diagnostic services, laboratory services, radiology, pathology, anesthesiology, etc.). We believe that it is a common occurrence that when a consumer visits a provider for a health concern or complaint, ancillary services may be required in the recommended course of treatment. A consumer being able to recognize the need for ancillary services likely requires a level of advanced medical knowledge that is more appropriate for providers. The selection of ancillary providers and services are often determinations made during a clinical episode and driven by real-time clinical decision making and medical necessity (for example, a surgical patient utilizing anesthesia or pathology services during an operation). In this example, the patient may be unable to assess if the anesthesiologist and pathologist accepted the benefit amount as payment in full prior to or during the surgery. Therefore, it would not be reasonable for a patient to anticipate ancillary providers and services as these are often determined by the provider (for example, the surgeon) and not known in advance. For this reason, we are finalizing additional language at Sec. 156.236(b)(7) to promote additional consumer protection by ensuring non-network plans have a strategy for providing consumer- friendly information to enrollees on navigating episodes of care with multiple benefit amounts (including for ancillary providers and services). This information is important so that non-network plans can assist enrollees in avoiding balance billing and additional out-of- pocket costs beyond their control when receiving care that may trigger multiple benefit amounts that could not be reasonably anticipated. However, considering the novelty of these plan types, and the related complexity associated with potential out-of-pocket costs and balance billing scenarios, we will continue to consider if additional regulatory refinements around consumer protections are necessary and welcome recommendations.

Comment: Commenters raised additional concerns regarding the potential impact of non-network plans on providers, including rural and safety net providers (such as ECPs), hospitals, emergency departments, and independent physician practices. Commenters believed that providers may face pressure to accept benefit amounts from enrollees of non- network plans without the ability to negotiate directly with the plan, especially in markets where Exchange enrollment represents a large share of patient volume. Commenters stated that this may then lead to increased uncompensated care, financial assistance spending, and downstream public costs. Commenters also stated that rural hospitals and clinics already operate on thin margins, and independent physician practices lack the support of larger systems that can cross-subsidize losses, thus risking facility closures.

In addition, commenters stated that without direct insurer-provider exchanges within a non-network plan, providers would experience less predictability and fewer estimates on patient volume in advance. Some commenters also stated concerns that if patients, especially those in need of specialty care, cannot regularly locate providers willing to accept the plan's benefit amount as payment in full, then more care could shift to safety-net providers and emergency departments that are obligated to treat patients regardless of insurance status or ability to pay. Some commenters shared concerns that, over time, a non-network plan could impact trust between providers and consumers if such plans lead to disputes (including disputes in court) between patients and providers on billing, eligibility, payment sufficiency, and coverage; and that these disputes could be mitigated through provider and insurer contracting.

In contrast, an insurer currently offering a non-network plan stated that providers had positive experiences with the plan due to increased freedom to treat patients without restrictions caused by prior authorization, step-therapy protocols, and formulary restrictions, along with the prompt payment upon rendering services.

Response: Commenters raised important concerns; however, many of these issues, such as provider financial pressure due to plan payment amounts, uncertainty in patient volume, and billing disputes between providers and patients, are already well-documented systemic issues across plan types and are not specifically tied to non-network plans. For example, safety net providers and independent practices already face disproportionate financial strain, including higher levels of uncompensated care and risk for closure, influenced by broader payment structures across public and private payers and not necessarily by network design.\342\ And, disputes already exist between patients and providers influenced by poor good faith estimates, incorrect coding, and balance billing.

\342\ Enumah, S.J., & Chang, D.C. (2021). Predictors of Financial Distress Among Private U.S. Hospitals. The Journal of Surgical Research, 267, 251-259. https://doi.org/10.1016/j.jss.2021.05.025.

We acknowledge the concerns from providers that they may be influenced to accept the benefit amount as payment in full without an ability to directly negotiate with the non-network plan, and the impacts this may have on rural and safety net providers. However, it is our understanding that non-network plans perform comprehensive research prior to setting benefit amounts, as would any other network plan prior to negotiating payment rates. This includes directly gathering pricing information from providers, leveraging both Medicare and private payor rates, utilizing publicly available data, identifying regional factors to adjust for health care prices, and reviewing

existing medical codes. Thus, we believe non-network plans' benefit amounts would be developed in a way that takes the current market and health care prices accepted by providers into consideration, such that benefit amounts are developed so enrollees can reasonably access providers in their service area that accept the benefit amount as payment in full.

We cannot require that providers accept a network agreement from an issuer; likewise, we cannot require that providers accept a non-network plan's benefit amount as payment in full. If there is not a sufficient choice of providers, including specialty care, available in an enrollee's service area that agree to accept the benefit amount as payment in full, then a non-network plan could not reasonably satisfy the proposed regulatory requirements under Sec. 156.236, in which case we would not certify a non-network plan as a QHP to be offered through the FFE. Likewise, State Exchanges and SBE-FPs allowing non-network plans to be offered on their Exchanges may deny QHP certification to a non-network plan in this circumstance for not meeting requirements under Sec. 156.236(a) to ensure access to a range of providers that accept the non-network plan's benefit amount as payment in full consistent with Sec. 155.1050(a)(2). We also acknowledge concerns that providers would experience less predictability and fewer estimates on patient volume in advance without direct insurer-provider interactions in non-network plans but remind commenters that the existence of non- network plans in their area by no means precludes the existence of network plans. As most plans have traditionally operated with a provider network, and these plans are likely most familiar to consumers, we expect many consumers will continue to enroll in network plans, and providers may continue to contract with network plans as they see fit, which may provide more certainty regarding expected patient volume for providers for whom this is a concern. We also understand concerns providers may have in potential erosion of trust with consumers over potential billing disputes. If a provider understands a consumer is enrolled in a non-network plan, we recommend that the provider communicate expected costs clearly with consumers, as they would with self-pay or uninsured individuals.

Though we acknowledge provider concerns with our proposal, there are also potential benefits to providers related to non-network plans, including increased freedom to treat patients without restrictions caused by prior authorization, step-therapy protocols, and formulary restrictions, along with the prompt payment upon rendering services, as verified by the one commenter providing non-network plans and based on our research into non-network plans. We believe some of these benefits may also reduce billing disputes experienced between providers and issuers when services are not covered and impact treatment due to these restrictions.

Comment: Several commenters shared feedback on whether non-network plans would reduce health care costs, including administrative costs. Some commenters did not believe non-network plans would reduce overall health care costs, stating that providers may be incentivized to charge any payment amount for services without the safeguards of network contract agreements whereby providers and insurers agree in advance to negotiated, pre-determined rates that make care the least expensive for consumers seeing in-network providers. Commenters were uncertain that a non-network plan's benefit amounts would actually be sufficient, and that providers may not necessarily be obligated to accept the non- network plan's benefit amount and could change prices at any time, absent a contract with a plan. Other commenters shared that non-network plans would not meaningfully reduce health care costs but offload costs and responsibility to providers and patients, while allowing non- network plans to potentially evade accountability to secure access to care and control costs for consumers. Though, a different commenter did not believe a non-network plan would avoid administrative costs, since they would need to implement processes to verify a benefit amount as payment in full was accepted by providers and identify new solutions to monitor claims submitted by providers that they do not contract with. Commenters also stated concerned that non-network plans may drive patients into more expensive, less appropriate care settings that lead to avoidable spending and an inefficient use of taxpayer dollars that maximize the insurer's financial return via collected premiums and subsidies.

However, one consumer enrolled in a non-network plan shared that they switched to a non-network plan after previously experiencing an increase in premiums within a network plan, leading to a reduction in premium costs within the non-network plan. Another commenter thought both patients and providers would experience administrative cost savings resulting from no network limitations or prior authorization, leading to care that is not subject to administrative delays. In contrast, another commenter did not believe a non-network plan would produce enough administrative cost savings that would allow for enrollees to receive larger premium reductions.

Response: We understand that commenters may be concerned with the potential for providers to set higher payment amounts without the influence of a network plan's pre-negotiated payment rates. However, we cannot dictate rates providers must accept or set. For the reasons stated earlier in this final rule, we believe that the structure of non-network plans, in which consumers are “shopping” for health care and potentially negotiating costs directly with providers, has potential to create a more competitive environment for health care services and discourage providers from setting unreasonably high payment amounts. If a certain provider were to set higher payment amounts due to the existence of non-network plans in their service area, an enrollee may choose to see a different provider with lower payment amounts that would accept the benefit amount as payment in full. In addition, non-network plans would be required to make benefit amounts publicly available and accessible to enrollees who can utilize these benefit amounts to compare prices among available providers as they seek care from providers who will accept the plan's benefit amount as payment in full. And, if there were a significant number of providers in an enrollee's service area that do not accept the plan's benefit amount as payment in full (for example, because of setting higher payment amounts for non-network enrollees), the non-network plan would not be able to demonstrate access to a range of providers that accepts the non-network plan's benefit amount as payment in full, which is needed to satisfy requirements under Sec. 156.236. In such a case, the non-network plan would be denied QHP certification by HHS. Likewise, State Exchanges and SBE-FPs allowing non-network plans to be offered on their Exchanges may deny QHP certification to a non-network plan in this circumstance for not meeting requirements under Sec. 156.236(a) to ensure access to a range of providers that accept the non-network plan's benefit amount as payment in full consistent with Sec. 155.1050(a)(2).

While a non-network plan may reduce administrative costs associated with provider network management, we do not believe a non-network plan would evade responsibility to ensure access to care, as again, the non- network plan

must provide sufficient access to providers that accept the non-network plan's benefit amount as payment in full. These plans will be required to establish processes to set reasonable, data-driven benefit amounts and conduct outreach to providers to prove there is a sufficient number of providers that accept the plan's benefit amount as payment in full, as required under the proposed certification requirements. These plans will also be required to provide ample resources to assist enrollees in locating providers who will accept the plan's benefit amount as payment in full consistent with Sec. 156.236(b)(9), and an exceptions process for enrollees who cannot provide providers consistent with Sec. 156.236(b)(8). We also agree with the one commenter stating a non- network plan would not necessarily avoid all administrative costs. This is because non-network plans maintain claims processing technology to track care received by enrollees and reimburse enrollees and/or providers with benefit amounts for covered services, as supported by our preliminary research of existing non-network plans. Lastly, while it is true that non-network plans may save financial resources in not contracting with providers, providers may also benefit from administrative cost savings stemming from not needing to pursue contract negotiations with issuers of non-network plans or to provide documentation to justify the medical necessity of services rendered to enrollees in a non-network plan as part of prior authorization processes as verified by the one commenter currently providing non- network plans and based on our research into non-network plans. In addition, we believe that the reduced administrative costs associated with network contracting activities may be passed on to consumers in the form of reduced premiums, as evidenced by comments shared by current consumers in non-network plans and issuers of non-network plans.

Lastly, while we appreciate commenters expressing concerns that a non-network plan may drive patients to more expensive care settings, we do not believe there is substantive evidence of this claim at this time. Again, we reiterate that we believe the structure of non-network plans, in which consumers are “shopping” for health care and potentially negotiating costs directly with providers, will encourage thoughtful use of health care services by consumers and potentially create a more competitive environment for healthcare services. However, we will monitor consumer complaints from individuals enrolled in these plans to ensure enrollees have access to a range of providers as required under Sec. 156.236(a) and, if appropriate, decertify the plan under Sec. 155.1080(c) or deny certification to the plan under Sec. 155.1000(c)(1).

Comment: Many commenters conveyed the need to have guaranteed access to providers with certainty. Commenters believed that provider networks with contracted providers offer stable, predictable health coverage at reduced rates for enrollees. Commenters reasoned those guaranteed contracts with providers provide extra financial protection and limit risk at the point of care from potential balance billing. One commenter also stated that without a quantifiable network of providers, access to providers within non-network plans may be difficult to enforce, and consumers need certainty before enrolling in a QHP that a given provider will treat them at the plan's benefit amount. The commenter stated that this certainty is critical, so patients do not enroll in a plan with opaque pricing, ad-hoc provider acceptance, and billing disputes after services are already rendered. Overall, commenters were concerned that allowing certification of non-network plans may take away the incentive for current issuers to sign long- term, stable contracts that may affect overall market stability.

Response: We agree with commenters that network plans provide both stability and value to enrollees through providers contracted with the network plan that agree to furnish health care services to enrollees at negotiated rates. For this reason, we do not intend to sway consumers towards non-network plans if consumers are satisfied with the benefits a network plan provides. As we have previously stated, we understand that the non-network plan design may not suit every consumer enrolling in a QHP offered through the FFE. Instead, our intention is to offer more choices to consumers in the plan design options available on the FFE, especially since each consumer may have different needs and expectations for their plans. However, we do not believe that network plans necessarily provide guaranteed access to providers for covered services with certainty, as it is common for in-network providers to transition out-of-network without a consumer's awareness or consumers may struggle to find in-network providers within a reasonable time, especially due to provider availability.

For the reasons explained earlier in this section of this final rule, we believe that non-network plans do provide a certain level of guarantee that enrollees can choose a provider of their choice and receive publicized benefit amounts for covered services. So long as non-network plans set benefit amounts in such a way that consumers have access to a sufficient choice of providers within their service area that accept the benefit amount as payment in full, then consumers should be able to locate necessary care while limiting out-of-pocket costs. Non-network plans are also required to make information available regarding exceptions processes for consumers who cannot find providers willing to accept the benefit amount as payment in full, under Sec. 156.236(b)(8) and provide adequate customer service supporting consumers in finding providers who will accept the plan's benefit amount as payment in full under Sec. 156.236(b)(9). We acknowledge commenters' concerns regarding worries that issuers may be disincentivized from signing long-term, stable contracts that may affect overall market stability. However, we do not believe that non- network plans will wholly replace network plans. Many consumers are familiar with, and will prefer to remain in network plans, and issuers will likely continue to offer network plans with contracted providers. Network plans do offer valuable benefits to consumers and should continue to be available through the FFE. However, we will continue to monitor the market for any potential effects on stability. Under Sec. 155.1000(c)(2), like network plans, non-network plans, could be denied QHP certification if it is determined that making available such health plans through such Exchange is not in the interests of qualified individuals and qualified employers in the State. This also applies if non-network plans affect the integrity of plans offered through the FFE, including the availability of network plans.

Comment: Commenters shared both support and concern for HHS' proposed general requirement under Sec. 156.236(a) that a non-network plan must ensure access to a range 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. A few commenters raised concerns that this approach is not enforceable, and that HHS would not be able to verify adequate access until consumers are already enrolled. Commenters believe that this “theoretical access” framework relies on issuers' representations of sufficient access, rather than objective metrics and

verifiable commitments based on provider contracts. Several commenters encouraged HHS to consider including other metrics to measure access to providers under a non-network plan, such as a combination of provider acceptance data, historical claims, binding participation agreements with providers, and other objective indicators showing that enrollees can obtain services within reasonable timeframes and geographic distances. One commenter reasoned that collecting real provider participation data would better measure access to providers rather than HHS requiring non-network plans to demonstrate access to providers through an attestation process. Another commenter requested HHS clarify how the agency will monitor access on an ongoing basis. Overall, commenters believed these alternative measurement approaches would improve the proposed regulatory requirement under Sec. 156.236(a) and strengthen consumer protections to maintain reliable access to providers.

In contrast, an issuer currently offering a non-network plan supported the requirement that non-network plans utilize benefit amounts to indicate enrollees have access to a sufficient range of providers who will accept the benefit amount as payment in full. The commenter added that benefit amounts are currently utilized by non- network plans and that benefit amounts are informed by real-world pricing data, including cash prices, commercial rates, and Medicare fee schedules, to ensure enrollees can access care that is fully covered by the plan.

A few commenters shared that requiring a non-network plan to ensure access to a range of providers, such as providers that specialize in mental health and substance use disorder services, that accept the non- network plan's benefit amount as payment in full would help expand access to behavioral health. Commenters noted that many mental health and substance use disorder providers choose not to contract with insurers, often due to inadequate reimbursement rates or only accept a small number of patients at a lower rate paid by the insurer while reserving the remainder of their appointments for those who pay a much higher cash rate. Another commenter stated that health plans often do not display payment rates for behavioral health providers, thus enrollees may lack information to make an informed choice on which plan may best suit their behavioral health needs.

Response: We appreciate these comments, including the alternative approaches shared by commenters to improve ways to measure access to care within non-network plans. We continue to believe that measuring access within non-network plans based on providers that accept the plan's benefit amount as payment in full is an acceptable and reasonable data point, supported by the other factors in place for assessing non-network plans and not a purely theoretical framework that cannot verify adequate access until consumers are already enrolled. Under our proposal, to be certified as a QHP on the FFEs, non-network plans must provide information about its assessed percentage of providers that accept the non-network plan's benefit amount as payment in full and whether it meets a minimum percentage of available ECPs that accept the plan's benefit amount as payment in full. It also must detail its methodology for determining benefit amounts and for providing adequate customer service, among other information about the plan's structure that we believe promotes sufficient access to care. It is our understanding, as shared by an issuer offering a non-network plan in the public comments received, that non-network plans have set benefit amounts for covered services informed by various data sources (for example, direct provider engagement, Medicare and private payor rates, regional factors, etc.), and consumers utilize the benefit amount as a reference point for how much they should expect to pay for the receipt of services under the plan.

Regarding concerns about insurers reporting lower payment reimbursement rates compared to actual charges received by consumers for their care, it is our understanding that non-network plans must have a process in place to assess whether a benefit amount was accepted by a particular provider when their enrollee seeks care, and that non- network plans build a repository over time of such providers accepting the benefit amount based on an enrollee's claims, which can inform non- network plans decisions to adjust or increase benefit amounts. To help reinforce this process, we proposed under Sec. 156.236(b)(4) that non- network plans must report their strategy for conducting continuous outreach to available providers in a particular area to determine whether they would accept the plan's benefit amount as payment in full. Thus, we believe that non-network plans should be able to quantify the set of available providers in an applicable service area that accept the plan's benefit amount as payment in full. And by collecting this quantitative data as part of data submission requirements during QHP certification, we can measure access within a non-network plan's “network” consisting of the providers in the applicable area that would accept the plan's benefit amount as payment in full, even without formal contractual relationships.

We further clarify that we will not be requiring issuers to merely attest that their non-network plan has sufficient access to providers that accept the plan's benefit amount as payment in full. We will be collecting quantitative data from issuers that provide additional information regarding sufficient access to providers with non-network plans, including a numerical assessed percentage of providers that accept the plan's benefit amount as payment in full, and specific ECPs that have accepted the plan's benefit amount as payment in full. We also believe that the other information that non-network plans are required to submit work in concert to ensure sufficient access to providers that access the non-network plan's benefit amount as payment in full, including the strategy for making benefit amounts publicly available, methodology for determining benefit amounts, strategy for providing consumer-friendly and public information regarding costs, availability of exceptions processes, and strategy for providing adequate customer service to assist enrollees and potential enrollees in finding providers in their area who will accept the plan's benefit amount as payment in full. Together, we believe these factors constitute a framework that will ensure sufficient access to providers as they provide additional qualitative information on how the non- network plan has structured the plan, determines benefit amounts, and ensures consumers have sufficient access to care.

However, commenters raised valid recommendations on other data metrics to consider to measure provider access under a non-network plan, including a combination of provider acceptance data, binding provider acceptance agreements, historical claims data, and other objective indicators showing that enrollees can obtain services within reasonable timeframes and geographic distances. It is unclear to us how a provider acceptance agreement (a written agreement between the provider and non-network plans that the provider will accept a benefit amount as payment in full) may differ from traditional network contract agreements under a network plan. An explicit requirement to have provider acceptance agreements in place may also run counter to the premise underlying a non-network plan that distinguishes itself by not having formal agreements with providers. Part

of the benefit of non-network plans, as verified by the one commenter currently providing non-network plans and based on our research into non-network plans, includes increased freedom on the part of providers to treat patients without restrictions caused by prior authorization, step-therapy protocols, and formulary restrictions, along with the prompt payment upon rendering services. In the proposed rule, we sought comment on the PY 2027 effective date on this proposal and whether PY 2028 would be more appropriate (91 FR 6413). We believe that delaying implementation of this policy until PY 2028 would be appropriate to allow HHS further time to consider if these alternative metrics and proposed modifications would improve access to providers within a non- network plan, as needed, in future rulemaking.

In response to the commenter requesting clarification on how we will monitor access on an ongoing basis, we will monitor potential issues raised by consumers on the FFEs and escalate any identified access concerns by performing direct outreach to QHP issuers with non- network plans, as appropriate. We will also consider additional outreach initiatives, including conducting consumer focus groups with enrollees of non-network plans. If we were to identify that a non- network plan cannot meet all certification requirements under Sec. 156.236, we would consider decertification of such plan. Likewise, if a State Exchange or SBE-FP that allows non-network plans on their Exchange finds that a non-network plan no longer meets standards under Sec. 156.236(a) and State requirements for non-network plans to provide access to providers, as applicable, then the State Exchange or SBE-FP may choose to decertify the non-network plan.

Lastly, we appreciate commenters' support that non-network plans may provide meaningful coverage for behavioral health providers that often do not contract with network plans.

Comment: Many commenters shared concerns as well as recommendations regarding HHS' proposed general requirement under Sec. 156.236(b)(1) that a non-network plan must submit information on an assessed percentage of providers in each plan's service area that accepts the plan's benefit amount as payment in full. Commenters questioned if HHS would require non-network plans to report the actual percentage of providers that agree to accept the benefit amount as payment in full and why HHS did not establish a specific minimum percentage.

Moreover, commenters stated concerns regarding whether a reported assessed percentage of providers in each plan's service area that accepts the plan's benefit amount as payment in full would allow the non-network plan to adequately determine how many providers would be sufficient to ensure services will be accessible without unreasonable delay. Commenters encouraged HHS to define how this assessment must be conducted, and to establish additional guidance regarding acceptable verification methodologies, required documentation, reassessment frequency, cadence for re-reporting the assessed percentage during the plan year, and required updates when provider acceptance declines. Another commenter recommended that HHS require non-network plans to conduct regular, independent, and transparent audits of how many providers accept the benefit amounts as payment in full, including behavioral health providers and to make the results of such audits publicly available prior to being certified as a QHP each year. This same commenter recommended the establishment of behavioral health provider availability thresholds for non-network plans to ensure sufficient access to behavioral health providers. Lastly, commenters opposing this proposal stated concern that an assessed percentage of providers in each plan's service area that accepts the plan's benefit amount as payment in full would function only as a point-in-time estimate that is subject to change, as there is no obligation that a provider would continuously accept the plan's benefit amount.

Response: We appreciate these comments. We will require non-network plans to report an assessed percentage of providers that agree to accept the benefit amount as payment in full as part of data submission during the QHP certification cycle. We did not propose a specific minimum assessed percentage of providers that must accept the plan's benefit amount as payment in full as we intend to learn more about this novel plan type during QHP certification. We believe non-network plans may rely on various strategies to determine benefit amounts and different ways to analyze whether providers in a particular area will accept a benefit amount as payment in full and we first seek to understand in greater detail and intend to analyze these strategies after collecting this information from non-network plans during QHP certification. Thus, we plan to first collect the quantitative assessed percentage consistent with Sec. 156.236(b)(1), as well as additional supporting information, including strategies to determine benefit amounts and the providers that will accept them consistent with Sec. 156.236(b)(4) and Sec. 156.236(b)(6), to supplement data analyses we will conduct prior to considering any data-driven selection of a specific minimum assessed percentage that we may address through future rulemaking. We do not believe it is appropriate to set a specific minimum percentage at this time until we are certain such a percentage would be effective and reasonable to promote access to a sufficient choice of providers that accept the benefit amount as payment in full. In addition, we do not agree with commenters that a non-network plan reporting an assessed percentage of providers accepting the plan's benefit amount as payment in full would mean that the issuer wholly decides what constitutes sufficient access, as the issuer must report this measure in good faith after a thorough analysis of providers available in their service area along with other data as part of its QHP application, so that we (and not the issuer) can make the determination if a non-network plan provides access to a sufficient choice of providers. In addition, the non-network plan's assessed percentage of providers that accept the plan's benefit amount as payment in full is not the only data point that we will utilize to determine whether a plan provides access to a sufficient choice of providers. Proposed language at Sec. 156.236(b) indicates that that the determination as to whether 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 would be based on all the required information submitted to us consistent with that requested under Sec. 156.236(b)(1) through (b)(9).

In addition, we acknowledge commenters' concerns that an assessed percentage of providers that accept the plan's benefit amount as payment in full could potentially represent only a point-in-time estimate that could change if a provider no longer accepts the plan's benefit amount as payment in full. Though, we believe that this issue is common in the existing health care market and is not only unique to a non-network plan, as issuers with network plans and providers may decide to terminate a contract during the plan year or a provider may change payment rates to adapt to shifts in health care prices outside of our purview. Nevertheless, this is one reason that we require plans to re-submit data each year as part of a new certification cycle,

so we can identify changes in an issuer's data, including changes in a non-network plan's assessed percentage of providers that could result if a provider no longer accepts the non-network plan's benefit amount as payment in full. In the meantime, non-network plans would be required under revised Sec. 156.236(b)(5) to regularly publicly update changes in benefit amounts, including if providers no longer accept benefit amounts so enrollees are aware and can make informed health care decisions.

Moreover, we appreciate commenters' request for additional information on how to perform a reasonable assessment of the assessed percentage of providers that accept the plan's benefit amount as payment in full, such as acceptable methodologies, reassessment frequencies, and documentation requirements. Similar to the reasons that we seek to learn more about the methodologies non-network plans utilize to determine an assessed percentage of providers prior to potentially establishing a minimum assessed percentage, we likewise believe it is premature to disseminate additional guidance on acceptable assessment methodologies until we gather more information on effective methodologies. We also believe that collecting more information on a non-network plan's assessed percentage of providers is important prior to considering establishing minimum thresholds for behavioral health providers or other specialty types. Collecting more information first would allow us to establish more evidence-based minimum thresholds that effectively promote access to providers, including in geographic areas that lack access to various specialty types. We also believe establishing separate thresholds for specific specialty types that must accept the non-network plan's benefit amount as payment in full would benefit from notice and comment rulemaking, just as we have historically done for proposing new provider-specific requirements and expanding provider types for network adequacy (under Sec. 156.230) and ECP (under Sec. 156.235). This would allow the public an opportunity to provide feedback on specific threshold percentages proposed by HHS and to assess if appropriate specialty type categories are adequately represented in a way that would promote access. However, for the reasons stated earlier in this section of this final rule, we believe the other information requested under Sec. 156.236(b)(1) through (b)(9) works together to ensure a sufficient choice of providers in non-network plans, despite no specified minimum percentage being designated at this time.

As we learn more information prior to PY 2028, including after interested party engagement activities, we will consider commenters' suggestions to issue any additional guidance that may be necessary to provide to issuers offering non-network plans prior to implementation in PY 2028. While we do not intend to prescribe specific methods a non- network plan may use, we encourage non-network plans to consider a variety of methods, including, but not limited to, provider outreach, historical claims data, public data sources on available providers within the plan's service area, and other payor data.

We also acknowledge commenters' suggestion to require non-network plans to conduct regular, independent audits of how many providers accept the plan's benefit amounts as payment in full. However, we do not intend to require non-network plans to conduct audits and make this information publicly available at this time. We do not currently publicly report similar issuer certification review results as part of network adequacy and ECP reviews. If we determine that additional information is necessary to verify how many providers accept a non- network plan's benefit amount as payment in full beyond the information the issuer and HHS collect, then we may consider proposing this additional requirement through future rulemaking.

Comment: A few commenters supported HHS' proposed requirements for non-network plans related to ECPs under Sec. 156.236(b)(1) through 156.236(b)(3). These commenters agreed that non-network plans should be able to demonstrate that they provide access to a sufficient number and geographic distribution of ECPs, including Indian health care providers. One commenter requested HHS to clarify how HHS plans to measure and enforce these requirements and ensure that ECPs accept the non-network plan's benefit amount as payment in full.

Response: We appreciate commenters' support for these ECP requirements that non-network plans must meet as part of obtaining QHP certification. To measure and enforce these requirements under Sec. 156.236(b)(1) through 156.236(b)(3), we will require non-network plans to submit ECP data within MPMS during the annual QHP certification cycle to designate specific ECPs within their service area that have accepted the benefit amount as payment in full. Non-network plans will be required to select from a list of ECPs in the MPMS, that include qualifying ECPs that we approved for inclusion on the Final Plan Year ECP List.\343\ For each ECP selected by the issuer, non-network plans will be required to append a facility status (for example, accepted benefit amount as payment in full, rejected offer for benefit amount as payment in full, or did not offer a benefit amount as payment in full) to enable us to determine the issuer's satisfaction of each of the ECP requirements during certification reviews. Based on the facility statuses selected, we will be able to calculate whether the issuer meets minimum percentage requirements under Sec. 156.236(b)(1), category per county requirements under Sec. 156.236(b)(2), and Indian health care requirements under Sec. 156.236(b)(3). For additional operational information, we refer commenters to the forthcoming 2027 Final Letter to Issuers and earlier discussion in this section of this final rule.

\343\ We have developed and regularly maintained an ECP List since 2015, which provides a large national snapshot of the universe of qualified ECPs across all States and by various category types. The ECP List helps us identify the exact geographic location and distribution of ECPs to highlight specific ECPs that may be available within an issuer's service area and available for contracting with the issuer to satisfy ECP requirements.

Comment: Multiple commenters shared concerns as well as recommendations regarding HHS' proposed requirement under Sec. 156.236(b)(4) that would require non-network plans to submit information on their strategy for conducting continuous outreach to available providers in a particular area to determine whether they would accept the plans' benefit amount as payment in full. Some commenters did not believe requiring non-network plans to report an outreach strategy would be sufficient, since there is still the potential that enrollees may be subject to additional out-of-pocket costs for charges exceeding the benefit amount even if a non-network plan conducts outreach to providers to inform benefit amounts. Commenters requested additional clarification on what constitutes adequate outreach, how frequently adequate outreach must occur, required documentation during outreach, and how HHS would evaluate the sufficiency of these outreach efforts. Another commenter questioned how outreach would work in practice, as it is possible providers may lack the incentive to provide price information to non-network plans that they do not contract with as they are often busy, under no formal contract with the issuer, and may not see the benefit in doing so.

Response: We appreciate commenters raising these concerns. We intend to collect qualitative data from issuers with non-network plans as part of data submission requirements during the annual QHP certification cycle, in which non-network plans would need to sufficiently describe these continuous outreach efforts. We disagree with commenters that did not believe requiring non-network plans to report information on their strategies for outreach would be sufficient since there is still the potential that enrollees may be subject to additional out-of-pocket costs. For reasons discussed earlier in this section, we believe that all the factors under Sec. 156.236(b)(1) through (b)(9) collectively assist us in obtaining information to comprehensively assess whether a non-network plan pursues actions to limit out-of-pocket costs and ensure that there are sufficient choice of providers that accept the non-network plan's benefit amount as payment in full. Also, as discussed earlier in this section, relevant No Surprises Act provisions apply to non-network plans to limit costs associated with surprise billing for certain services. We also do not agree with commenters' assertion that collecting information on outreach efforts would not be sufficient. It is critical to understand a non-network plan's outreach efforts since these efforts would help us assess whether a non-network plan receives real-world data directly from communicating with providers to understand how many providers in the area will accept their benefit amount as payment in full. This effort is important to help the non-network plan set benefit amounts that providers would accept in practice to ensure that there is sufficient access to providers that accept the non-network plan's benefit amount as payment in full, so that consumers can avoid additional out-of-pocket costs. We are aware of at least one non- network issuer who is already performing provider outreach to inform the selection of benefit amounts. Requiring non-network plans to submit this information is crucial to understand if non-network plans provide sufficient choice of providers, as it will assist us in understanding how that information is provided and to ensure the benefit amount as payment in full remains relevant.

We believe that adequate outreach may consist of, but is not necessarily limited to, direct outreach to providers within the issuer's service area by utilizing multiple communication channels (for example, email, phone, in-person), collecting pricing information on a variety of different services from a meaningful sample of different provider types across various geographical areas, maintaining detailed documentation on the outcomes of such outreach (including verbal acceptance from providers that they accept benefit amounts as payment in full), and conducting this outreach at least annually to ensure that benefit amounts are routinely updated and current. Through engagement with issuers, these are common strategies that issuers with network plans conduct to ensure access to providers, thus we believe these strategies would also be appropriate to non-network plans. As an example, we will not consider it sufficient if the issuer were to only contact a single provider that accepts a benefit amount as payment in full and base any subsequent rates based on that single provider. Overall, we believe that conducting outreach is an essential tool along with other data sources (for example, claims, private payor rates, etc.) to assess acceptance of a non-network plan's benefit amount by providers.

Lastly, while it could be true in some cases that providers may not provide price information to non-network plans that they do not contract with, as they often are handling significant patient volumes and administrative processes, under no formal contract with the issuer, and may not see the benefit in doing so, we do believe that some providers may be incentivized to provide this information to attract new consumers. This may especially occur if non-network plans appropriately communicate the potential benefits of these plans to providers, including those mentioned by some providers currently accepting non-network plans, such as no need for prior authorization, step therapy protocols, and prompt payment upon services provided that often serve as barriers to providers furnishing care. We also believe that in practice, providers may already be required to disclose some price information since consumers have a right to request advance cost estimates for their services due to existing Federal price transparency requirements under the No Surprises Act and due to patients seeking to pay cash for services.

Comment: Commenters stated both support and concern and shared recommendations regarding HHS' proposed requirement under Sec. 156.236(b)(5) that non-network plans must report their strategy for making benefit amounts publicly available in an easily accessible and understandable format. Commenters supported transparent benefit amount information, stating that issuers offering non-network plans should maintain verified, current data on which providers accept the plan's benefit amount as payment in full. A few commenters suggested that HHS standardize the manner in which non-network plans display their benefit amounts, such as by requiring non-network plans to use recognizing billing codes (for example, CPT, HCPCS, or DRG codes). These commenters further recommended that the benefit amounts be made available through machine-readable formats, which would both allow researchers and consumers to more easily compare prices, and assist HHS in understanding how these benefit amounts compare to other negotiated rates. Lastly, one commenter stated that benefit amount information should be updated regularly to reflect current prices for services. An issuer currently offering a non-network plan shared that benefit amounts are reviewed and updated by the non-network plan at least quarterly to account for inflation, market changes, and enrollees access patterns and made available to enrollees.

Response: We appreciate the feedback shared by commenters, especially from commenters confirming the importance of ensuring that benefit amounts are publicly available and accessible to consumers. We believe that issuers offering non-network plans must ensure that benefit amounts remain current, as this is essential to ensure that consumers can rely on the accuracy of price information prior to seeking care from providers, so consumers have certainty that they can access a provider that will accept the benefit amount as payment in full. For this reason, and with additional context received that non- network plans do regularly update their benefit amounts, we are finalizing additional language at Sec. 156.236(b)(5) to reflect that a non-network plan must report their strategy for making benefit amounts publicly available in an easily accessible and understandable format and for regularly updating any changes to benefit amounts.

Lastly, we appreciate commenters' suggestions on ways to improve the standardization of benefit amounts. However, consistent with our interpretation of our statutory authority under section 1311(c)(1)(B) and (c)(1)(C) of the Affordable Care Act, we do not believe it would be appropriate to dictate specific billing codes a non-network plan must utilize, even for the purposes of standardization. Given their expertise in this area, we also believe specific billing codes plans should use are more appropriately determined jointly by issuers and providers. Lastly,

we acknowledge requests to make benefit amounts available in a machine- readable format, however we believe it would be premature to standardize the format and structure for machine readable reporting at this time. We will consider these requests for future plan years.

Comment: Commenters shared concern as well as recommendations regarding HHS' proposed requirement under Sec. 156.236(b)(7) that a non-network plan must report their strategy for providing consumer- friendly and public information about potential balance billing scenarios and expected out-of-pocket costs, including historical data on actual out-of-pocket costs incurred by its enrollees while accessing providers (including ECPs) in the area. Commenters advocated for balance billing protections, such as through the implementation of clear, consumer disclosures with plain language. Specifically, commenters suggested that HHS utilize clear, standardized disclosure so enrollees understand how a non-network plan works, including how benefit amounts are determined, the percentage of providers in a service area that accept the plan's benefit amount, how to find providers that would accept the benefit amount as payment in full, potential out-of-pocket costs, and how to access consumer assistance resources. Commenters believed that disclosures specifying this type of information are necessary to prevent consumer confusion, limit the risk that consumers enroll in plans without fully considering risks versus benefits of the plan, and further protect against balance billing risks. Some commenters requested clarity regarding how HHS intends to display or “label” non-network plans.

Moreover, one commenter stated that requiring a non-network plan to report the strategy for providing consumer-friendly information about balance-billing scenarios is not a substitute for protecting against these balance-billing scenarios. Many commenters raised concerns that many medical interactions pose significant balance-billing risks, including in ways that may violate provisions of the NSA, due to consumer uncertainty regarding what medical services a patient will actually need since most consumers lack detailed medical knowledge. Thus, commenters shared that consumers need more information beyond potential out-of-pocket costs.

Response: We appreciate commenters raising these important points related to balance-billing and the implementation of clear disclosures for consumers. We agree that clear disclosures are essential to communicate important information on non-network plans. This is why we proposed under Sec. 156.236(b)(7) to require non-network plans to provide information on their strategy for providing consumer-friendly and public information about potential balance billing scenarios and expected out-of-pocket costs, including historical data on actual out- of-pocket costs incurred by enrollees while accessing providers in the area. We will utilize this information to determine whether a non- network plan adequately provides clear discourses to consumers on balance billing risks and out-of-pocket costs. Particularly due to the novelty of this innovative network design, we agree that consumers should have accessible information about the structure of these plans, the use of benefit amounts and how to apply these benefit amounts, potential balance-billing risks, and other consumer assistance resources. As we have previously stated in this section of this final rule, we understand that a non-network plan may not necessarily fit every consumer. These plans may be more suitable for consumers who wish to take an active role in searching for and negotiating prices with providers, and less suitable for those who do not wish to “shop around” and navigate additional administrative processes associated with their care, but rather prefer to enroll in a plan with contracted providers who have set, negotiated rates. Thus, it is important for issuers to communicate vital information about non-network plans to consumers so consumers understand their structure and how to utilize the plan, so consumers can make well-informed decisions prior to enrollment and confidently select a plan that best suits their needs. For that reason, we will ensure non-network plans are clearly differentiated from network plans during plan selection on HealthCare.gov and ensure clear information about these plans is accessible to consumers, including information regarding the lack of a traditional network, links to the public benefit amounts on the issuer's website, potential balance billing risks, and the availability of other consumer resources.

Furthermore, and as stated in the discussions above, we understand that commenters have concerns about the ability of enrollees to predict all the required health services they will need during an episode of care, prior to receiving services. Many medical interactions result in the need for additional ancillary services that a consumer may not be able to reasonably predict, including diagnostic and laboratory tests, imaging tests, and recommendations for necessary services from ancillary providers such as pathologists, anesthesiologists, and radiologists. As we previously stated in discussions above, consumers should not be expected to understand and anticipate all the ancillary providers and services their provider may recommend during their episode of care, as this anticipation likely requires a level of advanced medical knowledge that is more appropriate for providers. And, the selection of ancillary providers and services are often determinations made during a clinical episode by providers (not patients) and are driven by real-time clinical decision making and medical necessity. When we proposed this factor in the proposed rule, we stated that this factor is important to ensure non-network plans have in place a cohesive strategy for providing consumer-friendly information about how the plan may be most effectively used to limit out-of-pocket costs and the impact of seeking care from providers who charge more than the plan's benefit amount, since this plan design may not be immediately intuitive to enrollees (91 FR 6411). An enrollee receiving additional ancillary services and care from ancillary providers would likely impose additional out-of-pocket costs, especially if the enrollee initially proceeded with care due to a benefit amount wholly accepted by the primary provider. But, the enrollee did not foresee the care furnished by ancillary providers and ancillary services costing more than the plan's benefit amount when selecting the primary provider, which would constitute additional out- of-pocket costs. Thus, we are finalizing additional language in Sec. 156.236(b)(7) to ensure non-network plans have a strategy for providing consumer-friendly information to enrollees on navigating episodes of care with multiple benefit amounts (including for ancillary providers and services). We believe modifying this factor to reflect consumer- friendly information on costs associated with ancillary providers and services would be consistent with our expectation when initially proposing this factor that plans should provide information about how the plan may be most effectively used to limit out-of-pocket costs and the impact of seeking care from providers who charge more than the plan's benefit amount. This type of information would be required to be disseminated to consumers along with other information on potential out-of-pocket costs and balance-billing

scenarios, to support expected needs of most consumers using these plans and in order for non-network plans to meet the requirements under Sec. 156.236(b)(7).

Comment: Commenters shared both support and concern as well as recommendations regarding HHS' proposed requirement under Sec. 156.236(b)(8) that a non-network plan must describe the availability of an exceptions process under the non-network plan for enrollees who cannot find providers (including ECPs) willing to accept the benefit amount as payment in full. Specifically, commenters believed that the proposed regulatory language should be more detailed in how it defines standards for an acceptable exceptions process to meet Sec. 156.236(b)(8) and that the existence of an exceptions process does not prevent out-of-pocket costs. A few commenters stated that the language only addresses “unavoidable” out-of-pocket costs, which does not provide ample consumer protections. One commenter requested that HHS establish minimum standards for exceptions processes, timelines for resolving gaps in access to care, payment adjustments if the provider does not accept a benefit amount as payment in full, and “consumer rights if access failures occur.” Another commenter stated that network plans are subject to important consumer protections such as appeal and exception rights, which allow enrollees to appeal for coverage of services provided by out-of-network providers when no in- network providers are available; thus, the commenter requested clarification on whether non-network plans would be required to have similar protections.

An issuer currently offering a non-network plan described that the plan's exceptions process ensures that enrollees have access to care at or below the plan's benefit amount, or the non-network plan would increase the benefit amount to fill gaps in access to care. The commenter stated that diligent adjustments of the benefit amount help promote consumer protections.

Response: We appreciate commenter's feedback. We do not agree with commenters that stated the language currently under Sec. 156.236(b)(8) only addressed “unavoidable” out-of-pocket costs, since this language is not explicitly in the proposed regulation text. Rather, the proposed regulation text requires non-network plans to disclose information regarding an exceptions process for enrollees who cannot find providers willing to accept the benefit amount as payment in full. For the reasons we explain earlier in this section of this final rule, we expect the non-network plan to provide broad information on their exceptions processes such that we can determine if it adequately protects consumers in the event the consumer is unable to find care at or below the plan's benefit amount.

As we previously stated (91 FR 6411), it is important that the non- network plan remains flexible for enrollees who have little choice in providers and cannot locate providers willing to accept the benefit amount as payment in full. If a non-network plan cannot protect consumers against out-of-pocket costs in situations where many providers refuse to accept the plan's benefit amount as payment in full, an effective exceptions process should be able to shift the burden of paying any unavoidable, additional out-of-pocket costs from the enrollee to the non-network plan. We expect that the non-network plan's exceptions process can appropriately assist consumer's in limiting out-of-pocket costs if assisting the consumer in locating additional providers that accept the plan's benefit amount, increasing the benefit amount so that providers in the consumer's service area accept the benefit amount as payment in full, or by some other means. As these plans become available through the FFEs, we will consider whether additional requirements may be needed as part of an exceptions process including if complaints from non-network plan enrollees are identified through regular HHS monitoring that can be mitigated by proposing more requirements on a non-network plan's exceptions process. We may also assess exceptions processes that may potentially be adopted by State Exchanges and SBE-FPs offering non-network plans through their Exchanges to consider the application of these processes on the Federal level.

Overall, we appreciate commenters' suggestions to mandate more prescriptive standards surrounding the exceptions process. We believe that well-established exceptions processes that already exist for enrollees in network plans to receive coverage for an out-of-network provider when an in-network provider is not available, should also be extended to enrollees in non-network plans when enrollees cannot locate a provider that will accept the benefit amount as payment in full. For example, just as issuers with network plans must provide access to covered services when in-network providers are unavailable, non-network plans must maintain an exceptions process to ensure that enrollees are able to obtain covered services at or below the plan's benefit amount when there is not sufficient access to providers accepting the plan's benefit amount as payment in full.

Lastly, in response to commenters that advocated for more guidelines on the exceptions and appeals processes to promote more consumer protections, we affirm that non-network plans must provide all the same consumer protections that apply to individual and small group health insurance coverage, including, but not limited to, those specified in PHS Act title XXVII parts A through D, as all other plans applying for QHP certification are subject to providing. These consumer protections that non-network plans must provide include both an exceptions processes for non-covered services by providers, and formal appeal processes to allow enrollees to appeal coverage and benefit determinations. Lastly, we note that the requirement under Sec. 156.236(b)(8) under which non-network plans must submit information to HHS regarding whether the plan has an exceptions process for enrollees who cannot find providers willing to accept the benefit amount as payment in full, does not exempt non-network plans from also ensuring their enrollees have access to formal appeals processes consistent with consumer protections specified in PHS Act title XXVII parts A through D.

Comment: Commenters stated both support and concern as well as shared recommendations regarding proposed Sec. 156.236(b)(9) that would require a non-network plan to report the plan's strategy for providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers (including ECPs) in their area who will accept the plan's benefit amount as payment in full. Commenters supported directories of providers that have been determined to accept the plan's benefit amount as payment in full. Commenters stated that the list of these providers should be routinely updated, including at least monthly and verified at least every 90 days. Commenters stated that this information would be important so that enrollees have current information and can avoid getting care from providers who may no longer accept the plan's benefit amount as payment in full.

Additionally, some commenters stated that consumers need more customer service resources, such as tools to provide enrollees real- time information on the cost of care, so consumers fully understand their financial liabilities before services are furnished or at the point of service. One commenter stated that medical technology has expanded, such that

real-time pricing infrastructure systems are becoming more accessible. The commenter stated these systems can consider benefit amounts and provider charges, while calculating full payment determinations by accounting for “eligibility verification, benefit computation, cost- sharing calculations, and coordination of benefits.” An issuer currently offering a non-network plan added that the plan provides online tools, so enrollees have real-time information on local providers, anticipated costs, and benefit amounts so consumers may make informed decisions. The commenter shared that in cases where a provider's total cost exceeds the plan's benefit amount, the enrollee receives that information and should they continue to seek care from the provider, they do so knowingly.

Response: We thank commenters for this information. We agree that non-network plans should have accessible provider directory assistance resources so enrollees can easily locate providers willing to accept the plan's benefit amount as payment in full, thus we intend to finalize this requirement so that non-network plans report to us their strategy for providing these resources to enrollees.

Additionally, we understand the importance for consumers to understand potential costs associated with receiving care prior to the point of service, especially since a single episode of care could trigger multiple benefit amounts that consumers may not be able to sufficiently anticipate. We appreciate commenters noting that technology to provide consumers that real-time information is becoming more accessible, and that non-network plans have already implemented efforts to provide these services to consumers, as the issuer currently offering non-network plans shared that the plan provides online tools so consumers have real-time information on local providers, anticipated costs, and benefit amounts. Therefore, we are finalizing additional language at Sec. 156.236(b)(9) to ensure non-network plans have a strategy to assist enrollees in receiving real-time cost estimates prior to care being furnished. We believe this would further address commenters' concerns about balance-billing risks and unanticipated out- of-pocket costs, as outlined in discussions above, as it would help enrollees more appropriately determine healthcare costs in advance of seeking care so a consumer can make an informed decision on seeing a provider after evaluating a real-time cost estimate. And, we believe it is feasible as one issuer with a non-network plan confirmed the plan already has online tools to perform these real-time cost estimates to inform consumers. In addition, there is robust evidence that real-time cost estimate technology has already been widely adopted by both issuers and providers, thus we maintain that this requirement is reasonable for non-network plan issuers to meet.\344\

\344\ Higgins, A., Brainard, N., & Veselovskiy, G. (2016). Characterizing Health Plan Price Estimator Tools: Findings From a National Survey. The American Journal of Managed Care, 22(2), 126- 131. https://pubmed.ncbi.nlm.nih.gov/26885672/; Berlin, N.L., Chopra, Z., Bryant, A., Agius, J., Singh, S.R., Chhabra, K.R., Schulz, P., West, B.T., Ryan, A.M., & Kullgren, J.T. (2022). Individualized Out-of-Pocket Price Estimators for “Shoppable” Surgical Procedures: A Nationwide Cross-Sectional Study of US Hospitals. Annals Of Surgery Open: Perspectives Of Surgical History, Education, And Clinical Approaches, 3(2), e162. https://doi.org/10.1097/AS9.0000000000000162.

Comment: One commenter recommended that individuals enrolling in non-network plans be permitted to access a special enrollment period to switch plans mid-year if they are unable to access care from providers willing to accept the plan's benefit amount as payment in full.

Response: While we may consider this issue in future rulemaking, we do not believe it is appropriate at this time. Again, we reiterate that we believe that information requested by us under Sec. 156.236(b)(1) through (b)(9) works together to ensure non-network plans provide a sufficient choice of providers that accept the plan's benefit amount as payment in full, including the availability of an exceptions process for enrollees who cannot find providers willing to accept the benefit amount as payment in full (under Sec. 156.236(b)(8)) and the non- network plan's strategy for providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers in their area who will accept the plan's benefit amount as payment in full (under Sec. 156.236(b)(9)). If we identify during the plan year that a non-network plan no longer provides access to providers willing to accept the plan's benefit amount as payment in full, the non-network plan may no longer meet certification requirements under Sec. 156.236 and is subject to decertification in accordance with Sec. 155.1080(c). We also note that there is currently no special enrollment period exception for individuals enrolled in network plans if their plans no longer cover their preferred in-network providers, and we did not discuss the applicability of special enrollment periods within the proposed rule.

Comment: One commenter requested that HHS require non-network plan issuers to provide consumers with maximum binding cost commitments prior to service delivery, including for services such as scheduled imaging, laboratory panels, and preventive screenings, to ensure a cost for a specific service would not exceed a maximum amount.

Response: We believe that non-network plans must provide consumers with transparent benefit amount information, so that consumers can make informed decisions about their care. We understand that services such as imaging, laboratory services, and preventive screenings may constitute additional costs that consumers cannot always anticipate prior to seeking care. While we cannot dictate specific payment obligations to non-network plans related to specific services, we finalized a modification at Sec. 156.236(b)(7) to ensure non-network plans have a strategy for providing consumer-friendly information to enrollees on navigating episodes of care with multiple benefit amounts (including for ancillary providers and services). We believe these ancillary services would be inclusive of imaging, laboratory services, and preventive screenings, and thus a non-network plan providing resources to consumers on how to navigate these services would help limit potential out-of-pocket costs associated with such services combined with public benefit amount information.

Comment: Many commenters stated concern regarding how HHS plans to operationalize the proposals and the implementation timeline. Specifically, commenters were concerned with HHS assessing compliance with non-network plan standards under Sec. 156.236(b)(4) through (b)(9) based on an issuer's “yes” or “no” attestations. Commenters feared it would be too easy for these attestations to be given in bad faith. Commenters advocated for HHS to disseminate clear sub-regulatory guidance, including before the QHP certification cycle, so issuers can better understand requirements under Sec. 156.236 and build infrastructure to capture benefit amounts.

Lastly, a large portion of commenters recommended that HHS delay implementation of this proposal to PY 2028, and some encouraged separate notice-and-comment rulemaking or a request for information (RFI) on non-network plans. One commenter suggested phasing in certification of non-network plans over time. Commenters reasoned that after the finalization of this payment notice, there would be a short turnaround time

for plans to prepare for the upcoming QHP certification cycle. Commenters also believe that delaying finalization would allow HHS time to further strengthen the proposed regulatory requirements, evaluate potential impacts to market stability, analyze the intersections of non-network plans with other policy areas, and gather interested party input.

Response: We acknowledge commenters' concerns regarding attestations that may be answered in bad faith. Issuers are responsible for answering truthfully regarding any attestations made during the QHP certification process and risk QHP certification denial if they do not answer truthfully. In our experience certifying QHPs, we have found issuer's attestation responses to be done in good faith and generally found to be truthful. To address commenters' concerns with providing more certainty that non-network plans provide consumer protections, and to collect better qualitative data on non-network plans, we will require issuers to provide additional information to support compliance with requirements under Sec. 156.236(b)(4) through (b)(9). Specifically, issuers with non-network plans will be required to provide written descriptions to describe how the plan satisfies each of the factors under Sec. 156.236(b), and submit additional supporting documentation (for example, empirical data, methodology for setting benefit amounts, resources provided to consumers, evidence of publicly available benefit amounts, etc.) to validate these responses. We believe requiring this additional information would provide more detail to us than “yes” or “no” responses to each of the factors that do not explain how and why an issuer meets or does not meet requirements, so that we have more information during determinations on whether a non-network plan provides adequate consumer protections.

Moreover, we recognize that commenters may need additional time to learn about this novel plan type (especially consumers) and to adequately prepare infrastructure for the entry of these plans. We also believe that commenters have raised valid concerns in response to this proposal that warrant further consideration and analysis--principally, concerns on consumer out-of-pocket costs, impact of non-network plans on providers, risk-adjustment, and alternative methods to measure access to providers within non-network plans. For this reason, we agree that it is appropriate to delay implementation of this proposal until PY 2028. We remain open to further engaging interested parties to discuss potential concerns with non-network plans and modifications to finalized policies under Sec. 156.236 to ensure these plans provide meaningful access to care to enrollees enrolled in QHPs on the FFE.

Comment: One commenter recommended that HHS develop a uniform set of reporting metrics applicable across non-network plan issuers, encompassing measures such as provider acceptance rates, out-of-network utilization rates, complaint categories, and complaint resolution timelines, and reports on how often a non-network plan's payment amounts are challenged by providers using the independent dispute resolution (IDR) process that exists under the No Surprises Act. Another commenter pointed to the availability of third-party quality measurement tools as viable mechanisms to provide consumers and enrollees with sufficient information to make well-informed decisions about their health care and coverage.

Response: We appreciate commenters' recommendations regarding data reporting and metrics that could be valuable tools for consumers or used to assess a non-network plan's compliance with law. At this time, we decline to finalize such data reporting metrics as we believe instituting these requirements would benefit from separate notice and comment rulemaking, so that we can better understand if specific metrics are consistent with data collected by non-network plans and whether these metrics are realistic for plans to report to us. Not finalizing these requirements at this time will also allow us additional time to consider whether a uniform set of reporting metrics could be adopted and standardized for both network and non-network plans. In addition, much of the data reporting metrics requested by commenters is consistent with data that we already intend to collect, including an assessed percentage of providers that accept the plan's benefit amount as payment in full (for example, provider acceptance rates) under Sec. 156.236(b)(1), and an exceptions process for enrollees who cannot find providers willing to accept the plan's benefit amount as payment in full (for example, complaint resolution) under Sec. 156.236(b)(8). We also respect that State Exchanges and SBE-FPs have broad authority to develop reporting metrics and related requirements that will allow them to assess a non-network plan's access to care. HHS, as operator of the FFEs, will take these suggestions into consideration as we learn more about the possible variations of non- network plans and as we further develop policy in this area and encourage State Exchanges and SBE-FPs to do the same.

Comment: Many commenters questioned how non-network plans would intersect with other existing policy areas, such as the Mental Health Parity and Addiction Equity Act (MHPAEA), transparency in coverage requirements, EHB requirements, coverage of preventive services, advanced explanation of benefits reporting, medical necessity, utilization requirements, and continuity of care requirements.

Commenters also requested additional clarity on how non-network plans would need to demonstrate coverage of each EHB, including coverage of preventive services without cost sharing and additional costs beyond the plan's benefit amount. One commenter stated concern that if non-network plans cannot guarantee access to preventive services without cost sharing, enrollees may be disincentivized from seeking preventive services. Another commenter questioned how a non- network plan would comply with non-quantitative treatment limitation requirements under MHPAEA, so that non-network plans do not impose more restrictive non-quantitative treatment limitations on mental health and substance use disorder services than on medical/surgical services.

Response: We thank commenters for raising these important questions. Non-network plans will not be exempt from market requirements applicable to network plans and must provide all the same consumer protections that apply to individual and small group health insurance coverage. These requirements include, but are not limited to, those specified in PHS Act title XXVII parts A through D, including MHPAEA and advanced explanation of benefits reporting requirements, and the requirement to provide coverage for preventive services consistent with section 2713(a) of the PHS Act and Sec. 147.130, including by demonstrating a sufficient choice of providers that accept the plan's benefit amount as payment in full for all the required categories of preventive services (for example, immunizations for routine use, evidence-informed preventive care and screenings, etc.). Regarding the commenter's question on how a non-network plan would comply with non- quantitative treatment limitation requirements under MHPAEA, since MHPAEA is included under PHS Act title XXVII part A, non-network plans must comply with these requirements and would not be permitted to impose more restrictive non-quantitative

treatment limitations on mental health and substance use disorder services than on medical/surgical services.

Furthermore, to receive certification as a QHP, a non-network plan must provide the EHB package in accordance with Sec. 156.115, and comply with benefit design standards defined in Sec. 156.20, the cost- sharing requirements at Sec. 156.130, and the levels of coverage requirement at Sec. 156.140. The requirement to provide EHB in accordance with Sec. 156.115 means that the non-network plan must, among other things, provide benefits that are substantially equal to the relevant State's EHB-benchmark plan. As part of QHP certification, non-network plans must submit the Plans and Benefits Template as any other network plans, which will allow us to ensure all EHBs are covered.

Additionally, it is our understanding that non-network plans currently do not place restrictions on medical necessity, nor do they require prior authorization for covered services, as verified by the one commenter currently providing non-network plans and based on our research into non-network plans. A non-network must provide consumers appropriate information on the plan's benefit amount for covered services, whether a provider would accept the plan's benefit amount, and information on a consumer's out-of-pocket costs. Overall, we believe delaying implementation of this proposal until PY 2028 will provide time for us to conduct additional analysis on these thoughtful questions about how non-network plans intersect with other policy areas more fully and how non-network plans would demonstrate compliance with requirements, including through additional guidance.

Comment: Some commenters requested additional information from HHS on the structure of a non-network plan design, including if these plans have deductibles, maximum out-of-pocket limits, cost-sharing such as coinsurance and copayments, and traditional formularies. Commenters questioned if non-network plans have annual and lifetime limits, maximum out-of-pocket limits, and deductible limits. Commenters sought more information on cost sharing, including how the annual limitation on cost sharing would apply to non-network plans when applicable provisions are often defined in terms of in-network benefits. Commenters also requested that HHS address how the annual out-of-pocket maximum limit would function for non-network plans, including how benefit amounts would be addressed within this limit when the limit is often calculated with negotiated rates for in-network providers. Commenters urged HHS to establish clear cost-sharing standards, including by considering that all providers under a non-network plan should count as being in-network.

Commenters also questioned a non-network plan's compatibility with the AV Calculator, with some commenters requesting that HHS require non-network plans to demonstrate compliance with metal level actuarial value (AV) requirements using the existing AV Calculator. Some commenters sought to understand how non-network plans would calculate AV when the AV Calculator uses in-network benefits. One commenter reasoned that since non-network plans set benefit amounts for a particular service, the structure of the AV Calculator may need to be modified to appropriately capture the value of benefits in absence of a non-network plan inputting coinsurance and copayment amounts. One commenter reasoned that if HHS did not require non-network plans to utilize the existing AV Calculator, the non-network plan type may appear affordable to consumers, while lacking adequate coverage.

Response: We acknowledge that non-network plans represent a novel plan offering and there are open questions regarding how these non- traditional plans will comply with various standards that may be applicable to individual market coverage. We are finalizing clear requirements under which non-network plans must comply with the market reforms and consumer protections under the Affordable Care Act. Based on our internal preliminary research into existing non-network plans, it is our understanding that most non-network plans currently have deductibles, premiums, and maximum out-of-pocket limits. We believe there are some non-network plans available that do not have traditional coinsurance and copayment structures; rather, these plans utilize benefit amounts (or set payment rates) for covered services. Thus, an enrollee seeking care from a provider that does not accept the plan's benefit amount as payment in full may experience excess charges as out- of-pocket costs. Nevertheless, non-network plans must comply with the cost-sharing requirements at Sec. 156.130.

In addition, non-network plans must comply with the levels of coverage requirement at Sec. 156.140 as a condition of QHP certification similar to network plans. Regarding use of the AV Calculator, we maintain that a non-network plan will still be required to meet Federal standards for AV calculation for determining level of coverage, per Sec. 156.135. We may consider additional refinements to AV calculation requirements under Sec. 156.135 and alternative methodologies for a non-network plan to estimate AV through future rulemaking, as appropriate. The Affordable Care Act's MOOP requirement under section 1302(c)(1) does not set forth a specific exception for non-grandfathered, non-network plans.\345\ Additionally, it is our understanding that non-network plan types do not have traditional formularies, rather they apply benefit amounts for certain covered drugs under the plan, as identified by our internal preliminary research into existing non-network plans. Nevertheless, due to the novelty of this plan design, it is possible other variants of non- network plans currently exist in the market that apply these elements, such as how they structure drug coverage, in different ways.

\345\ See generally FAQs about Affordable Care Implementation (Part XXI) (Oct. 10, 2014), available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-21 and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/reference_pricing_faq_101014.pdf.

While we understand the need for consumers to understand the applicability of benefit amounts to various elements of plan design in more detail, we believe this would require additional clarifications on how benefit amounts would fit within the Federal definition of cost sharing, which is beyond the scope of this final rule. However, the Departments have previously addressed the application of MOOP requirements pertaining to reference-based pricing arrangements in Affordable Care Act Implementation FAQs (Part XIX and Part XXI).\346\ Specifically, the guidance states that the Departments would not consider a plan or issuer as failing to comply with the annual limitation on cost sharing requirements of PHS Act section 2707(b) because the plan or issuer treats providers that accept the reference amount as the only in-network providers, as long as the plan or issuer uses a reasonable method to ensure that it offers adequate access to quality providers, including maintaining an

exceptions process and appropriate consumer protections. The Departments subsequently provided additional guidance as to what constituted a reasonable method within these aforementioned FAQs.

\346\ Affordable Care Act Implementation FAQs--Part 19, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-19.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/aca_implementation_faqs19; Affordable Care Act Implementation FAQs-- Part 21, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-21.pdf and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/reference_pricing_faq_101014.pdf.

Comment: Commenters stated concerns over non-network plans having lower premiums and potentially becoming the second lowest cost silver plan in areas they are sold. Consequently, commenters were concerned that due to the second lowest cost silver plan being tied to APTCs, this may reduce premium tax credits raising out-of-pocket costs for consumers not even enrolled in these plans. One commenter requested HHS to consider prohibiting non-network plans from setting the APTC benchmark. Commenters were further concerned that if a non-network plan has lower administrative costs, they may offer lower premiums that attract consumers who do not fully grasp the plans' complexity and despite premium savings, may ultimately expend more resources to navigate benefit amounts, locating providers, and negotiating prices.

Response: We acknowledge commenters' concerns regarding potential impacts non-network plans may have on the overall market, especially to the extent that these plans end up affecting the costs for consumers not enrolled in these plans. We have never prevented a plan from becoming the second lowest cost silver plan and believe it would be premature to break that precedent based on assumptions that non-network plans will have significantly lower premiums without us first receiving this data directly from non-network plans during QHP certification. We reiterate that our goal with this proposal is to encourage innovation and competition in the Exchange. However, commenters raise valid concerns that we will continue to monitor to identify if non-network plans produce downstream impacts on costs to consumers across the individual market. Should we have concerns regarding market stability, as we have previously stated, under Sec. 155.1000(c)(2), Exchanges have broad discretion to determine whether a plan is in the interest of qualified individuals and qualified employers, regardless of whether the plan meets other minimum certification requirements consistent with Sec. 155.1000(c)(1). We have long maintained \347\ that Exchanges are free to exercise the authority at section 1311(e)(1) of the Affordable Care Act (as implemented at Sec. 155.1000(c)(2)) to refuse certification to a plan if they determines that making available such health plan through such Exchange is not in the interests of qualified individuals and qualified employers in the State,\348\ even if the plan otherwise meets all other QHP certification requirements. We will consider these issues in future rulemaking to determine if exercising this “interest standard” is appropriate.

\347\ We have addressed the interest standard in past rulemaking, including in the 2012 Exchange Final Rule (77 FR 18405) and in the 2017 Payment Notice (81 FR 12289).

\348\ Except that the Exchange may not exclude a health plan: (i) on the basis that such plan is a fee-for-service plan; (ii) through the imposition of premium price controls; or (iii) on the basis that the plan provides treatments necessary to prevent patients' deaths in circumstances the Exchange determines are inappropriate or too costly (77 FR 18405).

We also acknowledge concerns related to consumers who may be attracted by lower premiums who do not fully understand the plan. To this extent, we reiterate we intend to ensure non-network plans are clearly differentiated from network plans during plan selection on HealthCare.gov and ensure clear information about these plans is accessible to consumers, including information regarding the lack of a traditional network, links to the benefit amounts, potential balance billing risks, and the availability of other consumer resources.

Comment: Many commenters stated concerns over a non-network plan's potential to attract healthier, more-price sensitive consumers due to lower premiums, while concentrating higher-cost enrollees with greater health needs in network-based plans with higher premiums. Commenters noted their belief that this may lead to risk segmentation by significantly altering risk pools, including across various metal tiers, and destabilize the risk adjustment program, including by suppressing statewide average premiums used in risk adjustment calculations. Overall, commenters shared concerns that these effects would affect long-term market stability.

In addition, a few commenters responded to HHS' comment solicitation on considerations for non-network plans in the HHS-RADV process. One commenter raised concerns that if a non-network plan was not able to report diagnoses with claims as part of the risk adjustment process, this may result in “significant risk adjustment payables, and potentially very large RADV transfer adjustments.” The commenter stated concern that if the non-network plans would not be able to financially cover these transfer amounts, then other plans would not receive the risk adjustment amounts they are owed. The commenter did not believe it would be appropriate to exempt non-network plans from HHS-RADV, as it could incentivize plans to avoid covering individuals with greater health needs.

A different commenter recommended that HHS consider flexibility in the data sources utilized for the HHS-operated risk adjustment program and HHS-RADV, including direct payment to providers via invoices, medical records, cash-pay transactions, encounter data, or third-party data to submit verified diagnosis information. The commenter also requested HHS to allow the use of centralized, independent data integrators or aggregators that can make objective determinations of enrollee risk across all issuers by utilizing data already available through data-exchanges and other Federal sources. The commenter noted their belief that this recommended approach would more fairly support newer plans entering the market that do not have the resources and data aggregation capabilities that larger health plans may have developed to maximize risk adjustment payments by using sophisticated data methods to increase the number of diagnostic codes summitted through issuers' EDGE servers.

Response: We agree with commenters that non-network plans should not be exempt from participation in HHS-RADV. Participation in HHS-RADV is a critical element of maintaining program integrity by validating issuers' risk under the HHS-operated risk adjustment program. For the purposes of the HHS-operated risk adjustment program, we believe that the approach to gathering diagnoses through a standardized claim-data format best ensures that HHS risk adjustment transfers under the State payment transfer formula are based upon the most reliable data possible. For the purposes of HHS-RADV, we continue to believe medical record review to be the best approach for validating the diagnoses submitted through issuers' EDGE servers.\349\ Therefore, we did not propose and are not finalizing any changes to the risk

adjustment data submission process or HHS-RADV to incorporate additional data flexibilities for non-network plans nor are we allowing issuers to use alternative data sources for risk adjustment and HHS- RADV. In accordance with Sec. Sec. 153.700 through 153.740, we will continue to collect enrollee-level plan enrollment data, enrollee claims data, and enrollee encounter data from issuers' EDGE servers for the purposes of calculating HHS risk adjustment transfers under the State payment transfer formula. Furthermore, in accordance with Sec. 153.630(b)(7), we will continue to use relevant medical record documentation to validate enrollee health status through review of all relevant paid/positively adjudicated pharmacy claims, validating medical records according to industry standards for coding and reporting, and having a senior reviewer confirm any enrollee risk adjustment error discovered during the initial validation audit to validate the demographic and risk score of enrollees in HHS-RADV. We also note that non-network plans may opt out of participation in HHS- RADV in favor of being assessed a default data validation charge (DDVC) as described in Sec. 153.630(b)(10).

\349\ As discussed in the Affordable Care Act (ACA) HHS-Operated Risk Adjustment Data Validation (RADV) Process White Paper (2013),\349\ “we consider medical records for health services as the authoritative source and gold standard for documenting enrollee health status for enrollee risk scores.” https://www.cms.gov/files/ document/medical-record-reviewer-guidance-january- 2020.pdf#:~:text=The%20general%20guidance%20in%20this%20document%20is ,contracts%2C%20and%20the%20Electronic%20Data%20Interchange%20Agreeme nts.

We appreciate the comments regarding non-network plans' potential impacts on the HHS-operated risk adjustment program. We acknowledge commenters' concern that non-network plans are likely to attract healthier enrollees. However, we do not believe this will have the impact of suppressing the statewide average premium used in the State payment transfer formula. The statewide average premium is a weighted average based on enrollment in each plan in a State market risk pool. If non-network plans offer lower premiums and attract healthier enrollees away from other plans, the statewide average premium should remain around the same value, assuming roughly the same population of enrollees remain enrolled statewide. Nevertheless, it would be likely that under such a scenario, non-network plans, if they attract healthier enrollees, would generally owe risk adjustment charges to other issuers in the relevant State market risk pool. We therefore caution issuers considering offering non-network plans to carefully weigh the impact of risk adjustment in their rating decisions.

Comment: Overall, commenters had mixed reactions to the proposal to allow FFE States the flexibility to conduct provider access or ECP certification reviews of non-network plans provided the FFE State elects to conduct such reviews and satisfies applicable criteria to be considered to have an Effective Provider Access Review Program under proposed Sec. 155.1050(d) and/or an Effective ECP Review Program under proposed Sec. 155.1051.

One issuer currently offering a non-network plan shared that States generally possess unique knowledge of local market conditions, geographic constraints, provider availability, and population demographics which may make States well positioned to review non- network plans. A few commenters noted that some FFE States may already have existing regulatory frameworks or experience reviewing non-network plans. For example, one commenter shared that Ohio has experience in reviewing non-network plans, which could be leveraged by HHS and Exchanges to inform the development of effective review processes for non-network plans. However, some commenters cautioned that some FFE States currently may not be equipped to conduct their own reviews without more specific guidance from HHS regarding processes and assessment methodologies for evaluating a sufficient choice of providers under a non-network plan.

Response: We agree that FFE States possess unique knowledge of local factors affecting consumers' ability to access a full range of providers, which can adapt certification reviews of both network and non-network plans to address local needs. We also agree that some FFE States may not be equipped to conduct reviews of non-network plans in time for the upcoming PY 2027 QHP certification cycle, since some FFE States may need to develop new regulations and operational processes to review non-network plans. Consistent with our decision to delay implementation of the proposal to permit certification of non-network plans as QHPs to PY 2028, we also will delay to PY 2028 implementation of the provisions allowing FFE States with an Effective Provider Access Review Program and/or Effective ECP Review Program to conduct certification reviews for non-network plans under Sec. 155.1050 and Sec. 155.1051, respectively. Specifically, we are finalizing modifications to Sec. 155.1050(d)(1) and Sec. 155.1051(a) such that they will be applicable to non-network plans for plan years beginning on or after January 1, 2028. We intend to issue further guidance and provide technical assistance to FFE States to help them develop their own technical capacity and processes to evaluate non-network plans for QHP certification.

Comment: Commenters provided specific recommendations on how HHS should apply the Effective ECP Review Program to non-network plans. Commenters recommended clear, specific, and verifiable standards that issuers offering non-network plans must meet to demonstrate they provide access to ECPs under an Effective ECP Review Program prior to a non-network plan receiving certification as a QHP. For example, commenters recommended allowing issuers offering non-network plans to demonstrate that they provide access to ECPs via contracts or participation agreements with ECPs that accept the issuer's benefit amount as payment in full. Another recommendation included a more quantitative, data-driven approach that would incorporate an analysis of an issuer's benefit amounts that would then be compared to other data sources of ECP service charges in the same service area; the commenter stated that this could be accomplished by HHS defining a methodology that includes a specific percentile threshold that benefit amounts must meet, while performing additional analyses to reduce geographic disparities in access to ECPs.

Response: In the proposed rule, we proposed that an FFE State with an Effective ECP Review Program must ensure that issuers offering non- network plans meet specific ECP requirements. Specifically, we stated at proposed Sec. 155.1051(b) that FFE States with an Effective ECP Review Program must ensure that a non-network plan applying for certification to be offered as a QHP through an FFE demonstrates that it provides reasonable and timely access to ECPs that accept the plan's benefit amount as payment in full to ensure that services will be accessible without unreasonable delay. We appreciate commenters recommending ways that non-network plans could demonstrate reasonable and timely access to ECPs. First, we do not believe it is appropriate to require FFE States to collect data from non-network plans on contracts with ECPs because non-network plans do not typically contract with providers. We also believe that our proposed requirements for an FFE State with an Effective ECP Review Program under Sec. 156.236(b)(1) through (3) would address the commenters' request to demonstrate an ECP's acceptance of benefit amounts as payment in full. We also proposed under Sec. 155.1051(e)(7) that we would consider whether the State collects information from issuers with non-network plans regarding the status of offers of benefit amounts as payment in full to ECPs; this would

allow HHS to assess the State's ability to collect verifiable data that can be utilized to quantitatively assess an issuer's compliance with minimum percentage, category per county, and Indian health care requirements under Sec. 156.236(b)(1) through (3), which can be evaluated based on benefit amounts as payment in full that were offered to or accepted by an ECP.

Additionally as part of this proposal, we intended to propose an regulatory framework for non-network plans to demonstrate a sufficient choice of providers consistent with section 1311(c)(1)(B) and (c)(1)(C) of the Affordable Care Act that is distinct from existing provider access and ECP requirements for network plans under Sec. 156.230 and Sec. 156.235, but also complementary to these existing requirements by proposing an alternative methodology to measure access to providers without traditional provider networks. Thus, we do not intend to prescribe billing and payment requirements by defining benefit amount percentiles that non-network plans must meet relative to an ECPs' service charges. Rather, we aim to capture facility-level data (and not service charge data from ECPs) on the number of ECPs that accept the non-network plan's benefit amount as payment in full, similar to how we currently collect how many ECPs in an issuer's network and service area accepted or were offered a contract. And, since for the reasons stated earlier in this final rule we believe it is appropriate to establish a Federal floor of baseline ECP requirements that apply across the FFE through the Effective ECP Review Program under Sec. 155.1051, we do not intend to create more stringent requirements for FFE States than proposed Federal ECP requirements for non-network plans at this time. However, we are not limiting an FFE State's ability to create more stringent requirements than those under Sec. 155.1051 or limiting an FFE State's ability to require a non-network plan to submit this type of data. Commenters sharing these various ways that non-network plans may demonstrate reasonable and timely access to ECPs affirms our decision to not be prescriptive in setting these requirements. We are implementing these requirements beginning in PY 2028. Additional details about these ECP requirements related to non-network plans will be detailed in the 2027 Final Letter to Issuers.

Comment: One commenter supported HHS' approach to require that FFE States meet applicable criteria for reviewing both network and non- network plans to demonstrate having an Effective Provider Access Review Program and/or Effective ECP Review Program. While the commenter recognized that some FFE States may not yet have the expertise to review non-network plans, the commenter stated that requiring the FFE State to demonstrate the ability to review for both plan types is essential to prevent FFE States from selectively electing to only conduct reviews of network plans and choosing not to invest in or develop capacity to conduct reviews for non-network plans. Overall, the commenter believed that FFE States should accept the responsibility to conduct reviews for the full range of plan types, and that if FFE States are not prepared to do so, then FFE States should defer to HHS to conduct reviews for non-network plans.

Response: We appreciate the commenter's support for the requirement that FFE States demonstrate the capacity to review both network and non-network plans as part of our determination of whether an FFE State has an Effective Provider Access Review Program or Effective ECP Review Program, assuming the FFE State permits non-network plans to be certified as QHPs. We also intend to conduct outreach to FFE States over the coming year to assess their current capacity and readiness to review non-network plans in advance of the PY 2028 implementation date of this policy.

Finally, while we understand commenter's desire for a State not to limit the types of plans it allows (network vs. non-network plans), we affirm that we will not require FFE States to offer non-network plans in their State. We believe that States, that know their population and local markets best, should be able to make a final determination about whether or not non-network plans are appropriate for their State. Should an FFE State choose not to allow these plans, a State would only be required to demonstrate sufficient authority and the technical capacity to review network plans to be determined to have an Effective Provider Access Review Program or an Effective ECP Review Program.

Comment: Some commenters encouraged HHS and FFE States to publicly disclose details of non-network plan certification review processes. Some commenters recommended public disclosure of the criteria utilized to evaluate non-network plans and the outcomes of such reviews. Commenters reasoned that this reporting would promote consistency across the FFE to ensure that consumer protections are applied consistently.

Response: We appreciate commenters' suggestions. We have laid out the criteria under which we would review non-network plans to be certified as QHPs on the FFE under Sec. 156.236(b)(1) through (9). Additional operational details regarding non-network plan data submission for PY 2028 will be detailed in the 2027 Final Letter to Issuers with subsequent guidance anticipated in the 2028 Final Letter to Issuers. Issuers and the public can also learn more about non- network plan review processes on the QHP certification website in the Application Instructions section.\350\

\350\ QHP Application Instructions can be accessed at the following URL: https://www.qhpcertification.cms.gov/QHP/applicationmaterials/Application-Instructions.

However, we believe the suggested approach to publicize the outcomes of non-network reviews, which would be inconsistent with current network adequacy and ECP review procedures which do not currently publicize the outcomes of network adequacy or ECP reviews for network plans, would be inappropriate because private, market proprietary information may be published in the process. A number of public use files (PUFs) are made available to the public as part of the QHP certification process, and the Plan Attributes PUF will reflect plan attributes for non-network plans, including data originating from the issuer's Plans and Benefits Template which the issuer submits to detail plan data, including information about benefit packages, cost- sharing, and EHBs. Information on what is included in the Plan Attributes PUF can be found at the Health Insurance Exchange Public Use Files website.\351\ Lastly, since application of both the Effective Provider Access Review Program and Effective ECP Review Program would establish a Federal floor of minimum criteria that FFE States must demonstrate to adequately review non-network plans, we believe these minimum requirements will help promote a level of consistency in how non-network plans are reviewed across the FFEs. Based on our experience administering the FFEs, if non-network plans undergo consistent, standardized reviews across the FFE, this will likely facilitate consistent application of consumer protections.

\351\ The Health Insurance Exchange Public Use Files URL is located at https://www.cms.gov/marketplace/resources/data/public-use-files.

Comment: One commenter responded to HHS's request for comment on whether HHS should clarify the information FFE States with an Effective Provider Access Review Program or an Effective ECP Review Program must

review when evaluating non-network plans to ensure alignment with HHS' approach under Sec. 156.236(b)(4) through (b)(9). This commenter supported enumerating the information these FFE States must review to promote consistency across the FFEs and ensure non-network plan enrollees receive similar consumer protections regardless of whether HHS or the FFE State is conducting the certification review.

Response: We appreciate the commenter supporting the clarification of the information that non-network plans must submit to the FFE listed at Sec. 156.236(b)(4) through (b)(9) as requirements for FFE States with an Effective Provider Access Review Program and/or an Effective ECP Review Program to review non-network plans for certification. For the reasons stated earlier in this final rule, we believe these factors will yield important information that an FFE State with an Effective Provider Access Program or an Effective ECP Review Program would need to collect to ensure it has sufficient authority and the technical capacity to review non-network plans.

In response to the commenter's support for enumerating the information these FFE States must collect to promote consistency across the FFE in how non-network plans are reviewed, we are adding an additional factor related to the Effective ECP Review Program under Sec. 155.1051(e)(11) and modifying an existing factor related to the Effective Provider Access Review Program under Sec. 155.1050(d)(4)(vi) to indicate the State has a process to collect and review information described under Sec. 156.236(b)(4) through (9) from non-network plans, which the non-network plan must submit for a determination that it provides access to a sufficient choice of providers that accept the non-network plan's benefit amount as payment in full. We believe adding these additional factors is crucial to ensure safeguards are in place across the FFE so that non-network plans remain consumer protective, regardless of the entity (HHS or the FFE State) conducting the review. Requirements described under Sec. 156.236(b)(4) through (9) are specific to non-network plans and reflect additional safeguards to ensure these plans maintain access to providers without traditional network arrangements. These requirements include assessing a non- network plan's strategy for conducting outreach to providers in their area, making benefit amounts public to enrollees, methodologies for determining benefit amounts, publishing consumer-friendly information on balance billing and potential out-of-pocket costs, the availability of exceptions processes for enrollees unable to locate providers who accept benefit amounts as payment in full, and customer services resources. As evidenced in the discussions above related to public comments received on these specific factors, it is important that non- network plans across the FFEs consistently report this information so that we and/or the FFE State can assess whether the non-network plan: (1) provides a sufficient choice of providers; (2) executes the necessary steps to effectively set data-driven benefit amounts that providers would accept in full to limit enrollee out-of-pocket costs; and (3) disseminates all the resources enrollees need to leverage non- network plans to meet their health needs.

Comment: One commenter encouraged HHS to adopt standards for non- network plans that provide enough flexibility to accommodate innovative plan models (including related to network design) that are not purely reference-based pricing models, such as hybrid models which may blend a contracted network of providers and reference-based pricing models.

Response: We appreciate the commenter's suggestion regarding additional variations of non-network plan design that could be supported by this policy. Encouraging innovation in plan design is the goal in which this proposal is rooted. We welcome continued engagement on ways this policy might be implemented to support variations on plan designs that do not fully rely on a contracted network to ensure access to essential community providers in accordance with HHS regulations and access to sufficient numbers and types of providers to ensure all services will be accessible without unreasonable delay, including services from providers that specialize in mental health and substance use disorders.

Comment: Several commenters raised concerns that allowing non- network plans to be certified as QHPs as early as the PY 2027 would not allow sufficient time for States to build oversight capacity or for Federal and State regulators to coordinate regarding the approval of non-network plans seeking QHP certification. One commenter stated concern that the proposed rule does not adequately address how States will monitor whether non-network plans maintain a sufficient number of providers willing to accept the plan's benefit amount as payment in full, particularly given the absence of a mechanism to ensure that providers will continue to accept that reimbursement amount for the duration of a consumer's plan year. Another commenter raised concerns regarding the operational burden imposed by the late release of the proposed rule, leaving little time for issuers, States, and other interested parties to understand, adjust to, and implement non-network plans for the upcoming plan year.

Several commenters also recommended that HHS work with States and NAIC to ensure that non-network plans remain financially stable and that their issuers understand financial obligations associated with QHP participation. They also requested that States retain full plan approval authority, with a number of States commenting that they were grateful that HHS was not requiring States to offer non-network plans and stating that they would assess interested party interest before making any determination on whether or not they would offer non-network plans in their State. Commenters also encouraged greater coordination among CMS, State insurance regulators, and Exchanges to identify and establish realistic, actionable policies to address concerns related to non-network plans. One commenter also recommended that we extend requirements for non-network plans under Sec. 156.236(b) to State Exchanges and SBE-FPs.

Response: We appreciate the detailed feedback from commenters regarding State oversight capacity, implementation timelines, financial oversight, and the need for Federal and State coordination for non- network plans. We affirm that we are not requiring States to allow certification of non-network plans in their markets, including FFE States, State Exchanges, and SBE-FPs. Our proposal did not aim to interfere with whether States choose to offer these plans in general, rather we aimed to establish a clear regulatory standard that non- network plans must meet to be offered as QHPs through the FFE. State Exchanges and SBE-FPs retain full discretion and authority to determine whether non-network plan designs are appropriate for their markets, subject to Sec. 156.236(a), if allowing non-network plans to be offered as QHPs through State Exchanges and SBE-FPs and consistent with applicable State laws and regulations. To provide more clarity, we are finalizing 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 also acknowledge the concerns raised regarding the ability of States to monitor ongoing provider availability in non-network plans, especially in the absence of a mechanism to ensure that providers will continue to accept the non-network plan's benefit amount for the duration of a consumer's plan year. We recognize that the absence of traditional network contracting structures presents unique oversight challenges and that we are not able to dictate what a provider charges for services. Providers may choose to modify charges for their services based on any number of factors, including changes in their operating expenses, changes in medical advancement, competitive pressure, or for no particular reason at all. And, they may choose to change this amount at any time. We stated that, consistent with Sec. 156.236(b)(4), it is imperative that a non-network plan have in place a strategy for conducting continuous outreach to available providers (including ECPs) in a particular area to determine whether they would accept the plan's benefit amount as payment in full, so that the plan can make adjustments to its benefit amounts to ensure that enrollees can access a sufficient number of providers. Additionally, for the reasons stated earlier in this section of this final rule, we are confident that all the factors laid out under Sec. 156.236(b)(1) through (b)(9) provide a means to appropriately determine if a non-network plan is providing sufficient access to providers (including ECPs), whether HHS or an FFE State is conducting the review.

Regarding the recommendation that we apply the requirements under Sec. 156.236(b) to State Exchanges and SBE-FPs, we are declining to do so to remain consistent with the proposal to restore aspects of network adequacy authority back to these Exchanges. As we discuss in more detail in section III.D.18 of this final rule, State Exchanges and SBE- FPs have significant experience conducting provider access reviews and are well-positioned to account for the unique needs of their specific populations and markets. Accordingly, while we continue to require that State Exchanges and SBE-FPs provide sufficient access to providers in a manner that meets standards under Sec. 156.230(a)(1)(ii) and (iii) for network plans, and under Sec. 156.236(a) for non-network plans, as applicable, we are affording these Exchanges the flexibility to determine the specific parameters for meeting these requirements.

Regarding implementation challenges raised by commenters, we sought comment regarding the effective date of this proposal in the proposed rule, requesting comments from QHP issuers that may be interested in submitting non-network plans for QHP certification for PY 2027 or whether PY 2028 may be the soonest that any QHP issuer could realistically consider submitting non-network plans for QHP certification. We acknowledge the implementation challenges raised by commenters, especially considering the timing of the release of this final rule and the time it takes for States and issuers to develop and design plans to be submitted to us for consideration for QHP certification. In recognition of these comments that pushed for delayed implementation, and to allow States, issuers, and other interested parties sufficient time to prepare for potential certification of non- network plans as QHPs across the FFEs, we are delaying implementation of this non-network plan certification proposal to PY 2028. We believe this will allow additional, sufficient time for issuers to fully consider the finalized policies and make adequate preparations for the next QHP certification cycle to meet regulatory requirements, including but not limited to modifications to plan design, additional outreach to providers regarding benefit amounts, and developing consumer-facing materials. States would also have an additional year to consider whether they wish to allow non-network plans in their State and if any State-level legislative or regulatory actions are required before non- network plans can enter State markets. It will further provide us more time to conduct additional analyses on more complex issues raised by commenters in this final rule and engage interested parties to boost operational readiness and incorporate additional feedback prior to implementation of non-network plans. We are committed to working with States, issuers, and other interested parties during this period through interested parties outreach to support successful implementation in a manner that minimizes operational burden and reduces the risk of adverse outcomes for consumers and systems operations.

Lastly, while HHS is delaying implementation of this policy to allow non-network plans to receive certification to be offered as QHPs through the FFE beginning PY 2028, HHS is not requiring State Exchanges or SBE-FPs to also delay implementation of allowing non-network plans to be offered as QHPs through their Exchanges beginning PY 2028. Rather, State Exchanges and SBE-FPs retain full discretion and authority to not only assess whether non-network plan designs are appropriate for their markets, but also to independently determine the appropriate implementation timeline for their States if allowing non- network plans to be offered through their Exchanges. Consistent with discussions in this final rule to restore aspects of network adequacy back to State Exchanges (see section III.D.18 of this final rule), both State Exchanges and SBE-FPs have unique knowledge on local factors (for example, market conditions, geographic constraints, provider shortages, etc.) that have been consistently leveraged to conduct their own network adequacy certification reviews, which can also be utilized to conduct reviews of non-network plans. Thus, we believe these States may already possess the knowledge and expertise to begin conducting reviews of non-network plans and offering these plans through State Exchanges or SBE-FPs. For this reason, we do not desire to limit these States in proceeding with offering these non-network plans if States already allow these plans in State Exchanges or SBE-FPs or are well-positioned to begin doing so effective PY 2027. Accordingly, we are finalizing under Sec. 155.1050(a)(2) that State Exchanges and SBE-FPs must ensure that each QHP provides sufficient access to providers in a manner that meets standards under Sec. 156.236(a) for non-network plans for plan years beginning on or after January 1, 2027, if such plans are allowed to be offered through the Exchange, as applicable. State Exchanges and SBE-FPs still have autonomy to target implementation dates after PY 2027, if they desire. 13. Strengthening HHS' Oversight of the Administration of Advanced Payments of the Premium Tax Credit, Cost-Sharing Reductions, and User Fee Programs and Clarifying HHS' Compliance Review Authority (Sec. 156.480)

In the 2027 Payment Notice proposed rule (91 FR 6417), we proposed two proposals related to Sec. 156.480. First, we proposed to modify Sec. 156.480 to clarify HHS' authority to audit or conduct a compliance review of an issuer that offers a QHP through an Exchange for the purposes of administering and providing oversight of the APTC, CSR, and user fee programs. Specifically, we proposed to amend Sec. 156.480(c) to provide that HHS or its designee may audit or conduct a compliance review to assess compliance with all requirements related to APTC, CSR, and user fee programs applicable to issuers offering a QHP in an Exchange, rather than only

the requirements of 45 CFR subpart E and Sec. 156.50, as is currently provided. For consistency, we also proposed to make conforming changes to Sec. 156.480(c)(6) to provide that in instances where HHS enforces compliance with any requirements related to the APTC, CSR, and user fee programs for QHP issuers participating in State Exchanges or SBE-FPs, HHS may do so in accordance with Sec. 156.805. Second, we proposed to clarify that HHS may conduct a compliance review to assess issuers' compliance with requirements related to these programs under Sec. 156.480(c) as needed or on an annual basis rather than only on an ad hoc basis, as previously stated in the preamble to part 2 of the 2022 Payment Notice (86 FR 24244 through 24247).

To explain our first proposal, in the 2014 Payment Notice (78 FR 65078), we established HHS' authority at Sec. 156.480(c) to assess issuers' compliance with requirements in 45 CFR part 156, subpart E through audits to ensure the appropriate use of Federal funds related to the APTC and CSR programs. After several years of experience with operating the Exchanges, in part 2 of the 2022 Payment Notice (86 FR 24244, 24246), we expanded HHS' oversight tools at Sec. 156.480(c) to include the authority for HHS to conduct compliance reviews, in addition to audits, and expanded the scope of such audits and compliance reviews to include requirements in Sec. 156.50 related to the user fee program, in addition to those previously referenced in part 156, subpart E. We also provided that compliance reviews conducted under this oversight authority would follow the standards set forth in Sec. 156.715. In the proposed rule, we considered additional clarifications to HHS' authority on compliance reviews under Sec. 156.480.

Currently, Sec. 156.480(c) provides that in conducting APTC, CSR, and user fee audits or compliance reviews, HHS may assess an issuer's compliance with the requirements in 45 CFR part 156, subpart E and Sec. 156.50. The regulatory text does not currently reference assessment of an issuer's compliance with other Exchange requirements related to administration of the APTC, CSR, and user fee programs that are outside of subpart E and Sec. 156.50. For example, it does not include the assessment of grace period requirements at Sec. 156.270(g), located in part 156, subpart C, which mandates that an issuer terminate an enrollee's enrollment after not receiving payments for any outstanding premium balance, or an amount within an issuer- established premium payment threshold, within the 3-month grace period. Noncompliance with this, and other enrollment and payment requirements, can result in an issuer receiving APTCs on behalf of an enrollee who is not eligible for APTC due to nonpayment of premiums. To prevent these improper payments, we stated in the proposed rule that it follows that HHS' administration and oversight of the APTC program should include assessment of issuers' compliance with these requirements.

To further explain, we have historically interpreted section 1313(a)(5) of the Affordable Care Act, which states that the Secretary shall implement any measure or procedure that the Secretary has authority to implement in title I of the Affordable Care Act or any other Act, to protect against fraud and abuse, and section 1321(c) of the Affordable Care Act to provide HHS with broad authority to implement oversight activities to assess compliance with all Exchange standards issued in accordance with section 1321(a)(1) of the Affordable Care Act. For example, compliance reviews conducted in accordance with Sec. 156.715 as part of HHS' financial integrity oversight of QHP issuers in the FFE, and under the authority of Affordable Care Act section 1321(c), are not limited in scope to a set of listed regulatory requirements. Instead, Sec. 156.715(a) identifies the scope of such compliance reviews as tools to generally ensure “ongoing compliance with Exchange standards applicable to issuers offering QHPs in a Federally-facilitated Exchange.” Audits and compliance reviews conducted as part of HHS' oversight of the APTC, CSR, and user fee programs, which ensure fiscal responsibility of issuers and compliance with the requirements for QHP issuers, fall under this same broad statutory authority. We stated in the proposed rule that while requirements related to the APTC, CSR, and user fee programs are concentrated in Sec. 156.50 and subpart E, it was an unintended limitation to confine the scope of audits and compliance reviews conducted in accordance with Sec. 156.480(c) to only these requirements. We noted that HHS has issued regulations that impact administration of these programs in other regulatory sections. For example, noncompliance with the premium payment requirements established in subpart C of part 156 may result in an issuer's receipt of improper APTCs on behalf of ineligible enrollees.

We stated in the proposed rule that as we continue to conduct audits and compliance reviews, we want to ensure that we are clear on our authority to assess and enforce compliance with requirements related to the APTC, CSR, and user fee programs that are outside subpart E and Sec. 156.50. Therefore, to provide this clarity, we will revise the introductory text in Sec. 156.480(c) and make conforming revisions to paragraph (c)(6) to state that HHS may audit or conduct compliance reviews and enforce issuer compliance with all applicable requirements related to the APTC, CSR, and user fee programs.

To explain our second proposal, we proposed to revise our current position in the preamble of part 2 of the 2022 Payment Notice (86 FR 24244 through 24247), stating that HHS conducts compliance reviews on an ad hoc basis, to provide that HHS may conduct compliance reviews as needed, including on an annual basis based on HHS' assessment of noncompliance with the applicable requirements and any identified issues related to noncompliance.

In part 2 of the 2022 Payment Notice (86 FR 24244 through 24247), we stated that compliance reviews would be conducted on an ad hoc basis to provide HHS with a mechanism to address situations where a systemic error or issue is identified during an audit, and if HHS suspects similarly situated issuers may have experienced the same systemic error or issue but were not selected for audit in the year in question. However, we stated in the proposed rule that we have found that this approach is insufficient. We noted, for example, that annual APTC, CSR, and user fee program audits of issuers in State Exchanges often identify data inaccuracies in issuers' enrollment and payment data that resulted in APTC over- or underpayments. While annual, these audits are conducted on benefit year data after the close of the 3-year window for resolution of payment inaccuracies described in Sec. 156.1210(c).\352\ We stated that annual compliance reviews would provide issuers with an opportunity to proactively correct these data inaccuracies prior to the scheduled audits, which would ensure better compliance with APTC and other related requirements and, in turn, more quickly resolve any APTC over- or

underpayments. We stated that with compliance reviews only occurring on an ad hoc basis, we are unable to regularly and fully address these issues prior to the audit process. As a result, we proposed to revise our position such that HHS may conduct compliance reviews as needed, including on an annual basis, based on its assessment of identified issues related to noncompliance. We stated that we were not seeking to make amendments to regulation text at Sec. 156.480(c) to address this; rather, we were proposing to clarify in the preamble of this final rule that the compliance review authority would allow us to conduct compliance reviews on an annual or as needed basis.

\352\ Plan year data inaccuracies described to HHS or the State Exchange (as applicable) before the end of the 3-year period described in Sec. 156.1210(c) beginning at the end of the plan year to which the inaccuracy relates are eligible for resolution and payment to the issuer of any confirmed APTC underpayments. Data inaccuracies identified after the 3-year period are not eligible for repayment to the issuer. However, should an issuer identify a payment error after the 3-year period, the issuer must notify HHS or the State Exchange (as applicable) and repay any overpayments.

In summary, we proposed to add language to the introductory text of Sec. 156.480(c) which states that HHS may audit or conduct a compliance review of an issuer offering a QHP through an Exchange to assess its compliance with the applicable requirements related to administration of the APTC, CSR, and user fee programs. We also proposed to add conforming language to Sec. 156.480(c)(6) to state that in instances where HHS enforces compliance with any requirement related to APTC, CSR, and user fee programs for QHP issuers participating in State Exchanges or SBE-FPs, HHS may do so in accordance with Sec. 156.805. Finally, as discussed above, we proposed to revise our position on the frequency of compliance reviews such that HHS would conduct compliance reviews as needed, including on an annual basis based on its assessment of identified issues related to noncompliance; however, we did not propose amendments to regulation text at Sec. 156.480(c) to address this.

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 these policies as proposed. We summarize and respond below to public comments received on the proposed clarification that HHS may audit or conduct a compliance review of an issuer offering a QHP through an Exchange to assess its compliance with the applicable requirements related to administration of the APTC, CSR, and user fee programs, and the proposal that HHS may conduct compliance reviews on an as needed or annual basis, rather than just on an ad hoc basis.

Comment: Several commenters generally supported HHS strengthening the oversight of the APTC, CSR, and user fee programs, and some of these commenters also supported clarifying HHS' authority to audit or conduct compliance reviews to assess compliance with these programs. Another commenter recommended that to prevent increased administrative burden, when conducting audits, HHS should allow issuers to consolidate multiple audits into a single audit across HIOS IDs under common company control.

Some commenters were concerned that if compliance reviews occur on an as needed or annual basis, the reviews may place significant administrative burdens on issuers. Several commenters provided recommendations for how HHS should conduct compliance reviews to prevent administrative burdens on issuers. One commenter encouraged HHS to consider operational impacts and ensure that the timing, scope, and frequency of reviews remain predictable and risk-based to avoid administratively and financially burdening issuers. Another commenter recommended that HHS establish a predictable, risk-based audit cadence every three years while preserving targeted review authority in response to certain data inaccuracies, complaints, or identified compliance risks. Another commenter noted that between existing statutory safeguards, current CMP authority, and State insurance oversight, there are multiple layers of oversight and that expanding review frequency or adding duplicative Federal audit processes would increase administrative burden and costs, since it would divert resources from other activities, and recommended that HHS reconsider the scope of these proposed enforcement expansions to ensure they align with the Administration's commitment to reducing unnecessary regulatory complexity.

Response: We are finalizing these proposals as proposed. We appreciate commenters' recommendations on how best to conduct audits and compliance reviews while preventing increased administrative burdens on issuers. We intend to work with issuers to identify additional efficiencies to prevent undue burden as we follow the audit procedures described under Sec. 156.480(c).

In terms of compliance reviews, we believe that it is important that we safeguard Federal funds, and conducting compliance reviews on an as needed or annual basis is an important part of these safeguards. By conducting compliance reviews on an as needed or annual basis, we are ensuring that issuers resolve data inaccuracies on a timely basis, which may result in over- or underpayments of Federal funds, such as APTC, on behalf of enrollees to issuers. Compliance reviews, alongside audits and other enforcement mechanisms such as CMPs, are a necessary oversight tool to aid both issuers and HHS in ensuring compliance with the applicable APTC, CSR, and user fee program requirements. Further, we do not believe that compliance reviews occurring on an annual or as needed basis will create additional burdens on issuers.

Moreover, as discussed in the proposed rule (91 FR 6418), experience with past audits that occur after the close of the 3-year window for resolution of payment inaccuracies described in Sec. 156.1210(c) are still finding systemic errors and numerous data inaccuracies. For example, annual APTC, CSR, and user fee program audits of issuers in State Exchanges often identify data inaccuracies in issuers' enrollment and payment data that resulted in APTC over- or underpayments. Therefore, we believe that it is in the best interest of the issuer, State, and HHS to conduct compliance reviews on an annual or as needed basis, to provide timely reporting to issuers and States and allow the issuer to proactively resolve data inaccuracies or any issues of noncompliance resulting from systemic errors prior to the annual audit process (and the 3-year cutoff after which issuers would not receive additional APTCs as a result of data inaccuracies). We also believe that conducting compliance reviews on an as needed or annual basis and providing issuers and States information to resolve payment inaccuracies within the 3-year window will help to reduce many burdens that arise during the audit process. We will work with States and issuers during compliance reviews, which will be conducted annually or as needed, to conduct the reviews efficiently and without undue administrative burden. As with audits, issuers will have an opportunity to provide feedback that HHS considers to improve future compliance reviews and ensure that the process is not overly burdensome. 14. Factors Considered in Determining the Amount of CMPs and HHS' Authority To Impose CMPs Against Issuers in State Exchanges and SBE-FPs (Sec. 156.805)

In the 2027 Payment Notice proposed rule (91 FR 6418), we proposed two proposals related to Sec. 156.805. First, we proposed to amend Sec. 156.805(b) to reiterate what factors HHS considers when determining the amount of CMPs as enforcement remedies against QHP issuers in Exchanges. Specifically, to

increase transparency in how HHS calculates the amounts of CMPs imposed against QHP issuers for violations described in Sec. 156.805(a), including but not limited to substantial noncompliance with Exchange standards under parts 153 and 156 of title 45, we proposed to reiterate in Sec. 156.805(b) that in determining the amount of CMPs, in addition to the factors HHS takes into account when determining a CMP amount listed in Sec. 156.805(b)(1) through (3), HHS would identify the lawful purpose or purposes of the CMP amount. As discussed in section III.A.1. of the proposed rule, to align with these proposed amendments to Sec. 156.805(b), we also sought to clarify the factors considered in determining the CMP amount and the purpose of the CMP in Sec. 150.317.

Second, we proposed to amend Sec. 156.805(f) to clarify the authority HHS has to impose CMPs against issuers in State Exchanges or SBE-FPs for identified violations. Specifically, we proposed to amend Sec. 156.805(f) to clarify that HHS' authority to impose CMPs against issuers in State Exchanges or SBE-FPs includes the authority to impose CMPs for identified violations of any Exchange requirements and standards applicable to issuers offering a QHP in an Exchange, when a State notifies HHS that it is not enforcing these requirements or HHS determines that a State is failing to substantially enforce these requirements. As detailed further below, we did not propose any other changes to the legal bases for imposing CMPs against issuers in FFEs nor the circumstances in which HHS may exercise its enforcement authority against issuers in State Exchanges or SBE-FPs.\353\

\353\ We stated in the proposed rule that the bases and processes for imposing CMPs in FFEs and the circumstances in which HHS may exercise enforcement in State Exchanges would not be impacted by a State's decision to implement the proposed DE option under Sec. 155.221(j), if finalized.

Under the first proposal, sections 2723(b)(2), 2718(b)(3), and 2761(b) of the PHS Act and section 1321(c)(2) of the Affordable Care Act authorize the Secretary to impose CMPs when a QHP issuer fails to meet the required standards.\354\ In prior rulemakings (78 FR 54121; 79 FR 15240, 15242 through 15243; 79 FR 30240, 30264; 81 FR 12204, 12313 through 12314; and 81 FR 61538, 61581), to implement these statutory provisions, we established provisions at Sec. 156.805 to govern the bases and process for imposing CMPs against QHP issuers in Exchanges when HHS has reasonably determined that the issuer has engaged in one or more of the enumerated actions listed in Sec. 156.805(a)(1)-(7), including noncompliance with issuer standards and requirements under 45 CFR parts 153 and 156. Further, in part 2 of the 2022 Payment Notice (86 FR 24242 through 24243), we set forth the framework for HHS' enforcement of the applicable Federal APTC, CSR, and user fee standards in situations where State authorities fail to substantially enforce those standards for the QHP issuers participating in State Exchanges and SBE-FPs, and HHS' authority to impose associated CMPs.

\354\ See PHS Act sections 2723(b)(2)(G), 2718(b)(3), and 2761(b) (indicating CMPs shall be paid to the Secretary and shall be available without appropriation and until expended for the purpose of enforcing the provisions for which the penalty was imposed); see also Affordable Care Act section 1321(c)(2) (authorizing the Secretary to impose CMPs on the same basis as detailed in section 2723(b) of the PHS Act).

Since 2014, Exchange regulations have imposed standards and requirements on issuers offering QHPs participating in Exchanges, including, but not limited to, standards and requirements under 45 CFR subtitle A, subchapter B, parts 153 and 156,\355\ such as compliance with premium payment policies in part 156. Historically, to facilitate QHP issuers' compliance with Exchange standards and requirements, HHS conducted audits, the results of which played a critical role in ensuring that Federal funds are appropriately safeguarded. However, we exercised enforcement discretion and did not seek to impose CMPs to enforce the findings in such audits, to give issuers time to acclimate to a new market and learn the regulatory scheme, and relied instead on other mechanisms available, such as recouping overpayments, decertification of QHP issuers for egregious violations, and corrective action plans.\356\ But, as we stated in the proposed rule, as the markets have matured, HHS audits consistently reveal that in practice, issuers implement inconsistent policies, even after we have provided such issuers with guidance and recommendations to cure identified noncompliance. We stated that continued violations put HHS at risk of making improper payments, such as APTC payments for enrollees with noncompliant effectuations or continued enrollments that should have been cancelled or terminated. We further stated that violations may be identified long after an improper payment is made,\357\ and retroactive changes often involve loss of eligibility for APTC, disenrollment of coverage, and reversal of paid claims, which together can cause enrollees outsized financial harm. We noted, for example, that if we were to find that an issuer maintained an enrollee's coverage in violation of an enrollment or payment requirement and directed the issuer to retroactively terminate the enrollee's coverage to correct the noncompliance, the enrollee would lose their APTC for the months they were covered, which may have tax implications, and the enrollee could be liable for claims costs previously covered under their plan which might, as a practical matter, be difficult for a QHP issuer to recover. We stated that to minimize these needless harms to enrollees and QHP issuers alike and bolster compliance with HHS standards and requirements applicable to issuers offering QHPs participating in Exchanges, HHS oversees QHP issuer compliance in this area.

\355\ CMPs may be imposed on an issuer in an Exchange, if, based on credible evidence, HHS has reasonably determined that the issuer has engaged in one or more of the actions listed under Sec. 156.805(a).

\356\ See, for example, Sec. 156.480(c)(4), which requires, in part, that a QHP issuer must comply with actions set forth in a final audit report and provide a written corrective action plan for HHS approval and QHP issuer implementation.

\357\ Improper payments are often discovered long after an improper payment is made because these audits are conducted on benefit year data after the 3-year window for resolution of payment inaccuracies described in Sec. 156.1210(c) closes, which is well after an issuer receives an APTC on behalf of an enrollee and claims were processed.

We proposed to amend Sec. 156.805 to reiterate that HHS would identify the lawful purpose or purposes of the CMP when calculating CMP amounts. As noted above, section 2723(b)(2) of the PHS Act and section 1321(c)(2) of the Affordable Care Act authorize HHS to impose CMPs to enforce Exchange standards and requirements applicable to issuers offering QHPs participating in Exchanges. Section 2723(b)(2)(C)(i) of the PHS Act caps the amount of the CMP at $100 (as adjusted annually under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and other relevant laws) \358\ for each day for each individual for which an entity fails to comply with a relevant statutory or regulatory requirement. Further, when assessing a CMP, section 2723(b)(2)(C)(ii) of the PHS Act requires HHS to consider the previous record of compliance of the entity with the applicable legal provisions and the gravity of the violation.

\358\ See Sec. 701 of Public Law 114-74; see also 45 CFR 102.3; see also 89 FR 64815.

As discussed in the proposed rule, that broad delegation of enforcement authority can encompass several traditional purposes of monetary

remedies. For example, in some circumstances, when consistent with these provisions and applicable law, HHS might impose a CMP to penalize a QHP issuer when an audit reveals that it failed to comply with an applicable law in prior years and thereby collected payments for some period despite not being entitled to those payments under a public benefits program the government runs. In other circumstances, HHS might impose a CMP to bring a currently noncompliant QHP issuer into compliance with relevant laws, such as if HHS discovers that a QHP issuer is currently refusing to comply with particular laws. And in still other circumstances, HHS might impose a CMP to try to make a wronged party whole for harm caused by the QHP issuer's conduct, such as if HHS discovers violations that cost the public money and HHS is able to make the Government whole through its CMP authority.

We stated that these purposes for which HHS imposes CMPs related to enforcement of Exchange standards and requirements applicable to issuers offering QHPs participating in Exchanges are not mutually exclusive. To increase transparency in how HHS calculates the amounts of CMPs imposed against QHP issuers for violations described in Sec. 156.805(a), including but not limited to substantial noncompliance with Exchange standards under parts 153 and 156 of title 45, we proposed to clarify that HHS will identify the underlying lawful purpose or purposes of a CMP when calculating the relevant amount.

We stated that QHP issuers have been on notice of possible CMPs for noncompliance since the inception of the Exchange, through regulations, and directly through subsequent HHS communications. We noted, for example, that in the 2019 CMS Program Integrity letter to FFE issuers,\359\ we stated that CMPs may be imposed against QHP issuers for violations of applicable regulatory requirements identified through FFE audits of APTCs and user fees beginning for benefit year 2020. We added similar language to APTC and user fee audit reports for FFE issuers for benefit years 2016-2019,\360\ and we restated that we may begin imposing CMPs starting with 2020 benefit year APTC and user fee audits of FFE (and SBE-FP) issuers in a Fall 2023 webinar for all FFE and SBE-FP issuers.\361\ In the proposed rule, we noted that QHP issuers now have over a decade of experience implementing applicable Exchange standards and requirements. We stated that given the duty to safeguard Federal funds, ongoing concerns with QHP issuers' inconsistent premium payment policies, and in light of ongoing audit observations and findings of noncompliance,\362\ HHS plans to proactively monitor and enforce compliance with the Exchange standards and requirements applicable to issuers offering QHPs participating in Exchanges, including through the imposition of CMPs, as warranted.

\359\ See CMS Issuer Letter, available at https://www.cms.gov/files/document/ppfmgea-audit-communication-non-auditees5cr071819.pdf.

\360\ See, for example, materials available at https://www.cms.gov/files/zip/2019-ffe-audit-report-part-1.zip.

\361\ See Registration for Technical Assistance Portal (REGTAP), available at https://regtap.cms.gov/reg_library_openfile.php?id=4647&type=l.

\362\ See CMS. The Center for Consumer Information & Insurance Oversight: Advance Payments of the Premium Tax Credit (APTC) Audits, available at https://www.cms.gov/cciio/programs-and-initiatives/health-insurance-market-reforms/auditreports.

Second, we proposed to clarify the authority that HHS has to impose CMPs against issuers in State Exchanges or SBE-FPs when a State notifies HHS that it is not enforcing the applicable requirements or HHS determines that a State is failing to substantially enforce these requirements. Specifically, we proposed to amend Sec. 156.805(f) to clarify that HHS' authority to impose CMPs against issuers in State Exchanges or SBE-FPs includes authority to impose CMPs for identified violations of the requirements applicable to the noncompliant actions described in Sec. 156.805(a) that are applicable to issuers offering a QHP in a State Exchange or SBE-FP, including substantial noncompliance with issuer standards and requirements under parts 153 and 156 of title 45, as opposed to just those requirements in subpart E or Sec. 156.50, as currently written. We also proposed a conforming change to Sec. 156.800.

In prior rulemaking (86 FR 24248 through 24252), we set forth the framework, consistent with section 2723(b) of the PHS Act and section 1321(c)(2) of the Affordable Care Act, for HHS' authority to enforce applicable Exchange standards for QHP issuers participating in State Exchanges and SBE-FPs. We further clarified that this enforcement authority arises when a State authority notifies HHS that it is not enforcing these standards or HHS determines that a State has failed to substantially enforce these standards, and that if HHS has this enforcement authority, HHS could impose a CMP. However, as we stated in the proposed rule, when establishing this framework, we inadvertently limited the scope of HHS' authority under Sec. 156.805(f) to enforcement of only those requirements in subpart E of part 156 or in Sec. 156.50.

To align with HHS' statutory authority, we proposed to amend Sec. 156.805(f) to expressly provide that when appropriately triggered, HHS has the authority to enforce the requirements applicable to the noncompliant actions described in Sec. 156.805(a) that are applicable to issuers offering a QHP in a State Exchange or SBE-FP, as well as the authority to impose CMPs against a QHP issuer in a State Exchange or SBE-FP on the same grounds for which it can impose CMPs for QHP issuers in a FFE under Sec. 156.805. We further stated that amending the language to expressly address HHS' enforcement authority for these requirements would help to ensure that HHS can hold all issuers accountable for violations of requirements that result in improper APTC payments.

We stated that this proposed amendment would not usurp the States' power to enforce these requirements in their own Exchanges. As previously established in prior rulemaking, the process for imposing CMPs must either require that the State notify HHS that it is failing to enforce the requirements of subpart E or Sec. 156.50 or that HHS make its own determination, following the standards in Sec. 150.201, et seq., that the State is failing to substantially enforce these requirements.

In summary, we proposed to amend Sec. 156.805(b) to reiterate that in determining the amount of CMPs, in addition to the factors HHS takes into account when determining a CMP amount listed in Sec. 156.805(b)(1) through (3), HHS would identify the lawful purpose or purposes of the CMP amount. We also proposed to amend Sec. 156.805(f) to provide that when appropriately triggered, HHS would enforce the requirements applicable to the noncompliant actions described in Sec. 156.805(a) that are applicable to issuers offering a QHP in a State Exchange or SBE-FP, and has the authority to impose CMPs against a QHP issuer in a State Exchange or SBE-FP on the same grounds for which it can impose CMPs for QHP issuers in an FFE.

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 the amendments to Sec. 156.805(b) and (f) as proposed. We

summarize and respond below to public comments received on the proposed reiteration in Sec. 156.805(b) that in determining the amount of CMPs, in addition to the factors HHS takes into account when determining a CMP amount, HHS would identify the lawful purpose or purposes of the CMP amount, and the proposed amendments to Sec. 156.805(f) to clarify HHS' authority to impose CMPs against issuers in State Exchanges and SBE-FPs.

Comment: Several commenters supported the proposal to reiterate that when HHS determines the amount of a CMP, HHS would identify the lawful purpose or purposes of the CMP. One of these commenters recommended that if the proposal is finalized, HHS should minimize unintended disruption to consumers receiving ongoing coverage, and such actions could include enrollment protections and transition safeguards where enforcement actions affect issuer participation or plan operations.

Response: We appreciate comments on the proposed revisions to Sec. Sec. 150.317 and 156.805(b) and are finalizing these provisions as proposed. As for concerns about the unintended disruption of consumers' ongoing coverage, we note that the audits and CMPs discussed in this section do not typically occur until after the benefit year has closed, and therefore, we do not expect these provisions to retroactively impact enrollee coverage for the benefit year. However, CMPs should promote future compliance by issuers in their participation or plan operations to ensure that enrollee coverage is appropriate and compliant with all applicable Exchange requirements, such as premium payment requirements.

Comment: Other commenters recommended clarifications regarding when a CMP would be imposed. One commenter stated the proposed language for Sec. 156.805(b) would expand enforcement authority without defining the nature or severity of conduct which would result in the imposition of a CMP and recommended the adoption of specific and measurable criteria for violations, including safe harbors for good faith compliance efforts. The commenter also recommended that HHS articulate factors considered, such as issuer size, duration of violation, and consumer harm, to help ensure that CMP amounts are proportional to the nature of the violation and issuer size. Another commenter urged HHS to clarify that CMPs will be imposed only for actions solely within an issuer's control. The commenter stated that many administrative functions are performed by Exchanges and are outside of issuers' control; therefore, issuers should not be subject to CMPs that result from operational failures or determinations that are an Exchange's responsibility, and rather than imposing CMPs, actions attributed to an Exchange should be addressed through appropriate oversight of the Exchange.

Response: HHS' audit processes and regulations for imposing CMPs provide issuers with information on whether a CMP will be imposed and describe what factors HHS takes into consideration when determining the CMP amount. Under Sec. 156.805(a), if there is credible evidence, HHS may impose CMPs if there is a determination that an issuer has engaged in certain actions. Such actions include when there is misconduct or substantial noncompliance by the issuer with Exchange standards and requirements applicable to QHP issuers, which include requirements and issuer standards under 45 CFR parts 153 and 156. If HHS seeks to impose a CMP, when determining the CMP amount, along with considering the lawful purpose of the CMP, HHS may also take into account the factors under Sec. 156.805(b)(1)-(3), which we did not propose to change in this rule. HHS may consider the level of the violation, as determined in part by the frequency of the violation, taking into consideration whether any violation is an isolated occurrence, represents a pattern, or is widespread. HHS may also consider any aggravating or mitigating circumstances or other such factors as justice may require. Therefore, if factors such as volume of violations, which may correlate with issuer size based on the volume of policies, duration of violations, financial impact, and good faith compliance efforts fall within the factors described in Sec. 156.805(b)(1)-(3), then HHS may take those factors into consideration when determining the CMP amount.

Additionally, in accordance with regulations at Sec. 156.480(c), HHS conducts entrance and exit conferences for audits (including those which may result in CMPs) and provides issuers with documentation such as preliminary \363\ and final audit reports, which provide information on HHS' reasoning for proposing a CMP and the CMP amount. During audit entrance and exit conferences and in these audit reports, HHS will continue to work collaboratively with issuers to ensure they are directly informed of the process and methodology for the CMP determination and CMP amount.

\363\ In accordance with 45 CFR 156.480(c)(3)(i), HHS will share its preliminary audit findings with the issuer, who will then have 30 calendar days to respond to such findings in the format and manner specified by HHS. See also, 45 CFR 156.806 (requiring HHS to provide 30 days for the issuer to respond to and provide additional information to refute an alleged violation before imposing a CMP).

Further, as discussed above, HHS may impose CMPs if an issuer has engaged in actions where there is misconduct or substantial noncompliance with Exchange standards and requirements applicable to QHP issuers, which includes requirements and standards for QHP issuers under 45 CFR parts 153 and 156. HHS has discretion in determining whether to impose a CMP. As described in Sec. 156.805(b)(3), HHS may consider any aggravating or mitigating circumstances or other such factors as justice may require. Conduct outside of the issuer's control could be considered a mitigating circumstance that HHS could consider when determining the CMP amount.

Comment: A few commenters supported the proposal to clarify that when appropriately triggered, HHS has the authority to impose CMPs against issuers in State Exchanges and SBE-FPs for identified violations of requirements described in Sec. 156.805(a). One commenter supported the clarification and stated that it reinforces the consequences for failing to comply with requirements and will help to restore accountability for issuers, as well as encourage better State performance and help to maintain accountability across all Exchanges without overriding State roles in routine cases. Another commenter supported the clarification and HHS' active enforcement to safeguard individual and government spending (that is, premiums and APTC) against issuer noncompliance. One commenter, although supportive, raised concerns that an expansion in authority may create conflicts with the Exchange's implementation and recommended working with State Exchanges to address compliance concerns. One commenter stated that enforcement must account for variability in State regulatory authorities, respect State roles in regulating their Exchanges, and avoid unintentional Federal preemption of valid State requirements.

Several commenters opposed the proposal, stated concerns about expanding HHS' enforcement authority beyond statutory limits, and stated that the proposed clarification encroaches upon State authority. One commenter noted that it would be contrary to section 1321 of the Affordable Care Act to penalize issuers for failing to comply with State guidance or for violations stemming from State Exchange failures, recommending that HHS refrain from expanding its CMP authority. Another

commenter stated that because HHS enforcement authority is limited to specific enumerated circumstances tied to the APTC, CSR, and user fee programs, expanding HHS' authority would encroach into areas reserved for the States by Congress, going against the Affordable Care Act's Federal-State framework. Another commenter stated the current regulations already appropriately respect the role of States in regulating their Exchanges, and further stated the proposed amendments deviate from constitutional norms and usurp States' constitutional roles as regulators within their own borders. Another commenter opposed the clarification and stated that HHS intervention should be limited to only when the State explicitly notifies HHS it is not enforcing requirements. Another commenter opposed the clarification because State Exchange issuers would be exposed to substantial financial penalties in circumstances where they are complying with State requirements, creating conflicting and duplicative enforcement.

A few commenters recommended that, if these proposals are finalized, HHS defer the applicability of these provisions to give State Exchanges, SBE-FPs, and issuers time to make necessary adjustments. One commenter recommended allowing a safe-harbor period of 1 year to allow time for State Exchanges, SBE-FPs, and issuers to address any changes in regulatory scope and obligations. Another commenter recommended deferring enforcement of CMPs against issuers in State Exchanges or SBE-FPs for 6 months following the applicability date for these provisions to allow issuers time to update compliance processes, seek appropriate guidance, and align internal controls to avoid the risk of inadvertent noncompliance.

One commenter recommended publishing implementation guidance and considering implementing phase-in periods for the new enforcement procedures to allow time for issuers, agents, and brokers to adapt their operational processes and internal compliance systems.

Response: We appreciate these comments and are finalizing these provisions as proposed. We agree that the clarification that HHS can assess compliance with any applicable Exchange requirements helps to ensure issuer accountability, appropriately safeguard Federal funds, and ensure that there is accountability for Exchange standards across every Exchange.

As stated above, we did not propose any changes to the circumstances in which HHS may exercise its enforcement authority against issuers in State Exchanges or SBE-FPs. We are not expanding HHS' enforcement authority beyond statutory limits and are merely reiterating current authority governing when HHS can take enforcement actions against issuers in State Exchanges and SBE-FPs. In the proposed rule (91 FR 6420), we stated that this proposed amendment would not usurp States' power to enforce these requirements in their own Exchanges and therefore, this proposal would align with section 1321 of the Affordable Care Act. As previously established in prior rulemaking (86 FR 24248 through 24252), HHS may not impose CMPs unless either the State notifies HHS that it is failing to enforce Exchange requirements or HHS makes its own determination, following the standards in Sec. 150.201, et seq., that the State is failing to substantially enforce these requirements. Therefore, we disagree that the finalized provisions will encroach upon States' authority and that HHS is improperly expanding its enforcement authority beyond statutory limits.

When developing the State-Federal regulatory framework for CMPs, we set forth the framework to be consistent with section 2723(b) of the PHS Act and section 1321(c)(2) of the Affordable Care Act, which allows the Secretary to implement Exchange standards in a State when directly authorized to do so. The PHS Act and Affordable Care Act authorize the Secretary to do so when a State has failed to substantially enforce provisions for health insurance issuers in the State. This authority includes imposing CMPs for issuers' failure to comply with Exchange requirements, such as APTC, CSR, and user fee program requirements. Additionally, the regulatory framework takes into consideration States' powers to regulate their own Exchanges, as HHS is unable to impose CMPs against issuers in State Exchanges or SBE-FPs unless specific statutory and regulatory requirements are met, and noncompliance is identified for requirements enforceable by HHS under Sec. 156.805(f). As such, we do not believe that there is conflicting or duplicative enforcement.

For the comments suggesting HHS delay the applicability date of HHS enforcing requirements in State Exchanges or SBE-FPs, we do not agree. This policy only clarifies current HHS authority and is not making any changes to the Exchange requirements with which issuers are required to comply. Issuers and States have been on notice prior to this rulemaking \364\ that HHS can enforce in instances in which a State Exchange or SBE-FP informs HHS that it is not enforcing these requirements or HHS determines that the State Exchange or SBE-FP is not substantially enforcing these requirements.

\364\ In the 2022 Payment Notice (86 FR 24242), we set forth a framework for HHS enforcement of the applicable Federal APTC, CSR, and user fee standards in situations where State authorities fail to substantially enforce those standards with respect to the QHP issuers participating in State Exchanges and SBE-FPs.

Lastly, we are finalizing HHS' authority under Sec. 156.805(f), which allows for the imposition of CMPs against QHP issuers for certain actions. We note that the comment regarding guidance and an implementation phase for agents and brokers to adapt their operational processes and internal systems is out of scope of this final rule because it does not relate to our proposal--these amendments will impact issuers and not agents and brokers. However, we appreciate the commenter's attention and feedback.

Comment: Commenters provided additional recommendations on determinations for when State Exchanges or SBE-FPs are not enforcing requirements. One commenter recommended that HHS publish a list of Exchange requirements that details what State Exchanges or SBE-FPs have informed HHS they are not enforcing the requirements or when HHS has determined that the State Exchange or SBE-FP substantially failed to enforce Exchange requirements. Another commenter noted that the current authority for HHS to enforce requirements in subpart E of part 156 or in Sec. 156.50 against issuers participating in State Exchanges and SBE-FPs rests on questionable statutory authority, as this commenter believed that there is no clear statutory authority allowing this, and recommended that HHS clearly articulate the parameters of its authority. The commenter also recommended that HHS provide clear notice to regulated parties that responsibility has shifted to HHS to enforce requirements, so that issuers are not subject to conflicting regulatory directives. Another commenter recommended that HHS issue further rules detailing circumstances in which HHS will deem a State Exchange's or SBE-FP's enforcement activities insufficient and that HHS should further establish procedures in advance via notice and public comment in cases of intended enforcement.

Commenters also provided recommendations on how to best implement a framework for imposing CMPs against issuers in State Exchanges or SBE- FPs. One commenter

recommended that HHS work closely with States on developing and implementing a CMP framework for issuers and that HHS should prioritize aligning any Federal penalty framework with State oversight efforts to ensure it does not disrupt a State's regulation of its Exchange. Another commenter stated that enforcement must account for variability in State regulatory authorities, respect State roles in regulating their Exchanges, and avoid unintentional Federal preemption of valid State requirements.

Response: We will not impose CMPs against QHP issuers in State Exchanges and SBE-FPs unless we determine that HHS is responsible for enforcing Exchange requirements, which occurs when HHS is notified by a State Exchange or SBE-FP that the Exchange is not enforcing these requirements or HHS follows the processes under Sec. 150.201 et seq. and determines the State Exchange or SBE-FP is not substantially enforcing these requirements. We intend to provide notification to State Exchange or SBE-FP issuers if HHS is responsible for enforcement and may impose CMPs against issuers in these Exchanges. For example, we could provide notification through audit processes, such as the preliminary or final audit reports.

Additionally, as discussed above, HHS' authority comes from statutory provisions which grant it enforcement authority over Exchange requirements, including those related to the APTC, CSR, and user fee programs, when a State does not substantially enforce them. Further, regardless of whether a State Exchange or SBE-FP is responsible for enforcing requirements against issuers within its Exchange or HHS is responsible for such enforcement, the requirements do not change; rather, it is merely the entity responsible for enforcement that would change. Further, section 1321(d) of the Affordable Care Act provides that there would be no interference with State regulatory authority. Therefore, there would not be any conflicts between State and Federal law if HHS is responsible for enforcement, as the requirements would be applied equally, just as they would be if the State is enforcing the requirements. 15. Administrative Review of QHP Issuer Sanctions (Sec. Sec. 156.903 and 156.935)

In the 2027 Payment Notice proposed rule (91 FR 6420), to improve the accuracy of hearing decisions and increase hearing efficiency, we proposed to amend the review process that governs administrative appeals of QHP issuer sanctions imposed under Sec. 156.800, including QHP decertification actions and CMPs imposed against QHP issuers for, among other actions, violations of Exchange standards. First, under Sec. 156.903, we proposed to allow an administrative law judge (ALJ) who presides over an administrative appeal of a QHP issuer sanction imposed in accordance with Sec. 156.800 to issue subpoenas, upon his or her own motion or at the request of a party, if the subpoenas are reasonably necessary for the full presentation of a case. Second, to expedite the process of appeals and limit duplication, we proposed to amend Sec. 156.935 so that the discovery provisions set forth therein do not apply to administrative appeals of proposed CMPs for violations identified through audits of the APTC, CSR, or user fee programs conducted in accordance with Sec. 156.480(c). We stated that if finalized as proposed, these amendments would apply to appeals filed on or after the effective date of the final rule.

In the 2014 Payment Notice (78 FR 65079), we codified the administrative appeals process for QHP issuers in an FFE to challenge the imposition of a sanction, as described in Sec. 156.800. These procedures include the opportunity for a hearing before an ALJ of the HHS Departmental Appeals Board (DAB). In part 2 of the 2022 Payment Notice (86 FR 24253), we further amended these procedures to affirm that the process applies to appeals of sanctions imposed against QHP issuers participating in any Exchange and to align with the DAB's internal practices for administrative hearings to appeal CMPs.

The DAB's internal practices include procedures that ALJs and parties must follow for appeals and administrative hearings, and ALJs and parties must also follow any relevant agency's administrative hearing procedures as prescribed by the agency through regulation for the agency's programs.\365\ The DAB's procedures currently allow parties to request subpoenas, and they allow ALJs to issue a subpoena if the ALJ is authorized by law to issue a subpoena and applicable regulatory requirements are met.\366\ However, currently, 45 CFR part 156, subpart J does not provide the authority for the ALJ to issue subpoenas in hearings requested by parties to appeal the imposition of a QHP issuer sanction, as defined in Sec. 156.800. We stated in the proposed rule that having the option to issue a subpoena would help the ALJ obtain necessary documentation, information, and potential testimony from witnesses to fully develop a case before issuing a decision, which could streamline hearing processes and improve the accuracy of DAB decisions, benefiting both parties. We further stated that granting ALJs the authority to issue a subpoena would also align with other similar programs.\367\ Therefore, to further align HHS administrative appeal procedures with the DAB's procedures and improve the speed and accuracy of the hearing process, we proposed to add the ability to issue a subpoena in the ALJ's current authority under Sec. 156.903.

\365\ See HHS. Appeals to DAB Administrative Law Judges (ALJs). Available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-alj/index.html.

\366\ See HHS. Department Appeals Board (DAB): Discovery. Available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-alj/procedures/discovery/index.html. See also HHS. Department Appeals Board (DAB): Summoning Witnesses. Available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-alj/procedures/summoning-witnesses/index.html.

\367\ See, for example, 42 CFR 498.58; see also 42 CFR 422.1044.

As part of this provision, we also proposed that a party must file a written request for a subpoena with the ALJ at least 5 calendar days before the date set for the hearing and that the request must identify the witness(es) or documents to be produced, describe their address(es) or location(s) with sufficient particularity to permit them to be found, specify the pertinent facts the party expects to establish by the witness(es) or documents, and indicate why those facts could not be established without use of a subpoena. We stated that establishing these requirements in regulation would provide structure to the subpoena request, thereby increasing the efficiency with which ALJs can exercise the proposed subpoena authority. We further stated that these requirements would also ensure that parties requesting subpoenas provide ALJs with all relevant information ALJs will need to determine if the subpoena is reasonably necessary for full presentation of the case.

Second, to expedite the process of appeals and limit duplication, we proposed to amend Sec. 156.935 to ensure that the discovery provisions set forth therein do not apply to administrative appeals of notices of proposed CMP assessments for violations identified through audits of the APTC, CSR, or user fee programs conducted in accordance with Sec. 156.480(c). To explain, current audit processes under Sec. 156.480(c)(3) require that HHS (1) conduct an audit entrance conference with each issuer selected for audit to discuss the scope of the audit, (2) provide issuers with preliminary audit

findings and an opportunity to refute the preliminary findings prior to receiving the final audit report, and (3) provide issuers with an opportunity to discuss final audit findings during an exit conference. In addition, audits are collaborative, meaning that at any point during the audit, issuers can ask questions of the auditors or seek clarification on the information or documentation needed. Further, in conjunction with these audit processes and in accordance with Sec. 156.806, when imposing a CMP, HHS must provide written notice to the issuer that describes the potential violation(s), provides 30 days from the date of the notice to respond and provide additional information to refute the allegations, and states that a CMP may be assessed if the allegations are not refuted as determined by HHS.

During the established audit processes, HHS makes available to issuers relevant information that HHS relies on in making final audit determinations, including written audit procedures, and provides issuers with multiple opportunities to ask HHS questions about the audit procedures and audit findings. Should HHS determine that a CMP is appropriate, HHS would also make relevant information that HHS relied on to determine the CMP amount available to the issuer during the audit process. Therefore, as we stated in the proposed rule, under these established audit processes, issuers are able to develop an extensive record that can inform a CMP appeal. For these reasons, we stated that we believe issuers would not need to rely on the time-consuming process of discovery for information to develop a record for an administrative appeal of a notice of proposed CMP assessment for violations identified through audits of the APTC, CSR, or user fee programs.

Similarly, we stated that these established audit procedures already allow HHS to obtain information necessary to inform final audit findings from the issuer during the audit process, limiting the need for discovery of information. Therefore, to prevent duplicative efforts for gathering documentation and information and to reduce burden on both parties to an appeal, we proposed adding a new paragraph to Sec. 156.935 which would exclude appeals of CMPs resulting from audits at Sec. 156.480(c) from the process of discovery.

In summary, we proposed to add a new paragraph to Sec. 156.903 which provides the ALJ with the authority to issue subpoenas, upon his or her own motion or at the request of a party, if they are reasonably necessary for the full presentation of a case for an administrative appeal brought under Sec. 156.805 or Sec. 156.810. We also proposed to add a new paragraph to Sec. 156.935 to ensure that the discovery provisions set forth therein do not apply to appeals of proposed CMPs imposed under Sec. 156.805 resulting from audits at Sec. 156.480(c). We stated that, if finalized as proposed, these amendments would apply to appeals filed on or after the effective date of the final rule.

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 below to public comments received on the proposed additions to Sec. 156.903 to grant ALJs the authority to issue subpoenas and the proposed additions to Sec. 156.935 to ensure that the discovery provisions set forth therein do not apply to appeals of proposed CMPs imposed under Sec. 156.805 resulting from audits at Sec. 156.480(c).

Comment: Several commenters opposed the proposal that provides that the discovery provisions do not apply to appeals of proposed CMPs under Sec. 156.805 resulting from audits under Sec. 156.480(c). Commenters noted this proposal raises due process concerns, as the removal would limit issuers' due process protections. One commenter noted that discovery is essential to the determination of the reasonableness of a CMP and the removal of discovery violates statutory requirements for administrative decisions to be made on a full record. Other commenters noted the removal of discovery could result in issuers not being able to develop a full record and present a case. One commenter stated that eliminating discovery would limit access to necessary information, making it difficult for the issuer to understand the basis for the enforcement action and assemble a complete record which includes complex factual and technical evidence, and recommended that issuers have the ability to retain adequate tools and time to prepare effective responses, particularly where sanctions carry significant financial or operational consequences. Another commenter recommended that discovery should be retained as the proposal would require issuers to develop their defense from their audit record alone, which would preclude an issuer's ability to compel necessary information to develop a full defense.

Response: We acknowledge these comments but are finalizing Sec. 156.935 as proposed, as discovery for appeals of proposed CMPs under Sec. 156.805 resulting from audits under Sec. 156.480(c) is redundant and unnecessary. The audit procedures under Sec. 156.480(c) and the CMP imposition process provide both issuers and HHS with necessary documentation and ample opportunities to disclose necessary and pertinent information. The audits conducted under Sec. 156.480(c) are collaborative, where HHS works with issuers to ensure they have several opportunities to provide information and evidence to address any findings of noncompliance.

Audit procedures under Sec. 156.480(c)(1) and (3) require that HHS conduct an audit entrance conference with each issuer selected for audit to discuss the scope of the audit and provide issuers with preliminary audit findings and an opportunity to refute the preliminary findings prior to receiving the final audit report. Issuers are also provided with an opportunity to discuss final audit findings during an exit conference. In addition to these opportunities, HHS provides issuers with documentation throughout the audit, including the audit sampling and extrapolation methodology, audit notification letters, entrance conference slides, instructions for completing the audit, a discrepancy process to provide additional documentation or justification of findings, the Notice of Noncompliance Preliminary Findings Audit Report (which includes the methodology for determining CMP amounts), and the Final Findings Audit Report (which includes written responses to refutations). For example, under Sec. 156.806, prior to imposing CMPs, if there is a potential violation identified under Sec. 156.800 which may result in a CMP, HHS provides the Noncompliance Preliminary Findings Audit Report. This report includes the methodology for determining CMP amounts; describes each violation, including the issuer's explanation of the circumstances surrounding the violation; provides the issuer with 30 days to refute the violation; and notifies the issuer that CMPs may be assessed if violations are not refuted. Therefore, throughout the audit, issuers receive the administrative record and have ample opportunities to both share information with HHS and request information from HHS to better understand why HHS has identified violations due to noncompliance and why a CMP may be assessed, allowing issuers to develop a full case to present in front of the DAB and ALJ if necessary. Thus, the removal of discovery will not prevent issuers from having a fair opportunity to

present a full case. Additionally, regulations for other programs, such as the appeal and CMP regulations for Medicare Advantage at 42 CFR part 422, for example, do not have any provisions for discovery.

Comment: Several commenters recommended that HHS clarify the scope and limits of the proposed subpoena authority and include sufficient procedural safeguards to protect fairness so that issuers have the fair opportunity to present a case. One commenter recommended that the ALJs' subpoena authority be narrowly tailored to prevent disruption of issuer operations and to ensure the authority to subpoena would address relevant issues.

Response: We appreciate these comments and are finalizing this provision as proposed. The ALJ's subpoena authority will allow the ALJ to issue subpoenas either upon his or her own motion or upon the request of a party, and having the option to issue a subpoena will help the ALJ obtain necessary documentation, information, and potential testimony from witnesses to fully develop a case before issuing a decision. HHS intends that this provision will streamline hearing processes and improve the accuracy of DAB decisions, benefiting both parties. Under this process, the ALJ must follow certain regulatory procedures when issuing subpoenas, thereby ensuring the authority is not broad and is tailored to the case. Also, this authority under Sec. 156.903 will provide the scope of what information subpoena requests are required to include and ensure that the requested subpoena seeks information that will address relevant issues in the case. Additionally, other regulations for other programs, such as the appeal and CMP regulations for Medicare Advantage at 42 CFR part 422, for example, provide the ALJ with the authority to issue subpoenas. 16. Quality Standards: Quality Improvement Strategy (Sec. 156.1130)

In the 2027 Payment Notice proposed rule (91 FR 6421), we proposed to require QHP issuers to submit quality improvement strategies (QISs) addressing any two of the five topic areas listed in section 1311(g)(1) of the Affordable Care Act, without mandating which specific topic areas a QHP issuer would be required to address to meet the QIS statutory certification requirement beginning with PY 2027.

In accordance with section 1311(c)(1)(E) of the Affordable Care Act, QISs described in section 1311(g)(1) of the Affordable Care Act must be implemented across Exchanges as a QHP certification requirement. Section 1311(g)(1) of the Affordable Care Act defines a QIS as a payment structure that provides increased reimbursement or other market-based incentives for implementing activities related to five health care topic areas identified in statute: improving health outcomes of plan enrollees, preventing hospital readmissions, improving patient safety and reducing medical errors, promoting wellness and health, and reducing health and health care disparities. Under Sec. 156.1130(a), an issuer participating in an Exchange for two or more consecutive years must implement and report on a QIS, including a payment structure that provides increased reimbursement or other market-based incentives in accordance with the health care topic areas in section 1311(g)(1) of the Affordable Care Act, for each QHP offered in an Exchange, consistent with the guidelines developed by HHS under section 1311(g) of the Affordable Care Act. In the 2016 Payment Notice (80 FR 10844 through 10848), we established a phase-in approach for QIS implementation standards and reporting requirements to provide QHP issuers time to understand the populations enrolling in a QHP offered through the Exchange and to build quality performance data on their respective QHP enrollees. In the 2023 Payment Notice (87 FR 27341 through 27345), we finalized a guideline to require QHP issuers to address health and health care disparities as a specific topic area within their QIS, in addition to at least one other topic area described in section 1311(g)(1) of the Affordable Care Act, beginning in 2023.

We proposed to modify the approach finalized in the 2023 Payment Notice (87 FR 27208) to instead require QHP issuers to submit QISs addressing any two of the five topic areas listed in section 1311(g)(1) of the Affordable Care Act, without mandating which specific topic areas a QHP issuer would be required to address to meet the QIS statutory certification requirement. We did not propose any amendments to the regulatory text outlined in Sec. 156.1130.

We stated in the proposed rule that we believe this proposal would align with current Administration priorities, provide increased flexibility and reduced burden for QHP issuers that are required to submit QISs, and would better allow these QHP issuers to define the health outcome needs of their enrollees, set goals for improvement, and provide increased reimbursement to their providers or other market- based incentives to reward achievement of those goals, as initially described in the 2015 Payment Notice (79 FR 13744) when establishing the QIS program. Specifically, we stated that by allowing QHP issuers to select the two topic areas most relevant to their population and operational context, the proposal would empower issuers to focus resources on areas with the greatest potential for meaningful improvement, rather than adhering to a one-size-fits-all approach. We stated that this targeted flexibility would support innovative strategies for improving patient outcomes, encourage adoption of best practices across diverse settings, and help ensure that incentives are aligned with measurable progress on priority health outcomes, consistent with the objectives articulated in the 2015 Payment Notice (79 FR 13744) when establishing the QIS program.

We stated that we continue to believe that improving health care quality and outcomes for all is important. We stated that QHP issuers have a critical role in promoting high quality health care by designing QISs that tie provider payments or other market-based incentives to measures of performance, such as when providers meet quality indicators or when enrollees make certain choices associated with improved health. We further stated that for each QIS topic area, issuers may select quality measures, such as those from the Marketplace Quality Rating System, or other performance targets based on their programmatic goals and the needs of their enrollee populations, to monitor QIS progress.

We stated that although QHP issuers would no longer be required to submit a QIS that addresses health and health care disparities as a specific topic area within their QIS under this proposal if finalized, they would be permitted to continue to choose this topic area as one of the two topic areas they address in their QIS. We further noted that health and health care disparities may relate to various factors such as geographic, economic, educational, disability status, and other factors that impact high quality health care for all.

We sought comment on this proposal.

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 on the proposed requirement that QHP issuers submit QISs addressing any two of the five topic areas described in section 1311(g)(1) of the Affordable Care Act, without mandating that issuers address health and health care disparities as a specific topic area below.

Comment: Some commenters supported the proposal to allow QHP issuers to select any two of the five statutory QIS topic areas described in section 1311(g)(1) of the Affordable Care Act to address in their QISs. These commenters stated that increased flexibility would allow QHP issuers to better tailor their QISs to enrollee needs and local market conditions, and to focus resources on areas with the greatest potential impact. Several commenters also noted that the proposal would reduce administrative burden by removing prescriptive requirements.

Many commenters opposed or stated concerns regarding the proposal to no longer require QHP issuers to address health and health care disparities as a specific topic area within their QISs. These commenters emphasized that maintaining a required focus on health and health care disparities is critical to advancing health equity across QHP issuers. Several commenters stated that making this topic area optional could reduce prioritization of health and health care disparity-related activities, lead to variability in QHP issuer implementation of QIS activities addressing health and health care disparities and weaken alignment with broader health equity goals. A few commenters recommended retaining the requirement to address health and health care disparities as a specific topic area within a QIS or establishing alternative mechanisms to ensure continued focus on health and health care disparities.

Response: We appreciate commenters' support for this proposal and agree that the proposal would reduce administrative burden and increase flexibility, allowing QHP issuers to better tailor their QISs to enrollee needs and local market conditions and focus resources on areas with the greatest potential impact. We acknowledge commenters' concerns that making the health and health care disparities topic area optional could reduce prioritization of health and health care disparity-related activities. However, we continue to believe that allowing QHP issuers to select any two of the five statutory QIS topic areas under section 1311(g)(1) of the Affordable Care Act provides appropriate flexibility to address the most pressing needs of their enrollee populations and supports more targeted and effective quality improvement efforts. We also reiterate that QHP issuers may continue to select health and health care disparities as one of their QIS topic areas. We do not agree that this flexibility diminishes the importance of strategies to address health and health care disparities. Rather, it is intended to support more effective and context-specific implementation of quality improvement strategies, including those that directly address health and health care disparities. In addition, issuers retain the ability to select reducing health and health care disparities as one of their QIS topic areas, ensuring that flexibility is available for issuers to focus their quality improvement efforts on chosen areas of disparities.

For commenters' recommendations to retain the requirement to address health and health care disparities as a specific topic area within a QIS or establish alternative mechanisms to ensure continued focus on reducing health and health care disparities, we are not adopting those recommendations at this time. We believe that continued flexibility is maintained for issuers to choose to address health and health care disparities in quality improvement efforts. Through educational webinars and technical guidance, we will ensure continued focus on reducing health and health care disparities, along with other QIS topic areas.

Comment: Several commenters opposed the proposal more broadly, expressing concern that removing prescriptive requirements could weaken the effectiveness of the QIS program, reduce consistency across QHP issuers, and diminish alignment with broader quality goals. A few commenters stated that the current requirement to address health and health care disparities as a specific topic area within a QIS provides important structure and accountability.

Several commenters requested additional clarity to support consistent implementation, while other commenters recommended that CMS monitor the effects of the policy change, including impacts on quality and health equity outcomes.

Response: We acknowledge commenters' concerns. As discussed in the proposed rule (91 FR 6421), we believe that allowing QHP issuers to select the two statutory QIS topic areas most relevant to their populations and operational contexts supports more targeted and meaningful quality improvement efforts while reducing unnecessary burden. We proposed to remove the prescriptive topic area requirements to afford QHP issuers greater flexibility in designing QIS programs that are tailored to the specific needs of their enrolled populations while continuing to advance meaningful quality improvement objectives. This approach is consistent with the statutory framework under sections 1311(c)(1)(E) and 1311(g)(1) of the Affordable Care Act and the original intent of the QIS program as established in the 2015 Payment Notice (79 FR 13744).

For commenters' concerns that removing prescriptive requirements could reduce consistency across QHP issuers and weaken QIS program effectiveness, we note that QHP issuers remain subject to the QIS requirements under Sec. 156.1130, which require issuers to implement and report on strategies that include a payment structure tied to performance and quality improvement incentives. As discussed in the proposed rule, we believe that the statutory framework under sections 1311(c)(1)(E) and 1311(g)(1) of the Affordable Care Act, as implemented at Sec. 156.1130, continues to provide a foundation for accountability and quality improvement regardless of which topic areas an issuer selects.

Regarding commenters' concerns about the removal of health and health care disparities as a specifically enumerated topic area and potential implications for alignment with broader quality goals, we reiterate that QHP issuers may continue to select health and health care disparities as a topic area under the revised framework, and we further encourage issuers to tailor their QIS activities as appropriate to the needs of their enrolled populations, which may appropriately include a focus on health and health care disparities where relevant. We continue to believe that providing issuers flexibility to determine how best to address the needs of their enrollees is consistent with the intent of the QIS program as established in the 2015 Payment Notice (79 FR 13744) and as subsequently modified in the 2023 Payment Notice (87 FR 27341 through 27345). This flexibility supports more targeted and effective quality improvement by enabling issuers to align QIS activities with population-specific needs and local performance data.

The QIS statutory framework under sections 1311(c)(1)(E) and 1311(g)(1) of the Affordable Care Act, as implemented at Sec. 156.1130, provides a foundation for this approach by requiring issuers to implement and report on QISs that include a payment structure tied to performance and quality improvement incentives. This reporting requirement creates a mechanism for accountability in that CMS and Exchange authorities are able to review QHP issuer submissions to assess whether QHP issuers are actively implementing strategies designed to improve the quality of care and health outcomes for their enrollees.

Specifically, because QHP issuers must document and report on their QIS activities, including the topic areas they have selected and the performance-based payment structures they have established, there is a transparent record of QHP issuer efforts that is subject to oversight and review. Where we identify deficiencies in a QHP issuer's QIS submission, we may require the issuer to remediate those deficiencies, thereby providing an additional layer of accountability and oversight. The requirement to tie payment structures to performance further ensures that QHP issuers have a financial incentive to achieve meaningful quality improvement outcomes, rather than merely satisfying a procedural reporting obligation. Accordingly, while this policy affords QHP issuers greater flexibility with respect to the topic areas they select to address in their QISs, the underlying structural requirements of Sec. 156.1130--including implementation, performance- based payment, reporting, and deficiency review--continue to serve as the mechanisms through which QHP issuer accountability is maintained under the revised framework.

For commenters' requests for additional clarity to support consistent implementation, we note that the comments did not identify with specificity the aspects of the revised framework for which additional clarity was sought. To the extent interested parties have questions regarding implementation of the revised QIS requirements under Sec. 156.1130, we will consider addressing these implementation questions through sub-regulatory guidance, as appropriate, to promote consistency across QHP issuers. We encourage issuers and other interested parties to submit specific implementation questions through established CMS channels so that we may consider addressing them in future guidance as appropriate and necessary.

Finally, regarding commenters' recommendations that CMS monitor the effects of this policy change, we agree that ongoing oversight is appropriate and consistent with CMS' broader quality improvement objectives. We will continue to monitor QHP issuer selection of QIS topic areas, QIS activities, and associated outcomes, including those related to health and health care disparities, and may consider future policy changes or refinements, as needed. We agree that clear implementation and ongoing oversight are important and will continue to oversee QIS implementation through established reporting and review processes, and provide technical assistance, as needed, consistent with our authority under section 1311(g)(2) of the Affordable Care Act to develop guidelines for QIS implementation. 17. Netting and Establishment of Debt Regulations To Include CMPs (Sec. 156.1215)

In the 2027 Payment Notice proposed rule (91 FR 6422), we proposed to amend the payment and collections processes set forth at Sec. 156.1215. In particular, we proposed to amend Sec. 156.1215(b) to provide that any CMPs assessed \368\ against health insurance issuers for violations of any applicable Exchange standards and requirements or PHS Act requirements applicable to health insurance issuers would be subject to netting as part of HHS' integrated monthly payment and collections cycle. We proposed to apply the netting provisions of the payment and collections process to CMPs assessed against health insurance issuers to allow the payment and collections process to evolve with the needs of the programs administered by HHS, ensure stability and consistency in the monthly payment and collections process, and improve HHS' ability to recover Federal debts by withholding funds payable by HHS to, or held by HHS for, health insurance issuers to satisfy a debt to HHS for CMPs assessed against health insurance issuers.

\368\ A CMP is assessed only after any applicable imposition and appeal processes set forth in 45 CFR subtitle A, subchapter B have been exhausted or expire.

In the proposed rule, we stated that since finalizing the netting rules at the beginning of the Affordable Care Act financial management programs (79 FR 13817, 81 FR 12317 through 12318), the programs under title XXVII of the PHS Act have evolved, and existing Exchange programs have matured and stabilized. We noted that we have undertaken efforts to adapt our payment and collections process to fit the current needs of the Exchange and other programs administered by HHS. We stated that as we work to enhance enforcement of these maturing programs, we believe that the payment and collections process should reflect this change by further evolving to provide that CMPs assessed against health insurance issuers, for violations of any applicable Exchange standards and requirements or PHS Act requirements, including the No Surprises Act, applicable to health insurance issuers, are also subject to netting as part of HHS' integrated monthly payment cycle.

Accordingly, we proposed to amend Sec. 156.1215(c) to provide that any amount owed to the Federal Government by an issuer and its affiliates for these unpaid CMP amounts due to the Federal Government from these issuers and their affiliates, after HHS nets amounts owed by the Federal Government under these programs, would be the basis for calculating the determination of the debt.

We stated in the proposed rule that HHS' current integrated monthly payment and collections cycle is designed to streamline payment processing for both health insurance issuers and HHS, and includes statements to health insurance issuers that reflect how payments have been netted in the monthly payment and collections cycle. We stated that the proposed changes, to provide for netting of CMPs assessed against health insurance issuers and their affiliates, would ensure stability and consistency in the monthly payment and collections process and support HHS' continued ability to recover Federal debts by withholding funds payable to (or held by HHS for) issuers to satisfy an outstanding balance due to HHS for CMPs. We further stated that netting supports HHS' integrated monthly payment and collections cycle by limiting the number of charges flowing back and forth between HHS and issuers, mitigates the need for additional steps for Federal debt collection when internal netting may resolve the outstanding balance due to HHS from a determined debt, and may prevent inappropriately enriching an issuer if a payment is made from HHS when the issuer has an outstanding CMP.

In summary, we proposed to amend Sec. 156.1215(b) to add language which applies the netting provisions of the payment and collections process to CMPs assessed for violations of any applicable Exchange standards and PHS Act requirements applicable to health insurance issuers. We also proposed to amend Sec. 156.1215(c) to add language which provides that any amount owed to the Federal Government by an issuer and their affiliates for unpaid CMP amounts due to the Federal Government, after HHS nets amounts owed by the Federal Government under these programs, is a determination of debt.

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 these policies as proposed. We summarize and respond below to public comments received on the proposed amendments to the payment

and collections processes set forth at Sec. 156.1215(b) to provide that any CMPs assessed against health insurance issuers for violations of any applicable Exchange standards and requirements or PHS Act requirements applicable health insurance issuers will be subject to netting as part of HHS' integrated monthly payment and collections cycle, and on the proposed amendment to Sec. 156.1215(c) to provide that any amount owed to the Federal Government by an issuer and its affiliates for unpaid CMP amounts will be the basis for calculating the determination of the debt.

Comment: One commenter stated that the netting of CMPs would allow immediate collection, offset, or withholding from issuer revenue streams and noted that issuers may not have sufficient revenue to offset potential CMPs, which creates a risk of insolvency. The commenter suggested there should be exceptions to netting CMPs in situations where there is a risk of issuer insolvency. Another comment stated that this proposal, in tandem with the proposal to limit discovery during proceedings for appeals of CMPs set forth in Sec. 156.935, would expose issuers to heightened financial exposure.

Response: HHS continuously monitors issuers' financial solvency and liquidation status, but we do not believe that an exception should be made to netting CMPs in situations where there is a risk of issuer insolvency. We believe that it is more important to ensure the most efficient method for recovering debts owed to the Federal government-- netting--is being used. Specifically, prioritizing issuer solvency over penalty collection undermines the integrity of the Exchange and creates a shift of the financial risk of non-compliance onto the Federal Government and taxpayers. Furthermore, many factors contribute to an issuer's insolvency issues, so netting for CMPs alone would not likely be the sole reason for an issuer becoming insolvent. A legally enforceable debt is recorded on the issuers' books and would be part of the financial health evaluation performed by State and Federal regulators. To comply with Federal debt collection requirements, netting of these charges is appropriate. Further, HHS maintains working relationships with State regulators to monitor issuer solvency and has procedures in place to address situations of financial instability such as State supervision, rehabilitation, and liquidation.

Additionally, we do not believe that limiting discovery in proceedings for appeals of CMPs as set forth in Sec. 156.935, in combination with this netting of CMPs as finalized in this rule, would further impact issuer insolvency, as the issuer will continue have the full administrative record from the audit even without discovery. For these reasons, we are finalizing these policies as proposed. 18. Technical Correction to Cross Reference (Sec. 156.1220(b)(1))

In the 2027 Payment Notice proposed rule (91 FR 6422), we proposed a technical correction to Sec. 156.1220(b)(1) to update a cross- reference in the regulation text from paragraph (a)(5) to (a)(6). We noted that the process for administrative appeals consists of requests for reconsideration, described in Sec. 156.1220(a), followed by informal hearings, described in Sec. 156.1220(b). We stated that Sec. 156.1220(b)(1) serves to explain the manner and timing of the request for an informal hearing, in the event that a request for reconsideration is not accepted by HHS. Currently Sec. 156.1220(b)(1) references Sec. 156.1220(a)(5), which is the scope of review of the reconsideration decision, and we proposed to correct this reference to Sec. 156.1220(a)(6) on the reconsideration decision.

We sought comments on this technical correction.

We only received one comment that acknowledged the proposed technical correction to Sec. 156.1220(b)(1) but did not express any support or opposition. After consideration of this comment and for the reasons outlined in the proposed rule and this final rule, we are finalizing this correction as proposed. F. Part 158--Issuer Use of Premium Revenue: Reporting and Rebate Requirements 1. Comment Solicitation on Potential Adjustment to the MLR Standard for a State's Individual Market (Subpart C)

In the PY 2027 Payment Notice proposed rule (91 FR 6422), we sought comment on the impact of the Federal MLR standard on individual market stability, including the impact of MLR on costs and premiums and how such impact, if any, may affect individual market stability. We thank commenters for their feedback and will take these comments into consideration as we continue to consider potential adjustments to the Federal MLR standard for particular States' individual health insurance markets.+ G. Applicability Dates

In the 2027 Payment Notice proposed rule, we proposed that some policies, if finalized, would become applicable for plan years beginning on or after January 1, 2027.

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 the applicability dates with the following modifications as provided in Table 13. We note that this rule is effective 30 days after publication in the Federal Register, and we provide further specificity where applicability dates of certain provisions may vary. BILLING CODE 4120-01-P

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[GRAPHIC] [TIFF OMITTED] TR20MY26.027

[GRAPHIC] [TIFF OMITTED] TR20MY26.028

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