Reuters is reporting on a disturbing situation in Lousiana. Individuals with a positive HIV status have been receiving federal help to purchase healthcare for the past two decades via the Ryan White Act. This act helps pay for prescription drugs and basic primary care for people who need AIDS and HIV treatment but otherwise can not afford it. Some portions of this Act provide premium support to buy private insurance.
All Exchange insurance plans in Louisiana are creatively misinterpreting CMS regulation and guidance in order to not accept Ryan White payments and therefore kick people with AIDS and HIV off of their plans for either non-payment of premiums or as risk/fraud/abuse risks.
The Center for Medicare and Medicaid Services (CMS) is the primary administrative and rule-making hub for federal guidelines on Medicare, Medicaid, Childrens Health Insurance Program (CHIP), and now the Exchanges. Congress and CMS has always intended for the Ryan White CARE Act’s goals to be achived through PPACA. For instance, CMS mentioned that Ryan White centers would be part of essential community services for all Exchange plans last April. Last September, CMS issued regulations that demonatrated an intent to continue Ryan White funding and premium assistance programs for individuals whose insurance situation moved to the Exchange.
In November 2013, CMS issued guidance on third party reimbursement of premiums. The goal of this guidance was to avoid double dealing and intentional wrecking of risk pools in a scenario where a hospital would pay the premium of a currently uninsured patient with chronic or repeated episodes of intervention needed conditions in order to get payments. This would destroy any randomness as the hospitals would only do this for their sickest/costliest patients.
The problem in Lousiana is all of the health plans recently read that guidance to apply to all third party payment support, including other federal programs. From this (mis)-reading, they are trying to disenroll anyone who has submitted Ryan White payments as a potential for fraud and abuse while coincidentally dramatically lowering expected medical loss costs.
The November 4, 2013 FAQ does not apply to payments for premiums and cost sharing made on behalf of QHP enrollees by Indian tribes, tribal organizations, urban Indian organizations, and state and federal government programs or grantees (such as the Ryan White HIV/AIDS Program). QHP issuers and Marketplaces are encouraged to accept such payments.
As CMS stated in its 2015 Draft Letter to Issuers on Federally-facilitated and State Partnership Exchanges,2 pursuant to section 1312 of the Affordable Care Act, section 402 of the Indian Health Care Improvement Act, and 45 CFR 155.240(b), a Marketplace may permit Indian tribes, tribal organizations, and urban Indian organizations to pay QHP premiums on behalf of members who are qualified individuals, subject to terms and conditions determined by the Marketplace. Indeed, Federal law specifically provides for this approach.
In addition, guidance from the Health Resources Services Administration (HRSA) on the Ryan White HIV/AIDS Program3 specifically describes how grantees can use grant funds to pay premiums and cost sharing for eligible individuals enrolled in QHPs.
So why is this happening?
If I squint hard enough, I can see the fuzziness in the language, especially if I am only looking at the November FAQ from CMS. That fuzziness can lead to the leading insurer in Louisiana to make the choice of reducing claims costs by kicking out several hundred people with high medical needs and the other two Exchange insurers have to follow suit as their risk pools would get destroyed if they picked up every AIDS patient in Louisiana. This happened in two states where the regulators aren’t particulary keen on making PPACA work, so there is no local pushback from state regulators. It takes a bit of time for issues to escalate to CMS attention, so if the assumption is do anything that is plausible to minimize claims impact, I can see this happening.