Drug Discount Monitor

CMS Issues Final Rule for Health Insurance Exchanges

Publication coincides with Supreme Court deliberations on health care reform.

March 28, 2012—The Centers for Medicare and Medicaid Services (CMS) yesterday formally published an interim final regulation to establish health insurance exchanges under the Affordable Care Act (ACA)—the constitutionality of which will soon be decided by the U.S. Supreme Court.

The High Court today wrapped up six hours of arguments on whether the question of ACA's constitutionality is ripe for consideration, whether ACA's so-called individual mandate to buy health insurance and its expansion of Medicaid are constitutional, and whether the entire reform law must be struck down if any of its provisions is found to be infirm.

If the Court declares the entire law unconstitutional, the exchanges will be struck down, as will ACA's expansion of 340B drug discounts to critical access hospitals, sole community hospitals, rural referral centers, and free-standing cancer centers. The justices are expected to hand down their ruling by late June.

Making Insurance Affordable

A linchpin of health care reform, health insurance exchanges are intended to enable individuals and small businesses to buy affordable insurance from qualified health plans.

The reform law requires plans in the exchanges to include essential community providers (ECPs) in their networks and explicitly recognizes 340B covered entities as ECPs. Providers enrolled in 340B submitted comments on CMS's proposed rule asking it to require the plans to reimburse them at rates on a par with those for non-340B providers.

In the final rule's preamble, CMS clarified that participating plans should not discriminate against ECPs by offering them "unfavorable rates."  It went on to say that the term "generally applicable payment rate" should mean "at a minimum, the rate offered to similarly situated providers who are not [ECPs]." Although CMS did not include these clarifications in the rule itself, 340B providers believe the language in the preamble reinforces that participating plans cannot discriminate against them.

The final rule also fleshed out ACA's requirement that plans' networks must include providers serving "predominately low-income, medically-underserved individuals." It said networks "must have a sufficient number and geographic distribution of [ECPs], where available, to ensure reasonable and timely access to a broad range of such providers for low-income, medically underserved individuals in the [plan's] service area, in accordance with the exchange’s network adequacy standards."

CMS declined one commenter's request to make sure that providers clearly understand 340B and follow its rules against drug diversion as falling outside of the final rule's scope.