May 2, 2019
Centers for Medicare &
Department of Health and Human
P.O. Box 8016
Submitted electronically at http://www.regulations.gov
Re: CMS-2407-PN: Comments on the Funding Methodology for 2019 and 2020
for the Basic Health Program
Dear Administrator Verma,
On behalf of our members, which
include 141 hospitals and health systems that serve patients and communities
throughout our state, the Minnesota Hospital Association (MHA) offers the
following comments and requests in response to the proposed Basic Health Plan
(BHP) federal payment methodology for 2019 and 2020. Given that Minnesota and
New York are the only states with BHPs, the proposed methodology is especially
important to our members. Before finalizing the payment methodology, we
respectfully request that your agency modify its approach to reflect the
statutorily established formula.
The proposed methodology
deviates from your agency’s approach in past years, from the formula and intent
established by Congress,
and from sound public policy. If implemented, the proposed methodology would
cut support for Minnesota’s BHP by $24 million over 2019 and 2020 according to
the Minnesota Department of Human Services (DHS). This unjustified cut in
federal funding shifts greater financial burden onto Minnesotans who already
contribute to ensure that low-income working individuals and families have
This proposal uses your
agency’s 2018 payment methodology, that was adjusted based on Minnesota and New
York’s legal challenge. The proposed formula goes further by reducing federal
BHP funding through a new manufactured “metal-tier selection factor” (MTSF).
Nothing in the BHP statute or previous rulemaking includes, references or
authorizes use of this MTSF. Not coincidentally, adding this CMS invention
works entirely in the federal government’s favor.
CMS attempts to explain the
MTSF adjustment as a means to capture the agency’s hunch that it would pay less
in Advanced Premium Tax Credits (APTCs) because more people would pick
bronze-level insurance products with premiums that are less than the total
amount of APTCs they would receive if they picked a silver-level plan.
This year’s proposed payment
formula’s inclusion of the MTSF is oddly reminiscent of the CMS interpretation
of the BHP statute from 2016. However, in 2016, the logic used by the agency
was almost entirely the reverse of logic used in its attempt to justify its
In 2016, CMS
asserted that Minnesota’s decision to create and finance a reinsurance program
that lowered premiums in the individual market necessitated cuts to federal BHP
funding by $168 million. CMS rationalized this cut because it claimed that it
could not consider premium rates from Qualified Health Plans (QHPs) in states
without reinsurance because Minnesota’s BHP enrollees did not have the option
to purchase a QHP.
claims that using the premium amounts for bronze-tier QHPs and the QHP
selection decisions of people in other states is entirely appropriate, even
though Minnesota’s BHP enrollees remain prohibited from selecting a QHP and
restricted exclusively to the BHP.
So, CMS cannot consider other states’ QHP
premium rates and plan selections when ignoring them would result in cutting
$168 million from federal funding for Minnesota’s BHP. And now, CMS can consider other states’ QHP premium
rates and plan selections when doing so would result in cutting $24 million
from federal funding for Minnesota’s BHP funding. There is no standard; there
is only an arbitrary, capricious and blatantly self-serving decision based on
how a formula can be manipulated to reduce the amount of BHP payments to
Over time, the
agency’s unauthorized, mathematical contortions drive toward an outcome that
runs counter to good public policy. More comprehensive and affordable coverage
for individuals at lower federal cost should be the policy CMS encourages
states to pursue. Instead, by continuing to cut BHP payments, CMS may cause
Minnesota policy makers to mistakenly consider abandoning the BHP. This would
result in CMS paying more in APTCs than it would under a fair and legitimate BHP
payment methodology and, worse yet, would force 100,000 working Minnesotans
either to join the ranks of the uninsured or to purchase QHPs with dramatically
higher premiums and radically higher deductibles. This is nonsensical and
counterproductive from both an economic and a humanitarian perspective.
MHA joins with
the near-unanimous urging of Minnesota’s congressional delegation, our Medicaid
agency and fellow health care stakeholders in urging CMS to abandon its
intention to use the MTSF to modify the BHP payment formula and decrease the
amount of federal BHP funding Minnesota receives.
Thank you for
the opportunity to offer these comments on behalf of our members. If you have
questions, feel free to contact me anytime.
President of Policy & Chief Strategy Officer
42 U.S.C. § 18044.