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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Rules and Regulations between the BHP and QHP populations, which is why, absent a state election, we will use a value for the PHF see section III.D.3. of this final methodology to determine a prospective payment rate which assumes no difference in the health status of BHP enrollees and QHP
enrollees. There is considerable uncertainty regarding whether the BHP
enrollees will pose a greater risk or a lesser risk compared to the QHP
enrollees, how to best measure such risk, the potential effect such risk would have had on PTC, and risk adjustment that would have otherwise been made had BHP enrollees been enrolled in coverage through an Exchange.
However, to the extent that a state would develop an approved protocol to collect data and effectively measure the relative risk and the effect on federal payments of PTCs and CSRs, we are finalizing our proposal to permit a retrospective adjustment that will measure the actual difference in risk between the two populations to be incorporated into the certified BHP
payment methodology and used to adjust payments in the previous year.
For a state electing the option to implement a retrospective population health status adjustment as part of the BHP payment methodology applicable to the state, we are finalizing our proposal to require the state to submit a proposed protocol to CMS, which would be subject to approval by us and would be required to be certified by the Chief Actuary of CMS, in consultation with the OTA. We will apply the same protocol for the population health status adjustment as what is set forth in guidance in Considerations for Health Risk Adjustment in the Basic Health Program in Program Year 2015 http
www.medicaid.gov/Basic-HealthProgram/Downloads/Risk-Adjustmentand-BHP-White-Paper.pdf. We proposed to require a state to submit its proposed protocol for the 2022 program year by the later of August 1, 2021 or 60
days after the publication of this final notice. Because this final notice is being published within 60 days of August 1, 2021, we are finalizing that a state will be required to submit its proposed protocol for the 2022 program year by 60 days after the publication of this final notice. This submission will also need to include descriptions of how the state would collect the necessary data to determine the adjustment, including any contracting contingences that may be in place with participating standard health plan issuers. We will provide technical assistance to states as they develop their protocols, as requested. To
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implement the population health status adjustment, we must approve the states protocol by December 31, 2021 for the 2022 program year. Finally, the state will be required to complete the population health status adjustment at the end of the program year based on the approved protocol. After the end of the program year, and once data is made available, we will review the states findings, consistent with the approved protocol, and make any necessary adjustments to the states federal BHP
payment amounts. If we determine the federal BHP payments were less than they would have been using the final adjustment factor, we will apply the difference to the states next quarterly BHP trust fund deposit. If we determine that the federal BHP payments were more than they would have been using the final reconciled factor, we will subtract the difference from the next quarterly BHP payment to the state.
IV. Collection of Information Requirements Although the methodologys information collection requirements and burden had at one time been approved by the Office of Management and Budget OMB under control number 09381218 CMS10510, the approval was discontinued on August 31, 2017, since we adjusted our estimated number of respondents below the Paperwork Reduction Act of 1995 PRA 44 U.S.C.
3501 et seq. threshold of ten or more respondents only New York and Minnesota operate a BHP at this time.
Since we continue to estimate fewer than ten respondents, the final 2022
methodology is not subject to the requirements of the PRA.
V. Regulatory Impact Analysis A. Statement of Need Section 1331 of the Patient Protection and Affordable Care Act 42 U.S.C.
18051 requires the Secretary to establish a BHP, and section 1331d1
specifically provides that if the Secretary finds that a state meets the requirements of the program established under section 1331a of the Patient Protection and Affordable Care Act, the Secretary shall transfer to the state federal BHP payments described in section 1331d3. This final methodology provides for the funding methodology to determine the federal BHP payment amounts required to implement these provisions for program year 2022.
B. Overall Impact We have examined the impacts of this rule as required by Executive Order
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12866 on Regulatory Planning and Review September 30, 1993, Executive Order 13563 on Improving Regulation and Regulatory Review January 18, 2011, the Regulatory Flexibility Act RFA September 19, 1980, Pub. L.
96354, section 1102b of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 March 22, 1995;
Pub. L. 1044, Executive Order 13132
on Federalism August 4, 1999, and Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 the Congressional Review Act 5
U.S.C. 801 et seq..
Executive Orders 12866 and 13563
direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, distributive impacts, and equity. Section 3f of Executive Order 12866 defines a significant regulatory action as an action that is likely to result in a rule: 1 Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities also referred to as economically significant; 2 creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; 3 materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or 4 raising novel legal or policy issues arising out of legal mandates, the Presidents priorities, or the principles set forth in the Executive Order.
A regulatory impact analysis RIA
must be prepared for major rules with economically significant effects $100
million or more in any 1 year. As noted in the BHP final rule, the BHP provides states the flexibility to establish an alternative coverage program for lowincome individuals who would otherwise be eligible to purchase coverage on an Exchange. To date, two states have established a BHP, and we expect state participation to remain static as a result of this payment methodology. However, the final payment methodology for program year 2022 differs from the payment methodology for program year 2021 due to the removal of the MTSF, which would increase BHP payments, compared to the methodology for program year 2021. OMB Office of
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