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New CMS Provision Lowers Maximum Out of Pocket Costs

CMS adopted new provisions to lower maximum out-of-pocket costs to consumers by $400

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May 5, 2021 – The Centers for Medicare & Medicaid Services (CMS) announced the second 2022 Notice of Benefit and Payment Parameters final rule. It is also referred to as the 2022 payment notice.

The rule contains new provisions to lower the maximum out-of-pocket costs to consumers by $400. The provisions are also designed to increase competition and improve customer satisfaction. The rules will apply to those on the Federal Health Insurance Marketplaces for the 2022 plan year.

The Biden-Harris Administration is committed to protecting and building on the Affordable Care Act (ACA). This new rule reduces health care costs and makes the system easier to navigate. The 2022 payment notice also makes the system more equitable, a major focus of the Biden Administration.

2022 Payment Notice Details

The 2022 payment notice does not just lower out-of-pocket costs by $400. It includes several provisions to help consumers distinguish between plan options.

They are also provisions to increase opportunities to qualify for special enrollment periods (SEPs). An SEP is when consumers are eligible to enroll in the marketplace plans outside of the regular annual open enrollment window. By expanding SEP opportunities, it provides greater flexibility for those in need of coverage.  This is particularly important in communities devastated by COVID-19.

The 2022 payment notice also includes regulatory changes for individual and small-group health insurance markets. Additionally, it outlines parameters and requirements that issuers design plans and set rates for the following plan year.

The CMS Fact Sheet provides a detailed breakdown of all of the provisions of the 2022 payment notice.

New CMS Provision Has Strong Support

The new rule has strong support within the ranks of the Biden-Harris Administration.

U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra touted the 2022 payment notice by stating, “Health care access is personal to me as it is for families across the country. The Department of Health and Human Services is committed to building on the ACA to make sure our health care system is more accessible for every American.”

“Families deserve to have access to health care coverage that doesn’t break the bank. That’s why today we’re acting to lower consumers’ maximum out-of-pocket costs by $400 and why President Biden has a plan to reduce families’ health care costs for the long run,” Becerra added.

Jeff Wu, CMS acting principal deputy administrator and the deputy director for policy in the CMS Center for Consumer Information & Insurance Oversight also supported the rule.         

“The ACA and the American Rescue Plan offer a lifeline to coverage for millions who might otherwise be uninsured,” Wu announced. “Those groundbreaking legislative actions are lowering health insurance premiums for millions of Americans, and the regulatory steps we’re taking today build upon those actions. They will ensure that next year, Americans will continue to find affordable, quality coverage through the marketplaces. Consumers and insurers alike will benefit from improvements in the 2022 payment notice.”

CMS Finalizing Payment Notice in Phases

Instead of making all of the changes at once, CMS is finalizing the payment notice in multiple phases. The first 2022 payment notice was released in January 2021.

The second notice was released on April 30, 2021. Through these new payment notices, CMS is working towards stabilizing the insurance market and reducing regulatory burdens.

For more information on the 2022 payment notice final rule, you can check out the CMS Fact Sheet.


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The VBP Blog is a comprehensive resource for all things related to value-based payments. Up-to-date news, informative webinars, and relevant blogs in the VBP sphere to help your organization find success.