Pre-Existing Conditions High Risk Pool Creation

I wanted to pass on some information about the regulations around the new Pre-Existing High Risk Pools that are to go into effect later this year. Some of the information is for Administative purpose but could be informative as to the whole process and what an individuals rights are.

Pre-Existing Conditions High Risk Pools will be created (HHS) to operate a high-risk pool program in your State consistent with the provisions in the Patient Protection and Affordable Care Act. As you know, this is a temporary program to provide coverage to your uninsured residents with preexisting conditions. In the interests of providing coverage to as many individuals as possible within the funds available, we encourage States to operate these programs as efficiently as possible.
The contracts awarded through this solicitation will include a start-up period of performance that will run until December 31, 2010, and three additional one-year periods of performance that will run until December 31, 2013. There will be a final closeout period that will run from January 1, 2014 through March 31, 2014.

A.2 DEFINITIONS
Administrative costs refers to reasonable costs incurred by the Contractor to administer
the pool.
Creditable coverage has the meaning given such term under both section 2701(c)(1) of
the Public Health Service Act before enactment of the Affordable Care Act and 45 CFR
146.113(a)(1).
Enrollee refers to an individual receiving coverage from a qualified high risk pool
established under this section.
Nonprofit entity refers to a nonprofit insurer or other organization capable of operating a
qualified high risk pool.
Qualified high risk pool or Pool refers to a program which provides coverage in
accordance with the requirements of section 1101 of the Affordable Care Act of 2010,
as determined by HHS.
Pre-existing condition exclusion has the meaning given such term in 45 CFR 144.103.
Resident means an individual who is legally domiciled in a State.
Service Area refers to the geographic area encompassing an entire State or States in
which a qualified high risk pool furnishes benefits.
State refers to any one of the 50 States or the District of Columbia.

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A.3 BACKGROUND
On March 23, 2010, the President signed into law H.R. 3590, the Patient Protection and
Affordable Care Act (Public Law 111-148), hereafter referred to as the Affordable Care
Act. Section 1101 of the Affordable Care Act establishes a “temporary high risk health
insurance pool program” to provide health insurance coverage to currently uninsured
individuals with pre-existing conditions. The Affordable Care Act authorizes HHS to
carry out the program directly or through contracts with States or private, nonprofit
entities.
This is a non-competitive solicitation for States to establish and administer temporary
high risk health insurance pool programs to provide coverage for eligible individuals
beginning in 2010 and ending on December 31, 2013. On April 2, 2010, HHS issued a
letter to governors and state insurance commissioners asking each State to indicate its
interest in participating in this temporary high risk pool program. This solicitation is
being sent to the designated contacts for all states who indicated a willingness to
participate in establishing this program. In response to this solicitation, States are
asked to submit proposals to establish and administer those qualified high risk pools
under contracts to be issued by HHS.
As a result of this solicitation process, HHS intends to award the proposing States a
negotiated contract for the administration of the high risk insurance pool. HHS will also
establish an account through which each state can draw down their respective benefit
claims.
As stated in the April 2, 2010 letter, HHS will carry out the coverage program in States
that do not submit proposals to operate qualified high risk pools. HHS may pursue a
separate acquisition process to acquire any services it may find necessary to operate
high risk health insurance pools in those States.
HHS’s goal is to grant the flexibility needed to permit successful and expeditious
implementation of the program by States. HHS encourages States to take advantage of
that flexibility in developing proposals, including consideration of the following options:
• Operate a new high risk pool alongside a current State high risk pool;
• Establish a new high risk pool (in a State that does not currently have a high risk
pool);
• Build upon other existing coverage programs designed to cover high risk
individuals;
• Sub-contract with a current HIPAA insurance carrier of last resort or other
insurance carrier, to provide subsidized coverage for the eligible population.

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States may designate a nonprofit entity as the proposed contractor to operate a
qualified high risk pool on behalf of the State. All proposals submitted in response to
this solicitation must include written confirmation that the submitting entity has been
approved to do so by the governor or state insurance commissioner. Only 1 (one)
proposal may be submitted per state. Two or more States may elect to join together to
establish and operate a single qualified high risk pool that covers enrollees in each
State.
The Affordable Care Act establishes standards that a qualified high risk pool must follow
to be eligible for Federal contract funding. To meet the requirements of this solicitation,
a proposal must be structured in a manner that is consistent with the terms described in
service and delivery tasks below.
A.4 SPECIFIC SERVICE AND DELIVERY TASKS OF CONTRACTED STATE HIGH
RISK POOL PROGRAMS
A.4.1 The Contractor shall have the capacity and technical capability to perform all
functions necessary to the design, implementation, and operation of a qualified high risk
pool that will provide coverage to eligible individuals, that is, currently uninsured
individuals with pre-existing conditions. If the Contractor operates another high risk
pool, the Contractor shall segregate funding and expenditures for the two programs and
track all benefits and services separately for enrollees in each program.
A.4.2 The Contractor shall design, implement, and operate a qualified high risk pool
that is compliant with the following basic design requirements of the temporary high risk
pool program.
Important Note: As of the date of this solicitation, the final regulations for the high risk
pool program have not yet been published. If there are significant changes to the
requirements below as a result of Federal regulations, HHS will amend this solicitation
and give States an opportunity to make changes in their proposals prior to the issuance
of contracts.
1) Eligibility for Individuals to Enroll in High Risk Health Insurance Pool Programs –
The Contractor shall develop eligibility criteria for participation in a high risk pool subject
to the approval of HHS. Generally, HHS anticipates Contractors will develop criteria
that include all of the requirements included in A.4.2.1.a and A.4.2.b Subject to the
approval of HHS, the Contractor shall develop eligibility criteria meeting some or all of
the elements included in A.4.2.1.c. That is an individual:
a) Is a citizen or national of the United States or lawfully present in the United
States;
b) Has not been covered under creditable coverage for a continuous 6-month
period of time prior to the date on which such individual is applying for coverage in the
high risk pool program.

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c) Meets the pre-existing condition requirement established for a qualified high risk
pool. HHS anticipates that Contractors will use methods to define pre-existing
condition that include, but are not limited to:
i) Evidence of denial of coverage.
ii) Evidence that coverage is available only with an exclusionary rider.
iii) The presence of certain medical conditions specified by the State and approved
by HHS.
2) Benefits Requirements – The qualified high risk pool may offer one or more
benefit plans, provided that they are actuarially consistent with the statutory requirement
that the issuer’s share of the costs is not less than 65 percent of the total costs of the
benefit. Contractors may propose the benefit and coverage structure to be used by the
qualified high risk pools within the limits of their allotments.
3) A qualified high risk pool must provide to all eligible individuals that it enrolls in a
qualified high risk pool, health coverage that does not impose any pre-existing condition
exclusions with respect to such coverage, and may not deny enrollment based on a preexisting
condition.
4) The premiums charged under the high risk pool may not exceed 100 percent of
the premium for the applicable standard risk rate that would apply to the coverage
offered in the State or States. The qualified high risk pool shall determine a standard
risk rate by considering the premium rates charged for similar benefits and cost-sharing
by other insurers offering health insurance coverage to individuals in the applicable
State or States. The standard risk rate shall be established using reasonable actuarial
techniques. A qualified high risk pool may not use other methods of determining the
standard rate, except with the approval of the Secretary. Premiums charged to
enrollees in the qualified high risk pool may vary on the basis of age, by a factor not
greater than 4 to 1.
5) The qualified high risk pool’s average share of the total allowed costs of the
required benefits must be at least 65 percent of such costs. The out-of-pocket limit of
coverage for cost-sharing for the required benefits may not be greater than the
applicable amount described in section 223(c)(2) of the Internal Revenue Code of 1986
for the year involved.
6) A qualified high risk pool may specify the networks of providers from whom
enrollees may obtain services. The qualified high risk pool must demonstrate to HHS
that it has a sufficient number and range of providers to ensure that all covered services
are reasonably available and accessible to its enrollees.

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7) A qualified high risk pool shall establish and maintain procedures for individuals
to appeal eligibility and coverage determinations. Minimally, the appeals procedures
must provide enrollees and potential enrollees the right to a timely redetermination by
the qualified high risk pool or its designee of a determination concerning eligibility or
coverage, and the right to a timely reconsideration of a coverage redetermination by an
entity independent of the qualified high risk pool or the entity designated to make that
redetermination.
A.4.3 The Contractor shall perform all eligibility determination and enrollment functions.
1) The Contractor shall develop and utilize an eligibility determination process that
will assure that only individuals eligible for coverage (as described in A.4.2.1) receive
benefits from the program.
2) As part of the enrollment application process, the Contractor will obtain the
name, address, date of birth and Social Security number of a person applying for
coverage.
3) The Contractor shall implement a process to confirm that the enrollee is a citizen
or national of the United States or an alien lawfully present in the United States. The
Contractor shall submit to HHS for approval a plan for verifying citizenship in
accordance with the Affordable Care Act.
4) The Contractor shall develop and operate an enrollment process that ensures
eligible individuals timely access to benefits under the qualified high risk pool and that
enrollment is maintained per the eligibility criteria established by the qualified high risk
pool. The Contractor shall submit a description of the enrollment process to HHS for
approval. HHS anticipates that, in general, the enrollment process proposed by the
Contractor will provide that an individual eligible for enrollment who submits a complete
enrollment request by the 15th day of a month must have coverage take effect by the 1st
day of the following month, except in exceptional circumstances that are subject to HHS
approval.
5) The Contractor shall develop and operate a disenrollment process. The
Contractor shall submit a description of the disenrollment process to HHS for approval.
HHS anticipates that the disenrollment process will include provisions that include, but
are not limited to, policies for disenrolling an individual if the monthly premium is not
paid on a timely basis; when an individual no longer resides in the qualified high risk
pool’s service area; when an individual obtains other creditable coverage; and, in the
case of a death of the individual.
A.4.4 The Contractor shall provide customer service functions on behalf of high risk
pool enrollees.
1) The Contractor shall operate a customer service call center that is appropriately
staffed to the number of plan enrollees so as to provide prompt and accurate
information and services to high risk pool program members.

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2) The Contractor shall have the capability to provide customer service and plan
enrollment information in languages other than English to meet the needs of the
population anticipated to be served by the high risk pool program and must also make
customer service and plan enrollment information available in formats that are
accessible by people with disabilities.
A.4.5 The Contractor, at a minimum, shall operate a technical support center, which
may include both a call center and an electronic/automated system, to respond to
health care and pharmacy providers seeking information related to an enrollee’s
benefits, coverage determinations (including exceptions and prior authorizations) and
enrollee appeals.
A.4.6 The Contractor shall be responsible for premium administration for the high risk
pool program.
1) The Contractor shall calculate the appropriate premium amount, bill, and collect
premiums from health risk pool program enrollees or enrollee’s designee.
2) The Contractor shall use premiums collected and any interest earned on
premiums held by the high risk pool program solely to offset the approved administrative
expenses and high risk pool program enrollee claims for health services as included in
this Contract.
A.4.7 The Contractor may develop and implement disease and utilization management
that will assure high risk pool program enrollees have access to necessary health care
services and prescription drugs via a provider network capable and available to deliver
those services for high risk pool program enrollees in a cost-effective manner.
A.4.8 The Contractor shall develop and implement a system for processing and paying
claims for health and prescription drug claims, including a point-of-sale claim system for
prescription drugs.
A.4.9 The Contractor shall develop and implement a plan for marketing and outreach
for the high risk pool program to make potentially eligible individuals and organizations
and providers that interact with potentially eligible individuals aware of the high risk pool
program and the coverage offered by the qualified high risk pool.
A.4.10 The Contractor shall establish procedures to identify and report to HHS instances
where health insurance issuers or group health plans are discouraging high-risk
individuals from remaining enrolled in their current coverage (or discouraging enrollment
in available coverage) in instances in which such individuals subsequently are eligible to
enroll in the qualified high risk pool. Such procedures may include, but are not limited
to:
1) Questions on the high risk pool application form to identify applicants (or their
family members) that are employed, may have, or have had, access to other coverage
including employment based group health coverage, or are getting assistance in the
payment of premiums for the qualified high risk pool from employers or other sources.

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2) Questions on the application form asking applicants to identify their most recent
health coverage and the reasons for leaving or losing that coverage.
3) A requirement that enrollees report changes in their employment status (or that
of a family member) during the course of enrollment.
A.4.11 The Contractor shall develop operating procedures to prevent, detect, recover
(when applicable or allowable), and immediately report to HHS incidences of waste,
fraud, and abuse and shall cooperate with Federal law enforcement authorities in cases
involving waste, fraud, and abuse.
A.4.12 The Contractor shall establish and implement an effective system for routine
monitoring and identification of compliance risks. The system shall include internal
monitoring and audits to evaluate the high risk pool program, including any subcontractors
utilized by the program, in terms of compliance with HHS requirements.
A.4.13 The Contractor shall develop and implement a system for coordinating benefits
for health and prescription drug claims with other payers as needed, such as Workers’
Compensation.
A.5 PAYMENT TO CONTRACTOR
1) The Contractor will not be responsible for the costs of covered health insurance
claims filed by enrollees in the State high risk pool program or for the administrative
expenses of operating those programs to the extent that those claims and
administrative expenses are in excess of the premiums collected by the State high risk
pool program. The contractor will ensure that the claims and administrative expenses
are incurred within the terms of the contract, and the claims and administrative
expenses do not exceed any limits set by HHS. HHS will reimburse the Contractor for
claims for covered services and for administrative expenses that are in excess of the
premiums collected by the qualified high risk pool. Reimbursement for claims and
administrative expenses is contingent on the extent that the Contractor complies with
the terms of the contract, including the Contractor’s responsibility to act in consultation
with HHS to limit the amount of anticipated expenses to the available funds HHS
allocates to the State to operate the high risk pool program.
2) The Contractor shall receive actual cost reimbursement payments from HHS for
allowable and allocable administrative costs and claims costs incurred in the
development and operation of the qualified high risk pool.