My colleagues and I sent a comment letter to the Centers for Medicare and Medicaid Services yesterday. We commented on the Notice for Benefit Payment and Parameters-2026 which is the ACA’s rule book for the 2026 plan year. There was a lot going on in the rule-making including a negative proposed change on silverloading but I was conferencing last week and did not have the time to write well on that.
So why comment? This is how we petition to redress our grievances.
If an agency is legitimately trying to figure out what to do or how to do something, comments help shape action. This is an act of active citizenship.
This is how we create administrative records that can be used for litigation. If an agency receives an on-topic comment and blows it off, that would be strong evidence that the final rule-making would be arbitrary and capricious.
So below the fold is our comment:
Dear Secretary Becerra,
We are academic health policy researchers writing in reply to the draft Notice for Benefit Payment and Parameters 2026, folio reference CMS-9888-P. We have published over two dozen peer reviewed papers on the Affordable Care Act in leading health policy, health economics and clinical journals over the past decade. We comment on the proposed change to risk adjustment. We applaud the inclusion of Pre-Exposure Prophylactic (PrEP) preventive treatment to avoid HIV infections into risk adjustment as a separate, scorable factor.
The purpose of risk adjustment is to encourage insurers to act as if they are risk agnostic so that enrollees who have low predictable costs are no more attractive, on net, than enrollees with high predictable costs. When risk adjustment is imperfect, insurers will design the health plans they offer to attract risk adjustment-profitable enrollees, and to repel risk adjustment-unprofitable enrollees. When risk adjustment overpays for enrollees with predictably high costs, networks will expand, higher actuarial value plans will be offered at more competitive prices, and prior authorization may decrease. When risk adjustment overpays relative to actual costs for individuals with low expected costs, insurers compete solely on premiums by shrinking networks, imposing more cost-sharing and prior authorization for inpatient stays and specialty drugs, and reducing the generosity and prevalence of higher actuarial value plans. Insurers will respond to these incentives at both the general and service category specific levels.1
Insurers currently receive modest risk adjustment support for PrEP through increased payments for covering gender-by-age subgroups more likely to use PrEP. This assumes that people likely to benefit from PrEP cannot be identified nor predicted in advance by insurers. This assumption is violated on both counts. Need for PrEP is concentrated in relatively small geographic areas. Insurers can accurately anticipate where they will enroll members who benefit from PrEP. These areas likely lead to insurers to lose money. Insurers currently have strong reasons to minimize their exposure to individuals who will benefit from PrEP.
We applaud the creation of the PrEP Affiliated Cost Factor (ACF) comprised of both NDC and CPT codes. This far more specific, individual-level approach will encourage insurers to not avoid individuals who will benefit from PrEP. Insurers who can prospectively predict which beneficiaries have PrEP specific predictable costs and who can efficiently provide PrEP will have strong incentives to actively market to these individuals.
More broadly, we applaud the conceptual framework behind ACFs. We believe that this framework should be expanded in future regulatory frameworks. Specifically, this framework should be adopted for “Status” HCC such as HCC-018 Pancreas Transplant Status, HCC-034 Liver Transplant Status, and HCC-041 Intestine Transplant Status among others. The ACF for “Status” HCC should be split into an “active transplant” as determined by CPT codes and a “history of transplant” as these are two very different cost structures with the active transplant year likely being far more expensive than future years’ experiences.
Additionally, the ACF concept could be broadly applicable to chronic, orphan diseases such as Hemophilia (HCC066) and Cystic Fibrosis (HCC159) where there are innovative, effective and costly treatments available. Insurers currently covering such enrollees and their treatments receive diagnosis-based risk adjustment payments that are far below their actual costs. Other insurers who can avoid covering such individuals will, in contrast, be relatively profitable.
We applaud the creation of Affiliated Cost Factors and we greatly appreciate the time and energy CMS and CCIIO have expended on remodeling risk adjustment so that it can more effectively shape the insurance markets to address enrollees’ chronic health conditions.
Zelma
I actually think I understood your comment and what it convinces me of is that the current system is absolutely bonkers. Insurance companies are acting rationally because their goal is profits not health care. You can’t really fault them. So the government has to make sure they will find it profitable to provide insurance to folks who really need health care. What a system.
H.E.Wolf
Many thanks to you and your colleagues!
There go two miscreants
TIL that Intestine Transplants are a thing! Never occurred to me.
David Anderson
@There go two miscreants: I did not know that either
Ruckus
I’d bet (rather serenely BTW) that most people do not really understand what ANY large company/entity has as their first and most important goal – MAKING MONEY.
As a person that has owned 2 companies – one manufacturing and one retail, I have understood for decades that ALMOST EVERYTHING IS ABOUT PROFIT.
Now that sounds inhumane but the reality is that it isn’t. If a business entity is not interested and/or not understanding in being profitable, it will not exist for long. Even if you start with a billion in startup money, if you do not make a profit, at some point you will not exist. The most important thing for everyone to remember is THE POSSIBLE LEVEL OF PROFITABILITY. If you own a business that has zero possibility of profit – IT WILL FAIL. It may take a while but it will fail. It does not have to be a large profit, but profit has to exist. A large, or huge profit is a different discussion.
Any business has to have a reserve for emergencies. Any individual has to have some sort of reserve for emergencies, or if that emergency is severe enough almost all possibilities of existence disappear. Take an earthquake for example, what happens to the humans involved? Depending on the severity of the earthquake, people could die, homes/businesses could disappear and possibly rebuilt – at what cost? Insurance is about minimizing that risk, whatever the risk – and to pay over time for it.
Zelma
I think most of us understand that a business has to make a profit. My discontent with the system is how wrong-headed it was to let the profit motive become paramount in health insurance. It just strikes me that the insurance system has become incredibly cumbersome and inefficient. I wonder what will happen when the for-profit insurance companies take over Medicare via Medicare Advantage? I’m afraid Medicare Advantage won’t look like such a good deal in a few years.
Kent
Before I became a teacher I spent 15 years of my life working for a regulatory agency (National Marine Fisheries Service) writing fisheries regulations and implementing policy.
For big actions we would get hundreds upon hundreds of comments that we would do our best to summarize and respond to. But that is all process. As long as you recognize the comment and show that you responded to it you can still do whatever you want. Comments aren’t prescriptive, they are just process.
The real bureaucratic ninja way to undermine unlawful regulations is to seed the administrative record with Easter eggs waiting to be found by outside groups (after you tell them where to find them). So, for example, a memo to the file that you write summarizing the results of a meeting between bosses in which they chose to go down some unlawful path. In which you write out in detail for the record what you advised and that what contrary path they took and why you feel it is illegal. Emails to the file, emails to colleagues to the file, etc. What you do is create a massive paper trail underlining how a particular course of action is illegal and contrary to whatever statute. And that the agency actually knows that what they are doing is illegal. That sort of thing is deadly in court.
Your political appointee bosses aren’t even going to know you are doing it because they aren’t records clerks and have no idea what sort of things you are putting into the official record of decision for any particular action. And they won’t find out until the agency gets sued and it all comes out. And if you are really good at bureaucratese they won’t even really understand what you did.
You do need to keep careful notes of where to find what documents that you can pass on to the attorneys of whatever interest group is suing your agency. So they can “discover” them in discovery.
Ruckus
@Zelma:
Profit is important in any business. As a person who has owned 2 businesses, one in manufacturing and one in retail, I can easily and assuredly tell you that money is IMPORTANT. Because without it you will not stay in business. And you will often have far less of that money when that business ends. Or fails to make a PROFIT.
Now the biggest issue for all of us non business owners is how large is that PROFIT? And the reason for that is that a too large profit is making money too efficiently. Humanity isn’t efficient. We’ve created a too large profit generator. Money is a very, very highly regarded issue in humanity, often at the benefit of a too small minority. Do we need multi billionaires when people are starving, or without healthcare or food or housing or whatever? I’d venture to say, not all that much. But that isn’t how humanity works. In this country at least we do not have dictators or anarchy. But we do have a population that has the option of choice. And a sizable segment of the population have chosen to respect money and power over democracy. Why I have almost zero clue, other than money and power has a certain glamor and a profit all their own, and our country supports that to a certain degree. And I believe we as a country have been here before. The money wasn’t a big an issue – based upon the amount of money but one has to take into account of what money is worth and what BIG money is worth.