DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Center for Consumer Information and Insurance Oversight
200 Independence Avenue SW
Washington, DC 20201

Date: August 10, 2017
Title: Information on Risk Adjustment Methodology and Rate Filing Deadlines
Question: What changes will be made to the risk adjustment methodology to account for
recent rating practices that assume issuers of silver-level QHPs facing increased liability for
enrollees in cost-sharing reduction plan variations?
Answer: At this time, there have been no changes regarding HHS’s ability to make cost-sharing
reduction payments to issuers. The HHS risk adjustment methodology currently assumes that
plans that provide cost-sharing reductions receive compensating cost-based payments from the
Federal government. Many state departments of insurance (DOIs) have permitted issuers to
increase rates for their silver metal level plans for the 2018 benefit year in order to account for
uncompensated liability that issuers may face for cost-sharing reductions provided to eligible
insured individuals. As a result, CMS intends to propose a modification to the HHS risk adjustment
methodology in future rulemaking for states in which all marketplace issuers increase silver metal
plan rates to account for cost-sharing reduction payments in this manner.
The HHS risk adjustment methodology currently assumes that plan liability for cost-sharing plan
variations reflects actuarial value of 70 percent. We intend to propose adjustments to the
methodology for the individual market to reflect the assumption of greater plan liability in states
that make this rating change. Beginning for the 2018 benefit year, we intend to propose to apply
the platinum metal tier risk adjustment model coefficients for the 87 percent and 94 percent costsharing reduction plan variants. For the risk adjustment transfer formula, we intend to propose
considering the 87 percent and 94 percent silver plan variants (as well as the limited cost-sharing
and zero cost-sharing variants) to have plan metal level actuarial values of 0.9 in order to account
for the higher relative actuarial risk associated with these plans. We would also propose to apply
the platinum level induced demand factor of 1.15 for these same variants in the transfer formula.
Additionally, we would propose to not apply the CSR adjustment factors to the risk score
calculations for enrollment periods beginning on and after January 1, 2018, because the platinum
plan coefficients already account for the induced utilization associated with the platinum level of
benefit. We would propose to continue to use the silver model coefficients and transfer formula
factors for enrollees in 73 percent CSR plan variations and treat these as basic silver plans. We
would propose to apply this policy to all risk adjustment covered issuers in the individual market
in States where HHS operates risk adjustment.

 Question: Given these requests from the States, will CMS provide further flexibility on filing
deadlines to permit issuers to account for these rating changes?
Answer: Yes, in order to provide consistency to such requests, the updated filing deadlines for
single risk pool coverage are set forth below. All applicable parts of the Rate Filing Justification
should be submitted as outlined in Table 1, including the Unified Rate Review Template (URRT),
the Actuarial Memorandum and, if any of the plans have a rate increase of 10 percent or more, the
Consumer Justification Narrative. These new timelines do not apply to standalone dental plan
(SADP) issuers.

Table 1: Timeline for Single Risk Pool Rate Filing Changes
Activity
Issuers submit modified 2018 rate filings (QHPs and non-QHPs) to
state or CMS
States and CMS review modified QHP 2018 rate filings
States or CMS submit final determinations on 2018 QHP rate
filings to URR module in HIOS
States and CMS submit final determinations on 2018 non-QHP
only rate filings to URR module in HIOS
Target date for CMS to post all final rate filing information (QHPs
and non-QHPs) on https://ratereview.healthcare.gov

Dates
9/5/17
9/6/17 – 9/19/17
9/20/17
10/6/2017
11/1/2017

If a state chooses to not allow issuers in their state to modify their 2018 rate filings, we request
that the state inform CMS no later than September 5, 2017 by emailing RateReview@cms.hhs.gov.
QHP issuers offering plans through the Federally-facilitated Exchange (FFE) and State-based
Exchanges utilizing the Federal platform (SBE-FP) should transfer plan data in accordance with
the QHP data change submission deadlines specified in Table 2. Issuers applying for QHP
certification in FFEs may submit their revised 2018 rates table template to HIOS during an initial
window between 8:00 am Eastern Time (ET) on September 1, 2017 and September 6, 2017 at 6:00
pm ET. Issuers applying for QHP certification in FFEs performing plan management functions
and SBE-FPs may submit their 2018 modified rates table template in SERFF, and states should
transfer the 2018 modified rates table template by September 6, 2017 at 12:01 pm ET. Issuers that
submit revised rate data during this window will be able to view their updated rates in QHP Plan
Preview and identify any needed corrections prior to the submission of final QHP rates table
templates. CMS will review 2018 modified rates table templates between September 7, 2017 and
September 15, 2017. CMS will send correction notices, if applicable, only to QHP issuers that
made changes during the window on September 19, 2017. CMS will conduct a second window
between 8:00 am ET September 21, 2017 and September 25, 2017 at 6:00 pm ET, which is the
final window during which issuers may submit revised 2018 rates table templates. FFE states

 performing plan management functions and SBE-FP states may transfer revised data between 8:00
am ET September 21, 2017 and September 25, 2017 at 12:01 pm ET. These new timelines do
not apply to stand alone dental plan (SADP) issuers. Issuers may only make changes to the 2018
QHP rates table template, and may not make changes to any other QHP templates unless directed
to do so by CMS.
Table 2: Timeline for QHP Data Changes
Activity
Deadline for issuer changes to entire QHP Application, except
rates table template
Initial window to submit revised 2018 rates table templates
CMS reviews revised 2018 rates table templates
CMS sends revised 2018 rates notices to issuers and states
Final window to submit revised QHP 2018 rates table templates
Deadline for issuer submission of finalized QHP rates table
templates
Issuers send signed Agreements, confirmed plan lists and final
Plan Crosswalks to CMS
States provide 2018 plan confirmation recommendations to
CMS
Open Enrollment begins

Date(s)
8/16/17
9/1/17-9/6/17
9/7/17-9/15/17
9/19/19
9/21/17 – 9/25/17
9/25/17
9/16/17 – 9/27/17
9/27/17
11/1/2017