Essential Plan (EP) Guidance

Guidance Document is available in PDF format as well:

Office of Health Insurance Programs

Essential Plan (EP) Guidance 3.0: Information Regarding EP Rate Setting Assumptions for Calendar Year 2023 and 2024

Date of Issuance: July 19, 2023

The purpose of this document is to provide information in relation to provisions included as part of the State Fiscal Year (SFY) 2023-24 Enacted Budget.

Essential Plan Rate Setting Assumptions

The Department has added additional funding ($800M) for both the Calendar Year (CY) 2023 and CY 2024 rates. This investment, which will recur annually beyond CY 2024, is intended to create reimbursement parity across all EP premium groups for hospital inpatient, hospital outpatient, and physician services. This funding is in addition to the annual $420M existing provider reimbursement investment authorized in the SFY 2021-22 Budget (and outlined in EP Guidance 2.0[1]).

• The Department expects that health plans will raise provider reimbursement rates for EP 3 and EP 4 premium groups to the level of EP 1 and EP 2 premium groups for hospital inpatient, hospital outpatient, and physician services and remit payments to impacted providers through reprocessing of claims or via lump sum payments.
• The goal of this EP rate enhancement is to expand access to services for EP enrollees, promoting health equity for all EP enrollees, and establishing parity in reimbursement across all premium groups for hospital inpatient, hospital outpatient, and physician services.
• For CY 2023, 12 months of funding ($800M) will be included in a rate revision effective July 1, 2023 paid over a 6 month period. CY 2024 and beyond will include a full annual funding amount ($800M) paid over a 12 month period.
• Consistent with prior years and the existing rate methodology, historical health plan reported expenditures were trended to the rating period. From there, an additional $800M (CY 2023) and $800M (CY 2024) will be added for this purpose. Consistent with past practice, the Department and its actuary will provide plans with their specific rate information and an overview of rate development via routine Plan Finance meetings in the coming months. Please note:
  • This health plan premium adjustment will be applied to all components of the inpatient and outpatient hospital-based categories of service (e.g., operating, capital, etc.).
  • These funding amounts should be treated consistent with standard inpatient and outpatient fee schedule reimbursement. As such, rates have been adjusted for Graduate Medical Education (GME) for premium groups EP 1 and EP 2, the Covered Lives Assessment and HCRA Commercial rate of 9.63% where applicable.

  [1] Essential Plan (EP) Guidance 2.0 included guidance for plans in EP1 and EP2 premium groups to reimburse inpatient and outpatient hospital services at 225% of Medicaid fee for service reimbursement for the same services.

  EP Guidance 2.0 - June, 25, 2021

  Guidance Document is available in PDF format as well:

  Office of Health Insurance Programs

  Essential Plan (EP) Guidance 2.0: Information Regarding EP Rate Setting Assumptions for Fiscal Year 2022

  Date of Issuance: June, 25, 2021

  The purpose of this document is to provide information in relation to provisions included as part of the Fiscal Year (FY) 2022 Enacted Budget.

  Essential Plan Rate Setting Assumptions

  1. The FY 2022 Budget included a full annual investment of $420M gross into provider reimbursement rates for the EP1 (FPL 151% to 200%) and EP2 (FPL 139% to 150%) premium groups to bring rates more in line with Commercial reimbursement for inpatient and outpatient hospital-based services. Based on plan reported data, it is estimated that this increase will result in rates for inpatient and outpatient hospital-based services that are 225% of Medicaid fee for service reimbursement for the same services. Plans should utilize funding to increase provider medical reimbursement rates to improve the quality, accessibility, appropriate utilization, and efficiency of services provided to enrollees. Benchmarking assumptions built into rates will be as follows:
     • Full annual (12 months) funding will be included in June 1, 2021 rates for Calendar Year (CY) 2021. As a result, the $420M investment will be prorated and paid over 7 months. Effective January 1, 2022, and annually thereafter, funding will be paid over 12 months.
     • As a result, for CY 2021 plans and providers may reprocess claims retroactive to January 1, 2021, or alternatively, adjustments could be made to claims prospectively for the 7-month period June 1, 2021 through December 31, 2021 or shorter period if implementation of the adjustments is delayed beyond June 1, 2021. The method of adjustment should reflect the full annual amount of the CY 2021 investment and ultimately be consistent with contractual agreements between the parties.
       • Historical plan reported expenditures will be trended to the rating period and include an additional $420M gross for the provider reimbursement rate investment adjustment.
       • This Plan premium adjustment will be applied to all components of the inpatient and outpatient hospital-based categories of service (e.g. operating, capital, etc.) resulting in the estimated 225% increase noted above.
       • Finally, Graduate Medical Education funding continues to be included as part of the EP1 and EP2 rate assumptions as does the Covered Lives Assessment and HCRA Commercial rate of 9.63%.
     • The FY 2022 Budget also included modifications to member cost sharing which included the following:
       • Effective June 1, 2021, the $20 member premium for EP1 has been removed. EP1 premiums will be adjusted accordingly.
       • Effective June 1, 2021, all EP1 and EP2 members will receive coverage for dental and vision with no monthly premium or cost sharing. EP1 and EP2 premiums will be adjusted accordingly.
     • The FY 2022 Budget also included the establishment of a $200M gross Essential Plan Quality Incentive Pool for participating managed care plans. The incentive will be based on Measurement Year (MY) 2020 results from health plan 2020 Quality Assurance Reporting Requirements (QARR) submission and the most recent CAHPS survey results for their population (additional details will be forthcoming). It is anticipated the incentive will be paid to plans who earn an award in the fourth quarter (Jan. 2022 - March 2022) of FY 2022.

  EP Guidance 1.0 through 1.3 (Sept. 2015 - Oct. 2015)

  Guidance Documents are available in PDF format as well:

  • EP Guidance 1.0 (PDF)
  • EP Guidance 1.1 (PDF)
  • EP Guidance 1.2 (PDF)

  EP Guidance 1.0: Information Regarding EP Rate Setting Assumptions and Emergency Out-of-Network Hospital Reimbursement

  Date of Issuance: September 10, 2015

  The purpose of this document is to provide Information Regarding the Department of Health´s Essential Plan Rate Setting Assumptions and Emergency Out-of-Network Hospital Reimbursement guidance.

  Essential Plan Rate Setting Assumptions

  • The Affordable Care Act (ACA) provides states the option to establish a basic health program for:
    • Individuals with incomes between 138-200% of the Federal Poverty Level (FPL) who are ineligible for Medicaid or Child Health Plus (CHP), and do not have access to affordable employer coverage; and
    • Individuals with incomes below 138% of FPL who are ineligible for Medicaid due to immigration status.