Department of Health and Human Services
Federal Register publication date: March 27, 2012
Final rule, Interim final rule.
Excerpts from pages 34-37
Summary of Regulatory Changes
If the Exchange is an independent State agency or not-for-profit entity established by the State, we proposed that its governing board meet the standards outlined in §155.110(c)(1) through §155.110(c)(4) of the proposed rule, which included: the Exchange accountability structure must be administered under a formal, publicly-adopted operating charter or by-laws; the Exchange board must hold regular public meetings; representatives of health insurance issuers, agents, brokers, or other individuals licensed to sell health insurance may not constitute a majority of the governing board; and, all members of the governing board must meet conflict of interest and qualifications standards.
Several commenters urged HHS to apply conflict of interest standards to eligible contracting entities.
Response: We generally defer to States to establish conflict of interest standards for eligible contracting entities beyond the prohibition of health insurance issuers being eligible contracting entities, as established in section 1311(f)(3) of the Affordable Care Act and codified in §155.110(a)(1)(iii). We believe that many States have existing conflict of interest laws, have appropriate expertise in this area, and can support Exchanges in the development of conflict of interest standards for such entities.
Commenters suggested broadening the list of groups identified as having a conflict of interest in proposed §155.110(c)(3)(ii) to include: health care providers; anyone with a financial interest; anyone with a spouse or immediate family with a conflict of interest; major vendors, subcontractors, or other financial partners of conflicted parties; members of health trade associations and providers; and, health information technology companies. Commenters recommended that such groups be limited or prohibited from participation in an Exchange. Other commenters recommended that individuals with ties to the insurance industry participate through technical panel or advisory group instead of through board membership.
Response: As proposed, §155.110(c)(3)(ii) ensures as a minimum standard that the groups with the most direct conflict of interest cannot form a majority of voting members on a governing board. We believe that further definition of conflict of interest may create inconsistencies with State law and other existing State standards, but note that Exchanges may expand the list or further define conflict of interest. For example, a State may elect to prohibit any conflicted members from serving on the board.
Final rule, Interim final rule. (644 pages):
http://www.kaiserhealthnews.org/~/media/Files/2012/Exchange%20Standards%20For%20Employers%20March%202012.pdf
HHS release:
http://www.healthcare.gov/news/factsheets/2011/07/exchanges07112011a.html
Reulatory impact analysis:
http://www.kaiserhealthnews.org/~/media/Files/2012/Exchange%20Regulatory%20Impact%20Analysis%20March%202012.pdf
Comment:
By Don McCanne, MD
Skim reading this 644 page HHS rule on the state insurance exchanges to be established under the Affordable Care Act makes you realize even more how unnecessarily complicated this legislation had to be merely to accommodate the private insurance industry. If you are suffering from euphoria, read this rule and it will cure you.
As everyone knows, the Affordable Care Act was written by and for the private insurance industry. Just to show how much the insurance industry’s influence extends into the Obama administration you merely need to look at the rule on the governing board composition and conflict of interest, to wit, “representatives of health insurance issuers, agents, brokers, or other individuals licensed to sell health insurance may not constitute a majority of the governing board.”
Absolutely astounding! The private insurance industry can occupy up to one-half of the seats on the governing board! Amongst all of the other members of the board, they need only one friend. Watching the reform process take place it is clear that they have friends everywhere!
During the comment period, many expressed concern about this obvious conflict of interest, suggesting even that insurers participate as an advisory group rather than through board membership. And HHS’s response? “We believe that further definition of conflict of interest may create inconsistencies with State law and other existing State standards.”
This is an outrage! Mobilize the forces!