DEPARTMENT OF HEALTH AND HUMAN SERVICES 

Centers for Medicare & Medicaid Services 

[CMS-9970-NC] 

Request for Information Regarding the Reinsurance Program under the Affordable Care 

Act 

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. 

ACTION: Request for Information. 

SUMMARY: This notice is a request for information (RFI) to gain market information on 

entities that could administer a transitional reinsurance program. This RFI will inform one or 

more future Requests for Proposals (RFP). This RFI solicits information about entities that 

could function as a reinsurance entity for the transitional reinsurance program. CMS or one or 

more States may contract for services required to fulfill the statutory and regulatory requirements 

of the reinsurance entity. 

DATES: Submit written or electronic comments by [Insert date 30 days after date of publication 

in the Federal Register]. 

ADDRESSES: In responding, please refer to file code CMS-9970-NC. Because of staff and 

resource limitations, we cannot accept comments by facsimile (FAX) transmission. 

 You may submit responses in one of four ways (please choose only one of the ways 

listed): 

1. Electronically. You may submit electronic comments on this regulation to 

http://www.regulations.gov. Follow the instructions under the "More Search Options" tab. 

 2. By regular mail. You may mail written comments to the following address ONLY: 

 Centers for Medicare & Medicaid Services, 
CMS-9970-NC 2 

 

 Department of Health and Human Services, 

 Attention: CMS-9970-NC, 

 P.O. Box 8016, 

Baltimore, MD 21244-8016. 

Please allow sufficient time for mailed comments to be received before the close of the 

comment period. 

3. By express or overnight mail. You may send written comments to the following 

address ONLY: 

 Centers for Medicare & Medicaid Services, 

 Department of Health and Human Services, 

 Attention: CMS-9970-NC, 

 Mail Stop C4-26-05, 

 7500 Security Boulevard, 

Baltimore, MD 21244-1850. 

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written 

comments before the close of the comment period to either of the following addresses: 

a. For delivery in Washington, DC-- 

 Centers for Medicare & Medicaid Services, 

Department of Health and Human Services, 

Room 445-G, Hubert H. Humphrey Building, 

 200 Independence Avenue, S.W., 

 Washington, DC 20201. 
CMS-9970-NC 3 

 

(Because access to the interior of the Hubert H. Humphrey Building is not readily 

available to persons without Federal government identification, commenters are encouraged to 

leave their comments in the CMS drop slots located in the main lobby of the building. A stampin clock is available for persons wishing to retain a proof of filing by stamping in and retaining 

an extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD-- 

Centers for Medicare & Medicaid Services, 

Department of Health and Human Services, 

7500 Security Boulevard, 

Baltimore, MD 21244-1850. 

If you intend to deliver your comments to the Baltimore address, please call telephone 

number (410) 786-9994 in advance to schedule your arrival with one of our staff members. 

 Comments mailed to the addresses indicated as appropriate for hand or courier delivery 

may be delayed and received after the comment period. 

For information on viewing public comments, see the beginning of the "SUPPLEMENTARY 

INFORMATION" section. 

FOR FURTHER INFORMATION CONTACT: 

Milan Shah, 301-492-4427. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All comments received before the close of the comment period 

are available for viewing by the public, including any personally identifiable or confidential 

business information that is included in a comment. We post all comments received before the 

close of the comment period on the following Web site as soon as possible after they have been 
CMS-9970-NC 4 

 

received: http://www.regulations.gov. Follow the search instructions on that Web site to view 

public comments. 

Comments received timely will also be available for public inspection as they are 

received, generally beginning approximately 3 weeks after publication of a document, at the 

headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To 

schedule an appointment to view public comments, phone 1-800-743-3951. 

We note that responses to this RFI are not offers, and cannot be accepted by the 

Government to form a binding contract or to issue a grant. The purpose of this RFI is to inform 

one or more Requests for Proposals, not to gather public comments on the proposed rules for 

reinsurance, risk corridors, or risk adjustment under the Affordable Care Act. Those comments 

have been collected and are being evaluated separately. Information obtained in response to this 

RFI may be used by the Government for program planning and development, or other purposes 

with or without attribution. Do not include any information that might be considered proprietary 

or confidential. 

I. Background 

Section 1341 of the Patient Protection and Affordable Care Act (Pub. L. 111-148, enacted 

on March 23, 2010) (the Affordable Care Act), provides that each State must establish a 

transitional reinsurance program to help stabilize premiums for coverage in the individual market 

during the first three years of Exchange operation (2014-2016). The reinsurance program, which 

is a State-based program, will reduce the uncertainty of insurance risk in the individual market 

by making payments for high-cost cases. This program will stabilize individual market rate 

increases that might otherwise occur because of the immediate enrollment of individuals with 
CMS-9970-NC 5 

 

unknown health status, potentially including, at the State’s discretion, those currently in State 

high-risk pools. CMS published proposed rules for States and health insurance issuers for this 

reinsurance program on July 15, 2011 (76 FR 41930). 

The Affordable Care Act instructs each State to establish or contract with an entity to 

carry out the reinsurance program. Section 1321(c)(1) of the Affordable Care Act directs the 

Secretary to take such actions as are necessary to implement the reinsurance program in a State if 

a State has not taken action necessary to do so. The reinsurance entity, whether operating under 

contract with a State or CMS, must be a not-for-profit organization with a tax-exempt status. 

II. Request for Information 

This RFI seeks comment on the entities that could carry out the transitional reinsurance 

program. CMS may enter into one or more contracts to fulfill the statutory and regulatory 

requirements of the transitional reinsurance program established under section 1341 of the 

Affordable Care Act depending on the workload and number of States that would require 

assistance. In such a case, the contractor may be tasked with one or more of the following 

functions: 

• Collecting reinsurance contributions; 

• Accepting and validating requests for reinsurance payments; 

• Remitting reinsurance payments; 

• Reconciling and verifying reinsurance contributions and payments; 

• Maintaining records; and, 

• Providing customer support to issuers. 

CMS is seeking to engage formally, in a transparent and participatory manner, with 

entities that understand the reinsurance market, and would be able to perform the responsibilities 
CMS-9970-NC 6 

 

of a reinsurance entity under the statute and associated regulations. In carrying out the 

transitional reinsurance program, CMS seeks to mitigate conflicts of interest (COI) that may 

arise if potential market competitors operate the reinsurance program. As such, we request any 

information on potential COIs, and potential avenues for mitigation, from all stakeholders, 

including issuers and third-party administrators. 

Infrastructure 

1. Does your organization operate as a not-for-profit reinsurance entity in the State(s) 

in which you currently conduct business? 

2. If your organization operates as a reinsurance entity but does not function as a 

not-for-profit, what steps would have to be taken to convert the organization or the part of that 

organization responsible for reinsurance operations into a not-for-profit entity? What other 

considerations should be taken into account in connection with such a conversion? 

3. What other steps must your organization take in order to be prepared to smoothly 

transition into a role as administrator of a new temporary reinsurance program? 

4. Does your organization operate nationally or in limited geographic areas? If the 

latter, what are the geographic areas? 

5. Would your organization be able and willing to contract with a State and/or the 

Federal government to operate a temporary reinsurance program? 

6. Are there any State and/or local licensing requirements that must be considered by 

an organization operating as such a reinsurance entity? 

7. What potential conflicts of interest (COI) could arise if your organization were to 

operate such a reinsurance program as a not-for-profit entity? How might these COIs be 

mitigated? 
CMS-9970-NC 7 

 

8. For organizations that do not currently have COI mitigation programs, what steps 

would have to be taken to develop and execute such a program? 

9. What is a reasonable amount of time for your organization to become fully 

operational (for example, have all systems in place to operate a reinsurance program) after the 

date of a contract award? What resources would be necessary? 

Collection and Disbursement of Reinsurance Funds 

10. Describe your organization’s ability to perform the following functions: 

• Collecting reinsurance contributions; 

• Accepting and validating requests for reinsurance payments; 

• Remitting reinsurance payments; and, 

• Reconciling and verifying reinsurance contributions and payments. 

11. What services related to the collection of reinsurance contributions, or disbursement 

of reinsurance payments to another entity would your organization need to subcontract due to a 

lack of capacity, expertise, or experience? 

12. What COIs could arise for such potential subcontractors? 

Data Collection 

13. Describe current data systems that are used by your organization, including any 

standards, security systems, and web-based interactive structure. Are your systems compliant or 

have the capability of being Section 508 compliant <http://www.section508.gov/>? 

14. Do your organization’s current data systems have the capability to interface with 

external systems to accept data and reports? If yes, what types of interfaces are currently in 

place? 

15. What data are currently collected by your organization related to medical costs? 
CMS-9970-NC 8 

 

16. What is your organization’s current capacity for collecting and verifying claims 

submissions from issuers? What processes does your organization have in place to ensure 

confidentiality and security protections of patient information? 

17. In what formats does your organization currently collect data? Can your 

organization support other formats? If so, which ones? 

18. Would your organization need to subcontract any services related to data collection? 

19. What COIs could arise for such subcontractors? 

Customer Support 

20. What telecommunication and technical support systems does your organization 

currently maintain for health insurance issuers or other commercial clients (for example, 

websites, 24-hour hotlines, helpdesk)? 

21. Are your support systems compliant or have the capability of being Section 508 

compliant <http://www.section508.gov/>? 

22. Would your organization need to subcontract any services related to data collection? 

23. What COIs could arise for such subcontractors? 

Evaluation 

24. Does your organization currently conduct evaluations of operations and activities? 

Do such evaluations include a financial assessment of your organization’s activities? 

25. What are your organization’s current financial and data reconciliation processes? 
Authority: (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare--Hospital 

Insurance; and Program No. 93.774, Medicare--Supplementary Medical Insurance Program) 

Dated: January 20, 2012 

 _______________________________ 

Charles Littleton 

Contracting Officer,

 Office of Acquisition and Grants Management, 

 Centers for Medicare and Medicaid Services.

BILLING CODE 4120-01-P

[FR Doc. 2012-1944 Filed 01/27/2012 at 8:45 am; Publication Date: 01/30/2012]