Solution Sheet

Cost Sharing Reduction

The Cost Sharing Reduction (CSR) provision of the ACA introduces a process to subsidize member out-of-pocket costs for low-income members on more expensive variant plans. Issuers receive a Per Member Per Month (PMPM) payment from the government to offset the higher plan cost. Issuers then need to reconcile these payments with the actual cost incurred for these members based on their claim experience using a Simplified or Standard methodology. Many issuers initially chose the Simplified methodology based on time to market. Given the extension they have chosen to implement the Standard methodology based on their financial analysis that substantiated financial benefits.

The standard CSR formula is complex due to the requirement that each claim line originally adjudicated under a Silver Variant Plan must be recalculated as if it were processed under the associated Silver Standard Plan. This allows issuers to determine if the government subsidies were more or less than the actual incurred costs.

Enterprise Solutions Approach

The Precisely CSR solution addresses the requirements of the CSR regulation with a comprehensive set of tools that allow issuers to recalculate the affected claims to achieve accurate and reliable results. Reporting is provided to allow monthly or quarterly monitoring of subsidy payments vs. liability and analysis of the trends of this data.

How it Works

The Precisely team stays on top of regulation updates to support the changes in the solution and notifies customers to ensure they are up-to-date. Interim CSR calculations can be made to understand and monitor plans before they need to be submitted.

Learn more about how Precisely can help you increase the speed at which the cost sharing reduction reconciliation is completed while obtaining accurate and detailed results.

Cost Sharing Reduction