Section 66.08 - Submission and Review of Rate Filings(1)Definitions. For rate filings submitted pursuant to 211 CMR 66.08(2), the following definitions also shall apply:(a)Adjusted Minimum Medical Loss Ratio. A specific Carrier's aggregated medical loss ratio for all its merged market plans which was less than the Minimum Medical Loss ratio, but at least 1% greater than the Carrier's equivalent loss ratio for the 12 months prior to the Carrier's present rate filing.(b)Capital Costs and Depreciation Expenses. All expenses associated with depreciation (depreciation for electronic data processing, equipment, software, and occupancy); capital acquisitions (acquisition of capital assets, including lease payments that were paid or incurred during the year); capital costs on behalf of a hospital or clinic (expenditures for capital and lease payments incurred or paid during the year on behalf of a hospital or clinic (or part of a partnership, joint venture, integration or affiliation agreement); and other capital (other costs that are directly associated with the incurring of capital costs, such as legal or administrative costs, incurred or paid during the year).(c)Charitable Contributions Expenses. All contributions to tax-exempt foundations and charities, not related to the company business enterprises.(d)Claim Completion Method. Any actuarial method used to quantify claims which have been incurred but not yet paid.(e)Claims Operations Expenses. All expenses associated with claims adjudication and adjustment of claims, appeals, claims settlement, coordination of benefits processing, maintenance of the claims system, printing of claims forms, claim audit function, electronic data interchange expenses associated with claims processing and fraud investigation.(f)Distribution Expenses. All expenses associated with distribution and sale of products, including commissions, producer, broker and benefit consultant fees, other fees, commission processing and account reporting to brokers, agents and producers.(g)Financial Administration Expenses. All expenses associated with underwriting, auditing, actuarial, financial analysis, investment-related expenses (not included elsewhere), treasury, and reinsurance.(h)General Administration Expenses. All expenses associated with payroll administration expenses and payroll taxes (salaries, benefits and payroll taxes); real estate expenses (company building and other taxes and expenses of owned real estate, excluding home office employee expenses and rent (not allocated elsewhere) and insurance on real estate); regulatory compliance and government relations (federal and state reporting, rate filing, state and federal audits, tax accounting, lobbying, licensing and filing fees, preparation and filing of financial, utilization, statistical and quality reports and administration of government programs); board, bureau or association fees (Board of Directors, Bureau and association fees paid or expensed during the calendar year); other administration (information technology, senior management, outsourcing (not allocated elsewhere), insurance except on real estate, equipment rental, travel (not allocated elsewhere), certification and accreditation fees, legal fees and expenses before administrative and legal bodies, and other general administrative expenses); and negative adjustment for reimbursement from uninsured plans (all revenue receipts from uninsured plans (including excess pharmaceutical rebates and administrative fees net of expenses) and reimbursements from fiscal intermediaries including administrative fees net of expenses from the government).(i)Marketing and Sales Expenses. All expenses associated with billing and Member enrollment (group and individual billing, Member enrollment, premium collection and reconciliation functions); customer service and Member relations (individual, group or provider support relating to membership, enrollment, grievance resolution, specialized phone services and equipment, consumer services and consumer information); product management, marketing and sales (management and marketing of current products, including product promotion and advertising, marketing materials, changes or additions to current products, sales, pricing and enrollee education regarding coverage prior to the sale); and product development: (product design and development for new products not currently offered, major systems development associated with the new products and integrated system network development).(j)Medical Administration Expenses. All expenses associated with quality assurance and cost containment (health and disease management and wellness initiatives (other than for education), health care quality assurance, appeals, case management, fraud detection and prevention, utilization review, practice protocol development, peer review, outcomes analysis related to existing products, nurse triage, medical management and other Medical Care evaluation activities); wellness and health education (wellness and health promotion, disease prevention, Member education and materials, provide education and outreach services); and medical research (outcomes research, medical research programs and development of new medical management programs not currently offered, major systems development and integrated system network development).(k)Minimum Medical Loss Ratio. The Minimum Medical Loss Ratio for the Merged Market is 88%.(l)Miscellaneous Expenditures Expenses. All other not classified expenses including all collection and bank service charges, printing, office supplies, postage and telephone (not allocated elsewhere).(m)Network Operations Expenses. All expenses associated with provider contracting negotiation and preparation, monitoring of provider compliance, field training with providers, provider communication materials and bulletins, administration of provider capitation and settlements, hospital and physician relations, medical policy procedures, network access fees and credentialing.(n)Normalized per Member per Month Claim Cost. Claim cost expressed per Member per month adjusted to represent a Member whose rating factors equal one.(o)Taxes, Assessments and Fines Paid to Federal, State or Local Governments (as Expenses). All expenses associated with taxes (state premium taxes, state and local insurance taxes, federal taxes, except taxes on capital gains, state income tax, state sales tax and other sales taxes not included with the cost of goods purchased); assessments, fees and other amounts paid to regulatory agencies (assessments, fees or other amounts paid to state or local government and does not include taxes or fines or penalties paid to any government agency); and fines and penalties paid to regulatory agencies (penalties and fines paid to government agencies).(2)Content of Rate Filings. A Carrier's submission shall be submitted in a format specified by the Commissioner and shall show the company's development of the filed rates and contain at least the following information:(a) Summary rate information for each product, including:1. proposed rate change compared to rates in effect 12 months before proposed effective date;2. number of currently enrolled Members impacted by the proposed rate change presented as: a. number of employer groups and covered employees/dependents renewing by month; andb. individual accounts and covered individuals/dependents renewing by month; and3. maximum increase for any employer group or individual covered under the proposed rate change.(b) Changes to cost-sharing and/or benefits for each product relative to the 12-month period prior to the proposed effective date of the filed rates for the following: 1. inpatient hospital care;2. outpatient hospital care, with separate information for:a. radiological/laboratory/pathology costs; andb. all other outpatient costs;3. health care providers, with separate information for:a. medical and osteopathic physicians;b. behavioral health providers; andc. all other health care practitioners;4. outpatient prescription drugs; and5. supplies. For information submitted pursuant to 211 CMR 66.08(2)(c) through (h), a Carrier's submission shall provide details in aggregate.
(c) Actual fee-for-service claims payment experience, utilization experience, and claims cost for each of the latest available 12 months on both an actual and per Member per month basis for products issued or renewed according to M.G.L. c. 176J, on an aggregate basis for the period impacted for the proposed rate change, differentiating among: 1. inpatient hospital care;2. outpatient hospital care, with separate experience for:a. radiological/laboratory/pathology costs; andb. all other outpatient costs;3. health care providers, with separate experience for:a. medical and osteopathic physicians;b. behavioral health providers; andc. all other health care practitioners.4. outpatient prescription drugs; and5. supplies. The analysis should explain any differences between what is included in this filing and what normally is included in the Carrier's financial statements. The Carrier also should submit projected Trend in Health Plan Expenses for fee-for-service utilization per 1,000 Members, price per service and per Member per month costs for each of the noted service types that the Carrier is using to project historic claims forward to the period for which the rates will be effective. Annual price and use assumptions for Trend in Health Plan Expenses for fee-for-service expenses should be provided for each year in the projection period and the carrier must indicate how many months of each year are used in the analysis. Trend in Health Plan Expenses for fee-for-service expenses should reflect provider price increases whereas utilization may include mix of services and mix of providers. The Trend in Health Plan Expenses for fee-for-service expenses information should include the actuarial basis for all changes in Trend in Health Plan Expenses for fee-for-service expenses, including all relevant studies used to derive the factors.
(d) The Carrier's historic capitation, as well as per Member per month cost experience, for the latest available 12 months and projected capitation on a per Member per month basis for the period impacted for the proposed rate change, differentiating among:1. inpatient hospital care;2. outpatient hospital care, with separate experience for:a. radiological/laboratory/pathology costs; andb. all other outpatient costs;3. health care providers, with separate experience for:a. medical and osteopathic physicians;b. behavioral health providers; andc. all other health care practitioners;4. outpatient prescription drugs; and5. supplies. The analysis should explain any differences between what is included in this filing and what normally is included in the Carrier's financial statements. The Carrier also should submit projected factors for Trends in Health Plan Expenses for capitation payments that the Carrier is using to project capitation costs forward to the period for which the rates will be effective. Annual Trends in Health Plan Expenses for capitation payments assumptions should be provided for each year in the projection period and the Carrier must indicate how many months of each year are used in the analysis. Trends in Health Plan Expenses for capitation should reflect provider price increases whereas utilization may include mix of services and mix of providers. The Trend in Health Plan Expenses for capitation payments to providers information should include the actuarial basis for all changes, including all relevant studies or information that the Carrier believes will lead to changes in capitation costs.
(e) The Carrier's other non-fee-for-service and non-capitation payments to providers, as well as per Member per month experience, and projected non-fee-for-service and noncapitation payments to providers for the period impacted for the proposed rate change, differentiating among.1. inpatient hospital care;2. outpatient hospital care, with separate experience for:a. radiological/laboratory/pathology costs; andb. all other outpatient costs;3. health care providers, with separate experience for:a. medical and osteopathic physicians;b. behavioral health providers; andc. all other health care practitioners;4. outpatient prescription drugs; and5. supplies. The other payments should include all bonus/incentives tied to provider performance and other payments not tied to service or performance. The Carrier also should submit the projected Trends in Health Plan Expenses for non-fee-for-services and non-capitation payments to providers factor in the other provider payments per Member per month costs that the Carrier is using to project other costs forward to the period for which the rates will be effective. Annual assumptions for Trend in Health Plan Expenses for non-fee-for-services and non-capitation payments to providers should be provided for each year in the projection period and the Carrier must indicate how many months of each year are used in the trend analysis. Trend in Health Plan Expenses for non-fee-for-services and non-capitation payments to providers should reflect provider price increases whereas utilization may include mix of services and mix of providers. The Trend in Health Plan Expenses for non-fee-for-services and non-capitation payments to providers information should include the actuarial basis for all changes in these payments, including all relevant studies or information that the Carrier believes will lead to changes in these other provider payment costs.
(f) The Carrier's administrative expenses and per Member per month administrative expenses relevant to products issued or renewed according to M.G.L. c. 176J and used in the development of the filing, for the two years prior to the submission of the rate filing for each of the following categories:1. expenses for capital costs and depreciation;2. expenses for charitable contributions;3. expenses for claims operations;4. expenses for distribution;5. expenses for financial administration;6. expenses for general administration;7. expenses for marketing and sales;8. expenses for medical administration, with specific detail on costs related to programs that improve health care quality;9. expenses for miscellaneous expenditures described in detail;10. expenses for network operations;11. expenses for taxes, assessments and fines paid to federal, state or local governments; and12. total administrative expenses [subtotaling 211 CMR 66.08(2)(f)1. through 11.]. The Carrier also should submit projected increases in administrative expenses per Member per month that the Carrier is using to project administrative expenses forward to the period for which the rates will be effective. The Trend information should include an explanation for all significant changes in the Carrier's administrative expenses due to onetime costs, including where changes in administrative expenses may be caused by regulatory requirements or efforts to contain health care delivery costs, an explanation of the projected cost and cost per Member per month that can be attributed to each regulatory requirement or effort to contain health care delivery costs and the method that the Carrier is using to allocate any companywide expenses to the Merged Market line of business.
(g) The Carrier's contribution to surplus, relevant to products issued or renewed according to M.G.L. c. 176J, both in the aggregate, on a normalized per Member per month basis and as a percentage (%) of premium for the two years prior to the submission of the rate filing. The Carrier also should identify the contribution to surplus included in the rate filing on a per Member per month basis and as a percentage (%) of premium and should provide a detailed explanation of the reasons that the contribution to surplus has been filed at that level, as well as the contribution to surplus levels that the Carrier is using in all other lines of coverage. The Carrier should describe the method used to quantify the contribution to surplus in the proposed rates.(h) The three-year historic medical loss ratio for the rates, relevant to products issued or renewed according to M.G.L c. 176J and the projected medical loss ratios for the one year period during which rates will be in effect.(i) A detailed description of all cost containment programs the Carrier is employing or will employ during the Rating Period to address health care delivery costs and the realized past savings and projected savings from all such programs.(j) If the Carrier intends to pay similarly situated providers within its provider networks different rates of reimbursement, a detailed description of the bases for the different rates including, but not limited to: 1. quality of care delivered;3. geographic location at which care is provided; and4. intensity of services provided.(k) Interrogatories including, but not limited to: 1. Detailed explanations of methodological changes that have been employed by the Carrier in development of rates, loads or factors since most recent filing, including:
b. administrative expense loads;c. contribution to surplus loads;d. Rating Adjustment Factors;e. cost containment and quality improvement efforts;f. provider contracting initiatives;g. methodology for setting claim reserves;h. size of the claim reserve relative to the total incurred claims estimate for the most recent year of experience; andi. reconciliation of claim payments in filing to claims system and recorded claim payments in filed financial statements.2. Detailed explanations of the development of the filing's claims completion factor(s) including, but not limited to: a. explanation of the Claim Completion Method and the source of the filing's completion factor(s);b. high level analysis of derivation of factor;c. explanation of whether factor(s) is consistent with reserve development for financial reporting;d. explanation of level of conservatism used in developing factor(s);e. demonstration for each calendar month in the claim experience period of how any incurred but unreported claims were estimated using the Carrier's completion factor(s); andf. a comparison of estimated claim payments provided in the most recent prior filing to current estimated claims costs for the same time period.3. Detailed explanations of planned changes in methods of paying providers, including:a. Three-year historical analysis of the proportion of provider services reimbursed according to the following methodologies:i. discounted or undiscounted charges;ii. payment based on fee schedules;iii. incentive-based fee-for-service (payment is initially withheld and repaid to provider based on provider performance);iv. fee-for-service payments with bonus/incentives tied to performance (additional payments above and beyond the standard payment where the amount of the additional payment is based on provider performance;v. capitation payments (fixed payment per Member per month for a specified set of services);vi. risk sharing adjustment to provider payments made in a fiscal year-end settlement whereby provider payments are increased or decreased based on provider performance that is shared with the health plan; andvii. payments not tied to provision of specific service or performance.b. Explanation of projected distribution of provider services to be reimbursed using these methodologies in the Rating Period and an explanation of the impact on expected costs for covered Member services.c. Explanation of the weighting of the criteria that the plan uses for evaluating performance based provider payments, including:ii. outcomes measurement;iii. participation or adherence to processes to improve quality;iv. measured achievement of quality standards;v. measured achievement of utilization efficiency standards;vi. measured achievement of cost containment goals; andvii. measured implementation of technology necessary to improve efficiency.d. Explanation of a Carrier's plan to change the distribution of payment systems to providers in the future and how this will impact future rate filings.4. Benefit Level Rate Adjustment Factors, including:a. explanation of the process used to ensure that the Benefit Level Rate Adjustment Factor reflects the actuarial value of benefits in one plan versus another;b. explanation of any effect that Connector-offered plans may have on plans not offered through the Connector; andc. explanation of any reasons that a filing may reflect different Benefit Level Trends for different products and how this may be incorporated into the rate analysis.5. Rating Adjustment Factors, including an illustration of how a sample Member's premium is calculated based on that Member's permissible Rating Adjustment Factors;6. Credibility analyses, including: a. explanation of how the actuary conducted a credibility analysis of available data; andb. explanation of adjustments made due to concerns over the credibility of available data and basis for said adjustments, including an explanation of national or regional data that was used in place of or in combination with plan data when developing factors.7. A discussion of the impact of overestimates or underestimates of Trend in Health Plan Expenses in prior year rate filings on the development of the current proposed rate.8. Overall rate impacts, including: a. Illustration of rate changes for each product, after application of the Rating Adjustment Factors and any changes in the demographic make-up of the individual or group contract, using the following ranges:i. reduction of 10% or more;ii. reduction between 5.01% and 9.99%;iii. reduction of 5% or less (including no change);iv. increase of less than 5%;v. increase of between 5.01% and 9.99%;vi. increase of between 10.0% and 14.99%; andvii. increase of 15% or more.b. Explanation of the reasons, distinguishing by Group Base Premium Rate changes and the application of Rating Adjustment Factors, for which rates of any Eligible Individuals or Eligible Small Groups increase by more than 15%.(l) Any other information requested by the Commissioner including, but not limited to, any information requested by the Commissioner on behalf of the National Association of Insurance Commissioners.(m) Each rate filing shall be accompanied by a supporting actuarial memorandum and an Actuarial Opinion prepared and certified by a qualified Member of the American Academy of Actuaries.(3)Timing of Submission and Opportunity for Public Comment. (a) Every Carrier, as a condition of doing business under M.G.L. c. 176J and 211 CMR 66.00, must submit a complete annual rate filing for their Group Base Premium Rates and Rating Adjustment Factors. Such rate filings must be submitted on or before May 15th for rates intended to be effective on or after January 1st of the following calendar year.(b) Any provider-specific rates of reimbursement or Rating Adjustment Factors included in the Merged Market rate filing materials submitted for review by the Division shall be deemed confidential and exempt from the definition of public records in M.G.L. c. 4, § 7, clause 26.(c) In addition to the rate filing required by 211 CMR 66.08, each Carrier shall submit a rate filing summary that will be available for public inspection while the rate filing is reviewed by the Division. The rate filing summary should be submitted in a format determined by the Commissioner and must include:1. An overview of the rate filing, including an identification of the products that are subject to the rate filing, key drivers for the proposed rate change, the range of rate changes and the overall average proposed rate change, and the number of renewing Eligible Individuals and the number of renewing Eligible Small Groups and Small Group Members.2. A summary of the cost-sharing and benefits for each product, as proposed in the rate filing for a. inpatient hospital careb. outpatient hospital care i. radiological/laboratory/pathology costsii. all other outpatient costsc. health care providersi. medical and osteopathic physiciansii. behavioral health providersiii. all other health care practitionersd. outpatient prescription drugs3. An explanation of the general methodology for establishing rates of reimbursement for providers; any proposed changes in the methods of paying providers or provider contracting initiatives; the basis for paying similarly situated providers within a provider network different rates of reimbursement including, but not limited to, quality of care delivered, mix of patients, geographic location at which care is provided and intensity of services provided; and any non-fee-for-service and non-capitation payments to providers included in the rate filing including, but not limited to, bonuses and incentives tied to provider performance and other payments not tied to service or performance.4. A summary of the administrative expenses, in the aggregate and per Member per month, used in the development of the rate filing and the projected increases for the period in which the filed rates will be in effect, including an explanation for significant changes in the Carrier's administrative expenses due to one-time costs.5. Medical loss ratios, including three-year historic ratios for Merged Market products and the projected medical loss ratio for the period during which the filed rates will be in effect.6. Contribution to surplus and the reasons why the Carrier filed at that level.7. An explanation of how or why information contained in the rate filing is different from information contained in the Carrier's filed financial statements.8. A description of cost containment programs the Carrier is employing to address health care delivery costs and a summary of the realized past savings and projected savings from all such programs.9. Any other information required by the Commissioner.(d) Within ten business days of the annual rate filing submission deadline, the Division will prepare and post to its website a summary of the rate filings received, along with copies of the rate filing summaries submitted by the Carriers pursuant to 211 CMR 66.08(3)(c). This summary will include a table of the rate change requests with the rate changes requested and approved for the last two years.(e) The Division will provide notice of an opportunity for the public to comment on the Carriers' proposed rate changes. No later than June 5th, on an annual basis, unless otherwise determined by the Commissioner, the Division will schedule during the course of review a public information session to accept comments from interested parties on the proposed rate changes submitted under 211 CMR 66.08(3)(a). At the public information session, Carriers will be expected to present the information contained in their rate filing summaries submitted under 211 CMR 66.08(3)(c) and may be asked to respond to questions from the Division. Interested parties will be invited to present oral or written comments on the Carriers' proposed rate changes to the Division. At the hearing officer's discretion, the Division will accept written comments from interested parties from the date notice of the public information session is given for at least ten days following the public information session. While written and oral comments on the Carriers' proposed rate changes will be considered by the Division as part of the public information session, the Division's review of a specific rate filing will at all times be governed by the requirements of 211 CMR 66.08.(f) The Division will develop and post to its website a set of frequently asked questions about the rate review process for Merged-Market rates.(g) Following the Division's review of the rate filings and no later than August 31st each year, unless otherwise determined by the Commissioner, the Division will update the table posted to its website to reflect the rate changes that were not disapproved and which will be used by Carriers on and after the succeeding January 1st.(4)Review of Rate Filings.(a) All Group Base Premium Rates and Rating Adjustment Factors are subject to disapproval if they do not meet the requirements of M.G.L. c. 176J and 211 CMR 66.00.(b) A Carrier shall respond to any request for additional information by the Division within five business days of the date of the Division's request. Failure to respond to the Division's request within five business days may result in a delay of the Division's review of the filing and a delay in the proposed effective date of the filed rates.(c) Every Carrier shall include with any submission under 211 CMR 66.08(3) a cover letter summarizing the content in 211 CMR 66.08(2)(g)12., (h) and (i). Group Base Premium Rates will be presumptively disapproved as excessive if the rate filing does not meet the following standards: 1.Administrative Expense Standards. Group Base Premium Rates will be presumptively disapproved if the filing's projected administrative expense loading component, not including taxes and assessments, health care quality improvement expenses, and fraud and abuse detection, increases by more than the most recent calendar year's increase in the New England medical CPI. a. The projected administrative expense loading component is the per Member per month administrative expense described in 211 CMR 66.08(2)(g)12. plus the producer commission expense.b. The most recent calendar year's increase in the New England medical CPI shall be calculated by dividing the index value for the November period preceding the date of the filing by the same index value from the November period one year earlier. For the purpose of 211 CMR 66.08(4)(d)1.b., the New England medical CPI shall reflect the Consumer Price Indexes for All Urban Consumers (CPI-U), U.S. city averages and selected areas, for the Boston-Brockton-Nashua area.2.Contribution to Surplus Standards. Group Base Premium Rates will be presumptively disapproved as excessive if the rate filing's contribution-to-surplus loading component exceeds 1.9% of the total filed Group Base Premium Rate. a. The contribution-to-surplus loading component shall represent the per Member per month contribution-to-surplus amount submitted in 211CMR 66.08(2)(h).b. If a Carrier's Risk-Based Capital Ratio, calculated according to the provisions of 211 CMR 25.00: Risk-based Capital (RBC) for Health Organizations, falls below 300% for the four most recent consecutive quarters, the Group Base Premium Rates will be presumptively disapproved as excessive if the filing's contribution-to-surplus loading component exceeds 2.5% of premium.3.Medical Loss Ratio Standards. Group Base Premium Rates will be presumptively disapproved as excessive if the rate filing's projected aggregate medical loss ratio for all plans offered in the Merged Market is less than the Minimum Medical Loss Ratio.a. The projected aggregate medical loss ratio shall be reported as submitted in 211 CMR 66.08(2)(i).b. When a Carrier's Merged Market Group Base Premium Rates for a Rating Period would have been presumptively disapproved for failure only to meet the aggregate Minimum Medical Loss Ratio, the Group Base Premium Rate will not be presumptively disapproved if the aggregate loss ratio for all of the Carrier's Merged Market plans was at least 1% higher than the Carrier's equivalent medical loss ratio in the 12 months prior to the present filing. In this case, the filed medical loss ratio will be considered the Adjusted Minimum Medical Loss Ratio.(5)Presumptive Disapprovals Issued Pursuant to M.G.L. c. 176J, § 6(g). (a) Rate filings may be presumptively disapproved by the Commissioner as described in 211 CMR 66.08(4)(d).(b) If a Carrier's filing is presumptively disapproved, the Commissioner shall notify the Carrier in writing within five business days of the annual rate filing submission stating the reason(s) for the presumptive disapproval.(c) New Health Benefit Plans whose initial Group Base Premium Rates are presumptively disapproved may not be offered.(d) Within ten days of receipt of the presumptive disapproval, the Carrier shall communicate to all employers and individuals covered under a Health Benefit Plan approved under M.G.L. c. 176J that the proposed rate change has been presumptively disapproved and will be subject to a public hearing at the Division.(e) In the event of a presumptive disapproval, Carrier shall comply with the following procedures: 1. the Carrier shall not quote, issue, make effective, deliver, or renew Health Benefit Plans in the Commonwealth using disapproved Group Base Premium Rates. The Carrier shall quote, issue, make effective, deliver or renew all Health Benefit Plans using Group Base Premium Rates in effect 12 months prior to the proposed effective date of the presumptively disapproved Group Base Premium Rates. In recalculating premiums, the Carrier must apply the age and geographic Rating Adjustment Factors in effect 12 months prior to the proposed effective date of the presumptively disapproved Group Base Premium Rates;2. the Carrier shall recalculate applicable rates for all affected Health Benefit Plans and shall issue rate quotes and make all Health Benefit Plans available through all distribution channels, including Intermediaries, the Connector, licensed insurance producers and the Carrier's website, but in no event more than ten calendar days after the Carrier's receipt of the presumptive disapproval;3. the Carrier shall promptly provide notice of all material changes to the evidence(s) of coverage to all affected individuals and groups in accordance with M.G.L. c. 176O, § 6(a) and 211 CMR 52.12(6): General Notice of Material Changes.(f) With respect to the hearing for the presumptive disapproval:1. the public hearing shall be scheduled within 15 calendar days of the submission of a complete rate filing; and2. notice of the public hearing will be given to, or advertised in, newspapers in Boston, Brockton, Fall River, Pittsfield, Springfield, Worcester, New Bedford, and Lowell and posted to the Division's website.3. The purpose of the public hearing will be to provide the Carrier with the opportunity to rebut the reasons for the presumptive disapproval. For purposes of 211 CMR 66.08(5)(f)3., the administrative record to be considered at the public hearing will be limited to the materials and information included in the Carrier's presumptively disapproved rate filing submitted pursuant to 211 CMR 66.08.(6)Disapprovals Issued Pursuant to M.G.L. c. 176J, § 6(h). (a) Rate filings also shall be disapproved by the Commissioner if the benefits provided therein are unreasonable in relation to the rate charged, or if the rates are excessive, inadequate or unfairly discriminatory or do not otherwise comply with the requirements of M.G.L. c. 176J or 211 CMR 66.00.(b) Changes to filed Rating Adjustment Factors shall be disapproved by the Commissioner if found to be discriminatory or not actuarially sound.(c) New Health Benefit Plans whose initial Group Base Premium Rates are disapproved may not be offered.(d)1. If the Commissioner disapproves a Carrier's proposed Group Base Premium Rate(s) or proposed changes to rating factors or Rating Adjustment Factor(s), the Commissioner shall notify the Carrier no later than 75 days prior to the effective date of the Carrier's filing, and he shall state the reason(s) for the disapproval, including whether the disapproval is presumptive.2. Unless otherwise determined by the Commissioner, if the Commissioner disapproves a Carrier's proposed Group Base Premium Rate(s) or proposed changes to Rating Adjustment Factor(s), the Commissioner shall notify the Carrier in writing no later than July 5th of the year preceding the rates' effective date, stating the reason(s) for the disapproval.(e) In the event of a disapproval, Carrier shall comply with the following procedures:1. the Carrier shall not quote, issue, make effective, deliver or renew Health Benefit Plans in the Commonwealth using disapproved Group Base Premium Rates. The Carrier shall quote, issue, make effective, deliver or renew all Health Benefit Plans using Group Base Premium Rates as in effect 12 months prior to the proposed effective date of the disapproved Group Base Premium Rates. In recalculating premiums, the Carrier may apply the age and geographic Rating Adjustment Factors;2. the Carrier shall recalculate applicable rates for all affected Health Benefit Plans and shall issue rate quotes and make all Health Benefit Plans available through all distribution channels, including Intermediaries, the Connector, licensed insurance producers and the Carrier's website, but in no event more than ten calendar days after the Carrier's receipt of the disapproval;3. the Carrier shall promptly provide notice of all material changes to the evidence(s) of coverage to all affected individuals and groups in accordance with M.G.L. c. 176O, § 6(a) and 211 CMR 52.12(6): General Notice of Material Changes.(f) The Commissioner retains the right to disapprove a rate filing for reasons other than those identified upon review of the rate filing.(g) Hearings on Disapprovals issued pursuant to M.G.L. c. 176J, § 6(h) 1. within ten days of receipt of the disapproval, the Carrier may request a hearing on the disapproval;2. the Division shall schedule a hearing within 15 calendar days of receipt of the Carrier's request;3. the purpose of the hearing will be to consider whether the disapproval is supported by substantial evidence and not based upon an error of law; and4. The Commissioner shall issue a written decision either affirming or rejecting the disapproval within 30 days after the conclusion of the hearing.(7)Appeals. Any final order, decree, or judgment of the Massachusetts Superior Court or appellate court modifying, amending, annulling, or reversing a decision of the Commissioner disapproving a rate filing, and any further decision of the Commissioner pursuant to such an order, decree, or judgment that affects the overall rate not disapproved shall be effective as ordered.(8)Maintaining Records. Every Carrier must maintain at its principal place of business a complete and detailed description of its rating practices, including information and documentation which demonstrates that its rating methods and practices are based upon commonly accepted actuarial assumptions, are in accordance with sound actuarial principles, and comply with the provisions of 211 CMR 66.00.(9)Methodology for Calculating and Reporting Refund, Rebate or Credit Calculations.(a) Unless otherwise determined by the Commissioner, for the purposes of M.G.L. c. 176J, § 6, Carriers are to calculate and submit a rebate calculation form as designated by the Commissioner each calendar year by July 31st, or another date as determined by the Commissioner, for the previous calendar year based on the current federal methodology for calculating rebates. When completing the form for Massachusetts, Carriers are to use the Minimum Medical Loss Ratio, or if applicable, the Adjusted Minimum Medical Loss Ratio, that applies in the year for which the calculation was completed.(b) If the calculation illustrates that a refund or rebate is warranted, the Carrier shall submit a detailed plan, for the Commissioner's approval, that will provide a detailed description of the manner in which the Carrier will refund the excess premium to those individuals or small employers who were covered during the prior calendar year or an explanation of the reasons that the Carrier proposes not to make a refund or rebate. The amount of the rebate will be based on the individual's or small employer's relative share of the premiums that were paid to the Carrier during the calendar year.(c) A Carrier shall communicate within 30 days to all individuals and small employers that were covered under plans during the relevant 12-month calendar year that such individuals and small employers qualify for a refund which may take the form of either a refund on the premium for the applicable 12-month period, or if the individual or small employer are still covered by the Carrier, a credit on the premium for the subsequent 12-month period.(d) The basis for all refunds issued shall equal the amount of a Carrier's earned premium that exceeds that amount necessary to achieve the Minimum Medical Loss Ratio, or if applicable, the Adjusted Minimum Medical Loss Ratio, as reported to the Commissioner. The Commissioner may authorize a waiver or adjustment of the refund requirement if the Commissioner determines that issuing such refunds would result in Financial Impairment for the Carrier or if the Commissioner determines that such refunds are de minimus. The aggregate of any de minimus amount not refunded shall be used to reduce overall premiums.(e) Refunds shall be paid annually by August 31st or another date as determined by the Commissioner, following the calendar year of the rebate calculation.(f) Carriers who issue refunds shall keep records of all refunds made to affected individuals and small groups for inspection by the Division.(g) No individual or small employer may assign his or her or its rights to such premium adjustments to another person or entity.(h) If a Carrier fails to make refunds, rebates or premium adjustments acceptable to the Commissioner, the Commissioner may order premium adjustments, refunds or premium credits he or she deems necessary.(10)Implementation. The provisions of 211 CMR 66.08(3), 211 CMR 66.08(5) and 211 CMR 66.08(6) shall only apply to merged-market rates to be effective on or after January 1, 2024. For merged-market rates with effective dates prior to January 1, 2024, the requirements of the most recent prior version of 211 CMR 66.08 relative to the submission and disapproval of merged-market rate filings shall apply.Amended by Mass Register Issue 1349, eff. 10/6/2017.Amended by Mass Register Issue 1487, eff. 1/20/2023.Amended by Mass Register Issue 1489, eff. 1/20/2023.