Clarification of Final Rules for Grandfathered Plans, Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, Dependent Coverage, Appeals, and Patient Protections Under the Affordable Care Act
Final rule; clarification.
CFR Part: "26 CFR Part 54"
RIN Number: "RIN 0938-AS56"
Citation: "83 FR 19431"
Document Number: "RIN 1210-AB72"
Page Number: "19431"
"Rules and Regulations"
SUMMARY: On
EFFECTIVE DATE: This clarification is applicable beginning
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
I. Background
A. The Rulemaking at Issue
i. Statutory Background
The Patient Protection and Affordable Care Act (Pub. L. 111-148), was enacted on
Section 2719A of the PHS Act, which is entitled "Patient Protections," provides requirements relating to coverage of emergency services for non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage /1/ and states, in general, that if a group health plan, or a health insurance issuer offering group or individual health insurance coverage, provides or covers any benefits with respect to services in an emergency department of a hospital, the plan or issuer shall cover emergency services--(A) without the need for any prior authorization determination; (B) whether the health care provider furnishing such services is a participating provider with respect to such services; (C) in a manner so that, if such services are provided to a participant, beneficiary, or enrollee--(i) by a nonparticipating health care provider with or without prior authorization; or (ii)(I) such services will be provided without imposing any requirement under the plan for prior authorization of services or any limitation on coverage where the provider of services does not have a contractual relationship with the plan for the providing of services that is more restrictive than the requirements or limitations that apply to emergency department services received from providers who do have such a contractual relationship with the plan; and (II) if such services are provided out-of-network, the cost-sharing requirement (expressed as a copayment amount or coinsurance rate) is the same requirement that would apply if such services were provided in-network.
FOOTNOTE 1 Section 2719A of the PHS Act also provides, for non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage, rules regarding designation of primary care providers, access to pediatric care, and patient access to obstetrical and gynecological care. This document does not address those aspects of section 2719A of the PHS Act. END FOOTNOTE
Therefore, among other things, the statute requires non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage that cover emergency services to do so even if the provider is not one of the plans' or issuers' "participating provider[s]." /2/ In addition, section 2719A of the PHS Act requires non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage to apply the same cost-sharing requirement (expressed as copayments and coinsurance) for emergency services provided out-of-network as emergency services provided in-network; however, the statute does not expressly address how much the out-of-network provider of emergency services must be paid for performing such services by the non-grandfathered group health plan or health insurance issuer offering non-grandfathered group or individual health insurance coverage.
FOOTNOTE 2 See section 2719A(b)(1)(B) of the PHS Act. END FOOTNOTE
As background, the amount an out-of-network provider may charge for emergency services may exceed the group health plan's or health insurance issuer's "allowed amount" (the "[m]aximum amount on which payment is based for covered health care services"). /3/ The allowed amount may be subject to deductibles and other cost-sharing in terms of a fixed-amount per service and/or a coinsurance percentage of the allowed amount. In circumstances in which a provider's charge exceeds the allowed amount, some states allow an out-of-network provider to "balance bill" the patient for the amount of the provider's charge that exceeds the allowed amount.
FOOTNOTE 3 See definition of "allowed amount" and "balance billing" in the Uniform Glossary of Health Care Coverage and Medical Terms, https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/sbc-uniform-glossary-of-coverage-and-medical-terms-final.pdf. END FOOTNOTE
Section 2719A of the PHS Act does not prohibit an out-of-network provider from balance billing a participant or beneficiary because although it includes a cost-sharing rule, "cost sharing" is a statutorily defined term that "does not include . . . balance billing amounts for non-network providers" and the cost-sharing requirement in section 2719A(b)(1)(C)(ii)(II) of the PHS Act applies to cost sharing "expressed as a copayment amount or coinsurance rate." /4/
FOOTNOTE 4 See PPACA section 1302(c)(3)(B). See also 80 FR 72192, 72212-13 (
ii. The Departments' Regulation and Related Comments
On
Accordingly, these interim final regulations considered three amounts: The in-network rate, the out-of-network rate, and the Medicare rate. Specifically, a plan or issuer satisfies the copayment and coinsurance limitations in the statute if it provides benefits for out-of-network emergency services in an amount equal to the greatest of three possible amounts--(1) The amount negotiated with in-network providers for the emergency service furnished; (2) The amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services (such as the usual, customary, and reasonable charges) but substituting the in-network cost-sharing provisions for the out-of-network cost-sharing provisions; or (3) The amount that would be paid under Medicare for the emergency service. Each of these three amounts is calculated excluding any in-network copayment or coinsurance imposed with respect to the participant, beneficiary, or enrollee. /5/
FOOTNOTE 5 75 FR at 37194 (footnote omitted). For the interim final regulation text, see 75 FR at 37225, 37232, and 37238. END FOOTNOTE
This is sometimes referred to as the "Greatest of Three" or the "GOT" regulation because it sets a floor on the amount non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage are required to pay for out-of-network emergency services under this provision at the greatest of the three listed amounts.
During the comment period for the
FOOTNOTE 6 Available at https://www.regulations.gov/contentStreamer?documentId=EBSA-2010-0016-0022&attachmentNumber=1&contentType=pdf. END FOOTNOTE
* . . [W]e appreciate the clearly stated acknowledgement that allowing plans and insurers to pay emergency physicians whatever they see fit defeats the purpose of protecting patients from potentially large bills. In that light, we also support development of an objective standard to establish `fair payment.' Insurers know that emergency physicians will see everyone who comes to the ED due to EMTALA responsibilities, and many leverage that fact to impose extremely low reimbursement rates. While a large majority of our members participate in nearly every plan or insurer network in their area, the primary reason they cite for not joining a plan's network is that the plan has arbitrarily offered an in-network payment rate that fails to cover the costs of providing the service. This forces the physicians to balance bill the patients, which often results in an unsatisfactory experience for everyone but the insurer. . .
As noted in the IF rule, `there is wide variation in how plans and issuers determine in [network] and out-of-network rates.' The term `reasonable' is in the eye of the beholder. For many years, usual and customary rates referred to charges or a proportion of charges. This has changed in recent years and physicians, particularly emergency physicians, have had problems with the `black box' approach that commercial insurers have used to determine [the] usual and customary `rates' for out-of-network providers. At this time, we are unaware of a national database that is widely available and provides timely data for objective comparisons of charges and/or costs that could be used to implement this part of the regulation. A new database, perhaps the
Other groups, such as Advocacy for Patients with
FOOTNOTE 7 The
On
FOOTNOTE 8 The final regulations incorporated guidance that had been provided in FAQs about Affordable Care Act Implementation (Part I), Q15, available at www.dol.gov/ebsa/faqs/faq-aca.html and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs.html. The FAQ and final regulations provide that if state law prohibits balance billing, or in cases in which a group health plan or health insurance issuer is contractually responsible for balance billing amounts, plans and issuers are not required to satisfy the GOT regulation, but may not impose any copayment or coinsurance requirement for out-of-network emergency services that is higher than the copayment or coinsurance requirement that would apply if the services were provided in-network. See 26 CFR 54.9815-2719A(b)(3)(iii); 29 CFR 2590.715-2719A(b)(3)(iii); and 45 CFR 47.138(b)(3)(iii). END FOOTNOTE
FOOTNOTE 9 80 FR 72192, 72213 (
B. Other Guidance
In response to concerns about transparency with respect to the second prong of the GOT regulation raised by
FOOTNOTE 10 See https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf, or https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-31_Final-4-20-16.pdf. END FOOTNOTE
FOOTNOTE 11 See DOL Advisory Opinion 96-14A (
FOOTNOTE 12 29 CFR 2560.503-1, 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR 147.136. For additional requirements for the full and fair review standard that applies under PHS Act section 2719, in addition to 29 CFR 2560.503-1(h)(2), see 26 CFR 54.9815-2719(b)(2)(ii)(C), 29 CFR 2590.715-2719(b)(2)(ii)(C), and 45 CFR 147.136(b)(2)(ii)(C) and (b)(3)(ii)(C). END FOOTNOTE
C. The Court's Remand Order
On
FOOTNOTE 13 See https://www.acep.org/Legislation-and-Advocacy/Regulatory/ACEPvsHHS_051216/. END FOOTNOTE
Following briefing by both parties, on
FOOTNOTE 14
The court did not vacate the
FOOTNOTE 15 Id. END FOOTNOTE
The Departments are issuing this document to provide the additional consideration required by the court's remand order. Specifically, the Departments are responding more fully to
II. Further Consideration of the Departments' Final Rule in Response to the Court's Remand Order
In light of the statutory language in section 2719A of the PHS Act and the totality of the comments received in response to the
A. GOT Regulation Is Reasonable and Transparent
The Departments believe that
Under the GOT regulation, the three prongs work together to establish a floor on the payment amount for out-of-network emergency services, and each state generally retains authority to set higher amounts for health insurance issued within the state. The GOT regulation requires that a group health plan or health insurance issuer must pay the highest amount determined under the three prongs, which reflect amounts that the federal government itself or group health plans and health insurance issuers have established as reasonable.
The Departments determined the GOT methodology was sufficiently transparent by taking into account other federal laws which require disclosure in certain circumstances. Specifically, a group health plan subject to ERISA must disclose how it calculates a payment amount under the GOT regulation, including payment amounts to in-network providers, and the method the group health plan or health insurance issuer used to determine the UCR amount to a claimant or the claimant's authorized representative. /16/
FOOTNOTE 16 See DOL Advisory Opinion 96-14A (
Additionally, as described above, under the internal claims and appeals and external review requirements of section 2719 of the PHS Act, which apply to plans that are subject to the protections of section 2719A of the PHS Act, a claimant (or the claimant's authorized representative) upon appeal of an adverse benefit determination must be provided reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits, including information about the plan's determination of the UCR amount. A failure to provide or make payment of a claim in whole or in part is considered an adverse benefit determination. /17/
FOOTNOTE 17 26 CFR 54.9815-2719(b); 29 CFR 2590.715-2719(b); 45 CFR 147.136(b). See also footnote 11. END FOOTNOTE
Further, the Medicare rate is transparent because the Medicare statute's provisions on setting physician payment rates are objective and detailed, and provide payment at a level that reflects the relative value of a service. /18/ Medicare rates for physicians' services are established and reviewed every year through a rulemaking in which all physicians and other stakeholders are invited to submit public comment on the agency's proposed calculations. /19/
FOOTNOTE 18 See Social Security Act Section 1848(b)(1). END FOOTNOTE
FOOTNOTE 19 See id. END FOOTNOTE
As a result, patients who are to be protected by the statute have a right to transparent access to the calculations used to arrive at the allowed amount for out-of-network emergency services, and a provider can obtain this information as a patient's authorized representative. /20/ To the extent that a provider is not able to obtain these calculations, the Departments believe that the patients' ability to obtain and to potentially challenge the information through litigation or the appeals process creates adequate safeguards with respect to
FOOTNOTE 20 See 29 CFR 2560.503-1(b)(4). See also 26 CFR 54.9815-2719(b)(2)(i), 29 CFR 2590.715-2719(b)(2)(i), and 45 CFR 147.136(b)(2)(i), requiring non-grandfathered group health plans and issuers to incorporate the internal claims and appeals processes set forth in 29 CFR 2560.503-1. END FOOTNOTE
B. Creation of a Database or Use of a Publicly Available Database Is Problematic
The creation and use of
ACEP's suggestion that the Departments mandate the use of an existing database (for example,
Thus, the Departments concluded in the
FOOTNOTE 21 The website of the
III. Conclusion
The Departments believe that the
IV. Collection of Information Requirements
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the
Deputy Commissioner for Services and Enforcement,
Approved:
Assistant Secretary of the
Approved:
Signed this 25th day of
Assistant Secretary,
Dated:
Administrator,
Dated:
Alex M. Azar II,
Secretary,
[FR Doc. 2018-09369 Filed 4-30-18;
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