Interim Rules on Various PPACA Requirements

As reported by SIIA's Government Relations Staff, Federal agencies will be continually issuing regulations and notices of guidance pertaining to how provisions of the newly enacted Patient Protection and Affordable Care Act will be implemented.  SIIA staff will develop summaries of these and distribute along with the full documents as soon as they are released.
 
Departments of Labor, Treasury and Health and Human Services Jointly Release Interim Final Rules on Provisions Dealing with Preexisting Conditions Exclusions, Annual and Lifetime Limits, Recessions, Primary Care Physician Designation and Availability, Pediatric Physician Designation and Availability, Gynecologic and Obstetrical Physician Designation and Availability, Coverage of Emergency Services
 
This afternoon, Federal Departments released a Final Interim Rule detailing how plans must specifically comply with the provisions dealing with preexisting condition exclusions, annual and lifetime limits, recessions, primary care physician designation and availability pediatric physician designation and availability, obstetrical and gynecologic physician designation and availability and coverage of emergency services.
 
Background on Prohibition Against Denials Based on Preexisting Conditions:
The PPACA prohibits all group health plans and plans offering individual coverage from denying coverage based on an applicants preexisting condition (as currently defined by HIPAA).  Previously allowable limited exclusion periods by group health plans that had been in place under HIPAA are no longer applicable.  This prohibition generally is effective with respect to plan years beginning on or after January 1, 2014, but for enrollees who are under 19 years of age; this prohibition becomes effective for plan years beginning on or after September 23, 2010.
 
Final Interim Rule on Prohibition Against Denials Based on Preexisting Conditions:
These interim final regulations prohibits not just an exclusion of coverage of specific benefits associated with a preexisting condition in the case of an enrollee, but a complete exclusion from such plan or coverage, if that exclusion is based on a preexisting condition.  These interim final regulations do not change the HIPAA rule that an exclusion of benefits for a condition under a plan or policy is not a preexisting condition exclusion if the exclusion applies regardless of when the condition arose relative to the effective date of coverage.
 
Background on Prohibition of Annual and Lifetime Limits:
The PPACA prohibits all group health plans and plans offering individual coverage from maintaining annual and lifetime limits on the dollar value of health benefits.  The PPACA prohibits annual limits on the dollar value of benefits generally, but allows "restricted annual limits" with respect to essential health benefits (as defined in section 1302(b) of the Affordable Care Act) for plan years beginning before January 1, 2014.  With respect to benefits that are not "essential health benefits", a plan or issuer may impose annual or lifetime per-individual dollar limits on specific covered benefits.  For plan years beginning before the issuance of regulations defining "essential health benefits", for purposes of enforcement, plans are expected to make good faith efforts to comply with a reasonable interpretation of the term "essential health benefits".  
 
Final Interim Rule on Prohibition of Annual and Lifetime Limits:
These interim final regulations adopt a three-year phased approach for restricted annual limits.  Under these interim final regulations, annual limits on the dollar value of benefits that are essential health benefits may not be less than the following amounts for plan years (in the individual market, policy years) beginning before January 1, 2014:
 
* For plan or policy years beginning on or after September 23, 2010 but before
September 23, 2011, $750,000;
 
* For plan or policy years beginning on or after September 23, 2011 but before
September 23, 2012, $1.25 million; and
 
* For plan or policy years beginning on or after September 23, 2012 but before
January 1, 2014, $2 million
 
Plans or issuers may use higher annual limits or impose no limits.
 
These interim final regulations clarify that the prohibition under PHS Act section 2711 does not prevent a plan or issuer from excluding all benefits for a condition, but if any benefits are provided for a condition, then the requirements of the rule apply. Therefore, an exclusion of all benefits for a condition is not considered to be an annual or lifetime dollar limit.
 
The minimum annual limits for plan or policy years beginning before 2014 apply on an individual-by-individual basis.
 
Under these interim final regulations, individuals who reached a lifetime limit under a plan or health insurance coverage prior to the applicability date of these interim final regulations and are otherwise still eligible under the plan or health insurance coverage must be provided with a notice that the lifetime limit no longer applies.
 
These interim final regulations provide that the prohibition on limits does not apply to CDHPs.  
 
Background on Prohibition Against Recessions:
The PPACA prohibits all group health plans and plans offering individual coverage from rescinding coverage except in the case of fraud or an intentional misrepresentation of a material fact.  For purposes of this provision, a rescission is a cancellation or discontinuance of coverage that has retroactive effect.
 
Final Interim Rule on Prohibitions Against Recessions:
This provision builds on already-existing policies in the PHSA sections 2703(b) and 2742(b) regarding cancellations of coverage.  Moreover, this new provision also builds on existing HIPAA nondiscrimination protections for group health coverage in ERISA section 702, Code section 9802, and PHS Act section 2705.
 
These interim final regulations also clarify that other requirements of Federal or State law may apply in connection with a rescission or cancellation of coverage beyond the standards established in PHS Act section 2712, if they are more protective of individuals. 
 
These interim final regulations include several clarifications regarding the standards for rescission in PHS Act section 2712. First, these interim final regulations clarify that the rules of PHS Act section 2712 apply whether the rescission applies to a single individual, an individual within a family, or an entire group of individuals.  Second, these interim final regulations clarify that the rules of PHS Act section 2712 apply to representations made by the individual or a person seeking coverage on behalf of the individual.  Finally, PHS Act section 2712 refers to acts or practices that constitute fraud. These interim final regulations clarify that, to the extent that an omission constitutes fraud, that omission would permit the plan or issuer to rescind coverage. 
 
These interim final regulations provide that a group health plan, or a health insurance issuer offering group health insurance coverage, must provide at least 30 calendar days advance notice to an individual before coverage may be rescinded.  The notice must be provided regardless of whether the rescission is of group or individual coverage; or whether, in the case of group coverage, the coverage is insured or self-insured, or the rescission applies to an entire group or only to an individual within the group.  
 
Background on Primary Care Physician Designation and Availability:
The PPACA provides that if a group health plan, or a health insurance issuer offering group or individual health insurance coverage, requires or provides for designation by a participant, beneficiary, or enrollee of a participating primary care provider, then the plan or issuer must permit each participant, beneficiary, or enrollee to designate any participating primary care provider who is available to accept the participant, beneficiary, or enrollee.  
 
Final Interim Rule on Primary Care Physician Designation and Availability:
Under these interim final regulations, the plan or issuer must provide a notice informing each participant of the terms of the plan or health insurance coverage regarding designation of a primary care provider. 
 
These interim final regulations require such plans and issuers to provide a notice to participants of these rights when applicable.
 
Background on Pediatrician Designation and Availability:
The PPACA provides that if a group health plan, or a health insurance issuer offering group or individual health insurance coverage, requires or provides for designation by a participant, beneficiary, or enrollee of a participating pediatrician, then the plan or issuer must permit each participant, beneficiary, or enrollee to designate any participating pediatrician who is available to accept the participant, beneficiary, or enrollee.  
 
Final Interim Rule on Pediatrician Designation and Availability:
Under these interim final regulations, the plan or issuer must permit the designation of a pediatrician (allopathic or osteopathic) who specializes in pediatrics as the child's primary care provider if the provider participates in the network of the plan or issuer and is available to accept the child.
 
 
Background on Obstetrical or Gynecological Designation and Availability:
The PPACA provides that if a group health plan, or a health insurance issuer offering group or individual health insurance coverage, requires or provides for designation by a participant, beneficiary, or enrollee of a participating obstetrical or gynecologist, then the plan or issuer must permit each participant, beneficiary, or enrollee to designate any participating pediatrician who is available to accept the participant, beneficiary, or enrollee.  
 
Final Interim Rule on Obstetrical or Gynecological Designation and Availability:
In such a case, the plan or issuer may not require authorization or referral by the plan, issuer, or any person (including a primary care provider) for a female participant, beneficiary, or enrollee who seeks obstetrical or gynecological care provided by an in-network health care professional who specializes in obstetrics or gynecology.  The plan or issuer must inform each participant (in the individual market, primary subscriber) that the plan or issuer may not require authorization or referral for obstetrical or gynecological care by a participating health care professional who specializes in obstetrics or gynecology.
 
Nothing in these interim final regulations precludes the plan or issuer from requiring an in-network obstetrical or gynecological provider to otherwise adhere to policies and procedures regarding referrals, prior authorization for treatments, and the provision of services pursuant to a treatment plan approved by the plan or issuer. The plan or issuer must treat the provision of obstetrical and gynecological care, and the ordering of related obstetrical and gynecological items and services, by the professional who specializes in obstetrics or gynecology as the authorization of the primary care provider. For this purpose, a health care professional who specializes in obstetrics or gynecology is any individual who is authorized under applicable State law to provide obstetrical or gynecological care, and is not limited to a physician.
 
The general terms of the plan or coverage regarding exclusions of coverage with respect to obstetrical or gynecological care are otherwise unaffected. These interim final regulations do not preclude the plan or issuer from requiring that the obstetrical or gynecological provider notify the primary care provider or the plan or issuer of treatment decisions.
 
Background on Coverage of Emergency Services:
If a group health plan or health insurance coverage provides any benefits with respect to emergency services in an emergency department of a hospital, the plan or issuer must cover emergency services in a way that is consistent with these interim final regulations.
 
Final Interim Rule on Coverage of Emergency Services:
These interim final regulations require that a plan or health insurance coverage providing emergency services must do so without the individual or the health care provider having to obtain prior authorization (even if the emergency services are provided out of network) and without regard to whether the health care provider furnishing the emergency services is an in-network provider with respect to the services. The emergency services must be provided without regard to any other term or condition of the plan or health insurance coverage other than the exclusion or coordination of benefits, an affiliation or waiting period permitted under part 7 of ERISA, part A of title XXVII of the PHS Act, or chapter 100 of the Code, or applicable cost-sharing requirements. For a plan or health insurance coverage with a network of providers that provides benefits for emergency services, the plan or issuer may not impose any administrative requirement or limitation on benefits for out-of-network emergency services that is more restrictive than the requirements or limitations that apply to in-network emergency services.
 
Additionally, for a plan or health insurance coverage with a network, these interim final regulations provide rules for cost-sharing requirements for emergency services that are expressed as a copayment amount or coinsurance rate, and other cost-sharing requirements. Cost-sharing requirements expressed as a copayment amount or coinsurance rate imposed for out-of-network emergency services cannot exceed the cost-sharing requirements that would be imposed if the services were provided in-network. Out-of-network providers may, however, also balance bill patients for the difference between the providers' charges and the amount collected from the plan or issuer and from the patient in the form of a copayment or coinsurance amount.
 
In applying the rules relating to emergency services, the statute and these interim final regulations define the terms emergency medical condition, emergency services, and stabilize. These terms are defined generally in accordance with their meaning under the Emergency Medical Treatment and Labor Act (EMTALA), section 1867 of the Social Security Act. There are, however, some minor variances from the EMTALA definitions. For example, both EMTALA and PHS Act section 2719A define "emergency medical condition" in terms of the same consequences that could reasonably be expected to occur in the absence of immediate medical attention. Under EMTALA regulations, the likelihood of these consequences is determined by qualified hospital medical personnel, while under PHS Act section 2719A the standard is whether a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in such consequences.
 
How SIIA Intends to Educate its Members Further:
Given the obvious importance of this new law, SIIA will be holding a series of one-day seminars to provide members with more in-depth information to help their businesses prepare for change.  Please go to http://www.siia.org/i4a/pages/index.cfm?pageid=5338 for more details.  

 

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