More Health Care Regulations . . . No More Cost Sharing for Evidence-Based Preventive Services

Posted: July 15, 2010

Section 2713 of the Public Health Services Act, added by the Patient Protection and Affordable Care Act (PPACA), requires that group health plans and health insurance issuers offering group or individual health insurance coverage provide benefits for and prohibit the imposition of cost-sharing requirements to certain preventive services. The Departments of Health and Human Services (HHS), Labor, and the Treasury have announced new interim regulations on July 14, 2010, to be published in the Federal Register on July 19, 2010, outlining this new provision, which requires “non-grandfathered” health plans (i) to cover “evidence-based preventive services” and (ii) to eliminate cost-sharing requirements (e.g., deductibles, co-payments) for such services.

What is the basic rule?

For plan years beginning on or after September 23, 2010, non-grandfathered group health plans must cover preventive services that have strong scientific evidence of their health benefits. Additionally, these plans may no longer charge patients a co-payment, co-insurance or deductible for these services when they are delivered by a network provider. Any State insurance laws that impose on health insurance issuers requirements stricter than those imposed by the PPACA will not be superseded by the PPACA.

Does this requirement apply to self-insured group health plans?

Yes. The term “group health plan” includes both insured and self-insured group health plans.

What kinds of preventive services does the rule cover currently?

The preventive services these regulations apply to include:

Evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (Task Force) with respect to the individual involved.
Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (CDC) with respect to the individual involved. A recommendation of the Advisory Committee is considered to be “in effect” after it has been adopted by the Director of the CDC. A recommendation is considered to be for routine use if it appears on the Immunization Schedules of the CDC.
With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA).
With respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA (and not otherwise addressed by the recommendations of the Task Force). HHS expects to issue guidelines no later than August 1, 2011.

The complete list of preventive services recommendations and guidelines that must be covered under the interim final regulations can be found at http://www.HealthCare.gov/center/regulations/prevention.html.

How do the regulations affect certain billing and coverage practices of a plan?

The interim final regulations clarify the cost-sharing requirements when a recommended preventive service is provided during an office visit:

If a recommended preventive service is billed separately (or is tracked separately as individual encounter data) from an office visit, then a plan or issuer may apply cost-sharing requirements with respect to the office visit.
If a recommended preventive service is not billed separately (or is not tracked separately as individual encounter data) from an office visit and the primary purpose of the office visit is the delivery of such a preventive item or service, then a plan or issuer may not apply cost-sharing requirements with respect to the office visit.
Finally, if a recommended preventive service is not billed separately (or is not tracked separately as individual encounter data) from an office visit and the primary purpose of the office visit is not the delivery of such a preventive item or service, then a plan or issuer may apply cost-sharing requirements with respect to the office visit.

Also, where there is no frequency, method, treatment, or setting specified for the recommended preventive service, the plan can use reasonable medical management techniques to determine any coverage limitations.

What if a plan covers preventive services beyond “recommended” preventive services?

Plans that cover preventive services in addition to those required under the new law may apply cost-sharing requirements for the additional services.

Do the requirements apply to preventive services provided by out-of-network providers?

No. The regulations make clear that group health plans are not required to provide coverage for recommended preventive services delivered by an out-of-network provider.

When a new preventive service is added, must plans put it into effect immediately?

No. When new recommended preventive services are named under the law, there is an interval of not less than one year between when recommendations or guidelines under Public Health Services Act Section 2713(a) are issued and the plan year for which coverage of the services addressed in such recommendations or guidelines must be in effect. Under the regulations, coverage for a recommended preventive service generally must be provided for plan years beginning on or after the later of September 23, 2010, or one year after the date the recommendation or guideline for the preventive service is issued. Thus, recommendations and guidelines issued prior to September 23, 2009, must be provided for plan years (in the individual market, “policy years”) beginning on or after September 23, 2010.

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Although the interim regulations were issued without the usual full rulemaking notice-and-comment period (giving the public an opportunity to comment beforehand), the agencies now invite public comment on the development of additional guidelines regarding the utilization of value-based insurance designs by group health plans and health insurance issuers with respect to preventive benefits, as well as the impact of these rules on small entities.

The Employee Benefits Group of Jackson Lewis LLP is providing substantive advice on these interim final regulations. In addition, the Government Relations Group of Jackson Lewis LLP regularly assists employers and associations in submitting regulatory comments as well as facilitates other efforts to influence regulations and legislation.