The Patient Protection and Affordable Care Act requires new health plans to cover preventive health services without imposing cost‐sharing requirements for the services. On July 14, 2010, the Departments of Health and Human Services (HHS), Labor and Treasury issued interim final rules relating to coverage of preventive services. This requirement is generally effective for plan years beginning on or after September 23, 2010 and does not apply to grandfathered health plans.
Highlights of the regulations include:
This HCR Pathways summarizes the new interim final rules. The rules are available at http://edocket.access.gpo.gov/2010/pdf/2010‐17242.pdf.
Coverage of Preventive Services
The interim final rules address the requirement that new (i.e., non‐grandfathered) health plans cover certain recommended preventive services and eliminate cost‐sharing requirements for such services. For plan years beginning on or after September 23, 2010, new group health plans must cover certain preventive services and may not charge copayments, coinsurance or deductibles for these services when delivered by a network provider.
The recommended preventive services covered by these requirements are:
These recommended preventive services include screening for a number of conditions, as well as counseling for various health‐related issues. The complete list of recommended preventive services that must be covered can be found at
The interim final rules note that a recommended preventive service becomes subject to the coverage requirement one plan year after the date the recommendation or guideline is issued. Thus, while the U.S. Preventive Services Task Force currently lists screening and counseling for obesity in children as in effect January 31, 2010, group health plans and insurance must provide coverage for this item without charge to enrollees in plan years beginning on or after January 31, 2011.
In addition, the interim final rules state that a group health plan or insurance need not provide coverage or waive cost‐sharing requirements for items or services that cease to be a recommended preventive service. If a group health plan or insurance drops coverage or imposes cost‐sharing for an item or service that is no longer on the recommended preventive service list, notification to enrollees about this material modification must be given 60 days in advance.
A group health plan or insurance is permitted to cover preventive services beyond those that are required by the Patient Protection and Affordable Care Act (PPACA). For these additional services, the plan or insurance may impose cost‐sharing requirements.
The interim final rules clarify the cost‐sharing requirements when a recommended preventive service is provided during an office visit. Whether cost‐sharing requirements may be imposed will depend on: (a) whether the preventive service is billed or tracked separately, and (b) whether the preventive service is the primary purpose of the office visit. Cost‐sharing is permitted only if:
Example. An individual covered by a group health plan visits an in‐network health care provider. While visiting the provider, the individual is given a cholesterol screening (a recommended preventive service). The provider bills the plan for an office visit and for the laboratory work of the cholesterol screening test. The plan may not impose any cost‐sharing requirements with respect to the laboratory work. Because the office visit is billed separately from the cholesterol test, the plan may impose cost‐sharing requirements for the office visit.
Example. An individual covered by a group health plan visits an in‐network health care provider to discuss recurring abdominal pain. During the visit, the individual has a blood pressure screening (a recommended preventive service). The provider bills the plan for an office visit. The blood pressure screening was not the primary purpose of the visit. Therefore, the plan may impose a cost‐sharing requirement for the office visit charge.
Example. A child covered by a group health plan visits an in‐network pediatrician to receive an annual physical exam (a recommended preventive service). During the office visit, the child receives additional items and services that are not recommended preventive services. The provider bills the plan for an office visit. The recommended preventive service was not billed as a separate charge and was the primary purpose of the visit. Therefore, the plan may not impose a cost‐sharing requirement for the office visit
The regulations make clear that plans may continue to impose cost‐sharing requirements on preventive services that employees receive from out‐of‐network providers. Also, plans may use reasonable medical management techniques to determine the frequency, method, treatment or setting for preventive services, as long as they are not specified in the recommendation or guideline.
Recommended Action / Next Steps
Both grandfathered and non‐grandfathered group health plan sponsors should review the interim final rules and the extensive lists of preventive services that must be covered without enrollee cost‐sharing (including the respective effective dates).
Non‐grandfathered plan sponsors should consider the effects the requirements will have on their plans in plan years beginning on or after September 23, 2010 (Plan cost impact currently estimated at 1.5%).
When the PPACA’s and the interim final rules’ requirements apply, communication materials will have to be revised to reflect the newly covered preventive services. To the extent that a plan charges copayments, coinsurance, and/or deductibles, for services provided out‐of‐network or for preventive services that are beyond the required benefits, the communications should be worded clearly to limit misunderstandings by plan participants.
The federal agencies are continuing to develop additional regulations that may have implications directly related to the interim final rules’ guidance on preventive health services. For example, guidelines are expected in the future on “value based” plan designs that promote consumer choice of providers or services that offer the best value and quality, while ensuring access to critical, evidence‐based preventive services.
Sources: Milliman, Zywave ‐Content © 2010 Zywave, Inc
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This ACA Pathways is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
The information contained in this ACA Pathways includes emerging health care news from a limited perspective and does not encompass all views. The information was selected from a wide range of sources selected on the basis of their potential impact on employers and/or their employee benefit plans. For more information, please contact Burnham Benefits.