Temp. Regs. Explain New Health Plan Requirement to Provide Preventive Services Without Cost Sharing

Editor: Mark G. Cook, CPA, MBA

Employee Benefits & Pensions

The Patient Protection and Affordable Care Act, P.L. 111-148 (the Affordable Care Act), was enacted on March 23, 2010. The act adds Section 715(a)(1) to the Employee Retirement Income Security Act (ERISA) and Sec. 9815(a)(1) to the Code to incorporate the provisions of the Public Health Service Act, 42 U.S.C. ch. 6A (PHS Act) into ERISA and the Code and make them applicable to group health plans and issuers. New Section 2713 of the PHS Act relates to coverage of preventive health services. It requires that a group health plan and a health insurance issuer offering group or individual health insurance coverage must, at a minimum, provide coverage for, and not impose any cost-sharing requirements for, specified preventive health services. On July 19, 2010, the IRS, the Department of Labor, and the Department of Health and Human Services issued temporary regulations to implement PHS Act Section 2713 (T.D. 9493).

Section 2713 requires that a group health plan and a health insurance issuer offering group or individual health insurance coverage must provide benefits for and not impose cost-sharing requirements with respect to the following preventive health services:

• Services recommended by the U.S. Preventive Services Task Force;
• Immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention;
• Preventive care and screenings for infants, children, and adolescents supported by the Health Resources and Services Administration (HRSA); and
• Preventive care and screenings for women, supported by HRSA.

The temporary regulations clarify the cost-sharing requirements for various services provided.

Office Visits

When a recommended preventive service is billed separately or is tracked as individual encounter data separately, a plan or issuer may impose cost-sharing requirements for the office visit. When a recommended preventive service is not billed separately and the primary purpose of the office visit is the delivery of such a service, a plan or issuer may not impose cost-sharing requirements for the office visit. When a recommended preventive service is not billed separately and the primary purpose of the office visit is not the delivery of such a service, a plan or issuer may impose cost-sharing requirements for the office visit.

Out-of-Network Services

The temporary regulations provide that if a plan or health insurance coverage has a network of providers, the plan or issuer is not required to provide coverage for recommended preventive services delivered by an out-of-network provider and may also impose cost-sharing requirements if such services are provided by out-of-network providers.

Medical Management

If a recommended preventive service does not specify the frequency, method, treatment, or setting for the provision of the service, the temporary regulations allow plans or issuers to rely on established medical management techniques and the relevant evidence base to determine the frequency, method, treatment, or setting without cost-sharing requirements to the extent not specified in a recommendation or guideline.

If a plan or issuer covers preventive services in addition to those Section 2713 requires it to cover, the plan or issuer may impose cost-sharing requirements for these additional services and the treatments, even if the treatments result from a recommended preventive service.

Finally, these temporary regulations make clear that a plan or issuer is not required to provide coverage or waive cost-sharing requirements for any services that have ceased to be recommended preventive services. However, other federal or state requirements may apply before a plan or issuer ceases to provide coverage or change cost-sharing requirements. For example, PHS Act Section 2715(d)(4) requires that a 60-day advance notice be provided to enrollees before any material modifications become effective.

Effective Date and Timing of Covered Recommendations

The PHS Act requires the Departments of Health and Human Services, Labor, and Treasury to establish an interval of not less than one year between when recommendations or guidelines under Section 2713(a) are issued and the plan year (in the individual market, policy year) for which coverage of the services addressed in such recommendations or guidelines must be in effect. The temporary regulations provide that such coverage must be provided for plan years (in the individual market, policy years) beginning on or after the later of September 23, 2010, or one year after the date the recommendation or guideline is issued. Thus, recommendations and guidelines issued prior to September 23, 2009, must be provided for plan years beginning on or after September 23, 2010.

EditorNotes

Mark Cook is a partner at Singer Lewak LLP in Irvine, CA.

For additional information about these items, contact Mr. Cook at (949) 261-8600, ext. 2143, or mcook@singerlewak.com.

Unless otherwise noted, contributors are members of or associated with Singer Lewak LLP.