July 23, 2010
This Week in Health Care Reform
More information about pre-existing conditions, limits, rescissions and other patient protection provisions
Interim final rule regulations have been published and offer more information about the following health care reform provisions:• Pre-existing conditions: Implementation for children up to age 19 will start with plan years (or policy years for individual products) beginning after September 23, 2010.
• Lifetime and annual limits: Some annual limits are permitted in limited circumstances.
• Rescissions: Limited to fraud or intentional misrepresentation of material fact.
• Other patient protection provisions: Includes designating primary care providers and changes to how emergency room services are covered.
Here are the highlights of each provision and what we are doing to meet these regulations:
Pre-existing condition exclusion for children
The prohibition on pre-existing condition exclusions, which also prohibits denial of health care coverage due to a pre-existing condition, begins January 2014. However, health plans must implement this provision for children under the age of 19, beginning with plan years or policy years beginning on or after September 23, 2010.Grandfathered individual plans are exempt from this provision.* All other health plans, including grandfathered group health plans, are required to implement this provision.
* There may be limited exceptions to this exemption.
Rescissions
Rescissions must be based on "an act, practice or omission that constitutes fraud, or unless the individual makes an intentional misrepresentation of material fact."A plan may only terminate a member's coverage due to a mistake in eligibility (without fraud or misrepresentation on the member's part) prospectively, not retroactively.
In the event of a rescission for intentional misrepresentation or fraud, a 30-day advance notification of the rescission is required.
This applies to grandfathered and non-grandfathered plans.
We expect additional guidance to come.
While rarely used, rescissions help reduce fraud. We already have many processes in place. Some go beyond the requirements of the law, such as offering a binding, external, independent third-party review process, which was cited as a model in the industry. We were also the first to implement individual market rescission legislation, effective May 1, well before the effective date in the legislation.
Lifetime and Annual limits
We are making the following changes to all benefits:1. Plans will no longer include annual or lifetime dollar limits at the plan (aggregate) level.
2. We will no longer include annual dollar limits on specific "essential health benefits."
Additional guidance will define "essential health benefits." Until then, we are making a good faith effort to comply with the intent of the legislation. If necessary, we will revise any decision based on the additional information.
Individuals who may have previously reached their lifetime or annual maximum, and, therefore, were no longer eligible for coverage, must be provided with a special enrollment period to re-enroll in benefits. We will notify enrolled members not receiving benefits and terminated individuals to tell them of this special enrollment period. For groups, this enrollment period will be during open enrollment at the time of renewal.
This provision applies to medical and pharmacy benefits only. Dental and vision coverage is not impacted.
Patient Protections
While not required for grandfathered plans, we will include the patient protection provisions in all plan offerings. Self-funded groups with grandfathered plans will be able to exclude some patient protections.Health plans that require primary care physicians must allow member to choose any available in-network PCP, including a participating pediatrician for children.
Health insurers must allow individuals to seek care from an in-network OB/GYN specialist without requiring preauthorization or referral. Preauthorization for specific OB/GYN services is allowed.
Requirements of those seeking emergency room services (for an emergency condition defined by a "prudent lay person") include:
o No preauthorization can be required for emergency services, whether the emergency room is in or out of network. Post-treatment notification requirements are permitted.
o Insurers must cover out-of-network emergency room services. Copays and coinsurance for these services cannot exceed those for in-network emergency room services.
o Other types of cost sharing (such as deductibles and out-of-pocket limits) are allowed for out-of-network emergency room services if it is the same cost sharing used for other out-of-network benefits.
Participants can be balanced billed by the out-of-network provider.
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