Reform Alert - News from the Blues' Office of National Health Reform

“Patient's Bill of Rights”: Government releases regulations on several patient protection provisions

June 29, 2010

The Departments of Health and Human Services (HHS), Labor, and Treasury issued regulations to implement a new “Patient’s Bill of Rights” under the Patient Protection and Affordable Care Act (PPACA) aimed at helping children with pre-existing conditions gain coverage and keep it, protecting all Americans’ choice of doctors and ending lifetime limits on the care consumers may receive.

These new protections apply to nearly all individual and group health insurance plans. Further guidelines defining “essential benefits” are still to come and may impact implementation of the provisions described below. The information in this Reform Alert includes highlights of the Patient’s Bill of Rights regulations.

Pre-existing Condition Exclusions:

Individual and group plans that choose not to cover specific conditions that are not required to be covered by PPACA, such as coverage for autism, may still choose to deny coverage for those conditions for all members.

Plans also cannot impose waiting periods for individuals or group members to receive coverage for pre-existing conditions. This applies to people under age 19 for plan years beginning on or after Sept. 23, 2010 and to everyone for plan years beginning on or after Jan. 1, 2014.

This provision does not apply to grandfathered individual plans, those in existence prior to Mar. 23, 2010.

Rescissions:

The regulations define a rescission as a cancellation or discontinuation of coverage that has a retroactive effect. In other words, rescissions that treat a policy as void from the time of enrollment or that void benefits paid up to a year before the cancellation are prohibited for individual and group members, except in two circumstances. 

Rescissions are allowed in cases of fraud or intentional misrepresentation of material facts. 

Plans can cancel or choose not to renew policies: 

  • Due to nonpayment of premiums 
  • When an insurer stops offering a specific product 
  • When an insurer moves out of the geographic area
    When individuals or employers move out of the geographic market 

Retroactive cancellation for nonpayment of premiums is not considered a “rescission” under the law and is permissible. A cancellation or discontinuance of coverage that only affects future coverage and claims is not a rescission.

The law applies whether the rescission applies to a single individual, an individual covered by a family policy or an entire group of individuals. If an individual or group omits certain information that constitutes fraud, plans can rescind coverage.

Plans must provide at least 30 calendar days notice to an individual before rescinding coverage. Notices must provide individuals the opportunity to contest the rescission or to look for alternative coverage as appropriate.

Annual Dollar Limits:

"Essential health benefits" will be defined in future regulations. 

In the interim, HHS will take into account good faith efforts to comply with a reasonable interpretation of the term "essential health benefits," and group health plans must apply this definition consistently. 

The regulation does not provide any information or prohibition on non-dollar limits, such as limits on frequency of doctor visits for certain conditions. 

Plans may exclude all benefits for a specific condition and not be in violation of the annual and lifetime limit provision of PPACA. However, if any benefits are provided for a condition, the requirements of the provision apply. 

Before Jan. 1, 2014, restricted annual dollar limits on essential benefits are permitted. There is a three-year phase out of the restricted annual limits on "essential health benefits." The lowest annual limits plans may apply are: 

  • $750,000 for plan years beginning from Sept. 23, 2010 to Sept. 22, 2011 
  • $1.25 million for plan years beginning from Sept. 23, 2011 to Sept. 22, 2012 
  • $2 million for plan years beginning from Sept. 23, 2012 to Dec. 31, 2013

Minimum annual limits apply on an individual by individual basis (not family). Only essential benefits are counted against the restricted annual limits. Benefits which are not essential benefits cannot be counted against the restricted annual limit amount. 

HHS may waive requirements for annual limits if compliance would result in significant decrease in access to benefits or significant increase in premiums. HHS will be issuing additional regulations relating to waivers and applications. 

This provision does not apply to grandfathered individual plans.

Lifetime Dollar Limits:

Starting with plan years beginning on or after Sept. 23, 2010, lifetime limits are no longer allowed for "essential health benefits."

If an individual lost coverage due to reaching a lifetime limit, they must be allowed to re-enroll via an open-enrollment period. 

  • This regulation does not apply to individuals who reached a lifetime limit while covered by a contract that was not renewed or is no longer in effect.
  • It does apply to family members who lost coverage due to reaching a lifetime limit if other members of the family are still covered by an active policy. 
  • Plans must notify these individuals how and when they are eligible to re-enroll. 
  • The open enrollment opportunity must occur no later than the first day of the first plan year beginning on or after Sept. 23, 2010. 
  • Coverage must start no later than the first day of the first plan year beginning on or after Sept. 23, 2010.

This applies to all plans in all market segments, new or Individual and group plans that choose not to cover specific conditions that are not required to be covered by PPACA, such as coverage for autism, may still choose to deny coverage for those conditions for all members.

Plans also cannot impose waiting periods for individuals or group members to receive coverage for pre-existing conditions. This applies to people under age 19 for plan years beginning on or after Sept. 23, 2010 and to everyone for plan years beginning on or after Jan. 1, 2014.

This provision does not apply to grandfathered individual plans, those in existence prior to Mar. 23, 2010.

Choice of Health Care Professional:

The regulation outlines requirements about how plan members can choose primary care providers, including the ability to choose pediatricians as primary care providers for children and required access to obstetric and gynecological care. 

This regulation only applies to plans that have networks of providers. 

If plans require that members choose a primary care provider, the plan must provide notice that: 

  • Any participating primary care provider who is available to accept the member or beneficiary can be designated. 
  • Any participating physician specializing in pediatrics can be designated as the primary care provider for a child. 
  • Plans may not require authorization or referral for obstetrical or gynecological care by in-network health care professionals specializing in obstetrics or gynecology. 

This does not apply to Individual and group plans that choose not to cover specific conditions that are not required to be covered by PPACA, such as coverage for autism, may still choose to deny coverage for those conditions for all members.

Plans also cannot impose waiting periods for individuals or group members to receive coverage for pre-existing conditions. This applies to people under age 19 for plan years beginning on or after Sept. 23, 2010 and to everyone for plan years beginning on or after Jan. 1, 2014.

This provision does not apply to grandfathered individual plans, those in existence prior to Mar. 23, 2010. plans. 

Choice of Primary Care Provider: 

Plans that require members to choose a primary care provider must allow those members to choose any primary care provider who is available to accept the member. 

Choice of Pediatrician as Primary Care Provider for a Child: 

Plans that require members to choose a primary care provider must allow members to choose any participating provider specializing in pediatrics as the primary care provider for a child as long as the provider is available to accept the child. 

The requirement to allow members to choose a pediatrician as a primary care provider for a child does not affect the general terms of insurance coverage regarding pediatric care. 

For example, if a plan does not cover treatment for food allergies, the plan does not have to pay for any treatment for food allergies even if the designated pediatrician referred the child for food allergy treatment. 

This does not apply to Individual and group plans that choose not to cover specific conditions that are not required to be covered by PPACA, such as coverage for autism, may still choose to deny coverage for those conditions for all members.

Plans also cannot impose waiting periods for individuals or group members to receive coverage for pre-existing conditions. This applies to people under age 19 for plan years beginning on or after Sept. 23, 2010 and to everyone for plan years beginning on or after Jan. 1, 2014.

This provision does not apply to grandfathered individual plans, those in existence prior to Mar. 23, 2010. plans.

Access to Obstetric and Gynecological Care:

Plans that provide coverage for obstetrical or gynecological care that require members to choose a primary care provider must allow female members seeking obstetrical or gynecological care to see in-network providers specializing in obstetrical or gynecological care without a referral or authorization. 

As defined by the regulation, 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. This is not limited to physicians. 

Under the direct access provision, a woman will not need to obtain a specialist referral to see an OB/GYN. However, the OB/GYN is required to follow the plan’s policies on referrals to other providers and prior authorizations for services to be performed by them. In other words, a plan may not impose a preauthorization requirement in order for a woman to see an OB/GYN but may require preauthorization for additional services or referrals. So for example, the health plan can require prior authorization before providing benefits for specific procedures such as uterine fibroid embolization. The plan requirement for prior authorization before providing benefits for uterine fibroid embolization does not violate the requirements of the regulations because, although the prior authorization requirement applies to obstetrical services, it does not restrict access to any providers specializing in obstetrics or gynecology. 

This does not apply to Individual and group plans that choose not to cover specific conditions that are not required to be covered by PPACA, such as coverage for autism, may still choose to deny coverage for those conditions for all members.

Plans also cannot impose waiting periods for individuals or group members to receive coverage for pre-existing conditions. This applies to people under age 19 for plan years beginning on or after Sept. 23, 2010 and to everyone for plan years beginning on or after Jan. 1, 2014.

This provision does not apply to grandfathered individual plans, those in existence prior to Mar. 23, 2010. plans.

Coverage of Emergency Services:

Plans that provide any benefits for emergency services in hospital emergency departments must:

  • Provide coverage without requiring prior authorization, even if the services are provided out of network.
  • Cover emergency services for both in-network and out-of-network providers.
  • May not charge members more for out-of-network emergency services than for in-network emergency services.

Cost sharing in the form of a copayment or co-insurance for out-of-network emergency services cannot exceed cost sharing for in-network emergency services.

An out-of-network emergency services provider can bill patients for the difference between the providers’ charges and the amount collected from the plan and from the patient in the form of copayment or co-insurance.

In order to ensure that a “reasonable amount” is paid to out-of-network emergency services providers in order to limit additional costs for members, plans are required to pay an amount equal to the greatest of the following:

  • The amount negotiated with in-network providers for the emergency service furnished minus patient cost sharing.
  • The amount for the emergency service plans generally pay for out-of-network services minus the coinsurance or copayment amount the member would pay for in-network services.
  • The amount that would be paid under Medicare for the emergency service not including any cost sharing a Medicare member would pay.

Cost sharing requirements that members pay, such as deductibles or out-of-pocket maximums, may only apply for out-of-network emergency services in the same way they generally apply for all out-of-network services.

  • Deductibles can only apply for out-of-network emergency services if they are part of an overall out-of-network deductible.
  • If maximum out-of-pocket costs generally apply for out-of-network services, those out-of-pocket maximum costs must apply to out-of-network emergency services.
  • Insurers are allowed to apply lower cost-sharing amounts for out-of-network emergency services than those generally applied for out-of-network services.

This does not apply to Individual and group plans that choose not to cover specific conditions that are not required to be covered by PPACA, such as coverage for autism, may still choose to deny coverage for those conditions for all members.

Plans also cannot impose waiting periods for individuals or group members to receive coverage for pre-existing conditions. This applies to people under age 19 for plan years beginning on or after Sept. 23, 2010 and to everyone for plan years beginning on or after Jan. 1, 2014.

This provision does not apply to grandfathered individual plans, those in existence prior to Mar. 23, 2010. plans.

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.

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