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

Pre-Existing Condition Insurance Plan Program interim final rule

Update: Dec. 30, 2013 — Pre-Existing Condition Insurance Plan extended

May 29, 2013

Under Section 1101 of the Affordable Care Act (ACA), the Department of Health and Human Services (HHS) established a temporary high risk health insurance pool program that provides access to affordable health insurance coverage to eligible uninsured individuals with pre-existing conditions. This program is commonly referred to as the Pre-Existing Condition Insurance Plan program (PCIP). HHS is making adjustments to the federally administered PCIP to ensure that there is sufficient funding available to provide coverage to currently enrolled individuals until the program ends in 2014.

HHS issued an interim final rule on May 22. Comments are due July 22.

What are the changes?
This interim final rule:

  • Sets the payment rates for covered services provided to individuals enrolled in the PCIP program administered directly by HHS beginning with covered services furnished on June 15, 2013, and
  • Prohibits providers from "balance billing" enrollees in the federally administered PCIP for the difference between the plan allowance for those covered services and the charge for the covered service.

What is balance billing?
Beginning with June 15, 2013 dates of service, all facilities and providers that accept payment from the federally administered PCIP for furnishing a covered service to an enrollee must accept as payment in full the plan allowance for the covered service, which includes the cost-sharing amount calculated by the plan for the covered service. Facilities or providers may not bill the enrollee for an amount greater than the amount determined by the plan to be the enrollee's cost-sharing amount for the covered service.

Which services are excluded from balance billing?
The prohibition on balance billing will not apply to covered services furnished under the prescription drug, organ/tissue transplant, dialysis and durable medical equipment benefits because covered services furnished under these benefits will continued to be paid at the existing in-network payment rates.

What is Michigan doing?
Michigan elected to contract with HHS to establish and administer a high-risk pool using PCIP funds. HHS directly established and administers a high-risk pool in the remaining states and the District of Columbia.

Beginning in 2014, most health insurance issuers will be required to offer coverage to all individuals, regardless of pre-existing conditions. Eligible individuals can obtain health insurance coverage by enrolling in a qualified health plan (QHP) offered through the new Health Insurance Marketplaces (HIM), or offered in the individual or group market outside of the HIM.

Where can I find more information?
More information can be found at pcip.gov.


The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. 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. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

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