Federal officials issued further guidance on several key provisions of the health reform law last week, as insurers warned that they could add to the cost of care.
On June 22, three months after he signed the Patient Protection and Affordable Care Act, President Barack Obama met with health insurance CEOs at the White House and warned that future rate increases would be monitored.
"The CEOs here today need to know they will have to justify premium rate increases, Obama said in a speech after the meeting. Obama also announced a "patients' bill of rights consumer protections in the reform law that will soon go into effect that aim to end some of the most criticized practices in the insurance industry.
Simultaneously, HHS, along with the departments of Labor and Treasury, released 196 pages of interim final regulations on these key provisions. The regulations provide details on a new ban on rescissions, where insurers can no longer revoke member policies retroactively except in certain situations, and bans on lifetime and annual limits of coverage. The public comment period is 60 days.
The regulations also provide guidance on access to emergency services, including reimbursement of out-of-network providers and billing patients the balance of provider charges that insurers don't cover.
Obama called the regulations "basic rules of the road for insurance coverage and "a long overdue victory for consumers and patients. Most of these provisions go into effect Sept. 23, though consumers might not see changes until Jan. 1, 2011, when many policies are renewed.
Under the rules, insurers cannot rescind coverage except in cases when the enrollee has committed fraud or intentionally misrepresented material facts on the application for coverage. Insurers must give customers 30 days' notice that their coverage will be terminated, and have an appeals process in place.
The rules also phase out annual dollar limits on coverage, starting in September, with annual limits gradually rising over the next three years, from $750,000 this year, going up to $2 million in 2013. Annual limits are prohibited starting in 2014.
Lifetime limits on coverage are prohibited as of Sept. 23.
"Those practices will come to an end right now, HHS Secretary Kathleen Sebelius told reporters.
Plans also must cover emergency services without the member having to obtain prior authorization, even if the provider is out of the plan's network, according to the rules. Plans can't limit benefits for out-of-network emergency care beyond what is provided for in-network care. Plans also can't charge customers more, in the form of coinsurance or copayments, for emergency out-of-network care than they do for in-network care, the rules state.
However, out-of-network providers can charge patients the balance of a bill not collected from health plans for these emergency services. Allowable patient charges are based on several factors. "It is necessary that a reasonable amount be paid before a patient becomes responsible for a balance billing amount, the regulations state.
As such, the rules detail that providers can balance bill patients "in an amount equal to the greatest of three possible amounts. These amounts are the negotiated in-network rate, the Medicare rate and the out-of-network rate with in-network cost-sharing provisions.
Grandfathered health plansthose plans that meet certain benchmarks for maintaining coverageare exempt from these emergency services coverage rules.
On first look, the American Medical Association gave the balance billing part of the proposed rules a generally positive review. Cecil Wilson, AMA president, said in an e-mailed statement: "We are continuing to review the rule, but our initial impression is that the balance billing reference is an accurate interpretation of the underlying law, which placed no restrictions on balance billing for out-of-network emergency providers.
The American Hospital Association said it could not yet comment on the rules.
America's Health Insurance Plans and the Blue Cross and Blue Shield Association, both representing major insurers, warned that the set of new regulations could add to the price tag of health benefits.
"There are costs associated with these regulations that will be reflected in the cost of coverage, said Robert Zirkelbach, spokesman for AHIP.
The regulations were unveiled just a day after the Kaiser Family Foundation reported that premiums for individual policies jumped an average of 20% in recent months.
Copyright 2010 Crain Communications Inc. All Rights Reserved.
Source Citation
"Spelling out the rules; Regulations detail how law will protect consumers." Modern Healthcare 40.26 (2010): 14. Academic OneFile. Web. 6 July 2010.
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