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July 13, 2023 – Reg Season is upon us, and regulations are beginning to drop! However, at the time I’m writing this, we are still waiting for the big ones to be released: the Physician Fee Schedule and the Hospital Outpatient Prospective Payment System proposed regs. They could be issued at any time (even by the time you are reading this blog post).
In the meantime, I want to focus on some other recent regs. Last week, the US Department of Health and Human Services (HHS), the US Department of Labor and the US Department of the Treasury issued a reg modifying the definition and use of short-term limited duration plans as well as a frequently asked questions (FAQs) document related to the No Surprises Act (NSA). The Consumer Financial Protection Bureau (CFPB), HHS and the Treasury Department also issued a request for information (RFI) related to medical credit cards, loans and other financial products used to pay for healthcare. Separately (and not discussed in this post), the Centers for Medicare & Medicaid Services issued a reg impacting 340-B acquired drugs. If you are interested in learning more about the 340-B proposed reg, please read our +Insight here.
The short-term limited duration proposed reg, the NSA FAQs, and the medical credit cards and loans RFI are part of a Biden Administration initiative to crack down on “junk fees” in health plans, as well as what the Administration regards as gimmicks and tricks that confuse patients and cause them to pay more for medical care than they thought they actually owed. In other words, these policies address “surprise” medical bills that still arise even after the implementation of the NSA.
President Biden hosted an event at the White House last Friday to announce this effort. He was introduced by Corey Dowd, an individual who received an unexpectedly large medical bill. Dowd purchased what he thought was a comprehensive health plan but in fact was a short-term limited duration plan. He suffered acute appendicitis and had to have his appendix removed. His bill for that procedure was $37,000. This definitely “surprised” him, since he believed he had comprehensive medical coverage, and created a lot of unease and uncertainty.
Short-term limited duration plans, such as the type of coverage Dowd purchased, are not considered group coverage or employer-sponsored coverage that must comply with the federal consumer protections and requirements established by the Affordable Care Act (ACA) for comprehensive coverage in the group market. For example, short-term health plans aren’t required to cover all 10 “essential health benefits,” which are services that all health plans really should cover, such as preventive and emergency services. Since short-term limited duration plans typically don’t have to cover these vital services, patients like Dowd can be stuck with extremely high medical bills.
The Trump Administration implemented changes that allowed individuals to purchase such plans for a duration of up to 36 months. The Biden Administration’s short-term limited duration plan proposed reg, if finalized, would once again limit the length of time that individuals can be enrolled in these plans. The reg proposes a maximum duration of four months, inclusive of any renewals or extensions. The reg also would require these plans to notify consumers that the plans are not comprehensive and that consumers should visit HealthCare.gov (the ACA Exchange website) for information on comprehensive coverage.
While the short-term limited duration plan proposed reg addresses one type of surprise bill, the NSA FAQs are meant to help eliminate another: a “loophole” that still exists even with the NSA in place. As most of you well know, the intent of the NSA is to ban balance billing for out-of-network services and remove patients from the middle of billing disputes between health insurers and providers. The FAQs help clarify patient cost-sharing rules under the NSA and the ACA (ACA section 1302(c)(1), sometimes called the maximum out-of-pocket limit or MOOP limit). According to the Biden Administration, there has been some confusion and potential gamesmanship over whether certain providers are in- or out-of-network, resulting in patients footing more of the bill than required under NSA and ACA protections. These FAQs address this issue.
The FAQs also note a concern that “individuals are increasingly being charged facility fees for health care received outside of hospital settings, which increases health care costs.” The Biden Administration states that it is monitoring the potential implications of facility fees and advises that facility fees must be included as part of the good faith estimate to uninsured/self-pay individuals as well as the publicly available price comparisons required by the Transparency in Coverage Final Rules.
Finally, through the medical credit card and loan RFI, the CFPB, HHS and the Treasury Department want to better understand how certain financial products that are used to pay for healthcare affect patients across different demographic groups. The agencies also seek comment on policy options to address practices by healthcare providers, health plans and others that result in consumers paying excess costs. It is important to note that HHS includes its own set of questions related to how medical payment products have intersected with federal health programs (such as Medicare and Medicaid), federal laws against healthcare fraud and abuse, and ACA and NSA protections.
All in all, the name of the game for the short-term limited duration proposed reg, the NSA FAQs, and the medical credit card and loans RFI is protecting patients. As a consumer of healthcare services myself, I’m glad the Administration is focusing on this important issue. However, I must say that, with respect to the NSA, the Administration’s most recent action may be missing the forest for the trees.
It is not a surprise (pun intended) to any of you that the NSA’s implementation has involved significant challenges. As I have noted in previous blog posts while at the American College of Emergency Physicians (ACEP), a plethora of implementation issues have complicated each step of the dispute resolution process for out-of-network services: from the time physicians and hospitals receive the initial payment or notice of denial for an out-of-network service, to the open negotiations and independent dispute resolution (IDR) processes, and ultimately to the post-IDR period. Throughout each step, there is a perceived lack of enforcement of statutory and regulatory requirements, thereby allowing these implementation issues to remain ongoing and unchecked, with little to no consequences for the party that is not complying with the requirements.
Because of these significant issues, many stakeholders have voiced concerns that the NSA simply isn’t operating as Congress intended. As I stated earlier, one of the NSA’s main goals is to keep patients out of the middle of billing disputes—but unfortunately, that vital patient protection has been jeopardized by the flawed implementation. Since the rules of the road aren’t enforced and the IDR process isn’t working properly, patients are likely receiving incorrect bills or being asked to cover more of the service cost after they pay their initial cost-sharing amount (patient cost-sharing for out-of-network services under the NSA is supposed to be restricted to what patients would have paid if the service were delivered by an in-network provider). Thus, the flawed implementation of the NSA could result in patients receiving some surprise medical bills.
ACEP, along with the Emergency Department Practice Management Association (EDPMA), the American Medical Association, the American Society of Anesthesiology, the American College of Radiology, the American Hospital Association and many other stakeholders, has put forth viable solutions to help address these issues and ensure that patients are protected. ACEP and EDPMA, for example, have written more than a dozen joint letters to the Administration, with the latest letter including several concrete solutions—none of which have been adopted. Having worked at HHS, I understand and appreciate that the federal government has limited bandwidth to work on these extremely complicated, but important, programs. At the same time, though, it is essential that the Biden Administration put the implementation of the NSA at the top of its priority list.
Going forward, the hope is that future FAQs, regs and guidance related to surprise bills will address the “big fish”—the major issues that must be addressed to truly protect patients!
We do know that the Biden Administration plans to issue a proposed reg related to the NSA in the coming months. Specifically, the Independent Dispute Resolution Operations proposed reg has a target publication date of July, but it may not be released that soon. While we don’t know exactly what will be in this reg, it could be a great opportunity for the Administration to address some core areas related to the calculation of the qualifying payment amount (also known as the QPA), batching of claims in the IDR process, and the types of disclosures that health plans must make to providers at the time of the initial payment or notice of denial. Only time will tell whether the administration proposes meaningful reforms to the IDR process in this reg!
Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.
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