KC Health Care Reform

There has been a lot of activity during the past few months with several new health care reform regulations being published. The below will provide a general overview of each regulatory update.

Rate Review

On May 23, 2011, the final rule for the Department of Health and Human Services and States to establish a process for the annual review of unreasonable premium increases for health insurance coverage was published in the Federal Register. The rate review program is designed to ensure that all rate increases that meet or exceed an established threshold (10 percent) are reviewed by the appropriate state or Centers for Medicare & Medicaid Services to determine if the rate increases are unreasonable.

The rule applies only to the individual and small group market segments. Grandfathered plans, excepted benefits (benefits not required to comply with most of the HIPAA portability requirements like limited scope dental and vision), and retiree-only plans remain outside the scope of the regulations. The rule is effective for all rates submitted or effective as of September 1, 2011.

Internal Claims and Appeals and External Review

On June 24, 2011, an amendment (and some technical guidance) to the rules on internal claims and appeals and external review was published in the Federal Register, changing some of the previously published requirements. The Department of Labor, Treasury Department, and HHS reexamined and amended the interim rule after stakeholders stated the original rules would be difficult and costly to administer within the timelines required. The proposed rules related to internal claims and appeals and external review now include:

• Requirements for additional information to be placed on the EOB (Explanation of Benefits). This information includes a description of the internal and external review requirements;
• A requirement that additional information be available in culturally and linguistically appropriate for individuals living within certain counties in the United States (as determined by CMS);
• A requirement that individual members have access to only one level of internal appeal;
• Requirements related to a state and/or federal external review process, accessible to all members for certain types of denials.

Previously published rules related to requirements for diagnosis and treatment codes and 24 hour urgent care claims turnaround were removed.

Reinsurance, Risk Corridors, and Risk Adjustments

On July 15, 2011, HHS published proposed regulations in the Federal Register regarding Affordable Insurance Exchanges. Exchanges will allow individuals and small businesses to purchase private health insurance beginning in 2014 as required in the Patient Protection and Affordable Care Act.

To help protect insurers against risk selection and market uncertainty associated with coverage provided in the Exchange, the proposed regulation establishes three programs that begin in 2014 that govern: (1) reinsurance, (2) risk corridors, and (3) risk adjustment. The transitional reinsurance program for the individual market and the risk corridor program for individual and small group markets are temporary programs to provide payment stability as insurance market reforms begin. The risk adjustment program is a permanent program that will make payments to health insurance issuers that cover higher-risk populations.

Women’s Preventive Services

On August 3, 2011, regulators published an amendment to the rules related to coverage of preventive services in the Federal Register that include new recommendations/guidelines for women’s preventive services. In non-grandfathered plans, the below services must be covered without any cost to the women, if received from network providers:

• Well-woman visits;
• Screening for gestational diabetes;
• Human Papillomavirus (HPV) DNA testing;
• Counseling for sexually transmitted infections;
• Counseling and screening for human immune-deficiency virus (HIV);
• FDA-approved contraception methods and contraceptive counseling;
• Breastfeeding support, supplies, and counseling; and
• Screening and counseling for interpersonal and domestic violence.

These mandates are effective for plan years beginning on and after August 1, 2012.

Exchanges

On July 15, 2011, HHS published proposed regulations regarding Affordable Insurance Exchanges in the Federal Register. Exchanges will allow individuals and small businesses to purchase private health insurance as required by Patient Protection and Affordable Care Act.

The regulation proposed Establishment Standards and Other Related Standards that States must meet to establish an exchange and outlines the minimum requirements that health insurance issuers must meet to participate in the exchange and offer qualified health plans. The proposed rule also provides basic standards that employers must meet to participate in the Small Business Health Options Program.

Again, these are proposed regulations. We’ll provide updates here as we learn of them to make sure you’re aware of reform changes and what they may mean to you.