AMA Health Reform Insights: What to Expect From Regulatory Implementation of Insurance Reforms
The Affordable Care Act (ACA) called for a broad range of significant health insurance market reforms. The AMA is actively involved in the implementation of these reforms through advocacy with both the National Association of Insurance Commissioners (NAIC) and the Obama administration.
Below are some of the key implementing regulations that have already been issued and a description of relevant AMA advocacy efforts.
Premium transparency/medical loss ratios
Insurance companies will be required to spend more premium dollars on actual medical care instead of profits, bonuses, advertising and overhead. Furthermore, they must submit data on the portion of premiums spent on health care and quality improvements compared to overhead costs (i.e., their medical loss ratios). The NAIC is charged with drafting uniform definitions, standard methodologies and information collection forms to determine medical-loss ratios and how data should be reported.
The AMA submitted comments on May 14 on premium transparency and medical-loss ratio standards in response to a request for information issued by the U.S. Department of Health and Human Services (HHS). The AMA also is actively engaged in discussions with the NAIC.
The AMA’s concerns since the beginning of the project have centered on ensuring that any definition of quality improvement included in the loss ratio have a clear nexus to direct patient care. The AMA drafted and sent five individual letters to the NAIC expressing concerns about multiple versions of the reporting requirements to which health insurers must comply when reporting medical-loss ratio data. The AMA also organized two sign-on letters: one with the Federation of American Hospitals (FAH) and the American Hospital Association (AHA) and the second with state medical associations.
The AMA organized a grassroots coalition of Pfizer, Pharmaceutical Research and Manufacturers of America, AHA, FAH and others to ensure that NAIC members heard the AMA’s message. The AMA continues to be engaged with the NAIC and HHS as the issue moves forward.
Grandfathered health plans
Health plans that existed on March 23 (the date the Affordable Care Act became law) may be grandfathered and are thus exempt from certain new market reform requirements. These requirements, include:
- No cost-sharing for preventive benefits, internal appeals and external review procedures.
- Treating emergency services as in-network benefits with no preauthorization.
- Patient protections in choosing certain specialty physicians.
- Minimum essential benefit requirements and prohibition on discrimination against individuals participating in clinical trials.
On June 17, the Departments of HHS, Labor and Treasury issued an interim final rule (IFR) to clarify when a group health plan will be deemed a grandfathered plan, the administrative steps necessary to keep its status as a grandfathered plan, and what changes will cause a plan to lose its grandfathered status.
The AMA submitted comments on August 12, focusing on concerns involving the Employee Retirement Income Security Act pre-emption and recommending additional actions that should trigger a loss of grandfathered status.
Pre-existing condition exclusions, lifetime and annual limits, rescissions and patient protections
On June 28, the Departments of HHS, Labor and Treasury issued an IFR regarding pre-existing condition exclusions, lifetime and annual limits, rescissions and other patient protections, such as choice of health professional, notice requirements, coverage of out-of-network emergency services and cost-sharing for such services.
The AMA’s comments were generally supportive of the rule but did raise concerns over determination of cost-sharing for out-of-network emergency services, defining fair payment, and limitations on balance billing. These key protections under the new law go into effect on September 23 (pre-existing condition protections take effect this year for children only; protections for adults go into effect in 2014).
The Departments of HHS, Labor and Treasury issued an IFR on July 19 to implement the preventive health services provisions. The rules require group and individual health insurance plans to cover certain preventive services without cost-sharing (when they are delivered by in-network providers), which include:
- Cancer screenings.
- Blood pressure and cholesterol tests.
- Weight loss and smoking cessation counseling.
- Healthy checkups and immunizations.
The AMA will be submitting comments by the September 17deadline that are generally supportive but will raise some practice issues related to billing and coding. The benefits go into effect on September 23.
Internal/external claims appeals
The Affordable Care Act provides consumers with the right to appeal decisions made by their health carrier to an outside, independent decisionmaker, no matter what state they live in or what type of health insurance they have.
An IFR was issued on July 23 on the ACA’s provision on internal and external claims appeals. Under the IFR, plans and issuers must comply with a state external review process or the federal external review process. State laws that meet or exceed the consumer protections in the NAIC Uniform External Review Model Act will apply to carriers that are subject to state law.
The AMA has expressed concern with the external review provisions of the NAIC’s model laws process because the external reviewer is not, in fact, as independent as it should be in light of the relationship with the insurer. The AMA will be submitting comments to the Obama administration by the deadline on September 21.
HHS issued a request for information on August 3 regarding the planning and establishment of state-level exchanges to help HHS develop regulations regarding the exchange-related provisions of the Affordable Care Act. HHS is requesting comments on:
- The factors states will consider in determining whether to create exchanges.
- Governance and structure of such exchanges.
- Qualifying health plan certification criteria.
- Establishing standards for a plan rating system and quality measurements for plans.
- Enrollment and eligibility issues.
- Rating areas.
- Employer participation.
- Risk adjustment.
- Risk corridors.
Comments are due to HHS on October 4, and the AMA will be submitting its views.
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