On May 17, the Department of Health and Human Services (HHS) released an interim final rule with comment period setting new payment rates for services delivered to individuals enrolled in the federally-administered Pre-Existing Condition Insurance Plan (PCIP) program effective June 15, 2013. The rule specifies that most covered services furnished to enrollees in the federally-administered PCIP program will be paid at 100 percent of Medicare payment rates or, where Medicare payment rates cannot be implemented by the federally-administered PCIP, 50 percent of billed charges or a rate using a relative value scale.
Furthermore, in most circumstances, the rule prohibits facilities and providers from “balance billing,” or charging the enrollee an amount greater than the enrollee’s cost-sharing amount as calculated by the plan. While the American Hospital Association supports providing access to health care coverage for uninsured individuals with pre-existing conditions, they are concerned about HHS setting mandatory Medicare rates for most services provided to these enrollees.
Highlights of the interim final rule follow.
The Patient Protection and Affordable Care Act (ACA) established a temporary high-risk insurance program to provide health insurance coverage to eligible uninsured individuals with pre-existing conditions. The program took effect June 21, 2010 and will end Jan. 1, 2014 when other ACA health coverage provisions begin, including new qualified health plans offered through the health insurance exchanges.
The ACA directed HHS to establish, directly or through contracts with states or nonprofit entities, the high-risk pool program. HHS contracted with some states to administer a high-risk pool using PCIP funds, known as “state-based PCIPs;” HHS administers a high-risk pool in the remaining states and the District of Columbia, known as “federally-administered PCIPs.”
Funding for the risk pool was set in statute at $5 billion. Since its inception, approximately 135,000 individuals have accessed the plan.
Interim Final Rule
The interim final rule applies only to the federally-administered PCIP.
Insufficient Funds. HHS states that the overall cost of the PCIP program is higher than originally projected and funding will expire unless the department implements policy changes. The ACA requires the HHS Secretary to make adjustments to eliminate any projected deficit. Over the past two years, the administration has implemented a number of provisions to contain costs with the intent of sustaining the program. In addition, on Feb. 15 the federally-administered PCIP suspended its acceptance of new enrollment applications.
New Payment Rate. Most services delivered to enrollees in the federally-administered PCIP program will be paid at: (1) 100 percent of Medicare payment rates, or (2) where Medicare payment rates cannot be implemented by the federally-administered PCIP, 50 percent of billed charges or a rate generated pricing methodology using a relative value scale. Excluded services are: prescription drugs, organ/tissue transplant, dialysis and durable medical equipment benefits. These new rates are effective June 15. The rates will become the new plan allowance for the covered service. The plan will reimburse the facility or provider for a portion of the rate, and the enrollee will be responsible for reimbursing the facility or provider for the remainder, based on current cost sharing rules.
Premiums and Cost-sharing. Also beginning June 15, in most circumstances, the rule prohibits any facility or provider from billing the enrollee an amount greater than the enrollee’s out-of-pocket cost for the covered service as calculated by the plan. In other words, providers will not be able to use “balance billing;” they may not bill a patient for the difference between the plan allowance for a covered service and the amount that the facility would otherwise charge for the service.
Exceptions to this provision are prescription drugs, organ/tissue transplant, dialysis and durable medical equipment benefits.
As a result of the interim final rule, facilities and providers have a choice – continue to treat federally-administered PCIP enrollees and accept the new payment rates, or choose not to provide care for federally-administered PCIP enrollees.
This interim final rule with comment period takes effect June 15. Comments will be accepted until July 19.