ACA: Patient Protections


Reference

Section 2719A of the Public Health Service Act (the “Act”), as added by the Affordable Care Act (“ACA”), provides certain “patient protections” relating to the choice of a health care professional and benefits for emergency services.

On June 28, 2010, the Departments of Health and Human Services, Labor, and Treasury (the “Departments”) published an Interim Final Rule addressing several provisions of the Affordable Care Act, referred to as the “Patients Bill of Rights,” which provides regulatory guidance applicable to the patient protection provisions of the ACA.

These requirements do not apply to grandfathered plans.

WHAT YOU SHOULD KNOW

Choice of Healthcare Professional

Plans Covered

The three requirements relating to participants choice of health care professional apply only with respect to a plan or health insurance coverage with a network of providers. In addition, the choice of healthcare provider requirements only apply to plans operating under an HMO, Point-of-Service (POS) or other type of “gatekeeper” model where patients must obtain a referral from their primary care physician before receiving services from other in-network or out-of-network providers.

Thus, a plan or issuer that does not participate in any negotiated preferred provider network, or a plan that operates under an “open” preferred provider arrangement where referrals from a primary care physician are not required, is not subject to the requirements relating to the choice of a health care professional.

Please note that non-grandfathered plans remain subject to the patient protection requirements relating to benefits for emergency services, as described later in this section, even if they are not subject to the choice of healthcare professional provisions.

Selection of Primary Care Physician

Under the choice of healthcare professional provisions of the Interim Final Rule, if a group health plan, or a health insurance issuer offering group health insurance coverage, requires or provides for designation by a participant of a participating primary care provider, then:

  1. The plan or issuer must permit each participant to designate any participating primary care provider who is available to accept the participant, beneficiary, or enrollee the plan or issuer cannot itself assign a primary care provider.
  2. The plan or issuer must permit the designation of a physician (allopathic or osteopathic) who specializes in pediatrics as the child’s primary care provider if the provider participates in the network of the plan or issuer and is available to accept the child. The general terms of the plan or health insurance coverage regarding pediatric care otherwise are unaffected, including any exclusions with respect to coverage of pediatric care.
  3. If the plan or issuer provides coverage for obstetrical or gynecological care, the plan or issuer may not require authorization or referral by the plan, issuer, or any person (including a primary care provider) for a female participant who seeks obstetrical or gynecological care provided by an in-network health care professional who specializes in obstetrics or gynecology. The obstetrical or gynecological provider must otherwise adhere to policies and procedures regarding referrals, prior authorization for treatments, and the provision of services pursuant to a treatment plan approved by the plan or issuer.
  4. The plan may apply reasonable and appropriate geographic limitations with respect to which participating primary care providers are considered available for purposes of selection as primary care providers.

Notice of Choice of Healthcare Provider

When the plan requires the participant to designate a primary care provider, the plan must provide written notice to each participant describing their rights under the ACA. Specifically, this notice must describe the participant’s right to:

  1. Choose a primary care provider or a pediatrician when a plan requires designation of a primary care physician; and
  2. Obtain obstetrical or gynecological care without prior authorization.

This notice must be included whenever a summary plan description or other similar description of benefits is provided to a participant, and no later than the first day of the first plan year beginning or after September 23, 2010. 

Emergency Services

Under ACA, when a plan or health insurance coverage provides benefits to participants for emergency services, it must do so without application of any prior authorization requirements otherwise provided under the terms of the plan, and without regard to whether the health care provider administering services is an in-network provider.

When emergency services are obtained from an out-of-network provider, the plan cannot impose cost-sharing, in the form of copayment and coinsurance provisions, or other plan administrative limitations on those services that are more restrictive than the copayment, coinsurance, or other administrative plan limitations imposed for services received from an in-network provider.

It is important to note that out-of-network providers may balance bill patients for the difference between the provider’s charges and the amount collected from the plan or issuer and from the patient in the form of a copayment or coinsurance amount. (In contrast, in-network providers would generally be prohibited from balance billing under the terms of the network agreement. ) See Balance Billing below for more information.

Definitions

Emergency services means screening and stabilization services with respect to a medical condition that is characterized by acute symptoms of sufficient severity (including severe pain) that a reasonable layperson would expect the absence of medical attention to place the health of the individual in serious jeopardy.

Screening services includes ancillary services routinely used to evaluate a medical condition.

Stabilization services include any further medical examination and treatment needed to stabilize the patient.

 Balance Billing

 Out-of-network providers may balance bill patients for the difference between the providers’ charges and the amount collected from the plan or issuer and from the patient in the form of a co-payment or coinsurance amount.

To avoid the circumvention of the protections in the ACA, the regulation requires that a reasonable amount be paid for services by the plan or issuer.  A plan or issuer satisfies the regulation if it provides benefits for out-of-network emergency services in an amount equal to the greatest of three possible amounts: 

Each of these three amounts is calculated excluding any in-network copayment or coinsurance imposed with respect to the participant, beneficiary, or enrollee.

For plans and health insurance coverage under which there is no per service amount negotiated with in- network providers (such as under a capitation or other similar payment arrangement), the first amount above is disregarded, meaning that the greatest amount is going to be either the out-of-network amount or the Medicare amount.

 In-Network Clarification

Multiple Negotiated Amounts

If a plan or issuer has more than one negotiated amount with in-network providers for a particular emergency service, the amount is the median of these amounts, treating the amount negotiated with each provider as a separate amount in determining the median.

Thus, for example, if for a given emergency service a plan negotiated a rate of $100 with three providers, a rate of $125 with one provider, and a rate of $150 with one provider; the amounts taken into account to determine the median would be $100, $100, $100, $125, and $150; and the median would be $100.

 Out-of-Network Clarification

The out-of-network amount is determined without reduction for out-of-network cost sharing that generally applies under the plan or health insurance coverage with respect to out-of-network services.

Thus, for example, if a plan generally pays 70 percent of the usual, customary, and reasonable amount for out-of-network services, the out-of-network amount that should be used to calculate reimbursement for an emergency service is the total (that is, 100 percent) of the usual, customary, and reasonable amount for the service, not reduced by the 30 percent coinsurance that would generally apply to out-of-network services (but reduced by the in-network copayment or coinsurance that the individual would be responsible for if the emergency service had been provided in-network).

Following the commonly accepted definition of median, if there is an even number of amounts, the median is the average of the middle two. (Cost sharing imposed with respect to the participant, beneficiary, or enrollee would be deducted from this amount before determining the greatest of the three amounts above.)

 Anti-Abuse Rule

Although a plan or health insurance coverage is generally not constrained by the requirements of ACA for cost-sharing requirements other than copayments or coinsurance, the regulations include an anti-abuse rule with respect to such other cost-sharing requirements so that the purpose of limiting copayments and coinsurance for emergency services to the in-network rate cannot be thwarted by manipulation of these other cost sharing requirements.

Accordingly, any other cost-sharing requirement, such as a deductible or out-of-pocket maximum, may be imposed with respect to out-of-network emergency services only if the cost-sharing requirement generally applies to out-of-network benefits. Specifically, a deductible may be imposed with respect to out-of-network emergency services only as part of a deductible that generally applies to out-of-network benefits.

Similarly, if an out-of-pocket maximum generally applies to out-of-network benefits, that out-of-pocket maximum must apply to out-of-network emergency services. A plan or health insurance coverage could fashion these other cost-sharing requirements so that a participant, beneficiary, or enrollee is required to pay less for emergency services than for general out-of-network services; the anti-abuse rule merely prohibits a plan or health insurance coverage from fashioning such rules so that a participant, beneficiary, or enrollee is required to pay more for emergency services than for general out-of-network services.

Emergency Services Examples

 Example 1

Facts

A group health plan imposes a 25% coinsurance responsibility on individuals who are furnished emergency services, whether provided in-network or out-of-network. If a covered individual notifies the plan within two business days after the day an individual receives treatment in an emergency department, the plan reduces the coinsurance rate to 15%.

Conclusion

In this Example 1, the requirement to notify the plan in order to receive a reduction in the coinsurance rate does not violate the requirement that the plan cover emergency services without the need for any prior authorization determination. This is the result even if the plan required that it be notified before or at the time of receiving services at the emergency department in order to receive a reduction in the coinsurance rate.

Example 2

Facts

A group health plan imposes a $60 copayment on emergency services without preauthorization, whether provided in-network or out-of-network. If emergency services are preauthorized, the plan waives the copayment, even if it later determines the medical condition was not an emergency medical condition.

Conclusion

In this Example 2, by requiring an individual to pay more for emergency services if the individual does not obtain prior authorization, the plan violates the requirement that the plan cover emergency services without the need for any prior authorization determination. (By contrast, if, to have the copayment waived, the plan merely required that it be notified rather than a prior authorization, then the plan would not violate the requirement that the plan cover emergency services without the need for any prior authorization determination.)

Example 3

Facts

A group health plan covers individuals who receive emergency services with respect to an emergency medical condition from an out-of-network provider. The plan has agreements with in-network providers with respect to a certain emergency service. Each provider has agreed to provide the service for a certain amount. Among all the providers for the service: One has agreed to accept $85, two have agreed to accept $100, two have agreed to accept $110, three have agreed to accept $120, and one has agreed to accept $150. Under the agreement, the plan agrees to pay the providers 80% of the agreed amount, with the individual receiving the service responsible for the remaining 20%.

Conclusion

In this Example 3, the values taken into account in determining the median are $85, $100, $100, $110, $110, $120, $120, $120, and $150. Therefore, the median amount among those agreed to for the emergency service is $110, and the amount used to determine the payment to the out-of-network provider is 80% of $110 ($88).

Example 4

Facts

Same facts as Example 3. Subsequently, the plan adds another provider to its network, who has agreed to accept $150 for the emergency service.

Conclusion

In this Example 4, the median amount among those agreed to for the emergency service is $115. (Because there is no one middle amount, the median is the average of the two middle amounts, $110 and $120.) Accordingly, the amount used to determine the payment to the out-of-network provider is 80% of $115 ($92).

Example 5

Facts

Same facts as Example 4. An individual covered by the plan receives the emergency service from an out-of-network provider, who charges $125 for the service. With respect to services provided by out-of-network providers generally, the plan reimburses covered individuals 50% of the reasonable amount charged by the provider for medical services. For this purpose, the reasonable amount for any service is based on information on charges by all providers collected by a third party, on a zip-code-by-zip-code basis, with the plan treating charges at a specified percentile as reasonable. For the emergency service received by the individual, the reasonable amount calculated using this method is $116. The amount that would be paid under Medicare for the emergency service, excluding any copayment or coinsurance for the service, is $80.

Conclusion

In this Example 5, the plan is responsible for paying $92.80, 80% of $116. The median amount among those agreed to for the emergency service is $115 and the amount the plan would pay is $92 (80% of $115); the amount calculated using the same method the plan uses to determine payments for out-of-network services— $116—excluding the in-network 20% coinsurance, is $92.80; and the Medicare payment is $80. Thus, the greatest amount is $92.80. The individual is responsible for the remaining $32.20 charged by the out-of-network provider.

Example 6

Facts

Same facts as Example 5. The group health plan generally imposes a $250 deductible for in-network health care. With respect to all health care provided by out-of-network providers, the plan imposes a $500 deductible. (Covered in-network claims are credited against the deductible.) The individual has incurred and submitted $260 of covered claims prior to receiving the emergency service out-of-network.

Conclusion

In this Example 6, the plan is not responsible for paying anything with respect to the emergency service furnished by the out-of-network provider because the covered individual has not satisfied the higher deductible that applies generally to all health care provided out of network.

Additional Resources

Fact Sheet