Preventive services with no cost sharing begin January 2011, employers have decisions to make under PPACA regulations

Beginning January 1, 2011 new health plans and those health benefit plans that have lost grandfathering (generally as a result cost management plan changes) will provide coverage for many preventive services with no deductible, co-payments or coinsurance applied, in other words no cost sharing.  The complete list of items and services that are required to be covered under interim final regulations can be found at  HealthCare.gov

“In general, the recommended preventive services are: (1) Evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (Task Force) with respect to the individual involved; (2) immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved; (3) with respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and (4) with respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA (not otherwise addressed by the recommendations of the Task Force).”

Regulations state that a plan is not required to provide coverage for recommended preventive services delivered by an out-of-network provider. Such a plan or issuer may also impose cost-sharing requirements for recommended preventive services delivered by an out-of-network provider.  A plan sponsor must make a decision to cover or exclude preventive services from out-of-network providers and if covered whether to apply cost sharing. If these preventive services provide value, one could easily argue that it makes no sense to exclude them when provided out of network.  Likewise, if one believes that cost sharing inhibits the use of such services, cost sharing should not apply even out of network.  Rather, the plan sponsor may simply limit the payment for such out of network services to the payment allowed in network for the same service.  That way the communication of coverage and cost sharing is the same, but the cost control remains with the plan and still provides an incentive to use in network providers.

A second decision faced by a plan sponsor relates to certain services where the recommended frequency, method, etc. is not defined.

“The interim final regulations also provide that if a recommendation or guideline for a recommended preventive service does not specify the frequency, method, treatment, or setting for the provision of that service, the plan or issuer may use reasonable medical management techniques to determine any coverage limitations. The use of reasonable medical management techniques allows plans and issuers to adapt these recommendations and guidelines for coverage of specific items and services where cost sharing must be waived. Thus, a plan or issuer may rely on established techniques and the relevant evidence base to determine the frequency, method, treatment, or setting for which a recommended preventive service will be available without cost sharing requirements to the extent not specified in a recommendation or guideline.”

In many cases this is what plans and insurers have been doing for a wide array of health care services, typically under the heading of “medical necessity.” It is also a process that leads to ongoing controversy and which drew criticism during the health care debate.  It is likely to be more controversial when applied to preventive services.

Value-Based Insurance Design (Promoting use of high value, high quality health care providers).

A third decision for plan sponsors will involve the incentives for plan participants to use certain providers for preventive services. DOL assumes that steering patients to in-network providers provides the best value. High quality may or may not accompany net work providers.

The preamble to the interim final regulations states:

“The Departments (HHS, Treasury, and DOL) recognize the important role that value-based insurance design can play in promoting the use of appropriate preventive services. These interim final regulations, for example, permit plans and issuers to implement designs that seek to foster better quality and efficiency by allowing cost-sharing for recommended preventive services delivered on an out-of-network basis while eliminating cost-sharing for recommended preventive health services delivered on an in-network basis. The Departments are developing additional guidelines regarding the utilization of value-based insurance designs by group health plans and health insurance issuers with respect to preventive benefits. The Departments are seeking comments related to the development of such guidelines for value-based insurance designs that promote consumer choice of providers or services that offer the best value and quality, while ensuring access to critical, evidence-based preventive services.”

Related Articles

• U-M’s concept of value-based insurance design featured in major health policy journal (eurekalert.org)