November 6, 2013
Sponsors of Non-Grandfathered Group Health Plans Must Soon Review Their Definition of “Provider”
Effective for plan years beginning on or after January 1, 2014, the Affordable Care Act1 provides that non-grandfathered group health plans and health insurers may not discriminate with respect to participation under the plan or coverage against health care providers who are acting within the scope of their license or certification under applicable state law.2 The new rule appears to affect plans that restrict payment of services to health care providers based on the type of license the provider holds.
To comply with the new provider non-discrimination provision, sponsors of non-grandfathered group health plans may need to amend plan documents. Specifically:
- Plans that prohibit payment to one type of provider, but pay another for a similar service may need to amend plan documents. For example, a plan that covers treatment related to foot care, but does not allow payment to a podiatrist, may need to revisit this plan provision if the podiatrist holds a license that allows them to provide the treatment.
- State laws governing licensing of the health care provider may mean that claims may be payable in one state but not another. Plans that restrict payment to certain types of providers based on their license (e.g., chiropractors, acupuncturists, optometrists, naturopaths, midwives or other similar providers) may need to revise plan documents to permit payment if these providers hold a license to provide the treatment in the state where services were rendered.
Some aspects of reimbursement are not affected by the new provider non-discrimination provision. For example, group health plans are not required to enter into contracts with “any willing provider” (i.e., they do not have to allow any provider to join the plan’s network). In addition, plans may continue to establish varying reimbursement rates based on quality or performance measures, or other market standards.
No Guidance on this Provision Expected Before the Effective Date
The three federal agencies responsible for implementing the Affordable Care Act — the Department of Labor (DOL), the Department of Health and Human Services and the Treasury Department — will not be issuing regulations addressing the provider non-discrimination provision of the law prior to its effective date.
An answer to a frequently asked question (FAQ) states that the section is “self-implementing.”3 It directs plan sponsors to implement the requirements of the provision using a good-faith, reasonable interpretation of the law.
Implications for Plan Sponsors
Plan sponsors should review their plans’ definition of “provider” and any plan exclusions based on the type of license or certification held by the provider, and revise them as necessary. Plan language may need to be made more specific in order to control costs, or some type of utilization review may be necessary. Where the plan uses a contracted network provided by a third-party administrator or insurer, the plan sponsor should initiate discussions with that network provider to assure that these new requirements are being addressed.
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As with all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their legal counsel for authoritative advice on the interpretation and application of application of the Affordable Care Act. Sibson Consulting can be retained to work with plan sponsors and their attorneys on compliance issues.
- The Affordable Care Act is the shorthand name for the Patient Protection and Affordable Care Act (PPACA), Public Law No. 111-48, as modified by the subsequently enacted Health Care and Education Reconciliation Act (HCERA), Public Law No. 111-152. (Return to the Capital Checkup.)
- That language from Section 2706(a) of the Public Health Service Act is codified at 42 U.S.C. §300gg-5(a). (Return to the Capital Checkup.)
- See the answer to FAQ XV on the DOL’s website. (Return to the Capital Checkup.)
Capital Checkup is Sibson Consulting’s periodic electronic newsletter summarizing activity in Washington with respect to health care and related subjects. Capital Checkup is for informational purposes only and should not be construed as legal advice. It is not intended to provide guidance on current laws or pending legislation. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice.