PPACA Preventive Services Rule Issued

On July 14, 2010, the Departments of Labor, Health and Human Services (HHS), and the Treasury issued an Interim Final Rule relating to coverage of preventive services under the Patient Protection and Affordable Care Act (PPACA). This PPACA coverage mandate requires group health plans to provide coverage for certain preventive health services without imposing any cost-sharing requirements (e.g., copayments, coinsurance, or deductibles). Group health plans must provide coverage for the required preventive health services on a first-dollar basis beginning with the first plan year that begins on or after Sept. 23, 2010 (Jan. 1, 2011 for calendar year plans). This coverage mandate does not apply to grandfathered health plans. Therefore, employers that are in the process of determining whether they will maintain grandfathered status for their group health plans should understand how the coverage requirements described below would impact their plans if they choose to relinquish grandfathered status.

Preventive Services That Must Be Covered on a First-Dollar Basis

The Interim Final Rule and the PPACA's provisions require group health plans to provide first-dollar coverage for the following items and services:

Ø 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 with respect to the individual involved;

Ø 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;

Ø with respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration; and

Ø with respect to women, to the extent not already required above, evidence-informed preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration. The Department of HHS is developing these guidelines and expects to issue them no later than Aug. 1, 2011.

The Interim Final Rule confirms that the recommendations of the United States Preventive Services Task Force regarding breast cancer screening, mammography, and prevention issued in November 2009, which were the subject of some controversy, will not be considered current for purposes of providing those preventive services on a first-dollar basis. Instead, the prior recommendation (which recommends a screening mammography for women with or without a clinical breast examination every one to two years for women aged 40 or older) is considered current and will be required to be covered.

Recommendations and guidelines issued before Sept. 23, 2009 must be included in group health plans without cost-sharing requirements as of the first plan year beginning on or after Sept. 23, 2010 (Jan. 1, 2011 for calendar year plans). Recommendations and guidelines that were issued on or after Sept. 23, 2009 are not required to be provided on a first-dollar basis until the first plan year that begins on or after the date that is one year after the date the recommendation or guideline is issued. For an up-to-date listing of all the required recommendations and guidelines, including the dates on which they were issued, visit the federal government's health care reform Web page on preventive services at http://www.healthcare.gov/center/regulations/prevention/recommendations.html.

Office Visits

The Interim Final Rule provides guidance with respect to when a group health plan may impose cost-sharing requirements for office visits during which required preventive services are provided. The Rule provides three separate scenarios:

Ø If the preventive item or service is billed separately (or tracked as individual encounter data) from the office visit, then the plan may impose cost-sharing requirements with respect to the office visit.

Ø If the preventive item or service is not billed separately (or is not tracked as individual encounter data) from the office visit and the primary purpose of the office visit is to deliver the preventive item or service, then the plan may not impose cost-sharing requirements with respect to the office visit.

Ø If the preventive item or service is not billed separately (or is not tracked as individual encounter data) from the office visit and the primary purpose of the office visit is not to deliver the preventive item or service, then the plan may impose cost-sharing requirements with respect to the office visit.

Out-of-Network Coverage

The statutory language under the PPACA does not make a distinction between preventive services provided on an in-network basis and those provided on an out-of-network basis. The Interim Final Rule makes clear that if a group health plan has a network of providers to provide the required preventive services, and the plan imposes no cost-sharing requirements when the services are provided in-network, then the plan does not need to provide coverage for preventive services on an out-of-network basis at all. To the extent a group health plan does provide coverage for preventive services delivered by out-of-network providers, the plan may continue to impose cost-sharing requirements for preventive services received from out-of-network providers.

Reasonable Medical Management

The Interim Final Rule provides that, to the extent not specified in a recommendation or guideline, a group health plan may use reasonable medical management techniques to determine the frequency, method, treatment, or setting for a recommended preventive item or service. This means that, in the absence of specific guidance, group health plans may fill in gaps in the federal preventive service guidelines using reasonable medical management techniques when a federal preventive service guideline does not specifically state how often a preventive service should be provided, the method with which it should be provided, its treatment modality, or where it should be provided.

Extra Preventive Services Not Subject to First-Dollar Coverage

To the extent that a group health plan provides coverage for preventive services or items that are not included in the list of recommended preventive services or items subject to this PPACA mandate, the group health plan may continue to impose cost-sharing requirements on such services and items. Similarly, a group health plan can still impose cost-sharing requirements with respect to recommended preventive services or items that go beyond the specific recommendation or the plan's reasonable medical management guidelines for the preventive service or item (if the federal guideline does not specifically identify the frequency, method, treatment, or setting for the particular preventive service or item).

Ice Miller LLP has been tracking the regulations and other guidance issued under the PPACA, and you can read about the regulations that have been issued thus far, including the grandfather rule, the adult-child rule, and the prohibition on annual and lifetime limits on Ice Miller's Health Care Reform Web site.

For more information regarding the coverage for preventive services rules under the PPACA, or for any other questions regarding how health care reform impacts group health plans, please contact Mary Beth Braitman, Terry A. M. Mumford, Christopher Sears, Tara Sciscoe, Shalina Schaefer, or the Ice Miller LLP Employee Benefits attorney with whom you work.

July 15, 2010

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.