Guest Article

(From the July 19, 2010 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

New "Preventive Services" Coverage Mandate - Requirements Are Clarified

Interim final regulations were released to implement the requirement under the Patient Protection and Affordable Care Act (PPACA) as amended that non-grandfathered health plans must provide coverage for, and may not impose any cost-sharing requirements with respect to, certain preventive care services effective with the first plan year beginning on or after September 23, 2010.

The Departments of Health and Human Services, Labor, and Treasury issued interim final regulations to clarify a variety of issues related to this PPCA requirement, including:

Mandated Preventive Services

The preventive services that must be covered, and may not be subject to any cost-sharing requirements (including copayments, coinsurance, or deductibles) - i.e., "mandated preventive services" are:

The relevant recommendations or guidelines sometimes do not specify how frequently a preventive service should be provided, or the specific screening method that should be used. For example, screening for colorectal cancer by fecal occult blood testing, sigmoidoscopy, or colonoscopy, is rated A by the U.S. Preventive Services Task Force for adults beginning at age 50 and continuing until age 75. Does that mean a group health plan must cover - and not impose any cost-sharing with respect to - all three methods of colorectal cancer screening for participants within the 50 to 75 age band, regardless of how frequently the screenings are performed? Not necessarily. The regulations clarify that plans may use "reasonable medical management techniques to determine the frequency, method, treatment, or setting" for any mandated preventive service "to the extent not specified in the recommendation or guideline."

Significantly, the regulations reiterate the statutory rule that the Preventive Services Task Force's recommendations regarding breast cancer screening, mammography, and prevention issued on or around November 2009 are not considered "current recommendations" on this subject. This refers to a controversial change in the Task Force's recommendations for breast cancer screening, which previously indicated women should have a mammogram every 1 to 2 years beginning at age 40. The November 2009 guidelines recommended mammograms every two years, and only for women ages 50 to 74. Nonetheless, for purposes of this mandate group health plans will have to cover mammograms without any cost-sharing requirements for women 40 and older.

Guidelines Will Change Over Time

The various recommendations and guidelines at the core of this mandate will change over time. So in order to remain in compliance group health plans periodically will need to take steps such as adding coverage for certain preventive services and eliminating cost-sharing requirements for others. How are plan sponsors and administrators supposed to keep up?

In order to help group health plan sponsors identify - and keep up with changes to - the specific preventive services subject to the mandate, the preamble to the regulations cross-references a Web site (www.HealthCare.gov/center/regulations/prevention.html) that links to all the relevant recommendations and guidelines. As the relevant recommendations and guidelines are modified, so too will the lists maintained on this Web site. But group health plan sponsors and administrators will not have to react to these changes immediately.

The regulations clarify that plans will not have to comply with any updates to the relevant recommendations and guidelines until the first day of the plan year beginning one year after the date the updated recommendation or guideline is issued. When changes are posted to the Web site, the date issued will be included so plan sponsors and administrators will know when their plans must be updated accordingly. So plan sponsors and administrators need only visit this Web site once each year to determine what changes, if any, are necessary to keep their plans in compliance with this mandate.

Additionally, the regulations confirm that group health plans do not have to continue covering or observe the cost-sharing ban on preventive services that are no longer required by these recommendations or guidelines.

Applying the No Cost-Sharing Requirement to Office Visits

Preventive services are often provided during routine office visits. What happens if the office visit is subject to a copay, for example, but the preventive service being provided is covered by the "no costsharing" requirement? The regulations provide a series of rules and examples to explain how group health plans must deal with this situation.

The basic rule is that the cost-sharing requirement may be imposed with respect to the office visit if the mandated preventive service is billed separately or is tracked separately as individual encounter data. But if the mandated preventive service is not tracked or billed separately the cost-sharing may not be applied to the office visit unless the preventive service is not the primary purpose of the office visit.

Does the Mandate Extend to Out-of-Network Services?

If a group health plan uses a provider network does it have to cover mandated preventive services delivered by an out-of-network provider? The regulations clarify that plans are not required to cover any preventive services delivered outside of the plan's provider network, and that cost-sharing can be imposed with respect to any coverage provided for out-of-network preventive services - including mandated preventive services.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations. If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955. Copyright 2010, Deloitte.