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Guest Article

(From the October 11, 2010 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

What Claims Are Eligible for Reimbursement under the ERRP?

Essentially, only those items and services that are reimbursable under Medicare will count toward the threshold and be eligible for reimbursement under the Early Retiree Reimbursement Program (ERRP), the Department of Health and Human Services recently explained. However, certain of Medicare's limits and conditions will not apply to claims under ERRP, including: the amount, duration and scope limits on certain items and services; medical necessity determinations; benefit restrictions requiring a medical claims history; and (except for specific carve-outs) restrictions on the site or circumstances of care.

Eligible Claims

The Department of Health and Human Services (DHHS) recently clarified the claims eligible for consideration and reimbursement under the ERRP. In a release dated September 28, 2010, the DHHS explained that the Affordable Care Act allows reimbursement for certain claims for "health benefits" - defined as "medical, surgical, hospital, prescription drug, and such other benefits as shall be determined by the Secretary." The DHHS explained that these are generally items and services that are reimbursable under Medicare. Items that are generally excluded from Medicare coverage would not count towards the threshold and would not be eligible for reimbursement. Medicare imposes various limits and restraints in reimbursing certain claims. The DHHS guidance clarifies that certain Medicare limits and restraints will not be applied to claims under ERRP. Specifically:

Medicare Frequency or Maximum Limits. Although Medicare imposes amount, duration and scope limits on certain items and services (e.g., home health services, skilled nursing facility care), these will not be imposed under the ERRP. The DHHS intends to recognize the limits set under the employment-based plan.
Medical Necessity. Medicare medical necessity determinations will not be applied. Rather, the DHHS will defer to the medical necessity determinations made by the sponsor's plan.
Benefit Restrictions. Medicare benefit restrictions that require the sponsor to develop a claims history (e.g., that an individual was in a hospital before being admitted to a skilled nursing facility) will not be imposed.
Site or Circumstance of Care. Unless specifically excluded (see below), Medicare's restrictions on the site or circumstance of care will not be imposed (e.g., otherwise valid claims for items and services of providers that do not participate in Medicare will count toward the threshold and be reimbursable under ERRP).

Specific Exclusions

The guidance specifically excludes the following twelve items and services:

Custodial care (e.g., personal care by non-medically trained personnel, institutional care not meeting the requirements of skilled nursing facility care).
Routine foot care (e.g., orthopedic shoes).
Personal comfort items (e.g., hospital room TVs).
Routine services and appliances for vision (e.g., glasses, contact lenses).
Hearing aids and auditory implants.
Cosmetic surgery (except for prompt repair of accidental injury or to improve the functioning of a malformed body part).
Routine dental services.
Assisted suicide.
In-vitro fertilization, artificial insemination, sperm and embryo procurement.
Abortion services (except where the pregnancy results from rape or incest or endangers the life of the woman).
Drugs that are not covered by a standard Part D plan (unless covered under Parts A or B).
Items or services not furnished in the United States.

The DHHS advises that a detail list of codes corresponding with the exclusions will be posted shortly on www.errp.gov.

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.

BenefitsLink is an independent national employee benefits information provider, not formally affiliated with the firms and companies who kindly provide much of the content and advertisements published on this Web site, including the article shown above.