[Federal Register Volume 75, Number 137 (Monday, July 19, 2010)]
[Rules and Regulations]
[Pages 41726-41760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17242]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[TD 9493]
RIN 1545-BJ60
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2590
RIN 1210-AB44
DEPARTMENT OF HEALTH AND HUMAN SERVICES
[OCIIO-9992-IFC]
45 CFR Part 147
RIN 0938-AQ07
Interim Final Rules for Group Health Plans and Health Insurance
Issuers Relating to Coverage of Preventive Services Under the Patient
Protection and Affordable Care Act
AGENCIES: Internal Revenue Service, Department of the Treasury;
Employee Benefits Security Administration, Department of Labor; Office
of Consumer Information and Insurance Oversight, Department of Health
and Human Services.
ACTION: Interim final rules with request for comments.
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SUMMARY: This document contains interim final regulations implementing
the rules for group health plans and health insurance coverage in the
group and individual markets under provisions of the Patient Protection
and Affordable Care Act regarding preventive health services.
DATES: Effective date. These interim final regulations are effective on
September 17, 2010.
Comment date. Comments are due on or before September 17, 2010.
Applicability dates. These interim final regulations generally
apply to group health plans and group health insurance issuers for plan
years beginning on or after September 23, 2010. These interim final
regulations generally apply to individual health insurance issuers for
policy years beginning on or after September 23, 2010.
ADDRESSES: Written comments may be submitted to any of the addresses
specified below. Any comment that is submitted to any Department will
be shared with the other Departments. Please do not submit duplicates.
All comments will be made available to the public. WARNING: Do not
include any personally identifiable information (such as name, address,
or other contact information) or confidential business information that
you do not want publicly disclosed. All comments are posted on the
Internet exactly as received, and can be retrieved by most Internet
search engines. No deletions, modifications, or redactions will be made
to the comments received, as they are public records. Comments may be
submitted anonymously.
Department of Labor. Comments to the Department of Labor,
identified by RIN 1210-AB44, by one of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: [email protected].
Mail or Hand Delivery: Office of Health Plan Standards and
Compliance Assistance, Employee Benefits Security Administration, Room
N-5653, U.S. Department of Labor, 200 Constitution Avenue, NW.,
Washington, DC 20210, Attention: RIN 1210-AB44.
Comments received by the Department of Labor will be posted without
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and
available for public inspection at the Public Disclosure Room, N-1513,
Employee Benefits Security Administration, 200 Constitution Avenue,
NW., Washington, DC 20210.
Department of Health and Human Services. In commenting, please
refer to file code OCIIO-9992-IFC. Because of staff and resource
limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the instructions under
the ``More Search Options'' tab.
2. By regular mail. You may mail written comments to the following
address ONLY: Office of Consumer Information and Insurance Oversight,
Department of Health and Human Services, Attention: OCIIO-9992-IFC,
P.O. Box 8016, Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the
[[Page 41727]]
following address ONLY: Office of Consumer Information and Insurance
Oversight, Department of Health and Human Services, Attention: OCIIO-
9992-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD
21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses:
a. For delivery in Washington, DC--Office of Consumer Information
and Insurance Oversight, Department of Health and Human Services, Room
445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the OCIIO drop slots located in the main lobby of the building. A
stamp-in clock is available for persons wishing to retain a proof of
filing by stamping in and retaining an extra copy of the comments
being filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call (410) 786-7195 in advance to schedule your arrival with one
of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by following the
instructions at the end of the ``Collection of Information
Requirements'' section in this document.
Inspection of Public Comments. All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately
three weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. EST. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Internal Revenue Service. Comments to the IRS, identified by REG-
120391-10, by one of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: CC:PA:LPD:PR (REG-120391-10), room 5205, Internal
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC
20044.
Hand or courier delivery: Monday through Friday between
the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-120391-10),
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue,
NW., Washington DC 20224.
All submissions to the IRS will be open to public inspection and
copying in room 1621, 1111 Constitution Avenue, NW., Washington, DC
from 9 a.m. to 4 p.m.
FOR FURTHER INFORMATION CONTACT: Amy Turner or Beth Baum, Employee
Benefits Security Administration, Department of Labor, at (202) 693-
8335; Karen Levin, Internal Revenue Service, Department of the
Treasury, at (202) 622-6080; Jim Mayhew, Office of Consumer Information
and Insurance Oversight, Department of Health and Human Services, at
(410) 786-1565.
Customer Service Information: Individuals interested in obtaining
information from the Department of Labor concerning employment-based
health coverage laws may call the EBSA Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the Department of Labor's Web site (http://www.dol.gov/ebsa). In addition, information from HHS on private health
insurance for consumers can be found on the Centers for Medicare &
Medicaid Services (CMS) Web site (http://www.cms.hhs.gov/HealthInsReformforConsume/01_Overview.as) and information on health
reform can be found at http://www.healthreform.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Patient Protection and Affordable Care Act (the Affordable Care
Act), Public Law 111-148, was enacted on March 23, 2010; the Health
Care and Education Reconciliation Act (the Reconciliation Act), Public
Law 111-152, was enacted on March 30, 2010. The Affordable Care Act and
the Reconciliation Act reorganize, amend, and add to the provisions of
part A of title XXVII of the Public Health Service Act (PHS Act)
relating to group health plans and health insurance issuers in the
group and individual markets. The term ``group health plan'' includes
both insured and self-insured group health plans.\1\ The Affordable
Care Act adds section 715(a)(1) to the Employee Retirement Income
Security Act (ERISA) and section 9815(a)(1) to the Internal Revenue
Code (the Code) to incorporate the provisions of part A of title XXVII
of the PHS Act into ERISA and the Code, and make them applicable to
group health plans, and health insurance issuers providing health
insurance coverage in connection with group health plans. The PHS Act
sections incorporated by this reference are sections 2701 through 2728.
PHS Act sections 2701 through 2719A are substantially new, though they
incorporate some provisions of prior law. PHS Act sections 2722 through
2728 are sections of prior law renumbered, with some, mostly minor,
changes.
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\1\ The term ``group health plan'' is used in title XXVII of the
PHS Act, part 7 of ERISA, and chapter 100 of the Code, and is
distinct from the term ``health plan,'' as used in other provisions
of title I of the Affordable Care Act. The term ``health plan'' does
not include self-insured group health plans.
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Subtitles A and C of title I of the Affordable Care Act amend the
requirements of title XXVII of the PHS Act (changes to which are
incorporated into ERISA section 715). The preemption provisions of
ERISA section 731 and PHS Act section 2724 \2\ (implemented in 29 CFR
2590.731(a) and 45 CFR 146.143(a)) apply so that the requirements of
part 7 of ERISA and title XXVII of the PHS Act, as amended by the
Affordable Care Act, are not to be ``construed to supersede any
provision of State law which establishes, implements, or continues in
effect any standard or requirement solely relating to health insurance
issuers in connection with group or individual health insurance
coverage except to the extent that such standard or requirement
prevents the application of a requirement'' of the Affordable Care Act.
Accordingly, State laws that impose on health insurance issuers
requirements that are stricter than those imposed by the Affordable
Care Act will not be superseded by the Affordable Care Act.
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\2\ Code section 9815 incorporates the preemption provisions of
PHS Act section 2724. Prior to the Affordable Care Act, there were
no express preemption provisions in chapter 100 of the Code.
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[[Page 41728]]
The Departments of Health and Human Services, Labor, and the
Treasury (the Departments) are issuing regulations in several phases
implementing the revised PHS Act sections 2701 through 2719A and
related provisions of the Affordable Care Act. The first phase in this
series was the publication of a Request for Information relating to the
medical loss ratio provisions of PHS Act section 2718, published in the
Federal Register on April 14, 2010 (75 FR 19297). The second phase was
interim final regulations implementing PHS Act section 2714 (requiring
dependent coverage of children to age 26), published in the Federal
Register on May 13, 2010 (75 FR 27122). The third phase was interim
final regulations implementing section 1251 of the Affordable Care Act
(relating to status as a grandfathered health plan), published in the
Federal Register on June 17, 2010 (75 FR 34538). The fourth phase was
interim final regulations implementing PHS Act sections 2704
(prohibiting preexisting condition exclusions), 2711 (regarding
lifetime and annual dollar limits on benefits), 2712 (regarding
restrictions on rescissions), and 2719A (regarding patient
protections), published in the Federal Register on June 28, 2010 (75 FR
37188). These interim final regulations are being published to
implement PHS Act section 2713 (relating to coverage for preventive
services). PHS Act section 2713 is generally effective for plan years
(in the individual market, policy years) beginning on or after
September 23, 2010, which is six months after the March 23, 2010 date
of enactment of the Affordable Care Act. The implementation of other
provisions of PHS Act sections 2701 through 2719A will be addressed in
future regulations.
II. Overview of the Regulations: PHS Act Section 2713, Coverage of
Preventive Health Services (26 CFR 54.9815-2713T, 29 CFR 2590.715-2713,
45 CFR 147.130)
Section 2713 of the PHS Act, as added by the Affordable Care Act,
and these interim final regulations require that a group health plan
and a health insurance issuer offering group or individual health
insurance coverage provide benefits for and prohibit the imposition of
cost-sharing requirements with respect to:
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.\3\
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\3\ Under PHS Act section 2713(a)(5), the Task Force
recommendations regarding breast cancer screening, mammography, and
prevention issued in or around November of 2009 are not to be
considered current recommendations on this subject for purposes of
any law. Thus, the recommendations regarding breast cancer
screening, mammography, and prevention issued by the Task Force
prior to those issued in or around November of 2009 (i.e., those
issued in 2002) will be considered current until new recommendations
in this area are issued by the Task Force or appear in comprehensive
guidelines supported by the Health Resources and Services
Administration concerning preventive care and screenings for women.
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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 (Advisory Committee) with respect to the individual
involved. A recommendation of the Advisory Committee is considered to
be ``in effect'' after it has been adopted by the Director of the
Centers for Disease Control and Prevention. A recommendation is
considered to be for routine use if it appears on the Immunization
Schedules of the Centers for Disease Control and Prevention.
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).
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). The Department of HHS is developing these guidelines and
expects to issue them no later than August 1, 2011.
The complete list of recommendations and guidelines that are
required to be covered under these interim final regulations can be
found at http://www.HealthCare.gov/center/regulations/prevention.html.
Together, the items and services described in these recommendations and
guidelines are referred to in this preamble as ``recommended preventive
services.''
These interim final regulations clarify the cost-sharing
requirements when a recommended preventive service is provided during
an office visit. First, if a recommended preventive service is billed
separately (or is tracked as individual encounter data separately) from
an office visit, then a plan or issuer may impose cost-sharing
requirements with respect to the office visit. Second, if a recommended
preventive service is not billed separately (or is not tracked as
individual encounter data separately) from an office visit and the
primary purpose of the office visit is the delivery of such an item or
service, then a plan or issuer may not impose cost-sharing requirements
with respect to the office visit. Finally, if a recommended preventive
service is not billed separately (or is not tracked as individual
encounter data separately) from an office visit and the primary purpose
of the office visit is not the delivery of such an item or service,
then a plan or issuer may impose cost-sharing requirements with respect
to the office visit. The reference to tracking individual encounter
data was included to provide guidance with respect to plans and issuers
that use capitation or similar payment arrangements that do not bill
individually for items and services.
Examples in these interim final regulations illustrate these
provisions. In one example, an individual receives a cholesterol
screening test, a recommended preventive service, during a routine
office visit. The plan or issuer may impose cost-sharing requirements
for the office visit because the recommended preventive service is
billed as a separate charge. A second example illustrates that
treatment resulting from a preventive screening can be subject to cost-
sharing requirements if the treatment is not itself a recommended
preventive service. In another example, an individual receives a
recommended preventive service that is not billed as a separate charge.
In this example, the primary purpose for the office visit is recurring
abdominal pain and not the delivery of a recommended preventive
service; therefore the plan or issuer may impose cost-sharing
requirements for the office visit. In the final example, an individual
receives a recommended preventive service that is not billed as a
separate charge, and the delivery of that service is the primary
purpose of the office visit. Therefore, the plan or issuer may not
impose cost-sharing requirements for the office visit.
With respect to a plan or health insurance coverage that has a
network of providers, these interim final regulations make clear that a
plan or issuer 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.
These interim final regulations provide that if a recommendation or
[[Page 41729]]
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 can 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 to coverage of specific items and
services where cost sharing must be waived. Thus, under these interim
final regulations, 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.
The statute and these interim final regulations clarify that a plan
or issuer continues to have the option to cover preventive services in
addition to those required to be covered by PHS Act section 2713. For
such additional preventive services, a plan or issuer may impose cost-
sharing requirements at its discretion. Moreover, a plan or issuer may
impose cost-sharing requirements for a treatment that is not a
recommended preventive service, even if the treatment results from a
recommended preventive service.
The statute requires the Departments to establish an interval of
not less than one year between when recommendations or guidelines under
PHS Act section 2713(a) \4\ are issued, and the plan year (in the
individual market, policy year) for which coverage of the services
addressed in such recommendations or guidelines must be in effect.
These interim final regulations provide that such coverage must be
provided for plan years (in the individual market, policy years)
beginning on or after the later of September 23, 2010, or one year
after the date the recommendation or guideline is issued. Thus,
recommendations and guidelines issued prior to September 23, 2009 must
be provided for plan years (in the individual market, policy years)
beginning on or after September 23, 2010. For the purpose of these
interim final regulations, a recommendation or guideline of the Task
Force is considered to be issued on the last day of the month on which
the Task Force publishes or otherwise releases the recommendation; a
recommendation or guideline of the Advisory Committee is considered to
be issued on the date on which it is adopted by the Director of the
Centers for Disease Control and Prevention; and a recommendation or
guideline in the comprehensive guidelines supported by HRSA is
considered to be issued on the date on which it is accepted by the
Administrator of HRSA or, if applicable, adopted by the Secretary of
HHS. For recommendations and guidelines adopted after September 23,
2009, information at http://www.HealthCare.gov/center/regulations/prevention.html will be updated on an ongoing basis and will include
the date on which the recommendation or guideline was accepted or
adopted.
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\4\ Section 2713(b)(1) refers to an interval between ``the date
on which a recommendation described in subsection (a)(1) or (a)(2)
or a guideline under subsection (a)(3) is issued and the plan year
with respect to which the requirement described in subsection (a) is
effective with respect to the service described in such
recommendation or guideline.'' While the first part of this
statement does not mention guidelines under subsection (a)(4), it
would make no sense to treat the services covered under (a)(4) any
differently than those in (a)(1), (a)(2), and (a)(3). First, the
same sentence refers to ``the requirement described in subsection
(a),'' which would include a requirement under (a)(4). Secondly, the
guidelines under (a)(4) are from the same source as those under
(a)(3), except with respect to women rather than infants, children
and adolescents; and other preventive services involving women are
addressed in (a)(1), so there is no plausible policy rationale for
treating them differently. Third, without this clarification, it
would be unclear when such services would have to be covered. These
interim final regulations accordingly apply the intervals
established therein to services under section 2713(a)(4).
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Finally, these interim final regulations make clear that a plan or
issuer is not required to provide coverage or waive cost-sharing
requirements for any item or service that has ceased to be a
recommended preventive service.\5\ Other requirements of Federal or
State law may apply in connection with ceasing to provide coverage or
changing cost-sharing requirements for any such item or service. For
example, PHS Act section 2715(d)(4) requires a plan or issuer to give
60 days advance notice to an enrollee before any material modification
will become effective.
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\5\ For example, if a recommendation of the United States
Preventive Services Task Force is downgraded from a rating of A or B
to a rating of C or D, or if a recommendation or guideline no longer
includes a particular item or service.
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Recommendations or guidelines in effect as of July 13, 2010 are
described in section V later in this preamble. Any change to a
recommendation or guideline that has--at any point since September 23,
2009--been included in the recommended preventive services will be
noted at http://www.HealthCare.gov/center/regulations/prevention.html.
As described above, new recommendations and guidelines will also be
noted at this site and plans and issuers need not make changes to
coverage and cost-sharing requirements based on a new recommendation or
guideline until the first plan year (in the individual market, policy
year) beginning on or after the date that is one year after the new
recommendation or guideline went into effect. Therefore, by visiting
this site once per year, plans or issuers will have straightforward
access to all the information necessary to determine any additional
items or services that must be covered without cost-sharing
requirements, or to determine any items or services that are no longer
required to be covered.
The Affordable Care Act gives authority to the Departments to
develop guidelines for group health plans and health insurance issuers
offering group or individual health insurance coverage to utilize
value-based insurance designs as part of their offering of preventive
health services. Value-based insurance designs include the provision of
information and incentives for consumers that promote access to and use
of higher value providers, treatments, and services. The Departments
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.
The requirements to cover recommended preventive services without
any cost-sharing requirements do not apply to grandfathered health
plans. See 26 CFR 54.9815-1251T, 29 CFR 2590.715-1251, and 45 CFR
147.140 (75 FR 34538, June 17, 2010).
III. Interim Final Regulations and Request for Comments
Section 9833 of the Code, section 734 of ERISA, and section 2792 of
the PHS
[[Page 41730]]
Act authorize the Secretaries of the Treasury, Labor, and HHS
(collectively, the Secretaries) to promulgate any interim final rules
that they determine are appropriate to carry out the provisions of
chapter 100 of the Code, part 7 of subtitle B of title I of ERISA, and
part A of title XXVII of the PHS Act, which include PHS Act sections
2701 through 2728 and the incorporation of those sections into ERISA
section 715 and Code section 9815.
In addition, under Section 553(b) of the Administrative Procedure
Act (APA) (5 U.S.C. 551 et seq.) a general notice of proposed
rulemaking is not required when an agency, for good cause, finds that
notice and public comment thereon are impracticable, unnecessary, or
contrary to the public interest. The provisions of the APA that
ordinarily require a notice of proposed rulemaking do not apply here
because of the specific authority granted by section 9833 of the Code,
section 734 of ERISA, and section 2792 of the PHS Act. However, even if
the APA were applicable, the Secretaries have determined that it would
be impracticable and contrary to the public interest to delay putting
the provisions in these interim final regulations in place until a full
public notice and comment process was completed. As noted above, the
preventive health service provisions of the Affordable Care Act are
applicable for plan years (in the individual market, policy years)
beginning on or after September 23, 2010, six months after date of
enactment. Had the Departments published a notice of proposed
rulemaking, provided for a 60-day comment period, and only then
prepared final regulations, which would be subject to a 60-day delay in
effective date, it is unlikely that it would have been possible to have
final regulations in effect before late September, when these
requirements could be in effect for some plans or policies. Moreover,
the requirements in these interim final regulations require significant
lead time in order to implement. These interim final regulations
require plans and issuers to provide coverage for preventive services
listed in certain recommendations and guidelines without imposing any
cost-sharing requirements. Preparations presumably would have to be
made to identify these preventive services. With respect to the changes
that would be required to be made under these interim final
regulations, group health plans and health insurance issuers subject to
these provisions have to be able to take these changes into account in
establishing their premiums, and in making other changes to the designs
of plan or policy benefits, and these premiums and plan or policy
changes would have to receive necessary approvals in advance of the
plan or policy year in question.
Accordingly, in order to allow plans and health insurance coverage
to be designed and implemented on a timely basis, regulations must be
published and available to the public well in advance of the effective
date of the requirements of the Affordable Care Act. It is not possible
to have a full notice and comment process and to publish final
regulations in the brief time between enactment of the Affordable Care
Act and the date regulations are needed.
The Secretaries further find that issuance of proposed regulations
would not be sufficient because the provisions of the Affordable Care
Act protect significant rights of plan participants and beneficiaries
and individuals covered by individual health insurance policies and it
is essential that participants, beneficiaries, insureds, plan sponsors,
and issuers have certainty about their rights and responsibilities.
Proposed regulations are not binding and cannot provide the necessary
certainty. By contrast, the interim final regulations provide the
public with an opportunity for comment, but without delaying the
effective date of the regulations.
For the foregoing reasons, the Departments have determined that it
is impracticable and contrary to the public interest to engage in full
notice and comment rulemaking before putting these interim final
regulations into effect, and that it is in the public interest to
promulgate interim final regulations.
IV. Economic Impact
Under Executive Order 12866 (58 FR 51735), a ``significant''
regulatory action is subject to review by the Office of Management and
Budget (OMB). Section 3(f) of the Executive Order defines a
``significant regulatory action'' as an action that is likely to result
in a rule (1) having an annual effect on the economy of $100 million or
more in any one year, or adversely and materially affecting a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities
(also referred to as ``economically significant''); (2) creating a
serious inconsistency or otherwise interfering with an action taken or
planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order. OMB has
determined that this regulation is economically significant within the
meaning of section 3(f)(1) of the Executive Order, because it is likely
to have an annual effect on the economy of $100 million in any one
year. Accordingly, OMB has reviewed these rules pursuant to the
Executive Order. The Departments provide an assessment of the potential
costs, benefits, and transfers associated with these interim final
regulations, summarized in the following table.
TABLE 1--Accounting Table (2011-2013)
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Benefits:
Qualitative: By expanding coverage and eliminating cost sharing for the recommended preventive services, the
Departments expect access and utilization of these services to increase. To the extent that individuals
increase their use of these services the Departments anticipate several benefits: (1) prevention and reduction
in transmission of illnesses as a result of immunization and screening of transmissible diseases; (2) delayed
onset, earlier treatment, and reduction in morbidity and mortality as a result of early detection, screening,
and counseling; (3) increased productivity and fewer sick days; and (4) savings from lower health care costs.
Another benefit of these interim final regulations will be to distribute the cost of preventive services more
equitably across the broad insured population.
Costs:
Qualitative: New costs to the health care system result when beneficiaries increase their use of preventive
services in response to the changes in coverage and cost-sharing requirements of preventive services. The
magnitude of this effect on utilization depends on the price elasticity of demand and the percentage change in
prices facing those with reduced cost sharing or newly gaining coverage.
Transfers:
[[Page 41731]]
Qualitative: Transfers will occur to the extent that costs that were previously paid out-of-pocket for certain
preventive services will now be covered by group health plans and issuers under these interim final
regulations. Risk pooling in the group market will result in sharing expected cost increases across an entire
plan or employee group as higher average premiums for all enrollees. However, not all of those covered will
utilize preventive services to an equivalent extent. As a result, these interim final regulations create a
small transfer from those paying premiums in the group market utilizing less than the average volume of
preventive services in their risk pool to those whose utilization is greater than average. To the extent there
is risk pooling in the individual market, a similar transfer will occur.
----------------------------------------------------------------------------------------------------------------
A. The Need for Federal Regulatory Action
As discussed later in this preamble, there is current
underutilization of preventive services, which stems from three main
factors. First, due to turnover in the health insurance market, health
insurance issuers do not currently have incentives to cover preventive
services, whose benefits may only be realized in the future when an
individual may no longer be enrolled. Second, many preventive services
generate benefits that do not accrue immediately to the individual that
receives the services, making the individual less likely to take-up,
especially in the face of direct, immediate costs. Third, some of the
benefits of preventive services accrue to society as a whole, and thus
do not get factored into an individual's decision-making over whether
to obtain such services.
These interim final regulations address these market failures
through two avenues. First, they require coverage of recommended
preventive services by non-grandfathered group health plans and health
insurance issuers in the group and individual markets, thereby
overcoming plans' lack of incentive to invest in these services.
Second, they eliminate cost-sharing requirements, thereby removing a
barrier that could otherwise lead an individual to not obtain such
services, given the long-term and partially external nature of
benefits.
These interim final regulations are necessary in order to provide
rules that plan sponsors and issuers can use to determine how to
provide coverage for certain preventive health care services without
the imposition of cost sharing in connection with these services.
B. PHS Act Section 2713, Coverage of Preventive Health Services (26 CFR
54.9815-2713T, 29 CFR 2590.715-2713, 45 CFR 147.130)
1. Summary
As discussed earlier in this preamble, PHS Act section 2713, as
added by the Affordable Care Act, and these interim final regulations
require a group health plan and a health insurance issuer offering
group or individual health insurance coverage to provide benefits for
and prohibit the imposition of cost-sharing requirements with respect
to the following preventive health services:
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). While these guidelines
will change over time, for the purposes of this impact analysis, the
Departments utilized currently available guidelines, which include
blood pressure and cholesterol screening, diabetes screening for
hypertensive patients, various cancer and sexually transmitted
infection screenings, and counseling related to aspirin use, tobacco
cessation, obesity, and other topics.
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 (Advisory Committee) with respect to the individual
involved.
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).
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). The Department of HHS is developing these guidelines and
expects to issue them no later than August 1, 2011.
2. Preventive Services
For the purposes of this analysis, the Departments used the
relevant recommendations of the Task Force and Advisory Committee and
current HRSA guidelines as described in section V later in this
preamble. In addition to covering immunizations, these lists include
such services as blood pressure and cholesterol screening, diabetes
screening for hypertensive patients, various cancer and sexually
transmitted infection screenings, genetic testing for the BRCA gene,
adolescent depression screening, lead testing, autism testing, and oral
health screening and counseling related to aspirin use, tobacco
cessation, and obesity.
3. Estimated Number of Affected Entities
For purposes of the new requirements in the Affordable Care Act
that apply to group health plans and health insurance issuers in the
group and individual markets, the Departments have defined a large
group health plan as an employer plan with 100 or more workers and a
small group plan as an employer plan with less than 100 workers. The
Departments estimated that there are approximately 72,000 large and 2.8
million small ERISA-covered group health plans with an estimated 97.0
million participants in large group plans and 40.9 million participants
in small group plans.\6\ The Departments estimate that there are
126,000 governmental plans with 36.1 million participants in large
plans and 2.3 million participants in small plans.\7\ The Departments
estimate there are 16.7 million individuals under age 65 covered by
individual health insurance policies.\8\
---------------------------------------------------------------------------
\6\ All participant counts and the estimates of individual
policies are from the U.S. Department of Labor, EBSA calculations
using the March 2008 Current Population Survey Annual Social and
Economic Supplement and the 2008 Medical Expenditure Panel Survey.
\7\ Estimate is from the 2007 Census of Government.
\8\ US Census Bureau, Current Population Survey, March 2009.
---------------------------------------------------------------------------
As described in the Departments' interim final regulations relating
to status as a grandfathered health plan,\9\ the Affordable Care Act
preserves the ability of individuals to retain coverage under a group
health plan or health insurance coverage in which the individual was
enrolled on March 23, 2010 (a grandfathered health plan). Group health
plans, and group and individual health insurance coverage, that are
grandfathered health plans do not have to meet the requirements of
these interim final regulations. Therefore, only plans and issuers
offering group and individual health insurance coverage that are not
grandfathered health plans will be affected by these interim final
regulations.
---------------------------------------------------------------------------
\9\ 75 FR 34538 (June 17, 2010).
---------------------------------------------------------------------------
[[Page 41732]]
Plans can choose to relinquish their grandfather status in order to
make certain otherwise permissible changes to their plans.\10\ The
Affordable Care Act provides plans with the ability to maintain
grandfathered status in order to promote stability for consumers while
allowing plans and sponsors to make reasonable adjustments to lower
costs and encourage the efficient use of services. Based on an analysis
of the changes plans have made over the past few years, the Departments
expect that more plans will choose to make these changes over time and
therefore the number of grandfathered health plans is expected to
decrease. Correspondingly, the number of plans and policies affected by
these interim final regulations is likely to increase over time. In
addition, the number of individuals receiving the benefits of the
Affordable Care Act is likely to increase over time. The Departments'
mid-range estimate is that 18 percent of large employer plans and 30
percent of small employer plans would relinquish grandfather status in
2011, increasing over time to 45 percent and 66 percent respectively by
2013, although there is substantial uncertainty surrounding these
estimates.\11\
---------------------------------------------------------------------------
\10\ See 75 FR 34538 (June 17, 2010).
\11\ See 75 FR 34538 (June 17, 2010) for a detailed description
of the derivation of the estimates for the percentages of
grandfathered health plans. In brief, the Departments used data from
the 2008 and 2009 Kaiser Family Foundations/Health Research and
Educational Trust survey of employers to estimate the proportion of
plans that made changes in cost-sharing requirements that would have
caused them to relinquish grandfather status if those same changes
were made in 2011, and then applied a set of assumptions about how
employer behavior might change in response to the incentives created
by the grandfather regulations to estimate the proportion of plans
likely to relinquish grandfather status. The estimates of changes in
2012 and 2013 were calculated by using the 2011 calculations and
assuming that an identical percentage of plan sponsors will
relinquish grandfather status in each year.
---------------------------------------------------------------------------
Using the mid-range assumptions, the Departments estimate that in
2011, roughly 31 million people will be enrolled in group health plans
subject to the prevention provisions in these interim final
regulations, growing to approximately 78 million in 2013.\12\ The mid-
range estimates suggest that approximately 98 million individuals will
be enrolled in grandfathered group health plans in 2013, many of which
already cover preventive services (see discussion of the extent of
preventive services coverage in employer-sponsored plans later in this
preamble).
---------------------------------------------------------------------------
\12\ To estimate the number of individuals covered in
grandfathered health plans, the Departments extended the analysis
described in 75 FR 34538, and estimated a weighted average of the
number of employees in grandfathered health plans in the large
employer and small employer markets separately, weighting by the
number of employees in each employer's plan. Estimates for the large
employer and small employer markets were then combined, using the
estimates supplied above that there are 133.1 million covered lives
in the large group market, and 43.2 million in the small group
market.
---------------------------------------------------------------------------
In the individual market, one study estimated that 40 percent to 67
percent of individual policies terminate each year. Because all newly
purchased individual policies are not grandfathered, the Departments
expect that a large proportion of individual policies will not be
grandfathered, covering up to and perhaps exceeding 10 million
individuals.\13\
---------------------------------------------------------------------------
\13\ Adele M. Kirk. The Individual Insurance Market: A Building
Block for Health Care Reform? Health Care Financing Organization
Research Synthesis. May 2008.
---------------------------------------------------------------------------
However, not all of the individuals potentially affected by these
interim final regulations will directly benefit given the prevalence
and variation in insurance coverage today. State laws will affect the
number of entities affected by all or some provision of these interim
final regulations, since plans, policies, and enrollees in States that
already have certain requirements will be affected to different
degrees.\14\ For instance, 29 States require that health insurance
issuers cover most or all recommended immunizations for children.\15\
Of these 29 States, 18 States require first-dollar coverage of
immunizations so that the insurers pay for immunizations without a
deductible and 12 States exempt immunizations from copayments (e.g.,
$5, $10, or $20 per vaccine) or coinsurance (e.g., 10 percent or 20
percent of charges). State laws also require coverage of certain other
preventive health services. Every State except Utah mandates coverage
for some type of breast cancer screening for women. Twenty-eight States
mandate coverage for some cervical cancer screening and 13 States
mandate coverage for osteoporosis screening.\16\
---------------------------------------------------------------------------
\14\ Of note, State insurance requirements do not apply to self-
insured group health plans, whose participants and beneficiaries
make up 57 percent of covered employees (in firms with 3 or more
employees) in 2009 according to a major annual survey of employers
due to ERISA preemption of State insurance laws. See e.g., Kaiser
Family Foundation and Health Research and Education Trust, Employer
Health Benefits 2009 Annual Survey (2009).
\15\ See e.g., American Academy of Pediatrics, State Legislative
Report (2009).
\16\ See Kaiser Family Foundation, www.statehealthfacts.org.
---------------------------------------------------------------------------
Estimation of the number of entities immediately affected by some
or all provisions of these interim final regulations is further
complicated by the fact that, although not all States require insurance
coverage for certain preventive services, many health plans have
already chosen to cover these services. For example, most health plans
cover most childhood and some adult immunizations contained in the
recommendations from the Advisory Committee. A survey of small, medium
and large employers showed that 78 percent to 80 percent of their point
of service, preferred provider organization (PPO), and health
maintenance organization (HMO) health plans covered childhood
immunizations and 57 percent to 66 percent covered influenza vaccines
in 2001.\17\ All 61 health plans (HMOs and PPOs) responding to a 2005
America's Health Insurance Plans (AHIP) survey covered childhood
immunizations \18\ in their best-selling products and almost all health
plans (60 out of 61) covered diphtheria-tetanus-pertussis vaccines and
influenza vaccines for adults.\19\ A survey of private and public
employer health plans found that 84 percent covered influenza vaccines
in 2002-2003.\20\
---------------------------------------------------------------------------
\17\ See e.g., Mary Ann Bondi et. al., ``Employer Coverage of
Clinical Preventive Services in the United States,'' American
Journal of Health Promotion, 20(3), pp. 214-222 (2006).
\18\ The specific immunizations include: DTaP (diphtheria and
tetanus toxoids and acellular Pertussis), Hib (Haemophilus influenza
type b), Hepatitis B, inactivated polio, influenza, MMR (measles,
mumps, and rubella), pneumococcal, and varicella vaccine.
\19\ McPhillips-Tangum C., Rehm B., Hilton O. ``Immunization
practices and policies: A survey of health insurance plans.'' AHIP
Coverage. 47(1), 32-7 (2006).
\20\ See e.g., Matthew M. Davis et. al., ``Benefits Coverage for
Adult Vaccines in Employer-Sponsored Health Plans,'' University of
Michigan for the CDC National Immunizations Program (2003).
---------------------------------------------------------------------------
Similarly, many health plans already cover preventive services
today, but there are differences in the coverage of these services in
the group and individual markets. According to a 2009 survey of
employer health benefits, over 85 percent of employer-sponsored health
insurance plans covered preventive services without having to meet a
deductible.\21\ Coverage of preventive services does vary slightly by
employer size, with large employers being more likely to cover such
services than small employers.\22\ In contrast, coverage of preventive
services is less prevalent and varies more significantly in the
individual market.\23\ For PPOs,
[[Page 41733]]
only 66.2 percent of single policies purchased covered adult physicals,
while 94.1 percent covered cancer screenings.\24\
---------------------------------------------------------------------------
\21\ See e.g., Kaiser Family Foundation and Health Research and
Education Trust, Employer Health Benefits 2009 Annual Survey (2009)
available at http://ehbs.kff.org/pdf/2009/7936.pdf.
\22\ See e.g., Mary Ann Bondi et. al., ``Employer Coverage of
Clinical Preventive Services in the United States,'' American
Journal of Health Promotion, 20(3), pp. 214-222 (2006).
\23\ See e.g., Matthew M. Davis et. al., ``Benefits Coverage for
Adult Vaccines in Employer-Sponsored Health Plans,'' University of
Michigan for the CDC National Immunizations Program (2003).
\24\ See Individual Health Insurance 2006-2007: A Comprehensive
Survey of Premiums, Availability, and Benefits. Available at http://www.ahipresearch.org/pdfs/Individual_Market_Survey_December_2007.pdf.
---------------------------------------------------------------------------
In summary, the number of affected entities depends on several
factors, such as whether a health plan retains its grandfather status,
the number of new health plans, whether State benefit requirements for
preventive services apply, and whether plans or issuers voluntarily
offer coverage and/or no cost sharing for recommended preventive
services. In addition, participants, beneficiaries, and enrollees in
such plans or health insurance coverage will be affected in different
ways: Some will newly gain coverage for recommended preventive
services, while others will have the cost sharing that they now pay for
such services eliminated. As such, there is considerable uncertainty
surrounding estimation of the number of entities affected by these
interim final regulations.
4. Benefits
The Departments anticipate that four types of benefits will result
from these interim final regulations. First, individuals will
experience improved health as a result of reduced transmission,
prevention or delayed onset, and earlier treatment of disease. Second,
healthier workers and children will be more productive with fewer
missed days of work or school. Third, some of the recommended
preventive services will result in savings due to lower health care
costs. Fourth, the cost of preventive services will be distributed more
equitably.
By expanding coverage and eliminating cost sharing for recommended
preventive services, these interim final regulations could be expected
to increase access to and utilization of these services, which are not
used at optimal levels today. Nationwide, almost 38 percent of adult
residents over 50 have never had a colorectal cancer screening (such as
a sigmoidoscopy or a colonoscopy) \25\ and almost 18 percent of women
over age 18 have not been screened for cervical cancer in the past
three years.\26\ Vaccination rates for childhood vaccines are generally
high due to State laws requiring certain vaccinations for children to
enter school, but recommended childhood vaccines that are not subject
to State laws and adult vaccines have lower vaccination rates (e.g.,
the meningococcal vaccination rate among teenagers is 42 percent).\27\
Studies have shown that improved coverage of preventive services leads
to expanded utilization of these services,\28\ which would lead to
substantial benefits as discussed further below.
---------------------------------------------------------------------------
\25\ This differs from the Task Force recommendation that
individuals aged 50-75 receive fecal occult blood testing,
sigmoidoscopy, or colonoscopy screening for colorectal cancer.
\26\ For Behavioral Risk Factor Surveillance System Numbers see
e.g. Centers for Disease Control and Prevention (CDC). Behavioral
Risk Factor Surveillance System Survey Data. Atlanta, Georgia: U.S.
Department of Health and Human Services, Centers for Disease Control
and Prevention, (2008) at http://apps.nccd.cdc.gov/BRFSS/page.asp?cat=CC&yr=2008&state=UB#CC.
\27\ See http://www.cdc.gov/vaccines/stats-surv/imz-coverage.htm#nis for vaccination rates.
\28\ See e.g., Jonathan Gruber, The Role of Consumer Copayments
for Health Care: Lessons from the RAND Health Insurance Experiment
and Beyond, Kaiser Family Foundation (Oct. 2006). This paper
examines an experiment in which copays randomly vary across several
thousand individuals. The author finds that individuals are
sensitive to prices for health services--i.e. as copays decline,
more services are demanded. See e.g., Sharon Long, ``On the Road to
Universal Coverage: Impacts of Reform in Massachusetts At One
Year,'' Health Affairs, Volume 27, Number 4 (June 2008). The author
investigated the case of Massachusetts, where coverage of preventive
services became a requirement in 2007, and found that for
individuals under 300 percent of the poverty line, doctor visits for
preventive care increased by 6.1 percentage points in the year after
adoption, even after controlling for observable characteristics.
Additionally, the incidence of individuals citing cost as the reason
for not receiving preventive screenings declined by 2.8 percentage
points from 2006 to 2007. In the Massachusetts case, these
preventive care services were not necessarily free; therefore,
economists would expect a higher differential under these interim
final rules because of the price sensitivity of health care usage.
---------------------------------------------------------------------------
In addition, these interim final regulations limit preventive
service coverage under this provision to services recommended by the
Task Force, Advisory Committee, and HRSA. The preventive services given
a grade of A or B by the Task Force have been determined by the Task
Force to have at least fair or good \29\ evidence that the preventive
service improves important health outcomes and that benefits outweigh
harms in the judgment of an independent panel of private sector experts
in primary care and prevention.\30\ Similarly, the mission of the
Advisory Committee is to provide advice that will lead to a reduction
in the incidence of vaccine preventable diseases in the United States,
and an increase in the safe use of vaccines and related biological
products. The comprehensive guidelines for infants, children, and
adolescents supported by HRSA are developed by multidisciplinary
professionals in the relevant fields to provide a framework for
improving children's health and reducing morbidity and mortality based
on a review of the relevant evidence. The statute and interim final
regulations limit the preventive services covered to those recommended
by the Task Force, Advisory Committee, and HRSA because the benefits of
these preventive services will be higher than others that may be
popular but unproven.
---------------------------------------------------------------------------
\29\ The Task Force defines good and fair evidence as follows.
Good: Evidence includes consistent results from well-designed, well-
conducted studies in representative populations that directly assess
effects on health outcomes.
Fair: Evidence is sufficient to determine effects on health
outcomes, but the strength of the evidence is limited by the number,
quality or consistency of the individual studies, generalizability
to routine practice or indirect nature of the evidence on health
outcomes. See http://www.ahrq.gov/clinic/uspstf/gradespre.htm#drec.
\30\ See http://www.ahrq.gov/clinic/uspstf/gradespre.htm#drec
for details of the Task Force grading.
---------------------------------------------------------------------------
Research suggests significant health benefits from a number of the
preventive services that would be newly covered with no cost sharing by
plans and issuers under the statute and these interim final
regulations. A recent article in JAMA stated, ``By one account,
increasing delivery of just five clinical preventive services would
avert 100,000 deaths per year.'' \31\ These five services are all items
and services recommended by the Task Force, Advisory Committee, and/or
the comprehensive guidelines supported by HRSA. The National Council on
Prevention Priorities (NCPP) estimated that almost 150,000 lives could
potentially be saved by increasing the 2005 rate of utilization to 90
percent for eight of the preventive services recommended by the Task
Force or Advisory Committee.\32\ Table 2 shows eight of the services
and the number of lives potentially saved if utilization of preventive
services were to increase to 90 percent.
---------------------------------------------------------------------------
\31\ Woolf, Steven. A Closer Look at the Economic Argument for
Disease Prevention. JAMA 2009;301(5):536-538.
\32\ See National Commission on Prevention Priorities.
Preventive Care: A National Profile on Use, Disparities, and Health
Benefits. Partnership for Prevention, August 2007 at http://www.prevent.org/content/view/129/72/#citations accessed on 6/22/
2010. Lives saved were estimated using models previously developed
to rank clinical preventive services. See Maciosek MV, Edwards NM,
Coffield AB, Flottemesch TJ, Nelson WW, Goodman MJ, Rickey DA,
Butani AB, Solberg LI. Priorities among effective clinical
preventive services: methods. Am J Prev Med 2006; 31(1):90-96.
[[Page 41734]]
TABLE 2.--Lives Saved From Increasing Utilization of Selected Preventive Services to 90 Percent
----------------------------------------------------------------------------------------------------------------
Lives saved
annually if
Percent percent
utilizing utilizing
Preventive service Population group preventive preventive
service in 2005 service
increased to 90
percent
----------------------------------------------------------------------------------------------------------------
Regular aspirin use....................... Men 40+ and women 50+........... 40 45,000
Smoking cessation advice and help to quit. All adult smokers............... 28 42,000
Colorectal cancer screening............... Adults 50+...................... 48 14,000
Influenza vaccination..................... Adults 50+...................... 37 12,000
Cervical cancer screening in the past 3 Women 18-64..................... 83 620
years.
Cholesterol screening..................... Men 35+ and women 45+........... 79 2,450
Breast cancer screening in the past 2 Women 40+....................... 67 3,700
years.
Chlamydia screening....................... Women 16-25..................... 40 30,000
----------------------------------------------------------------------------------------------------------------
Source: National Commission on Prevention Priorities, 2007.
Since financial barriers are not the only reason for sub-optimal
utilization rates, population-wide utilization of preventive services
is unlikely to increase to the 90 percent level assumed in Table 2 as a
result of these interim final regulations. Current utilization of
preventive services among insured populations varies widely, but the
Departments expect that utilization will increase among those
individuals in plans affected by the regulation because the provisions
eliminate cost sharing and require coverage for these services.
These interim final regulations are expected to increase the take-
up rate of preventive services and are likely, over time, to lead
physicians to increase their use of these services knowing that they
will be covered, and covered with zero copayment. In the absence of
data on the elasticity of demand for these specific services, it is
difficult to know precisely how many more patients will use these
services. Evidence from studies comparing the utilization of preventive
services such as blood pressure and cholesterol screening between
insured and uninsured individuals with relatively high incomes suggests
that coverage increases usage rates in a wide range between three and
30 percentage points, even among those likely to be able to afford
basic preventive services out-of-pocket.\33\ A reasonable assumption is
that the average increase in utilization of these services will be
modest, perhaps on the order of 5 to 10 percentage points for some of
them. For services that are generally covered without cost sharing in
the current market, the Departments would expect minimal change in
utilization.
---------------------------------------------------------------------------
\33\ The Commonwealth Fund. ``Insurance Coverage and the Receipt
of Preventive Care.'' 2005. http://www.commonwealthfund.org/Content/Performance-Snapshots/Financial-and-Structural-Access-to-Care/Insurance-Coverage-and-Receipt-of-Preventive-Care.aspx.
---------------------------------------------------------------------------
Preventive services' benefits have also been evaluated
individually. Effective cancer screening, early treatment, and
sustained risk reduction could reduce the death rate due to cancer by
29 percent.\34\ Improved blood sugar control could reduce the risk for
eye disease, kidney disease and nerve disease by 40 percent in people
with Type 1 or Type 2 diabetes.\35\
---------------------------------------------------------------------------
\34\ Curry, Susan J., Byers, Tim, and Hewitt, Maria, eds. 2003.
Fulfilling the Potential of Cancer Prevention and Early Detection.
Washington, DC: National Academies Press.
\35\ Centers for Disease Control and Prevention. 2010. Diabetes
at a Glance. See http://www.cdc.gov/chronicdisease/resources/publications/aag/pdf/2010/diabetes_aag.pdf.
---------------------------------------------------------------------------
Some recommended preventive services have both individual and
public health value. Vaccines have reduced or eliminated serious
diseases that, prior to vaccination, routinely caused serious illnesses
or deaths. Maintaining high levels of immunization in the general
population protects the un-immunized from exposure to the vaccine-
preventable disease, so that individuals who cannot receive the vaccine
or who do not have a sufficient immune response to the vaccine to
protect against the disease are indirectly protected.\36\
---------------------------------------------------------------------------
\36\ See Modern Infectious Disease Epidemiology by Johan
Giesecke 1994, Chapter 18, The Epidemiology of Vaccination.
---------------------------------------------------------------------------
A second type of benefit from these interim final regulations is
improved workplace productivity and decreased absenteeism for school
children. Numerous studies confirm that ill health compromises worker
output and that health prevention efforts can improve worker
productivity. For example, one study found that 69 million workers
reported missing days due to illness and 55 million workers reported a
time when they were unable to concentrate at work because of their own
illness or a family member's illness.\37\ Together, labor time lost due
to health reasons represents lost economic output totaling $260 billion
per year.\38\ Prevention efforts can help prevent these types of
losses. Studies have also shown that reduced cost-sharing for medical
services results in fewer restricted-activity days at work,\39\ and
increased access to health insurance coverage improves labor market
outcomes by improving worker health.\40\ Thus, the expansion of
benefits and the elimination of cost sharing for preventive services as
provided in these
[[Page 41735]]
interim final regulations can be expected to have substantial
productivity benefits in the labor market.
---------------------------------------------------------------------------
\37\ Health and Productivity Among U.S. Workers, Karen Davis,
Ph.D., Sara R. Collins, Ph.D., Michelle M. Doty, Ph.D., Alice Ho,
and Alyssa L. Holmgren, The Commonwealth Fund, August 2005 http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2005/Aug/Health-and-Productivity-Among-U-S-Workers.aspx.
\38\ Ibid.
\39\ See e.g., RAND, The Health Insurance Experiment: A Classic
RAND Study Speaks to the Current Health Care Reform Debate, Rand
Research Brief, Number 9174 (2006), at http://www.rand.org/pubs/research_briefs/2006/RAND_RB9174.pdf and Janet Currie et al.,
``Has Public Health Insurance for Older Children Reduced Disparities
in Access to Care and Health Outcomes?'', Journal of Health
Economics, Volume 27, Issue 6, pages 1567-1581 (Dec. 2008). With
early childhood interventions, there appear to be improved health
outcomes in later childhood. Analogously, health interventions in
early adulthood could have benefits for future productivity.
\40\ In a RAND policy brief, the authors cite results from the
RAND Health Insurance Experiment in which cost-sharing is found to
correspond with workers having fewer restricted-activity days--
evidence that free care for certain services may be productivity
enhancing. See e.g., RAND, The Health Insurance Experiment: A
Classic RAND Study Speaks to the Current Health Care Reform Debate,
Rand Research Brief, Number 9174 (2006), at http://www.rand.org/pubs/research_briefs/2006/RAND_RB9174.pdf. See e.g. Janet Currie
et. al., ``Has Public Health Insurance for Older Children Reduced
Disparities in Access to Care and Health Outcomes?'' Journal of
Health Economics, Volume 27, Issue 6, pages 1567-1581 (Dec. 2008).
With early childhood interventions, there appears to be improved
health outcomes in later childhood. Analogously, health
interventions in early adulthood could have benefits for future
productivity. Council of Economic Advisers. ``The Economic Case for
Health Reform.'' (2009).
---------------------------------------------------------------------------
Illnesses also contribute to increased absenteeism among school
children, which could be avoided with recommended preventive services.
In 2006, 56 percent of students missed between one and five days of
school due to illness, 10 percent missed between six and ten days and
five percent missed 11 or more days.\41\ Obesity in particular
contributes to missed school days: One study from the University of
Pennsylvania found that overweight children were absent on average 20
percent more than their normal-weight peers.\42\ Studies also show that
influenza contributes to school absenteeism, and vaccination can reduce
missed school days and indirectly improve community health.\43\ These
interim final regulations will ensure that children have access to
preventive services, thus decreasing the number of days missed due to
illness.\44\ Similarly, regular pediatric care, including care by
physicians specializing in pediatrics, can improve child health
outcomes and avert preventable health care costs. For example, one
study of Medicaid enrolled children found that when children were up to
date for their age on their schedule of well-child visits, they were
less likely to have an avoidable hospitalization at a later time.\45\
---------------------------------------------------------------------------
\41\ Bloom B, Cohen RA. Summary health statistics for U.S.
children: National Health Interview Survey, 2006. Vital Health Stat
2007;10(234). Available at http://www.cdc.gov/nchs/nhis.htm.
\42\ University of Pennsylvania 2007: http://www.upenn.edu/pennnews/news/childhood-obesity-indicates-greater-risk-school-absenteeism-university-pennsylvania-study-revea.
\43\ Davis, Mollie M., James C. King, Ginny Cummings, and
Laurence S. Madger. ``Countywide School-Based Influenza
Immunization: Direct and Indirect Impact on Student Absenteeism.''
Pediatrics 122.1 (2008).
\44\ Moonie, Sheniz, David A. Sterling, Larry Figgs, and Mario
Castro. ``Asthma Status and Severity Affects Missed School Days.''
Journal of School Health 76.1 (2006): 18-24.
\45\ Bye, ``Effectiveness of Compliance with Pediatric
Preventative Care Guidelines Among Medicaid Beneficiaries.''
---------------------------------------------------------------------------
A third type of benefit from some preventive services is cost
savings. Increasing the provision of preventive services is expected to
reduce the incidence or severity of illness, and, as a result, reduce
expenditures on treatment of illness. For example, childhood
vaccinations have generally been found to reduce such expenditures by
more than the cost of the vaccinations themselves and generate
considerable benefits to society. Researchers at the Centers for
Disease Control and Prevention (CDC) studying the economic impact of
DTaP (diphtheria and tetanus toxoids and acellular Pertussis), Td
(tetanus and diphtheria toxoids), Hib (Haemophilus influenza type b),
IPV (inactivated poliovirus), MMR (measles, mumps and rubella),
Hepatitis B and varicella routine childhood vaccines found that every
dollar spent on immunizations in 2001 was estimated to save $5.30 on
direct health care costs and $16.50 on total societal costs of the
diseases as they are prevented or reduced (direct health care
associated with the diseases averted were $12.1 billion and total
societal costs averted were $33.9 billion).\46\
---------------------------------------------------------------------------
\46\ Fangjun Zhou, Jeanne Santoli, Mark L. Messonnier, Hussain
R. Yusuf, Abigail Shefer, Susan Y. Chu, Lance Rodewald, Rafael
Harpaz. Economic Evaluation of the 7-Vaccine Routine Childhood
Immunization Schedule in the United States. Archives of Pediatric
and Adolescent Medicine 2005; 159(12): 1136-1144. The estimates of
the cost savings are based on current immunization levels. The
incremental impact of increasing immunization rates is likely to be
smaller, but still significant and positive.
---------------------------------------------------------------------------
A review of preventive services by the National Committee on
Prevention Priorities found that, in addition to childhood
immunizations, two of the recommended preventive services--discussing
aspirin use with high-risk adults and tobacco use screening and brief
intervention--are cost-saving on net.\47\ By itself, tobacco use
screening with a brief intervention was found to save more than $500
per smoker.\48\
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\47\ Maciosek MV, Coffield AB, Edwards NM, Coffield AB,
Flottemesch TJ, Goodman MJ, Solberg LI. Priorities among effective
clinical preventive services: Results of a Systematic Review and
Analysis. Am J Prev Med 2006; 31(1):52-61.
\48\ Solberg LI, Maciosek, MV, Edwards NM, Khanchandani HS, and
Goodman MJ. Repeated tobacco-use screening and intevention in
clinical practice: Health impact and cost effectiveness. American
Journal of Preventive Medicine. 2006;31(1).
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Another area where prevention could achieve savings is obesity
prevention and reduction. Obesity is widely recognized as an important
driver of higher health care expenditures.\49\ The Task Force
recommends children over age six and adults be screened for obesity and
be offered or referred to counseling to improve weight status or
promote weight loss. Increasing obesity screening and referrals to
counseling should decrease obesity and its related costs. If providers
are able to proactively identify and monitor obesity in child patients,
they may reduce the incidence of adult health conditions that can be
expensive to treat, such as diabetes, hypertension, and adult
obesity.\50\ One recent study estimated that a one-percentage-point
reduction in obesity among twelve-year-olds would save $260.4 million
in total medical expenditures.\51\
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\49\ Congressional Budget Office. ``Technological Change and the
Growth of Health Care Spending.'' January 2008. Box 1, pdf p. 18.
http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf.
\50\ ``Working Group Report on Future Research Directions in
Childhood Obesity Prevention and Treatment.'' National Heart, Lung
and Blood Institute, National Institutes of Health, U.S. Department
of Health and Human Services (2007), available at http://www.nhlbi.nih.gov/meetings/workshops/child-obesity/index.htm.
\51\ Ibid.
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A full quantification of the cost savings from the extension of
coverage of preventive services in these interim final regulations is
not possible, but to illustrate the potential savings, an assessment of
savings from obesity reduction was conducted. According to the CDC, in
2008, 34.2 percent of U.S. adults and 16.9 percent of children were
obese (defined as having a body mass index (BMI) of 30.0 or
greater).\52\ Obesity is associated with increased risk for coronary
heart disease, hypertension, stroke, type 2 diabetes, several types of
cancer, diminished mobility, and social stigmatization.\53\ As a
result, obesity is widely recognized as an important driver of higher
health care expenditures on an individual \54\ and national level.\55\
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\52\ Centers for Disease Control and Prevention. ``Obesity and
Overweight.'' 2010. http://www.cdc.gov/nchs/fastats/overwt.htm.
\53\ Agency for Healthcare Research and Quality (AHRQ).
``Screening for Obesity in Adults.'' December 2003. http://www.ahrq.gov/clinic/3rduspstf/obesity/obesrr.pdf.
\54\ Thorpe, Kenneth E. ``The Future Costs of Obesity: National
and State Estimates of the Impact of Obesity on Direct Health Care
Expenses.'' November 2009; McKinsey Global Institute. ``Sample data
suggest that obese adults can incur nearly twice the annual health
care costs of normal-weight adults.'' 2007.
\55\ Congressional Budget Office. ``Technological Change and the
Growth of Health Care Spending.'' January 2008. Box 1, pdf p. 18.
http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf.
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As described below, the Departments' analysis assumes that the
utilization of preventive services will increase when they are covered
with zero copayment, and these interim final regulations are expected
to increase utilization of dietary counseling services both among
people who currently have the service covered with a copayment and
among people for whom the service is not currently covered at all.
Data from the 2009 Kaiser Family Foundation Employer Health
Benefits Survey shows that 73 percent of employees with employer-
sponsored insurance from a small (< 200 employees) employer do not
currently have coverage for weight loss programs,
[[Page 41736]]
compared to 38 percent at large firms.\56\ In the illustrative analysis
below, the share of individuals without weight loss coverage in the
individual market is assumed to be equal to the share in the small
group market.
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\56\ Kaiser Family Foundation. 2009 Employer Health Benefits
Annual Survey. Public Use File provided to CEA; documentation of
statistical analysis available upon request. See http://ehbs.kff.org.
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The size of the increase in the number of individuals receiving
dietary counseling or other weight loss services will be limited by
current physician practice patterns, in which relatively few
individuals who are obese receive physician recommendations for dietary
counseling. In one study of patients at an internal medicine clinic in
the Bronx, NY, approximately 15 percent of obese patients received a
recommendation for dietary counseling.\57\ Similarly, among overweight
and obese patients enrolled in the Cholesterol Education and Research
Trial, approximately 15 to 20 percent were referred to nutrition
counseling.\58\
---------------------------------------------------------------------------
\57\ Davis NJ, Emerenini A, Wylie-Rosett J. ``Obesity
management: physician practice patterns and patient preference,''
Diabetes Education. 2006 Jul-Aug; 32(4):557-61.
\58\ Molly E. Waring, PhD, Mary B. Roberts, MS, Donna R. Parker,
ScD and Charles B. Eaton, MD, MS. ``Documentation and Management of
Overweight and Obesity in Primary Care,'' The Journal of the
American Board of Family Medicine 22 (5): 544-552 (2009).
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These interim final regulations are expected to increase the take-
up rate of counseling among patients who are referred to it, and may,
over time, lead physicians to increase their referral to such
counseling, knowing that it will be covered, and covered without cost
sharing. The effect of these interim final regulations is expected to
be magnified because of the many other public and private sector
initiatives dedicated to combating the obesity epidemic.
In the absence of data on take-up of counseling among patients who
are referred by their physicians, it is difficult to know what fraction
of the estimated 15 percent to 20 percent of patients who are currently
referred to counseling follow through on that referral, or how that
fraction will change after coverage of these services is expanded. A
reasonable assumption is that utilization of dietary counseling among
patients who are obese might increase by five to 10 percentage points
as a result of these interim final regulations. If physicians change
their behavior and increase the rate at which they refer to counseling,
the effect might be substantially larger.
The share of obese individuals without weight loss coverage is
estimated to be 29 percent.\59\ It is assumed that obese individuals
have health care costs 39 percent above average, based on a McKinsey
Global Institute analysis.\60\ The Task Force noted that counseling
interventions led to sustained weight loss ranging from four percent to
eight percent of body weight, although there is substantial
heterogeneity in results across interventions, with many interventions
having little long-term effect.\61\ Assuming midpoint reduction of six
percent of body weight, the BMI for an individual taking up such an
intervention would fall by six percent as well, as height would remain
constant. Based on the aforementioned McKinsey Global Institute
analysis, a six percent reduction in BMI for an obese individual (from
32 to around 30, for example) would result in a reduction in health
care costs of approximately five percent. This parameter for cost
reduction is subject to considerable uncertainty, given the wide range
of potential weight loss strategies with varying degrees of impact on
BMI, and their interconnectedness with changes in individual health
care costs.
---------------------------------------------------------------------------
\59\ This estimate is constructed using a weighted average
obesity rate taking into account the share of the population aged 0
to 19 and 20 to 74 and their respective obesity rates, derived from
Census Bureau and Centers for Disease Control and Prevention data.
U.S. Census Bureau. ``Current Population Survey (CPS) Table
Creator.'' 2010. http://www.census.gov/hhes/www/cpstc/cps_table_creator.html. Centers for Disease Control and Prevention. ``Obesity
and Overweight.'' 2010. http://www.cdc.gov/nchs/fastats/overwt.htm.
\60\ McKinsey Global Institute Analysis provided to CEA.
\61\ Agency for Healthcare Research and Quality (AHRQ).
``Screening for Obesity in Adults.'' December 2003. p. 4. http://www.ahrq.gov/clinic/3rduspstf/obesity/obesrr.pdf.
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Multiplying the percentage reduction in health care costs by the
total premiums of obese individuals newly gaining obesity prevention
coverage allows for an illustrative calculation of the total dollar
reduction in premiums, and dividing by total premiums for the affected
population allows for an estimate of the reduction in average premiums
across the entire affected population. Doing so results in a potential
private premium reduction of 0.05 percent to 0.1 percent from lower
health care costs due to a reduction in obesity for enrollees in non-
grandfathered plans. This does not account for potential savings in
Medicaid, Medicare, or other health programs.
A fourth benefit of these interim final regulations will be to
distribute the cost of preventive services more equitably across the
broad insured population. Some Americans in plans affected by these
regulations currently have no coverage of certain recommended
preventive services, and pay for them entirely out-of-pocket. For some
individuals who currently have no coverage of certain recommended
preventive services, these interim final regulations will result in a
large savings in out-of-pocket payments, and only a small increase in
premiums. Many other Americans have limited coverage of certain
recommended preventive services, with large coinsurance or deductibles,
and also make substantial out-of-pocket payments to obtain preventive
services. Some with limited coverage of preventive services will also
experience large savings as a result of these interim final
regulations. Reductions in out-of-pocket costs are expected to be
largest among people in age groups in which relatively expensive
preventive services are most likely to be recommended.
5. Costs and Transfers
The changes in how plans and issuers cover the recommended
preventive services resulting from these interim final regulations will
result in changes in covered benefits and premiums for individuals in
plans and health insurance coverage subject to these interim final
regulations. New costs to the health system result when beneficiaries
increase their use of preventive services in response to the changes in
coverage of preventive services. Cost sharing, including coinsurance,
deductibles, and copayments, divides the costs of health services
between the insurer and the beneficiaries. The removal of cost sharing
increases the quantity of services demanded by lowering the direct cost
of the service to consumers. Therefore, the Departments expect that the
statute and these interim final regulations will increase utilization
of the covered preventive services. The magnitude of this effect on
utilization depends on the price elasticity of demand.
Several studies have found that individuals are sensitive to prices
for health services.\62\ Evidence that consumers change their
utilization of preventive services is available from CDC researchers
who studied out-of-pocket costs of immunizations for
[[Page 41737]]
privately insured children up to age 5 in families in Georgia in 2003,
to find that a one percent increase in out-of-pocket costs for routine
immunizations (DTaP, IPV, MMR, Hib, and Hep B) was associated with a
0.07 percent decrease in utilization.\63\
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\62\ See e.g., Jonathan Gruber, The Role of Consumer Copayments
for Health Care: Lessons from the RAND Health Insurance Experiment
and Beyond, Kaiser Family Foundation (Oct. 2006). This paper
examines an experiment in which copays randomly vary across several
thousand individuals. The author finds that individuals are
sensitive to prices for health services--i.e., as copays decline,
more services are demanded.
\63\ See e.g., Noelle-Angelique Molinari et al., ``Out-of-Pocket
Costs of Childhood Immunizations: A Comparison by Type of Insurance
Plan,'' Pediatrics, 120(5) pp. 148-156 (2006).
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Along with new costs of induced utilization, there are transfers
associated with these interim final regulations. A transfer is a change
in who pays for the services, where there is not an actual change in
the level of resources used. For example, costs that were previously
paid out-of-pocket for certain preventive services will now be covered
by plans and issuers under these interim final regulations. Such a
transfer of costs could be expected to lead to an increase in premiums.
a. Estimate of Average Changes in Health Insurance Premiums
The Departments assessed the impact of eliminating cost sharing,
increases in services covered, and induced utilization on the average
insurance premium using a model to evaluate private health insurance
plans against a nationally representative population. The model is
based on the Medical Expenditure Panel Survey data from 2004, 2005, and
2006 on household spending on health care, which are scaled to levels
consistent with the CMS projections of the National Health Expenditure
Accounts.\64\ This data is combined with data from the Employer Health
Benefits Surveys conducted by the Kaiser Family Foundation and Health
Research and Education Trust to model a ``typical PPO coverage'' plan.
The model then allows the user to assess changes in covered expenses,
benefits, premiums, and induced utilization of services resulting from
changes in the characteristics of the plan. The analysis of changes in
coverage is based on the average per-person covered expenses and
insurance benefits. The average covered expense is the total charge for
covered services; insurance benefits are the part of the covered
expenses covered by the insurer. The effect on the average premium is
then estimated based on the percentage changes in the insurance
benefits and the distribution of the individuals across individual and
group markets in non-grandfathered plans. The Departments assume that
the percent increase for insurance benefits and premiums will be the
same. This is based on two assumptions: (1) That administrative costs
included in the premium will increase proportionally with the increase
in insurance benefits; and (2) that the increases in insurance benefits
will be directly passed on to the consumer in the form of higher
premiums. These assumptions bias the estimates of premium changes
upward. Using this model, the Departments assessed: (1) Changes in
cost-sharing for currently covered and utilized services, (2) changes
in services covered, and (3) induced utilization of preventive
services. There are several additional sources of uncertainty
concerning these estimates. First, there is no accurate, granular data
on exactly what baseline coverage is for the particular preventive
services addressed in these interim final regulations. Second, there is
uncertainty over behavioral assumptions related to additional
utilization that results from reduced cost-sharing. Therefore, after
providing initial estimates, the Departments provide a sensitivity
analysis to capture the potential range of impacts of these interim
final regulations.
---------------------------------------------------------------------------
\64\ The National Health Expenditure Accounts (NHEA) are the
official estimates of total health care spending in the United
States. See http://www.cms.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp.
---------------------------------------------------------------------------
From the Departments' analysis of the Medical Expenditure Panel
Survey (MEPS) data, controlled to be consistent with projections of the
National Health Expenditure Accounts, the average person with employer-
sponsored insurance (ESI) has $264 in covered expenses for preventive
services, of which $240 is paid by insurance, and $24 is paid out-of-
pocket.\65\ When preventive services are covered with zero copayment,
the Departments expect the average preventive benefit (holding
utilization constant) will increase by $24. This is a 0.6 percent
increase in insurance benefits and premiums for plans that have
relinquished their grandfather status. A similar, but larger effect is
expected in the individual market because existing evidence suggests
that individual health insurance policies generally have less generous
benefits for preventive services than group health plans. However, the
evidence base for current coverage and cost sharing for preventive
services in individual health insurance policies is weaker than for
group health plans, making estimation of the increase in average
benefits and premiums in the individual market highly uncertain.
---------------------------------------------------------------------------
\65\ The model does not distinguish between recommended and non-
recommended preventive services, and so this likely represents an
overestimate of the insurance benefits for preventive services.
---------------------------------------------------------------------------
For analyses of changes in covered services, the Departments used
the Blue Cross/Blue Shield Standard (BC/BS) plan offered through the
Federal Employees Health Benefits Program as an average plan.\66\ Other
analyses have used the BC/BS standard option as an average plan as it
was designed to reflect standard practice within employer-sponsored
health insurance plans.\67\ BC/BS covers most of the preventive
services listed in the Task Force and Advisory Committee
recommendations, and most of the preventive services listed in the
comprehensive guidelines for infants, children, and adolescents
supported by HRSA. Not covered by the BC/BS Standard plan are the
recommendations for genetic testing for the BRCA gene, adolescent
depression screening,\68\ lead testing, autism testing, and oral health
screening.\69\
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\66\ The Blue Cross Blue Shield standard option plan
documentation is available online at http://fepblue.org/benefitplans/standard-option/index.html.
\67\ Frey A, Mika S, Nuzum R, and Schoen C. ``Setting a National
Minimum Standard for Health Benefits: How do State Benefit Mandates
Compare with Benefits in Large-Group Plans?'' Issue Brief.
Commonwealth Fund June 2009 available at http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2009/Jun/Setting-a-National-Minimum-Standard-for-Health-Benefits.aspx.
\68\ The Task Force recommends that women whose family history
is associated with an increased risk for deleterious mutations in
BRCA1 or BRCA2 genes be referred for genetic counseling and
evaluation for BRCA testing and screening of adolescents (12-18
years of age) for major depressive disorder (MDD) when systems are
in place to ensure accurate diagnosis, psychotherapy (cognitive-
behavioral or interpersonal), and follow-up.
\69\ Lead, autism, and oral health screening are from the HRSA
comprehensive guidelines.
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The Departments estimated the increase in benefits from newly
covered services by estimating the number of new services that would be
provided times the cost of providing the services, and then spread
these new costs across the total insured population. The Departments
estimated that adding coverage for genetic screening and depression
screening would increase insurance benefits an estimated 0.10 percent.
Adding lead testing, autism testing, and oral health screening would
increase insurance benefits by an estimated 0.02 percent. This results
in a total average increase in insurance benefits on these services of
0.12 percent, or just over $4 per insured person. This increase
represents a mixture of new costs and transfers, dependent on whether
beneficiaries previously would have purchased these services on their
own. It is also important to remember that actual plan
[[Page 41738]]
impacts will vary depending on baseline benefit levels, and that
grandfathered health plans will not experience any impact from these
interim final regulations. The Departments expect the increase to be
larger in the individual market because coverage of preventive services
in the individual market is less complete than coverage in the group
market, but as noted previously, the evidence base for the individual
market is weaker than that of the group market, making detailed
estimates of the size of this effect difficult and highly uncertain.
Actuaries use an ``induction formula'' to estimate the behavioral
change in response to changes in the relative levels of coverage for
health services. For this analysis, the Departments used the model to
estimate the induced demand (the increased use of preventive services).
The model uses a standard actuarial formula for induction 1/
(1+alpha*P), where alpha is the ``induction parameter'' and P is the
average fraction of the cost of services paid by the consumer. The
induction parameter for physician services is 0.7, derived by the
standard actuarial formula that is generally consistent with the
estimates of price elasticity of demand from the RAND Health Insurance
Experiment and other economic studies.\70\ Removing cost sharing for
preventive services lowers the direct cost to consumers of using
preventive services, which induces additional utilization, estimated
with the model above to increase covered expenses and benefits by
approximately $17, or 0.44 percent in insurance benefits in group
health plans. The Departments expect a similar but larger effect in the
individual market, although these estimates are highly uncertain.
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\70\ Standard formula best described in ``Quantity-Price
Relationships in Health Insurance'', Charles L Trowbridge, Chief
Actuary, Social Security Administration (DHEW Publication No.
(SSA)73-11507, November 1972).
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The Departments calculated an estimate of the average impact using
the information from the analyses described above, using estimates of
the number of individuals in non-grandfathered health plans in the
group and individual markets in 2011. The Departments estimate that
premiums will increase by approximately 1.5 percent on average for
enrollees in non-grandfathered plans. This estimate assumes that any
changes in insurance benefits will be directly passed on to the
consumer in the form of changes in premiums. As mentioned earlier, this
assumption biases the estimates of premium change upward.
b. Sensitivity analysis
As discussed previously, there is substantial uncertainty
associated with the estimates presented above. To address the
uncertainty in the group market, the Departments first varied the
estimated change to underlying benefits, to address the particular
uncertainty behind the estimate of baseline coverage of preventive
services in the group market. The estimate for the per person annual
increase in insurance benefits from adding coverage for new services is
approximately $4. The Departments considered the impact of a smaller
and larger addition in benefits of approximately $2 and $6 per person.
To consider the impact of uncertainty around the size of the behavioral
change (that is, the utilization of more services when cost sharing is
eliminated), the Departments analyzed the impact on insurance benefits
if the behavioral change were 15 percent smaller and 15 percent larger.
In the individual market, to accommodate the greater uncertainty
relative to the group market, the Departments considered the impact of
varying the increase in benefits resulting from cost shifting due to
the elimination of cost sharing, in addition to varying the cost of
newly covered services and behavioral change.
Combining results in the group and individual markets for enrollees
in non-grandfathered plans, the Departments' low-end is a few tenths of
a percent lower than the mid-range estimate of approximately 1.5
percent, and the high-end estimate is a few tenths of a percent higher.
Grandfathered health plans are not subject to these interim final
regulations and therefore would not experience this premium change.
6. Alternatives Considered
Several provisions in these interim final regulations involved
policy choices. One was whether to allow a plan or issuer to impose
cost sharing for an office visit when a recommended preventive service
is provided in that visit. Sometimes a recommended preventive service
is billed separately from the office visit; sometimes it is not. The
Departments decided that the cost sharing prohibition of these interim
final regulations applies to the specific preventive service as
recommended by the guidelines. Therefore, if the preventive service is
billed separately from the office visit, it is the preventive service
that has cost sharing waived, not the entire office visit.
A second policy choice was if the preventive service is not billed
separately from the office visit, whether these interim final
regulations should prohibit cost sharing for any office visit in which
any recommended preventive service was administered, or whether cost
sharing should be prohibited only when the preventive service is the
primary purpose of the office visit. Prohibiting cost sharing for
office visits when any recommended preventive service is provided,
regardless of the primary purpose of the visit, could lead to an overly
broad application of these interim final regulations; for example, a
person who sees a specialist for a particular condition could end up
with a zero copayment simply because his or her blood pressure was
taken as part of the office visit. This could create financial
incentives for consumers to request preventive services at office
visits that are intended for other purposes in order to avoid
copayments and deductibles. The increased prevalence of the application
of zero cost sharing would lead to increased premiums compared with the
chosen option, without a meaningful additional gain in access to
preventive services.
A third issue involves health plans that have differential cost
sharing for services provided by providers who are in and out of their
networks. These interim final regulations provide that a plan or issuer
is not required to provide coverage for recommended preventive services
delivered by an out-of-network provider. The plan or issuer may also
impose cost sharing for recommended preventive services delivered by an
out-of-network provider. The Departments considered that requiring
coverage by out-of-network providers at no cost sharing would result in
higher premiums for these interim final regulations. Plans and issuers
negotiate allowed charges with in-network providers as a way to promote
effective, efficient health care, and allowing differences in cost
sharing in- and out-of-network enables plans to encourage use of in-
network providers. Allowing zero cost sharing for out of network
providers could reduce providers' incentives to participate in insurer
networks. The Departments decided that permitting cost sharing for
recommended preventive services provided by out-of-network providers is
the appropriate option to preserve choice of providers for individuals,
while avoiding potentially larger increases in costs and transfers as
well as potentially lower quality care.
C. Regulatory Flexibility Act--Department of Labor and Department of
Health and Human Services
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes
[[Page 41739]]
certain requirements with respect to Federal rules that are subject to
the notice and comment requirements of section 553(b) of the APA (5
U.S.C. 551 et seq.) and that are likely to have a significant economic
impact on a substantial number of small entities. Section 9833 of the
Code, section 734 of ERISA, and section 2792 of the PHS Act authorize
the Secretaries to promulgate any interim final rules that they
determine are appropriate to carry out the provisions of chapter 100 of
the Code, part 7 of subtitle B or title I of ERISA, and part A of title
XXVII of the PHS Act, which include PHS Act sections 2701 through 2728
and the incorporation of those sections into ERISA section 715 and Code
section 9815.
Moreover, under Section 553(b) of the APA, a general notice of
proposed rulemaking is not required when an agency, for good cause,
finds that notice and public comment thereon are impracticable,
unnecessary, or contrary to the public interest. These interim final
regulations are exempt from APA, because the Departments made a good
cause finding that a general notice of proposed rulemaking is not
necessary earlier in this preamble. Therefore, the RFA does not apply
and the Departments are not required to either certify that the rule
would not have a significant economic impact on a substantial number of
small entities or conduct a regulatory flexibility analysis.
Nevertheless, the Departments carefully considered the likely
impact of the rule on small entities in connection with their
assessment under Executive Order 12866. Consistent with the policy of
the RFA, the Departments encourage the public to submit comments that
suggest alternative rules that accomplish the stated purpose of the
Affordable Care Act and minimize the impact on small entities.
D. Special Analyses--Department of the Treasury
Notwithstanding the determinations of the Department of Labor and
Department of Health and Human Services, for purposes of the Department
of the Treasury, it has been determined that this Treasury decision is
not a significant regulatory action for purposes of Executive Order
12866. Therefore, a regulatory assessment is not required. It has also
been determined that section 553(b) of the APA (5 U.S.C. chapter 5)
does not apply to these interim final regulations. For the
applicability of the RFA, refer to the Special Analyses section in the
preamble to the cross-referencing notice of proposed rulemaking
published elsewhere in this issue of the Federal Register. Pursuant to
section 7805(f) of the Code, these temporary regulations have been
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on their impact on small businesses.
E. Paperwork Reduction Act: Department of Labor, Department of the
Treasury, and Department of Health and Human Services
These interim final regulations are not subject to the requirements
of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) because
it does not contain a ``collection of information'' as defined in 44
U.S.C. 3502 (11).
F. Congressional Review Act
These interim final regulations are subject to the Congressional
Review Act provisions of the Small Business Regulatory Enforcement
Fairness Act of 1996 (5 U.S.C. 801 et seq.) and have been transmitted
to Congress and the Comptroller General for review.
G. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires
agencies to prepare several analytic statements before proposing any
rules that may result in annual expenditures of $100 million (as
adjusted for inflation) by State, local and tribal governments or the
private sector. These interim final regulations are not subject to the
Unfunded Mandates Reform Act because they are being issued as interim
final regulations. However, consistent with the policy embodied in the
Unfunded Mandates Reform Act, these interim final regulations have been
designed to be the least burdensome alternative for State, local and
tribal governments, and the private sector, while achieving the
objectives of the Affordable Care Act.
H. Federalism Statement--Department of Labor and Department of Health
and Human Services
Executive Order 13132 outlines fundamental principles of
federalism, and requires the adherence to specific criteria by Federal
agencies in the process of their formulation and implementation of
policies that have ``substantial direct effects'' on the States, the
relationship between the national government and States, or on the
distribution of power and responsibilities among the various levels of
government. Federal agencies promulgating regulations that have these
federalism implications must consult with State and local officials,
and describe the extent of their consultation and the nature of the
concerns of State and local officials in the preamble to the
regulation.
In the Departments' view, these interim final regulations have
federalism implications, because they have direct effects on the
States, the relationship between the national government and States, or
on the distribution of power and responsibilities among various levels
of government. However, in the Departments' view, the federalism
implications of these interim final regulations are substantially
mitigated because, with respect to health insurance issuers, the
Departments expect that the majority of States will enact laws or take
other appropriate action resulting in their meeting or exceeding the
Federal standards.
In general, through section 514, ERISA supersedes State laws to the
extent that they relate to any covered employee benefit plan, and
preserves State laws that regulate insurance, banking, or securities.
While ERISA prohibits States from regulating a plan as an insurance or
investment company or bank, the preemption provisions of section 731 of
ERISA and section 2724 of the PHS Act (implemented in 29 CFR
2590.731(a) and 45 CFR 146.143(a)) apply so that the HIPAA requirements
(including those of the Affordable Care Act) are not to be ``construed
to supersede any provision of State law which establishes, implements,
or continues in effect any standard or requirement solely relating to
health insurance issuers in connection with group health insurance
coverage except to the extent that such standard or requirement
prevents the application of a requirement'' of a Federal standard. The
conference report accompanying HIPAA indicates that this is intended to
be the ``narrowest'' preemption of State laws. (See House Conf. Rep.
No. 104-736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News
2018.) States may continue to apply State law requirements except to
the extent that such requirements prevent the application of the
Affordable Care Act requirements that are the subject of this
rulemaking. State insurance laws that are more stringent than the
Federal requirements are unlikely to ``prevent the application of'' the
Affordable Care Act, and be preempted. Accordingly, States have
significant latitude to impose requirements on health insurance issuers
that are more restrictive than the Federal law.
In compliance with the requirement of Executive Order 13132 that
agencies examine closely any policies that may have federalism
implications or limit
[[Page 41740]]
the policy making discretion of the States, the Departments have
engaged in efforts to consult with and work cooperatively with affected
State and local officials, including attending conferences of the
National Association of Insurance Commissioners and consulting with
State insurance officials on an individual basis. It is expected that
the Departments will act in a similar fashion in enforcing the
Affordable Care Act requirements. Throughout the process of developing
these interim final regulations, to the extent feasible within the
specific preemption provisions of HIPAA as it applies to the Affordable
Care Act, the Departments have attempted to balance the States'
interests in regulating health insurance issuers, and Congress' intent
to provide uniform minimum protections to consumers in every State. By
doing so, it is the Departments' view that they have complied with the
requirements of Executive Order 13132.
Pursuant to the requirements set forth in section 8(a) of Executive
Order 13132, and by the signatures affixed to these interim final
regulations, the Departments certify that the Employee Benefits
Security Administration and the Centers for Medicare & Medicaid
Services have complied with the requirements of Executive Order 13132
for the attached regulations in a meaningful and timely manner.
V. Recommended Preventive Services as of July 14, 2010
The materials that follow list recommended preventive services,
current as of July 14, 2010, that will have to be covered without cost-
sharing when delivered by an in-network provider. In many cases, the
recommendations or guidelines went into effect before September 23,
2009; therefore the recommended services must be covered under these
interim final regulations in plan years (in the individual market,
policy years) that begin on or after September 23, 2010. However, there
are some services that appear in the figure that are based on
recommendations or guidelines that went into effect at some point later
than September 23, 2009. Those services do not have to be covered under
these interim final regulations until plan years (in the individual
market, policy years) that begin at some point later than September 23,
2010. In addition, there are a few recommendations and guidelines that
went into effect after September 23, 2009 and are not included in the
figure. In both cases, information at http://www.HealthCare.gov/center/regulations/prevention.html specifically identifies those services and
the relevant dates. The materials at http://www.HealthCare.gov/center/regulations/prevention.html will be updated on an ongoing basis, and
will contain the most current recommended preventive services.
A. Recommendations of the United States Preventive Services Task Force
(Task Force)
Recommendations of the Task Force appear in a chart that follows.
This chart includes a description of the topic, the text of the Task
Force recommendation, the grade the recommendation received (A or B),
and the date that the recommendation went into effect.
B. Recommendations of the Advisory Committee On Immunization Practices
(Advisory Committee) That Have Been Adopted by the Director of the
Centers for Disease Control and Prevention
Recommendations of the Advisory Committee appear in four
immunization schedules that follow: A schedule for children age 0 to 6
years, a schedule for children age 7 to 18 years, a ``catch-up''
schedule for children, and a schedule for adults. Immunization
schedules are issued every year, and the schedules that appear here are
the 2010 schedules. The schedules contain graphics that provide
information about the recommended age for vaccination, number of doses
needed, interval between the doses, and (for adults) recommendations
associated with particular health conditions. In addition to the
graphics, the schedules contain detailed footnotes that provide further
information on each immunization in the schedule.
C. Comprehensive Guidelines Supported by the Health Resources and
Services Administration (HRSA) for Infants, Children, and Adolescents
Comprehensive guidelines for infants, children, and adolescents
supported by HRSA appear in two charts that follow: The Periodicity
Schedule of the Bright Futures Recommendations for Pediatric Preventive
Health Care, and the Uniform Panel of the Secretary's Advisory
Committee on Heritable Disorders in Newborns and Children.
BILLING CODE 4830-01-P; 4510-29-P; 4210-01-P
[[Page 41741]]
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[[Page 41743]]
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[[Page 41744]]
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[[Page 41746]]
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[[Page 41747]]
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[[Page 41748]]
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[[Page 41749]]
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[[Page 41750]]
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[[Page 41751]]
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[[Page 41752]]
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[[Page 41753]]
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[[Page 41754]]
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[[Page 41755]]
[GRAPHIC] [TIFF OMITTED] TR19JY10.038
BILLING CODE 4830-01-C; 4510-29-C; 4210-01-C
VI. Statutory Authority
The Department of the Treasury temporary regulations are adopted
pursuant to the authority contained in sections 7805 and 9833 of the
Code.
[[Page 41756]]
The Department of Labor interim final regulations are adopted
pursuant to the authority contained in 29 U.S.C. 1027, 1059, 1135,
1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a,
1191b, and 1191c; sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec.
401(b), Pub. L. 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec.
512(d), Pub. L. 110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e),
Pub. L. 111-148, 124 Stat. 119, as amended by Pub. L. 111-152, 124
Stat. 1029; Secretary of Labor's Order 6-2009, 74 FR 21524 (May 7,
2009).
The Department of Health and Human Services interim final
regulations are adopted pursuant to the authority contained in sections
2701 through 2763, 2791, and 2792 of the PHS Act (42 USC 300gg through
300gg-63, 300gg-91, and 300gg-92), as amended.
List of Subjects
26 CFR Part 54
Excise taxes, Health care, Health insurance, Pensions, Reporting
and recordkeeping requirements.
29 CFR Part 2590
Continuation coverage, Disclosure, Employee benefit plans, Group
health plans, Health care, Health insurance, Medical child support,
Reporting and recordkeeping requirements.
45 CFR Part 147
Health care, Health insurance, Reporting and recordkeeping
requirements, and State regulation of health insurance.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement, Internal Revenue
Service.
Approved: July 8, 2010
Michael F. Mundaca,
Assistant Secretary of the Treasury (Tax Policy).
Signed this 9th day of July, 2010.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
Dated: July 9, 2010
Jay Angoff,
Director, Office of Consumer Information and Insurance Oversight.
Dated: July 9, 2010.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Chapter 1
0
Accordingly, 26 CFR Part 54 is amended as follows:
PART 54--PENSION EXCISE TAXES
0
Paragraph 1. The authority citation for part 54 is amended by adding an
entry for Sec. 54.9815-2713T in numerical order to read in part as
follows:
Authority: 26 U.S.C. 7805. * * *
Section 54.9815-2713T also issued under 26 U.S.C. 9833. * * *
0
Par. 2. Section 54.9815-2713T is added to read as follows:
Sec. 54.9815-2713T Coverage of preventive health services
(temporary).
(a) Services--(1) In general. Beginning at the time described in
paragraph (b) of this section, a group health plan, or a health
insurance issuer offering group health insurance coverage, must provide
coverage for all of the following items and services, and may not
impose any cost-sharing requirements (such as a copayment, coinsurance,
or deductible) with respect to those items or services:
(i) 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
(except as otherwise provided in paragraph (c) of this section);
(ii) 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 (for this purpose, a
recommendation from the Advisory Committee on Immunization Practices of
the Centers for Disease Control and Prevention is considered in effect
after it has been adopted by the Director of the Centers for Disease
Control and Prevention, and a recommendation is considered to be for
routine use if it is listed on the Immunization Schedules of the
Centers for Disease Control and Prevention);
(iii) 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
(iv) With respect to women, to the extent not described in
paragraph (a)(1)(i) of this section, evidence-informed preventive care
and screenings provided for in comprehensive guidelines supported by
the Health Resources and Services Administration.
(2) Office visits--(i) If an item or service described in paragraph
(a)(1) of this section is billed separately (or is tracked as
individual encounter data separately) from an office visit, then a plan
or issuer may impose cost-sharing requirements with respect to the
office visit.
(ii) If an item or service described in paragraph (a)(1) of this
section is not billed separately (or is not tracked as individual
encounter data separately) from an office visit and the primary purpose
of the office visit is the delivery of such an item or service, then a
plan or issuer may not impose cost-sharing requirements with respect to
the office visit.
(iii) If an item or service described in paragraph (a)(1) of this
section is not billed separately (or is not tracked as individual
encounter data separately) from an office visit and the primary purpose
of the office visit is not the delivery of such an item or service,
then a plan or issuer may impose cost-sharing requirements with respect
to the office visit.
(iv) The rules of this paragraph (a)(2) are illustrated by the
following examples:
Example 1. (i) Facts. An individual covered by a group health
plan visits an in-network health care provider. While visiting the
provider, the individual is screened for cholesterol abnormalities,
which has 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. The provider bills the plan for an
office visit and for the laboratory work of the cholesterol
screening test.
(ii) Conclusion. In this Example 1, the plan may not impose any
cost-sharing requirements with respect to the separately-
[[Page 41757]]
billed laboratory work of the cholesterol screening test. Because
the office visit is billed separately from the cholesterol screening
test, the plan may impose cost-sharing requirements for the office
visit.
Example 2. (i) Facts. Same facts as Example 1. As the result of
the screening, the individual is diagnosed with hyperlipidemia and
is prescribed a course of treatment that is not included in the
recommendations under paragraph (a)(1) of this section.
(ii) Conclusion. In this Example 2, because the treatment is not
included in the recommendations under paragraph (a)(1) of this
section, the plan is not prohibited from imposing cost-sharing
requirements with respect to the treatment.
Example 3. (i) Facts. An individual covered by a group health
plan visits an in-network health care provider to discuss recurring
abdominal pain. During the visit, the individual has a blood
pressure screening, which has 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. The provider bills the
plan for an office visit.
(ii) Conclusion. In this Example 3, the blood pressure screening
is provided as part of an office visit for which the primary purpose
was not to deliver items or services described in paragraph (a)(1)
of this section. Therefore, the plan may impose a cost-sharing
requirement for the office visit charge.
Example 4. (i) Facts. A child covered by a group health plan
visits an in-network pediatrician to receive an annual physical exam
described as part of the comprehensive guidelines supported by the
Health Resources and Services Administration. During the office
visit, the child receives additional items and services that are not
described in the comprehensive guidelines supported by the Health
Resources and Services Administration, nor otherwise described in
paragraph (a)(1) of this section. The provider bills the plan for an
office visit.
(ii) Conclusion. In this Example 4, the service was not billed
as a separate charge and was billed as part of an office visit.
Moreover, the primary purpose for the visit was to deliver items and
services described as part of the comprehensive guidelines supported
by the Health Resources and Services Administration. Therefore, the
plan may not impose a cost-sharing requirement with respect to the
office visit.
(3) Out-of-network providers. Nothing in this section requires a
plan or issuer that has a network of providers to provide benefits for
items or services described in paragraph (a)(1) of this section that
are delivered by an out-of-network provider. Moreover, nothing in this
section precludes a plan or issuer that has a network of providers from
imposing cost-sharing requirements for items or services described in
paragraph (a)(1) of this section that are delivered by an out-of-
network provider.
(4) Reasonable medical management. Nothing prevents a plan or
issuer from using reasonable medical management techniques to determine
the frequency, method, treatment, or setting for an item or service
described in paragraph (a)(1) of this section to the extent not
specified in the recommendation or guideline.
(5) Services not described. Nothing in this section prohibits a
plan or issuer from providing coverage for items and services in
addition to those recommended by the United States Preventive Services
Task Force or the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention, or provided for by
guidelines supported by the Health Resources and Services
Administration, or from denying coverage for items and services that
are not recommended by that task force or that advisory committee, or
under those guidelines. A plan or issuer may impose cost-sharing
requirements for a treatment not described in paragraph (a)(1) of this
section, even if the treatment results from an item or service
described in paragraph (a)(1) of this section.
(b) Timing--(1) In general. A plan or issuer must provide coverage
pursuant to paragraph (a)(1) of this section for plan years that begin
on or after September 23, 2010, or, if later, for plan years that begin
on or after the date that is one year after the date the recommendation
or guideline is issued.
(2) Changes in recommendations or guidelines. A plan or issuer is
not required under this section to provide coverage for any items and
services specified in any recommendation or guideline described in
paragraph (a)(1) of this section after the recommendation or guideline
is no longer described in paragraph (a)(1) of this section. Other
requirements of Federal or State law may apply in connection with a
plan or issuer ceasing to provide coverage for any such items or
services, including PHS Act section 2715(d)(4), which requires a plan
or issuer to give 60 days advance notice to an enrollee before any
material modification will become effective.
(c) Recommendations not current. For purposes of paragraph
(a)(1)(i) of this section, and for purposes of any other provision of
law, recommendations of the United States Preventive Services Task
Force regarding breast cancer screening, mammography, and prevention
issued in or around November 2009 are not considered to be current.
(d) Effective/applicability date. The provisions of this section
apply for plan years beginning on or after September 23, 2010. See
Sec. 54.9815-1251T for determining the application of this section to
grandfathered health plans (providing that these rules regarding
coverage of preventive health services do not apply to grandfathered
health plans).
(e) Expiration date. This section expires on July 12, 2013 or on
such earlier date as may be provided in final regulations or other
action published in the Federal Register.
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Chapter XXV
0
29 CFR Part 2590 is amended as follows:
PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS
0
1. The authority citation for Part 2590 continues to read as follows:
Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c;
sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L.
105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L.
110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-
148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029;
Secretary of Labor's Order 6-2009, 74 FR 21524 (May 7, 2009).
Subpart C--Other Requirements
0
2. Section 2590.715-2713 is added to subpart C to read as follows:
Sec. 2590.715-2713 Coverage of preventive health services.
(a) Services--(1) In general. Beginning at the time described in
paragraph (b) of this section, a group health plan, or a health
insurance issuer offering group health insurance coverage, must provide
coverage for all of the following items and services, and may not
impose any cost-sharing requirements (such as a copayment, coinsurance,
or deductible) with respect to those items or services:
(i) 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
(except as otherwise provided in paragraph (c) of this section);
(ii) 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 (for this purpose, a
recommendation from the Advisory Committee on Immunization Practices of
the Centers for Disease Control and Prevention is considered in effect
after it has been
[[Page 41758]]
adopted by the Director of the Centers for Disease Control and
Prevention, and a recommendation is considered to be for routine use if
it is listed on the Immunization Schedules of the Centers for Disease
Control and Prevention);
(iii) 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
(iv) With respect to women, to the extent not described in
paragraph (a)(1)(i) of this section, evidence-informed preventive care
and screenings provided for in comprehensive guidelines supported by
the Health Resources and Services Administration.
(2) Office visits--(i) If an item or service described in paragraph
(a)(1) of this section is billed separately (or is tracked as
individual encounter data separately) from an office visit, then a plan
or issuer may impose cost-sharing requirements with respect to the
office visit.
(ii) If an item or service described in paragraph (a)(1) of this
section is not billed separately (or is not tracked as individual
encounter data separately) from an office visit and the primary purpose
of the office visit is the delivery of such an item or service, then a
plan or issuer may not impose cost-sharing requirements with respect to
the office visit.
(iii) If an item or service described in paragraph (a)(1) of this
section is not billed separately (or is not tracked as individual
encounter data separately) from an office visit and the primary purpose
of the office visit is not the delivery of such an item or service,
then a plan or issuer may impose cost-sharing requirements with respect
to the office visit.
(iv) The rules of this paragraph (a)(2) are illustrated by the
following examples:
Example 1. (i) Facts. An individual covered by a group health
plan visits an in-network health care provider. While visiting the
provider, the individual is screened for cholesterol abnormalities,
which has 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. The provider bills the plan for an
office visit and for the laboratory work of the cholesterol
screening test.
(ii) Conclusion. In this Example 1, the plan may not impose any
cost-sharing requirements with respect to the separately-billed
laboratory work of the cholesterol screening test. Because the
office visit is billed separately from the cholesterol screening
test, the plan may impose cost-sharing requirements for the office
visit.
Example 2. (i) Facts. Same facts as Example 1. As the result of
the screening, the individual is diagnosed with hyperlipidemia and
is prescribed a course of treatment that is not included in the
recommendations under paragraph (a)(1) of this section.
(ii) Conclusion. In this Example 2, because the treatment is not
included in the recommendations under paragraph (a)(1) of this
section, the plan is not prohibited from imposing cost-sharing
requirements with respect to the treatment.
Example 3. (i) Facts. An individual covered by a group health
plan visits an in-network health care provider to discuss recurring
abdominal pain. During the visit, the individual has a blood
pressure screening, which has 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. The provider bills the
plan for an office visit.
(ii) Conclusion. In this Example 3, the blood pressure screening
is provided as part of an office visit for which the primary purpose
was not to deliver items or services described in paragraph (a)(1)
of this section. Therefore, the plan may impose a cost-sharing
requirement for the office visit charge.
Example 4. (i) Facts. A child covered by a group health plan
visits an in-network pediatrician to receive an annual physical exam
described as part of the comprehensive guidelines supported by the
Health Resources and Services Administration. During the office
visit, the child receives additional items and services that are not
described in the comprehensive guidelines supported by the Health
Resources and Services Administration, nor otherwise described in
paragraph (a)(1) of this section. The provider bills the plan for an
office visit.
(ii) Conclusion. In this Example 4, the service was not billed
as a separate charge and was billed as part of an office visit.
Moreover, the primary purpose for the visit was to deliver items and
services described as part of the comprehensive guidelines supported
by the Health Resources and Services Administration. Therefore, the
plan may not impose a cost-sharing requirement with respect to the
office visit.
(3) Out-of-network providers. Nothing in this section requires a
plan or issuer that has a network of providers to provide benefits for
items or services described in paragraph (a)(1) of this section that
are delivered by an out-of-network provider. Moreover, nothing in this
section precludes a plan or issuer that has a network of providers from
imposing cost-sharing requirements for items or services described in
paragraph (a)(1) of this section that are delivered by an out-of-
network provider.
(4) Reasonable medical management. Nothing prevents a plan or
issuer from using reasonable medical management techniques to determine
the frequency, method, treatment, or setting for an item or service
described in paragraph (a)(1) of this section to the extent not
specified in the recommendation or guideline.
(5) Services not described. Nothing in this section prohibits a
plan or issuer from providing coverage for items and services in
addition to those recommended by the United States Preventive Services
Task Force or the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention, or provided for by
guidelines supported by the Health Resources and Services
Administration, or from denying coverage for items and services that
are not recommended by that task force or that advisory committee, or
under those guidelines. A plan or issuer may impose cost-sharing
requirements for a treatment not described in paragraph (a)(1) of this
section, even if the treatment results from an item or service
described in paragraph (a)(1) of this section.
(b) Timing--(1) In general. A plan or issuer must provide coverage
pursuant to paragraph (a)(1) of this section for plan years that begin
on or after September 23, 2010, or, if later, for plan years that begin
on or after the date that is one year after the date the recommendation
or guideline is issued.
(2) Changes in recommendations or guidelines. A plan or issuer is
not required under this section to provide coverage for any items and
services specified in any recommendation or guideline described in
paragraph (a)(1) of this section after the recommendation or guideline
is no longer described in paragraph (a)(1) of this section. Other
requirements of Federal or State law may apply in connection with a
plan or issuer ceasing to provide coverage for any such items or
services, including PHS Act section 2715(d)(4), which requires a plan
or issuer to give 60 days advance notice to an enrollee before any
material modification will become effective.
(c) Recommendations not current. For purposes of paragraph
(a)(1)(i) of this section, and for purposes of any other provision of
law, recommendations of the United States Preventive Services Task
Force regarding breast cancer screening, mammography, and prevention
issued in or around November 2009 are not considered to be current.
(d) Applicability date. The provisions of this section apply for
plan years beginning on or after September 23, 2010. See Sec.
2590.715-1251 of this Part for determining the application of this
section to grandfathered health plans (providing that these rules
regarding coverage of preventive health services do not apply to
grandfathered health plans).
[[Page 41759]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Subtitle A
0
For the reasons stated in the preamble, the Department of Health and
Human Services amends 45 CFR part 147, added May 13, 2010, at 75 FR
27138, effective July 12, 2010, as follows:
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
INDIVIDUAL HEALTH INSURANCE MARKETS
0
1. The authority citation for part 147 continues to read as follows:
Authority: Sections 2701 through 2763, 2791, and 2792 of the
Public Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-
91, and 300gg-92), as amended.
0
2. Add Sec. 147.130 to read as follows:
Sec. 147.130 Coverage of preventive health services.
(a) Services--(1) In general. Beginning at the time described in
paragraph (b) of this section, a group health plan, or a health
insurance issuer offering group or individual health insurance
coverage, must provide coverage for all of the following items and
services, and may not impose any cost-sharing requirements (such as a
copayment, coinsurance, or deductible) with respect to those items or
services:
(i) 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
(except as otherwise provided in paragraph (c) of this section);
(ii) 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 (for this purpose, a
recommendation from the Advisory Committee on Immunization Practices of
the Centers for Disease Control and Prevention is considered in effect
after it has been adopted by the Director of the Centers for Disease
Control and Prevention, and a recommendation is considered to be for
routine use if it is listed on the Immunization Schedules of the
Centers for Disease Control and Prevention);
(iii) 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
(iv) With respect to women, to the extent not described in
paragraph (a)(1)(i) of this section, evidence-informed preventive care
and screenings provided for in comprehensive guidelines supported by
the Health Resources and Services Administration.
(2) Office visits--(i) If an item or service described in paragraph
(a)(1) of this section is billed separately (or is tracked as
individual encounter data separately) from an office visit, then a plan
or issuer may impose cost-sharing requirements with respect to the
office visit.
(ii) If an item or service described in paragraph (a)(1) of this
section is not billed separately (or is not tracked as individual
encounter data separately) from an office visit and the primary purpose
of the office visit is the delivery of such an item or service, then a
plan or issuer may not impose cost-sharing requirements with respect to
the office visit.
(iii) If an item or service described in paragraph (a)(1) of this
section is not billed separately (or is not tracked as individual
encounter data separately) from an office visit and the primary purpose
of the office visit is not the delivery of such an item or service,
then a plan or issuer may impose cost-sharing requirements with respect
to the office visit.
(iv) The rules of this paragraph (a)(2) are illustrated by the
following examples:
Example 1. (i) Facts. An individual covered by a group health
plan visits an in-network health care provider. While visiting the
provider, the individual is screened for cholesterol abnormalities,
which has 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. The provider bills the plan for an
office visit and for the laboratory work of the cholesterol
screening test.
(ii) Conclusion. In this Example 1, the plan may not impose any
cost-sharing requirements with respect to the separately-billed
laboratory work of the cholesterol screening test. Because the
office visit is billed separately from the cholesterol screening
test, the plan may impose cost-sharing requirements for the office
visit.
Example 2. (i) Facts. Same facts as Example 1. As the result of
the screening, the individual is diagnosed with hyperlipidemia and
is prescribed a course of treatment that is not included in the
recommendations under paragraph (a)(1) of this section.
(ii) Conclusion. In this Example 2, because the treatment is not
included in the recommendations under paragraph (a)(1) of this
section, the plan is not prohibited from imposing cost-sharing
requirements with respect to the treatment.
Example 3. (i) Facts. An individual covered by a group health
plan visits an in-network health care provider to discuss recurring
abdominal pain. During the visit, the individual has a blood
pressure screening, which has 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. The provider bills the
plan for an office visit.
(ii) Conclusion. In this Example 3, the blood pressure screening
is provided as part of an office visit for which the primary purpose
was not to deliver items or services described in paragraph (a)(1)
of this section. Therefore, the plan may impose a cost-sharing
requirement for the office visit charge.
Example 4. (i) Facts. A child covered by a group health plan
visits an in-network pediatrician to receive an annual physical exam
described as part of the comprehensive guidelines supported by the
Health Resources and Services Administration. During the office
visit, the child receives additional items and services that are not
described in the comprehensive guidelines supported by the Health
Resources and Services Administration, nor otherwise described in
paragraph (a)(1) of this section. The provider bills the plan for an
office visit.
(ii) Conclusion. In this Example 4, the service was not billed
as a separate charge and was billed as part of an office visit.
Moreover, the primary purpose for the visit was to deliver items and
services described as part of the comprehensive guidelines supported
by the Health Resources and Services Administration. Therefore, the
plan may not impose a cost-sharing requirement for the office visit
charge.
(3) Out-of-network providers. Nothing in this section requires a
plan or issuer that has a network of providers to provide benefits for
items or services described in paragraph (a)(1) of this section that
are delivered by an out-of-network provider. Moreover, nothing in this
section precludes a plan or issuer that has a network of providers from
imposing cost-sharing requirements for items or services described in
paragraph (a)(1) of this section that are delivered by an out-of-
network provider.
(4) Reasonable medical management. Nothing prevents a plan or
issuer from using reasonable medical management techniques to determine
the frequency, method, treatment, or setting for an item or service
described in paragraph (a)(1) of this section to the extent not
specified in the recommendation or guideline.
(5) Services not described. Nothing in this section prohibits a
plan or issuer from providing coverage for items and services in
addition to those recommended by the United States Preventive Services
Task Force or the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention, or provided for by
guidelines supported by the Health Resources and Services
Administration, or from denying coverage for items and services that
are not recommended by that task force or that advisory committee, or
under those guidelines. A
[[Page 41760]]
plan or issuer may impose cost-sharing requirements for a treatment not
described in paragraph (a)(1) of this section, even if the treatment
results from an item or service described in paragraph (a)(1) of this
section.
(b) Timing--(1) In general. A plan or issuer must provide coverage
pursuant to paragraph (a)(1) of this section for plan years (in the
individual market, policy years) that begin on or after September 23,
2010, or, if later, for plan years (in the individual market, policy
years) that begin on or after the date that is one year after the date
the recommendation or guideline is issued.
(2) Changes in recommendations or guidelines. A plan or issuer is
not required under this section to provide coverage for any items and
services specified in any recommendation or guideline described in
paragraph (a)(1) of this section after the recommendation or guideline
is no longer described in paragraph (a)(1) of this section. Other
requirements of Federal or State law may apply in connection with a
plan or issuer ceasing to provide coverage for any such items or
services, including PHS Act section 2715(d)(4), which requires a plan
or issuer to give 60 days advance notice to an enrollee before any
material modification will become effective.
(c) Recommendations not current. For purposes of paragraph
(a)(1)(i) of this section, and for purposes of any other provision of
law, recommendations of the United States Preventive Services Task
Force regarding breast cancer screening, mammography, and prevention
issued in or around November 2009 are not considered to be current.
(d) Applicability date. The provisions of this section apply for
plan years (in the individual market, for policy years) beginning on or
after September 23, 2010. See Sec. 147.140 of this Part for
determining the application of this section to grandfathered health
plans (providing that these rules regarding coverage of preventive
health services do not apply to grandfathered health plans).
[FR Doc. 2010-17242 Filed 7-14-10; 11:15 am]
BILLING CODE 4830-01-P; 4510-29-P; 4210-01-P