Clarification of Final Rules for Grandfathered Plans, Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, Dependent Coverage, Appeals, and Patient Protections Under the Affordable Care Act, 19431-19436 [2018-09369]
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Federal Register / Vol. 83, No. 86 / Thursday, May 3, 2018 / Rules and Regulations
The full analysis of economic impacts is
available in the docket for this final rule
(Ref. 1).
V. Analysis of Environmental Impact
We have determined under 21 CFR
25.30(k) that this action is of a type that
does not individually or cumulatively
have a significant effect on the human
environment. Therefore, neither an
environmental assessment nor an
environmental impact statement is
required.
VI. Paperwork Reduction Act of 1995
This final rule contains no collection
of information. Therefore, clearance by
the Office of Management and Budget
under the Paperwork Reduction Act of
1995 is not required.
VII. Federalism
We have analyzed this final rule in
accordance with the principles set forth
in Executive Order 13132. FDA has
determined that the rule does not
contain policies that have substantial
direct effects on the States, on the
relationship between the National
Government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. Accordingly, we
conclude that the rule does not contain
policies that have federalism
implications as defined in the Executive
order and, consequently, a federalism
summary impact statement is not
required.
VIII. Consultation and Coordination
With Indian Tribal Governments
We have analyzed this rule in
accordance with the principles set forth
in Executive Order 13175. We have
determined that the rule does not
contain policies that have substantial
direct effects on one or more Indian
Tribes, on the relationship between the
Federal Government and Indian Tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian Tribes.
Accordingly, we conclude that the rule
does not contain policies that have
tribal implications as defined in the
Executive Order and, consequently, a
tribal summary impact statement is not
required.
in the Federal Register, but websites are
subject to change over time.
1. FDA, ‘‘Crabmeat; Amendment of Common
or Usual Name Regulation: Final
Regulatory Impact Analysis,’’ 2017. Also
available at https://www.fda.gov/
AboutFDA/ReportsManualsForms/
Reports/EconomicAnalyses/default.htm.
List of Subjects in 21 CFR Part 102
Beverages, Food grades and standards,
Food labeling, Frozen foods, Oils and
fats, Onions, Potatoes, Seafood.
Therefore, under the Federal Food,
Drug, and Cosmetic Act and under
authority delegated to the Commissioner
of Food and Drugs, 21 CFR part 102 is
amended as follows:
PART 102—COMMON OR USUAL
NAME FOR NONSTANDARDIZED
FOODS
1. The authority citation for part 102
continues to read as follows:
■
Authority: 21 U.S.C. 321, 343, 371.
2. In § 102.50 revise the table to read
as follows:
■
§ 102.50
*
*
Crabmeat.
*
*
Scientific name of crab
Chionoecetes opilio,
Chionoecetes tanneri,
Chionoecetes bairdii,
and Chionoecetes
angulatus.
Erimacrus isenbeckii .......
Lithodes aequispinus ......
Paralithodes brevipes .....
Paralithodes
camtschaticus and
Paralithodes platypus.
*
Snow crabmeat.
Korean variety crabmeat
or Kegani crabmeat.
Golden King crabmeat.
King crabmeat or
Hanasaki crabmeat.
King crabmeat.
Dated: April 27, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–09371 Filed 5–2–18; 8:45 am]
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IX. References
The following reference is on display
in the Dockets Management Staff (see
ADDRESSES) and is available for viewing
by interested persons between 9 a.m.
and 4 p.m., Monday through Friday.
FDA has verified the website addresses,
as of the date this document publishes
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[TD 9744]
RIN 1545–BJ45, 1545–BJ50, 1545–BJ62,
1545–BJ57
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2590
RIN 1210–AB72
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
45 CFR Parts 144, 146, and 147
[CMS–9993–N]
RIN 0938–AS56
Clarification of Final Rules for
Grandfathered Plans, Preexisting
Condition Exclusions, Lifetime and
Annual Limits, Rescissions,
Dependent Coverage, Appeals, and
Patient Protections Under the
Affordable Care Act
Internal Revenue Service,
Department of the Treasury; Employee
Benefits Security Administration,
Department of Labor; and Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services.
ACTION: Final rule; clarification.
AGENCY:
Common or usual name
of crabmeat
BILLING CODE 4164–01–P
19431
On November 18, 2015, the
Departments of Labor, Health and
Human Services, and the Treasury (the
Departments) published a final rule in
the Federal Register titled ‘‘Final Rules
for Grandfathered Plans, Preexisting
Condition Exclusions, Lifetime and
Annual Limits, Rescissions, Dependent
Coverage, Appeals, and Patient
Protections Under the Affordable Care
Act’’ (the November 2015 final rule),
regarding, in part, the coverage of
emergency services by nongrandfathered group health plans and
health insurance issuers offering nongrandfathered group or individual
health insurance coverage, including the
requirement that non-grandfathered
group health plans and health insurance
issuers offering non-grandfathered
group or individual health insurance
coverage limit cost-sharing for out-ofnetwork emergency services and, as part
of that rule, pay at least a minimum
amount for out-of-network emergency
services. The American College of
SUMMARY:
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Emergency Physicians (ACEP) filed a
complaint in the United States District
Court for the District of Columbia,
which on August 31, 2017 granted in
part and denied in part without
prejudice ACEP’s motion for summary
judgment and remanded the case to the
Departments to respond to the public
comments from ACEP and others. In
response, the Departments are issuing
this notice of clarification to provide a
more thorough explanation of the
Departments’ decision not to adopt
recommendations made by ACEP and
certain other commenters in the
November 2015 final rule.
This clarification is applicable
beginning May 3, 2018.
DATES:
FOR FURTHER INFORMATION CONTACT:
Amber Rivers, Employee Benefits
Security Administration, Department of
Labor, at (202) 693–8335; Dara R.
Alderman, Internal Revenue Service,
Department of the Treasury, at (202)
317–5500; and Katherine Carver,
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, at (410) 786–1565.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Rulemaking at Issue
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i. Statutory Background
The Patient Protection and Affordable
Care Act (Pub. L. 111–148), was enacted
on March 23, 2010; the Health Care and
Education Reconciliation Act of 2010
(Pub. L. 111–152) was enacted on March
30, 2010. These statutes are collectively
referred to as ‘‘PPACA’’ in this
document. The PPACA reorganized,
amended, and added to the provisions
of part A of title XXVII of the Public
Health Service Act (PHS Act). PPACA
also added section 715 to the Employee
Retirement Income Security Act (ERISA)
and section 9815 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. Accordingly,
sections 2701 through 2728 of the PHS
Act are incorporated into the Code and
ERISA.
Section 2719A of the PHS Act, which
is entitled ‘‘Patient Protections,’’
provides requirements relating to
coverage of emergency services for nongrandfathered group health plans and
health insurance issuers offering nongrandfathered group or individual
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health insurance coverage 1 and states,
in general, that if a group health plan,
or a health insurance issuer offering
group or individual health insurance
coverage, provides or covers any
benefits with respect to services in an
emergency department of a hospital, the
plan or issuer shall cover emergency
services—(A) without the need for any
prior authorization determination; (B)
whether the health care provider
furnishing such services is a
participating provider with respect to
such services; (C) in a manner so that,
if such services are provided to a
participant, beneficiary, or enrollee—(i)
by a nonparticipating health care
provider with or without prior
authorization; or (ii)(I) such services
will be provided without imposing any
requirement under the plan for prior
authorization of services or any
limitation on coverage where the
provider of services does not have a
contractual relationship with the plan
for the providing of services that is more
restrictive than the requirements or
limitations that apply to emergency
department services received from
providers who do have such a
contractual relationship with the plan;
and (II) if such services are provided
out-of-network, the cost-sharing
requirement (expressed as a copayment
amount or coinsurance rate) is the same
requirement that would apply if such
services were provided in-network.
Therefore, among other things, the
statute requires non-grandfathered
group health plans and health insurance
issuers offering non-grandfathered
group or individual health insurance
coverage that cover emergency services
to do so even if the provider is not one
of the plans’ or issuers’ ‘‘participating
provider[s].’’ 2 In addition, section
2719A of the PHS Act requires nongrandfathered group health plans and
health insurance issuers offering nongrandfathered group or individual
health insurance coverage to apply the
same cost-sharing requirement
(expressed as copayments and
coinsurance) for emergency services
provided out-of-network as emergency
services provided in-network; however,
the statute does not expressly address
how much the out-of-network provider
of emergency services must be paid for
1 Section 2719A of the PHS Act also provides, for
non-grandfathered group health plans and health
insurance issuers offering non-grandfathered group
or individual health insurance coverage, rules
regarding designation of primary care providers,
access to pediatric care, and patient access to
obstetrical and gynecological care. This document
does not address those aspects of section 2719A of
the PHS Act.
2 See section 2719A(b)(1)(B) of the PHS Act.
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performing such services by the nongrandfathered group health plan or
health insurance issuer offering nongrandfathered group or individual
health insurance coverage.
As background, the amount an out-ofnetwork provider may charge for
emergency services may exceed the
group health plan’s or health insurance
issuer’s ‘‘allowed amount’’ (the
‘‘[m]aximum amount on which payment
is based for covered health care
services’’).3 The allowed amount may be
subject to deductibles and other costsharing in terms of a fixed-amount per
service and/or a coinsurance percentage
of the allowed amount. In circumstances
in which a provider’s charge exceeds
the allowed amount, some states allow
an out-of-network provider to ‘‘balance
bill’’ the patient for the amount of the
provider’s charge that exceeds the
allowed amount.
Section 2719A of the PHS Act does
not prohibit an out-of-network provider
from balance billing a participant or
beneficiary because although it includes
a cost-sharing rule, ‘‘cost sharing’’ is a
statutorily defined term that ‘‘does not
include . . . balance billing amounts for
non-network providers’’ and the costsharing requirement in section
2719A(b)(1)(C)(ii)(II) of the PHS Act
applies to cost sharing ‘‘expressed as a
copayment amount or coinsurance
rate.’’ 4
ii. The Departments’ Regulation and
Related Comments
On June 28, 2010, the Departments
published an interim final rule (IFR) in
the Federal Register titled ‘‘Patient
Protection and Affordable Care Act;
Requirements for Group Health Plans
and Health Insurance Issuers Under the
Patient Protection and Affordable Care
Act Relating to Preexisting Condition
Exclusions, Lifetime and Annual Limits,
Rescissions, and Patient Protections,’’
75 FR 37188 (the June 2010 IFR). The
June 2010 IFR preamble on section
2719A of the PHS Act stated, in part,
that, because the statute does not
require plans or issuers to cover balance
billing amounts, and does not prohibit
balance billing, even where the
protections in the statute apply, patients
may be subject to balance billing. It
would defeat the purpose of the
protections in the statute if a plan or
3 See definition of ‘‘allowed amount’’ and
‘‘balance billing’’ in the Uniform Glossary of Health
Care Coverage and Medical Terms, https://
www.dol.gov/sites/default/files/ebsa/laws-andregulations/laws/affordable-care-act/for-employersand-advisers/sbc-uniform-glossary-of-coverage-andmedical-terms-final.pdf.
4 See PPACA section 1302(c)(3)(B). See also 80 FR
72192, 72212–13 (Nov. 18, 2015).
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Federal Register / Vol. 83, No. 86 / Thursday, May 3, 2018 / Rules and Regulations
issuer paid an unreasonably low amount
to a provider, even while limiting the
coinsurance or copayment associated
with that amount to in-network
amounts. To avoid the circumvention of
the protections of section 2719A of the
PHS Act, it is necessary that a
reasonable amount be paid before a
patient becomes responsible for a
balance billing amount. Thus, these
interim final regulations require that a
reasonable amount be paid for services
by some objective standard. In
establishing the reasonable amount that
must be paid, the Departments had to
account for wide variation in how plans
and issuers determine both in-network
and out-of-network rates. For example,
for a plan using a capitation
arrangement to determine in-network
payments to providers, there is no innetwork rate per service.
Accordingly, these interim final
regulations considered three amounts:
The in-network rate, the out-of-network
rate, and the Medicare rate. Specifically,
a plan or issuer satisfies the copayment
and coinsurance limitations in the
statute if it provides benefits for out-ofnetwork emergency services in an
amount equal to the greatest of three
possible amounts—(1) The amount
negotiated with in-network providers
for the emergency service furnished; (2)
The amount for the emergency service
calculated using the same method the
plan generally uses to determine
payments for out-of-network services
(such as the usual, customary, and
reasonable charges) but substituting the
in-network cost-sharing provisions for
the out-of-network cost-sharing
provisions; or (3) The amount that
would be paid under Medicare for the
emergency service. Each of these three
amounts is calculated excluding any innetwork copayment or coinsurance
imposed with respect to the participant,
beneficiary, or enrollee.5
This is sometimes referred to as the
‘‘Greatest of Three’’ or the ‘‘GOT’’
regulation because it sets a floor on the
amount non-grandfathered group health
plans and health insurance issuers
offering non-grandfathered group or
individual health insurance coverage
are required to pay for out-of-network
emergency services under this provision
at the greatest of the three listed
amounts.
During the comment period for the
June 2010 IFR, some commenters were
in favor of the GOT regulation while
others expressed concerns. Several
commenters, including ACEP, objected
5 75 FR at 37194 (footnote omitted). For the
interim final regulation text, see 75 FR at 37225,
37232, and 37238.
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to the second prong of the GOT
regulation, which relates to the method
the plan generally uses to determine
payments for out-of-network services,
such as the usual, customary, and
reasonable amount (henceforth referred
to as the UCR amount). ACEP’s August
3, 2010 comment letter 6 stated the
following:
. . . [W]e appreciate the clearly stated
acknowledgement that allowing plans and
insurersto pay emergency physicians
whatever they see fit defeats the purpose of
protecting patients from potentially large
bills. In that light, we also support
development of an objective standard to
establish ‘fair payment.’ Insurers know that
emergency physicians will see everyone who
comes to the ED due to EMTALA
responsibilities, and many leverage that fact
to impose extremely low reimbursement
rates. While a large majority of our members
participate in nearly every plan or insurer
network in their area, the primary reason
they cite for not joining a plan’s network is
that the plan has arbitrarily offered an innetwork payment rate that fails to cover the
costs of providing the service. This forces the
physicians to balance bill the patients, which
often results in an unsatisfactory experience
for everyone but the insurer. . .
As noted in the IF rule, ‘there is wide
variation in how plans and issuers
determine in [network] and out-ofnetwork rates.’ The term ‘reasonable’ is
in the eye of the beholder. For many
years, usual and customary rates
referred to charges or a proportion of
charges. This has changed in recent
years and physicians, particularly
emergency physicians, have had
problems with the ‘black box’ approach
that commercial insurers have used to
determine [the] usual and customary
‘rates’ for out-of-network providers. At
this time, we are unaware of a national
database that is widely available and
provides timely data for objective
comparisons of charges and/or costs that
could be used to implement this part of
the regulation. A new database, perhaps
the FAIR Health data[base] that is
currently being developed as a result of
the settlement with Ingenix, may prove
to be more timely and accurate, but any
database used to establish usual and
customary reasonable rates will require
transparent validation, monitoring, and
active enforcement by state and federal
insurance officials.’’
Other groups, such as Advocacy for
Patients with Chronic Illness, Inc. and
Lybba, the Emergency Department
Practice Management Association, the
American Medical Association, the
American Hospital Association, the
Texas Medical Association, the
6 Available at https://www.regulations.gov/
contentStreamer?documentId=EBSA-2010-00160022&attachmentNumber=1&contentType=pdf.
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19433
Healthcare Association of New York
State, and the California Chapter of
ACEP, submitted similar comments
expressing their concern about the lack
of transparency and potential for
manipulation of rates under the second
prong of the GOT regulation. Like
ACEP, several of these commenters
referenced the FAIR Health database as
a potential alternative solution.7
On November 18, 2015, the
Departments finalized the regulation
under section 2719A of the PHS Act,
including the GOT regulation (80 FR
72192). The November 2015 final rule
adopted the GOT regulation without
substantive revision from the June 2010
IFR and incorporated a clarification that
had been issued in subregulatory
guidance.8 In the November 2015 final
rule, the Departments reiterated the
need for the GOT regulation, and in
response to the comments described
above regarding the GOT regulation, the
Departments stated that ‘‘[s]ome
commenters expressed concern about
the level of payment for out-of-network
emergency services and urged the
Departments to require plans and
issuers to use a transparent database to
determine out-of-network amounts. The
Departments believe that this concern is
addressed by our requirement that the
amount be the greatest of the three
amounts specified in [the GOT
regulation].’’ 9
B. Other Guidance
In response to concerns about
transparency with respect to the second
prong of the GOT regulation raised by
ACEP in its comment and in subsequent
communications to the Departments, on
April 20, 2016, the Departments issued
Frequently Asked Questions About
Affordable Care Act Implementation
Part 31, Mental Health Parity
Implementation, and Women’s Health
7 The FAIR Health Database was created by FAIR
Health, an independent nonprofit that collects data
for and manages the nation’s largest database of
privately billed health insurance claims. See
https://www.fairhealth.org/about-us.
8 The final regulations incorporated guidance that
had been provided in FAQs about Affordable Care
Act Implementation (Part I), Q15, available at
www.dol.gov/ebsa/faqs/faq-aca.html and https://
www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/aca_implementation_faqs.html. The FAQ and
final regulations provide that if state law prohibits
balance billing, or in cases in which a group health
plan or health insurance issuer is contractually
responsible for balance billing amounts, plans and
issuers are not required to satisfy the GOT
regulation, but may not impose any copayment or
coinsurance requirement for out-of-network
emergency services that is higher than the
copayment or coinsurance requirement that would
apply if the services were provided in-network. See
26 CFR 54.9815–2719A(b)(3)(iii); 29 CFR 2590.715–
2719A(b)(3)(iii); and 45 CFR 47.138(b)(3)(iii).
9 80 FR 72192, 72213 (Nov. 18, 2015).
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and Cancer Rights Act Implementation,
which addressed, in part, the GOT
regulation.10 In Question & Answer
number 4, the Departments clarified that
a group health plan or health insurance
issuer of group or individual health
insurance coverage is required to
disclose how it calculates the amounts
under the GOT regulation, including the
UCR amount. These disclosure
requirements would also apply to a
request for disclosure of payment
amounts for in-network providers.
Specifically, for group health plans
subject to ERISA, documentation and
data used to calculate each of the
amounts under the GOT regulations for
out-of-network emergency services,
including the UCR amount, are
considered to be instruments under
which the plan is established or
operated and would be subject to the
disclosure provisions under section
104(b) of ERISA and 29 CFR 2520.104b–
1, which generally require that such
information be furnished to plan
participants (or their authorized
representatives) within 30 days of
request.11 In addition, the Department of
Labor claims procedure regulations, as
well as the internal claims and appeals
and external review requirement under
section 2719 of the PHS Act, which
apply to both ERISA and non-ERISA
non-grandfathered group health plans
and health insurance issuers of nongrandfathered group or individual
coverage, set forth rules regarding
claims and appeals, including the right
of a claimant (or the claimant’s
authorized representative) upon appeal
of an adverse benefit determination (or
a final internal adverse benefit
determination) to be provided upon
request and free of charge, reasonable
access to, and copies of, all documents,
records, and other information relevant
to the claimant’s claim for benefits, and
a failure to provide or make payment of
a claim in whole or in part is an adverse
benefit determination.12
10 See https://www.dol.gov/sites/default/files/
ebsa/about-ebsa/our-activities/resource-center/faqs/
aca-part-31.pdf, or https://www.cms.gov/CCIIO/
Resources/Fact-Sheets-and-FAQs/Downloads/
FAQs-31_Final-4-20-16.pdf.
11 See DOL Advisory Opinion 96–14A (July 31,
1996). See also FAQs about Affordable Care Act
Implementation (Part XXIX) and Mental Health
Parity Implementation, Q12, available at
www.dol.gov/ebsa/faqs/faq-aca29.html and
www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/Downloads/FAQs-Part-XXIX.pdf, providing
that a plan’s or issuer’s characterization of
information as proprietary or commercially
valuable cannot be a basis for non-disclosure.
12 29 CFR 2560.503–1, 26 CFR 54.9815–2719, 29
CFR 2590.715–2719, and 45 CFR 147.136. For
additional requirements for the full and fair review
standard that applies under PHS Act section 2719,
in addition to 29 CFR 2560.503–1(h)(2), see 26 CFR
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C. The Court’s Remand Order
On May 12, 2016, ACEP filed a
lawsuit against the Departments,
asserting that the final GOT regulation
should be invalidated because it does
not ensure a reasonable payment for
out-of-network emergency services as
required by the statute, and that the
Departments did not respond
meaningfully to ACEP’s comments
about purported deficiencies in the
regulation.13
Following briefing by both parties, on
August 31, 2017, the United States
District Court for the District of
Columbia issued a memorandum
opinion that granted in part and denied
in part without prejudice ACEP’s
motion for summary judgment, and
remanded the case to the Departments
for further explanation of the November
2015 final rule.14 The court concluded
that the Departments did not adequately
respond to comments and proposed
alternatives submitted by ACEP and
others regarding perceived problems
with the GOT regulation. In particular,
the court stated that the Departments’
response in the November 2015 final
rule ‘‘to numerous comments raising
specific concerns about the method
used in the GOT regulation for
determining the amounts insurers
would be required to pay for out-ofnetwork emergency medical services—
e.g., the rates’ lack of transparency or
their vulnerability to manipulation’’ did
not ‘‘seriously respond to the actual
concerns raised about the particular
rates, and it ignore[d] altogether the
proposed alternative of using a database
to set payment.’’ The court stated that
its holding was ‘‘a narrow one,’’ relating
‘‘only to the sufficiency of the
Departments’ response to comments and
proposed alternatives.’’
The court did not vacate the
November 2015 final rule but ordered
that ‘‘this matter is remanded to the
Departments of Health and Human
Services, Labor, and the Treasury so that
they can adequately address the
comments and proposals at issue in this
case. On remand, the Departments are
free to exercise their discretion to
supplement their explanation as they
deem appropriate and to reach the same
or different ultimate conclusions. At a
minimum; however, the Departments
are required to respond to [ACEP’s]
comments and proposals in a reasoned
54.9815–2719(b)(2)(ii)(C), 29 CFR 2590.715–
2719(b)(2)(ii)(C), and 45 CFR 147.136(b)(2)(ii)(C)
and (b)(3)(ii)(C).
13 See https://www.acep.org/Legislation-andAdvocacy/Regulatory/ACEPvsHHS_051216/.
14 See American College of Emergency Physicians
v. Price, et al., 264 F. Supp. 3d 89 (D.D.C. 2017).
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manner that ‘enable[s] [the Court] to see
what major issues of policy were
ventilated . . . and why the agency
reacted to them as it did.’ ’’ 15
The Departments are issuing this
document to provide the additional
consideration required by the court’s
remand order. Specifically, the
Departments are responding more fully
to ACEP’s written comment dated
August 3, 2010 in reference to the June
2010 IFR.
II. Further Consideration of the
Departments’ Final Rule in Response to
the Court’s Remand Order
In light of the statutory language in
section 2719A of the PHS Act and the
totality of the comments received in
response to the June 2010 IFR, the
Departments continue to believe that the
implementing regulations provide a
reasonable and transparent methodology
to determine appropriate payments by
non-grandfathered group health plans
and health insurance issuers offering
non-grandfathered group or individual
health insurance coverage for out-ofnetwork emergency services. ACEP’s
proposal that the GOT regulation
require the development of a new
database and/or utilization of a
publicly-available database to set UCR
amounts would require the Departments
to extend the scope of their authority
under section 2719A of the PHS Act
beyond the establishment of a minimum
payment amount to facilitate the costsharing requirements in section
2719A(b) of the PHS Act, to the
development of specific provider
reimbursement rates for group health
plans and health insurance issuers,
which is an area that, up to this point,
has been reserved for the states, issuers,
and health plans. Accordingly, the
Departments decline to adopt such a
requirement. Finally, even if the
Departments were prepared to extend
their authority in this manner, creating
and maintaining a database or assessing,
validating, and monitoring publicly
available databases would be costly and
time-consuming, and there is no
indication in either case that such a
database would provide a better method
for determining UCR amounts than the
methods group health plans and health
insurance issuers currently use.
A. GOT Regulation Is Reasonable and
Transparent
The Departments believe that ACEP
and other commenters did not provide
adequate information to support their
assertion that the methods used for
determining the minimum payment for
15 Id.
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sradovich on DSK3GMQ082PROD with RULES
out-of-network emergency services
under the GOT regulation are not
sufficiently transparent or reasonable. In
developing the GOT regulation, the
Departments accounted for wide
variation in how group health plans and
health insurance issuers determine both
in-network and out-of-network rates,
and made a determination to base the
GOT criteria on existing provisions of
federal law. The Departments have not
received any information regarding
ACEP’s concerns, as part of the
comment record or otherwise, that
persuaded us that these standards are
insufficiently transparent or otherwise
unreasonable, and we conclude that the
methodology for determining payment
amounts under all three prongs of the
GOT regulation is sufficiently
transparent and reasonable.
Under the GOT regulation, the three
prongs work together to establish a floor
on the payment amount for out-ofnetwork emergency services, and each
state generally retains authority to set
higher amounts for health insurance
issued within the state. The GOT
regulation requires that a group health
plan or health insurance issuer must
pay the highest amount determined
under the three prongs, which reflect
amounts that the federal government
itself or group health plans and health
insurance issuers have established as
reasonable.
The Departments determined the GOT
methodology was sufficiently
transparent by taking into account other
federal laws which require disclosure in
certain circumstances. Specifically, a
group health plan subject to ERISA must
disclose how it calculates a payment
amount under the GOT regulation,
including payment amounts to innetwork providers, and the method the
group health plan or health insurance
issuer used to determine the UCR
amount to a claimant or the claimant’s
authorized representative.16
Additionally, as described above,
under the internal claims and appeals
and external review requirements of
section 2719 of the PHS Act, which
apply to plans that are subject to the
protections of section 2719A of the PHS
Act, a claimant (or the claimant’s
authorized representative) upon appeal
of an adverse benefit determination
must be provided reasonable access to,
16 See
DOL Advisory Opinion 96–14A (July 31,
1996). See also FAQs about Affordable Care Act
Implementation Part 31, Mental Health Parity
Implementation, and Women’s Health and Cancer
Rights Act Implementation, available at https://
www.dol.gov/sites/default/files/ebsa/about-ebsa/
our-activities/resource-center/faqs/aca-part-31.pdf
and https://www.cms.gov/CCIIO/Resources/FactSheets-and-FAQs/Downloads/FAQs-31_Final-4-2016.pdf.
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15:59 May 02, 2018
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and copies of, all documents, records,
and other information relevant to the
claim for benefits, including
information about the plan’s
determination of the UCR amount. A
failure to provide or make payment of
a claim in whole or in part is considered
an adverse benefit determination.17
Further, the Medicare rate is
transparent because the Medicare
statute’s provisions on setting physician
payment rates are objective and
detailed, and provide payment at a level
that reflects the relative value of a
service.18 Medicare rates for physicians’
services are established and reviewed
every year through a rulemaking in
which all physicians and other
stakeholders are invited to submit
public comment on the agency’s
proposed calculations.19
As a result, patients who are to be
protected by the statute have a right to
transparent access to the calculations
used to arrive at the allowed amount for
out-of-network emergency services, and
a provider can obtain this information
as a patient’s authorized
representative.20 To the extent that a
provider is not able to obtain these
calculations, the Departments believe
that the patients’ ability to obtain and to
potentially challenge the information
through litigation or the appeals process
creates adequate safeguards with respect
to ACEP’s concerns regarding health
insurance issuer manipulation of UCR
amounts. This provides sufficient
protections, especially in light of the
focus of section 2719A of the PHS Act
on the protection of patients, rather than
physicians. For all these reasons, the
Departments believe that the
methodology in the GOT regulations is
sufficiently transparent and reasonable.
B. Creation of a Database or Use of a
Publicly Available Database Is
Problematic
The creation and use of ACEP’s
proposed database on payments and
charges would be problematic in a
number of ways. The establishment and
maintenance of a publicly available
database would be time-consuming,
would require contracting assistance,
and would be costly and burdensome to
maintain. Furthermore, there is no
indication that such a database would
17 26 CFR 54.9815–2719(b); 29 CFR 2590.715–
2719(b); 45 CFR 147.136(b). See also footnote 11.
18 See Social Security Act Section 1848(b)(1).
19 See id.
20 See 29 CFR 2560.503–1(b)(4). See also 26 CFR
54.9815–2719(b)(2)(i), 29 CFR 2590.715–
2719(b)(2)(i), and 45 CFR 147.136(b)(2)(i), requiring
non-grandfathered group health plans and issuers to
incorporate the internal claims and appeals
processes set forth in 29 CFR 2560.503–1.
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
19435
be a better barometer of UCR amounts
than the current methodology used by
group health plans and health insurance
issuers.
ACEP’s suggestion that the
Departments mandate the use of an
existing database (for example, FAIR
Health) presents similar issues. As an
initial matter, determining which
existing database (if any) is appropriate
for calculating UCR, and then
monitoring the database, would be
costly and time-consuming. And, as
with ACEP’s suggestion that the
Departments create a database, there is
no indication that a publicly available
database would be a better barometer of
UCR amounts than the current
methodology used by group health
plans and health insurance issuers.
Thus, the Departments concluded in
the November 2015 final rule, and still
maintain, that the existing GOT
regulation provides a statutorily
supportable, and also a more practical,
and cost-effective approach for group
health plans and health insurance
issuers to determine the required
minimum payment amounts. Further,
the Departments did not have a mandate
to require plans and issuers to use
different databases for the purposes of
implementing the Patient Protections
statutory requirements from what they
may currently use, and the Departments
decline to mandate the use of one
particular database in the limited
context of this rulemaking. It is the
Departments’ view that it is appropriate
to continue to reserve the determination
of the relative merits of each database to
the discretion of the states, insurers, and
health plans.21
III. Conclusion
The Departments believe that the
November 2015 final rule provides a
reasonable methodology to determine
appropriate payments by group health
plans and health insurance issuers for
out-of-network emergency services, in
light of the statutory language in section
2719A of the PHS Act and the totality
of the comments received in response to
the June 2010 IFR. The Departments
also believe that the three prongs of the
GOT regulation are sufficiently
transparent. ACEP’s proposal that the
GOT regulation require the development
of a database or utilization of a publicly
available database to set UCR amounts
would require the Departments to
extend the scope of authority provided
under section 2719A of the PHS Act to
21 The website of the All Claims Payable Database
Council lists 19 states with legislation enabling the
collection of claims and databases. https://
www.apcdcouncil.org/apcd-legislation-state.
E:\FR\FM\03MYR1.SGM
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19436
Federal Register / Vol. 83, No. 86 / Thursday, May 3, 2018 / Rules and Regulations
intrude on state authority and group
health plan and health insurance issuer
discretion; and even if the Departments
were prepared to extend their authority
in this manner, the establishment and
maintenance of a database or the
assessment, validation, and monitoring
of a publicly available database would
be costly and time-consuming. Further,
there is no indication that such a
database would provide a better method
for determining UCR amounts than the
methods group health plans and health
insurance issuers currently use. The
Departments therefore decline to adopt
the suggestions of ACEP and other
commenters that made similar
suggestions regarding the GOT
regulation.
IV. Collection of Information
Requirements
This document does not impose
information collection requirements,
that is, reporting, recordkeeping or
third-party disclosure requirements.
Consequently, there is no need for
review by the Office of Management and
Budget under the authority of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501, et seq.).
Kirsten B. Wielobob,
Deputy Commissioner for Services and
Enforcement, Internal Revenue Service.
Approved: April 25, 2018.
David J. Kautter,
Assistant Secretary of the Treasury (Tax
Policy).
Approved: April 25, 2018.
Signed this 25th day of April 2018.
Preston Rutledge,
Assistant Secretary, Employee Benefits
Security Administration, Department of
Labor.
Dated: April 25, 2018.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: April 27, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2018–09369 Filed 4–30–18; 4:15 pm]
sradovich on DSK3GMQ082PROD with RULES
BILLING CODE 4120–01–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
[Docket Number USCG–2018–0397]
RIN 1625–AA00
Safety Zone; Straits of Mackinac,
Mackinaw City, MI
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
The Coast Guard is
establishing a temporary safety zone for
navigable waters within a 500-yard
radius of construction equipment
vessels conducting operations in the
Straits of Mackinac. The safety zone is
needed to protect personnel, vessels,
and the marine environment from
potential hazards created by
surveillance and repair work to electric
utility cables that cross the Straits of
Mackinac. Entry of vessels or persons
into this zone is prohibited unless
specifically authorized by the Captain of
the Port Sault Sainte Marie or a
designated representative.
DATES: This rule is effective from May
3, 2018 until October 30, 2018. It will
be enforced with actual notice from
April 30, 2018, until May 3, 2018.
ADDRESSES: To view documents
mentioned in this preamble as being
available in the docket, go to https://
www.regulations.gov, type USCG–2018–
0397 in the ‘‘SEARCH’’ box and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rule.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this rule, call or
email LTJG Sean V. Murphy, Sector
Sault Sainte Marie Waterways
Management Chief, U.S. Coast Guard;
telephone 906–635–3319, email
sssmprevention@uscg.mil.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Table of Abbreviations
CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
§ Section
U.S.C. United States Code
ROV Remotely Operated Underwater
Vehicle
II. Background Information and
Regulatory History
The Coast Guard is issuing this
temporary rule without prior notice and
opportunity to comment pursuant to
authority under section 4(a) of the
VerDate Sep<11>2014
15:59 May 02, 2018
Jkt 244001
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
Administrative Procedure Act (APA) (5
U.S.C. 553(b)). This provision
authorizes an agency to issue a rule
without prior notice and opportunity to
comment when the agency, for good
cause, finds that those procedures are
‘‘impracticable, unnecessary, or contrary
to the public interest.’’ Under 5 U.S.C.
553(b)(B), the Coast Guard finds that
good cause exists for not publishing a
notice of proposed rulemaking (NPRM)
with respect to this rule because visual
imagery and repair of damage to the
utility cables is imperative to further
mitigate any risks to the environment
and the public. Emergent conditions
require immediate marine surveying of
the area due to damage to utility cables
in the Straits of Mackinac. It is
impractical to publish an NPRM
because of the urgent need to survey the
utility cables damaged.
Under 5 U.S.C. 553(d)(3), the Coast
Guard finds that good cause exists for
making this rule effective less than 30
days after publication in the Federal
Register. Delaying the effective date of
this rule would be impracticable
because immediate action is needed to
obtain visual imagery of damage to the
utility cables in order to successfully
effect repairs and further mitigate any
risks to the environment and the public.
III. Legal Authority and Need for Rule
The Coast Guard is issuing this rule
under authority in 33 U.S.C. 1231. The
Captain of the Port Sault Sainte Marie
(COTP) has determined that
construction vessels operating in the
Straits of Mackinac, will be a safety and
navigation concern for any vessel within
a 500-yard radius of the operations. This
rule is needed to protect personnel,
vessels, and the marine environment in
the navigable waters within the safety
zone while the operations are ongoing.
IV. Discussion of the Rule
This rule establishes a safety zone
from April 30, 2018 until October 30,
2018. The safety zone will cover all
navigable waters within 500 yards of
construction equipment vessel working
and surveying damaged utility cables in
the Straits of Mackinac. The duration of
the zone is intended to protect
personnel, vessels, and the marine
environment in these navigable waters
while operations are ongoing. The zone
will be enforced at various times
throughout this period. Local Broadcast
Notice to mariners, via VHF–FM marine
channel 16, will notify mariners when
the construction vessels are conducting
operations and the zone is being
enforced. No vessel or person will be
permitted to enter the safety zone
E:\FR\FM\03MYR1.SGM
03MYR1
]]>Agencies
[Federal Register Volume 83, Number 86 (Thursday, May 3, 2018)]
[Rules and Regulations]
[Pages 19431-19436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09369]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[TD 9744]
RIN 1545-BJ45, 1545-BJ50, 1545-BJ62, 1545-BJ57
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2590
RIN 1210-AB72
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 144, 146, and 147
[CMS-9993-N]
RIN 0938-AS56
Clarification of Final Rules for Grandfathered Plans, Preexisting
Condition Exclusions, Lifetime and Annual Limits, Rescissions,
Dependent Coverage, Appeals, and Patient Protections Under the
Affordable Care Act
AGENCY: Internal Revenue Service, Department of the Treasury; Employee
Benefits Security Administration, Department of Labor; and Centers for
Medicare & Medicaid Services, Department of Health and Human Services.
ACTION: Final rule; clarification.
-----------------------------------------------------------------------
SUMMARY: On November 18, 2015, the Departments of Labor, Health and
Human Services, and the Treasury (the Departments) published a final
rule in the Federal Register titled ``Final Rules for Grandfathered
Plans, Preexisting Condition Exclusions, Lifetime and Annual Limits,
Rescissions, Dependent Coverage, Appeals, and Patient Protections Under
the Affordable Care Act'' (the November 2015 final rule), regarding, in
part, the coverage of emergency services by non-grandfathered group
health plans and health insurance issuers offering non-grandfathered
group or individual health insurance coverage, including the
requirement that non-grandfathered group health plans and health
insurance issuers offering non-grandfathered group or individual health
insurance coverage limit cost-sharing for out-of-network emergency
services and, as part of that rule, pay at least a minimum amount for
out-of-network emergency services. The American College of
[[Page 19432]]
Emergency Physicians (ACEP) filed a complaint in the United States
District Court for the District of Columbia, which on August 31, 2017
granted in part and denied in part without prejudice ACEP's motion for
summary judgment and remanded the case to the Departments to respond to
the public comments from ACEP and others. In response, the Departments
are issuing this notice of clarification to provide a more thorough
explanation of the Departments' decision not to adopt recommendations
made by ACEP and certain other commenters in the November 2015 final
rule.
DATES: This clarification is applicable beginning May 3, 2018.
FOR FURTHER INFORMATION CONTACT: Amber Rivers, Employee Benefits
Security Administration, Department of Labor, at (202) 693-8335; Dara
R. Alderman, Internal Revenue Service, Department of the Treasury, at
(202) 317-5500; and Katherine Carver, Centers for Medicare & Medicaid
Services, Department of Health and Human Services, at (410) 786-1565.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Rulemaking at Issue
i. Statutory Background
The Patient Protection and Affordable Care Act (Pub. L. 111-148),
was enacted on March 23, 2010; the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152) was enacted on March 30,
2010. These statutes are collectively referred to as ``PPACA'' in this
document. The PPACA reorganized, amended, and added to the provisions
of part A of title XXVII of the Public Health Service Act (PHS Act).
PPACA also added section 715 to the Employee Retirement Income Security
Act (ERISA) and section 9815 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. Accordingly, sections 2701 through
2728 of the PHS Act are incorporated into the Code and ERISA.
Section 2719A of the PHS Act, which is entitled ``Patient
Protections,'' provides requirements relating to coverage of emergency
services for non-grandfathered group health plans and health insurance
issuers offering non-grandfathered group or individual health insurance
coverage \1\ and states, in general, that if a group health plan, or a
health insurance issuer offering group or individual health insurance
coverage, provides or covers any benefits with respect to services in
an emergency department of a hospital, the plan or issuer shall cover
emergency services--(A) without the need for any prior authorization
determination; (B) whether the health care provider furnishing such
services is a participating provider with respect to such services; (C)
in a manner so that, if such services are provided to a participant,
beneficiary, or enrollee--(i) by a nonparticipating health care
provider with or without prior authorization; or (ii)(I) such services
will be provided without imposing any requirement under the plan for
prior authorization of services or any limitation on coverage where the
provider of services does not have a contractual relationship with the
plan for the providing of services that is more restrictive than the
requirements or limitations that apply to emergency department services
received from providers who do have such a contractual relationship
with the plan; and (II) if such services are provided out-of-network,
the cost-sharing requirement (expressed as a copayment amount or
coinsurance rate) is the same requirement that would apply if such
services were provided in-network.
---------------------------------------------------------------------------
\1\ Section 2719A of the PHS Act also provides, for non-
grandfathered group health plans and health insurance issuers
offering non-grandfathered group or individual health insurance
coverage, rules regarding designation of primary care providers,
access to pediatric care, and patient access to obstetrical and
gynecological care. This document does not address those aspects of
section 2719A of the PHS Act.
---------------------------------------------------------------------------
Therefore, among other things, the statute requires non-
grandfathered group health plans and health insurance issuers offering
non-grandfathered group or individual health insurance coverage that
cover emergency services to do so even if the provider is not one of
the plans' or issuers' ``participating provider[s].'' \2\ In addition,
section 2719A of the PHS Act requires non-grandfathered group health
plans and health insurance issuers offering non-grandfathered group or
individual health insurance coverage to apply the same cost-sharing
requirement (expressed as copayments and coinsurance) for emergency
services provided out-of-network as emergency services provided in-
network; however, the statute does not expressly address how much the
out-of-network provider of emergency services must be paid for
performing such services by the non-grandfathered group health plan or
health insurance issuer offering non-grandfathered group or individual
health insurance coverage.
---------------------------------------------------------------------------
\2\ See section 2719A(b)(1)(B) of the PHS Act.
---------------------------------------------------------------------------
As background, the amount an out-of-network provider may charge for
emergency services may exceed the group health plan's or health
insurance issuer's ``allowed amount'' (the ``[m]aximum amount on which
payment is based for covered health care services'').\3\ The allowed
amount may be subject to deductibles and other cost-sharing in terms of
a fixed-amount per service and/or a coinsurance percentage of the
allowed amount. In circumstances in which a provider's charge exceeds
the allowed amount, some states allow an out-of-network provider to
``balance bill'' the patient for the amount of the provider's charge
that exceeds the allowed amount.
---------------------------------------------------------------------------
\3\ See definition of ``allowed amount'' and ``balance billing''
in the Uniform Glossary of Health Care Coverage and Medical Terms,
https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/sbc-uniform-glossary-of-coverage-and-medical-terms-final.pdf.
---------------------------------------------------------------------------
Section 2719A of the PHS Act does not prohibit an out-of-network
provider from balance billing a participant or beneficiary because
although it includes a cost-sharing rule, ``cost sharing'' is a
statutorily defined term that ``does not include . . . balance billing
amounts for non-network providers'' and the cost-sharing requirement in
section 2719A(b)(1)(C)(ii)(II) of the PHS Act applies to cost sharing
``expressed as a copayment amount or coinsurance rate.'' \4\
---------------------------------------------------------------------------
\4\ See PPACA section 1302(c)(3)(B). See also 80 FR 72192,
72212-13 (Nov. 18, 2015).
---------------------------------------------------------------------------
ii. The Departments' Regulation and Related Comments
On June 28, 2010, the Departments published an interim final rule
(IFR) in the Federal Register titled ``Patient Protection and
Affordable Care Act; Requirements for Group Health Plans and Health
Insurance Issuers Under the Patient Protection and Affordable Care Act
Relating to Preexisting Condition Exclusions, Lifetime and Annual
Limits, Rescissions, and Patient Protections,'' 75 FR 37188 (the June
2010 IFR). The June 2010 IFR preamble on section 2719A of the PHS Act
stated, in part, that, because the statute does not require plans or
issuers to cover balance billing amounts, and does not prohibit balance
billing, even where the protections in the statute apply, patients may
be subject to balance billing. It would defeat the purpose of the
protections in the statute if a plan or
[[Page 19433]]
issuer paid an unreasonably low amount to a provider, even while
limiting the coinsurance or copayment associated with that amount to
in-network amounts. To avoid the circumvention of the protections of
section 2719A of the PHS Act, it is necessary that a reasonable amount
be paid before a patient becomes responsible for a balance billing
amount. Thus, these interim final regulations require that a reasonable
amount be paid for services by some objective standard. In establishing
the reasonable amount that must be paid, the Departments had to account
for wide variation in how plans and issuers determine both in-network
and out-of-network rates. For example, for a plan using a capitation
arrangement to determine in-network payments to providers, there is no
in-network rate per service.
Accordingly, these interim final regulations considered three
amounts: The in-network rate, the out-of-network rate, and the Medicare
rate. Specifically, a plan or issuer satisfies the copayment and
coinsurance limitations in the statute if it provides benefits for out-
of-network emergency services in an amount equal to the greatest of
three possible amounts--(1) The amount negotiated with in-network
providers for the emergency service furnished; (2) The amount for the
emergency service calculated using the same method the plan generally
uses to determine payments for out-of-network services (such as the
usual, customary, and reasonable charges) but substituting the in-
network cost-sharing provisions for the out-of-network cost-sharing
provisions; or (3) The amount that would be paid under Medicare for the
emergency service. Each of these three amounts is calculated excluding
any in-network copayment or coinsurance imposed with respect to the
participant, beneficiary, or enrollee.\5\
---------------------------------------------------------------------------
\5\ 75 FR at 37194 (footnote omitted). For the interim final
regulation text, see 75 FR at 37225, 37232, and 37238.
---------------------------------------------------------------------------
This is sometimes referred to as the ``Greatest of Three'' or the
``GOT'' regulation because it sets a floor on the amount non-
grandfathered group health plans and health insurance issuers offering
non-grandfathered group or individual health insurance coverage are
required to pay for out-of-network emergency services under this
provision at the greatest of the three listed amounts.
During the comment period for the June 2010 IFR, some commenters
were in favor of the GOT regulation while others expressed concerns.
Several commenters, including ACEP, objected to the second prong of the
GOT regulation, which relates to the method the plan generally uses to
determine payments for out-of-network services, such as the usual,
customary, and reasonable amount (henceforth referred to as the UCR
amount). ACEP's August 3, 2010 comment letter \6\ stated the following:
---------------------------------------------------------------------------
\6\ Available at https://www.regulations.gov/contentStreamer?documentId=EBSA-2010-0016-0022&attachmentNumber=1&contentType=pdf.
. . . [W]e appreciate the clearly stated acknowledgement that
allowing plans and insurersto pay emergency physicians whatever they
see fit defeats the purpose of protecting patients from potentially
large bills. In that light, we also support development of an
objective standard to establish `fair payment.' Insurers know that
emergency physicians will see everyone who comes to the ED due to
EMTALA responsibilities, and many leverage that fact to impose
extremely low reimbursement rates. While a large majority of our
members participate in nearly every plan or insurer network in their
area, the primary reason they cite for not joining a plan's network
is that the plan has arbitrarily offered an in-network payment rate
that fails to cover the costs of providing the service. This forces
the physicians to balance bill the patients, which often results in
---------------------------------------------------------------------------
an unsatisfactory experience for everyone but the insurer. . .
As noted in the IF rule, `there is wide variation in how plans and
issuers determine in [network] and out-of-network rates.' The term
`reasonable' is in the eye of the beholder. For many years, usual and
customary rates referred to charges or a proportion of charges. This
has changed in recent years and physicians, particularly emergency
physicians, have had problems with the `black box' approach that
commercial insurers have used to determine [the] usual and customary
`rates' for out-of-network providers. At this time, we are unaware of a
national database that is widely available and provides timely data for
objective comparisons of charges and/or costs that could be used to
implement this part of the regulation. A new database, perhaps the FAIR
Health data[base] that is currently being developed as a result of the
settlement with Ingenix, may prove to be more timely and accurate, but
any database used to establish usual and customary reasonable rates
will require transparent validation, monitoring, and active enforcement
by state and federal insurance officials.''
Other groups, such as Advocacy for Patients with Chronic Illness,
Inc. and Lybba, the Emergency Department Practice Management
Association, the American Medical Association, the American Hospital
Association, the Texas Medical Association, the Healthcare Association
of New York State, and the California Chapter of ACEP, submitted
similar comments expressing their concern about the lack of
transparency and potential for manipulation of rates under the second
prong of the GOT regulation. Like ACEP, several of these commenters
referenced the FAIR Health database as a potential alternative
solution.\7\
---------------------------------------------------------------------------
\7\ The FAIR Health Database was created by FAIR Health, an
independent nonprofit that collects data for and manages the
nation's largest database of privately billed health insurance
claims. See https://www.fairhealth.org/about-us.
---------------------------------------------------------------------------
On November 18, 2015, the Departments finalized the regulation
under section 2719A of the PHS Act, including the GOT regulation (80 FR
72192). The November 2015 final rule adopted the GOT regulation without
substantive revision from the June 2010 IFR and incorporated a
clarification that had been issued in subregulatory guidance.\8\ In the
November 2015 final rule, the Departments reiterated the need for the
GOT regulation, and in response to the comments described above
regarding the GOT regulation, the Departments stated that ``[s]ome
commenters expressed concern about the level of payment for out-of-
network emergency services and urged the Departments to require plans
and issuers to use a transparent database to determine out-of-network
amounts. The Departments believe that this concern is addressed by our
requirement that the amount be the greatest of the three amounts
specified in [the GOT regulation].'' \9\
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\8\ The final regulations incorporated guidance that had been
provided in FAQs about Affordable Care Act Implementation (Part I),
Q15, available at www.dol.gov/ebsa/faqs/faq-aca.html and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs.html. The FAQ and final regulations provide
that if state law prohibits balance billing, or in cases in which a
group health plan or health insurance issuer is contractually
responsible for balance billing amounts, plans and issuers are not
required to satisfy the GOT regulation, but may not impose any
copayment or coinsurance requirement for out-of-network emergency
services that is higher than the copayment or coinsurance
requirement that would apply if the services were provided in-
network. See 26 CFR 54.9815-2719A(b)(3)(iii); 29 CFR 2590.715-
2719A(b)(3)(iii); and 45 CFR 47.138(b)(3)(iii).
\9\ 80 FR 72192, 72213 (Nov. 18, 2015).
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B. Other Guidance
In response to concerns about transparency with respect to the
second prong of the GOT regulation raised by ACEP in its comment and in
subsequent communications to the Departments, on April 20, 2016, the
Departments issued Frequently Asked Questions About Affordable Care Act
Implementation Part 31, Mental Health Parity Implementation, and
Women's Health
[[Page 19434]]
and Cancer Rights Act Implementation, which addressed, in part, the GOT
regulation.\10\ In Question & Answer number 4, the Departments
clarified that a group health plan or health insurance issuer of group
or individual health insurance coverage is required to disclose how it
calculates the amounts under the GOT regulation, including the UCR
amount. These disclosure requirements would also apply to a request for
disclosure of payment amounts for in-network providers. Specifically,
for group health plans subject to ERISA, documentation and data used to
calculate each of the amounts under the GOT regulations for out-of-
network emergency services, including the UCR amount, are considered to
be instruments under which the plan is established or operated and
would be subject to the disclosure provisions under section 104(b) of
ERISA and 29 CFR 2520.104b-1, which generally require that such
information be furnished to plan participants (or their authorized
representatives) within 30 days of request.\11\ In addition, the
Department of Labor claims procedure regulations, as well as the
internal claims and appeals and external review requirement under
section 2719 of the PHS Act, which apply to both ERISA and non-ERISA
non-grandfathered group health plans and health insurance issuers of
non-grandfathered group or individual coverage, set forth rules
regarding claims and appeals, including the right of a claimant (or the
claimant's authorized representative) upon appeal of an adverse benefit
determination (or a final internal adverse benefit determination) to be
provided upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to
the claimant's claim for benefits, and a failure to provide or make
payment of a claim in whole or in part is an adverse benefit
determination.\12\
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\10\ See https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf, or https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-31_Final-4-20-16.pdf.
\11\ See DOL Advisory Opinion 96-14A (July 31, 1996). See also
FAQs about Affordable Care Act Implementation (Part XXIX) and Mental
Health Parity Implementation, Q12, available at www.dol.gov/ebsa/faqs/faq-aca29.html and www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-XXIX.pdf, providing that a plan's or
issuer's characterization of information as proprietary or
commercially valuable cannot be a basis for non-disclosure.
\12\ 29 CFR 2560.503-1, 26 CFR 54.9815-2719, 29 CFR 2590.715-
2719, and 45 CFR 147.136. For additional requirements for the full
and fair review standard that applies under PHS Act section 2719, in
addition to 29 CFR 2560.503-1(h)(2), see 26 CFR 54.9815-
2719(b)(2)(ii)(C), 29 CFR 2590.715-2719(b)(2)(ii)(C), and 45 CFR
147.136(b)(2)(ii)(C) and (b)(3)(ii)(C).
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C. The Court's Remand Order
On May 12, 2016, ACEP filed a lawsuit against the Departments,
asserting that the final GOT regulation should be invalidated because
it does not ensure a reasonable payment for out-of-network emergency
services as required by the statute, and that the Departments did not
respond meaningfully to ACEP's comments about purported deficiencies in
the regulation.\13\
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\13\ See https://www.acep.org/Legislation-and-Advocacy/Regulatory/ACEPvsHHS_051216/.
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Following briefing by both parties, on August 31, 2017, the United
States District Court for the District of Columbia issued a memorandum
opinion that granted in part and denied in part without prejudice
ACEP's motion for summary judgment, and remanded the case to the
Departments for further explanation of the November 2015 final
rule.\14\ The court concluded that the Departments did not adequately
respond to comments and proposed alternatives submitted by ACEP and
others regarding perceived problems with the GOT regulation. In
particular, the court stated that the Departments' response in the
November 2015 final rule ``to numerous comments raising specific
concerns about the method used in the GOT regulation for determining
the amounts insurers would be required to pay for out-of-network
emergency medical services--e.g., the rates' lack of transparency or
their vulnerability to manipulation'' did not ``seriously respond to
the actual concerns raised about the particular rates, and it ignore[d]
altogether the proposed alternative of using a database to set
payment.'' The court stated that its holding was ``a narrow one,''
relating ``only to the sufficiency of the Departments' response to
comments and proposed alternatives.''
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\14\ See American College of Emergency Physicians v. Price, et
al., 264 F. Supp. 3d 89 (D.D.C. 2017).
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The court did not vacate the November 2015 final rule but ordered
that ``this matter is remanded to the Departments of Health and Human
Services, Labor, and the Treasury so that they can adequately address
the comments and proposals at issue in this case. On remand, the
Departments are free to exercise their discretion to supplement their
explanation as they deem appropriate and to reach the same or different
ultimate conclusions. At a minimum; however, the Departments are
required to respond to [ACEP's] comments and proposals in a reasoned
manner that `enable[s] [the Court] to see what major issues of policy
were ventilated . . . and why the agency reacted to them as it did.' ''
\15\
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\15\ Id.
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The Departments are issuing this document to provide the additional
consideration required by the court's remand order. Specifically, the
Departments are responding more fully to ACEP's written comment dated
August 3, 2010 in reference to the June 2010 IFR.
II. Further Consideration of the Departments' Final Rule in Response to
the Court's Remand Order
In light of the statutory language in section 2719A of the PHS Act
and the totality of the comments received in response to the June 2010
IFR, the Departments continue to believe that the implementing
regulations provide a reasonable and transparent methodology to
determine appropriate payments by non-grandfathered group health plans
and health insurance issuers offering non-grandfathered group or
individual health insurance coverage for out-of-network emergency
services. ACEP's proposal that the GOT regulation require the
development of a new database and/or utilization of a publicly-
available database to set UCR amounts would require the Departments to
extend the scope of their authority under section 2719A of the PHS Act
beyond the establishment of a minimum payment amount to facilitate the
cost-sharing requirements in section 2719A(b) of the PHS Act, to the
development of specific provider reimbursement rates for group health
plans and health insurance issuers, which is an area that, up to this
point, has been reserved for the states, issuers, and health plans.
Accordingly, the Departments decline to adopt such a requirement.
Finally, even if the Departments were prepared to extend their
authority in this manner, creating and maintaining a database or
assessing, validating, and monitoring publicly available databases
would be costly and time-consuming, and there is no indication in
either case that such a database would provide a better method for
determining UCR amounts than the methods group health plans and health
insurance issuers currently use.
A. GOT Regulation Is Reasonable and Transparent
The Departments believe that ACEP and other commenters did not
provide adequate information to support their assertion that the
methods used for determining the minimum payment for
[[Page 19435]]
out-of-network emergency services under the GOT regulation are not
sufficiently transparent or reasonable. In developing the GOT
regulation, the Departments accounted for wide variation in how group
health plans and health insurance issuers determine both in-network and
out-of-network rates, and made a determination to base the GOT criteria
on existing provisions of federal law. The Departments have not
received any information regarding ACEP's concerns, as part of the
comment record or otherwise, that persuaded us that these standards are
insufficiently transparent or otherwise unreasonable, and we conclude
that the methodology for determining payment amounts under all three
prongs of the GOT regulation is sufficiently transparent and
reasonable.
Under the GOT regulation, the three prongs work together to
establish a floor on the payment amount for out-of-network emergency
services, and each state generally retains authority to set higher
amounts for health insurance issued within the state. The GOT
regulation requires that a group health plan or health insurance issuer
must pay the highest amount determined under the three prongs, which
reflect amounts that the federal government itself or group health
plans and health insurance issuers have established as reasonable.
The Departments determined the GOT methodology was sufficiently
transparent by taking into account other federal laws which require
disclosure in certain circumstances. Specifically, a group health plan
subject to ERISA must disclose how it calculates a payment amount under
the GOT regulation, including payment amounts to in-network providers,
and the method the group health plan or health insurance issuer used to
determine the UCR amount to a claimant or the claimant's authorized
representative.\16\
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\16\ See DOL Advisory Opinion 96-14A (July 31, 1996). See also
FAQs about Affordable Care Act Implementation Part 31, Mental Health
Parity Implementation, and Women's Health and Cancer Rights Act
Implementation, available at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-31_Final-4-20-16.pdf.
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Additionally, as described above, under the internal claims and
appeals and external review requirements of section 2719 of the PHS
Act, which apply to plans that are subject to the protections of
section 2719A of the PHS Act, a claimant (or the claimant's authorized
representative) upon appeal of an adverse benefit determination must be
provided reasonable access to, and copies of, all documents, records,
and other information relevant to the claim for benefits, including
information about the plan's determination of the UCR amount. A failure
to provide or make payment of a claim in whole or in part is considered
an adverse benefit determination.\17\
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\17\ 26 CFR 54.9815-2719(b); 29 CFR 2590.715-2719(b); 45 CFR
147.136(b). See also footnote 11.
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Further, the Medicare rate is transparent because the Medicare
statute's provisions on setting physician payment rates are objective
and detailed, and provide payment at a level that reflects the relative
value of a service.\18\ Medicare rates for physicians' services are
established and reviewed every year through a rulemaking in which all
physicians and other stakeholders are invited to submit public comment
on the agency's proposed calculations.\19\
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\18\ See Social Security Act Section 1848(b)(1).
\19\ See id.
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As a result, patients who are to be protected by the statute have a
right to transparent access to the calculations used to arrive at the
allowed amount for out-of-network emergency services, and a provider
can obtain this information as a patient's authorized
representative.\20\ To the extent that a provider is not able to obtain
these calculations, the Departments believe that the patients' ability
to obtain and to potentially challenge the information through
litigation or the appeals process creates adequate safeguards with
respect to ACEP's concerns regarding health insurance issuer
manipulation of UCR amounts. This provides sufficient protections,
especially in light of the focus of section 2719A of the PHS Act on the
protection of patients, rather than physicians. For all these reasons,
the Departments believe that the methodology in the GOT regulations is
sufficiently transparent and reasonable.
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\20\ See 29 CFR 2560.503-1(b)(4). See also 26 CFR 54.9815-
2719(b)(2)(i), 29 CFR 2590.715-2719(b)(2)(i), and 45 CFR
147.136(b)(2)(i), requiring non-grandfathered group health plans and
issuers to incorporate the internal claims and appeals processes set
forth in 29 CFR 2560.503-1.
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B. Creation of a Database or Use of a Publicly Available Database Is
Problematic
The creation and use of ACEP's proposed database on payments and
charges would be problematic in a number of ways. The establishment and
maintenance of a publicly available database would be time-consuming,
would require contracting assistance, and would be costly and
burdensome to maintain. Furthermore, there is no indication that such a
database would be a better barometer of UCR amounts than the current
methodology used by group health plans and health insurance issuers.
ACEP's suggestion that the Departments mandate the use of an
existing database (for example, FAIR Health) presents similar issues.
As an initial matter, determining which existing database (if any) is
appropriate for calculating UCR, and then monitoring the database,
would be costly and time-consuming. And, as with ACEP's suggestion that
the Departments create a database, there is no indication that a
publicly available database would be a better barometer of UCR amounts
than the current methodology used by group health plans and health
insurance issuers.
Thus, the Departments concluded in the November 2015 final rule,
and still maintain, that the existing GOT regulation provides a
statutorily supportable, and also a more practical, and cost-effective
approach for group health plans and health insurance issuers to
determine the required minimum payment amounts. Further, the
Departments did not have a mandate to require plans and issuers to use
different databases for the purposes of implementing the Patient
Protections statutory requirements from what they may currently use,
and the Departments decline to mandate the use of one particular
database in the limited context of this rulemaking. It is the
Departments' view that it is appropriate to continue to reserve the
determination of the relative merits of each database to the discretion
of the states, insurers, and health plans.\21\
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\21\ The website of the All Claims Payable Database Council
lists 19 states with legislation enabling the collection of claims
and databases. https://www.apcdcouncil.org/apcd-legislation-state.
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III. Conclusion
The Departments believe that the November 2015 final rule provides
a reasonable methodology to determine appropriate payments by group
health plans and health insurance issuers for out-of-network emergency
services, in light of the statutory language in section 2719A of the
PHS Act and the totality of the comments received in response to the
June 2010 IFR. The Departments also believe that the three prongs of
the GOT regulation are sufficiently transparent. ACEP's proposal that
the GOT regulation require the development of a database or utilization
of a publicly available database to set UCR amounts would require the
Departments to extend the scope of authority provided under section
2719A of the PHS Act to
[[Page 19436]]
intrude on state authority and group health plan and health insurance
issuer discretion; and even if the Departments were prepared to extend
their authority in this manner, the establishment and maintenance of a
database or the assessment, validation, and monitoring of a publicly
available database would be costly and time-consuming. Further, there
is no indication that such a database would provide a better method for
determining UCR amounts than the methods group health plans and health
insurance issuers currently use. The Departments therefore decline to
adopt the suggestions of ACEP and other commenters that made similar
suggestions regarding the GOT regulation.
IV. Collection of Information Requirements
This document does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501, et seq.).
Kirsten B. Wielobob,
Deputy Commissioner for Services and Enforcement, Internal Revenue
Service.
Approved: April 25, 2018.
David J. Kautter,
Assistant Secretary of the Treasury (Tax Policy).
Approved: April 25, 2018.
Signed this 25th day of April 2018.
Preston Rutledge,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
Dated: April 25, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: April 27, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2018-09369 Filed 4-30-18; 4:15 pm]
BILLING CODE 4120-01-P
