APA Encouraged by Modifications Included in Final EHB Rule

Wed February 20, 2013

(Arlington, VA) - The Final Rule on essential health benefits that was released by HHS on February 20, 2013 largely mirrors an earlier released Proposed Rule to which the APA submitted regulatory comments in December 2012.  The APA has evaluated the Final Rule and offered comments on sections of the rule likely to be of the greatest relevance to its members and their patients. These sections include: the extent of the Affordable Care Act’s non-discrimination provisions as applied to EHB, the Mental Health Parity and Addiction Equity Act of 2008’s (MHPAEA) application to EHB, prescription drug coverage required of EHB, and how EHB’s habilitative services category may be defined.

HHS adds to the Proposed Rule by saying an issuer’s benefit design, or the implementation of its benefit design, may not discriminate based on an individual’s age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health conditions. HHS’s statement that an EHB benchmark plan’s “implementation of its benefit design” must conform with the ACA’s non-discrimination provisions gives these provisions extra teeth that could be of assistance to consumers who later experience a MHPAEA violation within their EHB.  Additionally, HHS confirms that the Interim Final Rule, released in 2010, which operationalizes the federal mental health parity law, MHPAEA, will apply to all non-grandfathered individual and small group market plans, including qualified health plans to be sold on state insurance exchanges, which must also contain the EHB mandated by the ACA. *

Like many other organizations, in response to the Proposed Rule on EHB, the APA had lobbied hard for EHB benchmark plans that will include a better floor for prescription drug coverage.  In particular, the APA had asked HHS to require EHB benchmark plans to abide by the Medicare Part D prescription drug “all or substantially all” standard which requires plans to include six classes or prescription drugs. While HHS retains its current requirement that an EHB’s prescription drug category be comprised of the greater of one drug per class or what’s currently covered in a given state’s prescription drug category for its EHB benchmark plan, HHS provide for beneficiaries of EHB to be able to go through an appeals process with their issuer when seeking a “clinically appropriate” drug not covered by their EHB benchmark plan. HHS states it will release further regulatory guidance to describe this appeals process. In instances in which a state’s benchmark plan lacks a mental health and substance use disorder services category, HHS will require the state to supplement this category with a mental health and substance use disorder services category from another HHS-approved benchmark plan type. HHS clarifies this supplementation can occur at no additional cost to the state.

The Final Rule additionally provides guidance on how the habilitative services benefits category will be defined.  The APA had encouraged HHS to define habilitative services using either the National Association of Insurance Commissioners (NAIC) definition or the Medicaid program definition.  In the Final Rule, HHS allows states the first opportunity to determine which habilitative benefits must be covered by their EHB benchmark plan, and they may choose to use the NAIC or Medicaid definition of habilitative services. Where states choose not to define habilitative services, insurance issuers may define habilitative services, but HHS will require that issuers define them so they are in parity with what is included in the given state’s benchmark plan’s rehabilitative services category.

In its comments in response to the Proposed Rule on Standards Related to EHB, the APA had requested that HHS include in its Final Rule guidance on “network adequacy.” HHS chooses to not address network adequacy in its Final Rule on EHB, stating that compliance with network adequacy standards is outside the scope of its Final Rule.  The APA hopes network adequacy will be addressed in future ACA or MHPAEA regulatory guidance.

For further questions about the Final Rule on Standards Related to EHB, please contact the APA’s Deputy Director, Regulatory Affairs, Julie A. Clements, J.D., by email at jclements@psych.org or by phone at (703)-907-7842.

Self-insured group health plans, health insurance coverage offered in the large group market, and grandfathered health plans are not required to cover the essential health benefits. Some of these plan types are governed by ERISA, and when this is the case, they may be required to comply with MHPAEA, the federal mental health parity law and the IFR which operationalizes this statute, but they are not required to carry EHB and thus comply with this Final Rule on EHB.

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