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No surprises in final essential-benefits rule

By Jessica Zigmond
Posted: February 20, 2013 - 3:45 pm ET

HHS on Wednesday released a final regulation on the health reform law's essential health benefits, actuarial value and accreditation provisions that closely follows the department's proposed rule from last November.

The final rule maps out standards (PDF) for the core set of benefits that health insurance issuers must cover in the individual and small group markets—both inside and outside of the health insurance exchanges—for 2014 and 2015. Those essential health benefits must include items and services within at least 10 categories, including emergency services, hospitalization, mental health and substance abuse services, prescription drugs, maternity care and pediatric services. HHS will revisit the provisions for the 2016 benefit year.

“I think this is really good for the states and health plans because they've been proceeding along on the basis of the proposed rule and don't have to change midcourse,” said Ian Spatz, an attorney and senior adviser at consulting firm Manatt Health Solutions.

Jan Kaplan, associate director for policy analysis at the Children's Hospital Association, said the organization was disappointed—though not surprised—that the administration followed its earlier guidance on essential health benefits. The Children's Hospital Association had encouraged HHS to include a comprehensive definition of pediatric benefits in the final rule and add a state's Children's Health Insurance Program plan as a benchmark option for children's coverage in that state. Absent that, the association had hoped states could supplement coverage from a CHIP plan in their benchmark plans. The association didn't get its wish. Instead, if states want to supplement coverage, they must take from another benchmark plan.

“The CHIP benefit was designed with kids in mind and the benchmark plan is designed for adults,” Kaplan said. “And for a healthy kid, that might be OK.”

The group was also displeased that HHS did not clearly define “habilitative services,” which Kaplan described as skills that need to be learned and maintained. As she explained, the proposed rule allowed states to define the term. And if they didn't, then insurers could define it. The Children's Hospital Association had suggested HHS adopt the National Association of Insurance Commissioners' definition of habilitative services as a way to set a standard, which HHS did not adopt in its final rule.

Meanwhile, the National Association of Psychiatric Health Systems praised the rule for recognizing behavioral healthcare as essential to overall health.

“This is a game-changer for people living with mental and addictive disorders,” Mark Covall, president and CEO of the NAPHS, said in a statement. “But unless these provisions are implemented carefully and with appropriate oversight, these gains will not be fully achieved.”

Another provision that HHS maintained relates to actuarial value, which is calculated as the percentage of total average costs for covered benefits. Bronze plans, for instance, have an actuarial value of 60%, which means consumers would cover the remaining 40%. The other levels are silver (70%), gold (80%), and platinum (90%). As in the final rule, HHS provided some leeway, saying health plans could meet those specified levels within plus or minus 2 percentage points. HHS created a downloadable AV calculator to help plans compute actuarial value.

The final rule clarified that the regulation does not bar insurers from using “reasonable management techniques” to control costs. Wednesday's rule also added requirements that plans ensure enrollee access to “clinically appropriate” drugs and specified that coverage requirements apply to FDA-approved drugs.

And the regulation provided a time frame for plans to meet accreditation standards and qualify for participation in federally operated health insurance exchanges in at least 26 states. That approach will allow those exchanges to accept the accreditation that issuers already have for their commercial, Medicaid or exchange plans and phase in accreditation plans that don't have such accreditations. The method was meant to maximize the number of plans available in the coming exchanges, according to the rule, because such accreditation processes can take up to 18 months—far longer than the roughly 10 months remaining for the exchanges to become operational. A timeline for the accreditation of multistate plans will be set by the Office of Personnel Management, according to the rule.

In related news Wednesday, the U.S. Labor department offered answers to the most frequently asked questions about implementing various provisions of the Patient Protection and Affordable Care Act.

—with Rich Daly

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