Insurers will not be protected if they mistakenly deny a claim for a transgender patient while the healthcare industry as a whole adjusts to a new federal rule banning discrimination based on sexual orientation.
Health plans, however, did win a delay in implementing provisions of the rule that would require changes to benefit packages.
Insurance companies that offer Medicaid or Medicare, as well as those that offer plans on state and federal marketplaces must comply with the requirements in the rule, which carries out anti-bias provisions of the Affordable Care Act.
The rule, released Friday, is far-reaching. An estimated 700,000 transgender individuals live in the U.S., according to the Williams Institute, a left-leaning research institute on LGBT policy. The rule does not explicitly require insurers to cover gender-transition treatments such as surgery. But insurers could face questions if they deny medically necessary services related to gender transition for a man who identifies as a woman, or a woman who identifies as a man.
During the rule's comment period, payers had asked HHS' Office for Civil Rights (OCR) to extend a good faith compliance protection while they made adjustments such as allowing a transgender person to self-identify on applications.
More nuanced information concerning gender identity generally is not an existing field on applications under many current enrollment and claims systems; most systems simply document whether an individual is female or male.
Without that nuance, scenarios could result where, for example, a transgender woman indicates female on an enrollment application but later seeks services for men, such as a prostate exam.
Industry stakeholders asked the OCR to clarify that an initial denial of a transgender enrollee's claim because of a documented discrepancy would not constitute discrimination if the enrollee successfully appeals the decision.
A denial "may occur through no fault of the health plan or individual seeking coverage,” Jeff Myers, president and CEO of the trade group Medicaid Health Plans of America, said in a comment letter.
Kris Haltmeyer, vice president, health policy and analysis at Blue Cross and Blue Shield Association, said in a comment on the proposed rule that he was worried about sanctions for inadvertent non-compliance.
The CMS in the final rule said it was rejecting that suggestion because "Requiring transgender enrollees to repeatedly go through the internal appeals process to obtain coverage for certain services would subject these enrollees to a burdensome process that is likely to delay their receipt of coverage.”
A practical workaround would be to have plans create billing code modifiers for providers, so that the plans know they need to take a closer look at the claims before approving or denying them, the CMS said.
The ACA empowers HHS to alert an offender and suspend, terminate or refuse to continue federal funding to any organization that does not address noncompliance. HHS may also contact the U.S. Justice Department with a recommendation to enforce the law if the discrimination is found to be a criminal offense.
HHS did allow a delay in implementing provisions that require changes to a plan's benefits design, limitations or restrictions, and cost-sharing mechanisms, such as coinsurance, copayments and deductibles.
Initially, plans needed to make these changes 60 days after the rules release in the Federal Register, now they have until Jan. 1, 2017.
Julie Miller, the general counsel for Americans Health Insurance Plans, the industry's lobbying group, said the delay was appreciated.
“However, we continue to have concerns about the short implementation time frames given that benefits and premiums have already been filed for 2017."
“We are sensitive to the difficulties that making changes in the middle of a plan year could pose for some covered entities and are committed to working with covered entities to ensure that they can comply with the final rule without causing excessive disruption for the current plan year,” CMS said.
The rule is estimated to cost $960 million over its first few years of implementation. That's up from the $558 million outlined in the proposed rule.