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Empire Justice Comments on Patient Protection & the Affordable Care Act

December 21, 2012


Secretary Kathleen Sebelius
Centers for Medicare and Medicaid Services,
Department of Health and Human Services
Attention: CMS-9980-P
P.O. Box 8010
Baltimore, MD 21244-8010

RE: Patient Protection and Affordable Care Act: Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation

Dear Secretary Sebelius:

These comments are submitted by the Empire Justice Center.  Empire Justice is a not-for-profit law firm dedicated to making systemic change to improve quality of life for low-income New Yorkers.  Empire Justice provides direct representation for clients and technical assistance and support for advocates in upstate New York and on Long Island in a wide variety of poverty-related issue areas, including health care access.  Impact work includes class action litigation and administrative and legislative advocacy. 

We want to begin by expressing our gratitude to national consumer organizations such as the National Health Law Program and Community Catalyst for their work convening discussions and providing draft comments to state advocates.  We concur with the comments submitted separately by these previously named national organizations, as well as the comments submitted by Health Care for All New Yorkers (HCFANY), whose work has also provided a valuable framework for the comments we submit today.
These regulations provide needed guidance on a critical aspect of Affordable Care Act (ACA) implementation. We applaud HHS for strengthening consumer protections by including anti-discrimination and parity protections and prohibiting substitution of benefits across categories. We believe that the regulations could be even stronger, however.  Our comments are intended to highlight the ways in which HHS could improve the regulations by providing stronger consumer protections.

Part 155 Exchange Establishment Standards and other related Standards under the Affordable Care Act

§155.170 (2) – Additional Required Benefits
The NPRM clarifies that states will not have to defray the cost of a state-required benefit enacted on or before December 31, 2011.

In our comments on HHS’s December 16th Essential Health Benefits Bulletin, Empire Justice joined with HCFANY to recommend that HHS include this clarification.  New York has enacted many benefits mandates to protect our most vulnerable consumers, and one important mandate for consumers with autism was adopted in November 2011, and will go into effect in November 2012.  Under this NPRM, autism coverage will be included in New York’s EHB, and New York will not be required to defray the cost. 

Recommendation: Adopt the NPRM’s provision that states will not have to defray the cost of a state-required benefit enacted on or before December 31, 2011.

Part 156 Subpart B

§156.100 - State Selection of Benchmark
The NPRM outlines the state benchmark selection process that has already been utilized in some states, including New York.
New York has already selected its benchmark plan for 2014-2015.  The State had a very short period of time in which to select the benchmark plan, and consumers had less than complete information about the benefits offered by the benchmark plan options.  Many consumer advocates, including Empire Justice, urged the State to select a state employee benefit plan, rather than the small group plan that was selected.  Consumers will need more detailed information about the benchmark plan options, and the process that HHS will use to review the EHB in 2016.
Recommendation: To increase transparency, we recommend that HHS evaluate the EHB of all states and make these assessments available to consumers in an accessible and understandable way.  HHS should publish the evaluation process for EHBs, including its measurement criteria, disclose the data that will be collected, and the process through which consumers can weigh in during the evaluation process.  These criteria should include plan comprehensiveness, affordability, administrative simplicity, mandate inclusion and continuity of coverage.

HHS should use existing networks of consumer advocacy groups as partners in ongoing evaluation, to collect information about how well the EHBs meet the needs of consumers. Once people begin enrolling in EHB plans, state consumer assistance programs, Navigators and In-Person Assistors will be well-versed in how well EHBs meet the needs of consumers.  New York’s designated consumer assistance program, Community Health Advocates, currently identifies trends in ACA implementation and works with state and federal regulators to resolve these problems.  Consumer health advocacy groups are well-equipped and eager to play this role and develop relationships with HHS.

Part 156 Subpart B

§156.110 State Selection of Benchmark
The NPRM does not define in detail the 10 benchmark categories of care listed in the ACA.  Consumers would benefit from more detailed definitions of some of these categories, including the pediatric services category and habilitative care.  Additionally, the NPRM did not provide a federal definition of medical necessity.  A clear and uniform definition of medical necessity at the federal level will lead to greater consistency of care, transparency for consumers and providers, and improved procedures for grievances and appeals.

Recommendation: HHS should provide detailed definitions of the 10 categories of care and a standardized definition of medical necessity that is not narrowly defined by acute treatment outcomes.  The definition should be broad enough to include services that improve, maintain, or prevent deterioration of a patient’s capacity to function.

§156.115(a) Mental Health Parity
The NPRM clearly states that EHB must be compliant with the federal Mental Health Parity and Addiction Equity Act (MHPAEA).  However, the proposed rule leaves open the question of states’ financial responsibility regarding MHPAEA compliance.

Recommendation: HHS should clarify that states do not have to defray the cost of bringing plans into compliance with the federal mental health parity law.  HHS should clarify what specific steps it will take to ensure parity enforcement for the new EHB plans and should clarify that states do not require conforming state legislation to enforce the federal parity law.  Finally, HHS should outline a clear process for supplementing the base benchmarks to meet parity requirements.

§156.115(b) Substitution of Benefits

The NPRM clearly states that insurers may not substitute benefits across categories.  It also states that plans may not substitute a prescription drug benefit.  However, the NPRM does allow substitution of benefits within a category.

Empire Justice commends HHS for prohibiting substitution of prescription drugs and substitution of benefits across categories.  We remain concerned that allowing substitution of benefits within a category will be harmful to consumers.  As we explained in our comments on the December 2011 Bulletin, the discretion to deviate benefits or limit a state’s benchmark plan is an important regulatory function which should be reserved to state government and not abdicated to commercial carriers.  We again urge HHS to amend the regulation to clarify that states have the regulatory authority to impose standardization and coherence amongst the insurance carrier offerings in the Exchange.

If substitutions are allowed, they should be disclosed through a transparent process that allows consumers to understand how the substitutions impact their health coverage.  Moreover, HHS should identify particular types of covered services (e.g. visit limits, utilization reviews, etc.) and levels of variation from the benchmark benefits that would raise a red flag for regulators.

§156.115(d) Prohibited Benefits

The NPRM states that a plan may not include routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits or cosmetic orthodontia as EHB benefits.

The preamble states that this provision was added to the regulation because the ACA envisions the EHB as equal in scope to a typical employer plan, and many employer plans exclude these benefits.  However, some of these services are covered by some of the New York benchmark plan options, and these essential services were considered very important to consumers who weighed in on the issues.  For example, one of the federal employee plans, two of the state employee plans and the three small group plans offered at least some coverage for annual eye exams.  All of the federal and state employee plans covered at least some routine adult dental exams and care.

We urge HHS to remove the provision prohibiting routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits or cosmetic orthodontia as EHB benefits.  HHS has chosen the benchmark methodology for the EHB selection, rather than providing a list of covered benefits, and should not arbitrarily remove some benefits from a benchmark plan’s carefully designed benefit package.

Recommendation: HHS should remove this provision.  The regulations should not designate categories of benefits to be removed from a selected benchmark plan.

§156.120 Prescription of Drug Benefits

To meet the EHB standard, the NPRM requires that a health plan provide the greater of (1) one drug in every category and class; or (2) the same number of prescription drugs in each category and class as the benchmark plan.  This is an improvement over HHS’s proposal in the December 2011 Bulletin, which was to require only coverage of one drug in every category and class.  HHS cites to a report that found that most small group plans offer more than one drug in each class. 

We commend HHS on making an effort to require more than one drug in every category and class.  However, we remain concerned that this requirement will leave many vulnerable consumers without access to needed prescription drugs.  For example, as we explained in our comments on the December 2011 Bulletin, women’s access to contraceptives and access to anti-retroviral treatment for HIV positive people could be limited under this rule.

Recommendation: We urge HHS to adopt a definition for prescription drug coverage that ensures individuals have access to necessary medical care and ensures that vulnerable populations receive the specific drugs they need.  To accomplish this, we urge HHS to increase the minimum number of drugs in each category and class to at least two, rather than one.  HHS should include the Medicare Part D requirement to cover “all or substantially all” of the drugs in six protected classes of drugs which are critical to vulnerable populations.  Finally, we urge HHS to gather information from consumer advocates, like Consumer Assistance Programs and Navigators, about how the prescription drug coverage benefits are meeting the needs of diverse consumers in each state.

§156.125 Prohibition of Discrimination

The NPRM prohibits discrimination in benefit design, as required by the ACA, but monitoring and enforcement responsibilities are largely devolved to the states.  Given this approach, the rule needs to be revised to provide clear and explicit instructions for how the federal government and the states will work together to assess products, monitor compliance and enforce the law’s non-discrimination provisions.

The prohibition on discrimination is very important to vulnerable consumers.  HHS should develop clear standards for what is a discriminatory benefit design and provide sub-regulatory guidance on how to evaluate products for discrimination.

Recommendations: HHS should develop sub-regulatory guidance that includes concrete examples across the many protected classes of consumers to serve as examples for states.  These should be publicly available to consumers.  In addition, HHS should require trained evaluators to review insurance contracts for discriminatory benefits.  HHS should evaluate in-network and out-of-network utilization, and review plan benefit designs and formularies to ensure that they are not used to steer consumers with significant health needs out of a plan.  Finally, if HHS does not prohibit benefit substitution within a category, it should monitor the substitutions made to ensure that they do not discriminate against consumers with health needs.

§156.130 Cost-sharing Requirements

The NPRM allows plans to exceed annual deductible limits if the plan “may not reasonably reach the actuarial value of a given level of coverage.”

Recommendation: HHS should define “reasonably” and detail how it will track and monitor these deviations.

§156.150 Stand Alone Dental Plans

The NPRM indicates that there will be a separate cost-sharing limit for stand-alone dental plans in addition to the out-of-pocket maximums that will already apply to a family’s EHB-associated costs.  The rule further states that the additional cost-sharing limit be “reasonable,” but fails to propose a specific test for such reasonableness.  This proposed change will increase a family’s out-of-pocket maximum and therefore will penalize families when purchasing separate dental coverage.

No family should be subject to out-of-pocket expenses in excess of the law’s clearly established affordability provisions.  This provision would make pediatric dental coverage less affordable for families purchasing it separately from the rest of their EHBs, effectively creating a disincentive to purchase a critical piece of a child’s benefit package.

Recommendation: HHS should amend the NPRM to require that out-of-pocket maximums established by the statute be applied to costs related to all EHBs – including those services covered by stand-alone dental plans – and to require that costs are tracked and coordinated among all insurance carriers for a family.

Appendix A: List of Proposed Essential Health Benefits Benchmarks

The NPRM also lists the proposed Essential Health Benefits Benchmark plans.  The benchmark plan selected by New York’s Exchange is a small group plan offered by Oxford Health Insurance, and the pediatric oral plan selected is the state’s CHIP benefit.

Empire Justice participated in the opportunity for comment that New York provided, joining with HCFANY to issue written comments urging New York to select the New York State Employee Plans’ Empire Plan.  The Empire Plan provides the most comprehensive benefits of the 10 benchmark options.  The one million consumers obtaining coverage through New York’s Exchange will be much more diverse than the population covered by a typical employer-based small group plan, and will have more diverse benefit needs.

We recognize that the Exchange’s selection of the Oxford plan balanced the need for a comprehensive benefits package with the need to minimize premiums.  However, we continue to support selection of the Empire Plan.  

Recommendation: We urge the New York Exchange and HHS to select the Empire Plan, rather than the Oxford small group plan, as New York’s EHB benchmark plan, for the reasons stated in our letter of August 10, 2012.

Overall, we commend HHS for developing proposed regulations that will help the states implement the ACA in a consumer-friendly manner.  As we outlined above, HHS could make these regulations even stronger by increasing transparency and stakeholder involvement.  In particular, consumers should have an opportunity to participate in the process of evaluating and updating EHB in 2016.