How ACA Regulates Private Health Insurance Providers

How ACA Regulates Private Health Insurance Providers

The Affordable Care Act (ACA) establishes federal requirements that apply to private health insurance.  The reforms affect insurance offered to groups and individuals and impose requirements on sponsors of coverage (e.g. employers).

Together, the ACA reforms create federal minimum requirements with respect to access to coverage, premiums, benefits, cost-sharing, and consumer protections.  The reforms can be grouped under the following categories:

• 1.      Obtaining coverage;
• 2.      Keeping coverage;
• 3.      Cost of purchasing coverage;
• 4.      Covered Services
• 5.      Cost-sharing limits
• 6.      Consumer assistance and other health care protections
• 7.      Plan requirements related to health care providers

The private health insurance market is characterized as having 3 segments – the large group, small group, and individual markets.  Insurance sold in the large and small group markets refers to plans offered through a plan sponsor, typically employer.  Prior to 2016, states can elect to define “small employers” as those that employ 100 or fewer employees or those that employ 50 or fewer.  Beginning in 2016, small employers will be defined as those with 100 or fewer workers.  The nongroup, or individual, market refers to insurance policies offered to individuals and families buying insurance on their own (i.e., not through a plan sponsor).

Analogous to HIPAA (Health Insurance Portability and Accountability Act of 1996), ACA follows the model of federalism where the Act establishes federal rules and the states have primary responsibility for monitoring compliance with and enforcement of such rules.

• Obtaining Coverage

o   Guaranteed Issue

“Guaranteed issue” in health insurance is the requirement that a plan accept every applicant for health coverage, as long as the applicant agrees to the terms and conditions of the insurance offers (such as premiums).

  

o   Nondiscrimination Based on Health Status

ACA prohibits plans from basing eligibility or coverage on health status-related factors.  Such factors include health status, medical condition (including both physical and mental illness), claims experience, receipt of health care, medical history, genetic information, evidence of insurability, disability, and any other health status-related factor determined appropriate by the Secretary of HHS.

ACA allows, however, for the offering of premium discounts or rewards based on enrollee participation in wellness programs.

o   Extension of Dependent Coverage

ACA requires that if a plan offers dependent coverage, the plan must make such coverage available to a child under age 26.  Plans that offer dependent coverage must make coverage available for both married and unmarried adult children under age 26 but not for the adult child’s children or spouse (although the plan may voluntarily choose to cover them).

o   Prohibition of Discrimination Based Salary

Employers are banned from establishing eligibility criteria for any full-time employee, which are based on the total hourly or annual salary of the employee.

Eligibility rules cannot be permitted to discriminate in favor of higher-wage employees.

o   Waiting Period Limitation

ACA prohibits plans from establishing waiting periods greater than 90 days.  42 U.S.C. § 300gg-7.

A “waiting period” is the time period that must pass before coverage for an individual who is eligible to enroll under the terms of the plan can become effective. 

•  Keeping Coverage

o   Guaranteed Renewability

“Guaranteed renewability” in health insurance is the requirement on a plan to renew individual coverage at the option of the policyholder, or renew group coverage at the option of the plan sponsor. Under ACA, most plans offered in the nongroup and small group markets must renew coverage at the option of the enrollee or plan sponsor; however, plans may discontinue coverage under certain circumstances. 42 U.S.C. § 300gg-4.

For example, a plan may discontinue coverage if the individual or plan sponsor fails to pay premiums or if an individual or plan sponsor performs an act that constitutes fraud in connection with the coverage. 45 CFR § 147.106.

o   Prohibition on Rescissions

The practice of “rescission” refers to the retroactive cancellation of medical coverage after an enrollee has become sick or injured. ACA generally prohibits rescissions, except that rescissions will still be permitted in cases where the covered individual committed fraud or made an intentional misrepresentation of material fact as prohibited by the terms of the plan.  42 U.S.C. § 300gg-12.

  

• Cost Associated with Coverage

o   Rating Restrictions

ACA requires adjusted (or modified) community rating rules on the determination of premiums.  42 U.S.C. § 300gg.

 “Adjusted community rating” rules prohibit plans from pricing health insurance products based on health factors but allow it for other key characteristics such as age. ACA’s rating rules restrict premium variation to 4 factors described below.

·         Self-only or family enrollment

o   In most states, plans can vary premiums based on whether an individual or an individual and any number of his/her dependents enroll in the plan.

·         Geographic rating area

o   States are allowed to establish one or more geographic rating areas within the state for the purposes of this provision.

o   The rating areas must be based on one of the following geographic boundaries: (1) counties; (2) three-digit zip codes; or (3) metropolitan statistical areas (MSAs) and non-MSAs.

·         Tobacco use

o   Plans are allowed to charge a tobacco user up to 1.5 times the premium that the plan will charge an individual who does not use tobacco.

·         Age

o   Plans can vary premiums by no more than a 3 to 1 ratio for adults aged 21 and older. This means that a plan will not be allowed to charge an older individual more than three times the premium that the plan will charge a 21-year-old.

• Covered Services

o   Coverage of Essential Health Benefits (42 U.S.C. § 18022)

ACA requires plans to cover the essential health benefits (EHB).

ACA does not explicitly list the benefits that comprise EHBs; rather, it lists 10 broad categories from which benefits and services must be included.

1)      ambulatory patient services;

2)      emergency services;

3)      hospitalization;

4)      maternity and newborn care;

5)      mental health and substance use disorder services, including behavioral health treatment;

6)      prescription drugs;

7)      rehabilitative and habilitative services and devices;

8)      laboratory services;

9)      preventive and wellness services and chronic disease management;

10)  and pediatric services, including oral and vision care.

Each state is required to select a benchmark plan.  If the benchmark plan does not cover services from all 10 categories listed in statute, a state is required to supplement the benchmark plan to ensure that all 10 categories are represented.  In general, plans that are required to offer the EHB must model their benefits package after the state’s selected benchmark plan.

o   No Cost-Sharing for Preventive Health Services

Plans are required to provide coverage for certain preventive health services without imposing cost-sharing.

o   Coverage of Preexisting Health Conditions

ACA prohibits plans from excluding coverage for preexisting health conditions.  42 U.S.C. § 300gg-3.

A “preexisting health condition” is a medical condition that was present before the date of enrollment for health coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date.

• Cost-Sharing Limits

o   Limits for Annual Out-of-Pocket Spending

ACA places annual limits on out-of-pocket spending.  The limits apply only to in-network coverage of the essential health benefits (EHB).

In 2014, the limits cannot exceed existing limits specified in the tax code applicable to certain high-deductible health plans: $6,350 for self-only coverage and $12,700 for coverage other than self-only.

o   Minimum Actuarial Value Requirements

 ACA requires plans to tailor cost-sharing to comply with one of 4 levels of actuarial value.  Actuarial value (AV) is a summary measure of a plan’s generosity, expressed as the percentage of total medical expenses that are estimated to be paid by the issuer for a standard population and set of allowed charges. AV reflects the relative share of cost-sharing that may be imposed. On average, the lower the AV the greater the cost-sharing for the enrollee.

Each level of plan generosity is designated according to a precious metal and corresponds to a specific actuarial value:

·         Bronze: 60% AV

·         Silver: 70% AV

·         Gold: 80% AV

·         Platinum: 90% AV

o   Prohibition of Lifetime Limits and Annual Limits

Prior to ACA, plans were generally able to set lifetime and annual limits—dollar limits on how much the plan would spend for covered health benefits either during the entire period an individual was enrolled in the plan (lifetime limits) or during a plan year (annual limits).

Under ACA, both lifetime and annual limits are prohibited; the limits apply specifically to essential health benefits (EHB).

Plans are permitted to place lifetime and annual limits on covered benefits that are not considered EHBs, to the extent that such limits are otherwise permitted by federal and state law.

Patient Dumping and EMTALA

Patient Dumping and EMTALA

The federal Emergency Medical Treatment and Labor Act (EMTALA), 42 U.S.C. § 1395dd, was enacted to prevent “patient dumping,” a practice in which patients are transferred from one hospital’s emergency room to another’s for other than therapeutic reasons.  EMTALA was enacted in 1986 amid growing concern over the availability of emergency health care services to the poor and uninsured. Gatewood v. Washington Healthcare Corp., 933 F.2d 1037, 1039 (D.C.Cir.1991).  EMTALA applies only to hospitals that accept payments from Medicare and operate an emergency department.  However, EMTALA applies to all patients of such a hospital and not just to Medicare beneficiaries.

EMTALA puts restraints on hospitals so that they have to treat everyone the same regardless of their ability to pay.  Under EMTALA, if a person comes to an emergency room of a hospital, the hospital must “provide for an appropriate medical screening examination within the capability of the hospital's emergency department” in order to determine whether or not an emergency medical condition exists. 42 U.S.C. § 1395dd (a).  Further, the hospital must stabilize the patient with emergency medical conditions or in active labor. § 1395dd (b). 

If an individual at a hospital has an emergency medical condition which has not been stabilized, the hospital may not transfer the individual unless—

n  the individual after being informed of the hospital's obligations and of the risk of transfer, in writing requests transfer to another medical facility

n  a physician has signed a certification that based upon the information available at the time of transfer, the medical benefits reasonably expected from the provision of appropriate medical treatment at another medical facility outweigh the increased risks to the individual and, in the case of labor, to the unborn child from effecting the transfer, or

n  if a physician is not physically present in the emergency department at the time an individual is transferred, a qualified medical person has signed a certification; and

n  the transfer is an appropriate transfer to that facility.

§ 1395dd (c).

Under EMTALA, the term “emergency medical condition” means--

(A) a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in--

(i) placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,

(ii) serious impairment to bodily functions, or

(iii) serious dysfunction of any bodily organ or part; or

(B) with respect to a pregnant woman who is having contractions--

(i) that there is inadequate time to effect a safe transfer to another hospital before delivery, or

(ii) that transfer may pose a threat to the health or safety of the woman or the unborn child.

§ 1395dd (e)(1).

If a woman is not in active labor, that is not having contractions, then she does not fall under the terms of the statute unless her condition fits the general definition of “emergency medical condition.”  In addition, the person who does the examination must be a “qualified medical person” by hospital bylaws.  The hospital must post a conspicuous sign which notifies patients and visitors of the right to be examined and to receive treatment. 

Under the 250 yard rule, EMTALA applies beyond the emergency room setting: a person who presents anywhere on the hospital campus and requests emergency services must be handled under EMTALA.  The 250 yard rule will continue to apply when defining the “hospital campus.”  However, that sphere does not include non-medical businesses (shops and restaurants located close to the hospital), nor does it include physicians’ offices or other medical entities that have a separate Medicare identity.  Once the patient is admitted and/or stabilized, the EMTALA obligations end.

EMTALA imposes penalties for non-compliance.  A hospital which regularly negligently violates the statute may be subject to a civil monetary penalty up to $50,000 per violation.  If the hospital has fewer than 100 beds, the maximum penalty is $25,000 per violation.  EMTALA also empowers patients to bring civil suits for damages against participating hospitals, but does not provide a private right of action against treating physician. 

Courts have held that in order to comply with the “appropriate medical screening” requirement, the hospital must provide “treatment that is equal, as opposed to treatment that meets professional standards of competence.” Brenord v. Catholic Med. Ctr. of Brooklyn & Queens, Inc., 133 F. Supp. 2d 179, 185 (E.D.N.Y. 2001). Thus, a hospital fulfills the appropriate screening requirement “when it conforms in its treatment of a particular patient to its standard screening procedures. By the same token, any departure from standard screening procedures constitutes inappropriate screening in violation of [EMTALA].” Id.  “The appropriateness of the screening examination is determined by reference to how the hospital treats other patients who are perceived to have the same medical condition ... That is true even if the hospital's perception of a particular patient is based on a misdiagnosis; EMTALA is implicated only when individuals who are perceived to have the same medical condition receive disparate treatment.” Id.

EMTALA was “not intended to duplicate preexisting legal protections, but rather to create a new cause of action, generally unavailable under state tort law, for what amounts to failure to treat.” Id.  Thus, EMTALA is not a federal medical malpractice statute, and most questions related to the adequacy of a hospital's standard screening procedure “must remain the exclusive province of local negligence law.” Id.  Since EMTALA was not enacted to remedy negligent diagnosis, only refusals to follow regular screening procedures violate the statute. Id. 

Joan Rivers and Mystery behind the Office of the Chief Medical Examiner

Joan Rivers and Mystery behind the Office of the Chief Medical Examiner

The New York City medical examiner has ruled that the comedian Joan Rivers, 81, died after a “therapeutic complication” during medical procedures to evaluate changes in her voice and determine whether she had acid reflux.[1]  The autopsy report said an investigation by the medical examiner’s office found that the disruption in Ms. Rivers’s breathing was “a predictable complication of medical therapy.”[2]

The autopsy is a post-mortem medical examination for studying the pathologic changes present and determining the cause of death.[3]  Coroners and medical examiners (C/MEs) have a statutory duty to file an autopsy report, as a certified written record of their examinations, when investigating certain types of deaths, such as when a death appears unexplained, violent, unusual or suspicious, or when a body is mysteriously found.[4]

In New York, rules concerning disclosure of autopsy reports heavily depend on who have produced them, whether the reports are generated by medical examiners or by hospitals.  Additionally, there are medical examiners’ reports generated upon hospitals’ requests.  New York City Charter governs C/MEs’ autopsy records in the City while Sections 4210 (2-a) and 4214 of New York Public Health Law set forth rules for hospital-originated autopsies.  In New York City, the Office of the Chief Medical Examiner (OCME) within the Department of Health and Mental Hygiene keeps full and complete autopsy records.[5]  The chief medical examiner must “promptly deliver to the appropriate district attorney copies of all records relating to every death as to which there is, in the judgment of the medical examiner in charge, any indication of criminality. Such records shall not be open to public inspection.”[6]

Further, New York Public Health Law § 4210 (2-a) codifies that if a person dies while under care or treatment at a general hospital, any autopsy report by the coroner or medical examiner for such person shall be made available to the hospital for the purpose of ongoing performance improvement of such hospital.  All such reports in the possession of a hospital shall be deemed confidential records.[7]

Hospital officials may order the performance of an autopsy provided that they first notify the next of kin and no objection is raised.[8]  In cases where a person dies in a hospital and the attending physician is able to certify the cause of death, the autopsy, if one is performed, is done in the hospital and the results are readily accessible to the hospital staff.[9]  The director of a hospital in which a patient has died may order the performance of an autopsy upon the body of such deceased person, after first giving notice of the death to the next of kin of such person.[10]  In the case of an unclaimed body of a deceased person, the medical colleges, schools, institutes and universities have a priority claim to the body, for the purposes of medical, anatomical or surgical science and study.[11]  Additionally, autopsies may be conducted at the request of the next of kin to determine the cause of death.[12] 

In Joan Rivers’ case, either her daughter or the hospital, where she died in September 2014, could have requested the Office of Chief Medical Examiner to perform an autopsy report to determine the cause of her untimely death.   Hopefully Joan’s autopsy report will not only be used as evidence in a potential medical malpractice lawsuit, but it will also deter other physicians from performing similar procedures in ambulatory setting.

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[1] Anemona Hartocollis, Joan Rivers Died From Complication in Treatment, Officials Say, Oct. 16 2014, available at http://www.nytimes.com/2014/10/17/nyregion/joan-rivers-died-of-complication-in-treatment-medical-examiner-says.html?_r=0.

[2] Id.

[3] Marc D. Ginsberg, The Confrontation Clause and Forensic Autopsy Reports-A "Testimonial", 74 La. L. Rev. 117, 171 (2013).

[4] Id.

[5] N.Y. Charter § 557 (g).  

[6] Id.

[7] N.Y. Pub. Health Law § 2805-m (McKinney 2014).

[8] N.Y. Pub. Health Law § 4214 (1) (McKinney 2014).

[9] Cent. Gen. Hosp., Inc. v. Lukash, 140 A.D.2d 113 (2d Dep’t 1988), aff'd, 74 N.Y.2d 619 (1989).

[10] N.Y. Pub. Health Law § 4214 (1).

[11] § 4214 (2).

[12] § 4210 (3).

Eligibility for Premium Tax Credits under the Affordable Care Act (ACA)

Eligibility for Premium Tax Credits under the Affordable Care Act

New federal tax credits, authorized under the Patient Protection and Affordable Care Act (ACA), first became available in 2014 to help certain individuals pay for health insurance.   The tax credits apply toward premiums for private health plans offered through “exchanges” (also referred to as health insurance marketplaces).   Exchanges have been established in every state, either by the state itself or by the Secretary of Health and Human Services (HHS), as required under ACA.  The new premium credits established under ACA are advanceable and refundable, meaning taxfilers need not wait until the end of the tax year in order to benefit from the credit, and may claim the full credit amount even if they have little or no federal income tax liability. Exchanges are structured to assist individuals and small businesses.  There is one type of exchange to serve families & individuals, and another type of exchange serves small businesses (“SHOP exchanges”).  Certain enrollees in the INDIVIDUAL exchanges are eligible for premium assistance in the form of federal tax credits.  ACA also establishes subsides to reduce cost-sharing expenses.

ACA specifies that premium credits will be available to “applicable taxpayers” in a “coverage month” beginning in 2014.  An APPLICABLE TAXPAYER is an individual who:

·         Is part of a tax-filing unit;

·         Is enrolled in a plan through an individual exchange; and

·         Has household income at or above 100% of the federal poverty level (FPL), but not more than 400% FPL.

A COVERAGE MONTH refers to a month in which the applicable taxpayer paid for coverage offered through an exchange, not including any month in which the taxpayer was eligible for “minimum essential coverage” with exceptions.

Given that the premium assistance is provided in the form of tax credits, they are administered through the tax system although advanced payments go directly to insurers.  The credits can only be obtained by qualifying individuals who file federal tax returns.  Married couples are required to file joint tax returns to claim the credit.

Premium credits are available only to individuals and families enrolled in a plan offered through an individual exchange.  Premium credits are not available through the small business (SHOP) exchanges.  Individuals may enroll in a plan through their state’s exchange if they are:

·         Residing in a state in which an exchange was established;

·         Not incarcerated, except individuals in custody pending the disposition of charges;

·         “Lawfully present” residents.

Only lawful residents are allowed to obtain exchange coverage.  Undocumented individuals are prohibited from purchasing coverage through an exchange, even if they could pay the entire premium without a subsidy.

To be eligible for premium credits, individuals must have “household income” within statutorily defined guidelines based on federal poverty level (FPL).  For purposes of premium credit eligibility, household income is measured according to the definition for “modified adjusted gross income” (MAGI).  Under IRS, MAGI is defined as Adjusted Gross Income (AGI) plus certain foreign earned income and tax-exempt interest.  However, for premium credit eligibility purposes, MAGI will also include nontaxable Social Security benefits. An individual whose MAGI is at or above 100% FPL up to and including 400% FPL may be eligible to receive premium credits.

To receive a premium credit, an individual may not be eligible for “minimum essential coverage,” with exceptions.  ACA broadly defines minimum essential coverage to include:

·         Medicare Part A;

·         Medicare Advantage;

·         Medicaid (with exceptions);

·         CHIP (State Children’s Health Insurance Program);

·         Tricare/Tricare for Life ( a program administered by Dep’t of Veterans Affairs);

·         Any plan offered in the individual health insurance market;

·         Any employer-sponsored plan;

·         Any grandfathered health plan.

However, ACA provides certain exceptions regarding eligibility for minimum essential coverage and receipt of premium credits:

o   An individual who is only eligible to obtain coverage through the individual (nongroup) health insurance market may be eligible to receive a premium credit.

o   An individual eligible for an employer-sponsored plan may still be eligible for premium credits if the employer’s coverage is either

o   Not affordable ( employee’s premium contribution toward employer’s self-only plan exceeds 9.5% of household income;  OR

o   Does not provide minimum value;

o   An individual who is eligible for limited benefits under Medicaid may still be eligible for premium credits.

Under ACA, states have an option to expand Medicaid eligibility to include all non-elderly, non-pregnant individuals with income up to 133% FPL.  States that choose to implement ACA Medicaid expansion will receive substantial federal subsidies.  If a person who applied for premium credits in an exchange is determined to be eligible for Medicaid, the exchange must have them enrolled in Medicaid.  Thus, any state that expands Medicaid eligibility to include persons with income at or above 100% FPL would make such individuals ineligible for premium credits.  Premium credit eligibility in such a state begins at the income level where Medicaid eligibility ends.  In general, a person may be eligible for only one subsidized health coverage program at a time.