GPAHU Pulse – February 2022

GPAHU - Monthly State and Legislative Updates

Here’s something to talk about when discussing plan design options and employer contribution strategy with group clients in the New Year.

Telehealth use skyrocketed during the early months of the pandemic. While it has since decreased somewhat from that high, it still represents a much more substantial share of health care than before COVID. From March through August 2021, 8% of all outpatient visits were conducted via telehealth – down from 13% in the first six months of the pandemic but well above pre-pandemic levels, when telehealth accounted for a negligible share of outpatient visits.

Source Lo, Justin, Rae, Matthew, Amin, Krutika, and Cox, Cynthia. “Outpatient Telehealth Soared Early In the COVID-19 Pandemic But Has Since Receded.” Kaiser Family Foundation, February 10, 2022,

The Big Three

Each month GPAHU identifies three top public policy or legal developments that could impact our members and clients.  Here are this month’s big three!

Biden Administration Updates Guidance on “Free” COVID-19 Home Tests

In response to consumer and stakeholder questions, the Biden Administration recently updated its guidance requiring all private health insurance issuers and group health plans to cover home-based COVID-19 diagnostic tests without applying cost-sharing or utilization management requirements.  The Pennsylvania Insurance Department also posted FAQ guidance about how the requirements should work. Here are some key points about what’s changed implementation-wise that you need to know.

  • Group health plans and carriers do not need to make COVID-19 home tests available on a first-dollar basis wherever sold. However, to limit full-scale coverage to just certain retailers, each plan needs to make sure that they provide “adequate access.” The Administration will judge the adequacy of each “direct coverage program” on a facts and circumstances basis. Still, generally, a plan needs to allow participants to buy home tests without needing to be reimbursed after the fact through at least one direct-to-consumer shipping mechanism and at least one in-person retailer. They also must provide all plan participants, beneficiaries, and enrollees adequate notice and information about their program, including what retail locations, distribution sites, or other mechanisms for distributing tests are available and which brands of tests are available under the direct coverage program. If the plan does not reimburse for OTC COVID-19 tests from certain re-sellers due to fraud concerns (such as disallowing coverage of tests bought on eBay), they need to note that too. If account-based plans are involved, the notice should include a warning about how federal tax law prohibits people from being reimbursed more than once for qualified medical expenses.
  • Plans do not have to make all brands of approved OTC COVID-19 home tests available at no cost through its direct coverage program. Plans still must cover all COVID-19 diagnostic tests that meet the law’s criteria, but they can limit reimbursement of tests offered by non-preferred brands to $12 or the actual price (including shipping), whichever is less.
  • Direct coverage programs must pay for reasonable shipping costs related to covered OTC COVID-19 tests in a manner consistent with other items or products provided by the plan or issuer via mail order. If a person buys a COVID-19 home test outside of the direct coverage program, then their reimbursement of such test may be limited to $12.  However, the $12 must include both the cost of the test and any shipping costs.  
  • Federal officials will not consider a plan or issuer to be out of compliance with the direct coverage program safe harbor if it is temporarily affected by a supply shortage.  They will also not take enforcement action if supply issues make it so that an individual cannot obtain at least eight OTC COVID-19 tests per 30-day period (or per month).
  • Plan or issuers are allowed to address suspected fraud and abuse related to the reimbursement of OTC COVID-19 tests by placing limits on coverage. Examples of how a plan or carrier might do this are requiring proof of purchase that identifies the product and seller or requiring a participant to certify that the test did not come from a re-seller and that they will not resell it.
  • Home tests that involve a person collecting a sample and then sending it into a laboratory or other health care provider to return results do not count in the “free” coverage requirement.  However, these tests must be covered without cost-sharing and medical management requirements if a person has a prescription/order from an attending health care provider.
  • People with account-based plans (HRAs, HSAs, Health FSAs) should not use their tax-preferred accounts to pay for the cost (or the portion of the cost) of an OTC COVID-19 home test that is going to be reimbursed by the plan or issuer.  Federal tax law prevents double-dipping! If someone did this by accident already, they need to contact the FSA or HRA administrator to return the funds. In the case of an HSA reimbursement error, the individual must either include the distribution in gross income or repay the distribution to the HSA.

Federal Government Issues New Guidance on the Federal Surprise Billing Independent Dispute Resolution Process

The federal surprise balance billing protections take effect this year for every group health plan and health insurance issuer on renewal. The law covers emergency care, air ambulance services, and almost all care performed by an “out-of-network” provider in an “in-network” facility. Facilities and providers must charge “in-network” rates for these services, and then providers and health plans need to work out the difference.  If they cannot settle payment terms within 30 days of billing, either party may trigger an independent dispute resolution (IDR) process. The federal Departments of Health and Human Services, Labor, and Treasury recently published FAQs for stakeholders about how the IDR process will work. Some of the critical information conveyed includes:

  • Plans and issuers seeking to resolve a surprise bill through the Federal IDR process are required to undertake a 30-day open negotiation period before initiating the IDR through the Federal portal.
  • Federal officials estimate that there will be approximately 17,000 IDR requests annually.
  • The Biden Administration launched the federal portal for all IDR requests on January 1, 2022. Right now, it is available for uninsured (or self-pay) individuals. Functionality for providers, facilities, providers of air ambulance services, and plans and issuers will launch in the coming weeks. The launch will also include functionality for certified IDR entities.
  • The payer and the provider involved in a fee negotiation must send each other notices at various stages of the process. Model notices are available on the DOL web site. The IDR entity and each party must complete most other actions through the Federal IDR portal.
  • The current list of certified IDR entities is available online now for anyone to view. The certification process will operate on a rolling basis, and they will add newly certified entities as they are approved.
  • There are two types of fees associated with the IDR process. Each party must pay an administrative fee of $50 for 2022 as part of participating in the IDR process. In addition, the losing party must pay the IDR entity’s arbitration fee. An IDR entity may charge between $200 to $500 to settle a single case, and they can charge between $268 to $670 for batched determinations. If an IDR entity wants to charge more for a case, they need federal approval first.
  • There is no limit to the number of claims that can be batched together; however, each disputed claim needs to meet all the federal criteria for claims batching.
  • Each party involved in the IDR must pay the entire IDR entity fee upfront, and then the entity will refund the fee to the prevailing party within 30 business days after settling the dispute. In the case of batched determinations, the party with the fewest findings in its favor is considered the non-prevailing party. It is responsible for paying the certified IDR entity fee. If each party prevails in an equal number of determinations within a batched case, the certified IDR entity fee will be split evenly between the parties.
  • Suppose the disputing parties come to a settlement after a certified IDR entity has already been selected and started its review. In that case, they must pay half of the certified IDR entity fee unless the parties agree otherwise. In addition, each party must pay the administrative fee.
  • The IDR process does not involve meetings or hearings between the opposing parties and the arbitrators. Instead, the Federal IDR process will be a paper review process. Both parties will submit all their required information and supporting documents to their IDR entity, and the arbitrator will make their determination based on those materials alone.
  • The information the parties are required to submit to the IDR entity includes their final offers of payment expressed both as a dollar amount and as a percentage of the qualifying payment amount (QPA) and the QPA for the applicable year for the same/similar items or services. Providers or facilities need to supply the size of the provider practice or facility, their practice specialty, and their coverage area. Plans and issuers must submit information on the coverage area of the plan or issuer, the relevant geographic region for purposes of the QPA, and whether the coverage is fully insured or self-funded.
  • The party initiating the IDR process picks a certified IDR entity from the list in the Federal IDR portal. The non-initiating party may accept or reject the proposed certified IDR entity. If the two parties cannot agree on another entity, federal officials will randomly select another certified IDR entity within the approved fee range.
  • Certified IDR entities have 30 business days after being selected for a case to settle the dispute.
  • The Federal IDR process does not replace the external review process, which addresses coverage disputes between individuals and plans or issuers. The Federal IDR process involves disputes between providers, facilities, or providers of air ambulance services and plans or issuers regarding payment amounts. An IDR entity does not make coverage determinations.

Groups that have fully insured coverage will generally rely on their health insurance carrier to handle the surprise billing requirements. Just check all contracts to ensure they reflect this division of responsibility. However, self-funded group plans will need to develop parameters with their third-party administrators to handle the process. How negotiations will work, the group’s strategy for proposed fee payments, and what happens when a claim goes to IDR are all matters to be resolved as soon as possible. Affected claims for January 1 groups will be flowing in over the next few weeks. A resolution will likely need to come through an amendment to the group’s administrative services agreement. 

PAHU Agrees To Support H.B. 2072 to Make Carriers Whole For Delinquent CHIP Premiums

The Pennsylvania Association of Health Underwriters has put its backing behind H.B 2072. The legislation would allow the state to reimburse health insurers who participate in the state Children’s Health Insurance Program (CHIP) if plan participants did not fully pay their premiums.  Due to the COVID-19 pandemic and related economic turmoil, many families fell behind on insurance premiums. Health insurance issuers participating in CHIP continued to provide coverage, so this legislation would make them whole for premium contributions not paid between March 1, 2020 – December 31, 2021.

This legislation was introduced by Representative Milou Mackenzie, a Republican serving the 131st District and parts of Montgomery, Lehigh, and Northampton counties. The bill is currently pending in the Senate Banking and Insurance Committee and is expected to advance shortly.

Check This Out!

If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!

A new Congressional Budget Organization report examines potential reasons that the prices paid by commercial health insurers for hospitals’ and physicians’ services are higher, rise more quickly, and vary more by area than the prices paid by the Medicare fee-for-service program. While this is a very complicated issue, and this report is far from conclusive, it is always useful intelligence to see how lawmakers are weighing cost considerations. 

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