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Group Health Plan Sponsors and Health Insurance Issuers Have Some Decisions to Make!

June 9, 2022

Recently, the two of us have been talking about decisions. We all make thousands of them every single day. Some of our choices are very deliberate and based on sound reasoning. We avoid gluten (Jen) and dairy (Jessica) because we have bad genetics and intolerant bodies. We maintain a HIPAA-compliant workplace since we have access to other people’s personal health information, the law spells out clear ways to protect it, and we are compliance geeks. We make our children do chores because we are mean like that, etc. But, many more of our choices are based on the flimsiest of reasons. It seemed like a pink shirt kind of day. We were famished and the restaurant brought the fries without us asking, so we just had to eat them. Instagram told us we needed to buy it, and so on and so forth.   

Talking about our personal decision-making processes made us wonder, are group health plan design choices made any difference? The two of us have been collecting a bit of anec-data over the past few months, and we’ve come to the conclusion that just like in everyday life, sometimes health plan administrators act based on data-driven standards (our plan follows MCG guidelines for utilization management decisions), while lots of other plan design choices are arbitrary (a service is an excluded item because someone thought covering it would be expensive, or the plan’s definition of a substance use treatment facility came from Googling it).  

However, the plan design decision-making bar is about to get a lot higher. According to the federal Department of Health and Human Services’ (HHS) recently finalized 2023 Notice of Benefit and Payment Parameters regulation, beginning on January 1, 2023, or on the next policy renewal, whichever is earlier, individual and group health plans that cover essential health benefits (EHBs) will have to use clinical evidence to support both EHB design and any related coverage limitations. Put another way, if there was ever any concern about a plan provision related an EHB being discriminatory, a health insurer, or in the case of self-funded coverage, the group plan sponsor, should be able to respond with plan documentation showing how the requirement or coverage standard is evidence-based.  

The final rule doesn’t explicitly define evidence-based standards or clinical guidelines, but it does specify what is not acceptable.  This includes using disreputable or unscientific sources of information or relying on a state’s EHB benchmark or a state-mandated benefit law as an independent source since state-level policies often are not based on any relevant clinical standards. However, plans may rely on the federal recommendations for preventive care coverage as an evidentiary standard, even if the guideline appears to be potentially discriminatory (for example, a cancer screening coverage policy based on a participant's age).  This approach is permissible because the federal government’s preventive care recommendations are all based on extensive clinical evidence and review.  

The final rule also includes some examples of what type of policy provisions could be considered discriminatory because they are not evidence-based. If a plan includes a limit on its coverage of autism spectrum benefits to children under age 18, or infertility benefits to women under age 35, these provisions should be removed, as there is clinical evidence that the benefits of these therapies are not linked to precise ages. Similarly, plan provisions that limit coverage of routine foot care to people with diabetes would be considered unacceptable since medical evidence demonstrates that such care is also beneficial for many other covered conditions. Another example would be a plan formulary that places all or most medications to treat a specific condition in the top coverage tier without clear and non-discriminatory evidence to support the decision. Cost can be a factor in evidence-based decision-making, but it cannot be the only factor.  

HHS does make it clear that plans may use reasonable medical management criteria when it comes to EHBs, they just need to do so fairly. Furthermore, it is important to note that these requirements only apply to covered EHBs, that plans may continue to exclude services, and that this rule does not mandate coverage of any new services.

The goal of the policy is to ensure benefits are provided fairly and that all enrollees have equal access to all types of covered and medically necessary care. In one way, ensuring that plan design is based on clinical evidence for all EHBs is going to be a big switch, but in another, it is simply an extension of what HHS has been urging plans to do all along. We know from the CAA’s mental health and substance use disorder parity requirements that plans need to document how they develop and apply non-quantitative treatment limitations based on clear factors and evidentiary standards.  So, this new policy is a natural continuation of that existing one. HHS may provide further guidance on the EHB evidentiary standard policy later this year when they issue a new regulation to further outline the ACA’s Section 1557 nondiscrimination requirements. The Department also indicates that they may be developing tools to help plans and issuers evaluate their benefit designs for any discriminatory practices.  

What do you think friends? Is this a big deal? Will it be hard for plans to accomplish? Are plans in your world more fully evolved than the ones we’ve been dealing with and already operating based on clinical practices on every front? Or do you know of a few plans who are going to need to rethink certain plan limitations a bit? Let us know how you feel! We always love to chat with our friends about complex topics like this one!