Benefits Byte

March 12, 2014

Agencies Request Information Regarding Provider Nondiscrimination under PPACA

The U.S. departments of Treasury, Labor, and Health and Human Services (the departments) are requesting comments on the provider nondiscrimination provisions under the Patient Protection and Affordable Care Act (PPACA), according to a March 12 formal request for information (RFI).

Under Section 2706(a) of the Public Health Service (PHS) Act, added by PPACA, “a group health plan and a health insurance issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable state law.” The PHS Act does not require “that a group health plan or health insurance issuer contract with any health care provider willing to abide by the terms and conditions for participation established by the plan or issuer,” and nothing in the PHS Act prevents “a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures.”

In April 2013, the departments issued Frequently Asked Questions (FAQ) Part XV, confirming that the provision applies to non-grandfathered group health plans and health insurance issuers for plan years beginning on or after January 1, 2014. The FAQ clarified that until further guidance is issued, plans and issuers “are expected to implement the requirements of Section 2706(a) using a good faith, reasonable interpretation of the law.” The FAQ stated that, “for this purpose, to the extent an item or service is a covered benefit under the plan or coverage, and consistent with reasonable medical management techniques specified under the plan with respect to the frequency, method, treatment or setting for an item or service, a plan or issuer shall not discriminate based on a provider’s license or certification, to the extent the provider is acting within the scope of the provider’s license or certification under applicable state law.”

The FAQ further stated that Section 2706(a) of the PHS Act “does not require plans or issuers to accept all types of providers into a network” and also “does not govern provider reimbursement rates, which may be subject to quality, performance, or market standards and considerations.”

In a July 2013 report (Page 126), the Senate Committee on Appropriations expressed concerns that the FAQ advises insurers that “this nondiscrimination provision allows them to exclude from participation whole categories of providers operating under a State license or certification.” According to the report, Section 2706 of the PHS Act “prohibits certain types of health plans and issuers from discriminating against any healthcare provider who is acting within the scope of that provider’s license or certification under applicable State law, when determining networks of care eligible for reimbursement. The goal of this provision is to ensure that patients have the right to access covered health services from the full range of providers licensed and certified in their State. The Committee is therefore concerned that the FAQ document issued by HHS, DOL and the Department of Treasury on April 29, 2013, advises insurers that this nondiscrimination provision allows them to exclude from participation whole categories of providers operating under a State license or certification.”

The report further directed HHS to work with DOL and the Treasury Department “to correct the FAQ to reflect the law and congressional intent.” The RFI, issued pursuant to this report, requests comments “on all aspects of interpretation, including, but not limited to access, costs, other federal and state laws, and feasibility.

Comments are being solicited by HHS through June 10. To provide input for consideration in a Council comment letter, or for more information, contact Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.