Health Reform Bulletin 167 – Federal Independent Dispute Resolution (IDR) Process

Federal Independent Dispute Resolution (IDR) Process

You may recall, the No Surprises Act, a part of the Consolidated Appropriations Act of 2021, (hereinafter referred to as NSA) prohibits balanced billing in three instances: (1) emergency services, (2) out-of-network services received in-network, and (3) emergent air ambulance services. These rules replace the emergency services rules.

While individuals can be charged no more than the in-network rates in these instances, the plan and the provider can negotiate on how to handle a so-called balanced bill. If the parties cannot agree, a baseball style arbitration can be entered into. This style of arbitration is known as the Independent Dispute Resolution process (IDR). The IDR process has been fraught with legal challenges since the onset.

Interim regulations were first issued on September 30, 2021, and multiple providers challenged those interim regulations – they were withdrawn as a result. Again, in August, 2022, the Departments issued final rules which again were challenged and on February 6, 2023, the U.S. District Court for the Eastern District of Texas issued a judgment and order in Texas Medical Association, et al., v. United States Department of Health and Human Services, et al, Case No. 6:22-cv-372-JDK.

In that judgment and order, the court vacated certain provisions governing the IDR process and applicable payment disputes and remanded back to the Department of Health and Human Services for further consideration of the final rule issued in August, 2022.

As a result of that decision, the offending parts of the regulations were again withdrawn, and the Departments suspended taking any new IDR processes while they sort through the next steps in the IDR saga.

If you are a health plan interested in pursuing arbitration of balanced medical bills keep an eye on the CMS website for further developments.

Contraception

As people are generally aware, the Affordable Care Act (ACA) requires that designated preventive services must be covered by a health plan at no cost to the individual. One of the categories of preventive services relates to women’s health and specifically contraception. This aspect of the preventive rules has been challenged many times and several years ago regulations were issued allowing plans to opt out either on religious or moral grounds. The methodology for doing so continues to cause angst. Recently, the Biden Administration has proposed regulations to address these challenges.

The proposed regulations would remove the moral exemption and retain the existing religious exemption, including the currently available accommodation process. Alternatively, employers objecting on religious grounds could simply exclude the offensive services. This would allow women and covered dependents to navigate their own care and still obtain birth control at no cost through providers that contract with qualified health plans offered through the marketplace, keeping the objecting employer plan out of participation in any way. Under the proposed regulations, employers would not have to change or do anything, unless they so choose.

The comment period for the proposed regulations is 60 days ending Friday, March 31, 2023. Plans will want to keep an eye on any updates.

 Federal Poverty Guidelines

2023 Federal Poverty Level

The Department of Health and Human Services has released the federal poverty level guidelines for 2023. The FPL guidelines will be published in the Federal Register soon. These poverty guidelines are important for a number of reasons, not the least of which is the Affordable Care Act.

• The FPL guidelines are used to determine eligibility for premium assistance and cost-sharing.
• Further, for employer shared responsibility purposes, use of the FPL guidelines is one of three safe harbor methods that can be used to determine an individual’s household earnings for purposes of satisfying the ACA’s affordability standard. Coverage under an employer-sponsored plan is deemed affordable to a particular employee if the employee’s required contribution to the plan does not exceed 9.12% (indexed for 2023) of the employee’s household income for the taxable year, based on the cost of single coverage in the employer’s least expensive plan. If the FPL guidelines safe harbor is used, the maximum individual contribution is $110.81 (9.12% x $14,580/12) (indexed for 2023). As background, employers subject to the ACA’s employer shared responsibility provisions who fail to offer minimum essential coverage to their full-time employees or fail to offer adequate and affordable coverage may be subject to an excise tax if at least one of its employees qualifies for premium assistance through a marketplace. If an employer is using the FPL as its affordability standard, it is allowed to use the FPL guidelines in effect six months prior to beginning of the plan year. Note: a calendar year plan must use the 2022 FPL guidelines since the 2023 FPL guidelines were not issued when the offer of coverage was made (9.12% x $13,590/12 = $103.28).

• In addition, these FPL guidelines are used to determine eligibility for other federal entitlement programs such as the Children’s Health Insurance Program, certain parts of Medicaid, and subsidies for Medicare Part D prescription benefits.

The 2023 FPL guidelines became applicable on January 12, 2023 (unless an office administering a program using the guidelines specifies a different effective date for that particular program). Below is a chart reflecting the 2023 and 2022 levels.

Poverty Guidelines for the 48 Contiguous States and the District of Columbia

*Note: The FPL limits vary slightly in Alaska and Hawaii

ACA-Required Reporting Reminders

As a reminder, the following filings are coming due to the IRS:

ACA Employer Shared Responsibility (February 28, 2023 (paper) or March 31, 2023 (efile))

Statements to Individuals on ACA (March 2, 2023)