Post­ed by Lin­da Rowings

CTA Survey smallThe Depart­ment of Labor (DOL), the IRS, and the Depart­ment of Health and Human Ser­vices (HHS) have joint­ly issued a FAQ that address­es how “ref­er­ence-based pric­ing” works with the Patient Pro­tec­tion and Afford­able Care Act’s (PPACA) restric­tions on out-of-pock­et max­i­mums. PPACA lim­its the out-of-pock­et max­i­mum a non-grand­fa­thered plan may impose, and gen­er­al­ly requires that co-pays, coin­sur­ance, and deductibles be count­ed toward this lim­it. How­ev­er, pre­mi­ums, bal­ance billed amounts for non-net­work providers, and non-cov­ered ser­vices do not need to be applied to the out-of-pock­et lim­it. (For 2015, the lim­its are $6,600 per indi­vid­ual or $13,200 per fam­i­ly.) The new FAQ explains how the out-of-pock­et lim­it applies to plans that use ref­er­ence-based pricing–i.e., a design under which the plan pays a fixed amount for a par­tic­u­lar pro­ce­dure (such as a knee replace­ment), which cer­tain providers have agreed to accept as full payment.

The FAQ states that the agen­cies will per­mit the ref­er­ence price to be treat­ed as the in-net­work price, as long as the plan uses a rea­son­able method to pro­vide ade­quate access to qual­i­ty providers who are will­ing to accept the ref­er­ence price. The agen­cies will deter­mine whether a plan that uses ref­er­ence-based pric­ing (or a sim­i­lar net­work design) is using a rea­son­able method to ensure ade­quate access to qual­i­ty providers based on:

  • The Type of Ser­vice. Plans may treat providers that accept the ref­er­ence price as the sole net­work providers only for those ser­vices for which con­sumers have enough time to make an informed choice of provider. For exam­ple, this design is not appro­pri­ate for emer­gency services.
  • Rea­son­able Access. Plans should ensure the avail­abil­i­ty of an ade­quate num­ber of providers that accept the ref­er­ence price. Con­sid­er­a­tions include net­work ade­qua­cy approach­es devel­oped by the states, geo­graph­ic dis­tance mea­sures, and patient wait times.
  • Qual­i­ty Stan­dards. Plans should ensure that an ade­quate num­ber of providers accept­ing the ref­er­ence price meet rea­son­able qual­i­ty standards.
  • Excep­tions Process. Plans should offer an eas­i­ly acces­si­ble excep­tions process when access to a provider that accepts the ref­er­ence price is unavail­able or would com­pro­mise the qual­i­ty of ser­vices for a par­tic­u­lar indi­vid­ual because, for exam­ple, of the patien­t’s oth­er med­ical issues.

Dis­clo­sure. Plans should pro­vide, auto­mat­i­cal­ly and free of charge, infor­ma­tion about the pric­ing struc­ture, includ­ing the ser­vices to which it applies and the excep­tions process. In addi­tion, the plan should pro­vide spec­i­fied infor­ma­tion, such as provider lists, upon request.

For more infor­ma­tion to help you bench­mark your health plan’s out of pock­et lim­its with oth­er employ­ers of sim­i­lar size, indus­try and geog­ra­phy, pre-order the 2014 UBA Health Plan Sur­vey Exec­u­tive Sum­ma­ry which will soon be avail­able with the lat­est data from near­ly 17,000 plans.

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