Watch out for this GOT-cha
The IRS, DOL and HHS issued a clarification of the “Final Rules for Grandfathered Plans, Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, Dependent Coverage, Appeals, and Patient Protections under the Affordable Care Act”—specifically addressing the rules regarding coverage of emergency services received on an out-of-network basis. The final rule will be published in the Federal Register May 3; you can read the draft version here.
As the agencies note, the amount an out-of-network provider may charge for out-of-network emergency services may exceed the plan’s “allowed amount” (i.e., the maximum amount on which the plan bases payment for a particular service). When this happens, an out-of-network provider may (depending on the state) bill the patient for the difference between the provider’s charge and the allowed amount. To protect the patient, however, the plan must pay a “reasonable amount” to the provider before the patient can be balance billed. This reasonable amount is determined as the greatest of three amounts (“GOT”):
- The in-network reimbursement rate for the emergency service;
- The amount calculated using the same method the plan general uses to determine out-of-network payments (e.g., usual, customary and reasonable – UCR – charges), but substituting the in-network cost-sharing provisions; or
- The amount that Medicare would pay for the emergency service.
Each of these amounts is calculated before considering any in-network copayment or coinsurance payable by the patient.
Here’s the GOT-Cha
Buried in the clarification is an important reminder—group health plans are required to disclose how it calculates the amounts under the GOT regulation. For example, did you know that:
- Plans must provide plan participants with details on how it calculates each of the amounts under the GOT regulations for emergency services–including how it calculates payment to in-network providers and how the plan determines the UCR amount–within 30 days of request.
- Participants must be provided with reasonable access to, and copies of, all documents, records and other information relevant to a benefits claim—including how the plan determines the UCR amount–under the internal and external claims and appeals requirements of the ACA.
Some employers address this information within their SPDs, either as a footnote to the summary of benefits chart, in the “Emergency Services” section, or in the “Definitions” section under “Emergency” or “Eligible Expense.” Others provide general information and refer employees to a benefits service center for more information. Given the increasing sensitivity around “surprise bills” after emergency room and hospital stays, at a minimum you should make clear that patients may be liable for the difference between the maximum allowable charge and the out-of-network provider’s charge.
Now might be a good time to review how you communicate about emergency room charges and balance billing, and make sure you have the proper documentation in place.
(Kim Buckey is the vice president of client services.)