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Medical Providers, Consumer Groups Say Proposed Rule Gives Insurers Too Much Control

By Rebecca Adams, CQ HealthBeat Associate Editor

December 21, 2012 – Trade organizations representing such major interests as medical providers and consumers argue in comments to federal officials that the essential health benefits proposal would give insurers and states too much flexibility, which could potentially undermine consistent, robust coverage.

The comments are just some of the more than 1,000 responses that the Centers for Medicare and Medicaid Services collected by Friday afternoon. Individuals are also bombarding CMS officials with pleas for specific benefits. Public comments are due by Dec. 26.

The American Hospital Association said that while its members understand the need for some flexibility for insurers, "we remain concerned that too much emphasis is being placed on providing flexibility and affordability rather than ensuring that coverage is meaningful."

Several groups said the proposed rule would allow too much substitution of services. The proposed rule did narrow the amount of substitution that could occur from an earlier bulletin released by federal officials last year. The bulletin had suggested that health plans could substitute one type of medical care for another. But the proposed rule, which was released Nov. 20, said insurers could only substitute care within certain categories, such as inpatient rehab services for outpatient rehab.

"The effect of this provision is that plans are allowed to deviate from their state's [essential health benefit] definition and the only real standard for the benefit is cost," Linda Fishman, AHA senior vice president for public policy analysis and development, wrote in the association's letter. "Furthermore, those substitutions may not be readily apparent in the general benefit summaries that will be available, resulting in a lack of transparency for consumers about what is covered."

Consumers Union suggested that summaries of the plans available in the exchanges be expanded to note what kinds of substitutions were made.

The group also recommended several provisions that would limit substitution and asked CMS officials to add language ensuring that state officials could ban benefit substitution if they wish.

Consumers Union officials offered an example of the kind of substitution that they are worried about.

An insurance company could substitute coverage of physical therapy services that treat short-term sports injuries for those that treat more chronic conditions and are more commonly used by people with disabilities.

"Leaving substitution up to insurers could result in their crafting benefit packages that attract certain populations at the expense of others," the group concluded.

The Alliance of Specialty Medicine, representing an array of specialists, said its members are worried that the proposal would lead to drug coverage that is not broad enough for many patients and result in insufficient access to specialty care.

In particular, the group raised concerns about the proposed rule's provision on prescription drug benefits. The original bulletin would have guaranteed coverage of at least one drug in every class. The proposed rule did expand that to say that every plan would have to cover at least one drug in every category and class, or the same number of drugs in each category and class as the benchmark plan that a state selects, whichever is more. That raises the possibility of having coverage of more than one drug in every class, but the Alliance said that does not go far enough.

"By allowing plans to cover an arbitrary number of drugs, there is no guarantee patients will get access to the medicines they need," the group wrote.

Another concern mentioned by groups, including the Alliance and AHA, is that the proposal would cap out-of-pocket spending by consumers but out-of-network costs do not count toward that limit, except for emergency care.

"As providers of specialty care, the Alliance believes it is a critical problem that there is no limit to the amount an individual may need to pay for out-of-network providers," the group said. "This aspect of the EHB proposed rule essentially promotes a closed provider network. It is especially problematic for patients who need to seek specialty care providers who, by the nature of their specialty, often see patients from a variety of health plans in- or out-of-network. This proposed rule would impede a patient's access to specialty care and treatment."

The National Health Council, a group that focuses on chronic disease, said it is important to put in place federal monitoring programs to ensure that plans are meeting federal requirements. They are worried that insurers could construct plans that would discriminate against people with certain types of conditions by putting in place high cost-sharing requirements or limits on services.

Insurers represented by America's Health Insurance Plans said that they are still working on their comments. They may want to respond to the concerns raised by other groups in their letters. The plans have said in the past that one of their main concerns is that the coverage be affordable, and they say putting restrictions on how plans can design their benefits can raise prices for consumers.

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