State Medicaid plan managers can tinker with autism therapy and infertility treatment benefits but must meet federal mental health parity standards.
Officials at the Centers for Medicare & Medicaid Services (CMS) have given those instructions in a new batch of Patient Protection and Affordable Care (PPACA) regulations, “Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment” (CMS-2334-F).
Parents and providers have waged big, successful political battles for rich autism therapy benefits mandates in many states, and CMS seems to be responsibility for continuing or ending that fight in the hands of state officials.
Elsewhere in the regulations, CMS officials set guidelines for states that want to keep employers with health plans from trying to shift workers’ children into state Children’s Health Insurance Program (CHIP) plans.
Officials also are brushing off commenters who asked CMS to keep health insurance agents and brokers from helping children and low-income people sign up for state Medicaid or CHIP coverage.
CMS, an arm of the U.S. Department of Health and Human Services (HHS), is getting ready to publish the 606-page final rule in the Federal Register July 15.
The regulations are set to take effect 60 days after the official publication date.
PPACA, the EHB package and ABA therapy
PPACA opponents are still fighting to block or delay implementation of all or part of PPACA, and the Obama administration recently delayed enforcement of a PPACA provision that could require many employers to provide health coverage or else pay a tax.
If the law takes effect as written and works as drafters expect, it will require HHS to work with state agencies to set up a new system of health insurance exchanges, or Web-based insurance supermarkets, by Oct. 1.
The exchanges are supposed to help eligible individuals sign up for public health programs, such as Medicaid plans and CHIP programs, as well as to help other individuals sign up for commercial health plans, or “qualified health plans” (QHPs), sold through the exchanges.
Other PPACA sections will require the QHPs sold through the exchanges to cover a standardized package of 10 types of “essential health benefits” (EHB).
States and their exchanges have some flexibility to design their own QHP EHB packages, but each state is supposed to use the benefits package of a widely used government health plan or a widely used small-group plan to serve as a “benchmark,” or model, for its EHB package.
Even if the benchmark plan does not provide dental and vision health benefits for children, a state’s EHB package must include children’s dental and vision benefits.
Similarly, if benchmark plan coverage for “habilitative services” — rehabilitation-type services for people born without certain abilities, such as the ability to talk or walk — is much different from the plan’s coverage for rehabilitation services, then a state either must come up with EHB habilitative services requirements or default to a requirement that EHB habilitative benefits must be comparable to rehabilitative benefits.
The PPACA EHB habilitative services provision could apply to users and providers of many different types of therapy, such as ordinary speech therapy for children who have trouble talking, or ordinary occupational therapy for children who have participating in class, but, in practice, the most active habilitative benefits battles have been over benefits for children with autism and related disorders.
Many parents of children with autism seek coverage for applied benefits analysis (ABA) therapy and other forms of intensive therapy that can cost more than $30,000 per year. The parents and their supporters contend that the money spent on the therapy can help some children who might end up spending their lives in institutions gain the ability to live on their own, work in the community and pay taxes.
The new final rule applies only to standards for “alternative benefit plans” — state-run Medicaid plans and CHIP programs.
The typical plan enrollees are low-income adults and children in low-income or moderate-income families. In some cases, states may open Medicaid and CHIP programs to other groups of people, such as people with disabilities, or people with health problems that have kept them from qualifying for conventional, medically underwritten health coverage.
Private health insurers help run the Medicaid and CHIP programs in most states.
CMS officials have based the final rule on parts of a draft regulation released in January. Consumers, insurance groups, provider groups, employer groups, patient groups and others submitted 741 comments.
The final rule
State Medicaid and CHIP managers can use a version of the EHB package that is similar to what commercial exchange QHPs use but somewhat different, CMS officials said in the preamble to the final rule.
States that want to come up with a definition of habilitative services and devices could use the definitions issued by the National Association of Insurance Commissioners (NAIC), officials said.
The NAIC defines the services and devices as “services and devices provided for a person to prevent deterioration or attain or maintain a skill or function never learned or acquired due to a disabling condition,” officials said in the preamble to the final rule. “CMS will consider the need for future guidance, once experience is gained in implementing these EHB services and devices.”
CMS officials cite many commenters who asked them to require states to make habilitative benefits standards as loose as possible or as strict as possible.
In general, the officials said, they are aligning the EHB definition of “rehabilitative services” more with commercial market definitions than the traditional Medicaid definition, and that they are treating habilitative services benefits as an addition to rehabilitative services.
CMS is providing the flexibility to help states make up for gaps in commercial market benefits, officials said.
The commercial market definition of EHB services, such as rehabilitative services “is the floor of coverage, subject to substitution flexibilities,” officials said. “If the commercial market coverage is not adequate, states, not issuers, define the benefit.”
CMS is assuming that Medicaid habilitative services benefits “will be clinically appropriate to meet the needs of individuals based on medical necessity,” officials said.
But CMS officials declined to require states to apply broad, Medicaid-based habilitative services requirements to commercial QHPs, and they stated a few paragraphs later that, “We reiterate that this regulation applies only to the Medicaid program, and has no bearing on the provision of habilitative services in the individual and small group markets.”
CMS officials also declined to require that a state use a Medicaid definition of habilitation that is “at least as generous as the definition used for exchange plans.”
“While we believe that the procedures we are adopting to determine habilitative services included in EHB for Medicaid will generally be at least as generous as the parallel procedures for the individual and group market, we are not requiring that result,” officials said. “We believe that the procedures for Medicaid will lead to appropriate coverage for Medicaid beneficiaries while recognizing the state’s role in designing Medicaid coverage.”
Similarly, CMS officials declined to set explicit standards for Medicaid and CHIP infertility treatment benefits.
But officials said the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) does apply to Medicaid and CHIP benefits packages.
Almost all commenters approved of the CMS announcement in the draft regulations that CMS will apply the 2008 mental parity rules to Medicaid and CHIP benefits, officials said.
Some commenters asked CMS to find ways to give the Medicaid and CHIP mental parity requirements more teeth. CMS declined to revise the draft regulations but said Medicaid and CHIP programs must comply with MHPAEA.
In a section on state efforts to discourage employers from eliminating dependent coverage, with the understanding that children would immediately get new CHIP coverage, officials said states could use CHIP waiting periods of up to 90 days as a defensive measure.
“Some commenters” asked CMS to prohibit states from letting licensed insurance agents and brokers from serving as certified application counselors for Medicaid and CHIP applicants.
The commenters argued that licensed agents and brokers would have an “inherent financial conflict of interest.”
Counselors must adhere to rules prohibiting conflicts of interest, but “we do not believe it necessary or appropriate to identify specific types of organizations as categorically barred from serving as application counselors,” officials said.