On February 6, a US district court in Texas vacated provisions of the No Surprises Act final rule related to the independent dispute resolution (IDR) process for determining payment for out-of-network services.
The district court granted summary judgment to the Texas Medical Association, which had brought suit against the US Departments of Health and Human Services (HHS), Labor and the Treasury over the IDR process. The district court held that provisions of the final rule were contrary to law and therefore in violation of the Administrative Procedure Act. The order vacated the provisions of the final rule that require IDR entities to look at the qualifying payment amount first and consider other factors only if those other factors are not already accounted for in the qualifying payment amount.
The departments have not yet filed a notice of appeal or amended their sub-regulatory guidance to align with the district court’s order.
On February 22, 2023, the US Supreme Court held in Helix Energy Solutions Group, Inc. v. Hewitt that an employee who was paid nearly $1,000 each day he worked was not exempt from the Fair Labor Standards Act (FLSA) and therefore owed overtime for the work he did. This case turned on an interpretation of the FLSA regulations, which exempt from the overtime requirement certain bona fide executive, administrative and professional employees.
A key feature of the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) was the government’s ability to provide access and coverage of COVID-19 tests. This resulted in overlapping legislation targeted at providing tests to benefit plan participants for free.
With the end of the NE and PHE set for May 11, 2023, there is confusion about what will happen to COVID-19 testing.
Starting on March 18, 2020, the Families First Coronavirus Response Act (FFCRA) required all public and private insurance coverage, including self-funded plans, to cover COVID-19 tests and costs associated with diagnostic testing with no cost-sharing for the duration of the PHE. The Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted shortly after expanded this requirement to cover out-of-network tests during the PHE. The Consolidated Appropriations Act of 2021 (CAA) then took a new approach and applied the requirement to over-the-counter (OTC) COVID-19 tests and added additional obligations. Under guidance issued by the US Departments of Labor, Health and Human Services, and Treasury, effective January 15, 2022, health plans were required to cover up to eight free OTC at-home tests per covered individual per month. Health plans could limit the reimbursement of these tests to the lesser of the actual or negotiated price or $12 per test. Health plans could also provide tests through participating network providers, such as pharmacies or retailers.
When the PHE ends, health plans will no longer be required to cover COVID-19 tests, either diagnostic or OTC, or testing-related services with no cost-sharing.
Employers should consider whether they want to continue to cover COVID-19 tests as required by a doctor or OTC without cost sharing. There is no requirement to stop doing this after the PHE but doing so may have some implications on group health plans. Importantly, if an employer decides to continue covering testing at no cost, they should consider how this affects any employer-sponsored high-deductible health plan (HDHP). IRS Notice 2020-15 permitted HDHP coverage of COVID-19 testing with no cost-sharing without conflicting with HSA eligibility (see our article here). This relief continues until further guidance is issued. Though COVID-19 testing could be considered preventative care under Section 223 of the Internal Revenue Code, the US Department of Treasury will need to provide further clarification. Employers should also consider whether they want to continue to apply a $12 reimbursement cap on COVID-19 or some other limitation.
After the PHE, employers who choose to continue to cover COVID-19 tests at no cost or apply a reimbursement cap may need to amend their plans or summary plan descriptions for these practices. They will also need to coordinate with any insurer or third-party administrator of the employer’s group health plan to ensure proper administration. Depending on the timing of these amendments, they may also need to provide a summary of material modifications to participants. Employers who decide not to continue coverage of COVID-19 tests or apply a reimbursement cap may need to amend their plans, depending on whether [...]
On January 30, 2023, the Biden administration announced its intention to make final extensions of both the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) through May 11, 2023, at which point both will end. These emergency declarations have been in place for nearly three years and have enabled the government to modify certain coverage requirements by Medicare, Medicaid and private insurance plans, as well as benefits administration rules. The end of the PHE and NE may mean added costs for benefits plans and new questions regarding compliance. This series will explore the implications of the PHE and NE and what their impending end may mean for benefit plan sponsors with articles released periodically before May 11.
There are several important benefit coverage and administration requirements connected to the PHE and/or NE that may remain the same, remain for a temporary period or may need to be discontinued upon the end of these federal emergencies. Over the course of the upcoming weeks, we will cover the key topics that may be triggered by the end of the PHE and/or NE, including:
High Deductible Health Plans, Health Savings Accounts and Employee Assistance Plans (Part 6 of 10)
Deadline Tolling Applied to Each of:
COBRA (Part 7 of 10)
Claims and Appeals + External Review (Part 8 of 10)
HIPAA Special Enrollment (Part 9 of 10)
Other Plan-Related Notices (Part 10 of 10)
Note that the items covered above are not an exhaustive list of all legislative and regulatory changes that could affect employee benefit plans. This series is meant to keep employers informed about some of the most important upcoming changes and the impending decisions and disclosures that need to be made.
For any questions regarding the end of the PHE and/or NE, please contact your regular McDermott lawyer or one of the authors.
On January 25, 2023, the US Department of Health and Human Services (HHS) announced that more than 16.3 million people nationwide selected an ACA Marketplace health plan during the 2023 open enrollment period that ran from November 1, 2022, until January 15, 2023, for most marketplaces.
According to HHS, total plan selections include 3.6 million people who are new to the marketplaces for 2023 (22% of the total). The 3.6 million figure is a 21% increase in new-to-marketplace plan selections over last year.
The data included in HHS’s January 25 announcement represents activity through January 15 for the 33 marketplaces using HealthCare.gov, and through January 14 or 15 for the 18 state-based marketplaces in 17 states and the District of Columbia that use their own eligibility and enrollment platforms. Some state-based marketplaces are still in open enrollment and will report updated enrollment data after that period closes. A fact sheet on state-based marketplace open enrollment deadlines can be found here.
The Centers for Medicare & Medicaid Services (CMS) recently issued a proposed rule regarding Contract Year 2024 Policy and Technical Changes to the Medicare Advantage (MA) and Medicare Prescription Drug Benefit Programs. This proposed rule includes a range of proposals addressing popular topics, including marketing and prior authorization, along with other significant changes to utilization management, Quality Star Ratings and the Programs of All-Inclusive Care for the Elderly (PACE).
Recently, President Joe Biden signed the Medical Marijuana and Cannabidiol Research Expansion Act, which provides a mechanism for industry and academia to access and research cannabis (including marijuana and other cannabis-derived products) without violating the Controlled Substances Act. This legislation creates a pathway for researchers to register with the US Department of Justice to legally conduct scientific research on such products subject to certain requirements. It also creates a system to allow drug manufacturers to legally produce products approved by the US Food and Drug Administration that contain cannabidiol or marijuana for commercial sale. The legislation also includes a doctor-patient relationship provision that permits state-licensed physicians to discuss the “currently known potential harms and benefits of marijuana and its derivatives, including cannabidiol, which may be derived from marijuana or other cannabis products such as hemp, as a treatment,” which may be of significant interest for healthcare providers.
The US Departments of Health and Human Services, Labor and Treasury (the Departments) recently issued a proposed rule to eliminate a moral exemption to the Affordable Care Act (ACA) contraceptive mandate and establish an “individual contraceptive arrangement” to permit individuals to obtain contraceptive services at no cost in instances in which their employer does not offer coverage based on its religious beliefs. This is the latest development in the Biden administration’s efforts to increase reproductive health access after Dobbs v. Jackson Women’s Health Organization. The Departments previously issued a reminder to health plans and insurers that the ACA requires contraceptive coverage at no additional cost to individuals.
The Federal Trade Commission’s newly proposed rules that would prohibit most noncompete clauses in employment represent a seismic shift for business. In this Barron’s article, McDermott Partner Michael Peregrine says corporate leadership should “take very seriously” the threat that federal antitrust policy presents to business operations and strategic development.
“This government activity has risen to a level that demands serious board and executive attention as a possible corporate enterprise risk,” Peregrine writes.
The No Surprises Act (NSA) provides federal protections against surprise billing with respect to emergency services, non-emergency items or services furnished by out-of-network providers at certain in-network healthcare facilities, and air ambulance services furnished by out-of-network providers of air ambulance services. The NSA also establishes that certain federal agencies publish information quarterly about the Federal IDR process. The first such report, Initial Report on the Independent Dispute Resolution (IDR) Process April 15 – September 30, 2022, offers insight into dispute volume, interaction of the Federal IDR process with the claims procedure rules and problems with botched claims.
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