Go Slow On Reference Pricing: Why The Federal Agencies Have It Wrong On Regulations

Despite concerns outlined in our previous post on reference pricing, federal oversight agencies essentially have taken a hands-off approach. First, they announced that for large group and self-insured plans, the Affordable Care Act’s (ACA) annual maximum limits on out-of-pocket costs do not apply to charges above the reference price. These limits are already high: $6,600 for an individual and $13,200 for family coverage in 2015. Without any discussion the agencies asserted that non-designated providers are out-of-network, and therefore cost sharing falls within the ACA’s exclusion of out-of-network cost from the maximum limits. This ruling is inconsistent with the ACA and harmful to patients, effectively allowing plans to circumvent the Act’s crucial out-of-pocket cost limits. The ACA’s annual out-of-pocket maximums are meant to apply to in-network care. If plan members receive care inside this provider network, the Act mandates that they are to be protected by these maximums. In so far as the Act’s mandate is concerned, it is of no relevance that certain providers have agreed to abide by a reference price, while others have not. Both sets of providers are in-network for purposes of the ACA’s out-of-pocket limitation. Two Definitions of Network These rules have also created another problem, again potentially harmful to plan members, by effectively allowing plans to use two definitions of “network” simultaneously. The ACA stipulates that plan members receiv...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: All Categories Business of Health Care Competition Consumers Cost Health Reform Insurance Payment Spending Source Type: blogs