Uniform Summary of Benefits and Coverage — Due March 23, 2012
Uniform Summary of Benefits and Coverage — Due March 23, 2012
MyHealthGuide Source: Gallagher Benefit Services, Inc., 7/ 2011, www.gallagherbenefits.com
A much-anticipated requirement under the Patient Protection and Affordable Care Act (PPACA) is the introduction of the “Uniform Summary of Benefits and Coverage Explanation” (Summary).
The primary purpose of the Summary is for use by health insurance Exchanges that will be available in 2014. However, because consumers will be comparing coverage available outside of the Exchanges, its use is required by all health insurers and group health plans. Under PPACA, the Department of Health & Human Services (HHS) is responsible for the development of the Summary in consultation with the National Association of Insurance Commissioners (NAIC) and other interested parties and stakeholders. The NAIC work group has been meeting regularly since June of 2010, developing and testing the Summary to be used by consumers when choosing between the various health insurance and health plans available to them.
Use of this Summary by health insurers and group health plans is required.
The Summary template with guidance on its use was due by March 23, 2011 and must be in use by March 23, 2012. While late, the NAIC work group recently completed this phase of its work and recommendations. The NAIC workgroup presented HHS with its final work product on June 30.
While HHS is free to make changes to the documents or recommended use, it is likely that HHS will adopt the majority of the workgroup’s suggestions and recommendations. This article is a review of the NAIC workgroups Summary document and recommendations in anticipation of the release of a Notice of Proposed Rulemaking by HHS.
Uniform Summary Requirements in Brief
PPACA laid out specific details regarding the content, appearance and distribution of the Summary. These include:
• A maximum of four pages
• 12-point font
• Use of plain English
• Provide uniform definition of insurance and medical terms
• Description of benefit cost sharing, limitations and exclusions
NAIC Recommended Summary
The final Summary recommended by the NAIC work group has three parts:
• 1. A four page Summary of Benefits and Coverage
• 2. A two-page attachment to the Summary providing coverage examples
• 3. A four page Glossary of Health Insurance and Medical Terms
Four Page Summary
The four page Summary is a template designed to provide specific high-level details similar to a typical schedule of benefits found in many insurance booklets. It includes several definitions in the Summary that research and focus groups found were confusing to consumers. The instructions provided to insurers for use when creating their summaries are very specific. No change in the order of the items or the text used in the template is permitted unless specifically noted on the Summary or in the instructions.
Coverage Examples
The four page Summary must be accompanied by coverage examples to help consumers decide among the plans available to them. The Coverage Examples, while not part of the four page Summary, must be included with the Summary when provided to applicants and enrollees.
The coverage examples provide three typical situations involving medical treatment and provide details about the out-of-pocket cost the consumer could expect to pay.
To develop the coverage examples the NAIC workgroup provided selected CPT codes, for services based on recognized clinical practice guidelines and use corresponding dollar values that reflected national average costs for the particular treatment. The insurers participating with the workgroup then applied the terms of a specific plan offered by the insurer. The coverage examples include disclaimers advising consumers that while these are intended to be realistic scenarios and costs, the examples are for comparison purposes only. The health care costs in the consumer’s geographic area may vary significantly from the examples.
Glossary of Health Insurance and Medical Terms
As required under PPACA, a glossary of insurance and medical terms was created for use with the Summary. The glossary is a separate document and developed with input from insurers and consumers working from the broad list of terms currently used by insurers and plans across the country, including terms currently defined under the various state insurance laws. When and where the glossary must be made available has not yet been defined. This is likely to be addressed in the Notice of Proposed Rulemaking ultimately issued by HHS. For a copy of the Glossary of Health Insurance and Medical terms, click here.
Recommendations by the NAIC Workgroup/Issues to Be Addressed by HHS
• The Summary does not include the required disclosure regarding the coverage of minimum essential coverage nor the statement relating to the minimum coverage requirement of 60% of total allowed costs of benefits (bronze level). The Summary must be updated when these areas of PPACA have been addressed in the regulations.
• Insurers will complete the document for each of the policies they offer. The summary of benefits and coverage document is intended
o to be a freestanding document;
o to be used for individual, small and large group insurers;
o There may be additional changes required to the Summary and instructions for large self-funded employer plans and for HMOs, but those have not yet been addressed in the Summary.
• The NAIC workgroup made clear that as supplementary standardized documents, they are not designed to preempt stricter state requirements that apply to benefit summaries and insurance contracts. Further, they expect that through the rule making process HHS will permit additional requirements for health insurers if a state determines it is in the best interests of its residents. This is an area of potential concern given the importance of a uniform summary for comparison purposes.
• Because some plans may not reimburse providers based on CPT codes (for example they may use other payment methods, including bundling and capitation), methods to create coverage examples that are apples-to-apples will need to be developed.
• When delivering the final documents to HHS, the workgroup clearly stated a significant goals was to help ensure that health insurers are able to produce and provide the summary of coverage and coverage examples in the most efficient and expeditious manner possible. The workgroup reiterated previous recommendations that, for each required coverage example, HHS supply uniform claims scenarios, including the CPT billing codes; frequency and order of services; and associated dollar values for allowed charges to be used by all health plans and insurers developing consumer cost estimates. Additional recommended guidance included certain stated assumptions and instructions to help insurers run the scenarios and produce the coverage examples in a consistent way:
o Costs do not include premiums.
o Sample care costs are based on national averages supplied to the U.S. Department of Health and Human Services (HHS), and are not specific to a particular geographic area or health plan.
o Patient’s condition was not an excluded, preexisting condition.
o All services and treatments started and ended in the same policy period.
o There are no other medical expenses for any member covered under this plan. Out-of-pocket expenses are based only on treating the condition in the example.
o The patient received all care from in-network providers. If the patient had received care from out-of-network providers, costs would have been higher.
Conclusion
The Notice of Proposed Rulemaking releasing HHS’s proposed direction relating to the Summary and related documents was expected in March. Now that the NAIC workgroup has submitted its recommendations to HHS, the release of the proposed rules is expected at any time. Although the Summary and the related documents are to be freestanding to be readily available to consumers, employers might want to consider the design and the glossary when creating other plan materials such as an annual enrollment newsletter relating to the health plans they sponsor.
About Gallagher Benefit Services
Gallagher operates from offices located throughout the United States and in six other countries, as well as through a network of correspondent brokers and consultants in more than 100 countries. Some of the company’s offices are fully staffed with sales, marketing, claims, loss control and other specialists; some function as servicing offices for the various divisions. Visit www.gallagherbenefits.com.
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