The Internal Revenue Service, the Department of Labor and the Department of Health and Human Services (“HHS”) issued final regulations for group health plans and health insurance issuers under the Newborns’ and Mothers’ Health Protection Act of 1996 (the “Newborns’ Act”). The Newborns’ Act was enacted on September 26, 1996, to provide protections for mothers and their newborn children with respect to hospital lengths of stay following childbirth. Interim final rules implementing the provisions of the Newborns’ Act were published on October 27, 1998 (the “Interim Rules”). The Newborns’ Act provides that a group health plan and a health insurance issuer may not restrict mothers’ and newborns’ benefits for a hospital length of stay in connection with childbirth to less than 48 hours following a vaginal delivery or 96 hours following a delivery by cesarean section.
The final regulations vary only slightly from the Interim Rules. In brief, the final regulations provide that:
- When a delivery occurs in the hospital, the stay begins at the time of delivery or, in the case of multiple births, at the time of the last delivery.
- When a delivery occurs outside of the hospital (e.g., at a birthing center), the stay begins at the time the mother or newborn is admitted.
- An attending provider may discharge the mother or her newborn before the expiration of the 48 or 96 hours if the decision is made in consultation with the mother. The final regulations clarify that the definition of “attending provider” does not include a plan, hospital, managed care organization or other issuer.
- A plan may not require that a physician or other health care provider obtain authorization or pre-certification from the plan, or from a health insurance issuer, to prescribe a hospital length of stay that is subject to the general rule. A plan or issuer is not prohibited from requiring precertification for any portion of a stay that extends beyond the 48 or 96 hours.
Group health plans may not deny a mother or her newborn child eligibility to enroll or renew coverage under the plan to avoid the requirements under the regulations. Plans are also prohibited from providing payments or rebates, including payments-in-kind, or offering disincentives to a mother to encourage her to accept less than the minimum protections available under the general rule. Similarly, the final regulations provide that a group health plan may not, directly or indirectly, penalize or otherwise reduce or limit the compensation of an attending provider because the provider furnished care to a participant or beneficiary in accordance with the general rule, nor can a group health plan encourage or induce an attending provider to furnish care to a participant or beneficiary in a manner inconsistent with the general rule. Plans, however, are not restricted from negotiating the level and type of compensation for care furnished in accordance with the general rule with attending providers.
The final regulations became effective on December 19, 2008, and apply to group health plans (insured and self-insured) and health insurers for plan years beginning on or after January 1, 2009.
Participants must receive a description of the applicable federal requirements (or, if greater, the state law requirements) governing hospital lengths of stay in connection with childbirth. Group health plans and issuers already in compliance with the Interim Rules will generally remain in compliance with the final regulations. We recommend that plan sponsors confirm that the plan’s summary plan description includes the required language to comply with the Newborns’ Act.