The Affordable Care Act (“ACA”) provides that if a group health plan or health insurer offers coverage for emergency services and such services are provided by an “out-of-network” provider, the cost-sharing required (i.e., copayment or coinsurance) must be the same as would apply to in-network services. On June 28, 2010, HHS, DOL, and the Treasury (collectively, the “Agencies”) published an Interim Final Rule regarding this emergency services provision. In order to address the risk that patients could still, in some states, be balance billed for the difference between the out-of-network providers’ charges and the amount paid by the health plan or health insurer, the Agencies included in the Interim Final Rule a requirement that a health plan or health insurer must provide benefits for out-of-network emergency services in an amount equal to the greatest of the following: (i) the in-network negotiated rate; (ii) the rate based on the same method used to determine payments for out-of-network services (such as the usual, customary, and reasonable (“UCR”) charges), but substituting the in-network cost-sharing provisions for the out-of-network cost-sharing provisions; or (iii) the Medicare rate (referred to as the “Greatest of Three” or “GOT” regulation).
During the comment period for the Interim Final Rule, the American College of Emergency Physicians (the “Physicians”) and numerous other interest groups submitted comments expressing concerns about relying on UCR charges as a possible method for calculating payment because the calculation of UCR charges is often not transparent or accurate, and suggested that an independent database, such as the FAIR Health database, could be used instead. When the Agencies issued the final version of the rule on November 18, 2015 (“Final Rule”), they adopted the GOT regulation without substantive revision and responded with only a conclusory statement to the related comments submitted by the Physicians and other groups.
The Physicians filed a lawsuit alleging that the Final Rule is invalid because it does not ensure a reasonable payment for out-of-network emergency services as required by the ACA and because the Agencies did not respond meaningfully to their concerns about the GOT regulation. The U.S. District Court for the District of Columbia (i) determined that the Agencies acted arbitrarily and capriciously by failing to seriously respond to the comments and proposed alternatives submitted by the Physicians and others with respect to the GOT regulation and (ii) ordered the Agencies to adequately address the comments and proposals at issue.
Employers sponsoring group health plans subject to the ACA must continue to comply with the GOT regulation but should be alert for any changes that may result from the Agencies’ further consideration of the GOT regulation.
Am. C. of Emergency Physicians v. Price, Civ. Act. No. 16-913(CKK) (D.D.C. Aug. 31, 2017).