Health care reform’s rules on emergency services have been in effect since 2011, but group health plan sponsors would do well to keep them top-of-mind when crafting initiatives to promote proper emergency room usage.
To review, the rules on emergency services apply to non-grandfathered, self-insured group health plans. The rules do not require a plan to cover emergency services, but provide that if a plan covers any benefits with respect to services in a hospital emergency department, then coverage for emergency services must be provided:
- without the need for prior authorization, even if the services are out-of-network;
- without regard to whether the provider of services is an in-network provider;
- if the services are performed out-of-network, without imposing any administrative requirement or limitation on coverage that is more restrictive for out-of-network than in-network services, and in compliance with cost-sharing requirements set out in the regulations (i.e., copayments or coinsurance rates imposed for out-of-network emergency services cannot exceed cost-sharing that would be imposed if in-network); and
- without regard to any other term or condition of coverage, other than a benefits exclusion, a coordination of benefits provision, a permissible waiting period, or applicable cost-sharing requirements.
Any other copayment or coinsurance requirement (deductible or out-of-pocket-maximum) may only be imposed with respect to out-of-network emergency services if it applies generally to out-of-network benefits.
The rules generally are directed at making out-of-network emergency services equivalent to in-network emergency services, and to ensure that participants are not penalized for using out-of-network emergency services when needed. However, plan sponsors might run afoul of these rules when crafting more creative attempts to reduce improper emergency room usage. For example, a plan sponsor would not want to institute a plan feature that could end up being viewed as a pre-authorization requirement under these rules. It may also be important for plan sponsors to analyze the definition of “emergency medical condition” as that is defined in the Social Security Act. Violations of the emergency services rules are subject to the Code section 4980D excise tax penalties of potentially $100 per day, per affected individual.