Under PPACA “recommended” preventive services must be covered at 100% with no deductible applied (except if the service is provided out of network). At first glance, this seems simple, an immunization or a routine exam is covered, no questions asked. After all, covering such services is a good thing, right? Covering such services may be a good thing, but such coverage is not necessarily going to save money. Eliminating all cost sharing is a continuation of the major mistake we have made in all health care, we insulate people from the real cost and provide a disincentive for individual responsibility as if paying for health care is somehow different from paying for any other life expense.
Seeking more flexibility to manage their health plans, some employers have made changes knowing they are losing grandfathering and thus now subject to all the preventive service provisions. In doing so employers have given up control over a wide array of services covered by their plan and have left themselves open to ongoing changes and increased costs determined solely by government agencies. This is quite different from government required minimum deductibles or eliminating limits on reimbursement.
Administering these new benefits will not be easy because the recommendations are going to change continuously, some services will fall off the recommended list and others added. Each time this happens, the plan sponsor must notify plan participants and change the plan provisions. A service reimbursed at 80% this month may be paid at 100% next month and vice versa. Communicating the loss of a benefit or the addition of a new one will be a challenge for employer plans. For self-insured plans, coordinating the communications, updating plan descriptions, the claim processing with the TPA and claim appeals will present twists and turns not seen even under ERISA.
In addition, there will likely be disputes over what services are reimbursed at 100%. For example, if the provider bills separately for an office visit during which a preventive services is provided, cost sharing may be applied to the office charge. On the other hand, if there is no separate charge, the total cost is covered at 100%. Obviously, the number of separate charges (paid at less than 100%) is going to decline under pressure from patients for 100% coverage. At the same time utilization of services provided at no cost to the patient are likely to increase, an obvious goal of the law, but an increase in costs nevertheless.
The services covered by the preventive section of PPACA are based on recommendations from several different groups such as the United States Preventive Services Task Force and the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (“CDC”). “Recommended” preventive services are defined in the Interim Final Regulations to mean evidence-informed preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration (“HRSA”).
For more details and charts that outline exactly the services covered under these regulations, visit this section of healthcare.gov. To see how comprehensive these preventive services are view the Recommendations for Preventive Pediatric Health Care .