On May 17, 2013, the Department of Health and Human Services (HHS) released an interim final rule, which lowers payments to providers for services furnished to individuals enrolled in the Pre-Existing Condition Insurance Plan (PCIP). The new rule will require providers to accept Medicare rates for services provided to PCIP participants instead of the commercial rates providers have received since the plan's inception.
The PCIP was established under the Patient Protection and Affordable Care Act (PPACA) which was enacted in March 2010. The plan was intended to be a temporary bridge to provide health insurance to uninsured individuals with pre-existing conditions until 2014. In 2014, most health insurance providers will be required under PPACA to offer coverage to all individuals, regardless of pre-existing conditions. Initially, HHS predicted that up to 400,000 individuals would enroll in PCIP, and Congress provided $5 billion in funds for the program. In fact, only 135,000 individuals have enrolled in the program, but due to the cost of the claims per enrollee being higher than originally projected, most of the $5 billion provided by Congress has been exhausted.
Several changes have already been instituted since the PCIP's creation in order to reduce costs, including ceasing referral payments to agents and brokers, changing provider networks, offering only a single plan option, increasing the maximum out-of-pocket limit for in-network services, and an increase in coinsurance once the enrollee's deductible has been met. Furthermore, the federally administered PCIP suspended its acceptance of new enrollment applications on February 15, 2013 until further notice.
Beginning June 15, 2013, services furnished to enrollees in the federally administered PCIP program will be paid at Medicare payment rates, or if Medicare payment rates cannot be implemented, then 50 percent of billed charges or at relative value scale pricing. HHS did note that prescription drugs, organ/tissue transplants, dialysis, and durable medical equipment benefits will continue to receive the commercial value payment these services have received since 2010. Furthermore, the new rule generally prohibits doctors and hospitals from increasing charges to consumers or PCIP enrollees to make up the difference resulting from this rule.
When this final interim rule becomes effective, providers will be paid less to treat PCIP enrollees. Providers will be forced to choose between treating PCIP patients and receiving less for their services, or to not treat PCIP enrollees at all. HHS alleged that the decrease in PCIP revenue providers experience will be offset by the uncompensated treatment providers would be forced to provide if the PCIP did not exist.
The interim final rule will not change the costs to the federal government; rather the rule specifies how HHS plans to spend the remaining $5 million appropriated by Congress. The rule did not specify what will happen if the $5 million runs out completely before 2014. For further information regarding the effect of this interim rule, or any question regarding billing for federal health care programs, please contact an experienced Wachler & Associates healthcare attorney at 248-544-3111.