The Department of Health and Human Services (HHS) has responded to comments submitted in 2010 in response to an interim final rule implementing regulations for qualified health plans (QHPs) under the Affordable Care Act (ACA). The response was a requirement of a court case filed by the American College of Emergency Physicians (AECP), and is specific to the method in which QHPs may calculate their reimbursement rate for out-of-network emergency department providers. Over 20 pages, HHS details that the agency stands by their previous decision and that the current regulation is “reasonable and transparent” and that alternative suggestions from AECP would be “problematic” to implement. Because the regulation will remain in force unchanged, little immediate impact will be felt; however, the decision to not change course is likely to protect patients from higher out-of-pocket costs when they seek care at an out-of-network emergency department.

The Affordable Care Act (ACA) requires health plans to cover emergency services at out-of-network hospitals without prior authorization requirements and at the same cost-sharing level that is assessed on in-network emergency services. In other words, plan members must be able to both seek emergency care at an out-of-network hospital without prior authorization and cannot be charged a higher cost-sharing rate than they would otherwise be charged if they sought emergency care at an in-network facility.

However, the law does not address at what rate health plans must pay the out-of-network facility; frequently, in-network providers accept a lower reimbursement rate in exchange for joining a plan’s network and total charges at out-of-network providers generally exceed the allowed amount, plus any patient cost-sharing. Some states allow plans to “balance bill” patients for this difference, increasing out-of-pocket costs for consumers. Because the ACA excludes these charges from the calculation of a patient’s out-of-pocket costs, the use of out-of-network providers can expose patients to charges that are not subject to consumer protections, such as annual limits on cost-sharing.

While the ACA does not prohibit balance billing, the law does require plans to pay out-of-network providers a “reasonable amount” in order to mitigate some of the balance billing charges billed to the patient. Thus far, the agency has defined a “reasonable amount” as the higher of: a plan’s negotiated in-network charge; a plan’s usual payment for out-of-network services, substituting the in-network cost-sharing; or the amount that would be paid under Medicare for the emergency service. When the regulation was issued in 2010 with this definition, the American College of Emergency Physicians (ACEP) objected, arguing that health plans relied on requirements that emergency departments treat all patients, regardless of ability to pay, as a way to impose “extremely low” reimbursement rates. Other medical and patient societies submitted similar comments.

The regulation was finalized in 2015 with no changes; in response to comments, the agency stated that plans are required to document their calculations to determine the “reasonable” payment. ACEP filed a lawsuit in May 2016, asserting that the final regulation should be invalidated because it does not ensure a “reasonable” payment and the agency did not respond meaningfully to the group’s comments. In August 2017, the courts allowed the regulation to remain, but required the agency to issue a response that adequately addressed the concerns raised by ACEP and others, and noted that the agency was free to “reach the same or different conclusion.” This clarification, which will appear in the May 3, 2018 issue of the Federal Register, is intended to satisfy that requirement.