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July 7, 2022 – The Self-insurance Institute of America, Inc. (SIIA) actively advocates and educates policymakers and regulators on federal and state issues on behalf of members through its government relations team.
This 2022 2nd Quarterly Update provides SIIA members with recent policy and regulatory developments on both the federal and state level impacting the self-insurance/captive insurance industries.
Index
Federal Legislative & Regulatory Activities
I. Surprise Medical Billing Final Rule Expected Soon
II. Congressional Reconciliation & Drug Pricing Reform
III. U.S Supreme Court Decision on Self-Insured Dialysis Payments
IV. Transparency in Coverage Rule Disclosure of INN Rates &OON Allowed Amounts (effective July1st)
State Legislative & Regulatory Update
SIIA Government Relations Team
Federal Legislative & Regulatory Activities
I. Surprise Medical Billing Final Rule Expected Soon
Recently, the federal agencies submitted for review to the Office of Management & Budget (OMB) the final rule on the surprise medical billing requirements, including the federally-developed arbitration process. Amid eight different lawsuits now having been filed in opposition of the interim final “arbitration” rule (issued back in Sept. 2021) by air ambulance and various healthcare provider organizations, it is unclear what this forthcoming final rule will include on the “rebuttable presumption standard” and other aspects of the Federal arbitration process.
With the understanding that OMB has scheduled stakeholder meetings through the middle of July, SIIA expects a final rule to be published sometime around the middle to end of July. SIIA will be communicating with members as soon as the final rule is published, in addition to providing more technical details shortly after the rule is released.
II. Congressional Reconciliation & Drug Pricing Reform
Congressional Democrats are once again attempting to resuscitate efforts to enact a reconciliation bill before the 2021-2022 fiscal year ends on October 1st. Utilizing the reconciliation process allows passage of policy initiatives without the need to gain a super majority in the Senate, which has been difficult in a split 50-50 Senate. Importantly, a reconciliation bill can only include provisions that impact revenue (i.e., taxes) and spending.
Currently, Senate Majority Leader Charles Schumer (D-NY) and Sen. Joe Manchin (D-WV) are in the final stages of a potential agreement on a reconciliation agreement that would include climate change reforms and deficit reductions paid for with drug pricing reforms and business tax increases. At this point, it is unclear whether this current package will include other social spending programs like an extension of the ACA’s “enhanced premium subsidies.”
While an extension of the ACA’s “enhanced premium subsidies” is something SIIA members should keep an eye on, the most impactful potential change is drug pricing reforms. Under consideration is the following:
• Among the 50 Rx drugs that Medicare Parts B and D spend the most money on, HHS can negotiate the prices of up to 10 Rx drugs beginning in 2023, increasing up to 20 Rx drugs in 2025 and future years, that – in the opinion of the Secretary of HHS – lack price competition.
• A $2,000 per beneficiary out-of-pocket maximum limit would be added to Medicare Part D.
• Imposing an inflation rebate policy whereby drug manufacturers would pay any above-inflation amount back to Medicare’s Trust Fund or face penalties, in addition to a premium stabilization policy to hold down annual premiums.
Previously, Congressional Democrats suggested placing a $35 cap on insulin covered by both individual and group health plans, including self-insured plans. While the House has passed this measure, it remains unclear whether this proposal will be included in reconciliation or if the Senate will attempt to seek passage separately. SIIA will continue to monitor any potential legislative activity and update members accordingly.
III. U.S Supreme Court Decision on Self-Insured Dialysis Payments
On June 21st, the U.S. Supreme Court, in a 7-2 opinion, found in favor of arguments put forward by the Self-Insurance Institute of America, Inc. (SIIA) and other industry participants in the case of DaVita v. Marietta Hospital, finding that the Marietta Hospital Employee Health Benefit Plan did not violate the Medicare Secondary Payer Act (MSPA) in limiting dialysis payments to DaVita. The Court’s full decision can be found here.
This latest legal victory is part of SIIA’s ongoing and broader mission of protecting and promoting the business interests of companies involved in the self-insurance/captive insurance marketplace.
In the majority opinion, the Supreme Court found that Marietta’s employer health plan does not violate the MSPA because it provides the same benefits, including the same outpatient dialysis benefits, to individuals with and without end-stage renal disease. The Court held that group health plans like Marietta’s can utilize cost-control designs under the MSPA so long as the plans offer the same terms of coverage for outpatient dialysis to all plan participants.
This important decision by the Supreme Court ensures that self-insured plan designs can continue to appropriately manage and pay for dialysis treatment for patients, without unnecessary payment increases to dialysis providers. SIIA is pleased that the ruling confirmed the ability of health plans to provide common-sense cost containment measures when it comes to high-cost services such as dialysis for those patients that need it the most. SIIA’s full release on the DaVita case can be found here.
IV. Transparency in Coverage Rule –Public Disclosure of In-Network Rates & Out-of-Network Allowed Amounts (Effective July 1st)
As of July 1st, the Federal Transparency in Coverage (TiC) Rule requires insurance carriers and self-insured plans to post on a public website their (1) negotiated rates with in-network providers and (2) historical payment amounts for a medical item and service that was furnished by an out-of-network provider during the 90-day time period that begins 180-days prior to the publication date of the file. Failure to comply with these public disclosure requirements could lead to a penalty of $100 per day per violation for each affected individual, meaning that penalties could be imposed if self-insured plans are not currently complying.
Plans are now required to update both of the files monthly and to post web links to their “machine-readable files” on the self-insured plan’s website. If the plan does not have a website, links to their machine-readable files can be posted on the employer-sponsor’s website or have a link to the TPA’s website, though plans/employers cannot merely post links to the machine-readable files on the TPA’s website only. SIIA’s technical summary of the Transparency in Coverage Rule can be found here.
The Federal Department issued FAQ’s earlier this year outlining safe harbors for plans using alternative reimbursement arrangements, such as RBP plans, that can be found here. Plans that cannot accurately derive a specific dollar amount until after a service is provided – because, for example, this plan reimburses providers a percentage of billed charges – may list their formula, methodology, and other relevant information about how the rate would be derived, in lieu of a specific dollar amount.
V. PCORI Fee Payments: Due July 31
Under the Consolidated Appropriations Act of 2020, the fee to fund the Patient-Centered Outcomes Research Institute (PCORI), which undertakes “comparative effectiveness” research, was extended for 10 additional years.
For 2022, the PCORI fee that is payable by self-insured plans and other health care payers is set at $2.79 per covered life, which can be determined by identifying the average number of all covered lives during the current plan year. PCORI fees for 2022 are due on July 31st.
The IRS PCORI Fact Sheet can be found here.
State Legislative & Regulatory Update
State legislatures across the country have been busy the first half of the year considering a myriad of legislation related to issues ranging from placing limits on stop-loss to imposing fees on self-insured and public option proposals. SIIA was able to track, engage and provide important outreach on a number of important state issues. As of June, many legislatures have adjourned, with the exception of special legislative sessions for amendments and veto issues. Thus, new legislation impacting self-insurance is not likely to be introduced or considered for the remainder of the year. A complete schedule of state legislative sessions can be found here.
For an updated list of state legislation being tracked by SIIA, please access the state legislative tracker page here. Please find summaries of key state legislative and regulatory activities below:
Louisiana
LA HB 677 (New Law) - Insulin Out of Pocket Cap
This law prohibits a health coverage plan from imposing a cost-sharing provision for insulin in the plan’s formulary if the enrollee is required to pay more than $75 per prescription for a 30-day supply, regardless of the amount or type of insulin needed to fill the enrollee’s prescription. It also requires a health plan to include at least one insulin from each therapeutic class in the plan’s formulary
Status: Signed by Governor and effective as law 8/01/2022
Michigan
MI SB 447 (New Law) - Large Employer Claim Disclosure
This law requires health insurers and employee welfare benefit plans of a "large employer group" to disclose claims utilization and cost information for the group's employees aggregated in an electronic, spreadsheet-compatible format, subject to conditions and limits described in the bill. The insurance buyer will have to sign an agreement not to disclose the data. (Note – Michigan defines a large employer group as a group having 51 or more full-time employees)
Status: Signed by Governor and effective as law 9/22/2022
New Jersey
NJ A1743 - Small Group Stop Loss Prohibition
This bill would prohibit the offer, issuance, or renewal of stop loss to small groups below 50 eligible employee lives within the state, when the majority of plan employees are within New Jersey.
Status: This bill did not make it out of committee prior to adjournment; not likely to pass this year.
Nevada
Proposed Stop-Loss Regulation: No. R151-20
This proposed regulation, which SIIA has testified upon and submitted formal comments, makes changes to the State’s stop-loss regulations, and amends certain data submissions. As a result of negotiations, instead of onerous restrictions, the proposed regulation raises the minimum specific attachment point from $10,000 up to $20,000, and the small employer group aggregate attachment point to the greater of 120% of expected claims or $20,000. The attachment point for non-small groups is at least 110% of expected claims. Other changes in this regulation include a prohibition on lasering and direct payments to employees, members, or participants. This proposal also effectively guarantees the rates of the policy for stop loss for at least 12 months, without adjustment (see bill text page 2 for exceptions).
Status: SIIA expects this regulation to be finalized by the NV DOI later this year.
Rhode Island
RI S 2944 A – TPA Assessment for State Mental Health Services
This Act would create the Rhode Island Psychiatry Resource Network, a new state entity that would fund mental health services by assessing TPA’s and self-insured entities. The services, budget, and operation of the Network is not defined in the Act. SIIA opposes this assessment, and will continue to monitor this legislation in the unlikely event the Rhode Island Legislature is called in for a special session.
Status: This bill failed in committee prior to the summer “recess” period and is unlikely to pass this year.
Texas
Hegar v. Health Care Service Corporation– Texas Supreme Court Validates Stop-Loss Premium Tax
This decision applies the definition of health insurance to stop-loss products. SIIA continues to oppose the premium tax application to stop-loss products and is reviewing potential policy and legislative options.
The issue in this case was whether the Comptroller correctly assessed taxes against an insurer’s sale of stop-loss policies under Texas Insurance Code Chapters 222 and 257. Blue Cross Blue Shield sued for a refund of its 2012 premium and maintenance taxes collected from its stop-loss policies, arguing that the policies did not cover risks on “individuals or groups” under Chapter 222. The trial court agreed with BCBS, but the Texas Supreme Court reversed, ruling that the comptroller properly taxed BCBS and the premium collected on its stop-loss policies were subject to taxation under Chapter 222. Because BCBS collected these premiums under its authority to write health insurance, they were subject to Chapter 257’s maintenance tax.
SIIA Government Relations Team Contacts
Please contact the following if you have any questions, or wish to discuss policy and regulatory developments in more detail.
Ryan Work
Senior Vice President Government Relations
[email protected]
Chris Condeluci, Esq.
Washington Counsel
[email protected]
Catherine Bresler
State Policy Advisor
[email protected]
Anthony M. Murrello
Government Relations Coordinator
[email protected]
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