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Home Affordable Care Act Feds Confirm Their Own ACA Emergency Care Cost Guidelines

Feds Confirm Their Own ACA Emergency Care Cost Guidelines

3 minute read
by Robert Sheen
Feds Confirm Their Own ACA Emergency Care Cost Guidelines

4 minute read:

It comes as no surprise that many organizations have had difficulty keeping up with the Affordable Care Act (ACA). Whether complying with the regulations under the employer mandate or making sense of the language on determining contributions for enrolled parties, the ACA can at times be difficult to comprehend.

This holds true for some healthcare providers who felt that the ACA guidelines for out-of-network costs for coverage of emergency services were unclear. One group, the American College of Emergency Physicians, (ACEP), felt so strongly they decided to sue the federal government, stating that the methods used for determining that costs were not affordable and rather vague. The ACEP suggested that there be nationwide transparency on the costs for emergency patients who are “out of network” and the methods for determining the rates be reevaluated.

The ACEP’s case was specifically centered around the language in Section 2719A of the Public Health Service Act (PHS Act) for determining out-of-network emergency services. This section was amended and modified as part of the enactment of the ACA. The ACEP was displeased with the language in the PHS Act, as it was not clear on developing a standard practice for determining the cost of out-of-network emergency services. In a 2016 press release, the ACEP asserted that insurance companies had failed to provide fair coverage for their insured patients and that the method for determining out-of-network emergency services was inadequate. As Jay Kaplan, president of the ACEP, put it, “Patients can’t choose where and when they will need emergency care and should not be punished financially for having emergencies.”

Several other organizations, such as the American Medical Association and the American Hospital Association, expressed similar comments, as well as concern for possible rate manipulation by insurance companies. The ACEP’s lawsuit asked for a clearer description of how to determine reimbursement costs.

One of the ACEP’s chief complaints with how the law is currently set up is that healthcare reimbursements for emergency services are at the discretion of the insurer, creating a disconnect in what is actually “affordable.” This created potential financial hardships for the insured. The ACEP, in their lawsuit, requested greater transparency on emergency services costs through development of a national database to compare services to ensure that costs were objectively affordable. The proposed database could be monitored, tracked, and regulated by officials on a federal and state level, creating a transparent system for establishing rates for out-of-network emergency services. Ultimately, this would protect patients and reduce the possibility of rate manipulation.

The requests of the ACEP were considered by the court, which sent the case back to the U.S. Departments of Health and Human Services, Treasury, and Labor for further explanation because it felt the comments submitted during the regulation’s development had not adequately been considered. The federal agencies took a closer look and ultimately decided that the current rules set forth for determining the costs for emergency services for out-of-network individuals would remain in place.

The provisions under the ACA provide three ways for determining the expenses for out-of-network emergency services are as follows:

  1. The amount negotiated with in-network providers for the emergency service furnished;
  2. The amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services (such as the usual, customary, and reasonable charges) but substituting the in-network cost-sharing provisions for the out-of-network cost sharing provisions; and
  3. The amount that would be paid under Medicare for the emergency service.

These provisions are referred to as the “Greatest of Three.” In confirming the earlier guidelines, the federal agencies determined that the ACA’s Greatest of Three were adequate guidelines for determining the minimum payment for out-of-network emergency services. The federal agencies also rejected the ACEP’s database proposition stating: “The establishment and maintenance of a publicly available database would be time-consuming, would require contracting assistance, and would be costly and burdensome to maintain.”

Despite criticism of the guidelines for determining the cost for out-of-network emergency services, the federal government has determined that they will remain unchanged despite other administrative changes that have been taken to undermine the ACA in terms of its individual mandate and work-arounds of the types of insurance offerings that must be made by employers to their full-time employees.

What’s interesting is that there also is very little talk of changing the employer shared responsibility provisions (ESRP) under the ACA that trigger potential penalties against organizations that are not complying with ACA. Under the ESRP, applicable large employers (ALEs), organizations with 50 or more full-time and full-time equivalent employees, are required to offer minimum essential coverage to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets minimum value and is affordable for the employee or be subject to IRS 4980H penalties. Those employers not meeting those requirements are now facing potential enforcement action from the IRS. The tax agency since late last year has been sending Letter 226J tax notices containing penalty assessments to those organizations it has determined were not in compliance with the ACA in 2015. To date, the IRS has sent more than 30,000 notices containing penalty assessments of $4.3 billion.

Organizations should continue to comply with the requirements under the ACA’s employer mandate or be subject to penalties presented in IRS Letter 226J. To learn more about Letter 226J, click here.

We’re committed to helping companies reduce risk, avoid penalties, and achieve 100% ACA compliance. For questions about the ACA contact us here.

Summary
Feds Confirm Their Own ACA Emergency Care Cost Guidelines
Article Name
Feds Confirm Their Own ACA Emergency Care Cost Guidelines
Description
Healthcare organizations must continue to abide by regulations under the ACA that govern the cost of out-of-network emergency services.
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Publisher Name
The ACA Times
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