New FAQs on Cost-Sharing Requirements for Certain Preventive Services

The Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury, (collectively, the Departments), issued a new set of FAQs (FAQ XXVI) relating to coverage of preventive services. The newly-released FAQs, published May 11, 2015, clarify issues that were left unanswered by the FAQs about Affordable Care Act Implementation Part XII (hereinafter, "FAQ XII") previously issued by the Departments on February 20, 2013. The text of FAQ XXVI can be found at:

Action Needed Now: The effective date of the FAQs relating to contraceptives is the plan or policy years beginning on or after July 10, 2015. There is no specific effective date for the other FAQs, which suggest they apply immediately. Non-grandfathered plans need to be aware of the new guidance and consider whether any changes in design or administration of the plan need to be made.

Summary of the FAQ XXVI Clarifications

In FAQ XXVI, the Departments set forth seven clarifications in the form of questions and answers for non-grandfathered group health plans and health insurance coverage offered in the individual or group market.

Coverage of BRCA Genetic Testing to Detect Breast Cancer

  • Q&A 1: So long as a woman has not been diagnosed with BRCA-related cancer, a plan or issuer must cover preventive screening, genetic counseling, and genetic testing without cost sharing, as determined appropriate by her attending provider. This clarification ends the confusion as to whether the recommendations for primary care screening, genetic counseling and genetic testing apply to women who have had a prior non-BRCA-related breast cancer or ovarian cancer diagnosis, even if they are currently asymptomatic and cancer-free. The "BRCA" (i.e., Breast Cancer Gene) test is a blood test designed to analyze cancer susceptible genes with harmful mutations.

Coverage of Food and Drug Administration (FDA) - Approved Contraceptives

  • Q&A 2: In its Birth Control Guide, the FDA identifies 18 distinct methods of contraception for women. This Q&A 2 clarifies that plans and issuers must cover, without cost sharing, at least one form of contraception under each identified method. The exclusion of any one method will result in a failure to comply with Section 2713.

In addition, plan sponsors and policy issuers should keep in mind that the FDA-approved methods include some methods of birth control that generally are available over-the-counter (OTC), such as contraceptive sponges and spermicides. Full compliance appears to require plans and insurers to cover such FDA-approved OTC contraceptive methods as preventive services, without cost sharing, to the extent prescribed by the woman's physician. See FAQ XII, at Q&A 15.

As discussed in Q&A 3 below, this clarification does not prevent a plan or issuer from using reasonable medical management techniques and imposing cost sharing (including full cost sharing) to encourage an individual patient to use specific services or FDA-approved items within the chosen contraceptive method. For example, a plan may discourage use of brand name pharmacy items over generic pharmacy items through the imposition of cost sharing. Similarly, a plan may use cost sharing to encourage use of one of several FDA-approved intrauterine devices (IUDs) with progestin.

  • Q&A 3: In instances where multiple services and FDA-approved items within a contraceptive method are medically appropriate, plans or issuers generally may use reasonable medical management techniques to determine which specific products to cover without cost sharing.

However, if the individual's attending provider recommends a particular service or FDA-approved item based on a determination of medical necessity with respect to that individual, the plan or issuer must defer to the determination of the attending provider and cover that service or item without cost sharing. Medical necessity includes such considerations as the severity of side effects, differences in permanence and reversibility of contraceptives, and the individual's ability to adhere to the appropriate use of the item or service.

Thus, for example, if a generic version is not available, or would not be as medically appropriate for the patient as a prescribed brand name contraceptive method (determined medically necessary by the attending provider), then the plan or issuer must provide coverage for the brand name drug without cost-sharing. See FAQ XII, at Q&A 14.

Procedurally, FAQ XXVI requires plans and issuers using medical management techniques to establish an easily accessible, transparent, and sufficiently expedient exceptions process that is not unduly burdensome on the individual to ensure coverage, without cost sharing, of any service or FDA-approved item within the specified method of contraception. This exception process must make a timely determination taking into account whether the claim is pre-service, post-service, or a claim for urgent care.

  • Q&A 4: The Departments give another variation of offering some, but not all, of the 18 distinct methods of contraception and repeats the answer given in Q&A 2 that explains what is not acceptable.

Coverage of Sex-specific Recommended Preventive Services

  • Q&A 5: Plans or issuers cannot limit sex-specific recommended preventive services based on an individual's sex assigned at birth, gender identity or recorded gender. The determination whether a sex-specific recommended preventive service is medically appropriate for a particular individual is to be determined by the individual's attending provider. The plan or issuer must provide coverage for the recommended preventive service, without cost sharing, regardless of sex assigned at birth, gender identity, or gender of the individual otherwise recorded by the plan or issuer.

Coverage of Well-women Preventive Care for Dependents

  • Q&A 6: Plans or issuers that cover dependent children must cover recommended women's preventive care services for such dependent children without cost sharing. The dependent children must be provided the full range of recommended preventive coverage as applicable for their age group.

Coverage of Colonoscopies Pursuant to USPSTF Recommendations

  • Q&A 7: Plans or issuers can no longer impose cost sharing with respect to anesthesia services performed in connection with a preventive colonoscopy to the extent they are determined to be medically appropriate by the attending physician1. As a result, cost sharing does not apply to anesthesia services associated with screening colonoscopies. The USPSTF, United States Preventive Services Task Force, issues guidelines including those addressing colonoscopies.

Cheiron Observations:

FAQ XXVI generally takes a less restrictive interpretation of the scope and management of preventive services. These clarifications may necessitate design or procedural changes in plans that were administering these benefits more restrictively, which could impact the cost of such benefits.

Cheiron health consultants can assist plan sponsors with the review and consideration of the impact of the clarifications set forth in FAQ XXVI.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.

1 This clarification echoes the rule set forth in Transmittal 3160 in CMS Manual System, Pub 100-04 Medicare Claims Processing, issued by the Department of Health & Human Services (DHHS) and the Centers for Medicare & Medicaid Services (CMS) on January 7, 2015. Transmittal 3160 revises the definition of "colorectal cancer screening tests" to include, effective January 1, 2015, anesthesia separately furnished in conjunction with screening colonoscopies.