Guidance on Essential Health Benefits from HHS/CMS – Healthcare reform under PPACA

Guidance on Essential Health Benefits from HHS/CMS – Healthcare reform under PPACA

Essential Health Benefits (“EHB”) is a set of health care service categories that must be covered by certain plans, starting in 2014*. Starting with plan years or policy years that began on or after September 23, 2010, health plans can no longer impose a lifetime dollar limit on spending for these services. All plans, except grandfathered individual health insurance policies, must phase out annual dollar spending limits for EHB services by 2014.

Centers for Medicare and Medicaid Services (CMS), a department of HHS (U.S. Department of Health & Human Services), has an office called The Center for Consumer Information and Insurance Oversight (CCIIO).  Strangely, in a move that some critics have called “deft” and others suggest is a “detour” CMS-CCIIO issued a “Benefits Bulletin” on Friday, December 16, 2011, called “Giving States Additional Flexibility to Implement Health Reform.”

For HHS & CMS to issue “guidance” in this way is strange to say the least.  Perhaps the Administration is looking to take some pressure off of HHS.  The recent backlash, as a result of the guidance calling for birth control to be a covered preventive benefit (starting January 1, 2013) may suggest that HHS is looking to defer to states to define EHB.  Whereas the input from the Institute of Medicine (IOM) suggested that the HHS adopt typical small employer coverages as a model for “essential benefits”, here, the HHS is suggesting that each State and the District of Columbia determine what is essential and balance that with issues of effectiveness and cost.  The current categories that EHB includes are:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management, and
  • Pediatric services, including oral and vision care

Public input is welcome on this intended approach. Please send comments on the bulletin (by January 31, 2012)to: EssentialHealthBenefits@cms.hhs.gov.

* PPACA requires that fully-insured small group and individual health plans on and off the Exchange must cover essential health benefits beginning January 1, 2014.  PPACA also mandates that plans of all sizes that cover benefits designated as Essential Health Benefits, including self-funded plans, must cover these benefits with no annual limits or lifetime maximums.

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