Employee Benefits-Departments Restate Their Position On Provider Non-Discrimination Under the Affordable Care Act

In FAQs about Affordable Care Act Implementation (Part XXVII), the Departments of Labor (“DOL”), Health and Human Services (“HHS”), and the Treasury (collectively, the “Departments”) provide guidance on non-discrimination against service providers under the Affordable Care Act. Here is what the FAQs say:

Background. PHS Act section 2706(a), as added by the Affordable Care Act, states that a group health plan must not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law. PHS Act section 2706(a) does not require that a group health plan contract with any health care provider willing to abide by the plan’s terms and conditions. Further, nothing in PHS Act section 2706(a) prevents a group health plan from establishing varying reimbursement rates based on quality or performance measures. Similar language is included in section 1852(b)(2) of the Social Security Act and HHS implementing regulations.

On April 29, 2013, the Departments issued FAQs (specifically, FAQs about Affordable Care Act Implementation Part XV) which addressed, among other issues, provider nondiscrimination requirements under PHS Act section 2706(a). Subsequently, the Senate Committee on Appropriations issued a report dated July 11, 2013 (to accompany S. 1284) raising questions about the Departments’ FAQs addressing provider nondiscrimination. The Departments published a request for information (RFI) on March 12, 2014, seeking comment on all aspects of interpretation of PHS Act section 2706(a). The RFI specifically solicited comments on access, costs, other federal and state laws, and feasibility. The Departments received over 1,500 comments in response to the RFI. The House Committee on Appropriations subsequently issued an explanatory statement dated December 11, 2014 (to accompany 113 H.R. 83) directing the Centers for Medicare & Medicaid Services to provide a corrected FAQ or provide an explanation.

The Departments are now issuing the following FAQs in response to the December 11, 2014 explanatory statement.

What is the Departments’ Approach to PHS Act section 2706(a)? In light of the breadth of issues identified in the comments to the RFI, the Departments are re-stating their current enforcement approach to PHS Act section 2706(a). Until further guidance is issued, the Departments will not take any enforcement action against a group health plan, with respect to implementing the requirements of PHS Act section 2706(a), as long as the plan or issuer is using a good faith, reasonable interpretation of the statutory provision, which states:

“A group health plan …shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law. This section shall not require that a group health plan contract with any health care provider willing to abide by the terms and conditions for participation established by the plan …. Nothing in this section shall be construed as preventing a group health plan … from establishing varying reimbursement rates based on quality or performance measures.”

Specifically, Q2 in FAQs about Affordable Care Act Implementation Part XV, which previously provided guidance from the Departments on PHS Act section 2706(a), is superseded by this FAQ. The Departments will continue to work together with employers, plans, issuers, states, providers, and other stakeholders to help them comply with the provider nondiscrimination provision and will work with families and individuals to help them understand the law and benefit from it as intended.