On May 21, 2014, the Secretary of Health and
Human Services (“HHS”), Kathleen Sebelius, published a letter
to the American Hospital Association (“AHA”) (“HHS Letter”) in response to the
AHA’s questions about qualified health plan (QHP) issuers accepting premium and
cost-sharing payments from third-party payors.
This HHS Letter is an additional level of
clarification in a series of various guidance documents issued by CMS in the
past year on this subject matter. Such
past guidance includes:
- an October 2013 letter to Representative Jim McDermott stating that QHPs that are offered through the Federally-facilitated Marketplaces (FFMs) are not considered “federal health care programs;”
- a November 4, 2013 Frequently Asked Questions document expressing concern regarding hospitals, other health care providers, and other commercial entities payment of premiums and cost-sharing obligations on behalf of QHP enrollees in Marketplaces;
- February 7, 2014 guidance clarifying the November 4th FAQ does not apply to payments for premiums and cost sharing made on behalf of QHP enrollees by Indian tribes, tribal organizations, urban Indian organizations, and state and federal government programs or grantees, and private, not-for-profit foundations, in certain circumstances; and
- a March 19, 2014 interim final rule requiring issuers of QHPs to accept premium and cost-sharing payments made on behalf of enrollees by the Ryan White HIV/AIDS Program, other federal and state government programs that provide premium and cost sharing support for specific individuals, and Indian tribes, tribal organizations, and urban Indian organizations.
The HHS Letter states that third-party
payments of premiums and cost sharing made on behalf of Marketplace QHP
enrollees by private, not-for-profit foundations are not prohibited to
the extent the payments are made in a manner consistent with the February 7,
2014 guidance. The February 7, 2014
guidance allows payment to be made by private, not-for-profit foundations on
behalf of QHP enrollees, if the QHP enrollees satisfy defined criteria based on
financial status, and do not consider enrollees’ health status. In addition, CMS expects that premium and
cost-sharing payments cover the entire policy year. In the HHS Letter, HHS then declined to
issue any additional guidance in the area at that time.
For questions on this HHS Letter and
previous guidance please contact Meghan McNab at mmcnab@kdlegal.com.