HHS Publishes a New Rule to Protect Dialysis Patients From Being “Steered” into Private Coverage for the Benefit of Dialysis Centers

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On implementing significant, new requirements for Medicare-certified dialysis facilities that make payment of premiums for individual health coverage, on December 14, 2016, the Department of Health and Human Services (HHS) published an Interim final rule with comment period. The regulations become effective 30 days after the date of publication – January 13, 2017, and comments regarding the interim must be received by HHS by 5 p.m. on January 11, 2017. 

In discussing the background for the regulation, HHS stated that it had recently become concerned about the inappropriate “steering” of individuals eligible for or entitled to Medicare or Medicaid into individual market plans. The concern is that individual market health plans typically provide significantly greater reimbursement to health care providers than public coverage like Medicare or Medicaid, and some providers may be encouraging individual patients to forego public coverage and instead enroll in an individual market plan based upon the financial interest of the health care provider, as opposed to the interests of the patient. Of particular concern to HHS is that providers are paying for, or arranging for payment for, the patient’s premium for the individual market plan. HHS also found that its own data and information suggested that the that steering of patients may be accelerating over time.

Based upon those concerns, in August HHS issued a request for information seeking comments from the public about such steerage. Comments received indicated that dialysis facilities are routinely involved in their patients’ coverage decisions and that the practice is widespread.   Comments also described three types of harms that can arise when patients forego public coverage and, instead, enroll in an individual market plan: “negatively impacting their determination of readiness for a kidney transplant, potentially exposing patients to additional costs for health care services, and putting them at significant risk of a mid-year disruption in health care coverage.” HHS concluded that providers and suppliers may be taking actions that result in harm to patients’ lives and wellbeing.

With the interim rule, HHS establishes new Conditions for Coverage standards (CfCs) for dialysis facilities. The CfCs apply to any dialysis facility that makes or contributes to payments of premiums for individual market health plans, whether directly, through a parent organization, or through another entity. To improve transparency for consumers, dialysis facility CFCs require that the centers make patients aware of potential coverage options and educate them about the benefits of each. This notice provided to patients must include the reimbursements that the facility would receive from each coverage option.

Importantly, in order to ensure that patients’ coverage is not disrupted mid-year, the facilities must also ensure that issuers are informed of and have agreed to accept the third-party payments. To do so, the facilities must make reasonable procedures for communicating with health insurance issuers in the individual market, and the centers must obtain and document that the issuer has agreed to accept such payments. If an issuer does not agree to accept the payments for the duration of the plan year, the facility is prohibited from making the premium payments and must take reasonable steps to ensure that such payments are not made by any third parties to which the facility contributes. The rule also contains a limited exception for the notification requirements, until July 1, 2017, for situations when a facility is aware that a patient is not eligible for Medicaid is not eligible to enroll in Medicare Part A and/or Medicare Part Be except during the general enrollment period.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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