Background. Health plan participants who are undergoing a course of treatment with a particular network provider may face a difficult choice if that provider’s participation in the network ends. If they continue treatment with that provider, they may need to absorb significant costs. However, having embarked on a course of treatment, participants may be reluctant to change to a new provider that is in the network. Plans sometimes address these situations, most commonly for in-patient care.
New Rule. If a continuing care patient who participates in a plan is receiving care from a particular health care provider at the time that the provider’s participation in a network terminates (or suffers certain similar disruptions), the plan or, if applicable, the insurer must notify the participant and provide the participant with the opportunity to elect transitional care. If the participant elects transitional care, the plan must continue to provide benefits under the same terms and conditions that applied prior to the termination. Such coverage must be offered for 90 days following the date that the notice is provided, but the period will end earlier if the participant ceases to receive care from that provider.
For these purposes, a continuing care patient is a patient who is:
- Undergoing a course of treatment for a serious and complex medical condition,
- Undergoing a course of institutional or in-patient care,
- Scheduled to undergo surgery (and post-operative care),
- Pregnant and undergoing a course of treatment for the pregnancy, or
- Receiving treatment for a terminal illness.
The rules will not apply where a contract is terminated for a failure to meet quality standards or fraud.
Providers are required to accept payments prescribed under these rules.
Citation. ERISA section 718; Internal Revenue Code section 9818; Public Health Services Act sections 2799A-3 and B-8.
Effective Date. Plan years beginning on or after January 1, 2022.
Enforcement. For health plans that are subject to ERISA, the U.S. Department of Labor and plan participants and beneficiaries may enforce compliance with these rules. Plans not subject to ERISA may be subject to enforcement by the U.S. Department of Health and Human Services. Insurers are subject to enforcement by HHS as well as state agencies. In addition, the Internal Revenue Service may impose an excise tax of $100 per day per affected individual under section 4980D of the Code for any failure to comply.
The federal agencies have announced that they do not expect to issue guidance on these requirements before the end of the year. Until such guidance is issued and effective, plans should comply with a good faith, reasonable interpretation of the statutory provisions.
Plan Considerations. Plans must take into account the requirements of these rules with regard to their vendor contracts and benefit design.
Recommended Steps. Plans should consider taking the following actions:
- Arranging with vendors to continue to process and adjudicate claims in these transitional situations as if network rates and other terms and conditions still applied and to provide the required notice.
- Amending their plans to provide for transitional in-network coverage for those who elect to continue on an in-network basis.
