FAQs on Issuer Flexibilities for Utilization Management and Prior Authorization (Apr. 21, 2020)
HHS has encouraged insurers to relax otherwise applicable utilization management processes (as permitted by state law) to mitigate the impact of the COVID-19 pandemic on health care providers and health plan enrollees. As background, the Families First Coronavirus Response Act (FFCRA), as amended by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), requires group health plans and insurers to provide benefits, without cost-sharing, prior authorization or other medical management requirements, for certain COVID-19 diagnostic testing and preventive items, services, and immunizations furnished on or after March 18, 2020, and during the public health emergency period (see our Checkpoint article).
To allow providers to focus on care delivery and reduce treatment delays, the guidance suggests that insurers waive certain prior authorization requirements and (because provider illnesses and workforce shortages associated with COVID-19 could limit in-network provider availability) minimize balance billing by negotiating rates with out-of-network providers. The guidance indicates that the CARES Act effectively precludes balance billing for COVID-19 diagnostic testing by generally requiring plans and insurers to reimburse any diagnostic-testing provider the cash price listed on the provider’s public website if the plan or insurer has not negotiated a rate with the provider (see our Checkpoint article). The guidance also suggests that insurers may consider applying utilization management practices to emerging treatments for COVID-19 (to the extent consistent with applicable law) to prevent drug shortages. HHS warns, however, that insurers should confirm that any changes to prior-authorization and utilization-management practices are clinically based and applied in a nondiscriminatory manner. Insurers that must comply with essential health benefits (EHB) regulations applicable to prescription drugs, for example, do not provide EHB if a benefit design, or the implementation of a benefit design, discriminates on the basis of age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health conditions.
EBIA Comment: Although plans and insurers cannot apply cost-sharing, prior authorization or other medical management requirements to most COVID-19-related diagnostic tests, immunizations, and preventive items and services, they will need to consider whether to voluntarily modify their coverages and associated utilization management techniques to accommodate various nonmandated treatments. While this guidance encourages relaxation and other changes to utilization management, it also highlights some of the perils. Although not mentioned in the guidance, the HIPAA health-status nondiscrimination rules should also be considered. For more information, see EBIA’s Group Health Plan Mandates manual at Section XVI.C (“COVID-19: Mandated Coverage of Diagnostic and Preventive Services”); EBIA’s HIPAA Portability, Privacy & Security manual at Section XI.C (“Nondiscrimination Rules for Eligibility and Benefits”); and EBIA’s Health Care Reform manual at Sections XIV.C (“No Discrimination Based on Health Status-Related Factor”) and XIV.F (“Comprehensive Health Coverage Requirement (Essential Health Benefits Package)—Applicable Only in the Individual and Small Group Markets”).
Contributing Editors: EBIA Staff.