The Wagner Law Group Description
Wagner Law Group, A Professional Corporation, is a nationally
recognized ERISA & employee benefits, estate planning,
employment, labor & human resources practice.
in 1996, The Wagner Law Group has 22 attorneys engaged
exclusively in employee benefits, estate planning and
employment law. Six of our attorneys are AV rated by
Martindale-Hubbell as having very high to preeminent legal abilities
and ethical standards. The firm is among the largest ERISA boutiques
in the country. Our practice is national in scope, with clients in
more than 40 states and several foreign countries.
Wagner Law Group
Fax: (561) 293-3591
7108 Fairway Drive
Palm Beach Gardens, FL 33418
Francisco, CA 94104
October 23, 2014
Health and Welfare Law
Agencies Issue Guidance
on Applicability of PPACA's Cost-Sharing Limitations
to Reference-Based Pricing
IRS, DOL, and HHS have
jointly issued FAQ Part XXI, which provides guidance on the
application of PPACA cost-sharing limits for non-grandfathered group
health plans that employ a reference-based pricing design.
Specifically, FAQ XXI identifies the factors that the agencies will
use to determine if a plan that utilizes reference based-pricing is
using a "reasonable method" to ensure adequate access to
quality providers at the reference price.
Reference-based pricing is a system under which the plan pays a fixed
amount for a particular drug, procedure or other service, which
certain providers will accept as full payment. When an individual
uses a provider that does not accept this amount, the individual is
required to pay the difference between the reference price and the
price actually charged for the service. This payment by the
individual is one type of "balance billing."
PPACA's cost-sharing limits
(i.e., the out-of-pocket maximums) place annual caps on the
costs that non-grandfathered plans can require an individual to spend
for covered essential health benefits. (Co-payments, coinsurance, and
deductibles generally count toward PPACA's cost-sharing limits.
However, premiums, balance billing amounts and non-covered health
services are not counted.) For plan or policy years beginning in
2015, PPACA's out-of-pocket limits are $6,600 for self-only coverage
and $13,200 for other coverage.
FAQ XXI Guidance.The agencies will
consider "all the facts and circumstances" when evaluating
whether a plan's reference-based pricing design is using reasonable
methods to ensure access to quality providers at the reference price.
In particular, the agencies will focus on the following factors:
- Type of services provided. Plans should only apply the reference-based pricing
design to services provided when an individual has time to make
an informed choice about the provider. For example, a plan
should not apply the reference-based pricing design to emergency
- Reasonable Access. Plans should utilize procedures that ensure an
adequate number of providers that accept the reference price are
in the network. Considerations include state-level standards for
adequacy, geographic distance measures and patient wait times.
- Quality Standards. Plans should utilize procedures that ensure an
adequate number of providers that accept the reference price
meet reasonable quality standards.
- Exceptions Process. Plans should maintain an easily accessible
exceptions process for times when there is no provider that
accepts the reference price for the service or when the quality
of service for an individual could be compromised.
- Disclosure. Plans should automatically furnish information
regarding the reference base pricing design, including the
services to which it applies and the exceptions process. Upon a
participant's request, plans should also provide certain
information, including provider lists and information on the
procedures used to ensure providers meet reasonable quality
Sponsors of non-grandfathered group health plans that utilize
reference-based pricing designs are advised to carefully review their
plans and implement any required adjustments to ensure compliance
with the standards identified in FAQ XXI. It is important to note
that a plan's failure to meet these standards may result in penalties
The FAQs are available at: http://www.dol.gov/ebsa/pdf/faq-aca21.pdf
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