Title 45—Public Welfare--Volume 1
PART 152—PRE-EXISTING CONDITION INSURANCE PLAN PROGRAM
§ 152.1   Statutory basis.
(a) Basis. This part establishes provisions needed to implement section 1101 of the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act), which requires the Secretary of the Department of Health and Human Services to establish a temporary high risk health insurance pool program to provide health insurance coverage for individuals described in § 152.14 of this part.
(b) Scope. This part establishes standards and sets forth the requirements, limitations, and procedures for the temporary high risk health insurance pool program, hereafter referred to as the “Pre-Existing Condition Insurance Plan” (PCIP) program.
§ 152.2   Definitions.
For purposes of this part the following definitions apply:
Creditable coverage means coverage of an individual as defined in section 2701(c)(1) of the Public Health Service Act as of March 23, 2010 and 45 CFR 146.113(a)(1).
Enrollee means an individual receiving coverage from a PCIP established under this section.
Lawfully present has the meaning given the term at 45 CFR 155.20.
Out-of-pocket costs means the sum of the annual deductible and the other annual out-of-pocket expenses, other than for premiums, required to be paid under the program.
Pre-Existing condition exclusion has the meaning given such term in 45 CFR 144.103.
Pre-Existing Condition Insurance Plan (PCIP) means the temporary high risk health insurance pool plan (sometimes referred to as a “qualified high risk pool”) that provides coverage in a State, or combination of States, in accordance with the requirements of section 1101 of the Affordable Care Act and this part. The term “PCIP program” is generally used to describe the national program the Secretary is charged with carrying out, under which States or non-profit entities operate individual PCIPs.
Resident means an individual who has been legally domiciled in a State.
Service Area refers to the geographic area encompassing an entire State or States in which PCIP furnishes benefits.
State refers each of the 50 States and the District of Columbia.
§ 152.6   Program administration.
(a) General rule. Section 1101(b)(1) of the Affordable Care Act requires that HHS carry out the Pre-Existing Condition Insurance Plan program directly or through contracts with eligible entities, which are States or nonprofit private entities.
(b) Administration by State. A State (or its designated non-profit private entity) may submit a proposal to enter into a contract with HHS to establish and administer a PCIP in accordance with section 1101 of the Affordable Care Act and this part.
(1) At the Secretary's discretion, a State may designate a nonprofit entity or entities to contract with HHS to administer a PCIP.
(2) As part of its administrative approach, a State or designated entity may subcontract with either a for-profit or nonprofit entity.
(c) Administration by HHS. If a State or its designated entity notifies HHS that it will not establish or continue to administer a PCIP, or does not submit an acceptable or timely proposal to do so, HHS will contract with a nonprofit private entity or entities to administer a PCIP in that State.
(d) Transition in administration. The Secretary may consider a request from a State to transition from administration by HHS to administration by a State or from administration by a State to administration by HHS. Such transitions shall be approved only if the Secretary determines that the transition is in the best interests of the PCIP enrollees and potential PCIP enrollees in that state, consistent with § 152.7(b) of this part.
§ 152.7   PCIP proposal process.
(a) General. A proposal from a State or nonprofit private entity to contract with HHS shall demonstrate that the eligible entity has the capacity and technical capability to perform all functions necessary for the design and operation of a PCIP, and that its proposed PCIP is in full compliance with all of the requirements of this part.
(b) Special rules for transitions in administration. (1) Transitions from HHS administration of a PCIP to State administration must take effect on January 1 of a given year.
(2) A State's proposal to administer a PCIP must meet all the requirements of this section.
(3) Transitions from State administration to HHS administration must comply with the termination procedures of the PCIP contract in effect with the State or its designated entity.
(4) The Secretary may establish other requirements needed to ensure a seamless transition of coverage for all existing enrollees.
§ 152.14   Eligibility.
(a) General rule. An individual is eligible to enroll in a PCIP if he or she:
(1) Is a citizen or national of the United States or lawfully present in the United States;
(2) Subject to paragraph (b) of this section, has not been covered under creditable coverage for a continuous 6-month period of time prior to the date on which such individual is applying for PCIP;
(3) Has a pre-existing condition as established under paragraph (c) of this section; and
(4) Is a resident of one of the 50 States or the District of Columbia which constitutes or is within the service area of the PCIP. A PCIP may not establish any standards with regard to the duration of residency in the PCIP service area.
(b) Satisfaction of 6-month creditable coverage requirement when an enrollee leaves the PCIP service area. An individual who becomes ineligible for a PCIP on the basis of no longer residing in the PCIP's service area as described in paragraph (a)(4) of this section is deemed to have satisfied the requirement in paragraph (a)(2) of this section for purposes of applying to enroll in a PCIP in the new service area.
(c) Pre-existing condition requirement. For purposes of establishing a process for determining eligibility, and subject to HHS approval, a PCIP may elect to apply any one or more of the following criteria in determining whether an individual has a pre-existing condition for purposes of this section:
(1) Refusal of coverage. Documented evidence that an insurer has refused, or a clear indication that the insurer would refuse, to issue coverage to an individual on grounds related to the individual's health.
(2) Exclusion of coverage. Documented evidence that such individual has been offered coverage but only with a rider that excludes coverage of benefits associated with an individuals' identified pre-existing condition.
(3) Medical or health condition. Documented evidence of the existence or history of certain medical or health condition, as approved or specified by the Secretary.
(4) Other. Other criteria, as defined by a PCIP and approved by HHS.
§ 152.15   Enrollment and disenrollment process.
(a) Enrollment process. (1) A PCIP must establish a process for verifying eligibility and enrolling an individual that is approved by HHS.
(2) A PCIP must allow an individual to remain enrolled in the PCIP unless:
(i) The individual is disenrolled under paragraph (b) of this section;
(ii) The individual obtains other creditable coverage;
(iii) The PCIP program terminates, or is terminated; or
(iv) As specified by the PCIP program and approved by HHS.
(3) A PCIP must verify that an individual is a United States citizen or national or lawfully present in the United States by:
(i) Verifying the individual's citizenship, nationality, or lawful presence with the Commissioner of Security or Secretary of Homeland Security as applicable; or
(ii) By requiring the individual to provide documentation which establishes the individual's citizenship, nationality, or lawful presence.
(iii) The PCIP must provide an individual who is applying to enroll in the PCIP with a disclosure specifying if the information will be shared with the Department of Health and Human Services, Social Security Administration, and if necessary, Department of Homeland Security for purposes of establishing eligibility.
(b) Disenrollment process. (1) A PCIP must establish a disenrollment process that is approved by HHS.
(2) A PCIP may disenroll an individual if the monthly premium is not paid on a timely basis, following notice and a reasonable grace period, not to exceed 61 days from when payment is due, as defined by the PCIP and approved by HHS.
(3) A PCIP must disenroll an individual in any of the following circumstances:
(i) The individual no longer resides in the PCIP service area.
(ii) The individual obtains other creditable coverage.
(iii) Death of the individual.
(iv) Other exceptional circumstances established by HHS.
(c) Effective dates. A PCIP must establish rules governing the effective date of enrollment and disenrollment that are approved by HHS. A complete enrollment request submitted by an eligible individual by the 15th day of a month, where the individual is determined to be eligible for enrollment, must take effect by the 1st day of the following month, except in exceptional circumstances that are subject to HHS approval.
(d) Funding limitation. A PCIP may stop taking applications for enrollment to comply with funding limitations established by the HHS under section 1101(g) of Public Law 111-148 and § 152.35 of this part. Accordingly, a PCIP may employ strategies to manage enrollment over the course of the program that may include enrollment capacity limits, phased-in (delayed) enrollment, and other measures, as defined by the PCIP and approved by HHS, including measures specified under § 152.35(b).
§ 152.19   Covered benefits.
(a) Required benefits. Each benefit plan offered by a PCIP shall cover at least the following categories and the items and services:
(1) Hospital inpatient services
(2) Hospital outpatient services
(3) Mental health and substance abuse services
(4) Professional services for the diagnosis or treatment of injury, illness, or condition
(5) Non-custodial skilled nursing services
(6) Home health services
(7) Durable medical equipment and supplies
(8) Diagnostic x-rays and laboratory tests
(9) Physical therapy services (occupational therapy, physical therapy, speech therapy)
(10) Hospice
(11) Emergency services, consistent with § 152.22(b), and ambulance services
(12) Prescription drugs
(13) Preventive care
(14) Maternity care
(b) Excluded services. Benefit plans offered by a PCIP shall not cover the following services:
(1) Cosmetic surgery or other treatment for cosmetic purposes except to restore bodily function or correct deformity resulting from disease.
(2) Custodial care except for hospice care associated with the palliation of terminal illness.
(3) In vitro fertilization, artificial insemination or any other artificial means used to cause pregnancy.
(4) Abortion services except when the life of the woman would be endangered or when the pregnancy is the result of an act of rape or incest.
(5) Experimental care except as part of an FDA-approved clinical trial.
§ 152.20   Prohibitions on pre-existing condition exclusions and waiting periods.
(a) Pre-existing condition exclusions. A PCIP must provide all enrollees with health coverage that does not impose any pre-existing condition exclusions (as defined in § 152.2) with respect to such coverage.
(b) Waiting periods. A PCIP may not impose a waiting period with respect to the coverage of services after the effective date of enrollment.
§ 152.21   Premiums and cost-sharing.
(a) Limitation on enrollee premiums. (1) The premiums charged under the PCIP may not exceed 100 percent of the premium for the applicable standard risk rate that would apply to the coverage offered in the State or States. The PCIP shall determine a standard risk rate by considering the premium rates charged for similar benefits and cost-sharing by other insurers offering health insurance coverage to individuals in the applicable State or States. The standard risk rate shall be established using reasonable actuarial techniques, that are approved by the Secretary, and that reflect anticipated experience and expenses. A PCIP may not use other methods of determining the standard rate, except with the approval of the Secretary.
(2) Premiums charged to enrollees in the PCIP may vary on the basis of age by a factor not greater than 4 to 1.
(b) Limitation on enrollee costs. (1) The PCIP's average share of the total allowed costs of the PCIP benefits must be at least 65 percent of such costs.
(2) The out-of-pocket limit of coverage for cost-sharing for covered services under the PCIP may not be greater than the applicable amount described in section 223(c)(2) of the Internal Revenue code of 1986 for the year involved. If the plan uses a network of providers, this limit may be applied only for in-network providers, consistent with the terms of PCIP benefit package.
(c) Prohibition on balance billing in the PCIP administered by HHS. A facility or provider that accepts payment under § 152.35(c)(2) for a covered service furnished to an enrollee may not bill the enrollee for an amount greater than the cost-sharing amount for the covered service calculated by the PCIP.
§ 152.22   Access to services.
(a) General rule. A PCIP may specify the networks of providers from whom enrollees may obtain plan services. The PCIP must demonstrate to HHS that it has a sufficient number and range of providers to ensure that all covered services are reasonably available and accessible to its enrollees.
(b) Emergency services. In the case of emergency services, such services must be covered out of network if:
(1) The enrollee had a reasonable concern that failure to obtain immediate treatment could present a serious risk to his or her life or health; and
(2) The services were required to assess whether a condition requiring immediate treatment exists, or to provide such immediate treatment where warranted.
§ 152.26   Appeals procedures.
(a) General. A PCIP shall establish and maintain procedures for individuals to appeal eligibility and coverage determinations.
(b) Minimum requirements. The appeals procedure must, at a minimum, provide:
(1) A potential enrollee with the right to a timely redetermination by the PCIP or its designee of a determination regarding PCIP eligibility, including a determination of whether the individual is a citizen or national of the United States, or is lawfully present in the United States.
(2) An enrollee with the right to a timely redetermination by the PCIP or its designee of a determination regarding the coverage of a service or the amount paid by the PCIP for a service.
(3) An enrollee with the right to a timely reconsideration of a redetermination made under paragraph (b)(2) of this section by an entity independent of the PCIP.
§ 152.27   Fraud, waste, and abuse.
(a) Procedures. The PCIP shall develop, implement, and execute operating procedures to prevent, detect, recover (when applicable or allowable), and promptly report to HHS incidences of waste, fraud, and abuse, and to appropriate law enforcement authorities instances of fraud. Such procedures shall include identifying situations in which enrollees or potential enrollees (or their family members) are employed, and may have, or have had, access to other coverage such as group health coverage, but were discouraged from enrolling.
(b) Cooperation. The PCIP shall cooperate with Federal law enforcement and oversight authorities in cases involving waste, fraud and abuse, and shall report to appropriate authorities situations in which enrollment in other coverage may have been discouraged.
§ 152.28   Preventing insurer dumping.
(a) General rule. If it is determined based on the procedures and criteria set forth in paragraph (b) of this section that a health insurance issuer or group health plan has discouraged an individual from remaining enrolled in coverage offered by such issuer or health plan based on the individual's health status, if the individual subsequently enrolls in a PCIP under this part, the issuer or health plan will be responsible for any medical expenses incurred by the PCIP with respect to the individual.
(b) Procedures and criteria for a determination of dumping. A PCIP shall establish procedures to identify and report to HHS instances in which health insurance issuers or employer-based group health plans are discouraging high-risk individuals from remaining enrolled in their current coverage in instances in which such individuals subsequently are eligible to enroll in the qualified high risk pool. Such procedures shall include methods to identify the following circumstances, either through the PCIP enrollment application form or other vehicles:
(1) Situations where an enrollee or potential enrollee had prior coverage obtained through a group health plan or issuer, and the individual was provided financial consideration or other rewards for disenrolling from their coverage, or disincentives for remaining enrolled.
(2) Situations where enrollees or potential enrollees had prior coverage obtained directly from an issuer or a group health plan and either of the following occurred:
(i) The premium for the prior coverage was increased to an amount that exceeded the premium required by the PCIP (adjusted based on the age factors applied to the prior coverage), and this increase was not otherwise explained;
(ii) The health plan, issuer or employer otherwise provided money or other financial consideration to disenroll from coverage, or disincentive to remain enrolled in such coverage. Such considerations include payment of the PCIP premium for an enrollee or potential enrollee.
(c) Remedies. If the Secretary determines, based on the criteria in paragraph (b) of this section, that the rule in paragraph (a) of this section applies, an issuer or a group health plan will be billed for the medical expenses incurred by the PCIP. The issuer or group health plan also will be referred to appropriate Federal and State authorities for other enforcement actions that may be warranted based on the behavior at issue.
(d) Other. Nothing in this section may be construed as constituting exclusive remedies for violations of this section or as preventing States from applying or enforcing this section or other provisions of law with respect to health insurance issuers.
§ 152.32   Use of funds.
(a) Limitation on use of funding. All funds awarded through the contracts established under this program must be used exclusively to pay allowable claims and administrative costs incurred in the development and operation of the PCIP that are in excess of the amounts of premiums collected from individuals enrolled in the program.
(b) Limitation on administrative expenses. No more than 10 percent of available funds shall be used for administrative expenses over the life of the contract with the PCIP, absent approval from HHS.
§ 152.33   Initial allocation of funds.
HHS will establish an initial ceiling for the amount of the $5 billion in Federal funds allocated for PCIPs in each State using a methodology consistent with that used to established allocations under the Children's Health Insurance Program, as set forth under 42 CFR part 457, subpart F, Payment to States.
§ 152.34   Reallocation of funds.
If HHS determines, based on actual and projected enrollment and claims experience, that the PCIP in a given State will not make use of the total estimated funding allocated to that State, HHS may reallocate unused funds to other States, as needed.
§ 152.35   Insufficient funds.
(a) Adjustments by a PCIP to eliminate a deficit. In the event that a PCIP determines, based on actual and projected enrollment and claims data, that its allocated funds are insufficient to cover projected PCIP expenses, the PCIP shall report such insufficiency to HHS, and identify and implement necessary adjustments to eliminate such deficit, subject to HHS approval.
(b) Adjustment by the Secretary. If the Secretary estimates that aggregate amounts available for PCIP expenses will be less than the actual amount of expenses, HHS reserves the right to make such adjustments as are necessary to eliminate such deficit.
(c) Payment rates for covered services furnished beginning June 15, 2013 to enrollees in the PCIP administered by HHS. (1) Covered services furnished under the prescription drug, organ/tissue transplant, dialysis and durable medical equipment benefits will be paid at the payment rates that are in effect on June 15, 2013.
(2) With respect to all other covered services, the payment rates will be—
(i) 100 percent of Medicare payment rates; or
(ii) Where Medicare payment rates cannot be implemented by the federally-administered PCIP, 50 percent of billed charges or a rate using a relative value scale pricing methodology.
§ 152.39   Maintenance of effort.
(a) General. A State that enters into a contract with HHS under this part must demonstrate, subject to approval by HHS, that it will continue to provide funding of any existing high risk pool in the State at a level that is not reduced from the amount provided for in the year prior to the year in which the contract is entered.
(b) Failure to maintain efforts. In situations where a State enters into a contract with HHS under this part, HHS shall take appropriate action, such as terminating the PCIP contract, against any State that fails to maintain funding levels for existing State high risk pools as required, and approved by HHS, under paragraph (a) of this section.
§ 152.40   Relation to State laws.
The standards established under this section shall supersede any State law or regulation, other than State licensing laws or State laws relating to plan solvency, with respect to PCIPs which are established in accordance with this section.
§ 152.44   End of PCIP program coverage.
Effective January 1, 2014, coverage under the PCIP program (45 CFR part 152) will end.
§ 152.45   Transition to the exchanges.
Prior to termination of the PCIP program, HHS will develop procedures to transition PCIP enrollees to the Exchanges, established under sections 1311 or 1321 of the Affordable Care Act, to ensure that there are no lapses in health coverage for those individuals.