exempt stand-alone HRAs from the annual limit restrictions, in order to offer flexibility in plan
design and because it may offer consumers lower premiums.

III. Rescissions

(1) Provide clarification that the Rule's rescission requirements do not apply to retroactive
terminations of coverage.

The prohibition on rescissions in Section 2712 of the Act only refers to rescissions of coverage
and not retroactive terminations of coverage. Rescission of coverage is to rescind the contract of
insurance such that a person never had such coverage. By contrast, retroactive termination is to
terminate the coverage retroactively, wherein the contract of insurance is cancelled back to a
point in time, and the enrollee retains coverage prior to that point in time. For example, if an
employer informs a plan that one of its employees left the company two months ago and requests
that the plan retroactively terminate that employee’s coverage, that termination should not be
affected by the Rule’s rescission provisions. Rescission has specific legal meaning that is not
applicable to the retroactive termination of coverage of employees or dependents in a group
insurance plan.

We are concerned that the Rule's definition of rescission, which requires fraud or an intentional
misrepresentation of material fact for a plan to retroactively cancel or discontinue any coverage,
is overly broad and could be read to prohibit routine changes to group eligibility rolls made in
the ordinary course of business. For example, the Rule's Example 2 outlines a case of a
retroactive termination — not rescission — wherein the employee retains his insurance coverage,
prior to the point the employee becomes a part-time employee. Since the employee retained
coverage the entire time the employee worked full-time, there was no rescission. However, the
inclusion of this example in the Rule wrongly implies that the rescission provisions apply in this
situation.

Recommendation: We request that the Agencies confirm that the Act's rescission provisions do
not apply to retroactive terminations of coverage as described above. We also request that the
Rule either eliminate Example 2 or revise the example to describe a true rescission of coverage.

IV. Emergency Services and Primary Care Provider Designations

(1) Ensure patient protection by prohibiting providers delivering emergency room services
from balance billing consumers.

The IFR sets forth a federal standard for reimbursement for out-of-network emergency room
services and, when the formula is applied, the reimbursement is considered "reasonable." If
reimbursement by plans to providers is "reasonable," then providers should be required to accept
such payment in full and prohibited from balance billing. Consumers are subject to unknown
financial risk if providers can determine when and for how much they want to seek additional
reimbursement from patients. Additionally, the ability to balance bill may create an incentive for
providers to terminate their contracts with plans. This will destabilize networks and ultimately
result in higher costs for services for consumers.


Thank you again for your time and thoughtful consideration of the enclosed comments.

Sincerely,

Hatt K Berchan

Gail K. Boudreaux
Executive Vice President
and President,
UnitedHealthcare


We believe this approach is consistent with policies encouraged in the Act. For example,
Congress took into account a provider's status as an out-of-network provider when it defined
cost-sharing in Section 1302(c)(3) of the Act. That section makes clear that balance billing
amounts for non-network providers should not be considered cost-sharing for purposes

of essential benefits. We also note the recently released Interim Final Rule on preventive care
services specifies that coverage requirements do not apply to services received out-of-network
for reasons that are also applicable to the provision of essential benefits by non-network
providers (and which are described in the preceding paragraph).

Recommendation: We recommend revising the Rule to allow the continued use of annual and
lifetime limits in the case of non-network services. Such a change would be consistent with
the Act’s regulatory framework and allow continued use of plan design tools to encourage the
provision of coordinated care through in-network providers.

(2) Specify, in the text of the regulation, that a policy or plan's exclusion of benefits for a
condition is not considered an annual or lifetime limit.

The Preamble to the IFR provides that an exclusion of benefits for a condition will not be treated
as an annual or lifetime limit, but this is not specified in the text of the IFR itself. We request
that the text of the IFR be clarified to reflect this guidance.

(3) Develop a model notice for required notice to enrollees who have exceeded their lifetime
limit.

Section (e) of the IFR contains the transitional rules for those individuals whose coverage or
benefits have ended due to a lifetime limit, including a requirement that plans issue a notice to
individuals when a lifetime limit will no longer apply and that the individual, if covered, is
eligible for benefits under the plan. The notice must also advise certain individuals of their right
to enroll in the plan. We request that the Agencies issue a model notice to facilitate compliance
with this requirement.

(4) Provide clarification that the re-enrollment right does not apply to former enrollees no
longer covered by the plan.

The IFR does not specify that notice of re-enrollment rights, for those individuals who have
reached the lifetime maximum, applies only to those individuals who are otherwise eligible for
the plan, and not to former enrollees who are no longer eligible or covered by the plan due to
reasons other than meeting the lifetime maximum. We request that the Agencies clarify that the
notice of re-enrollment rights are required only for those enrollees who are otherwise eligible for
the group plan and eligible and still covered under an individual plan.

(5) Provide an exemption from annual limit restrictions for stand-alone HRAs.

The IFR exempts from the annual limit restrictions certain types of health coverage, including
health flexible spending accounts, medical savings accounts, health savings accounts, retiree-
only HRAs and HRAs integrated with group health coverage that otherwise complies with the
annual and lifetime limit restrictions. The Agencies requested comments on non-retiree, stand-
along HRAs and whether the annual limits should apply. We recommend that the Final Rule

4


Recommendation: The Final Rule should clarify that emergency room providers must accept
payment from plans as payment in full and are prohibited from balance billing consumers for
emergency room services. If HHS determines that it does not have the authority to impose such
a prohibition, we recommend that the Final Rule provide additional guidance to states to address
this important consumer protection issue through state legislation by confirming that PPACA
does not preempt states from regulating this issue.

(2) Provide guidance on the application of the Rule’s provisions in an Accountable Care
Organization (“ACO”) setting.

The IFR requires that plans or issuers allow: (i) enrollees to designate any available participating
primary care provider (“PCP”) as their PCP; (ii) parents to designate any available participating
physician who specializes in pediatrics as their children’s PCP; and (iii) enrollees to directly
access in-network OB/GYNs without a prior authorization or referral. We request that the
Agencies consider how these provisions would work in an Accountable Care Organization
(“ACO”) setting, and whether the provisions would support the Act’s objectives for these new
delivery models.

ACOs are commonly defined as a group of providers associated with a defined population of
patients, accountable for the quality and cost of care delivered to that patient population. ACOs
may include a hospital, a group of primary care physicians, and specialists who share
accountability for the coordination and quality of care, including meeting specific outcomes
measures. The Act establishes an ACO pilot program that permits these entities to share in
Medicare savings generated through their initiatives. As the ACO framework is based on
extensive care coordination, we believe it is important to carefully consider whether the Rule’s
access provisions should apply to ACOs.

Recommendation: We request that the Agencies review the Rule’s access provisions and provide
guidance to clarify how these provisions would apply to an ACO framework.

(3) Provide guidance on the application of the Rule’s provisions in a capitated network
setting.

The Rule’s access provisions, as described above in Section IV(2), could have unintended
consequences if applied in a capitated network setting where providers receive a specified
payment per enrollee for managing and delivering health care services. Capitated provider
groups negotiate these specified payments based on a coordinated care model, with services
delivered by providers within their group. Enrollees typically select a capitated provider group
and that group receives a capitated payment to deliver services to that enrollee. However, an
enrollee who is permitted to access any participating OB/GYN without an authorization,
including an OB/GYN who participates in the plan’s network but is not part of the capitated
group, would undermine the group’s ability to manage that enrollee’s care and their negotiated
payment arrangements.


J

UnitedHealth Group’

Gail Boudreaux

Executive Vice President
President, UnitedHealthcare
9900 Bren Road East
Minnetonka, MN 55343

August 27, 2010

Office of Consumer Information and Insurance Oversight

Department of Health & Human Services

Attention: OCIIO-9994-IFC

P.O. Box 8016

Baltimore, MD 21244-1850

Submitted Via Federal Rulemaking Portal: http:www.regulations.gov

RE: Request for Comments Regarding the Interim Final Rules for Group Health Plans and
Health Insurance Issuers Under the Patient Protection and Affordable Care Act Relating
to Pre-Existing Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient
Protections

Dear Sir or Madam:

UnitedHealth Group is pleased to provide the Departments of Health and Human Services, Labor
and Treasury (the ““Agencies”) our comments regarding the Interim Final Rules (the "IFR" or the
“Rule”) relating to Pre-Existing Condition Exclusions, Lifetime and Annual Limits, Rescissions,
and Patient Protections under the Patient Protection and Affordable Care Act ("PPACA" or the
"Act"), 75 Fed. Reg. 37188 (June 28, 2010). We applaud the efforts of the Agencies to

publish this important regulatory guidance in such a timely manner.

UnitedHealth Group is dedicated to making our nation's health care system work better.
UnitedHealth Group's 78,000 employees serve the health care needs of more than 70 million
Americans, funding and arranging health care on behalf of individuals, employers and
government, in partnership with more than 5,000 hospitals and 650,000 physicians, nurses and
other health professionals. It is this experience upon which we rely in offering the following
comments.

We welcome the opportunity for constructive dialogue regarding the pre-existing condition
exclusions, lifetime and annual limits, rescissions and patient protection provisions, and their
impact on the health care system. We would be pleased to provide additional data and
information supporting the comments set forth in this letter.


Recommendation: We request that the Agencies review the Rule’s access provisions and
consider whether they should apply in a capitated network setting. We also recommend a
clarification that, in a capitated network setting, OB/GYN direct access provisions apply only to
OB/GYNs who belong to the enrollee’s selected medical group.

Vv. Waiver Process

(1) Establish and provide guidance on the waiver process, including factors for
consideration in granting waivers and the method for application and approval.

The IFR provides that the HHS Secretary may establish a program to waive the annual limit
restrictions, if compliance would result in: (1) a significant decrease in access to benefits under
the policy or plan; or (2) significantly increased premiums for policy or plan coverage. We
support the Secretary’s authority to establish a waiver program and request that the Final Rule
provide specific details on the process.

Recommendation: We request that the Agencies provide guidance in the Final Rule outlining the
Secretary’s waiver program, including application method, timeframes for Agency review and
decision-making, and factors that the Secretary will consider when evaluating waiver
applications. We also suggest that existing plans be provided grandfathered status through 2011,
as the waiver process is not yet established and open enrollment materials are being produced
now.

(2) Expand the Secretary’s waiver authority to include consideration of lifetime limit
provision waivers.

We strongly support the authority granted to the HHS Secretary to waive the annual maximum
provisions in the case of coverage where compliance with the Rule would cause a significant
increase in premiums or decrease access to plan benefits. We believe that the lifetime maximum
provisions may have the same impact on certain plans, resulting in significant premium increases
or decreased access to benefits. Therefore, we urge the Agencies to expand the Secretary’s
waiver authority to include both annual maximums and lifetime dollar maximums.

Summary of Recommendations & Conclusion

We believe the recommendations highlighted in this letter support the goals of the Act and the
IFR to balance protections for consumers with continued access to affordable and high quality
coverage. On behalf of the 70 million consumers served by UnitedHealth Group, we thank you
for your thoughtful consideration of these recommendations and the discussion of the issues and
concerns underlying them.

UnitedHealth Group appreciates the opportunity to provide you with our comments on the IFR
for Group Health Plans and Health Insurance Issuers under PPACA. Should you have any
questions regarding the information set forth in these comments please do not hesitate to contact
me.


Summary of Recommendations

The recommendations offered below stem from our evaluation of the practical implications of
implementing the IFR’s requirements across diverse health care offerings. To support our
recommendations, we provide specific examples and data based on our experience. We believe
these recommended changes are appropriate to best serve consumers and reduce unintended
consequences associated with the rules in their current form.

Accordingly, we recommend the following for the Final Rule for pre-existing condition
exclusions, lifetime and annual limits, rescissions and patient protections:

Pre-Existing Condition Exclusions

e Incorporate provisions related to annual open enrollment periods, as outlined in the Agency’s
July 27, 2010 “Questions and Answers on Enrollment of Children Under 19 Under the New
Policy That Prohibits Pre-Existing Condition Exclusions.”

Annual and Lifetime Limits

e Provide clarification that plans and issuers may treat out-of-network benefits differently,
consistent with the Agencies’ Interim Final Rule on preventive care services.

e Specify, in the text of the regulation, that a policy or plan's exclusion of benefits for a
condition is not considered an annual or lifetime limit.

e Develop a model notice for required notice to enrollees who have exceeded their lifetime
limit.

e Provide clarification that the re-enrollment right does not apply to former enrollees no longer
covered by the plan.

e Provide an exemption from annual limit restrictions for stand-alone health reimbursement
accounts (“HRAs”).

Rescissions

e Provide clarification that the Rule's rescission requirements do not apply to retroactive
terminations of coverage.

Emergency Services and Primary Care Provider Designations

e Ensure patient protection by prohibiting providers delivering emergency room services from
balance billing consumers.

e Provide guidance on the application of the Rule’s provisions in an Accountable Care
Organization (“ACO”) setting.

e Provide guidance on the application of the Rule’s provisions in a capitated network setting.

Waiver Process

e Establish and provide guidance on the waiver process, including factors for consideration in
granting waivers and the method for application and approval.


e Expand the Secretary’s waiver authority to include consideration of lifetime limit provision
waivers.

Highlighted below are the primary concerns that drive these recommendations, focusing on
potential unintended consequences to consumers, as well as specific detailed recommendations
for the modification of the IFR. We also include commentary on items that were specifically
noted for comment in the IFR or where the Agencies solicited feedback.

IL Pre-Existing Condition Exclusions

(1) Incorporate provisions related to annual open enrollment periods, as outlined in the
Agency’s July 27, 2010 “Questions and Answers on Enrollment of Children Under 19
Under the New Policy That Prohibits Pre-Existing Condition Exclusions.”

On July 27, 2010, HHS released “Questions and Answers on Enrollment of Children Under 19
Under the New Policy That Prohibits Pre-Existing Condition Exclusions.” This guidance
indicated that the IFR does not preclude plans and issuers from restricting open enrollment for
children under 19, whether in family or individual coverage, if permitted under existing state
law. The guidance further indicated that issuers in the individual market may determine the
length and frequency of open enrollment periods for children under 19, families and adults,
subject to state law. We urge the Agencies to include these open enrollment provisions in the
Final Rule, in order to provide appropriate clarity around these new pre-existing condition
exclusion requirements.

Recommendation: We request that the Agencies codify the guidance in the “Questions and
Answers on Enrollment of Children Under 19 Under the New Policy That Prohibits Pre-Existing
Condition Exclusions” by amending the Rule to include the provisions related to open
enrollment periods, including allowing plans and issuers to determine frequency and duration of
the open enrollment and include guidance on the plan’s rights and obligations outside of the open
enrollment period.

IL. Annual and Lifetime Limits

(1) Provide clarification that plans and issuers may treat out-of-network benefits
differently, consistent with the Agencies’ Interim Final Rule on preventive care services.

The IFR does not address whether the prohibition on annual and lifetime limits applies to out-of-
network benefits. Such limits are important plan design features that ensure quality of care and
assist in controlling health care costs. UnitedHealth Group, like the vast majority of health plans
and issuers, utilizes networks of credentialed providers that have a contractual relationship with
the plan or issuer to deliver health benefits to covered members. Our experience has shown that
the use of network providers enhances the quality, coordination, and efficiency of health care
services. We believe it is important to allow continued use of annual or lifetime limits on non-
network services, which provide an additional tool to encourage the use of in-network providers
by covered members.