August 27, 2010

Office of Consumer Information and Insurance Oversight

Department of Health and Human Services

Attention: OCIIO-9994-IFC

Mail Stop C4-26-05

7500 Security Boulevard

Baltimore, MD 21244-1850

By Electronic Mail

Re: Patient Protection and Affordable Care Act: 

Preexisting Condition Exclusions, Lifetime and 

Annual Limits, Rescissions, and Patient Protections

Dear Sir or Madame: 

Bayer Healthcare LLC (“Bayer”) thanks the Department of Health 

and Human Services, the Department of Labor, and the Department of the 

Treasury (“the Agencies”) for their continued efforts to ensure that 

individuals have access to high quality health insurance coverage under 

the provisions of the Patient Protection and Affordable Care Act 

(“PPACA”).1 We appreciate this opportunity to comment on the Interim 

Final Rules regarding the PPACA: Preexisting Condition Exclusions, 

Lifetime and Annual Limits, Rescissions, and Patient Protections 

(hereinafter “Interim Final Rules”).2

For more than 100 years, Bayer has been an active participant in the 

healthcare industry by innovating high-quality drugs, biologicals, and 

medical devices that have helped patients lead healthier lives. Our 

research and business activities are focused on a number of specialized 

areas of healthcare, many of which involve the management of chronic 

diseases: hematology / cardiology, oncology, diabetes, primary care, 

specialized therapeutics, diagnostic imaging and women’s healthcare. A 

significant number of our patients suffer from chronic conditions. 

Accordingly, we present the following comments, in summary, for your 

consideration:

• Support for Prohibition on Preexisting Condition 

Exclusions: Bayer strongly supports the Agencies’ 

 1 Patient Protection and Affordable Care Act, Pub. L. 111-148 (2010). 2 75 Fed. Reg. 37188 (June 28, 2010).

Sandra Oliver

Vice President Public 

Policy & Government 

Affairs

Bayer HealthCare LLC

555 White Plains Road

Tarrytown, NY 10591

Tel: 914-333-6924

Fax: 914-366-1882
actions in implementing the PPACA’s prohibitions on 

preexisting condition exclusions. We commend the 

Agencies for expanding the definition of “preexisting 

condition exclusion” to include denials of coverage. 

• Definition Needed of “Essential Health Benefit”: 

With regard to annual and lifetime dollar value 

coverage limits, the Agencies declined to provide a 

specific definition of “essential health benefit.” 

Defining “essential health benefit” is critical in order 

to give substance and meaning to the annual and 

lifetime limits prohibitions as Congress intended. 

We believe the Agencies must adopt a specific 

definition in the final regulations and allow 

stakeholders to comment on that definition.

• Restricted Annual Limits are Too Low and Based on 

Incomplete Data: The restricted annual coverage 

limits set by the Interim Final Rules are too low to 

ensure that access to needed services is made 

available, as required by the PPACA. In addition, the 

data available on the number of persons whose 

healthcare costs are likely to exceed such annual 

limits are inadequate to make reliable conclusions. 

We believe that the Agencies must increase the 

restricted annual limits until more data is available.

• Rigorous Standards Needed for Waiver of Restricted 

Annual Limits: The proposed waiver program is not 

expressly permitted by the PPACA; however, to the 

extent the Agencies decide to move forward with the 

waiver program, rigorous standards are needed in 

order to prevent abuse and ensure beneficiary access 

to critical services.

• Allowing Complete Exclusions of Benefits Instead 

of Annual or Lifetime Limits Not Permitted by 

Congress: The Interim Final Rules do not prevent a 

plan or issuer from excluding all benefits for a 

particular condition. This provision will most likely 

lead to less coverage for individuals with the most 

serious chronic conditions, and therefore runs counter 

to the purpose of the statute and Congress’ intent. 
Moreover, implementing such a provision exceeds the 

Secretaries’ authority under the PPACA.

• Support of Reenrollment Opportunity: Bayer 

commends the Agencies for providing an opportunity 

for individuals to reenroll for coverage that was 

denied due to the applicability of a lifetime limit. 

However, there are a number of opportunities for 

clarification regarding the reenrollment standards.

• Health Reimbursement Arrangements (“HRAs”): 

The Agencies specifically requested comments on the 

application of annual limits to stand-alone HRAs 

which are not retiree-only plans. Bayer suggests that 

the same standards apply to such plans as apply to 

group health plans and health insurance issuers 

offering group or individual health insurance 

coverage.

• Support for Prohibition of Rescissions: Bayer 

strongly supports the Agencies’ implementation of 

the rescission prohibition and commends the

Agencies for their efforts in this area.

• Support for Patient Protections: Bayer supports the 

provisions of the Interim Final Rules providing for 

patient protections and commends the Agencies for 

implementing these important rules.

These comments are discussed in further detail below.

I. Support for Prohibition on Preexisting Condition Exclusions

Bayer strongly supports the Agencies’ actions in implementing the PPACA’s 

prohibitions on preexisting condition exclusions. Prior to healthcare reform, patients with

chronic illnesses, such as cancer and diabetes, were often excluded from insurance coverage 

and suffered severe financial hardship. We commend the Agencies for swiftly promulgating 

regulations which will help to protect America’s most vulnerable patient populations.

Bayer particularly commends the Agencies for expanding the definition of “preexisting 

condition exclusion” to include not just a limitation or exclusion of benefits, but also a denial 

of coverage. This important change will help to ensure that Congress’ intent to provide 

access to coverage for individuals with preexisting conditions will be carried out.
While Bayer understands that the 2014 effective date for the preexisting condition 

exclusion was set by Congress, Bayer is concerned that individuals with the most serious 

medical conditions will continue to be denied healthcare coverage until these provisions take 

effect in 2014. We understand that the federally run high-risk pool will provide access to 

insurance for uninsured individuals with a preexisting condition until the preexisting 

condition exclusion prohibition takes effect in 2014. However, we would like to note that in 

order to make this high-risk pool program meaningful, the benefits provided under the highrisk program, and ultimately the Interim Final Rules, must ensure that the sickest patient 

populations receive adequate services to cover their medical needs.

II. Definition Needed of “Essential Health Benefit”

Effective for plan years beginning on or after September 23, 2010, the PPACA prohibits 

group health plans and health insurance issuers offering group or individual health insurance 

coverage from establishing lifetime or annual dollar value limits on coverage of “essential 

health benefits.”3

In the Interim Final Rules, the Agencies declined to provide a more specific definition 

of “essential health benefits.” Rather, the Interim Final Rules simply cross-reference the 

general definition provided in the PPACA. For plan years beginning before the issuance of 

more specific regulations defining “essential health benefits,” the Agencies propose to take 

into account “good faith efforts” to comply with a “reasonable interpretation” of the term. 

 Section 1302(b) of the PPACA defines general categories of “essential health 

benefits,” but defers to the Secretary to define the specific benefits included in each category.

While Bayer strongly supports the Agencies’ efforts in implementing prohibitions 

against annual and lifetime limits, it is critical that a more specific definition of “essential 

health benefits” be provided in order to make these prohibitions meaningful. Without a more 

specific definition of “essential health benefits,” this important part of the statute is rendered 

meaningless. There is a financial incentive for health insurers to define “essential health 

benefits” narrowly and continue to limit benefits which are critical to many Americans.

The impact of the Interim Final Rules is further compromised by the highly permissive 

standard provided for health insurers. Under the Interim Final Rules, plans are not even 

required to comply with a “reasonable interpretation” of the term “essential health benefits”; 

rather, they are only required to comply with the less stringent standard of making a “good 

faith effort” to comply with a reasonable interpretation. Such a loose standard will almost 

certainly result in many Americans being denied coverage. Individuals who exceed lifetime 

or annual limits are often those with very serious medical problems that require expensive 

treatment and frequently face severe financial difficulty, or lack of access to care once those 

limits have been exceeded. It is this population of patients who are the intended beneficiaries 

of the lifetime and annual limits provisions, and in order for the Agencies’ important actions 

to have teeth, the definition and standards regarding “essential health benefits” must be more 

specific and more stringent.

 3 PPACA §§ 1001(5) and 10101.
Accordingly, we strongly recommend that the Agencies include the following as 

“essential health benefits”: chronic disease management, such as diabetes, diabetes selfmanagement training, cancer screenings and related treatment, heart disease and 

hypertension treatments, treatments for multiple sclerosis, hemophilia treatments, utilization 

of remote monitoring devices (telehealth devices), access to reproductive health products, 

antibiotics, and radiological procedures (including contrast agents and 

radiopharmaceuticals). 

III. Restricted Annual Limits are Too Low and Based on Incomplete Data

While the PPACA permits the Secretary to determine “restricted annual limits” for 

plan years prior to January 1, 2014, the statute requires that the Secretary ensure that access to 

needed services is made available with a minimal impact on premiums. The restricted annual 

limits set in the Interim Final Rules are too low to adequately ensure access as required by this 

Congressional mandate.

As discussed above, the PPACA generally prohibits group health plans and health 

insurance issuers offering group or individual health insurance from establishing annual 

lifetime dollar limits on coverage of “essential health benefits” beginning in 2014. For plan 

years beginning prior to January 1, 2014, however, the PPACA permits plans to impose 

“restricted annual limits,” as defined by the Secretary. Pursuant to this statutory provision, 

the Agencies have provided that for plan years beginning on or after September 23, 2010 but 

before September 23, 2011, plans may continue to impose annual limits as low as $750,000; for 

plan years beginning on or after September 23, 2011 but before September 23, 2012, plans may 

impose limits of $1,250,000; and for plan years beginning on or after September 23, 2012 but 

before January 1, 2014, plans may impose limits of $2,000,000. 

However, the data available on the number of persons whose healthcare costs are 

likely to exceed such annual limits are inadequate to make reliable conclusions. The Agencies 

admit that there “are scant data on annual limits on which to base this impact analysis.”4

For example, patients suffering with severe hemophilia typically incur extremely high 

healthcare costs associated with managing their disease, often reaching $500,000 or more. A 

few hospitalizations or trips to the emergency room could bring such patients dangerously 

 The 

data on which the Agencies rely to estimate the number of persons whose healthcare costs are 

expected to exceed annual limits is based on a study of the “insured population.” As 

Congress has recognized through its implementation of healthcare reform laws, the “insured 

population” likely excludes many of the sickest Americans with the most costly health 

problems who are currently uninsured. As these individuals may become increasingly 

insured under the new laws, the data used by the Agencies underestimates the number of 

individuals who would be affected by these restricted annual limits. The low limits set by the 

Agencies will likely continue to exclude the sickest individuals with the highest drug costs, 

contrary to Congress’ intent.

 4 75 Fed. Reg. at 37203.
close to the $750,000 limit proposed for 2011. For these patients, exceeding annual limits 

could compromise their access to care and have a devastating financial impact on both the 

patients and their families. 

As such, we request that the Agencies increase the restricted annual limits to at least 

$2,000,000 per year until more data is available in order to ensure that, as intended by 

Congress, the sickest Americans continue to have access to healthcare coverage. 

IV. Rigorous Standards Needed for Waiver of Restricted Annual Limits

The Interim Final Rules permit the Secretary of Health and Human Services (“HHS”) 

to establish a program under which the restricted annual limits may be waived by a plan if 

compliance would result in a “significant decrease in access to benefits or a significant 

increase in premiums.”5

The Agencies have indicated that additional guidance will be issued regarding the 

scope and process for applying for a waiver under this program. We strongly urge HHS to 

ensure that such waivers are issued in appropriate circumstances. While Bayer applauds the 

Agencies for seeking to ensure access to benefits and reasonable premiums for beneficiaries, 

insurers will likely attempt to use this waiver program proposed by the Interim Final Rules to 

try to avoid compliance with the restricted annual limits imposed by the Agencies. 

 This waiver program is not expressly authorized by the PPACA. To 

the extent the Agencies decide to move forward with the proposed program, rigorous 

standards are needed in order to prevent abuse and ensure beneficiary access to critical 

services.

In issuing additional guidance on the waiver program, we urge HHS to set rigorous 

standards for insurers to justify any potential increase in premiums as a result of the 

imposition of restricted annual limits. Section 10101 of the PPACA provides that for plan 

years beginning prior to January 1, 2014, plans and issuers 

may only establish a restricted annual limit on the dollar value of benefits for any 

participant or beneficiary with respect to the scope of benefits that are essential 

health benefits under section 1302(b) of the [PPACA], as determined by the 

Secretary. In defining the term ‘restricted annual limit’ for purposes of the 

preceding sentence, the Secretary shall ensure that access to needed services is 

made available with a minimal impact on premiums.6

Thus, we strongly urge HHS to set rigorous standards for insurers to justify any 

increases in premiums that may result from compliance with annual limits. It is imperative 

that the waiver program not be used as a mechanism for non-compliance with the Congress’ 

intent to ensure individual access to health insurance with appropriate annual limits in place. 

 5 75 Fed. Reg. at 37191.

6 PPACA § 10101.
V. Allowing Complete Exclusion of Benefits Instead of Annual or Lifetime Limits Not 

Permitted by Congress

The Interim Final Rules purport to clarify that the annual and lifetime limit 

prohibitions enacted by Congress through the PPACA do not prevent a plan or issuer from 

excluding all benefits for a particular condition. This provision of the Interim Final Rules is 

counterintuitive to the purpose of the annual and lifetime limit provisions, contrary to 

Congress’ intent, and exceeds the Secretaries’ authority. The provisions of the PPACA 

dealing with annual and lifetime limits do not address the complete exclusion of benefits or in 

any way suggest that such complete exclusions are permitted. The Agencies cannot purport 

to “clarify” a provision of the PPACA which does not exist. 

Further, this provision of the Interim Final Rules is counterintuitive to the purpose of 

the annual and lifetime limits provisions, because allowing plans to completely exclude 

benefits for certain conditions will lead to impaired access to coverage for certain individuals 

with, most likely, the most serious medical conditions. Patients who reach annual or lifetime 

limits are those with the most severe, often chronic and debilitating medical problems. 

Accordingly, if plans and issuers are required to forego annual or lifetime limits, but are 

permitted to entirely exclude coverage for certain conditions, they likely will choose to 

exclude coverage for services related to the most costly and medically complicated conditions. 

By permitting plans and issuers to completely exclude benefits, the Agencies are opening the 

door for insurers to institute policies which could make it difficult for these vulnerable 

patients to receive coverage for the services they require. We strongly urge the Agencies to 

withdraw this potentially debilitating and far-reaching provision.

VI. Support of Reenrollment Opportunity

Bayer commends the Agencies for providing an opportunity for individuals to reenroll 

for coverage that was denied due to the applicability of a lifetime limit. This provision will be 

critically important and beneficial to the sickest Americans who have experienced extreme 

health care costs. While Bayer particularly commends the Agencies for requiring that 

reenrolling individuals be offered all the benefits packages available to “similarly situated” 

individuals who did not lose coverage, a number of clarifications are needed regarding this 

standard.

First, Bayer suggests that the Agencies more clearly indicate who will be considered a 

“similarly situated” individual for the purposes of determining which benefits packages and 

prices must be offered. There will be a financial incentive for plans to adopt an interpretation 

of “similarly situated” that minimizes their obligation to provide coverage. We urge the 

Agencies to consider implementing more specific guidelines regarding the definition of 

“similarly situated” in order to ensure that plans provide meaningful coverage to these 

individuals.

Second, the Agencies do not explain why this “similarly situated” standard applies for 

group health plans but not for issuers of group or individual health insurance coverage. We 
request that the Agencies consider providing a consistent standard for group health plans and 

group and individual health insurance coverage in order to benefit all enrollees. Similarly, 

the Agencies have provided no justification for declining to provide for a reenrollment 

opportunity for individuals who reached their lifetime limits on individual health insurance 

coverage if the contract is not renewed or otherwise is no longer in effect. We urge the 

Agencies to implement a similar reenrollment process for these individuals.

Finally, the Agencies have not articulated any reason why the reenrollment window is 

limited to 30 days. We suggest that individuals not be limited in the amount of time they 

have to reenroll. Many of these patients are dealing with severe illnesses and may not be 

physically or mentally able to complete the reenrollment process within such a short time 

frame.

VII. Health Reimbursement Arrangements (“HRAs”)

The Agencies have specifically requested comments regarding the application of 

annual limits to stand-alone HRAs which are not retiree-only plans. Bayer recommends that 

the standards that apply to group health plans and health insurance issuers offering group or 

individual health insurance coverage be consistently applied to stand-alone HRAs which are 

not retiree-only plans, keeping in mind, however, the deficiencies in those standards 

discussed above.

VIII. Support for Prohibition of Rescissions

The PPACA provides that, effective September 23, 2010, a group health plan or health 

insurance issuer offering group or individual health insurance coverage must not rescind 

coverage except in the case of fraud or an intentional misrepresentation of a material fact. 

This provision also applies to all grandfathered health plans. 

Bayer supports the Agencies’ implementation of this rescission prohibition, as these 

rules will provide important protection for individuals who do their best to honestly 

complete enrollment materials but have, up to now, been denied coverage based on 

inadvertent errors. We further commend the Agencies for providing that additional guidance 

will be issued to combat efforts to subvert the rules and ensure that individuals do not lose 

health coverage unjustly or without due process.

IX. Support for Patient Protections

Bayer supports the provisions of the Interim Final Rules providing patient protections 

and commends the Agencies for their efforts in implementing these rules.
X. CONCLUSION 

Thank you for this opportunity to comment on the Interim Final Rules. We greatly 

appreciate your thoughtful consideration of the important issues discussed above. 

Sincerely,

Sandra Oliver

Vice President, Public Policy and Government Affairs