August 27, 2010

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services

P.O. Box 8016

Baltimore, MD 21244-1850

Attention: File Code OCIIO-9994-IFC

Office of Health Plan Standards and Compliance Assistance 

Employee Benefits Security Administration 

Room N-5653 

U.S. Department of Labor 

200 Constitution Avenue, N.W. 

Washington D.C. 20210 

Attention: RIN 1210-AB43

Internal Revenue Service 

Room 5205 

P.O. Box 7604 

Ben Franklin Station 

Washington D.C. 20044 

Attention: REG-120399-10

Re: Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient 

Protections Interim Final Rules 

Submitted via eRulemaking Portal: www.regulations.gov

Dear Sir or Madam:

I am writing on behalf of America’s Health Insurance Plans (AHIP) to offer comments in

response to the interim final rule (IFR) concerning Preexisting Condition Exclusions, Lifetime 

and Annual Limits, Rescissions, and Patient Protections published in the Federal Register on 

June 28, 2010 (75 Fed. Reg. 37188). This IFR implements Sections 2704, 2711, 2712, and 

2719A of the Public Health Service Act, as amended by the Patient Protection and Affordable 

Care Act (the “Affordable Care Act”), which was signed into law March 23, 2010.1

AHIP is the national association representing approximately 1,300 health insurance plans that 

provide coverage to more than 200 million Americans. Our members offer a broad range of 

 1 Pub. L. No. 111-148, as amended by Pub. L. No. 111-152.
August 27, 2010

Page 2

health insurance products in the commercial marketplace and have demonstrated a strong 

commitment to participation in public programs.

AHIP’s members are committed to implementation of the Affordable Care Act and support 

efforts to expand coverage to the uninsured, particularly for children under age 19, by 

guaranteeing access to coverage in the individual market without application of a preexisting 

condition exclusion. We also recognize the important health benefit improvements under the 

Affordable Care Act, and members of our community support access to primary care providers, 

pediatricians acting as primary care providers, obstetric and gynecological care, and emergency 

services, as provided under the Act.

AHIP’s comments below are intended to contribute to the successful implementation of the 

Affordable Care Act provisions addressed in the IFR, while, at the same time, minimize 

disruptions for consumers and other unintended consequences. 

I. Preexisting Condition Exclusions

Subsequent to the publication of the IFR, the Department of Health and Human Services 

issued a questions and answers document2 (referred to as Q&As) to assist health plans 

and states in implementing the requirements for issuing coverage to children under 19 in 

the individual market. As noted in the Q&As, we appreciate the Administration’s 

recognition of the potential for “adverse selection” and the Q&As allowing specific open 

enrollment periods to address that concern. Open enrollment periods are key to help keep 

coverage affordable for all children in the individual market. 

In addition, there is recognition of the potential for “premium assistance” programs under 

state Medicaid and Children’s Health Insurance Programs (CHIP) to be used “...as a 

strategy to transfer vulnerable children to private individual market coverage.”3 The 

Q&As also state: “The Administration will enforce its current policies on premium 

assistance and consider new ones if evidence emerges that children with pre-existing 

conditions are being diverted inappropriately from Medicaid or CHIP to private insurance 

plans that newly offer guaranteed issue to children regardless of their health status.”4

 We 

support this approach that ensures these vulnerable children continue to receive the scope 

of coverage that best meets their needs and is consistent with benefits provided in the 

Medicaid and CHIP programs. 

 2 “Questions and Answers on Enrollment of Children Under 19 Under the New Policy That Prohibits Pre-Existing 

Condition Exclusions,” July 27, 2010

3 Id.

4 Id.
August 27, 2010

Page 3

The Q&As also address state requirements that establish open enrollment periods and 

provide that such provisions will not be preempted by federal requirements. As states 

consider the establishment of open enrollment periods, AHIP and its members will work 

with the National Association of Insurance Commissioners and individual states to ensure 

an orderly, consumer-oriented process for access to coverage for children under age 19. 

Under this process we would recommend an initial open enrollment period, followed by 

annual open enrollment periods. 

II. Lifetime and Annual Limits

A. Clarify That Coverage Meets the Annual Limit Requirement If the Total of All 

Essential Health Benefits Paid Equals or Exceeds the Limit 

The IFR prohibits a health insurance plan from establishing any annual limit on the 

dollar amount of benefits for any individual, except for the allowed restricted annual 

limits5, the “floor amounts”, for plan or policy years that begin before January 1, 

2014. This approach will increase consumer access to essential health benefits, while 

also considering the cost implications associated with the added consumer 

protections, as required under the Affordable Care Act.6

AHIP recommends clarification of the language in the IFR that requires the 

overall annual dollar amount of essential benefits to equal or exceed the floor 

amount established under the IFR, and that once the total dollar amount of 

essential benefits paid reaches an annual limit (as established in the plan or 

policy) that meets or exceeds the IFR floor amount during a plan or policy year, 

reimbursement for essential benefits will begin again at the start of the next plan 

or policy year.

Today, different types of 

coverage may apply separate annual internal limits on what may be considered to be 

essential health benefits services, as a means to help keep coverage affordable or to 

conform to state laws requiring coverage of specific benefits at defined dollar 

amounts. We believe the IFR language is subject to interpretation with respect to 

how these types of annual limits are impacted by the requirements for employer and 

health plan coverage to meet the floor amounts established under the IFR. 

B. Clarify the Application of the Annual Limit Requirements to Value-Based 

Programs and Care Management Initiatives 

 5 The IFR establishes permissible annual limit restrictions of $750,000 for the first plan year on or after September 

23, 2010, $1,250,000 for the next plan year, and $2,000,000 for the next plan year until January 1, 2014. 75 Fed. 

Reg. 37236 (June 28, 2010).

6 75 Fed. Reg. 37191 (June 28, 2010).
August 27, 2010

Page 4

We believe that the IFR annual limit requirements should be interpreted in a manner 

that supports the continued use of consumer incentives to access essential health 

benefits in a way that promotes value and quality, without unintentionally 

undermining these tools and techniques. For prescription drugs, there are two 

examples of programs that use consumer incentives. The first encourages use of mail 

order pharmacy coverage by requiring lower cost-sharing for mail order drugs and 

using annual dollar maximums on retail pharmacy coverage. A recent study 

determined that patients with diabetes who received prescriptions through the mail 

were 7.8 percentage points more likely to have good medication adherence compared

to patients filling prescriptions through a local pharmacy.7

 Such programs provide 

benefits to patients by encouraging greater adherence to a prescribed treatment and 

requiring lower cost-sharing levels, and we urge clarification that this type of 

program complies with the IFR requirements, so long as the mail order coverage 

meets or exceed the IFR annual floor amounts. 

An additional tool for addressing value, while safeguarding quality, occurs in 

programs that provide incentives for appropriate use of generic drugs. Value and 

quality have been studied for use of generic drugs, and, as an example, a metaanalysis of generic and brand-name drugs in cardiovascular disease and treatment 

outcomes demonstrated that the Food and Drug Administration’s bioequivalence 

standard for generic drugs is a reliable “proxy for clinical equivalence among a 

number of important cardiovascular drugs.”8 To avoid invalidating these types of 

programs, we urge clarification that annual maximums on brand name drugs are 

permissible when: 1) generic coverage is either unlimited or subject to the overall 

annual limit; and 2) coverage of a brand name drug is available on the same basis as 

the generic, in cases where use of the generic drug is not medically appropriate for the

patient. 

Both of the above approaches encourage the use of the most cost-effective delivery 

mechanism and therapy regimen for prescription drugs, without compromising health 

care quality or access to essential prescription drug benefits.

AHIP recommends clarification that the IFR provisions do not prohibit widelyused programs and initiatives for prescription drug coverage that promote both 

quality and value, without limiting consumer access to essential health benefits 

at the required annual amount.

 7 Duru, O. Kenrik, MD, MSHS, et al. “Mail-Order Pharmacy Use and Adherence to Diabetes-Related Medications.” 

The American Journal of Managed Care. Vol. 16, No. 1. 2010: pgs. 33-40. 8 Kesselheim, Aaron S., MD, JD, MPH, et al. “Clinical Equivalence of Generic and Brand-Name Drugs Used in 

Cardiovascular Disease.” Journal of the American Medical Association. Vol. 300. No. 21. Dec. 3, 2008: pgs. 2514-

2526.
August 27, 2010

Page 5

C. Clarify That the Scope of the Waiver Program for the Restricted Annual Limit 

Provisions Applies to a Wide Range of Consumers

The IFR grants to the Secretary of Health and Human Services waiver authority to allow

a group health plan or health insurance coverage to be exempt from the restricted annual 

limit requirements for plan or policy years beginning before January 1, 2014, should the 

IFR result in a “significant decrease in access to benefits under the plan or health 

insurance coverage or would significantly increase premiums for the plan or health 

insurance coverage.”9 In discussion of the waiver program, the preamble states that 

certain coverage, including limited benefit plans or “mini-med” plans, could be exempt 

from the restricted annual limit requirements in order to preserve consumer access to 

medical services and to shield consumers from significant increases in premiums. 

We believe the waiver program is an important means to preserve affordable coverage 

options for consumers prior to the implementation of the 2014 market reforms. In fact, 

the Affordable Care Act provides for an examination of coverage options that would be 

impacted by the annual limits requirements to “...ensure that access to needed services is 

made available with a minimal impact on premiums.”10

We believe the scope of the waiver should encompass consumers enrolled in a variety of 

types of comprehensive, major medical coverage. This could include coverage such as, 

but not limited to, basic medical-surgical expense and basic hospital/medical-surgical 

expense coverage that are not otherwise classified as HIPAA excepted benefits

 

11, as well 

as state-mandated conversion policies that have annual limits that are below the required 

minimum values under the IFR. These types of coverage should be eligible to be 

included in the exemption if the group health plan sponsor or group health insurer can 

demonstrate that meeting the regulatory threshold for the annual limit requirements 

would result in a significant decrease in access to benefits or a significant increase in 

premiums. 

As the Departments develop further guidance on the scope and procedures for 

applying for a waiver, AHIP recommends a flexible process that preserves

consumer access to affordable coverage options. Allowing reasonable exemptions to 

the restricted annual limit requirements will reduce disruptions of coverage for 

consumers and smooth the transition during the 2010 to 2014 transition period.

 9 75 Fed. Reg. 37236 (June 28, 2010). 10 42 U.S.C. § 300gg-11. 11 The intent to not apply the Affordable Care Act’s market reform provisions to excepted benefits has been 

previously acknowledged for the new Internet portal and in the preamble of the Interim Final Rules for 

Grandfathered Health Plans. 
August 27, 2010

Page 6

D. Clarify the Annual Limit for Essential Benefits with Respect to In-Network 

Benefits 

One of a group health plan’s or insurer’s primary mechanisms for assuring quality 

care is to provide incentives to enrollees to receive medical services from accredited, 

in-network providers. These incentives take the form of lower co-payments and 

coinsurance amounts, along with a prohibition on balance billing, associated with the 

use of in-network providers. The incentives to use doctors and hospitals within a 

health plan’s provider network help to lower medical costs for all enrollees and, as a 

result, help keep coverage affordable. Establishing different annual limits for out-ofnetwork providers reinforces these results, without limiting the overall benefits 

available to enrollees. Consumers would continue to have coverage for essential

benefits that meet the IFR requirements, since the in-network coverage would meet or 

exceed that requirement. This approach meets the IFR goal of assuring that 

consumers have a minimum level of essential benefits coverage, while preserving 

access to quality service from in-network providers. 

AHIP recommends a clarification that a health plan meets the IFR requirements 

if consumers have access to coverage for essential benefits on an annual basis 

from in-network health care providers that meets or exceeds the IFR 

requirements. 

E. Create a Safe Harbor for Employers and Health Plans for Notifying Retirees of Reenrollment Opportunity Because of Lifetime Limit Requirements

The IFR requires reenrollment opportunities for individuals whose coverage has 

ended by reason of reaching a lifetime limit. Health insurance plans and employers 

are tasked with giving such individuals written notice of their eligibility to reenroll 

not later than the first day of the first plan year beginning on or after September 23, 

2010. 

In situations where a group plan covers both active and retired employees, an 

employer or health plan may have difficulty locating retirees who meet these 

qualifications and providing timely notice. We suggest the Departments establish a 

safe harbor for good faith efforts to locate these retirees, under which employers and 

health plans will not be liable for failure to provide the required notice of 

reenrollment. 

AHIP suggests the establishment of a safe harbor for employers and health plans 

that make a reasonable, good faith effort to locate retirees who have reached a 

lifetime limit and may be eligible for reenrollment in coverage.
August 27, 2010

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F. Clarify the Application of Lifetime and Annual Limit Requirements to the Dollar 

Amount of Essential Benefits Provided 

The IFR states that the prohibition on lifetime and annual limits applies to the “dollar 

amount of benefits,” “dollar limits,” and “dollar value of all benefits.”12 A plain 

reading suggests that it would only apply to limits on essential benefits that are 

expressed in dollars and not to other types of limits such as the number of visits to a 

category of providers or on the number of days of coverage (e.g., a 20 visit limitation 

for rehabilitation services). These other types of limits are common in both group 

health plans and group and individual insurance coverage, and serve to hold down the 

cost of coverage, while preserving access to services. In some circumstance, without 

these limits, some employers or other coverage providers may decide to eliminate 

coverage for these services, as is permissible under the IFR. 

AHIP recommends clarification that employers and health plans may continue 

to establish “day” and “visit” requirements to encourage retention of and 

consumer access to coverage for these services. 

III. Rescissions

A. Clarify the Distinction Between a Cancellation and Rescission

The IFR provides:

For purposes of these interim final regulations a rescission is a 

cancellation or discontinuance of coverage that has retroactive 

effect. For example, a cancellation that treats a policy as void from 

the time of the individual’s or group’s enrollment is a rescission. 

As another example, a cancellation that voids benefits paid up to a 

year before the cancellation is also a rescission for this purpose. 

(emphasis added) A cancellation or discontinuance of coverage 

with only a prospective effect is not a rescission, and neither is a 

cancellation or discontinuance of coverage that is effective 

retroactively to the extent it is attributable to a failure to timely pay 

required premiums or contributions towards the cost of coverage.13

Because the IFR appears to interpret a rescission to include any retroactive 

cancellation, the IFR seemingly prohibits retroactive administrative corrections of an 

individual employee’s termination of coverage. Example 2 in Section § 54.9815–

 12 75 Fed. Reg. 3723 (June 28, 2010). 13 75 Fed. Reg. 37192 (June 28, 2010).
August 27, 2010

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2712T of the IFR contemplates a mistake in eligibility relating to a change from fulltime to part-time status. By extension, this would appear to also apply with respect to 

other changes in eligibility status, such as termination of employment or other actions 

that affect eligibility for coverage under a group plan. Such enrollment data is often 

supplied − by common premium billing practices, in accordance with collectively 

bargained agreements, or otherwise − on a retroactive basis. 

For example, under the Federal Employee Health Benefits Program, under some 

circumstances, coverage is retroactively terminated effective as of the date of 

termination of employment, even though the information is not received by a 

participating health plan, not due to an error, but rather a reporting time lag, until after 

the date of termination of employment. In other cases, where there is a clerical error

regarding an employee’s coverage under a plan, coverage may be retroactively 

terminated weeks or months after the error is corrected. In those cases, the premiums

erroneously received are refunded or offset from future premiums owed to the plan. 

Similarly, in state employee coverage programs, such as CalPERS, eligibility and 

enrollment information may not be received by a participating health plan until weeks 

or months after the event giving rise to the change in eligibility status. Under both of 

these examples, the IFR would appear to require coverage to be extended, and 

premiums paid, for periods not intended under the terms and conditions of the 

programs. 

The IFR’s definition of rescission as applying a cancellation or discontinuance of 

coverage that has retroactive effect represents a significant change in practice with 

regard to current, common premium billing practices and correction of clerical errors 

in enrollment in or eligibility under group health plans. 

Traditionally, rescission is a concept of contract law applicable to a broad spectrum of 

contracts and is grounded in common law and statutory law in many states. 

Rescission is a remedy that is available when one party has not disclosed material 

information at the inception of a contract, so that there is no “meeting of the minds” 

about the agreement. Without this “meeting of the minds,” a proper contact is not 

formed and, as a result, a rescission typically means that the contract never existed. 

In contrast, a retroactive cancellation implies that the contract was in existence for 

some period of time.

With the above concept in mind, AHIP suggests that, with respect to group 

coverage, a clarification be made acknowledging current practices that allow 

retroactive, “truing up” with respect to eligibility requirements under group 

coverage, without considering such practices to be rescissions. 
August 27, 2010

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B. Clarify That a Health Plan May Provide Notice of a Rescission If, After Good 

Faith Efforts, It Cannot Complete an Investigation

The IFR is silent as to how the rescission provision would apply in the event that a 

health plan is unable to complete its investigation of whether there has been fraud or 

an intentional misrepresentation of a material fact because of an individual’s or 

group’s lack of cooperation. For example, there could be a situation where an 

individual fails to acknowledge a request for information from the health plan or the 

individual declines to provide consent for a health care provider to provide relevant 

information to the health plan. 

Where a health plan has made good faith efforts to conduct an investigation, but 

is unable to do so because of non-responsiveness to requests for information or 

consent, AHIP suggests a clarification that the health plan may proceed to 

provide the 30-day notice required for a rescission and, if the non-responsiveness 

continues during the 30-day period, rescind the coverage.

IV. Patient Protections

Choice of Health Care Professional

Consumers Should be Allowed to Make Informed Choices within Long-Established 

Requirements for Access to Health Care Providers

We strongly support empowering patients to make informed choices with respect to their 

health care. The Affordable Care Act and the IFR provides three requirements relating to 

the choice of a health care professional with respect to a plan or health insurance 

coverage. These requirements support consumer access, without referral, to participating 

primary care providers, pediatricians (when acting as primary care providers for 

children), and to obstetrical and gynecological care.

In supporting these provisions, we believe clarification should be made that long-standing 

requirements with respect to availability of providers are not preempted in allowing 

access to participating providers. These long-standing requirements with respect to 

availability recognize that enrollees should not be required to travel long distances to 

access primary care providers. Indeed, these consumer protections are reflected in many 

states’ existing managed care access laws and regulations14

 14 For example, California has both general and very specific requirements for geographic availability of and 

accessibility to providers. See California Health & Safety Code Sections 1367(e) and 1373.3 and California Code of 

Regulations, Title 28, Sections 1300.51(d)(H)(i), 1300.67.1 and 1300.67.2.

, as well as in the standards 
August 27, 2010

Page 10

used for accrediting managed care organizations.15

In meeting these requirements and standards, health plans permit enrollees to select from 

among participating primary care providers in the same geographic area where the 

enrollee lives or works. In addition to allowing the health plan to comply with these state 

availability requirements and accreditation standards, this approach helps ensure timely 

and appropriate care. Studies have shown that consumers more appropriately access 

needed services, including preventive services, if they live in the same geographic area as 

their primary care provider.16

Additionally, agreements between health plans and physicians or medical groups often 

address the circumstances under which the physician agrees to accept and treat patients. 

Under these provisions, a physician’s or medical group’s obligation will be set forth and 

include specific geographic areas. Such provisions have the effect of promoting the 

quality of care, as well as reinforcing the expectation of the provider to treat a certain 

volume of patients in exchange for the negotiated reimbursement under the agreement 

with the health plan. 

AHIP members support the IFR provisions allowing consumer access, without 

referral, to participating primary care providers, including pediatricians, and 

obstetrical and gynecological care and recommend clarification that these 

provisions do not preempt application of geographic requirements with respect to 

selection of participating providers. 

Coverage of Emergency Services

AHIP and its members strongly support protecting consumer access to emergency 

services by ensuring that patients do not face barriers before accessing such services or 

unexpected costs after accessing them. We support the following provisions as consistent 

with these principles in providing coverage for emergency services:

• No need for consumers to obtain prior authorization (even if the emergency 

services are provided out-of-network);

 15 Standards and Guidelines for the Accreditation of Health Plans, National Committee for Quality Assurance, 

2010. 16 See, e.g., Blewett, Lynn A., PhD, et al. “When a Usual Source of Care and Usual Provider Matter: Adult 

Prevention and Screening Services.” J Gen Intern Med. 2008 Sept.; 23(9): pgs. 1354–60; Doescher, Mark P., MD, et 

al. “Preventive Care: Does Continuity Count?” J Gen Intern Med. 2004 June; 19(6): pgs. 632–37; Cardarelli, 

Roberto, DO, MPH and Thomas, Jennifer E., BS, “Having a Personal Health Care Provider and Receipt of 

Colorectal Cancer Testing,”Ann Fam Med. 2009 Jan.; 7(1): 5–10; Cardarelli, R. et al. “Having a personal healthcare 

provider and receipt of adequate cervical and breast cancer screening.” J Am Board Fam Med. 2010 Jan.-Feb.;

23(1): pgs. 75-81. 
August 27, 2010

Page 11

• No need for consumers to use in-network providers; and

• No need for consumers to pay out-of-network cost-sharing amounts for 

emergency services. 

A. Protect Consumers, Mitigate Costs, and Recognize the Role of State-Specific 

Factors by Revising the Methodology and Manner of Determining Reimbursement 

for Emergency Services 

We strongly believe that patients should not be subject to unexpected or unreasonable 

costs when faced with the necessity of utilizing emergency services. The preamble to 

the IFR, however, indicates that to avoid “defeat[ing] the purpose of the protections 

in the statute,” the regulations go beyond the language of the statute to require that a 

“reasonable amount be paid for services by some objective standard.”17

The IFR uses a three-pronged methodology to set the “reasonable amount” for out-ofnetwork emergency services as the greater of: (1) the median in-network rate; (2) the 

out-of-network rate (calculated in the manner generally used by the plan); and (3) the 

Medicare rate.

 The specific 

approach taken in the IFR, however, may have the unintended consequence of 

increasing costs for consumers, instead of the intended purpose of mitigating and 

protecting consumers from such costs. 

18 As a general matter, we suggest whether and how to approach the 

issue of reimbursement in such situations is a decision best left to the states, who can 

determine the best approach for consumers, based on their needs and the particular 

market factors in a given state. 

Whether included in the IFR or elsewhere, a statutory or regulatory methodology that 

establishes such reimbursement levels should be both workable and efficient, and not 

adversely impact consumers. The first prong of the test set forth in the IFR—the 

median in-network rate—is likely to both undermine networks (harming patients by 

denying them the quality and cost benefits of networks) and generate significant 

administrative costs (harming patients by ultimately leading to higher costs). 

The first prong is likely to undermine networks because, under the scheme set forth, 

some providers will have an incentive to drop out of networks to obtain a 

reimbursement rate that is, by definition, greater than the rate received by half of the 

in-network providers.19

 17 75 Fed. Reg. 37194 (June 28, 2010).

 This also will have the unintended and undesirable effect of 

18 75 Fed. Reg. 37240 (June 28, 2010).

19 Indeed, the IFR recognizes this potential impact of the test on rates, noting that “[t]hese interim final regulations 

may also require some health plans to make higher payments to out of network providers than are made under their 

current contractual arrangements.” 75 Fed. Reg. 37213 (June 28, 2010).
August 27, 2010

Page 12

increasing the number of patients subject to balance billing by providers.

The monitoring and calculation of a mean rate over broad provider networks and, in 

some cases, multiple networks, on an ongoing-basis also will be burdensome and 

expensive, generating significant administrative costs. These costs will be 

compounded by the absence of geographic, chronological, and other parameters in the 

calculation as established in the IFR. Thus, the application of the first prong of the 

test is likely to force consumers to shoulder additional financial responsibilities, 

resulting from narrower networks for emergency services and more balance billing by 

providers. 

Any methodology that uses the calculation of the “median” amount paid to innetwork emergency services providers, should, at the very least, include the following 

parameters:

• Allow the calculation to be made on an annual basis;

• Allow for good faith, methodology to estimate the median amount; and

• Allow the estimate to be based on categories, e.g., peer hospitals, types of 

providers, types of products, and different geographic areas.

AHIP recommends the Departments reconsider leaving the determination of 

whether and how to regulate reimbursement for out-of-network emergency 

services with the states. If, however, a methodology for determining a 

“reasonable amount” is retained in the IFR, we recommend removing the first 

prong of the test (relating to median in-network rates). Alternatively, we 

recommend establishing parameters, with flexibility, for determining the median 

in-network amount to protect consumers from the introduction of unnecessary 

costs in to the system. 

B. Protect Consumers from Balance Billing 

The Departments have suggested that the statute does not provide authority to enact 

balance billing protections for consumers.

20

To do this, we suggest a clarification that state laws prohibiting balance billing for 

out-of-network services that include emergency services are not intended to be 

preempted. We believe such state laws would not be preempted under section 2724 

 To fully protect patients from 

unexpected and unreasonable charges, it should be clarified that the Affordable Care 

Act and IFR do not preempt state laws that prohibit balance billing, and states should 

be encouraged to act to protect their residents from this practice. 

 20 75 Fed. Reg. 37194 (June 28, 2010).
August 27, 2010

Page 13

of the Public Health Service Act, which would apply to this provision.

21 Here, the 

establishment, implementation, or continuation in effect of state standards and 

requirements that prohibit balance billing in such situations would not prevent the 

application of a requirement of the statute, but rather would be consistent with the 

underlying goals of protecting patients from unreasonable and unexpected charges. 

In addition, we request clarification that the IFR does not prohibit assignment-ofbenefits requirements or provisions in health insurance coverage with respect to outof-network emergency services providers. These provisions allow direct payments to 

consumers in situations where services are provided by out-of-network providers. 

To achieve additional consumer protections, AHIP suggests clarification that the 

IFR neither disrupts existing state consumer protection laws addressing balance 

billing prohibitions nor precludes states from enacting new laws in this area. 

Further, we request acknowledgement that the IFR applies to comprehensive, major medical 

coverage, and not to the benefits classified as “excepted benefits” under subsection 2791(c) of 

the Public Health Service Act. The inapplicability of the Affordable Care Act’s insurance and 

market reform provisions to excepted benefits has been previously acknowledged for the new 

Internet portal and in the preamble of the Interim Final Rules for Grandfathered Health Plans, 

and we ask that the same recognition also be made with respect to this IFR. 

AHIP remains committed to our continued collaboration and dialogue and stands ready to 

provide information and support for the effective implementation of the IFR’s provisions 

regarding preexisitng condition exclusions, lifetime and annual dollar limits, rescissions, and 

patient protections. We appreciate the opportunity to comment on these important expansions of 

access to coverage, benefits, and health care providers and services.

Sincerely,

Jeffery L. Gabardi 

Senior Vice President, State Affairs

 21 42 USC § 300gg-23.