New Yorkers for Accessible Health Covera

August 27, 2010 

Secretary Timothy Geithner 

Department of the Treasury 

Secretary Hilda Solis 

Department of Labor 

Secretary Kathleen Sebelius 

Department of Health and Human Services 

Office of Consumer Information and Insurance Oversight 

P.O. Box 8016 

Baltimore, MD 21244-1850 

Attention: OCIIO–9994–IFC, 

To Whom it May Concern: 

New Yorkers for Accessible Health Coverage (NYFAHC) is a statewide coalition 

of 53 voluntary health organizations and allied groups who serve and represent 

people with chronic illnesses and disabilities, including mental illness for whom 

access to affordable, accessible comprehensive health coverage is essential to 

maintaining their well being. We appreciate this opportunity to comment on 

interim final rules implementing the Patient Protection and Affordable Care Act 

(ACA) provisions regarding preexisting conditions, lifetime and annual limits on 

benefits, rescissions, and patient protections. 

The Departments make great progress in implementing the consumer 

protections of the ACA with these interim final rules. However, we have 

concerns regarding three sections of the regulations: the rules restricting 

annual limits; the rules limiting rescissions; and the rules regarding coverage of 

emergency services (patient protections). We will address these sections in the 

same order as the interim final regulations notice. 

Lifetime and Annual limits (26 CFR § 54.9815-2711T, 29 CFR § 2590.715-2711, 

45 CFR§ 147.126) 

 

The restricted annual limits outlined in the interim final regulations should be 

slightly increased and allow adjustments in regions with higher-than-average 

health care costs. 

The ACA and the interim final regulations generally prohibit annual or lifetime 

caps on the dollar value of health benefits. The ACA allows insurers to establish 

a “restricted annual limit” on the dollar value of essential health benefits for 

plan years beginning prior to January 1, 2014. The interim final rules outline 

the following schedule of minimum permitted annual limits for this period: 

ge – August 27, 2010 
New Yorkers For Accessible Health Coverage 2 

 For a plan (or policy) year beginning on or after September 23, 2010 but 

before September 23, 2011, $750,000; 

 For a plan (or policy) year beginning on or after September 23, 2011 but 

before September 23, 2012, $1,250,000; and 

 For plan (or policy) years beginning on or after September 23, 2012 but 

before January 1, 2014, $2,000,000. 

The interim final regulations should be amended to increase the restricted 

annual limits and allow adjustments to these minimum limits in regions of the 

country with higher-than-average health care costs. A patient with a heart or 

lung condition or needing a bone marrow or other transplant could incur 

medical bills over $1,000,000 in one year. Accordingly, the restricted annual 

limit for plan or policy years beginning on or after September 23, 2010 but 

before September 23, 2011 should be raised to $1,000,000. The restricted 

annual limit for plan or policy years beginning on or after September 23, 2011 

but before September 23, 2012 should be raised to $1,500,000. And the rules 

should be amended to create a process by which the Secretary of Health and 

Human Services (HHS) can raise the restricted annual limits in regions like New 

York with higher-than-average health care costs. 

Because health plans may still apply non-monetary limits, such as numerical 

limits on physician visits or hospital days, HHS and US DOL should ensure that 

consumers understand what benefit limits can be applied and how they are in 

effect in their plans. These non-monetary limits are damaging to the adequacy 

of coverage for consumers, particularly those with chronic disease such as 

cancer, heart disease, and diabetes who have high utilization of health care. It 

should be made clear that insurance companies may not institute new limits to 

the volume of care as a proxy for annual limits on the dollar value of care. 

Additionally, the rules should make it clear that annual limits on a category of 

service, such as a dollar limit on the amount of hospital care that will be 

covered in a year, is an impermissible violation of the prohibition on annual 

limits. 

Finally, the Secretary of HHS’s future guidance on waivers of the annual limit 

rules should not permit insurance companies to continue to market limited 

benefit plans with annual limits far below the restricted annual limits. 

The preamble to the regulations states that the Secretary of HHS will be issuing 

further guidance related to the scope and process for applying for a waiver of 

the limited annual benefits rule. This guidance should not allow providers of 

“mini-med” plans to continue selling limited benefit plans with annual limits far 

below the restricted annual limits set out in this rule. The recession and related 

job loss have left many consumers out of work for long periods of time, leading 

to loss of work-related coverage; some consumers have used up the coverage 

they are permitted through COBRA or state mini-COBRA laws. These economic 

difficulties make consumers extremely vulnerable to being taken advantage of 

by companies that charge premiums while offering illusory coverage with very 

low annual limits. The ACA’s ban on annual and lifetime limits is intended to 
New Yorkers For Accessible Health Coverage 3 

protect consumers from these predatory plans, and the rules should not allow 

companies to continue to offer coverage that does not protect consumers. 

Prohibition on Rescissions (26 CFR § 54.9815-2712T, 29 CFR § 2590.715-2712, 

45 CFR§ 147.128) 

The ACA and these interim rules limit rescission of insurance coverage to cases 

of fraud, intentional misrepresentation of material fact, and failure to pay 

premiums. The interim rule’s also requires that a plan or insurance issuer 

provide at least 30 days advance written notice before coverage may be 

rescinded. 

The interim rules still allow insurance companies too much discretion in 

determining whether a consumer has committed fraud or an intentional 

misrepresentation of fact. The rules should provide a clear standard explaining 

that the burden of proof is on the plan or insurer when determining whether a 

consumer’s fraudulent act or misrepresentation was intentional. Further, the 

rules should outline a process requiring external review of the determination by 

an impartial party before the rescission takes effect. 

Patient Protections (26 CFR § 54.9815-2719AT, 29 CFR § 2590.715-2719A, 45 

CFR § 147.138) 

The ACA and the interim final regulations require a health plan or coverage that 

provides any benefits for emergency services to do so without requiring prior 

authorization and without regard to whether the provider is in-network with 

respect to emergency services. A plan with a network of providers that 

provides benefits for emergency services may not impose any administrative 

requirement or limitation on benefits more restrictive for out-of-network 

emergency services than that in effect for in-network emergency services. 

The ACA’s protections regarding coverage of emergency services are designed 

to protect consumers from receiving excessive bills for emergency services 

received without prior authorization or from out-of-network providers. They are 

also designed to eliminate the uncertainty that consumers face when forced to 

visit an out-of-network emergency room. Consumers may not be able to control 

which emergency room an ambulance takes them to. In many regards, the 

interim final rules regarding coverage of emergency services are extremely 

well-designed to protect consumers from these common experiences for 

consumers today. 

The rules’ failure to prohibit balance billing, however, leaves consumers open to 

receiving unaffordable bills from providers and prevents consumers from 

knowing, in advance, what level of debt they will incur during an emergency 

visit to an out-of-network provider. The rules should be changed to prevent or 

reduce balance billing by out-of-network providers for emergency services. 

Hospital billing reform measures in the ACA show the intent of Congress to 

make hospital billing fairer to consumers, but these protections are too 

narrowly drawn to protect insured consumers from balance billing by out-of-
New Yorkers For Accessible Health Coverage 4 

network emergency providers. Section 9007 of the ACA provides new 

requirements for tax-exempt hospitals regarding financial assistance and billing. 

This section prohibits tax-exempt hospitals from using gross charges when 

billing financial assistance-eligible individuals for emergency care; instead, the 

rule requires that they charge these individuals “not more than the amounts 

generally billed to individuals who have insurance covering such care.” 

Similarly, the interim rules under consideration should include a requirement 

that hospitals charge out-of-network patients no more than the amounts 

generally billed to in-network patients, or patients covered by Medicare. New 

York State has adopted this approach in our hospital financial assistance law for 

uninsured patients and patients who have hit their maximum benefits caps. 

Alternatively, a patient’s bill could be based on the rate the plan or issuer is 

required to pay under the rules. Hospitals should not be permitted to bill 

consumers protected by this statute using gross charges. 

Further, if a facility negotiates an agreement with an insurance plan to provide 

services at in-network rates, all providers practicing at the facility should be 

required to accept the negotiated rates. The rules should also clarify that any 

state laws that provide more protection for consumers in this regard are not 

pre-empted by the ACA. 

We appreciate this opportunity to comment these proposed rules. Thank you 

for your attention in this matter. 

Sincerely, 

Heidi Siegfried, Esq. 

Program Director