Aetna 

151 Farmington Avenue 

Hartford, CT 06156 

August 27, 2010 

Steven B. Kelmar 

Senior Vice President 

Government and Public Policy 

Law & Regulatory Affairs, RE6A 

(860) 273-2706 

Fax: (860) 273-8340 

Hon. Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services 

Hon. Hilda Solis, Secretary, U.S. Department of Labor 

Hon. Timothy Geithner, Secretary, U.S. Department of Treasury 

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services 

Attention: OCIIO-9994-IFC 

P.O. Box 8016 

Baltimore, MD 21244-1850 

Submitted via the Federal Regulations Web Portal, http://www.regulations.gov 

Re: Comments on Interim Final Rule on Preexisting Condition Exclusions for 

Children, Annual and Lifetime Limits, Rescissions, and Patient Protections 

and Request for Near-Term Guidance 

Dear Secretaries Sebelius, Solis, and Geithner: 

Aetna welcomes the opportunity to respond to the Departments of Health and Human 

Services, Labor, and Treasury (the "Departments") regarding the Interim Final Rule (the 

"IFR" or the "Regulation") on the Requirements for Group Health Plans and Health 

Insurance Issuers Under the Patient Protection and Affordable Care Act Relating to 

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

Protections as issued in the Federal Register on June 28, 2010 (75 Fed. Reg. 37188). 

Aetna is one of the nation's leading diversified health care benefits companies, providing 

members with information and resources to help them make better informed decisions 

about their health care. Our programs and services strive to improve the quality of health 

care while controlling rising employee benefits costs. Aetna offers a broad range of 

traditional and consumer-directed health insurance products and related services for early 

retirees, including medical, pharmacy, dental, behavioral health, group life, long-term 

care and disability plans and medical management capabilities. 

As a key stakeholder affected by the Patient Protection and Affordable Care Act 

("PPACA"), Aetna is committed to working with the Departments in developing 

reasonable and administrable standards for the implementation of PPACA. Aetna is 

filing these comments in response to the Departments' request for comments on the 
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Regulation. Our comments include specific recommendations for changes to the 

Regulation, as well as requests for clarification on particular areas of the Regulation. In 

connection with this comment letter, Aetna is requesting near-term clarification from the 

Departments regarding certain issues arising under the IFR. Aetna believes that the 

issues on which near-term guidance is requested are of such importance that the 

Departments should issue FAQs in the near-term. For purposes of assisting the 

Departments with such near-term guidance, Aetna has prepared proposed questions and 

answers for the Departments to consider. 

I. Annual and Lifetime Limits

 A. Day and Visit Treatment Limits Are Not Annual Limits 

Recommendation: The final Regulation should confirm that the annual and lifetime 

limits on the dollar value of health benefits does not apply to non-dollar treatment limits, 

including day and visit limits. 

Rationale: The PHSA § 2711, as added by PPACA, and the IFR provide that group 

health plans and health insurance issuers offering group or individual coverage may not 

impose annual or lifetime limits on the dollar value of essential health benefits. 75 Fed. 

Reg. at 37190; 45 CFR § 147.126. Notwithstanding this general rule, a plan or issuer 

may impose "restricted" annual limits on the dollar value of essential health benefits for 

plan and policy years beginning before January 1, 2014. 75 Fed. Reg. at 37191; 45 CFR 

§ 147.126(d). The IFR also allows for annual dollar limits on specific covered benefits 

that are not essential health benefits and for the complete exclusion of benefits for a 

condition. 75 Fed. Reg. at 37191; 45 CFR § 147.126(b). 

The IFR currently states that the limitations that are prohibited under the IFR are 

limitations on the annual dollar value of essential health benefits. As such, the IFR 

appears not to impose any limits on the use of non-dollar treatment limits, such as day or 

visit limits. The specific reference to "dollar" value in the IFR is consistent with, and we 

think required by, the statute, which by its terms did not include treatment limits. We 

also believe this represents good policy since treatment limits such as day and visit limits 

are a recognized and valued tool used by plans and insurers to contain costs and ensure 

that providers are rendering treatment within appropriate industry standards. Examples 

of day and visit limits include a plan or policy providing for ten physical therapy visits, 

60 days per year for a stay at a convalescent facility, and 120 visits per year for home 

health care. These limits are typically developed based on experience that visits or stays 

that are more extensive are not medically appropriate. If these treatment limits were 

prohibited, it is likely that plans and insurers would eliminate those benefits that are 

typically subject to day or visit limits, including others such as chiropractic treatments or 

skilled nursing visits, because being required to provide those benefits without limits 

would be cost prohibitive. Therefore, although we believe that the IFR allows these 

limits, express confirmation of this important point would be helpful. 
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B. Application of Annual and Lifetime Limits to Out-of-Network 

Services 

Recommendation: The final Regulation should be amended to provide that the annual 

and lifetime limits on the dollar value of health benefits does not apply to benefits, items, 

or services delivered by out-of-network providers. 

Additionally, the Departments should issue near-term guidance clarifying that plans and 

insurers may impose annual limits on benefits, items, or services delivered by out-ofnetwork providers. A proposed question and answer for the near-term guidance is set 

forth below. 

Rationale: As discussed above, the PHSA and the IFR set forth specific rules 

concerning the imposition of annual limits on essential benefits for years prior to and 

after 2014. Except for the restricted annual limits described in the IFR, a group health 

plan or issuer may not impose an annual limit on essential benefits. 75 Fed. Reg. at 

37191; 45 CFR § 147.126. 

Recognizing that eliminating annual limits would likely affect premiums, PPACA 

included a phase-in of the elimination of annual limits on essential benefits. The IFR also 

explicitly acknowledges the likely effect on premiums of the elimination of annual limits 

stating, "in order to mitigate the potential for premium increases . . . these interim final 

regulations adopt a three-year phased approach for restricted annual limits." 75 Fed. Reg. 

at 37191. It is unclear from the IFR whether the Departments were considering the 

effects on premiums of eliminating annual limits on essential benefits provided on an innetwork basis or an out-of-network basis, and the IFR is silent regarding whether the 

annual limit rules apply in the same manner to in-network and out-of-network items and 

services. In contrast, the distinction between in-network and out-of-network services is 

explicitly addressed in the IFR Relating to Coverage of Preventive Services (75 Fed. Reg. 

41726 (July 19, 2010)) ("Preventive Care IFR"), where the Departments concluded that a 

plan or insurer that has a network of providers is not required to provide benefits for 

items or services that are delivered by an out-of-network provider. 

Providing benefits through in-network providers is an effective tool used by plans and 

issuers to control cost increases and promote quality and efficiency. In the Preventive 

Care IFR, the Departments explicitly recognize the important role of value-based 

insurance designs (i.e., in-network systems) to group health plans and issuers. 75 Fed. 

Reg. at 41729. The Preventive Care IFR allows cost-sharing for preventive care services 

delivered by an out-of-network provider while no cost-sharing may be imposed on 

preventive care services delivered by an in-network provider. The same rationale of 

supporting value-based insurance designs should apply to annual limits for services 

delivered by in-network and out-of-network providers, (i.e., plans and issuers who are 

prohibited from imposing annual limits on essential benefits delivered on an in-network 

basis should be permitted to impose annual limits on essential benefits delivered on an 

out-of-network basis). Requiring plans and issuers to eliminate annual limits on essential 

benefits provided on an out-of-network basis may result in prohibitive cost increases 

which could result in plans and issuers eliminating out-of-network systems altogether. 
4

This conflicts with the goal of the Affordable Care Act as articulated in the IFR Relating 

to Status as a Grandfathered Health Plan (75 Fed. Reg. 34538, 34546) (June 16, 2010)), 

which is to allow those that like their healthcare to keep it. Permitting annual limits to be 

retained for services delivered on an out-of-network basis would (i) be consistent with the 

approach the Departments took in the Preventive Care IFR, (ii) foster the use of valuebased insurance designs, and (iii) increase the likelihood that plans and issuers would 

continue to offer out-of-network services. 

Proposed Near-Term Guidance FAQ: "Out-of-Network Dollar Limits"

Question: Do the annual limit restrictions, which prohibit a plan or insurer from 

imposing annual limits on benefits below a minimum dollar threshold prior to 2014, and 

fully prohibit annual limits in 2014, apply to items or services delivered by an out-ofnetwork provider? 

Answer: No. The IFR sets forth specific rules concerning the imposition of annual limits 

for years prior to and after 2014. However, the IFR is silent regarding whether the annual 

limit rules apply in the same manner to in-network and out-of-network items and 

services. In contrast, the distinction between in-network and out-of-network services is 

explicitly addressed in the IFR Relating to Coverage of Preventive Services (75 Fed. Reg. 

41726 (July 19, 2010)), where the Departments concluded that a plan or insurer that has a 

network of providers is not required to provide benefits for items or services that are 

delivered by an out-of-network provider. The Departments have determined that the 

annual limit rules should be interpreted in a consistent manner and that a plan or insurer 

that has a network of providers should be permitted to impose annual limits for items or 

services that are delivered by an out-of network provider without restriction. As stated in 

the IFR Relating to Status as a Grandfathered Health Plan (75 Fed. Reg. 34538, 34546) 

(June 16, 2010)), a goal of the Affordable Care Act is to allow those that like their 

healthcare to keep it. This position increases the likelihood that out-of-network coverage 

options will continue to be offered by plans and insurers, thus supporting that goal. 

 C. Exclusion of All Benefits for a Condition Is Permissible 

Recommendation: The final Regulation should retain the rule that exclusion of all 

benefits for a condition is not considered an annual or lifetime limit on the dollar value of 

essential health benefits. 

Rationale: The IFR provides that group plans and insurers are not prohibited under the 

annual and lifetime limit rule from excluding all benefits for a condition. 75 Fed. Reg. at 

37191; 45 CFR § 147.126(b)(2). Retaining the rule permitting exclusion of all benefits 

for a condition would provide certainty to plans and insurers that plans and policies do 

not need to be redesigned to cover benefits for conditions that the plan or insurer does not 

already cover. Such certainty is critical to planning and budgeting for benefits costs. 

Furthermore, plans and insurers are in the best position to evaluate the effectiveness and 

medical necessity of treatments, including whether certain conditions can be treated 

effectively, and such evaluations are an important tool to manage health care costs and 

eliminate wastefulness. Finally, in 2014, insurers offering coverage in the individual and 
5

small group markets must provide coverage that includes essential health benefits. See

PHSA §§ 2707(a). Additional restrictions on the ability of insurers to limit coverage are 

not required and would be inconsistent with the requirement to provide essential benefits. 

II. Rescissions

 A. Retroactive Correction of Routine Enrollment Errors 

Recommendation: The final Regulation should be amended to provide that retroactive 

correction of an enrollment error that is discovered within 30 days of the effective date of 

coverage is not a rescission. 

Additionally, the Departments should issue near-term guidance clarifying that 

notwithstanding the IFR's rules on rescission, a plan or insurer may retroactively correct 

an enrollment error that is discovered within 30 days of the effective date of coverage and 

that in circumstances where the plan terms are clear on who is eligible for coverage and 

such plan terms have been communicated to employees, plans and insurers may treat an 

employee-made enrollment error, which clearly conflicts with a plan's eligibility 

provision, as an intentional misrepresentation of material fact that would permit 

rescission. A proposed question and answer for the near-term guidance is set forth 

below. 

Rationale: The PHSA § 2712 and the IFR provides that a group health plan and health 

insurance issuers offering group or individual health insurance coverage may not rescind 

coverage with respect to an enrollee except where the individual has performed an act or 

practice that constitutes fraud or makes an intentional material misrepresentation of a 

material fact, as prohibited by the plan or coverage. 75 Fed. Reg. at 37192; 45 CFR § 

147.128(a). The IFR defines a rescission as a cancellation or discontinuance of coverage 

that has a retroactive effect. 75 Fed. Reg. 37192; 45 CFR § 147.128(a)(2). 

Enrollment errors occur routinely because of the complexity of the enrollment process for 

many group health plans. An employee is often presented with a menu of enrollment 

options, and eligibility terms often vary between categories of employees (e.g., part-time 

employees may be subject to a different waiting period or eligible for different benefit 

plans than full-time employees). Information is often communicated and transmitted 

electronically, which requires users to understand systems and exercise care to avoid 

mistakes. Errors frequently occur, due to actions taken by the employer or the employee, 

or due to limitations of an employer's payroll system itself. These types of enrollment 

errors are usually caught by employers and insurers within a short period after the error 

occurs – often within 30 days. The errors are corrected by undoing the transaction and 

returning any premium that may have been paid by the employer or employee. 

Correcting common enrollment errors such as those just described does not operate as a 

rescission of coverage under the plain language of the IFR because the individual is not 

"covered under the plan" as required under the IFR. 45 CFR § 147.128(a)(1). Group 

health plans generally require that an individual be eligible for coverage before an 

individual will be "covered under the plan." The IFR does not discuss when an 
6

individual should be considered to be "covered" under the plan or coverage for purposes 

of this rule, but makes clear that where a plan mistakenly treats an individual as covered 

for some period of time, retroactive termination of coverage would be treated as a 

rescission. (147.128(a)(3), Example 2). The enrollment errors described are 

administrative errors in advance of enrollment (often caused by the employee) and should 

not operate to extend coverage to otherwise ineligible individuals or to treat an otherwise 

ineligible individual as "covered" and entitled to protection under the rescission rule. 

Because the correction of these errors does not operate to rescind valid coverage under 

the plan, the rules relating to rescission should not apply when correcting the error. 

A second approach to addressing the correction of routine enrollment errors would be for 

the Departments to clarify in the final Regulation that employee-made enrollment errors 

may be deemed by plans and insurers to be intentional misrepresentations of material 

fact. This rule would apply in circumstances where the plan terms are clear on who is 

eligible for coverage and such plan terms have been communicated to employees. In 

those circumstances, it would be appropriate to treat the enrollment error, which clearly 

conflicts with a plan's eligibility provision, as an intentional misrepresentation of material 

fact that would permit rescission. 

Proposed Near-Term Guidance FAQ: "Correction of Routine Enrollment Errors"

Question: Do the rules on rescission apply to employer and employee enrollment 

mistakes in connection with group health coverage where such mistakes are discovered 

within 30 days of the effective date of coverage and promptly corrected upon discovery? 

Answer: No. The IFR provides that a group health plan or health insurance insurer 

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

the plan, or under the policy, certificate, or contract of insurance, once the individual is 

"covered" under the plan or coverage. The IFR does not discuss when an individual 

should be considered to be "covered" under the plan or coverage for purposes of this rule, 

but makes clear that where a plan mistakenly treats an individual as covered for some 

period of time, retroactive termination of coverage would be treated as a rescission. (45 

CFR § 147.128(a)(3), Example 2). 

The Departments are aware that the enrollment process for many group health plans may 

be complex. An employee is often presented with a menu of enrollment options, and 

eligibility terms often vary between categories of employees (e.g., part-time employees 

may be subject to a different waiting period or eligible for different benefit plans than 

full-time employees). Information is often communicated and transmitted electronically, 

requiring users to understand systems and exercise care to avoid mistakes. Errors 

frequently occur, due to actions taken by the employer or the employee, or due to 

limitations of an employer's payroll system itself. 

Given this complexity, the Departments believe that it would be appropriate to allow a 

short-term correction period following enrollment, during which an individual is not 

considered to be "covered" for purposes of the rescission rules if a mistake is discovered. 

Thus, notwithstanding the IFR's rules on rescission, a plan or insurer may retroactively 
7

correct an enrollment mistake that is discovered within 30 days of the effective date of 

coverage. Such correction must take place promptly upon discovery and must place the 

employee in the financial position he or she would have been in had the mistake not 

occurred. For example, where an employer enrolls an employee in a coverage option the 

employee did not elect and the mistake is discovered within 30 days of the effective date 

of coverage, the employer may enroll the employee in the correct coverage option and 

treat such employee as if he or she had been enrolled in the correct coverage option from 

the first day of the coverage period (i.e., collect or refund premiums/contributions as 

applicable, and pay claims based on the correct coverage option). 

Furthermore, in circumstances where the plan terms are clear on who is eligible for 

coverage and such plan terms have been communicated to employees, plans and insurers 

may treat an employee-made enrollment error, which clearly conflicts with a plan's 

eligibility provision, as an intentional misrepresentation of material fact that would 

permit rescission. For example, where an employee mistakenly elects coverage for an 

individual who is not eligible under the terms of the plan and the mistake is discovered 

within 30 days of the effective date of coverage, the employer may rescind such 

coverage, fully refund the premiums or contributions for such coverage and deny any 

claims for expenses incurred by that individual during the 30-day period. 

 B. Pending Claims During the Rescission Notice Period 

Recommendation: The final Regulation should be amended to provide that a plan or 

insurer may pend claims during the 30-day notice period and internal appeal period. 

Additionally, the Departments should issue near-term guidance clarifying that plans and 

insurers are permitted to pend claims during the 30-day notice period that is required in 

the case of rescission and the internal appeal period. A proposed question and answer for 

the near-term guidance is set forth below. 

Rationale: The IFR provides that a group health plan or issuer must provide at least 30 

days advance written notice to each participant who would be affected before coverage 

may be rescinded, regardless of, in the case of group coverage, whether the coverage is 

insured or self-insured, or whether the rescission applies to an entire group or only to an 

individual within the group. 75 Fed. Reg. 37193; 45 CFR § 147.128(a)(1). However, the 

IFR does not address whether claims must be paid during this 30-day notice period, and 

whether it would be permissible for a plan or insurer to hold or "pend" a claim during this 

period. Similarly, under the PHSA § 2719(a)(1)(C), a plan or insurer must provide 

continued coverage pending the outcome of an internal appeal. The IFR for Group 

Health Plans and Health Insurance Issuers Relating to Internal Claims and Appeals and 

External Review Processes Under the Patient Protection and Affordable Care Act (75 

Fed. Reg. 43330 (July 23, 2010)) also does not address whether claims must be paid 

during this period. 

Pending claims during the 30-day notice period creates the least administrative burden for 

the plan, employer, and participant because where rescission is permitted, the plan or 

insurer will have the ability to recover the amount of claims paid from the first day that 
8

coverage was effective up through the date of the rescission (less premiums or 

contributions paid by the participant). Similarly, where a claim denial is upheld 

following an appeal, the plan or insurer would have no obligation to pay the claim. 

Therefore, requiring a plan or insurer to pay claims during the 30-day notice period or 

internal appeal period only to then have to recover the claims paid would create 

unnecessary administrative burdens for the plan, insurer and participant, and risk that the 

plan or insurer may not be able to fully recover amounts that were not properly owing. 

Accordingly, plans and insurers should be permitted to pend claims during the 30-day 

notice period and internal appeal period. If the plan or insurer were to conclude that 

rescission was not permitted, or if a claim denial was overturned on appeal, the pended 

claims would be paid. 

Proposed Near-Term Guidance FAQ: "Pending Claims"

Question: Are plans or insurers permitted to pend claims (i.e., hold for later payment) 

during the 30-day notice period that is required in the case of rescission? 

Answer: Yes. The IFR provides that a group health plan, or a health insurance insurer 

offering group or individual health insurance coverage, must provide at least 30 days 

advance written notice to each participant who would be affected before coverage may be 

rescinded, regardless of, in the case of group coverage, whether the coverage is insured or 

self-insured, or whether the rescission applies to an entire group or only to an individual 

within the group. However, the IFR does not address whether claims must be paid during 

this 30-day notice period, and whether it would be permissible for a plan or insurer to 

hold or "pend" a claim. Similarly, under the PHSA § 2719(a)(1)(C), a plan or insurer 

must provide continued coverage pending the outcome of an internal appeal. The IFR 

Regarding Internal Claims and Appeals and External Review Process (75 Fed. Reg. 

43330 (July 23, 2010)) also does not address whether claims must be paid during this 

period of continued coverage. 

The Departments have determined that, because the rules described above are silent 

concerning the requirement to pay a claim during the period of continued coverage, 

nothing in these rules would preclude a plan or insurer from pending claims incurred 

during the 30-day notice period or during the internal appeal period. This position also 

creates the least administrative burden for the plan, employer and participant. Where 

rescission is permitted (and no claims are pended), the plan or insurer has the ability to 

recover the amount of claims paid from the first day that coverage was effective up 

through the date of the rescission (less premiums or contributions paid by the participant). 

If claims are pended, the need to collect during this period is avoided. Similarly, where a 

claim denial is upheld following an appeal, the plan or insurer would have no obligation 

to pay the claim. Therefore, requiring a plan or insurer to pay claims during the 30 day 

notice period or internal appeal period only to recover the claims paid would create 

unnecessary administrative burden for the plan, employer and participant. Of course, if 

the plan or insurer were to conclude that rescission was not permitted, or if a claim denial 

is overturned on appeal, the pended claims would need to be paid. 
9

C. Failure to Cooperate in Investigation of Fraud or Intentional 

Misrepresentation 

Recommendation: The final Regulation should be amended to provide that an 

individual's refusal to cooperate, including not responding to a request for information 

within a reasonable period of time, with an investigation by a plan or insurer into whether 

fraud or intentional misrepresentation has occurred, may be deemed fraud or intentional 

misrepresentation, thereby allowing rescission of coverage. 

Additionally, the Departments should issue near-term guidance clarifying that where a 

plan or insurer attempts, in good faith, to conduct an investigation to determine whether 

fraud or intentional misrepresentation has occurred and an individual refuses to cooperate 

with such investigation (including not responding to a request for information within a 

reasonable period of time), it would be appropriate for the plan or insurer to deem fraud 

or intentional misrepresentation to have occurred, thereby allowing rescission of 

coverage. A proposed question and answer for the near-term guidance is set forth below. 

Rationale: As discussed above, the PHSA and the IFR provides that a group health plan 

and health insurance issuers offering group or individual health insurance coverage may 

not rescind coverage with respect to an enrollee except where the individual has 

performed an act or practice that constitutes fraud or makes an intentional material 

misrepresentation of a material fact, as prohibited by the plan or coverage. 75 Fed. Reg. 

at 37192; 45 CFR § 147.128(a). The IFR defines a rescission as a cancellation or 

discontinuance of coverage that has a retroactive effect. 75 Fed. Reg. 37192; 45 CFR § 

147.128(a)(2). 

The IFR does not outline or discuss the steps that a plan or issuer should take to establish 

whether fraud or intentional misrepresentation has occurred. At a minimum, these steps 

should include an investigation of the facts, including consideration of any of the facts 

that the individual considers relevant to the investigation. Such a process would be 

consistent with the existing Department of Labor claims regulations and the newly issued 

IFR Relating to Internal Claims and Appeals and External Review Processes (75 Fed. 

Reg. 43330 (July 23, 2010)) ("Appeals IFR"). In both the existing claims regulations and 

the Appeals IFR, a claimant must be provided substantial amounts of information 

explaining any adverse benefit determination, and a claimant must be provided an 

opportunity to respond to such information and provide additional information as desired. 

The Appeals IFR expressly states that "by helping to ensure prompt and precise 

adherence to contract terms and by improving the flow of information between plans and 

enrollees" the Appeals IFR "will bolster the efficiency of labor, health care, and insurance 

markets." 45 Fed. Reg. at 43342. 

The flow of information between plans and enrollees is critical to making fair and 

uniform determinations on benefits, including determinations regarding rescissions of 

coverage. If a group health plan or issuer determines that rescission may be appropriate 

and attempts to gather additional information from the individual who may be subject to 

the rescission of coverage, the individual should not be permitted to frustrate the 

investigation or determination by refusing or failing to respond to requests for more 
10

information from the group health plan or issuer. To allow otherwise would be 

contradictory to the goals of the Appeals IFR and would result in individuals being able 

to avoid rescissions of coverage even where the individuals have committed fraud or 

intentionally misrepresented material facts. Therefore, the Departments should issue 

guidance to clarify that where a plan or insurer attempts, in good faith, to conduct an 

investigation to determine whether fraud or intentional misrepresentation has occurred 

and an individual refuses to cooperate with such investigation (including not responding 

to a request for information within a reasonable period of time), it would be appropriate 

for the plan or insurer to deem fraud or intentional misrepresentation to have occurred, 

thereby allowing rescission of coverage. 

Proposed Near-Term Guidance FAQ: "Failure to Cooperate"

Question: Can a participant who fails to cooperate in connection with an investigation of 

fraud or intentional misrepresentation (e.g., failure to respond to request for medical 

records) be deemed to engage in fraud or intentional misrepresentation, allowing the 

health plan to rescind coverage under the plan, policy, certificate, or contract of 

insurance? 

Answer: Yes. The IFR provides that the only situations in which rescission of coverage 

is permitted are those in which an individual (or a person seeking coverage on behalf of 

the individual) performs an act, practice, or omission that constitutes fraud, or makes an 

intentional misrepresentation of material fact, as prohibited by the terms of the plan or 

coverage. However, the IFR does not discuss the steps that a plan or insurer must take to 

establish whether fraud or intentional misrepresentation has occurred. At a minimum, 

these steps should include an investigation of the facts, including consideration of any of 

the facts that the participant considers relevant to the investigation. Therefore, where a 

plan or insurer attempts, in good faith, to conduct an investigation to determine whether 

fraud or intentional misrepresentation has occurred and a participant refuses to cooperate 

with such investigation (including not responding to a request for information within a 

reasonable period of time), the Departments have determined that it would be appropriate 

for the plan or insurer to deem fraud or intentional misrepresentation to have occurred, 

allowing rescission of coverage. 

III. Patient Protections

 A. Geographic Limits on Choice of Primary Care Provider 

Recommendation: The final Regulation should be amended to provide that a plan or 

insurer may limit a participant's choice of primary care provider, including a pediatrician 

for a child, to the geographic region in which the participant resides. 

Rationale: The PHSA § 2719A(a) and the IFR provide that group health plans and 

health insurance issuers offering coverage to individual or group health plans must allow 

an individual to choose his or her primary care provider and must allow a child to 

designate a pediatrician as his or her primary care provider. 75 Fed. Reg. 37193; 45 CFR 

§ 147.138(a). Furthermore, if a plan or insurer requires a participant to designate a 
11

primary care provider, the plan or insurer must permit each participant to designate "any 

participating primary care provider who is available to accept" the participant. 75 Fed. 

Reg. 37193; 45 CFR § 147.138(a)(1)(i). These rules only apply to plans or insurers with 

networks of providers. 

Although the rule only applies to plans or insurers with networks of providers, the IFR is 

silent on whether a plan or insurer may require that the designated primary care provider 

be within the geographic region of the network of providers in which the participant 

resides. Nevertheless, reading the rule to require that a designated primary care provider 

be within the geographic region of the network of providers in which the participant 

resides would be consistent with the rule's provision that a provider must be "available to 

accept" the participant because "available," by definition, means that something is able to 

be used or obtained. A provider who is in a participant's geographic region is able to be 

used and will be able to provide primary care services while a provider in another 

geographic region is likely too far away from the participant's residence for the 

participant to be able to use the primary care provider effectively. Networks of providers, 

which are usually grouped by geographic region, are designed to allow participants 

access to a wide-range of providers within their area who are properly credentialed and 

who agree to provide services at a negotiated rate. The use of geographically based 

provider networks is a common practice and a reasonable one to continue, and 

accordingly, the final Regulation should clarify that the continued use of geographic 

regions is permitted under this rule. 

B. Calculation of Median Amounts for Payment of Out-of-Network 

Emergency Services 

Recommendation: The final Regulation should be amended to provide that plans and 

issuers are permitted to determine the median of negotiated in-network rates for purposes 

of paying out-of-network emergency services using any reasonable good faith method 

provided that the plan or issuer uses the method or median rate for a set period of time. 

Additionally, the Departments should issue near-term guidance clarifying that plans and 

insurers are permitted to determine the median of negotiated in-network rates using any 

reasonable good faith method provided that the plan or issuer uses the method or median 

rate for a set period of time. A proposed question and answer for the near-term guidance 

is set forth below. 

Rationale: The PHSA § 2719A(b) and the IFR provide that if a participant obtains 

emergency services out-of-network, a health plan or insurers may only charge the 

copayment or coinsurance applicable to in-network emergency services and must provide 

benefits equaling the greatest of three amounts: (1) the median of negotiated in-network 

rates; (2) the generally applicable out-of-network cost; or (3) the Medicare rate. 75 Fed. 

Reg. at 37194; 45 CFR § 147.138(b)(3). A provider may "balance bill" over the amount 

that the plan or issuer is required to pay. Id. 

The IFR contains two simple examples involving nine and ten providers that illustrate 

one way in which median payments can be calculated. See 45 CFR § 147.138(b)(3)(iii), 
12

Examples 3 and 4. It is common for plans and insurers to have thousands of different 

payment agreements with providers, which are revised on a rolling basis throughout the 

year. Determining the median of negotiated in-network rates based on changing rates 

will be administratively difficult for plans and insurers. Accordingly, plans and insurers 

should be permitted to determine the median of negotiated in-network rates using any 

reasonable good faith method provided that the plan or insurers uses the method or 

median rate for a set period of time, for example, one year. 

Proposed Near-Term Guidance FAQ: "Calculating Median In-Network Rate"

Question: Can a plan or issuer develop its own reasonable good faith method for 

determining the median rate for in-network services, and once such method is developed, 

continue to use that method for a set period of time (e.g., a year)? 

Answer: Yes. The IFR provides that if a participant obtains emergency services out-ofnetwork, a health plan only may charge the copayment or coinsurance applicable to innetwork emergency services and must provide benefits equaling the greatest of three 

amounts: (1) the median of negotiated in-network rates; (2) the generally applicable outof-network cost; or (3) the Medicare rate. A provider may "balance bill" over the amount 

the plan is required to pay. Although the IFR contains a simple example involving nine 

providers that is intended to illustrate one way in which median payments can be 

calculated (45 CFR § 147.138(b)(3)(iii), Example 3), we are aware that insurers may 

have thousands of different payment agreements with providers, which are revised on a 

rolling basis throughout the year. Because the rate is constantly changing, the 

Departments have determined that the insurer can develop its own reasonable method for 

determining the median rate for in-network services. However, once such method is 

developed, the insurer must continue to use that method for a set period of time (e.g., a 

year). 

C. Limit the Calculation of Provider Payments for Out-of-Network 

Emergency Services to Situations Where There Is Balance Billing 

Recommendation: The final Regulation should be amended to provide that in 

circumstances where no balance billing is imposed on a participant for emergency 

services delivered by an out-of-network provider, it is not necessary for a plan or insurer 

to follow the out-of-network emergency provider payment methodology. 

Additionally, the Departments should issue near-term guidance clarifying that the 

provider payment methodology for out-of-network emergency services is limited to 

situations where there is balance billing, and accordingly, if no balance billing is 

imposed, it is not necessary to follow the provider payment methodology set forth in the 

IFR. A proposed question and answer for the near-term guidance is set forth below. 

Rationale: As discussed in the Preamble to the IFR, the reason that the Departments 

needed to develop a method to ensure that plans or insurers pay a reasonable amount to 

an out-of-network provider is because in many cases, balance billing is used. 

Specifically, the Preamble states, "...[I]t is necessary that a reasonable amount be paid 
13

before a patient becomes responsible for a balance billing amount." 75 Fed. Reg. at 

37194. If no balance billing is imposed, it should not be necessary to follow the provider 

payment methodology set forth in the IFR. For example, where a participant is informed 

in his or her certificate of coverage and explanations of benefits (EOBs) that the 

participant is not responsible for balance billing for out-of-network emergency services 

and that the participant should contact the insurer to take care of any balance billing that 

the provider might pursue, the participant is not exposed to balance billing. In that case, 

when the participant obtains emergency services out-of-network, the insurer would pay 

either the entire billed charge of the provider or pay the provider a fixed payment and 

negotiate with the provider to resolve any excess charges above the fixed payment. 

Because the participant would not be exposed to balance billing and would have an 

enforceable right under the participant's coverage document, the rationale for imposing 

the provider payment methodology should not apply. Accordingly, plans and insurers 

should be permitted to pay either the entire billed charge of the out-of-network provider 

or pay the out-of-network provider a fixed payment and negotiate with the out-ofnetwork provider to resolve any excess charges above the fixed payment the plan or 

insurer made. 

Proposed Near-Term Guidance FAQ: "No Balance Billing"

Question: Is the rule specifying a provider payment methodology for out-of-network 

emergency services limited to situations where there is balance billing? 

Answer: Yes. As discussed in the preamble to the IFR, the reason that the agencies 

needed to develop a method to ensure that plans or insurers pay a reasonable amount to a 

provider is because in many cases, balance billing is used. Specifically, the preamble 

states, "...[I]t is necessary that a reasonable amount be paid before a patient becomes 

responsible for a balance billing amount." 75 Fed. Reg. 37194. If no balance billing is 

imposed, it is not necessary to follow the provider payment methodology set forth in the 

IFR. For example, where a participant is told in his or her certificate of coverage and in 

his or her EOBs that the participant is not responsible for balance billing for out-ofnetwork emergency services and that the participant should contact the insurer to take 

care of any balance billing that the provider might pursue, the participant is not exposed 

to balance billing. In that case, when the participant obtains emergency services out-ofnetwork, the insurer would pay either the entire billed charge of the provider or pay the 

provider a fixed payment and negotiate with the provider to resolve any excess charges 

above the fixed payment the plan or insurer made. Because the participant would not be 

exposed to balance billing and would have an enforceable right under the participant’s 

coverage document, the rationale for imposing the provider payment methodology would 

not apply. 

* * * 
14

Aetna is pleased to have the opportunity to provide comments regarding the Interim Final 

Rule relating to Relating to Preexisting Condition Exclusions, Lifetime and Annual 

Limits, Rescissions, and Patient Protections. Thank you for considering our comments 

and our suggestions for near-term guidance. Should you have any questions, please feel 

free to contact me. 

Sincerely, 

Steven B. Kelmar