[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Proposed Rules]
[Pages 81544-81547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32612]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 147


Request for Information Regarding Value-Based Insurance Design in 
Connection With Preventive Care Benefits

AGENCIES:  Internal Revenue Service, Department of the Treasury; 
Employee Benefits Security Administration, Department of Labor; Office 
of Consumer Information and Insurance Oversight, Department of Health 
and Human Services.

ACTION: Request for information.

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SUMMARY: This document contains a request for information on how group 
health plans and health insurance issuers can employ value-based 
insurance design in the coverage of recommended preventive services.

DATES: Comments are due on or before February 28, 2011.

ADDRESSES: Written comments may be submitted to any of the addresses 
specified below. Any comment that is submitted to any Department will 
be shared with the other Departments. Please do not submit duplicates.
    All comments will be made available to the public. Warning: Do not 
include any personally identifiable information (such as name, address, 
or other contact information) or confidential business information that 
you do not want publicly disclosed. All comments may be posted on the 
Internet and can be retrieved by most Internet search engines. Comments 
may be submitted anonymously.
    Department of Labor. Comments to the Department of Labor, 
identified by VBID, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected].
     Mail or Hand Delivery: Office of Health Plan Standards and 
Compliance Assistance, Employee Benefits Security Administration, Room 
N-5653, U.S. Department of Labor, 200 Constitution Avenue, NW., 
Washington, DC 20210, Attention: VBID.
    Comments received by the Department of Labor will be posted without 
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and 
available for public inspection at the Public Disclosure Room, N-1513, 
Employee Benefits Security Administration, 200 Constitution Avenue, 
NW., Washington, DC 20210.
    Department of Health and Human Services. In commenting, please 
refer to file code HHS-OS-2010-002. Because of staff and resource 
limitations, we cannot accept comments by facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
     Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the instructions under 
the ``More Search Options'' tab.
     By regular mail. You may mail written comments to the 
following address ONLY: Office of Consumer Information and Insurance 
Oversight, Department of Health and Human Services, Attention: HHS-OS-
2010-002, Room 445-G, Hubert H. Humphrey Building, 200 Independence 
Avenue, SW., Washington, DC 20201.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
     By express or overnight mail. You may send written 
comments to the following address ONLY: Office of Consumer Information 
and Insurance Oversight, Department of Health and Human Services, 
Attention: HHS-OS-2010-002, Room 445-G, Hubert H. Humphrey Building, 
200 Independence Avenue, SW., Washington, DC 20201.
     By hand or courier. If you prefer, you may deliver (by 
hand or courier) your written comments before the close of the comment 
period to the following address: Office of Consumer Information and 
Insurance Oversight, Department of Health and Human Services, 
Attention: HHS-OS-2010-002, Room 445-G, Hubert H. Humphrey Building, 
200 Independence Avenue, SW., Washington, DC 20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the OCIIO drop slots located in the main lobby of the building. A 
stamp-in clock is available for persons wishing to retain a proof of

[[Page 81545]]

filing by stamping in and retaining an extra copy of the comments being 
filed.)
    Comments mailed to the address indicated as appropriate for hand or 
courier delivery may be delayed and received after the comment period.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 
three weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. EST. To schedule an appointment to view public comments, 
phone 1-800-743-3951.
    Internal Revenue Service. Comments to the IRS, identified by REG-
120391-10 VBID, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: CC:PA:LPD:PR (REG-120391-10 VBID), Room 5205, 
Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044.
     Hand or courier delivery: Monday through Friday between 
the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-120391-10 VBID), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, 
NW., Washington DC 20224.
    All submissions to the IRS will be open to public inspection and 
copying in Room 1621, 1111 Constitution Avenue, NW., Washington, DC 
from 9 a.m. to 4 p.m.

FOR FURTHER INFORMATION CONTACT: Amy Turner or Beth Baum, Employee 
Benefits Security Administration, Department of Labor, at (202) 693-
8335; Karen Levin, Internal Revenue Service, Department of the 
Treasury, at (202) 622-6080; Lisa Campbell, Office of Consumer 
Information and Insurance Oversight, Department of Health and Human 
Services, at (301) 492-4100.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor concerning employment-based 
health coverage laws may call the EBSA Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the Department of Labor's Web site (http://www.dol.gov/ebsa). In addition, information from HHS on private health 
insurance for consumers can be found on the Centers for Medicare & 
Medicaid Services (CMS) Web site (http://www.cms.hhs.gov/HealthInsReformforConsume/01_Overview.asp) and the Office of Consumer 
Information & Insurance Oversight (OCIIO) Web site (http://www.hhs.gov/OCIIO).

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 1001 of the Patient Protection and Affordable Care Act (the 
Affordable Care Act) added a new section 2713 to the Public Health 
Service Act (the PHS Act), relating to preventive care. The Affordable 
Care Act also added a new section 715(a)(1) to the Employee Retirement 
Income Security (ERISA) and section 9815(a)(1) to the Internal Revenue 
Code (the Code) incorporating the provisions of part A of title XXVII 
of the PHS Act (including PHS Act section 2713) into ERISA and the 
Code, making section 2713 applicable to group health plans and health 
insurance coverage in connection with group health plans. The 
Departments of the Treasury, Labor, and Health and Human Services (the 
Departments) published interim final regulations implementing the 
provisions of PHS Act section 2713 on July 19, 2010, at 75 FR 41726.
    Section 2713 of the PHS Act and the Departments' implementing 
regulations apply to group health plans and health insurance issuers 
offering group or individual health insurance coverage that is not 
grandfathered.\1\ These provisions require such plans and issuers to 
provide coverage for recommended preventive services, without imposing 
cost-sharing requirements.\2\ The complete list of items and services 
that are required to be covered under these interim final regulations 
can be found at http://www.HealthCare.gov/center/regulations/prevention.html.
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    \1\ For information on whether a particular group health plan or 
health insurance coverage is a grandfathered plan, see Affordable 
Care Act section 1251 and the Departments' implementing regulations 
at 75 FR 34538 (as amended by 75 FR 70114).
    \2\ In general, the recommended preventive services are: (1) 
Evidence-based items or services that have in effect a rating of A 
or B in the current recommendations of the United States Preventive 
Services Task Force (Task Force) with respect to the individual 
involved; (2) immunizations for routine use in children, 
adolescents, and adults that have in effect a recommendation from 
the Advisory Committee on Immunization Practices of the Centers for 
Disease Control and Prevention with respect to the individual 
involved; (3) with respect to infants, children, and adolescents, 
evidence-informed preventive care and screenings provided for in the 
comprehensive guidelines supported by the Health Resources and 
Services Administration (HRSA); and (4) with respect to women, 
evidence-informed preventive care and screening provided for in 
comprehensive guidelines supported by HRSA (not otherwise addressed 
by the recommendations of the Task Force).
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    The interim final regulations clarify that, with respect to a plan 
or health insurance coverage that has a network of providers, a plan or 
issuer is not required to provide coverage for recommended preventive 
services delivered by an out-of-network provider. Such a plan or issuer 
may also impose cost-sharing requirements for recommended preventive 
services delivered by an out-of-network provider.
    The interim final regulations also provide that if a recommendation 
or guideline for a recommended preventive service does not specify the 
frequency, method, treatment, or setting for the provision of that 
service, the plan or issuer may use reasonable medical management 
techniques to determine any coverage limitations. The use of reasonable 
medical management techniques allows plans and issuers to adapt these 
recommendations and guidelines for coverage of specific items and 
services where cost sharing must be waived. Thus, a plan or issuer may 
rely on established techniques and the relevant evidence base to 
determine the frequency, method, treatment, or setting for which a 
recommended preventive service will be available without cost-sharing 
requirements to the extent not specified in a recommendation or 
guideline.
    The preamble to the interim final regulations also invited comments 
on value-based insurance designs (VBID). In general, VBID includes the 
provision of information and incentives for consumers that promote 
access to and use of higher value providers, treatments, and services. 
The preamble stated:

    The Departments recognize the important role that value-based 
insurance design can play in promoting the use of appropriate 
preventive services. These interim final regulations, for example, 
permit plans and issuers to implement designs that seek to foster 
better quality and efficiency by allowing cost-sharing for 
recommended preventive services delivered on an out-of-network basis 
while eliminating cost-sharing for recommended preventive health 
services delivered on an in-network basis. The Departments are 
developing additional guidelines regarding the utilization of value-
based insurance designs by group health plans and health insurance 
issuers with respect to preventive benefits. The Departments are 
seeking comments related to the development of such guidelines for 
value-based insurance designs that promote consumer choice of 
providers or services that offer the best value and quality, while 
ensuring access to critical, evidence-based preventive services.

    In response to the solicitation of comments, the Departments 
received about 25 comment letters regarding VBID. Many commenters cited 
the importance of using VBID to help control rising health care costs 
and promote better health care outcomes. A number of other commenters 
raised

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concerns about VBID becoming a barrier to access to services. Some also 
questioned how value would be assessed and whether that assessment 
would include measures such as quality and effectiveness, not solely 
measures of cost.
    The Departments remain interested in promoting high-value, 
clinically effective, evidence-based preventive care. (Outside the 
context of preventive care, the coverage requirements and cost-sharing 
prohibition of PHS Act section 2713 are not applicable.) The 
Departments are issuing the fifth in a series of Affordable Care Act 
Implementation Frequently Asked Questions (FAQs), which identifies 
certain health plan design elements that are considered to comply with 
PHS Act section 2713. To inform future guidance, this RFI solicits 
additional information on specific examples and best practices of VBID 
for recommended preventive services, as well as data used to support 
and inform VBID benefit design, measurement, and evaluation in the 
context of recommended preventive services.

II. Solicitation of Comments

A. Comments Regarding Regulatory Guidance

    This RFI requests comments generally on VBID in the context of 
recommended preventive services, as well as specifically on the 
following questions:
    1. What specific plan design tools do plans and issuers currently 
use to incentivize patient behavior, and which tools are perceived as 
most effective (for example, specific network design features, targeted 
cost-sharing mechanisms)? How is effective defined?
    2. Do these tools apply to all types of benefits for preventive 
care, or are they targeted towards specific types of conditions (for 
example, diabetes) or preventive services treatments (for example, 
colonoscopies, scans)?
    3. What considerations do plans and issuers give to what 
constitutes a high-value or low-value treatment setting, provider, or 
delivery mechanism? What is the threshold of acceptable value? What 
factors impact how this threshold varies between services? What data 
are used? How is quality measured as part of this analysis? What time 
frame is used for assessing value? Are the data readily available from 
public sources, or are they internal and/or considered proprietary?
    4. What data do plans and issuers use to determine appropriate 
incentive models and/or amounts in steering patients towards high-value 
and/or away from low-value mechanisms for delivery of a given 
recommended preventive service?
    5. How often do plans and issuers re-evaluate data and plan design 
features? What is the process for re-evaluation? Specifically:
    a. How is the impact of VBID on patient utilization monitored?
    b. How is the impact of VBID on patient out-of-pocket costs 
monitored?
    c. How is the impact of VBID on health plan costs monitored?
    d. What factors are considered in evaluating effectiveness (for 
example, cost, quality, utilization)?
    6. Are there particular instances in which a plan or issuer has 
decided not to adopt or continue a particular VBID method? If so, what 
factors did they consider in reaching that decision?
    7. What are the criteria for adopting VBID for new or additional 
preventive care benefits or treatments?
    8. Do plans or issuers currently implement VBIDs that have 
different cost-sharing requirements for the same service based on 
population characteristics (for example, high vs. low risk populations 
based on evidence)?
    9. What would be the data requirements and other administrative 
costs associated with implementing VBIDs based on population 
characteristics across a wide range of preventive services?
    10. What mechanisms and/or safety valves, if any, do plans and 
issuers put in place or what data are used to ensure that patients with 
particular co-morbidities or special circumstances, such as risk 
factors or the accessibility of services, receive the medically 
appropriate level of care? For example, to the extent a low-cost 
alternative treatment is reasonable for some or the majority of 
patients, what happens to the minority of patients for whom a higher-
cost service may be the only medically appropriate one?
    11. What other factors, such as ensuring adequate access to 
preventive services, are considered as part of a plan or issuer's VBID 
strategy?
    12. How are consumers informed about VBID features in their health 
coverage?
    13. How are prescribing physicians/other network providers informed 
of VBID features and/or encouraged to steer patients to value based 
services and settings?
    14. What consumer protections, if any, need to be in place to 
ensure adequate access to preventive care without cost sharing, as 
required under PHS Act section 2713?

B. Comments Regarding Economic Analysis, Paperwork Reduction Act, and 
Regulatory Flexibility Act

    Executive Order 12866 (EO 12866) requires an assessment of the 
anticipated costs and benefits of a significant rulemaking action and 
the alternatives considered, using the guidance provided by the Office 
of Management and Budget. These costs and benefits are not limited to 
the Federal government, but pertain to the affected public as a whole. 
Under Executive Order 12866, a determination must be made whether 
implementation of this rule will be economically significant. A rule 
that has an annual effect on the economy of $100 million or more is 
considered economically significant.
    In addition, the Regulatory Flexibility Act (RFA) may require the 
preparation of an analysis of the impact on small entities of proposed 
rules and regulatory alternatives. An analysis under the Regulatory 
Flexibility Act must generally include, among other things, an estimate 
of the number of small entities subject to the regulations (for this 
purpose, plans, employers, and issuers and, in some contexts small 
governmental entities), the expense of the reporting, recordkeeping, 
and other compliance requirements (including the expense of using 
professional expertise), and a description of any significant 
regulatory alternatives considered that would accomplish the stated 
objectives of the statute and minimize the impact on small entities. 
For this purpose, the Departments consider a small entity to be an 
employee benefit plan with fewer than 100 participants.
    The Paperwork Reduction Act (PRA) requires an estimate of how many 
respondents will be required to comply with any ``collection of 
information'' requirements contained in regulations and how much time 
and cost will be incurred as a result. A collection of information 
includes recordkeeping, reporting to governmental agencies, and third-
party disclosures.
    The Departments are requesting comments that may contribute to the 
analyses that will be performed under these requirements, both 
generally and with respect to the following specific areas:
    1. What costs and benefits are associated with expanded use of VBID 
methods? How do costs and benefits vary among different types of 
preventive screenings, lifestyle interventions, medications, 
immunizations, and diagnostic tests?
    2. What policies, procedures, practices and disclosures of group

[[Page 81547]]

health plans and health insurance issuers would be impacted by expanded 
use of VBID methods? What direct or indirect costs and benefits would 
result? Which stakeholders will be impacted by such benefits and costs?
    3. What impact would expanded use of VBID methods have on small 
employers or small plans? Are there unique costs or benefits for small 
plans? What special considerations, if any, should the Departments take 
into account for small employers or small plans?

    Signed at Washington, DC on December 20, 2010.
Nancy J. Marks,
Division Counsel/Associate Chief Counsel, Tax Exempt and Government 
Entities, Internal Revenue Service, Department of the Treasury.
    Signed at Washington, DC on December 21, 2010.
George H. Bostick
Benefits Tax Counsel, Department of the Treasury.
    Signed at Washington, DC on December 16, 2010.
Phyllis C. Borzi
Assistant Secretary, Employee Benefits Security Administration, U.S. 
Department of Labor.
    Dated: December 21, 2010.
Jay Angoff
Director, Office of Consumer Information and Insurance Oversight.
[FR Doc. 2010-32612 Filed 12-27-10; 8:45 am]
BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P